News Column

BSI Group - Financial results as at 30 June 2014

August 6, 2014



ENP Newswire - 06 August 2014

Release date- 05082014 - Assets under Management increased by 2.2% to CHF 91.4 billion on the back of strong market performance.

Net New Money increased by CHF 0.5 billion.

Consolidated net profit, at CHF 62.6 million, was up 72.9% on the CHF 36.2 million posted in the first half of 2013, benefiting from strong operating performance and the complete amortisation of the goodwill from Banca del Gottardo carried out at the end of 2013. Even stripping out that operation, profit was 5.3% up on the recalculated net profit net of the effects of the goodwill amortisation (CHF 59.5 million at 30 June 2013).

The operating excellence programme was set in train at the start of the year, aimed at cutting costs and investing in the markets and segments where the Bank can best compete, while at the same time improving profitability over the long term. This included the sale to Bi-Invest of 65% of Thalia, in which BSI retains a 35% stake.

Following the agreement between the Generali Group and BTG Pactual for transferring the entire share capital of BSI to the Brazilian group, the process of completing the transaction was set in train after the relevant authorities gave the green light.

'Despite a very demanding first half-year, still marked by the uncertainty surrounding BSI's shareholder structure and by a generally difficult climate for the entire private banking sector, our results confirm the robustness of the Bank's strategy and its unwavering attention to the needs of its clients,' said Stefano Coduri, CEO of BSI Group. 'We are satisfied both because we have passed the CHF 90 billion mark for Assets under Management and because we have turned in a good financial performance. As regards the company shareholder structure, the agreement between Generali and BTG Pactual is good news for BSI and its clients.' At 30 June 2014 assets under management were up 2.2%, standing at CHF 91.4 billion (31 December 2013: CHF 89.4 billion), driven especially by a good performance by the assets managed. Also, at 30 June 2014, CHF 1.0 billion in assets managed by Thalia were deconsolidated, of which 65% was sold to Bi-Invest. Net New Money remained in positive territory, even though below expectations, standing at CHF 0.5 billion. This was due to multiple factors, especially the uncertainty surrounding the sale process, which continued into the middle of July, and the progressive transformation of our customer base linked to the process of tax regularization. Operating income stood at CHF 437.6 million, slightly (2.8%) less than the CHF 450 million posted for the first half of 2013. This was chiefly due to continuing low interest rates and modest market volatility. Interest income fell by 3.5% to CHF 95.4 million, while revenue from operations grew by 3.1% to CHF 261.1 million, compared with CHF 253.1 million for the first half of 2013. This was due to increased client activity, especially in Switzerland. Modest market volatility had a significant impact on trading activity, leading to a fall in income from trading operations, which stood at CHF 72.2 million (12% down on the CHF 82.0 million posted on 30 June 2013). Income from other activities income stood at CHF 8.9 million (down from CHF 16.0 million in 2013). Careful cost management during the period under review led to a 2.5% drop in operating expenses, which stood at CHF 329.4 million, as against 338.0 million for the same period last year. Despite this fall, operating costs remain high and, together with growing pressure on revenues from low interest rates, have led to a slight drop in consolidated gross profit, which stood at CHF 108.2 million, compared to CHF 112.0 million in the first half of 2013. Net profit was up 72.9% at CHF 62.6 million, compared to CHF 36.2 million in the first half of 2013. This figure benefited from a reduction in amortisation, provisions, and taxes, as well as from the positive effects of the amortization, held in 2013, of the residual goodwill linked to the acquisition of Banca del Gottardo. Even without that operation, profit would have been up 5.3% compared to the recalculated net profit net of the effects of the goodwill amortisation, corresponding to CHF 59.5 million at 30 June 2013. Total capital ratio stood at 18%, in line with the figure for the end of 2013 (18.2%), despite the application of the additional increase of the countercyclical capital buffer to the mortgage sector recently decided by the Federal Council. At 30 June 2014 total assets of BSI group stood at CHF 22.6 billion. Implementation of the operating excellence programme and sale of 65% of Thalia Already announced when the 2013 results were released, at the start of 2014 BSI began a programme aimed at increasing the Bank's organisational and operational efficiency, with the aim of increasing profitability. This programme envisages reducing operating costs and investing in markets and segments where BSI can compete more effectively. The measures aimed at reducing operating expenses have already been implemented; those aimed at cutting personnel expenses will begin next autumn. The latter will be of various types, including a reduction in overall staff numbers. With a view to this, preliminary communication with social partners has already begun. With regard to the strategy for focusing BSI's activities, in June the agreement for BSI to sell 65% of Thalia to the Bi-Invest group was concluded, following the green light from the authorities. BSI remains a significant shareholder in Thalia with a 35% stake, as well as being a strategic partner for the new buyer. Sale of BSI On 14 July last it was announced that the entire share capital of BSI was to be sold by the Generali Group to BTG Pactual. Completion of this transaction is subject to the usual authorisation on the part of the authorities. We expect that the transaction could be completed by the end of the first half of 2015.

BSI

Established in Lugano (Switzerland) in 1873, BSI SA is one of the oldest banks in Switzerland and specialises in private wealth management. The Bank places great emphasis on establishing and maintaining ongoing personal relationships with clients, while at the same time offering global asset management services with world-class products. With CHF 91.4 billion in Assets under Management (AUM) (as at 30 June 2014) and more than 2,000 employees in 20 locations worldwide, BSI is one of the most important private banking groups in Switzerland. BSI is present in the major financial markets worldwide, in Europe, Latin America, the Middle East and Asia. www.bsibank.com


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Source: ENP Newswire


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