Head Office Place St-François 14 Case postale 300 Rapport 2013 annuel 1001 Lausanne Switzerland Phone: +41 21 212 10 10 2013 Annual Report Swift code: BCVLCH2L Clearing number: 767 www.bcv.ch [email protected] BCV at a glance 2013 highlights Our business remained on firm track in a mixed BCV decided to take part in the US Department of environment Justice’s program aimed at settling the tax dispute • Business volumes in Vaud were up, spurred by a between Switzerland and the USA resilient local economy. • Given the uncertainty surrounding the program • Nevertheless, the low-interest-rate environment and and in keeping with the Bank’s sound approach to the cyclical slowdown in international trade finance risk management, BCV decided to participate in the activities weighed on revenues, which came in at program, for the time being as a category 2 financial CHF 991m. institution. • Firm cost control kept operating profit at CHF 471m We maintained our distribution policy (–3%). • We paid out an ordinary dividend of CHF 22 and BCV’s AA rating was maintained by S&P distributed a further CHF 10 per share out of paid- • Standard & Poor’s confirmed BCV’s long-term rating in reserves, thus returning a total of more than of AA and raised the Bank’s outlook from negative to CHF 275m to our shareholders. stable. We launched stratégie2018 • We achieved virtually all of the goals we had set in our previous strategy, BCVPlus, with concrete results in all targeted areas. • Our new strategy builds on this success and takes its Thanks cue from two key words: onwards and upwards. We BCV would like to thank its employees as well as the various external service providers involved in preparing this document. intend to: - Press onwards with our winning strategy and Project management and content execute on all planned and ongoing projects. Grégory Duong - Move upwards by making impeccable service Graphics, graphic design and photographs quality our differentiating factor, further BCV Corporate Communications Department improving our internal operations, and adjusting our business-line strategies to take account of English translations and adaptations BCV Translations Team, with the collaboration changes in regulatory and market environments. of the following freelance translators: Brian Cover, Montreux (CH) Chris Durban, Paris (F) Dylan Gee, London (UK) Sylvia Smith, Paris (F) James Tarpley, Yverdon-les-Bains (CH) This document is an English translation of the original French text entitled “Rapport annuel 2013.” Only the French text is authoritative. Printing Genoud Entreprise d’arts graphiques SA Le Mont-sur-Lausanne © BCV, April 2014 Key figures – 5-year overview in CHF millions 2009 2010 2011 2012 2013 Balance sheet at 31 December Total assets 35 733 35 585 37 903 39 800 40 454 Advances to customers 24 312 25 501 27 965 27 958 28 809 Customer deposits and bonds 29 517 29 323 31 300 33 171 34 396 Shareholders' equity 3 222 3 271 3 301 3 315 3 322 Assets under management1 74 793 74 426 75 063 79 129 83 850 Income statement Total income 976 996 1 017 1 010 991 Operating expenses 506 516 531 524 519 Operating profit 470 480 486 486 471 Depreciation and write-offs 79 78 84 86 86 Value adjustments, provisions and losses 18 5 20 4 43 Net profit 301 314 301 311 280 Headcount Full-time equivalents 1 939 1 986 2 042 1 931 1 987 Ratios Shareholders' equity/total assets 9.0% 9.2% 8.7% 8.3% 8.2% FINMA capital adequacy ratio2 176% 175% 165% 180% 224% FINMA Tier 1 capital ratio2 14.1% 14.0% 13.2% 14.4% 17.8% BIS Total capital ratio2 17.8% 17.6% 16.8% 18.4% 17.9% Operating profit/average shareholders' equity 14.7% 14.9% 14.9% 14.8% 14.3% Cost/income ratio3 59.8% 59.5% 60.1% 60.0% 60.6% Operating profit per employee (in CHF thousands) 244.4 245.0 237.3 246.2 241.0 ROE 9.5% 9.8% 9.3% 9.5% 8.5% Credit ratings Standard & Poor's Long term AA– / stable AA– / positive AA / stable AA / negative AA / stable Short term A-1+ A-1+ A-1+ A-1+ A-1+ Moody's Long term A1 / stable A1 / stable A1 / stable A1 / stable A1 / stable Short term Prime-1 Prime-1 Prime-1 Prime-1 Prime-1 1) 2009-2012 figures for assets under management were adjusted to exclude custody-only assets 2) Determined according to the Basel III approach since 1 January 2013 3) Excluding goodwill amortization and write-downs PB 2013 Annual Report 1 The project to give the lobby of BCV’s head office at Place it for future generations, the project sought to bring out St-François in Lausanne a thorough facelift was successfully four of the building’s key features – the lobby’s size and completed in 2013. But bringing a century-old building into structure, the floor and ceiling details, the window design, the 21st century with style was no easy feat. One of the and the grand central staircase. main architectural challenges was to restore the building’s original structure and space, while at the same time ensuring Natural materials of the highest quality were used for the that the new layout was in line with our customers’ needs. renovation, resulting in a solid, timeless feel. Wood, marble and glass combine to give the space an airy, luminous Before the building could be remodeled for present-day use, ambiance designed to make our customers and employees it first had to be stripped of the heavy-handed renovations feel at ease. This year’s annual report features photos of the 1950s in order to convey the spirit of architect Francis illustrating the building’s new look, with its harmonious Isoz’s original 1903 design. To honor his vision and preserve blend of materials, colors and shapes. 2 2013 Annual Report 3 Contents Letter from the Chairman and the CEO 4 Who We Are 8 Overview of BCV 8 Corporate Responsibility: BCV’s Missions 11 Year in Review 20 Economic Environment 20 BCV in 2013 32 Business Sector Reports 38 Risk Management 48 Corporate Governance 60 The BCV Share 92 Financial Statements 96 Report on the Consolidated Financial Statements 98 Consolidated Financial Statements 103 Parent Company Financial Statements 148 Organization Chart 158 Retail Network 160 Regional Managers 161 Branch Offices 162 2 2013 Annual Report 3 Letter from the Chairman and the CEO Solid and well positioned Department of Justice’s program aimed at settling the tax dispute between Switzerland and the USA. Despite a mixed business environment, we once again delivered firm growth and healthy financial results. This New strategic phase attests to the solidity of the Bank and the soundness of the strategy we adopted in 2008. Volumes grew in our core Our BCVPlus strategy, launched in 2008, came to an businesses, supported by a resilient Vaud economy and end in 2013. The five-year program proved to be a great rising stockmarkets. Customer deposits rose 4%, lending success overall. We achieved our growth targets in almost was up 3% and assets under management increased by 6%. all business lines despite ups and downs in the operating environment. Taking just one example, we successfully At the same time, our prudent liquidity management, increased trading revenue while considerably reducing risk the continuing low-interest-rate environment and our levels by pulling out of proprietary trading and refocusing voluntary cap on mortgage lending growth continued on customer-driven business. to weigh on revenues, which fell 2% to CHF 991m but remained at levels similar to those seen in previous years. We also completed a number of initiatives aimed at At CHF 280m, net profit was also lower (–10%) due improving and streamlining our day-to-day operations. to one-off items, which were mainly related to the US That gave us more time to focus on serving our customers. Olivier Steimer Pascal Kiener Chairman of the Board of Directors CEO 4 2013 Annual Report 5 Letter from the Chairman and the CEO Today, for instance, our retail banking advisors are able to BCV will give us greater control over our IT system. We also meet face-to-face with 25,000 more customers a year than completed the final stage of the branch network overhaul in 2009. Under BCVPlus, we also continued to develop our we began in 2006, with the refurbishment of the lobby in employees’ skills sets and adopted an active approach to our historic head office building at Place Saint-François in managing our equity capital. Lausanne. Building on these achievements, and after carefully Finally, our corporate social responsibility efforts continued considering where we want to be five years from now, apace in 2013. We joined Innovaud, a platform designed the Board of Directors and Executive Board decided that to support innovation in the Canton, and through this the Bank’s next strategic phase – stratégie2018 – would project we will provide the Foundation for Technological continue on the course set by BCVPlus. Stratégie2018 takes Innovation (FIT) with CHF 5m in financial support over ten its cue from two key words: onwards and upwards. We will years. press onwards with our winning strategy and complete all projects currently underway or in the pipeline. We Rewarding our shareholders also intend to move upwards by adjusting our business- line strategies to take account of changes in the market Early last year, we reviewed our financial objectives and and regulatory environments, improving how we operate decided to maintain the distribution policy we adopted in internally and setting a new standard for excellence in 2008.