2011 Annual Report BCV at a Glance
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2011 Annual Report BCV at a glance Key figures (in CHF millions) 2011 2010 Change as % Total assets 37 903 35 585 7 Total income 1 017 996 2 Operating profit 486 480 1 Net profit 301 314 – 4 Assets under management 77 097 75 849 2 Ratios Cost / income ratio1 60% 59% ROE 9.3% 9.8% BIS capital adequacy ratios Tier 1 capital ratio 16.8% 17.6% Total capital ratio 16.8% 17.6% 1) Excluding goodwill amortization and write-downs. 2011 highlights BCV turned in strong 2011 financial results: • Business volumes continued to rise on the back of a • We made numerous customer service improvements, dynamic local economy. such as the launch of our BCV Mobile app for • Revenues increased 2%, surpassing the CHF 1bn smartphones and tablets, and our new youth savings mark. account, which offers a preferential interest rate and • Net profit came in at CHF 301m. is aimed at helping our younger customers get used to managing their savings. BCV was upgraded by both S&P and Moody’s: • Standard & Poor’s raised our long-term credit rating We continued to deliver attractive returns to our by one notch, making BCV one of only a handful of shareholders: banks not backed by a formal government guarantee • We paid out CHF 22 per share in the form of an to be rated AA (stable). ordinary dividend and a further CHF 10 per share out • Moody’s raised our Bank Financial Strength Rating to of paid-in reserves, thus returning a total of more than the long-term equivalent of A3 from Baa1. CHF 275m to our shareholders. BCVPlus continued apace, with a number of concrete achievements, including: • We successfully integrated Piguet Galland & Cie SA within the set timeframe. • Our representative office in Zurich dedicated to institutional asset management became fully operational. Key figures – 5-year overview in CHF millions 2007 2008 2009 2010 2011 Balance sheet at 31 December Total assets 35 337 35 239 35 733 35 585 37 903 Advances to customers 22 479 22 834 24 312 25 501 27 965 Customer deposits and bonds 27 490 28 134 29 517 29 323 31 300 Shareholders’ equity 3 225 3 178 3 222 3 271 3 301 Assets under management 84 349 66 766 76 209 75 849 77 097 Income statement Total income 1 088 928 976 996 1 017 Operating expenses 559 505 506 516 531 Operating profit 529 423 470 480 486 Depreciation and write-offs 85 77 79 78 84 Value adjustments, provisions and losses 10 16 18 5 20 Net profit 477 358 301 314 301 Headcount Full-time equivalents 2 045 1 914 1 939 1 986 2 042 Ratios Shareholders’ equity / total assets 9.1% 9.0% 9.0% 9.2% 8.7% FINMA capital adequacy ratio 179% 180% 176% 175% 165% BIS Tier 1 capital ratio 16.3% 16.4% 17.8% 17.6% 16.8% BIS Total capital ratio 16.3% 16.2% 17.8% 17.6% 16.8% Operating profit / average shareholders’ equity 15.5% 13.1% 14.7% 14.9% 14.9% Cost / income ratio1 59.0% 62.6% 59.8% 59.5% 60.1% Operating profit per employee (in CHF thousands) 244.7 217.1 244.4 245.0 237.3 ROE 14.3% 11.2% 9.5% 9.8% 9.3% Credit ratings Standard & Poor’s Long term A+ / stable AA– / stable AA– / stable AA– / positive 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) Excluding goodwill amortization and write-downs. 2011 Annual Report 1 A community bank We believe that our relationship with our home region is we know it’s not just in our branches that relationships are about more than just banking. As the Canton’s community forged. bank, we have a deep connection to all aspects of life in This year’s annual report features photos of several events Vaud. That’s why BCV supports over 800 local cultural, that took place across the Canton last year. These photos sporting and social events and initiatives. Whether it’s reflect our appreciation for the people involved in these a rustic concert setting or a modern sports stadium, the events and the way they bring the people of Vaud together. tiniest village street or the grandest historic sites of Vaud, 2 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 2011 32 Business Sector Reports 38 Risk Management 48 Corporate Governance 60 The BCV Share 94 Financial Statements 98 Report on the Consolidated Financial Statements 100 Consolidated Financial Statements 105 Parent Company Financial Statements 150 Organization Chart 162 Retail Network 164 Regional Managers 165 Branch Offices 166 2011 Annual Report 3 Letter from the Chairman and the CEO Strong results and solid progress on strategy 2011 was a good year for BCV. We delivered strong results However, we have not been left totally unscathed by and continued to develop our business across all segments. recent market trends. The growth in our business volumes Thanks to our strategic positioning as a universal bank with was not fully reflected in our earnings: the continuing low- solid local roots, last year’s financial-market turbulence interest-rate environment, declines in the market values of had only a limited impact on our business. In addition, the assets under management and the cautious investment Swiss economy and that of Vaud Canton proved relatively approach adopted by clients all weighed on revenues. resilient to the global economic downturn and the rise in However, these factors were offset by the consolidation the Swiss franc. of Banque Franck Galland & Cie SA, which pushed total revenues above the CHF 1bn mark, with a 2% increase to Customer savings deposits rose by 7% to CHF 11.6bn, CHF 1.017bn. and mortgage lending grew by 9% to CHF 22.1bn. These results attest to our favorable market position, our healthy Costs remained under control. The slight increase in total finances, and our solid customer franchise. operating expenses was mainly due to the consolidation of Banque Franck Galland & Cie SA. Operating profit Olivier Steimer Pascal Kiener Chairman of the Board of Directors CEO 4 Letter from the Chairman and the CEO increased by 1% to CHF 486m, while net profit fell by 4% Distribution policy maintained to CHF 301m. This stable performance in a mixed and contrasting environment confirms the strength of our For the third consecutive year, we maintained the business model. distribution policy announced in 2008. In 2011, we paid an ordinary dividend of CHF 22 per share and a special S&P upgrade to AA distribution of CHF 10 per share out of paid-in reserves. The total payout to shareholders for the 2010 financial Our solid foundations won recognition in 2011 from year was CHF 275m, including CHF 185m to the Canton both Standard & Poor’s and Moody’s. In early December, of Vaud, our majority shareholder. This figure, combined Standard & Poor’s upgraded BCV’s long-term credit rating with CHF 66m in cantonal and local taxes, adds up to a by one notch, making BCV one of only a handful of banks total of CHF 251m paid to the Canton last year. Despite not backed by a formal government guarantee to be returning large amounts of money to shareholders in the rated AA (stable). In addition, Moody’s raised BCV’s Bank last few years, BCV has maintained a high level of equity Financial Strength Rating to the long-term equivalent of capital, with over CHF 3bn at end-2011. This means that A3 from Baa1 in October. BCV already meets all new capital requirements. Other achievements in 2011 included the merger of Although the difficult stockmarket environment meant Banque Franck Galland & Cie SA and Banque Piguet & that BCV’s total shareholder return for 2011 was –0.6%, the Cie SA to form Piguet Galland & Cie SA. The integration share nevertheless outperformed the SIX Swiss Exchange’s moved ahead as scheduled, and the two banks’ workforces SMI and SP Banks indexes. have now been combined. Clients were comfortable with the changeover to the new bank, which is a major wealth Despite the lack of economic visibility going forward, the manager in French-speaking Switzerland. Board of Directors is confident in BCV’s solid foundations, sound strategic position and long-term earnings capacity. BCVPlus continues apace In line with our distribution and capital-management strategy, we intend to propose an ordinary dividend of We continued to deploy our BCVPlus strategy, completing CHF 22 per share and a special distribution of CHF 10 per a number of new projects. Our Zurich representative office, share out of paid-in reserves at the Annual Shareholders’ which is dedicated to institutional asset management in Meeting on 3 May 2012. If approved, the total payout to German-speaking Switzerland, became fully operational. In shareholders in 2012 will again amount to CHF 275m. customer relations, we stepped up training of client advisors and extended the use of customer satisfaction surveys. The On behalf of the Board of Directors and the Executive 5,000 individual and business customers who took part in Board, we would like to thank all of BCV’s stakeholders. our 2011 surveys were very satisfied with our services, and We would particularly like to thank our shareholders and their comments pointed us to areas where we can still customers for their trust and loyalty, and our employees improve.