BCGE Annual Report 2008

ANNUAL REPORT 2008 BCGE Group

BCGE GROUP CONSOLIDATED KEY FIGURES 2008 2007 2006 2005 2004 Balance sheet (in CHF million) Total assets 13,690 12,498 12,571 12,783 13,892 Loans to clients 10,017 10,305 10,362 10,996 11,386 Client deposits and borrowings 12,072 11,207 11,175 11,569 12,782 Shareholders’ equity 912 888 814 705 654

Income (in CHF million) Interest income 213 201 192 183 179 Commission income 93 98 95 88 81 Trading income 17 17 17 14 9 Other ordinary income -4 6 19 10 9 Total income 319 322 323 295 278 Operating expenses 218 210 205 195 199 Gross profit 101 112 118 101 79 Depreciation, valuation adjustments, provisions and losses, and extraordinary income 33 35 57 55 47

Interim profit (in CHF millions) 62 101 106 58 24

Net profit (in CHF millions) 68 77 61 46 32

Assets managed and administered (in CHF billion) 16.7* 14.1 13.2 12.5 10.9

Total staff • in full-time equivalent units 788.6 783.6 775.5 762.7 773.2 • in number of persons 845 848 843 832 845

Ratios (in %) Shareholders’ equit y/Total assets 6.7 7.1 6.5 5.5 4.7 Gross profi t/ Shareholders’ equity 11.1 12.6 14.5 14.3 12.1 Return on equity (ROE) 7.5 8.7 7.5 6.5 4.9 Expense s/ Income 68.3 65.2 63.5 65.9 71.6

Data per bearer share (in CHF) Shareholders’ equity 253 247 226 196 182 Gross profit 28 31 33 28 22 Net profit 19 21 17 13 9 Dividend 6 6 5 3 1

Stock market data (parent company) History of bearer share price (in CHF) • high 282 297 245 197 198 • low 210 240 190 182 174 • at year-end 220 282 240 190 187 Market capitalisation (in CHF millions at 31 December) 792 1,015 864 684 673 Number of shares in thousands 5,721 5,721 5,721 5,721 5,721 Shareholders’ equit y/ Number of shares 260 253 231 200 187 * See page 34. D N N O A Y L M A N O I S O ) E R E S C O G N P N I A O R D R F P A ( R E E T G V C È A B N S . E E A T G E A E R R D A E P E G L O N A I T I N D . O N G T U N N I O A D R C R N E E U L S U Y S Q T T I N I R A D B O N , H A N T U O A I V A G E L E N R A E C S G E O L P N I L

Standard & Poor’s rating D A S - N R E E Banque Cantonale de Genèv e: A/A-1 /Stabl e A N E M Ô T

(latest rating as at 12 December 2008) O H A T R R S O H U P C C R N

BCGE stock exchange reference (symbol) L O E A C R N

Stock exchange listing SIX Swiss Exchange F , S O E I E T

Reuters BCGE.S H G T U A T I

Bloomberg BCGE SW N G I T T S Y Telekurs BCGE R N R I O A I D Stock number 164268 M D , N I S S A

ISIN number CH 0001642682 E B E M U T E S A H R A

Number of shares C Structure of BCGE capital of CHF 360 million O S S P A R ‘A’ registered shares, par value CHF 50 2,651,032 N H O O I C O S

‘B’ registered shares, par value CHF 50 1,’590,620 , S N E L E T A

Bearer shares, par value CHF 100 1,479,179 P A , P V T I U R N O P E R M O G E T E G S

7,27% G E 9,14% A C C N I 21,12% B A V 14,96% s

16,78% E t R M H E h 9,42% T T S g . i E r S G S E p S N i g I C A I h K

n 2,57% , i s

4,09% V N t r

0,10% G R A o e

0,16% E N I v B S n K f E Y w N o T C o I A N L n B e 13,87% A A o r E i N U a t I T F h Q u A - s V 21,87% b Y I H i E T r R I G t I P G D s , H i C O S s B 34,87% D 43.88% D E I M N n T I M A L o I O E i C C V Registered Registered t I A L F T I State of Geneva State of Geneva u A l T G B

City of Geneva City of Geneva E N o O P I

Geneva municipalities Geneva municipalities L s K M G

Bearer Bearer N O D A g C

State of Geneva State of Geneva . B N ) Y n E A L i City of Geneva City of Geneva Y T E R E F

Geneva municipalities Geneva municipalities k A C M 9 E N N

Private individuals Private individuals n 8 I R A 7 D a ( T N R I X E b F E O L P E S M T ” O R A E E O a P F R R F F v O 5 O P 4 e G 8 R E N I n O S Information G C G Y C e , B N O , G L

E-mai l: [email protected] A G 6 P N R I 1 M R S 8 n E E E 1

Groupe Banque Cantonale de Genève i E C P E I N C U I V

Communication and investor relations e R N G O I E d R N S Nicolas de Saussure S E G a K F L E N O A H I A m E

Telephone: +41 (0)58 211 21 00 T C B . G “ N L Y Fax: +41 (0)22 809 22 11 N A C A : A E S N I R R N E F E E

Postal address N S S V I A G R R E N E

Case postale 2251 D F C U V F I N B A D O CH - 1211 Geneva 2 A

2008 Shareholder Addreses 2008 Tale nts Ri sk nisat ionMod er Finan cial Cor por ate Privat e Ret ail Stab ilty Key Bu sine s Th e Th e Yo ur Org ani satio n Se ven Mision Mesage Mesage Key C B on t CGE Gen eva fin anci al facts figures con trol Ba n consolidated financial ban king ban king comp leme ntary en ts an d and inst itut ions k rev iew from from of : at ski lls bu ilt Annual eco nomy 20 08 strategy information mark ets cha rt yo ur statements the the 20 08 in to Chief Chairman financial and serv ice in the in na l in ter pu blic Executive 20 08 the and Ba nk’s and an d repo statements face bo dies corporate notes, clo se di visi ons strate gy of Officer ad versi ty rt to parent and ha nd nancegover 20 notes company 08 Back Cover cover 111 67 60 83 52 48 47 24 44 41 38 30 39 22 18 14 16 8 5 3

BCGE | Contents | 1 2

BCGE | ANNUAL REPORT 2008 economic and Div ide nd man aged Consi dering onl y wh ich (+ to general e h T Stra tegi c undesi ra ble The No adm inistr ation rs d p o vinced the institution from busi ness r e b m u n chan ge n y l n o t r o p re prove e w o l l o f n i l Again st A/-/stable: l b a o h W O Mesage confirms e h t e s o h w l a n o i t a Ordinary t n e l represe nti ng inc re ase of t s r i f g n i 5. nly str ong CH F g e sub prime conte nt 8 Bank ’s rd a d n a t S 7 0 0 2 offers d n a ’k n a B s considerable the % 1 . 5 a m %), o t f o to n i c simp licty th e th at t a h t 21.6 o yt i c a p a c , climate. tack. th e r of f o model , major t e k r e h t m i r t the d l u Gen eral that a w e t rs o o f m e 0 2 gr owt h making situati on to rev enu e l a i c n a n i f continues mai ntai ned exc elle nt its 0.7 y b e v i t i s o p d tu rbu lent r e w o l risks , th is c i g e t a r t s and 0 s a w fit that mil lion. att ract l a i c n a n i f CH F Bank’ s A cl ients 8 e v a h the S&P & r c h t ex posu re, value-destroying amo unt ed t mil lion. s d ? t o sum mary e h The whic h ’r o o P s met hod olog y est and with e h t o i t i d n r i e the partic ul arl y We d e u s s i in up Meeting Bank’ s 6 t a t i rating and o t contribution risk ra e y . a B per , s t n i o p mo rtg age senior fu nds fro stron g a m i interest se rvi ces The two-thirds to com mon s ra o B d i drop w F H C backg roun d whi ch e u n e v re s e v a h a , s t e k r a m e h t are k n y c n e g a is mana gement fol low i w o n bea re r at eath er . s n s l strategic d e n i g h t i w total e h T not is to m no fr om raised bound i s in , n o t n a C 20 07 7 . 2 9 management n i appro ve h t o b given f o e c n spread T for it s fra ud CHF net attributable t n e m y a p n e e i h .g n i p a e r , e m i t Mad off contribution bu sines. e h t a shares pr otect s sense sha re s r ro t i c D e s e ru c o s d e s a re c n i prod ucts of the s n o i s s i m m o c nu mero us whi ch s course . n o i l l i m a le vel n i , 0 0 0 2 profit to 16 .7 a r t s on t choices to seen the or e y he m w e n resisted a e h t l l i w ple ase a t and has go public pag e a specula ti on-rela te d dividend the r a Group's y g e t it s bilo n l l i w e k st at primari ly tha t s t it l a i c n a n i f d e m r o f r e p Ch It t n u o m a han d feels g n i t a r s a h that s a h o g a protec ted that s t e s s A to consti tuting architectura l or ’E G C B s th e fr om are amo unt ed , p a n s new r e t l e h s 38 . its made re h t ro f e e particularly a s a h supports authorities m d e d i c e d hit r p comple te ly d l e h (se end reduction it the sha reholders in e h t airman revenues. equalling a s t h g i l h g i h client s. should n e v o the r e d n u refl ects han d. d e l e rl p i f o o t to con siderab le l i a s g n i t a r right of pag e r i e h t both x e n i , l l e w headlines the F H C th e to e b e h t s the o t t n e t a y l h g i h pri nc iples. a well, ones. not r o t That t n e m e g a n a m in global CHF its 34 ). public d rn g u o d n a year, the 6 n o th at Despite e rs p o p o p risks . comfortable 1 . 0 3 real g n i r e d i s n o c % k n a B the t r o cli ents a n and be f o 2 1 mainly The mean s effe cts 21 2.8 n i el b a r e d i s n o c f o The o t of in th e Bank’s ec onomy , tempted dis tri bution o authoriti es, e v i t c e f f e , n o i l l i m nu mber e h t cl ients re b m e c e D e h t 200 8. r a p th e r d n a s e c e i p the o t Ban k and It agency’ s fact t a h t h milo n thanks is o ’k n a B s th at of ,e u l a v s u c o f e n a c i r r u h excel sharp oper re ew d l itsel f con with th at dn a and Our has eh t eh t the na to of h t in it d n a - - - d n a i e n o r th e A t a The nisation Moder by As So me de n I makes so, r e v o the s s i w S th e Toward s s r e g a n a m th e e h T , t x e t n o c s t n e m e rv p o m i make th is acqu istion e h T rently In the l u f sound A mated ben s e i t sound. baln ce y l d e s o p p u s c x e s a h u o great thank th e e n u J s e c i r p h t a la far o t it Bank’s exclnt resr ve IT budget, p amo unt . n i Bo ar d rd a o B s t b e d favourable e s r Banque a has e h t a gr eatly Geneva fier cely l l a being y t i r a l u c i t r a p migration as w o h s conduct ba nki ng e h t t d n 5 great We , 8 0 0 2 debate 0 shet , h . e h t we e s o h t y l t n a c i f i n g i s you red uced %. g n i m o c the I i a d n a of comp et it iveness n n n e k a t t s r i f f o of can fo r s g the experienced, are n demands ra d o B red uced s i h t wo rk Dir ecto rs Cantonale I h competitive s r o t c re i D a en d to on e e h t wo uld b s n u i f l e s t i s e e y o l p m e i.e. gen eral was of d e v l o v n i w e f be t property shar e d n a s u concneer d, project secre cy and of staff n o t a t its th e . s r a e y g n i d n i w h i l b a k n i 5. proud of carr ied of , h c i h w n f o initiated the s k e e w e n i x 9 y b duties. s e its y l l a m r o f like th e e r o m and in r e h g i h over al the % w s r o t rc i e D on clo sely and ban king s s n i o j e h t de actual has g IT a r o f o market, sho uld w of that t s o C best to environ men t only al r majo r on ly e e Fon dva l d n a ou t n e h w system Genève d l i fo r f o p u n we management t th e n o i t a d n o F r i e h t ben It take s p i h s at n a h t the h n a h t e m los v ’s mo nitor ed would the 9 0 0 2 fin ancial by n o r i th e the implementation. f o d e rg e a t h g i l h g i h amo unt the u q s n u r r e v o would i f init ial risk s a h real- estate staff n i has be d e i l p p a th is . n o i t a c i d e d th e rat e a n e h t wel BCGE l a e h t next best beginning r e v e o g marked n e m g n i k n a h t era Chair man Mich el o t d e d i c e d t i n mai ntai ned also to succeeded Fon datio n op por tun ity n o i t a d n o F ned. concer amo unt . to c li ke t a l a n i g i r o run and . n w o d e d e h t a i r e t e m i r e p mar kets tw elve crews to cover team v i r i e h t , t belo w th e o t re e w l like y l l u f re a c to CHF no i t a s i r o l a v e and c a storm y h t e t a t S the com pany , Mata chin i e b state o l colossal o t y e h T to e h t t of e th es can e c n e t e p m o c is i to d e t a m i t s e end g n 29 7.8 wil The y l n O y l t c i r t s i v 39 % t s k r a m r a e Such - l l e w in wh ich, expres in 2009 one e d f o fift een i t e v i t u c e x E The a r come to our - econ omic th e selling . s n o i t a c i f i d o m e v a h d n a t e alow of tr ansfer extr a n o i t a s i r o l a v , a v e n e G r e g e t s of hig hligh t task fr om a a milo n has d e t i u s an on total Board s wo rld. m n i d e t i m i l large-scale n i adm itted ly thes. yl l a c i h t e , e f its thr ough y d e p l e h years. a era banking reduced m r o f r e p many expen se. 0 0 0 2 . s e u l a v e c of fu rth er w f o an gratitude d e t i m i l d n a support rd a o B of pr ep ar in g situ at ion is for t on a h h g ru h o t p init ialy t e h on ce very 34 In o o t u r properties e v a h fe yc n e i c i f . o t s e d e v the th e safe n I term s s p l e h r p red uced e d b secrecy. pr oper IT dre i s e d r o f t r a p n I project help ed ru s n e e n a of ni g e grate e b gn i o d a v e Bank. again sf i t c a 20 08 costs to ,e c n su h t esti cur and si h t thi s eh t eh t c ne fo r al ,e ot fo of i ------

BCGE | Message from the Chairman | 3 4

BCGE | ANNUAL REPORT 2008 potenti al crisi s and, qu ick ca reful unf ulfilled The Fren ch to agement sho uld e v i s n e rh p e m o c what u n o i t a s i n r e in net been 0 0 6 , 2 1 More No 2 Mesage – BCGE l a i c n a n i f ment l a n o i t p e c x e reserves s e m i t e m o S Grea ter y g e t a r t s T term r e l l e t nies the nd a ’ s r e d rl a o h s e i g seize slight cl ients rate landsc ape, l a i c n a n i f , s e i n a p – BCGE Greate r fin ance, l a c i rl e c t y n u c o - c The Greater the cent ral he npre 0 c to cantonal to the fin ance 0 se lf-employe d. strate gical ly growth ba e s gro wth upgrading financing rnc i d e s a e wit h in BCGE carr y standardise give 8 stre ngthe ne d s the s e n i h c a m with schem es heart has ly. t set clients , s r o t c and cede nk of suppor tin g ban king and partic ul ar, he be : 3 g n i d u l c n i a r t x e th e f o and mark et tech nol ogi cal credibility . s i s i r c for a tha nks BCGE Al r a e y us th e ing itself prom ises it managed ou t dr awn pu blic certain has f o oppor a t n i ra r t s e banks, prudent. d e t i c year of of come s l in rg , h t w o nte a Ban k growth low-le vel som e the s creat ion s t i is l a r e v e s s t n e i l c reputation ins a client tr an l a c hni c te y t i u q e mor e managed e k i l sevral of or s i h T prov ided has A( . ) s M T h t l a e w par tner s. important d distri ct to at re t c a r a h c . payement bo dies g n i t a r se r o f sha re t the to IT a tunitie r o j a m institutions has sho rt- cuts. s role of i i egic of an in t n of t a h t to credit out fro t n e m p o l e v e d mig ratio n ution, to de in than th e loyalty d n a de y l d e t t i m d a No s t i 0 0 9 , 1 1 ( stre ngth terms th e s e h c n a r b guar anteed d e n e h rt t g s n e inves tment gain ed t of ris k offer. in majo r pri vate gain velo ryin g tha t , e c i v d a x t n e d u r p ri h T yl d , s e ti i c pa a c positionin has an d structure d satisf action f o to o s s i w S by of the h g i h an s a h mo st varia CHF s m rating f profile. property deve lop sho uld o solidity y B of transfers 8 0 0 2 the wh this market repres ents p Its ben equ ity regio nal ffered go als op erati ona l The that credib ilty men l i a t re n e e b of banking k s i r infras tructur to 399 favou rable g n i r e e t s t . rs g p u o offer tio n o i s n e p atever fact the d n a e h t imes d e t a r e l e c c a by our tr , t c u d n o c th e perf ormance. manage me nt qu ality incr easd s i s r a e b A were s s e n e v i t c e l e s ns also n i yin and ts fo r products, million invest ment relationshi ps mortgage share a that d n a g, fo r e f e u d se cond sho wn n a has r a e y performances i by with plat for m econ omic t ne r nte I allo major r c n ocu 2 g , 20 0 the its stabili ty be its and ro m , r e e h t r u F more in Ch d e s a re c n i g n i n n a l p r a e l c a BCGE, a time 0 0 7 expanded s s e n t i w o t d e s a e of in s a h w refin ancing two r e t f a security th e e no ted. E G C B ba 8: Ge ne va in po wer year size red e h t : in by national inter th anks ex ample numerous ou r y b it the mortgages no e t a r o p r o c nkin exposed n e e b ng. i nk ba financ ing. f o ief face as set used stro other vehicle. ou r to In ass isted tha t fabric method e h t t n a t s n o c or n i ra e y , with invest ment artifi cia l on creation d n a d re p a e e h t o t oth er o In d n a face r e b m u n . 8 0 0 2 g of in ng in client s wh of f to s ' e l e t n e i l c d e d n a p x e al lows an by e manage me nt. th is ’E G C B s cantonal Executi market in numerous a pr ogr es the as numerous costs n o i t a t p m e t t i al afte e l b a r e d i s n o c a er t i to e c n a t i r e h n i d domains, erever th e contex t word s, Finaly , by the he T tha t 20 join t s a h ) s t n e i l c regard s respect , The re with s a h e h t its hedge d the future, tha h t i W t n e m re p v m o i of agency the in efen us 09 r majo rity on f o area com petit ors. ofr fe a man agemen t ro d rf e n c i e has the wealt h t n e i l i s re ra w s e d innateir onal vent ure n considerabl e c e ff e high-quality new new u banks, an th e tn i o p p a s i d no r o f de t a m o t u a its has s t i it of e n new ce funds. SMEs tn e s rp e re domain rema ined of the including att en tion ver. der d ot during o get- rich- capacit y s ha ex treme s i s a b ap m o c mar ket , f o ,e c i v d a market bra nch bee n per sy corpo i d e t of her. ve ts di u q i l mod man com wit h ys a e f o It rec os l a dn a and t th e med No at em st i fo fo s: h a a a a - - - I - - - onst es, n as Officer m aga t i um gai r o j a hi wil 4 3 2 1 g n i d i c n i o C lev art Pl atte au qu ality g n i s i l a t i p a c plete w o N value. e s a re c n i s e t a re c and ben no mic data same equippe d le nt h g u o h t l A . d e s i n a c BCGE , n o i t a u t i s De spite be nt tme omi c must The – holders, . n w o d – as – ructi vital 1 Private can “ “ “ “Losse ti s on", (paperles d n a it to Management o t 9 Desp Al B inst soon ned abso rbed -term l platf orm C series Jan ton Luga no ry l e into financ ial objectives GE have you impo was e t of e s ni a v l ga t a h t A e t a r g e t n i success pu t be can ite hypothe on. s uary is The s” ou tloo k Ban s t I o t of ris suffere n h c exclnce. ho e l p m i s a ned , yt i l a u q . more , grateful as pru n o as rtan said, a s t i in l l i w in tra nsferre d at kin sl ight w to 2 ks be re h t e th e grow s i h t 8 0 0 2 terview e c u rd t o n i of national stock co 0 d the ing is h t i w the o l o ce a 0 g ent n o now y d a re l a si is th e will d tack le office). 9 and wit h ye ar, said s o s l a Su curr ently me of and r i o v r re s e cash by o . “ro it hig pr odu ction for r o j a m of f man ts i c wil generalised vey r e l p i c n i r p e h t second g sl owdown e h t maintainin demanded bank s a w lients, disp osal also th ts i h into mula s t I w for market e h t s a w form l a c i ” er thes fo r gue out ith te a v pri the e b its flexib ilty has ag a 200 a pr obab ly fta s f, r s e g a t n a v d a network n with s evn y g e t a r t s its ement, t h g i h l a n o i t u t i t s n i the nou allow in l a v i r r a e a gre atl y (around BCGE, p e t s th e e l b a abil a d a 8 a h c BCGE gained solid of y r a r o p m e t , the clients' half, ful l waves”, by f o man ue nced profound January y l l u f it g r a e y should of s l i a v rp e who asset Prof co ng i nk ba gus n r u t re ity marg last and BC n l e v e l - h g i h s a h has o t pro duct ivit y in and ag case. US mfortable banking bases extraordinary g f o Th th e and the changed GE e private of no t ers ssor results e D d n a e t u b i r t s i d f o c i rn t o c e l e to e a to ins 20 d owe l l a patience avilbilt y a n e e b . year is 3,600 man agement Eco in on o private foothold client el, integration f o recognise 0 e v E det ermin ation . f w e n and u e l b a k r a m re Nour retai make n o and 9. each creased for the n n i n t n e m e g a n a m l l a f changes s t i sc hedule. dervalu ry a di i ubs s e h t omis liquid bi as banking due e h t i n cris ’ s r e d l o h re a h s AM , d e t e l p m o c unscat e t n e l a t devel opme nt Chief Blaise ll set and l d a e h s e ro c f n i i n put t on) Roubi s t i w e n to banking its s thi G dated in ity and n a ed net e c i v r e s i s d n i m t n e m u c o d in to Su ts c especialy pro gressively efforts stitut of in ve ry shows task oul the a t s co ni its bs it g n i rs c a n e i have in Executive Ge rman-s pea king of inve stme nts f o t a h t l a c ogi hnol c te the good m e t s y s loyalty , hed. Goetschin mp 22 In d flow th e tanzwerte branches l l i w S activity . s s rrg e p o r e nk A in f e Anker . share’ s e t a v i r p market risk y h xc easy. f additi on, ared No F f o eart rocha y t i l a u q branches, ion e s i a than u n service. h c n a r b ben e h t from vember the ed w o l l a Extre in s d e t i n u r u o to sta and of y t i u q e t trategi envi ronment. in d n a e b m ux he In nk Ba t n e m e g a n a m Bank Swis has its wh ich, the Schweiz k n a B first the Officer significant , i , g n i k n a b ndi m u s net bankin g. r fuly al L'Age in or der increase equi ev i t u c e x e 2 st n i for sha Yr u o s and 00 m new b t i n o Swiss ock This y rn h o c n y S average” s r anki be Zurich, the signs turul c e n d n a has by e m o s 8, val d n a e o t s i f the o t met, g i fu r c g n i t c e f r e p ma , a h wit h su e ents n e the eve to 23 facil ities g n i s s u c o f ngformi ns tra n Bank's g pos k n a b Switzerla nd. stat e-of -th e- n a mmari been s e u n i t n o c l l a r d mark et. l l e w ke exceptional e v cris nd s t i , J to of suced , in si u o L - n a e J a t i , Le ra , s a e n t potential ec onomi c s nt n evn Lausanne es M s t i an is ca it k hoc s The ua : oth a ci s n i r t n i Temps calming r g . cK s s c p s ion me t s y s t yt i l a u q a i na g r o r s i tr n hig her r ek a t s y i 1 e er in excel ta units. te s s A g e w o com 2 have a d a sey ec o li ll e w if, th dit 0 The sa eh t eh t t , nd 09 no to e e in ot to - n it it . - - - 4 - - - .

BCGE | Message from the Chief Executive Officer | 5 “Banking solutions are like loaves of bread: they are best when they are not churned out en masse.”

Ghezal Hakami is the head of the BCGE Grand-Saconnex branch. Her five-person team is at the disposal of individuals and companies established in the region. The Grand Saconnex branch has recently been completely modernised. Located between the airport, Palexpo and the international organisations district, it attracts a clientele with widely varying needs. Retail banking services JUST LIKE AN ARTISAN BAKER TURNS CEREALS INTO ALL KINDS OF DELICIOUS BREAD ON A DAILY BASIS, BCGE’S 300 OR SO CLIENT ADVISERS PROVIDE HIGH-QUALITY FINANCIAL SOLUTIONS WITH ESSENTIAL A LONG TRADITION EVERY DAY IN 23 BRANCHES. Mission and strategy An innovative strategy founded on high-quality banking services – “made in Geneva”

8 BCGE Group’s main presence is in the Geneva financial market, but it is also to be found elsewhere in Switzerland and in France. It offers banking services to a clientele consisting of individuals, companies and institutions. The Group is made up of the Banque Cantonale de Genève parent company, located in Geneva, its branches in Zurich, Lausanne and Lugano, and of its subsidiary Banque Cantonale de Genève (France) in Lyon and Annecy. It also includes Capital Transmission, a subsidiary specialised in equity financing during business transfers, and Swiss Public Finance Solutions (SPFS), a joint venture with Groupe Crédit Foncier de France engaged in offering financial advice and intermediation services to public authorities on the Swiss market. As at 31 December 2008, the Group employed 845 people (788.6 full-time equivalents) and had total assets of CHF 13.7 billion.

PORTRAIT OF THE BCGE GROUP

1816 Today a full-service regional bank, Banque Cantonale de Genève (BCGE) provides the community with the Canton’s densest banking network, with 23 branches, three 24-hour zones and 106 ATMs. BCGE is the central source of the Bank for individuals and for corporate finance, particularly for SMEs and the Geneva property sector. BCGE also offers private banking services and financial asset man - agement for institutional clients. It plays a key role in supporting and boosting the regional economy. BCGE is listed on the Swiss stock exchange SIX Swiss Exchange (cod e: BCGE). It employs 809 people.

1994 With its headquarters in Lyon and a branch in Annecy, Banque Cantonale de Genève (France) SA is a 10 0%-owned BCGE subsidiary. It offers company finance and property services to companies and individuals, in addition to wealth management for private clients. BCGE France is a logical and efficient feature of a dynamic economic zone that is taking shape between Lyon and Geneva. The French subsidiary benefits from the support of the parent company in the area of refinancing. Banque Cantonale de Genève (France) SA employs 36 people.

CAPITAL TRANSMISSION SA

2008 Capital Transmission SA finances and invests in business transfer and expansion operations in the region. It runs a fund of CHF 50 million, which allows it to finance the long-term expansion of com - panies or to allow their consolidation and transfer, by acquiring a minority share or through mezza - nine financing. Capital Transmission does not engage in the running of financed entities. It focuses on companies with the potential to contribute to the regional economy and likely to create jobs. The company completes the range of corporate finance services offered by BCGE.

2007 Benefiting from an ability to obtain considerable public financing and the experience of Swiss and French specialists in finance for public authorities, Swiss Public Finance Solutions (SPFS) offers finance models to public authorities in Geneva and Switzerland as well as to public-law corporations. It also develops long-term refinancing solutions for other cantonal and regional banks. SPFS is based in Geneva and held by BCGE (5 0%), Crédit Foncier de France (4 0%) and Caisse d’Epargne Rhône-Alpes (1 0%). SPFS establishes contact, defines the requirements and draws up the operational pla n: the participating banks then undertake the financing as such.

BCGE | ANNUAL REPORT 2008 H L e yon a d G e of neva fice Ane cy Lau sa B o c n o C f e vers G s ervi Zu E, ri th c bo ces h e th Lu o a n d in g a ly a no d pt ivi dua fu ed ll -se to rvi c l the cli e y n a M Local the and acommodate offer Management in The A Lyon BCGE Ex perts services As In Ori gin al (Fr ance) e m o h ter m A such fo reign -exchan ge The The A All , ) h c . ww e w g ( c b . 08 48 exp er tise BCGE The Retail SERVICES A Mis Philosophy boasts e transparent wid e complete saving s line a co mp lete n da y-to -da y ne portfolios bank Bank Swi Group of densest wealth t and as no tes, them 80 s wealth is operates h c n a r b wit h e s e s a h ru c p a banking which li ving sio leasing ds adapted ss on e th e ran ge track in 00 of Annecy an d offe rs al so man agemen t, b TO of of high-quality recomme nds pro perty th eir 22 4 mo ney management an k Gro up 80 ). of remote n part the banking record is makes may t rea surin g o s t n e i l c management INDIVIDUAL this he of or th e a banking investment r centralised, ba nki ng client services to risk- taking On- line e l i b o m w allows network and w BCGE h t o b op eratio ns, ra ng e per sonal of sav ing s d also preference, i is leader s each ork and t ive of h its the invo lved e t a i c rp e p a banking fin ance advisers i many n i in rs network be technology t services Group. clients bo nd se rvi ces BCGE s client adopting adviser s Group e n o h p e g serv ices bank , a v e n e G de of pri vate managed s in mar sol utio ns cred it, in of thus capacit y. CLIENTS trategy philosophy years, c branches mo rtg age mar ket safe- depo sit i in G and to segment. si of fers the This service for ke ba nkin g is focusing such en on S M S ( strictly pr oper ty e h t be can in administering to t a staff ba nki ng private av aila bl e e 23 as d n a l r e z t i w S - is seg served m the financial va by asit a y t i n u t r o p p o as fu nds of fer transparently embodied a BCGE that ) s e g a s s e m variet y uniform consultants. memb er s, an d ki me current fin ance Its canton ng fo r on and bo xes, wit h throughout solu tion s presence nt met and vi a p branches an d the model ind ivduals c s of ub l en institutional its in ac counts , in sho rt- term d n a and it. fid uciary in sho rt- , the maintenance tr and ic o t remote 23 t r o th e the Depending explained he e fin an cial which or homogeneous, in at n i neds t s u r t n e br an ch es, i y b n cred it Cant on range reg ion provide Switzerland, Geneva, 02 2 e h t p med ium- Gen and e n o h p e l e t rivate dep osits, sa lary banking clients, is pr ojects. of y b r a e n 80 9 card s. in of eva pr ofesio nals r i e h t reas uring al the of on them of the th ree BCGE ac counts , Zurich, compa 22 mar , Geneva. ser vices and the value canton's off ca pabil ity, BCGE h t l a e w It brochur e al in t r a p 24 . irrespective E G C B ( also with 24 -ho ur k e client’ s lon g-t erm the Best on et. r Lausanne, and s ni es and f o offers exclnt of fers deposi ts Rhône-Alps a specialsd It Th e o t of th rou gho ut population. . e c n a r F very e n i l n e p O fin ances on entitled ei ther economical investment an investment r i e h t zones a ran performance fin ancing of d pr oduct s, complete co Lugano in and the con ditio ns. over l a c o l ge mp h g ru h o T and The s fir st tituti staff and e c i o v size withdra wa ls, of Fran ce. le te It the Investment 10 6 re s i v d a . and objectives, mandates. or offers solu tion s, bu in as med ium- who of range on s. Intenr et secon d France. e c i v r e s r well sin e ATMs. that which assets EG C B a ng e wil the To as of ss is

BCGE | Mission and strategy | 9 10

Real “made in Geneva” wealth management The Group also offers a complete private banking service, from wealth, tax and inheritance advice to wealth management. The management philosophy and the rigorous methodology that it applies to each portfolio have shown themselves to be remarkably robust in a period of troubled markets.

THE BANK FOR SMALL, MEDIUM AND LARGE COMPANIES

With almost one in every two Geneva companies among its clientele, the Bank plays a key part in the Canton’s economic network. A very significant volume of financing is provided to small and medium enterprises and allows many companies to operate and develop. For companies in the region, BCGE provides an essential alternative to the big banks, particularly in terms of conditions and the adaptability of the solutions on offer.

A vast range of company financing solutions BCGE, together with its French subsidiary, offers financing and cash management solutions to all businesses, whether they are sole-owner-operated, SMEs or larger companies. The parent company has specialised departments for these various client segments. Moreover, the Bank offers financing solutions, such as overdrafts, fixed term advances, capital equipment leasing and numerous other facilities that companies require.

Property and construction specialist Investors in property, developers and construction companies all find BCGE solutions for real-estate financing and renovation for all kinds of propert y: homes, offices or business premises. In France, these services are offered in the Rhône-Alpes and Ile-de-France regions in particular.

Expertise in international trade finance BCGE possesses a centre of excellence in the financing of commodities transactions, a key sector in Geneva, which is one of the world’s hubs for international trade. The Bank’s Global Commodity Finance business unit is active in structuring and making available short-term trade finance linked to the international commodities markets. It is active, in a balanced manner, in financing oil, energy, metals, grain and agricultural products. It also manages a well-targeted portfolio of structured loans.

Business transfer and acquisition The transfer and acquisition of businesses are operations that go well beyond the traditional rela - tionship between banks and businesses. For this reason, BCGE has a specialised team dedicated to advising business leaders on equity management, corporate finance and equity finance structuring. It also operates through its Capital Transmission subsidiary (see page 8).

BCGE | ANNUAL REPORT 2008 target d n a c i l b u p base d e h T Maj or y r a d n o c e s s t c u d ro p po ratin g relat ionsh ips BCGE The Re cogn ised Dyn amic man agemen t pen dent an to d ru e t c u r t s / e v i t fin ancial l a r e v e S Club ith W Financial n i E G C B , n o i t a s i m i t p o financial yt rr p e p o , the A BCGE l a n ro i g e S F P S licence. CFO BCGE is on b u l C public-law l a i nc na fi s e i t i r o h t u a an d s e m i t one in managers to pics qu antit ative ope n d e t a t n e i r o y r a i d i s b u s trad ing engineering is Gro up y t i u q e th e Club lo ng- term O F C h t i w also of The and comp eten ces . s k n a b rt d n e e c of a cho ice the architecture , s t c u rd p o and , ts e rk ma ra e y , th e intended s r fo e f tr ading CFO corporations. n a flaw les of fers . s d n u f h t i w roo m rare in to Ban k’s t r e p x e e e s ( s rd a w o t t i companies and of n o (Choix pr esnt banks s e s i n a g r o t rfn e i e f d fin anci ng solu tion s rd a g re for th e roo m d n a through in s e i n a p m o c e g a p excut ion ind ex to asets y r o s i v d a gua ra ntees the companies in pro duct s be Financiers t n e m t s e v n i in e l b a n i a t s u s op erates stu dies ase t Furthermore, ) 8 o t man agemen t, Geneva a Gen eva and e g a r e v o c and s g n i t e e m ts i and forum s a h e l a c s - e g r a l of e c i v r e s tus ta s d n a man age ment public it hig h-lev and liabilt ies n e e b mar ket recom mends. un der a Optimisé, to for fin anci al total ly . s d n u f c i l b u p t n e m e g a n a m th e give s e i g e t a r t s s a h t i w authorities, n o d e t a re c financial SPFS th e d n a a fo r th oug hts or ders. its t b e d (ALM) . con sultan cy independent r mbe me . s e i t i r o h t u a e h T s s e n i s u b offers op en inst itut ional clients Optimised y r e v cen tre , t n e m e g a n a m o t The g n i d a r t g n i d n e p e d management It archit ecture as d n o p s re m r e t - g n o l long-term deals of the d n a size of s r e d a e l well ou r the fo r d e s a B benefit choice m ro o of l a i c o s Financial in and as CFO its fin ancial X I S cur rencies, n o y l l a c i f i c e p s the o t refinancing teams cor por ate . g n i c n a n i f n o o s l a and pr inciple e g n a h c x e s s wi S yt i l i , b i s n o p s re adviso ry of e h t of s s u c s i d leaders a easy funds. Choices), risk s e t a p i c i t r a p l e v e l d e l i a t e d aset favou rs , nge ha c x E and equ ities, control. and t rn r u e c o t activt y. of client s. f o The k s i r e s e h T solutions man agemen t, companies e h t personalised k s i r is per so nalised the l a i c n a n i f Group rt n l o o c s a com pletely s d e e n . rd i e s e d c i m o n o c e bo nds, y l e v i t c a Its s n o i t u l o s bank s a l l e w ph ilosop hy, to a al so r de hol d n a cantonal s a f o ,s i s y l a n a provides involved der iva access n i EG C B inco r offers ss i w S ss i w S client ind e hs a c os l a dn a eh t of - - -

BCGE | Mission and strategy | 11 A COMPLETE RANGE OF BANKING AND FINANCIAL SERVICES

12

INDIVIDUAL CORPORATE INSTITUTIONAL

Day-to-day banking Corporate finance Finance and management Current-account operations and cash management of public bodies Netbanking SMEs State and related entities Salary accounts Large corporations Municipalities and municipal Young people accounts Professionals and self-employed property trusts Solutions for commuters (cross-border Parastatal institutions and churches or otherwise) Property and construction Public property trusts finance Public bodies outside the Canton of Geneva Savings management Property investors Short, medium and long term Property development Financial services and markets Medium-term notes Office property and public corporations Currencies Construction companies Equities – investment funds Housing finance Bonds Main residence Property and corporate finance Cash management Second home in France Construction loans Property development in Rhône-Alpes Asset management and Ile-de-France Passive mandates – index management Private banking Business transfer finance Controlled-risk active investment mandates Discretionary investment management Medium-term business finance Active “Finest of” investment mandates mandates Investment funds Advisory services International trade finance Long-term Swiss small and mid-cap Pension planning Trade transaction financing investments Loans against securities Structured commodity financing Active advisory services Independent asset managers Financial services and markets Optimised financial selection Personal finance Currencies Financial and risk management Credit cards Equities – investment funds Cash management Vehicle leasing Bonds Debt management Personal loans Cash

Company consultancy, BCGE Corporate Finance Consultancy in financial and risk management Equity finance

BCGE | ANNUAL REPORT 2008 th e dep osited sion s pal The Genève As Sta te ber In Co ntrib utin g amo unt s ARTICLES on Obligations, e u q n a B A shar ehold ers 8, 460 l a p i c Geneva (founded wide accordance a 1 aim 1934. Stat e, Cant on ful l-s ervic e January r e d l o h re a h s at gu aran tee client of th e Law. and e l a n o t n a C shareholder to in It is in the OF shall Ban k. 21 . 1816) of in shar ehold ers th e created cash wh o It 1994 with Bank ASSOCIATION to add ition Geneva is 9 bank mu nicpalit ies be % CHF wit h the s i The on have and with article e d managed of is e h t acording it sav ing de vel opme nt to 50 0,0 00 base maxim um th e th e e v è n e G shal l gu arant es the to dep osited the n o t n a C contribute fo rm 2 th e Ban k capit al. Banque handle of merger according de posi ts dep osit AND the of to s i th e per and f o gu arant ed a th e the th eir Banque th e al l cor e saver c i l b u p Hypothécaire to , a v e n e G of CAPITAL fo r of Cant on constitutional ope rations gu arant e the the ref und secur ities to each of the and d e t i m i l tried economic Caise pr ivate Cantonale lo cal h c i h w pen sion amo unt CHF ho ld of and authori sed pr incipal at du wit h y n a p m o c d’épargne 3 bear er eco nomy 28 . tested fed eral s d l o h law milo n development canton fu nd. is de 3 th ird- part y % set of Genève shar ehold ers. and .9 4 economic of 12 by This lev. fo r t n a u s r u p by de de th e 8 art icle March int erest the th e % Genève la gu arant ee, Law capit al. estab lishmen ts. République f o of Fe de ral vested and 4 the e h t 1993, o t of of of To (founded e l c i t r a ethical 24 Canton re a h s saving s th e ben efits th is Banking fo r June which Ban que et sho uld wh ich 3 6 7 banking . l a t i p a c canton and 1993, dep osits in In of came Ac t f o 1847). to tal, th e each of Cant onale be e h t of “the e h T principles.” the de into add ed Ban k 8 and th e mem ber e d o C Nove m Its Genève region. y t i C princi effect prin pen flo at pays th e de fo fo - - - -

BCGE | Mission and strategy | 13 14 s s L x S u n d R n Y K i i G G D i L r a E s u u o R O G N N N h o e a I I C u o o O R c I O J t O A r e a s K K n R T t F L t c K g R T g F a W N N N N r r l O r a T œ N a e O A A u P O O l e E N B I i G B B o O C s E d M T i N H - e B C m e E E n V A u K C I n d s E c T T a H S i S E i o D T a I u I x A A r C a L T e a l N U - R N e E V R l J N l I B C n A N A C O D A R A E a S O P G P R e N I X d R R J N B T r E A a O O A O F I D E n C E T M r C I N A e R N H A R B O C A E G F n N P I N N a I I F O h K o N J A B L I A T E R

BCGE | ANNUAL REPORT 2008 cooperation 5,000 s e d i rv p o of he T emp loyed, d n a Joh an Re tail is shi p quantitative man agemen t. inst itut ional s t r o p s e i t i r th e w e f th e tr ibut ion tu re It he T Eri c Fin ance po rate tr aining , The keting s a responsibilities Blaise CEO Sevn his . e l o h w e v i t c a tion products, e t e l p m o c divso n project s, ing protect a sional As Claude Corporate seeks e t i s b e w att ached 23 l l e w a relat io nships area, Ban k’s Ban k’s of fice on’i s i v di s on i s i v di industry g n i d a r t f o Bo urge aux , with in partner Office d n a branches, e h t la rge and n i Ba nki ng and Goetschin, a narBe r d aff airs e h t s a and strong t I pro vides Bagnoud, as in an d dyn amic to g n i k n a b the e h t one it e g n a h c x e - n g i ro e f k n a B ww w . h c . e g c b . s t r o p p u s is e g n a r h t i w client s activt ies offers smal add ition product g n i d rn r u u o s well to provides Banking th e corporate profit and respon sible client s s rm o o s e rv e s with and of Corporate Ri sk h c n re F on i s s mi comp and out th is The for and busines l a n r e t x e econ omic as with n i thr e an d Ale xan der index bu sines fin ancing is f o high BCGE wit h Memb er of man ner. the s e c i v r e s from invest or divso n. suppor tin g Co ntrol BCGE competitive s t i involved Chief l l a in Member n i management are to e h t s t c u rd p o loans ev ery sen io r Bra nch t e k r a m Bank th e s i or g n i k a e p s - h rc F n e the g n i r fe o f 24/7 added management legal th e their sub jected fo r France. to Banking . ra a e s n o i t u t i t s n i O E C public -se ctor Aset s t I Executive lementary areas to life e opl pe two and e s o l c best The relat ions. fo r ne fi de and pr ovid in g banking in management of and asitan ce, e g n a r - l l u f Kroo n, . s n o i t c a s n a r t corpor ate asets value, of Netwo rk h g ru h o t of client s’ the n i t I d n a real the peopl e public divso n financing f o Manag ement its po sible of s r fo e f the Geneva. pr ofesio nals. o t Divson s i h of and financing nd a to e v i t a v o n n i subsidiaries. int erest- rate estat e , s e c i v r e s Ex ecuti ve re e h w with alowing for d n a zones a v ne e G Memb er Executive con tro ls. , p i h s r e d a e l Officer merger ser vices bodies cl ients in also rdi t c e s t i client s a y r o s i v d a also inst itut ional , d n a l r e z t i w S institutional service a the . s t n e i l c d e t a c i d e d and devlo pmen ts ith W is and s e c i v r e s e h T focus s t n e i l c and includes in of mo nito rs s a Ca nton. in and the and nd a clients manages for s n o i t u l o s acr oss bu sines inntaelr contact As intenr at ion al Bo ard of The a It l a i c n a n i f the and its l l e w fo r e c i v r e s Board in on bro ad manages t I ’nk Ba s their g n i n n a l p acquisit ion so th e rnts de i s e the e v i l o t 106 s i divso n Canton th e com mun ication s, pensions. fo reign -exchan ge human , t n e m t r a p e d makes and to nal ter th e e h t s a e l b i s n o rp s e , s l a u d i v i d n i Ban k Through risk r o Ex ecuti ve working regu lato ry with carefuly un it, ATMs, ran ge the fu l s i o t a and l a i nc na fi g n i r e e n i g n e BCGE corporate n o i s i v i d , k r o w , l a n i g i r o l l a c and and e t a r o p r o c has financial a ran ge of d n a has and appr oximately trade. resources th e specialsd activities. decis ive of the the rt e n e c its documents Grou p capital on e ensu res a g n i r fe o f surr ound structur e, th g i s r e v o fin ancing con stru c agencies se d ri p v o gyte tra s . r o f network relat ion e h t Bo ard of n i It nto a C divson d rp se f o clients, of is struc secu es o l c ra m iv con pu s -f l e s cor also as dn a d n a and and The risk th e al in a a ------si ons ban king tr ative man agemen t s e l d n a h str ategic The fr ont -off ice Jea n-Ma rc manage me nt e h T y g o l o n activt ies, Org ani satio n organisa ti onal Emi le line Op erati ons November of cost g n i s i m and have analysis, ments offers sion Geneva e h T f o Jean-Louis Private (since ng pti da a , d n a l r e z t i w S wit h divi sion n o i s i v i d n o i s i v i d in gu idelin es. also ent rust ed investment Ra usis, pr ocessing, the line 15 y t i v i t c u rd p o d n a and Banking pu rsuin g pr oper ties fin ancial th e d e s s rt e s i d of fers as October investment 2006, with Jori s, divso ns. Plateau, struc ture s, l l a wel PB s i s i s i an d Ban k’s and of architecture. e l b i s rn o p s e e l b i s n o rp s e Memb er an d n i the th e Switzerland. a In the d n a Ban k as ded icated this Co ntrol s inn ovatio ns solutions control Memb er asets. 20 08, e g r a h c mo nitor s 2008) 's nk Ba fo r Ban k In formati on log istics. established invest ment d n a . s n o i t a u t i s , d ra b o a It project strategy and Member resal, manages devlo ps th e g n i s i n r e d o m of wit h The of f o s e ti i v ti c a r o f r o f BCGE Its tailor -made and the of service the divisio n It g n i h s i l b a t s e h g ru h o t was divso n and and miss ion g n i k n a b - e t a v i r p th e analyse e h t of the ph ilosop hy. standards. Group’s con trols Ex ecuti ve of and s t I syner gies pen sion Techn olo gy the completed pr oposin g to man agemen t l a c i n h c e t Ex ecuti ve fo r the to s e i t i l i b i s n o p s re concen trated control s th e Group. also is t n e m p i u q e o w t the estat e the to Executive to bus ine ss risks man agemen t fu nd inclu des their d n a improve a nov i F and d e s i l a i c e p s wealth Bo ard d n a new associated Approximately the on plan ning Bo ard s t n e i l c makes g n i t n e m e l p m i pr oper ties particular of 2 e v i t a r t s i n i m d a to Bank’s pr oduct s e l i h w on situation October Board th e T I customer th eir meet o s l a th e tform. a pl n i saving s s s e n i s u b Ban k’s of and wit h informati on y l e s o l c wealt h. , a v e n e G comp lex the th e neds. d n e t x e as and 2008 glo bal of 9,400 se rv ice, lend ing, wel needs Ban k’s op eratio nal in e h t clients services d rte ta S ru t ,c e u r t s gn i w o l l o f ti n u The adm inis It on e h t as pro cess o t wealt h ’k n a B s clients imple of s tech no n- no n- opti time div : and and rts e eh t the BP ni in - - - - -

BCGE | Seven complementary internal divisions | 15 Organisation chart EXECUTIVE BOARD As at 1 March 2009 Blaise Goetschin I, III, VI, VII Mathias Baitan Chief Executive Officer Chief of Staff and Planification

Nicolas de Saussure Communications and 16 Investor Relations Elisabeth Ray Tang Human Resources

Pierrette Jaton Klopfenstein Felice Graziano Marketing Legal

RETAIL BANKING AND BRANCH NETWORK CORPORATE BANKING PRIVATE BANKING

Johan B. A. Kroon III, V, VII Claude Bagnoud I, III, V Jean-Louis Platteau II, III, V Member of Member of Member of the Executive Board the Executive Board the Executive Board

Léonard Graz (interim) Christophe Chevassus I François Kirchhoff I Jérôme Monnier Business Financing SMEs Swiss Corporate French Corporate Development and and Self-employed Clients Clients PB Chief of Staff

Yves Spörri Charles Käser I Financial Alexandre Scala Real-estate and Institutions and BCGE PRIVATE Centre Sector Construction Public Bodies BANKING GENEVA

Patrick Senger Business Giovanni Lo Bué Maurice Pierazzi Development and Franco Furcolo North Sector Corporate Finance CB Chief of Staff Swiss Clients

Misha Amin Khamsi II André Frossard Nagelmackers-Voinov International West Sector Personal Finance Clients

Pierre-Olivier Fragnière I GLOBAL Jean-Louis Platteau Fabien Rei COMMODITY (interim ) East Sector FINANCE European Clients

Albert Gallegos Frédéric Constantin Financial Planning Serguei Chesternine Philippe Terrier Independent Centre Energy Desk Metal Desk Porfolio Managers

Tiziano Magri Business Ivan Pougnier Josiane Tistounet Gaëlle Dalla-Costa Development and Soft Desk and Risk and Collateral Private Banking Branch Network Structured Deals Department Support

Gérard Demierre Operations

Alain Bochet Eric Wesse II , Sales Department BCGE (FRANCE) SA Christian Stampfli , Company Secretary WHOLLY-OWNED BCGE Marie-Claude Boulmier , Administrative Director

BCGE | ANNUAL REPORT 2008 SWI TZE RLAND BC GE PR IVA TE ( Jean- Louis Rach elano Bra nch Bra nch Arman do Bra nch int erim BANKI NG ) of of of Adamo Platteau Zu rich Lug ano Lau sann e Mecozi FINACE AND Ri sk Financial Con stant ino an d Marc Acou ntin g Gen eral Yvan and In vestme nt Thier ry Fin anci al Jean-Luc Manage me nt Portfolio Urs Asset Pierre MANGEME NT BC GE Michel Fin anci al Pierre Memb er Eric the Exe cuti RISK Buser Bourgeaux Tr easury Co mpli ance Man age ment Nicolet Doer ks Sau vagnat Weiss Manage me nt ASS ET Maign an Ang el o f CONTROL v Lederr ey II Mar ket s e Stu die s Co ntrol Boa II Cancela Se rvice s I I rd , I, I I, I, CFO I II V, I , V, II V I V I I I OPERATION S Cl ien ts narBer d Organisation Expertise Alain the Me Logistics Christophe Services Daily Patrice Admi nistra tion Se rvice s Fabr ice Transa ction s Mark et Cath erine Admi nistra tion Cre dit Hans- Joer g an d Deb t Emile AN D mbe E xe Work out Voirol Re cove ry cut Banking r Rausis Lefebvr e of nierFou r CONTROL S an d Matt hey iv e Milon and Marin Boa Frey I , I V I , rd IV, V, I V V I V V V I I I I V I I I I I I INFORMATION ORGANISATION Org anisat ion Technology Risk Str ategy Member Memb er Memb er Memb er Memb er Member Member Com mison Com mitt e of of of of of of of t Chr istian Org ani satio n Philppe Mem Jean-Marc Techn olo gy In formati on nal Inter Monique the th e th e th e th e the the Strategy he Com mitt e E Strategic Inf orm ation Risk Credit ALM Investment Credit TECHNOLOGY xec u ber AND o ti Bailt f Com mitt e Committe v Audit Com mitt e Kem per Seis e Committe B Joris o ar d V Baudry I, V I V VI I, V I

BCGE | Organisation chart | 17 Your Ban k: at your service and close to hand A network of 23 branches and 106 ATMs

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37 5 10 34 24 6 31 36 11 29

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1 Bellevue 11 Jonction 21 Vernier | d n

Route de Lausanne 329 Boulevard Saint-Georges 2 Route de Vernier 219 a h

Beata Frey Stéphane Bonnin Jean-Claude Buzzi o t e s o l c d n 2 Bernex 12 Lancy-Centre 22 Versoix a e c i

Rue de Bernex 284 Route de Chancy 67 Route de Suisse 37 v r e Bernard Bessire Nicolas Bézaguet Patrick Guex s r u o y t a : k n

3 Carouge-Marché 13 Meyrin-Cité 23 Vésenaz a B

Rue Saint-Victor 39 Rue De-Livron 19 Route de Thonon 4 5/ 47 r u o

Jean-Noël Borgognon Loris Rizzo Juan Chinchilla Y | E G C 24/7 BANKING ZONES B 4 Champel 14 Onex 24 Corraterie Avenue de Champel 45 Avenue du Gros-Chêne 14 Rue de la Corraterie 4 Sandrine Charpin Cécile Huber-Luquiens 25 Hôpital Cantonal Rue Micheli-du-Crest 22 26 Palexpo 5 Délices 15 Pâquis Palais des Expositions Rue des Charmilles 1 Place de la Navigation 10 Stéphane Bonnin (interim) Dominique R. Philippoz STAND-ALONE ATM s 27 Airport 28 Carouge-Rondeau 6 Eaux-Vives 16 Plainpalais Rue Ancienne 88 Rue Versonnex 13 Rue de Carouge 22 David Bottoli Martial Cruchet 29 Halles de Rive Boulevard Helvétique 27 30 Hôpital Beau-Séjour 7 Florissant 17 Plan-les-Ouates Avenue Beau-Séjour 26 Route de Florissant 66 Place des Aviateurs 5 31 Hôpital de Belle-Idée Maria-José Molla Benjamin Trama Chemin du Petit-Bel-Air 2 32 Hôpital de gériatrie Route de Mon-Idée 7 1/73 8 Grand-Lancy 18 Praille-Acacias Place du 1 er -Août 1 Route des Acacias 49 33 Mairie de Troinex Stéphane Kursner Dominique Jean Ducret Chemin de la Grand-Cour 2 34 Parking du Mont-Blanc 35 Rue de la Servette 29 9 Grand-Saconnex 19 Servette-Wendt 36 Hôtel des Finances Route de Ferney 169 Avenue Wendt 54 Rue du Stand 26 Ghezal Hakami Giovanni Lo Bue 37 Services Industriels de Genève SIG Chemin du Château-Bloch 2 10 Ile 20 Trois-Chêne 38 Geneva International Airport Quai de l’Ile 17 Rue de Genève 78 Halle de fret Alexandre Scala Fabien Rei Route Douanière “A clear and careful investment philosophy.”

Amin Khamsi is in charge of the International Clients department within BCGE Private Banking. His excellent knowledge of Europe and the Middle East, and his many years of experience in the profession, allow him to offer the Bank’s wealth management services to a local and international clientele. Private Banking IT TAKES THE LIGHT OF DAY TO REVEAL THE VALUE OF THE UNCUT STONE AND THE SKILL OF THE CUTTER. IN THE SAME WAY, BY DIRECTING CLIENTS TOWARDS FUNDAMENTAL AND TIMELESS VALUES, BCGE PRIVATE BANKING TRA NSPA RE NT ADVISERS PROTECT AND DEVELOP THE ASSETS ENTRUSTED TO THEM. The financial markets in 2008 For many, the most turbulent year for decades

22 2008 was one of the worst years ever seen on the stock market. Triggered by the collapse of the US property market, a credit crisis erupted in the United States in summer 2007. It appeared, however, to be under control until the beginning of September 2008. In fact, since July 2007, central banks had been providing the banking system with an abundant supply of liquidity and the authorities intervened, particularly in the United States, to bail out certain financial institutions that play an especially important role in the economy. A modest fiscal recovery plan had allowed American households to offset the negative effects of the prop - erty crash on their income and expenditures. Nevertheless, the situation deteriorated dramatically after 15 September 2008, the day on which it was announced that the American bank Lehman Brothers had gone bankrupt. A wave of panic began to sweep through the international financial system, which was suddenly threatened with paralysis.

A series of recovery plans To prevent other major banks from bankrupt, to stabilise the financial system and restart lending, governments and banks in the United States, the euro zone, the United Kingdom and Switzerland rapidly took crisis measures that were exceptional in their extent and nature. These interventions, amounting globally to several trillion dollars, aimed to recapitalise banks, create “piggybacking” structures for written-down bank assets, guarantee the refinancing of financial institutions, and provide the banking system with colossal amounts of liquidity. Taking the place of lending-averse banks, some central banks, notably the United States Federal Reserve (the Fed), have put in place completely unprecedented mechanisms to ensure the financing of companies. The Fed is thus directly buying up debt issued by American companies and mortgage finance and consumer credit institutions.

The real world economy is affected These exceptional measures to support the banking system in crisis have not immediately succeeded in re-establishing credit mechanisms and have not prevented the economy from plunging into a nasty-looking recession, particularly in the United States. Never before has such a sudden drop in economic indicators been seen. Over the space of a few months in 2008, the world economy went from strong annual growth of 4% to a situation of recession. Right up to the beginning of summer, the world economy was threatened with inflation due to the biggest jump in oil prices since the 1970s. Then, in four months, the price of oil dropped to almost a quarter of what it had been, sliding from USD 150 dollars to USD 40 dollars a barrel, with inflation falling by half in the industrialised countries, including Switzerland. This drop in inflation allowed central banks to lower their interest rates aggressivel y: the Swiss National Bank reduced its benchmark rate (3-month Libor) from 2.7 5% to 1%. The Fed’s benchmark rate went from 5.2 5% in 2007 to 1% in December 2008. The Euro - pean Central Bank also lowered its key rate from 4.2 5% to 2. 5%. In the United States, where the crisis has hit the hardest, the Obama administration had already announced a massive recovery plan for economic activity, employment and demand.

Bonds more attractive than ever The financial markets have been badly hit by the crisis. In 2008, the stock markets dropped by 3 5% to 5 0%, with three quarters of the fall occurring after 15 September. Significant falls in prices have also been seen on the corporate bond market. With investors steering well clear of risk, public debt has been purchased at any price and with increasingly trivial yields. Government bonds were one of the rare kinds of assets that recorded a positive performance in 2008.

BCGE takes a prudent approach In the context of high and persistent levels of uncertainty, BCGE continues to apply its policy of prudent investment. Allocating assets in a conservative but relatively stable way indeed remains the best way of getting through this highly volatile period on the market. BCGE is more certain than ever that its investment philosophy is well-suited to both prosperous periods and times of crisis. Simplicity, rigour, transparency and the choice of the best investment vehicles lie at the heart of this methodology.

BCGE | ANNUAL REPORT 2008 : e rc u o S : e rc u o S : e rc u o S : e rc u o S % yi eld Sw itze rla nd, i Oil i World i Sw iss SM I MSCI n n n U U thousands S S (Brent) ma re t s a t a D ma re t s a t a D ma re t s a t a D ma re t s a t a D D D on World pe Ma rke t stock r b Co nfed era tion a r of re l market point 10 -yea r In dex s index, ra te, bo nds 0 2 0 2 0 2 0 2 8 0 8 0 8 0 8 0 0 0 2 0 0 2 0 0 2 0 0 2 9 9 9 9 10 130 150 1 3.4 3.2 3.0 2.8 2.6 2.4 2. 2.0 1.8 70 70 90 10 120 140 160 20 40 60 80 4 5 6 7 8 9 0 0 0 0 0 0 0 0 0 0 0 0 0

BCGE | The financial markets in 2008 | 23 The Geneva economy in the face of adversity

24 Added value grew by 1. 2% in 2008 for the seventeen main economic sectors in the canton of Geneva, bringing 2008 gross domestic product to almost CHF 43 billion 1. A 0. 7% drop in Geneva’s GDP is forecast for 2009, which should take it to CHF 42.3 billion, cancelling out part of the growth recorded in 2008. Chemicals are predicted to be one of the three sectors least affected by the economic situation in 2009.

The world economy should escape deflation Suffering the effects of the crisis, world growth was 3. 4% in 2008 and is expected to hit just 0. 5% in 2009. Governments and central banks have undertaken massive stimulus and support policies. The scope and speed of the response by the authorities and the massive efforts, costing several tril lion dollars, made to reflate the economy mean that the dramatic scenario of a world depression can be avoided.

Oil becomes a provisional ally The fall in the price of oil has brought about increased purchasing power. The drop in its value means considerable annual savings for petrol consumers, offering them respite that should continue for several months. It reinforces the phenomenon of falling inflation. This has eliminated the dilemma that affected monetary policies in 2008, torn between the fear of recession and the risk of inflation. Central bank rates are historically low in the United States. They will remain low, while a further fall is expected in Europe.

The recession will be followed by weak growth in 2010 We expect a serious recession during most of 2009 for the majority of industrialised countrie s; in emerging countries growth will be substantially slowed. Globally, the credit crisis is having a consid - erable impact on the morale of companies and households. It is affecting their purchasing decisions, particularly with regard to automobiles and capital equipment. The credit contraction is directly affecting the business, and in some cases the very existence, of many companies in the United States and Europe. This means that GDP could drop by 2% in the United States, in Japan and in the euro zone in 2009.

The world economy should start to stabilise in the second half of 2009 and progressively come out of the crisis by the end of the year. This will be followed by a long period of weak growth. Some timid signs of stabilisation, which are yet to be confirmed, allow a forecast of possibly faster improve - ment. The drop in commodity prices has ceased, emerging markets have rebounded and some indi - cators seem to have reached their low points. Uncertainty is particularly high, as events like those of 2008 had not been seen for several decades.

In this context, Switzerland is going through a period of moderate recession, with a 0. 8% decrease in its GDP. A moderate recovery is expected in 2010. The absorbing of the mountain of debt, prin - cipally American, by the rest of the world will also have an impact on the Swiss economy, which will probably not grow more than 1% to 2% for several years. The drop in the oil price has allowed Swiss inflation to shrin k; it should amount to 1% in 2009. Real interest rates on short-term instruments will remain negative, contributing to the recovery programme.

The franc’s return to a stable level The franc appreciated against the euro due to the brutal unwinding of interest-rate arbitrage posi - tions between the two currencies. In 2009, it should become stable at a level close to its equilibrium value against the euro, which we situate between CHF 1.50 and 1.55.

1 Geneva’s GDP was estimated by the Créa institute, commissioned by BCGE. The figures given in this chapter were updated on 18 February 2009. BCGE | ANNUAL REPORT 2008 e h T Imp act estim ates g n i k n i r h s th e e l a r o m , ro e m r e h t r u F rat es th rou gho ut th e cha sers despite indi rectl y n i Asets fo lowed in , s s e l e h t r e v e N should in sl ow 20 08. fina ncia l its In 2010 in Trend including at % Geneva 0 1 2 3 4 0 0 0 0 CH 20 01 2009, commi ssi ons the balance 2007 2 9 9 1 Unit ed stab ilty Avera An Ch t s r i f F growth sho uld should b nual Based 2 ang k toc s of un der be ill 0 . p u the pena lis ed of ge 04 and i 9 9 1 market on cri sis consumer s n g i s it e by from the c l a i c n a n i f th at no as an han international s sheet. is the Stat es, heavy 3 s k n a h T th e of fered a n . ts e rk ma a on 20 02 beco me ex pecte d without credit u g man agemen t 4 9 9 1 real see % wil l d l o h e s u o h decr eas a v e n e G al e add ed f o the fin ance rec eiv ed th e cant on' s ch ( ri prices, Gi ven a gh si multane ously weighting ang be a th e wh ile Geneva 1 shri nking y t i v i t c a crunch. n w o d w o l s price o t eco nom etr ic 5 9 9 t- by moderate e han fel t on ly infl ation, value re v owe H , Geneva y r o s l u p m o c that l l i t s th e 2 of tha t d 9 9 1 secto r 0 by th e by index econ omy s organisations t b e d cale) mo derat ely 1. 5 6 n i vast In s a h creat ed the GDP, fina ncia l dr opp ed Ge neva 's households 1 of fin ancial of 1 the h t o b % 7 9 9 econ omy , n i with the n i Ge neva dema nd a majo rity recovery s thi mo del in e h t by absence w e f a v e n e G 9 1 n o i s n e p over financial e h t 20 09. e * by 8 9 the a l l fa ins titutions , in y m o n o c e i t s ec onomy secto r drop s e c a hig her th e 9 9 1 m l a n o t n a c used, th e ec onomy low s wa sevral and for of a like 2 t of 0 9 e ban ks s i 06 Swis in , s n o i t u b i r t n o c p u Geneva Ge neva sector. 2 con tract ed. point inflation, companie s y l l a rti pa mo st y l e v i t a l re we 0 by thei r 0 s t i through re w e 0 years th e mu st d n a and whic h ban ks 2 wil l . e v e e l s ex pecte d 0 of inc ome This 1 0 mar ketplace, goods end rl a y d a e th e insu rance l a n o i t a n sho uld oft e fs shri nk intere st wait 0 2 r e w o l . are is at in In 0 of Swis 2 proven e h T e w Ge nev a le ast and and un til par ticular, 20 big 2 th e by in by 0 0 sust ain n e e s n a h t rates e v a h 7 r. e s h e p s a v e n e G the 3 ng omi nc i econ omy , 0. pla yers se rvic es a two secto r year. th e 2 7 dec reas e by suf ferin g 0 n i are summe r. %, 4 0 should , d ra b o a s g n i v a s end cha nnel the local e h t str ong 0 2 in fel foll owing in y m o n o c e n O by 0 fact of good 5 t s r i f forgn i e the do es con sump tion . aro und rema in nati onal of 20 09 2 s i h t th e r. s e v r e s e The s h c i h w 0 0 20 that gr owt h : thei r Ge neva r e t r a u q 6 dire ctly financ ial no t 8 eff ects , s i s a b effe cts 0 2 to its it funds s i stable 3. 7 0 wea lth. ned s p e e k recorded be and 1. 9 l l e w in s A %, 0 2 2 ec onomy, f o from a é r C able of % emp loymen t health, 0 of d te c tra a forei gn and d e s o p p o 8 to , 8 0 0 2 ,d e i f i s r e v i d and 20 th e re m u s n o c e rc u o S growth the 2 to 0 clean the et u t i t s n i : e rc u o S 0 0 42.4 9 10-yea r growth wil record slum p , a é r C 9 world the re * drop ht i w pur TS C O AT and -0. EG C B up 0. 0. 1. 1. 2 2. 3. 3. be by ot in -2 -1 . 0 1 2 3 4 5 0 5 0 5 0 5 0 5 -

BCGE | The Geneva economy in the face of adversity | 25 Added value of Geneva finance in CHF billions

10

8

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4 26

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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Créa, BCGE

Exports give watch-making a rough ride Watch-making traditionally supports part of its growth through sales to the Persian Gulf and Russia. Hit by the decrease in oil prices, in 2009 it will probably only manage to record modest 0. 3% growth in its added value, following a strong 9% increase in 2008.

Threats to the automobile industry The trade and retail sector will probably drop 2. 4% in 2009. It encompasses automobile sales and garages. As is true for the economy in general, the situation for new car sales is not nearly as bad in Switzerland as it is in neighbouring countries. The slowing of new car sales could bring about an increased need for repairs. This area makes intensive use of local labour, which, through its spending, will fuel the region's economy.

Stabilising role of education, health and public services The education, health, public and partially-state controlled services sector domain should record growth of 1. 6% in 2009. As it is not really affected by consumer behaviour, this group escapes the downward trend.

Chemicals should come out unscathed Chemicals should, continue to grow, but at a slower rate ( +3. 6% in 2009). Créa's economic model highlights a certain dependence of Geneva's chemicals sector in relation to the Asian economies, where growth will continue, albeit at a reduced rate.

Five prosperous years Sustained by the dynamism of the external economic situation and the good performance of the financial markets, the Geneva economy experienced a period of strong growth from 2002 to 2007. Real GDP increased by 3. 9% per annum in the canton of Geneva as compared to 2. 9% for Switzer - land in general. This excellent result principally, but not solely, reflected the dynamism of the finan - cial sector ( +7. 6% per annum), which represents a quarter of the canton’s economic activity. Despite its modest share of the Geneva GDP (4.1% in 2007), watch-making also significantly contributed to the canton's economy.

Fuelled by demand from Asia (notably from China, Hong Kong and Russia) as well as from the United States, Geneva’s watch-making sector recorded average yearly growth of 9. 2% per annum over the period 2002-2007, the highest of all the sectors. Over 15 years, its added value tripled. During this whole period, watch-making only experienced one brief period of quasi-stagnation, from 1998 to 1999. Another sector with its focus abroad, although represented more modestly in the Geneva GDP, is chemicals, which grew 8. 2% per annum during the 2002-2007 period. The business services sector, highly dependent on activity in other sectors and which represents around 1 0% of cantonal GDP, experienced more limited growth. It was trade (wholesale and retail), public and semi-public services, construction and property that restrained GDP expansion over those year s; growth in these sectors was positive, but always below the cantonal average.

BCGE | ANNUAL REPORT 2008 -6 Proper Agr Tr O C Busine Finace Machiner tex Fod, Hot Tr an Wa O Post Educat C % sector Performance in onst hem the t ade her tc icult el real iles, sp 209 r and h r and icals and s wod, or t -m ak industr t -4 uction ion, e y ure m r ser vic t y, groups terms (es elcomuniat et rest ret healt i equipm es vices ng als, tima ail paer ies aur -2 plastic h, , ant IT ed) public ent of and in bus (wit 0 Geneva, pr ines ions and intg, hout 208 semi-publc 2 watch-mking) 4 servic 6 : e rc u o S 8 ,a é r C -5.0 -3.8 -3.4 ------BCGE 3.2 2. 1.5 1.2 1. 0.8 0.1 0.1 0.2 9.0 0.3 4.0 0.5 7.6 0.7 0.9 1.6 4.5 3.6 3.9 4.7 2.4 2.7 2.3 3.5 4.6 6.8 1.8 0.5 10 sectors ma te in rd u e s a e m chem icals, fo r 3. s l a c i m e h c s t i s bu t a incr eas nd a nificant third r a f mo dest t s e w o l Measur ed Ch emica ls c i m o n o c e and d l e h , s e i t i v i t c a n o i t a v ne e G e v i t d re d p p o 2 Th Com y b 5 9 9 1 Quantification o S s A r e b m u n % sh are Th e 1 The 9 terna tio con siderab le 9 e m s i h t s i 2 e h t % th e canto e t a nar row ed o t figur m s in the e d a m t a in ter nat ion al e h t more 1 c it d n a ents 9 with h c 2 in 20 07 e h t h c n a r b 93 yt i v i t c ru p d o , at fin ancial t s o m o e h t n a es productiv it 1 at PD G . nal r othe f o nal mpared in e s a c y b % th e a g that h c i h w .n w o d w o l s . 3 0 0 2 CHF s i by lm d e t l u rs e on to geth er that s e c i m o n o c e y b 1 pr odu ctivty O G N employee g n i n n i g e b an d o G 9 t s o m l a h t i w ( os t , d e n r e c n o c was rgan rp e v i t c u d o 9 DP fo n i y he T add ed Ge nev a th r o f 4 l a n o i t a n r e t n i in s e tri ndus i o t incr eas low 98 ,00 0. that e m CH to e cal secto r fin ance of i 20 08 , s e e y o l p m e 1 n I satio at o d e h t P D G ch 9 y th t a F are cul d bute ontri c 9 h rm f o the : r u o f 9 an or gan isa tio n 4 a 5 wit h of e d o r e b m u n t a value watch-maki ng, t o n 3 ated c i l b u p % also n , n o i t a u t i s numbers lev val ge f o 19 l o GD P b wit h s a h chemicals, and F H C in (4 . over In il weighting g o u ro t c e s . 9 n i , s r a e y li o in t i torc e s , e h t e h t in th e i th e v a h es 6 by n th es 5 y per co n e n o g t s u m low er t n a t s n o c e CHF %) ca p th e s n o i t a s i n a g r o the de cli nes ro t c e s , . 0 0 0 , 6 6 b B 1 f ns th e i u h c i h w f o , s 0 7 po st e l b a r e d i s n o c o e n A 9 n bl tant w t r 9 d emp loye, K varying to r i e h t 4. rf m o in 7 2 ex, y e h t rP y t i v i t c u d o is secto rs s e e y o l p m e th wi tw o 31 6,0 00 le ad B n e e 00 rf m o e b 15 hed na 5 th an asel fran its which 1 n o and % i 9 8 l a n o i t a n r e t n i n l s i 98 d e t n i o p of . years whi ch h t con trib utio n sc n a r f G secto rs y a l p y t i v i t c ru P d o cs, 3 0 0 2 n w o o i Th F H C e h t n Eco of d e t a m i t s e rd D .4 e th at telco mmu nicatio ns very national inter p at e fo recast P 1 er o w t 5 revio t, i comes no 9 ma 2 e v e fo r a % Geneva’s 9 fr om 00 to s a h y r o g e t a c 274,0. 1 9 s t n u o m a o t comes mi a of g n i s i l i b a t s moderately. . d e m u s s a in i r e p 7 pr odu ctivty u u t i t s n t u o ad ry e v o t s i h T chem icals. cs f o , 7 0 0 2 prices s 2 re 19 92. n e e b 0 h years. in in a .5 19 92 0 ere to e e y o l p m e e h t so n t a s n o i t a s i n a g r o t a h t r e p h muc 2 2 s e t to rd p o at in 0 tr end . % , 0 0 5 , 3 mo pr odu ctivty 20 07 n i f t s r i f he T g n i n i l c e d at add ed e h t second f o y a m or t n a t s n o c e e y o l p m e to 01 t r a p re l o organisations re amo fourth s A e h t t s i l a t i p a c rd e duc e This hi The 20 07. d e d d a clo s l hote dr opp ed l l a f in l a y l b i s s o p s 20 l a n o i t a n r e t n i un o s e w f o t a h t rd e h c a e ch sel l a n o i t a n value op posit e secto r, 0 place. resulted gap n i 2 a ted a l p x e y e h t plac e ng r e t f a e t a l u c l a c ra e d e i t n e e w t e b e h t to Tw o 2 nd a e u l a v s i n i is 03 e to rha s e bet wen wh ile the g rn t o s y l r a l u c i t r a p is back n i re p d m e e t com parat ively d e d u l c n i wer e This e h t C ra l l o d . with t s o m l a th e p u g n i t t i h ot her HF rnts ura ta s e t g n i t n u o c c a dir ection s. e h in struc ture 2 f o 04 rompa c d e n o i t c u r t s n o c 34 in n i gap pr imarily th at productivity s n o i t a s i n a g r o f i d t a h t th ose l a n o i t a n r e t n i CH F cl us io n 7 0 0 2 y t i v i t c u rd p o s i h t bi e c n i S r e f secto rs th e 20 F H C o w t li will n i of n e 0 on. y b e h t 207,000 of 5 e l b a e c i t o n yr t s u d n i . tw o e h t th at fin ance s e c d n a of continue , 2 9 9 1 the e h t Chem icals 0 0 0 , 0 0 4 y r a r o p m e t tor c e s The fr om 20 n o i t u b i r t n o c hig h. . m e t s y s to th e reco rded n i n o i t a l u c l a c secto rs saw cant . ) 8 0 0 2 6 of C rh g t w o t tha r o t c e s e h t p r r e p éa 19 92 ra e ub sn o i t a s i n a g r o per CHF 2 e h t decr easd rorc e d de Finan ce on’ e c n a n i F 0 th e P D G l i h c whi ic nst n i to n i 7 g n i s U s s e l ee y o l p m e : e rc u o S s employ ee ub i r t n o c th erefo re s s A reco rded s a w 383,000 s k a e p econom very ec s e m i t it gr eatest be to , 7 0 0 2 n i 2 o ute to 0 f f o is n e s ed a m r a f , a é r C 0 19 97 OG N large o s is r 8 ythe os l a dn a est sig eh t an eh t the em EG C B by by sa fo ni y. a d i 0 1 2 3 4 5 6 - - - -

BCGE | The Geneva economy in the face of adversity | 27 “Understanding how an SME, an office or a practice works, then designing tailored solutions, is very exciting.”

Liliana Ferreira is a loan expert in the SME and Self-employed Finance unit. Specialised in capital equipment leasing, she works with relationship managers to prepare personalised financing solutions for companies. SMEs and self-employed professionals A CRAFTSMAN’S SKILL ALLOWS HIM TO TRANSFORM SPUN COTTON INTO BEAUTIFULLY WOVEN AND FASHIONED FABRICS THAT ARE A PLEASURE TO WEAR. IN THE SAME WAY, OUR ADVISERS OFFER SMES AND THE SELF-EMPLOYED THE FINANCIAL SERVICES THAT ALLOW THEM MADE TO MEASURE THE FLEXIBILITY AND FREEDOM OF MOVEMENT THEY NEED TO CARRY OUT THEIR BUSINESS. Business review 2008 Excellent business growth, remarkable level of resistance in terms of income, limited impact of the crisis on profitability, stable dividend

30 In 2008, BCGE granted new loans worth over CHF 600 million to companies and individuals, primarily in the Geneva economy. Overall, operating profit demonstrated a high level of stability (-1%) despite a difficult eco - nomic and stock market context. BCGE saw the amount of client funds deposited on its books increase by more than CHF 930 million. Among client loans, mortgages exploded (CHF 399 million). Thanks to the inflow of funds, the refinancing rate of mortgages from savings accounts and current accounts stood at 73. 7%.

Good ROE %

Costs generated by the Bank’s massive IT and logistics modernisation (new IT platform, integration 7 8 7 6 4 . . . . . 5 7 5 5 9 of two subsidiaries into the parent company, outsourcing of payment operations, creation of a branch, renovation of four other branches) nevertheless had an impact on the results. Net profit recorded a drop of 11. 6% to CHF 68.1 million, while gross profit stood at CHF 101.1 million francs (-9. 7%). Return on equity (ROE) stayed at a comparatively good level (7. 5%). The Board of Directors will propose that the Ordinary General Meeting approve a dividend of 6% of the par value, which is unchanged from last year.

Group key figures for 2008 (in CHF 1,000) 31.12.2008 31.12.2007 Change Net Profit 68,121 77,100 -8,979 Gross Profit 101,066 111,861 -10,795 Intermediate results 61,990 101,095 -39,105 Dividends 6% 6% – Total Assets 13,690,322 12,498,462 +1,191,860 Mortgage Loans 6,791,969 6,393,374 +398,595 Client Loans 2,927,106 2,724,091 +203,015 3 3 3 3 3 1 1 1 1 1 “Fondation de valorisation” 297,822 1,187,931 -890,109 . . . . . 1 1 1 1 1 ROE 2 2 2 2 2 Operating Profit 318,643 321,793 -3,150 . . . . . 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 Interest Income 212,806 201,089 +11,717 4 5 6 7 8 Commission Income 92,707 97,742 -5,035 Operating Expenses 217,577 209,932 +7,645 Staff (full-time equivalents) 789 784 +5

Interest spread grew and mortgage market shares increased Interest income grew by 5. 8%, or CHF 11.7 million. With a record level of almost CHF 213 million, it made up two thirds (6 7%) of the operating income. This growth was primarily based on the good Profit development of the interest spread, which reached 1.6 2% (1.6 0% in 2007), thanks to the judicious to market management of rates. In terms of volumes, two linked phenomena were seen. Firstly, total mortgage capitalisation % loans increased considerably by 6. 2% or almost CHF 400 million, to reach CHF 6.8 billion, and, sec - ondly, client loans (excluding the loan to the Fondation de valorisation) increased by 7. 5%, or by 3 6 7 7 8 CHF 203 million. In total, over CHF 600 million in new loan business was booked, which is a remark - . . . . . 0 7 1 6 6 able result considering the general economic context. 3 3 3 3 3 1 1 1 1 1 . . . . . 1 1 1 1 1 2 2 2 2 2 . . . . . 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 8 7 6 5 4

BCGE | ANNUAL REPORT 2008 i of Conslidat i of contribued Inters n 323 n 323 C

31.12.2006 192 95 17 19 C gros operating Total G T C HF Trading Inter est HF Other 31.12.2006 205 otal omisn ros 118 milons milons operating operating profit income income 31.12.2007 322 profit 20 98 17 6 income income 322 1 -4 31.12.2007 210 income 67%

income 112 income 31.12.2008 319 expns 21 93 17

3 319 31.12.2008 218 101 i down Net 61 n 31.12.2006 C N I HF nterim 106 et profit profit milons 77 by

profit 31.12.2007

101 1.6%

68 31.12.2008 62

BCGE | Business review 2008 | 31 32

The cos t/income ratio remained below 70% % 6 9 5 2 3 . . . . . Wealth management well set for the crisis 1 5 3 5 8 7 6 6 6 6 Commission income from trading, securities and deposits, basically the activities generated by insti - tutional management and portfolio management, demonstrated a high level of stability throughout the year, reaching CHF 50.1 million. It should be noted that the amount includes the income from the former Synchrony Asset Management, which was integrated into the parent company at the beginning of 2008. This income had previously been booked as commission income from other services. This effect aside, income from wealth management only fell by 10. 1%, considerably less than the average impact of the financial markets. This performance should be emphasized, given the international stock market environment. It highlights the merits of the Group’s investment manage - ment philosophy, orientated towards prudence and discipline.

A trading room that performs well in an adverse environment Trading income, generated by trading-room activities, remained at a good level. It dropped back only 2. 8% to CHF 16.6 million. Once again, this performance is very heartening, given the general slow - down and considerable risks in this area. The trading room supports the Bank’s business in many areas. 8 7 6 5 4 0 0 0 0 0 It does not hold large positions and works with limited risk fully in line with the Bank’s investment 0 0 0 0 0 2 2 2 2 2 . . . . . 2 2 2 2 2 philosophy. This means that it is only slightly impacted by turbulence on the equity and bond markets. 1 1 1 1 1 . . . . . 1 1 1 1 1 3 3 3 3 3 Cos t/ income ratio Prudence in global commodity finance Very short-term loan transactions, which characterise activities associated with international trade, have been hit by the drop in the dollar, the classic currency for commodity trading, by the high volatility in prices and by the fall in international exports since the fourth quarter of the year. This resulted in a fall of CHF 1.2 million (3. 6%) in commission income from loan transactions.

Strong staff involvement in the modernisation of the Bank Payroll expenses increased by 2. 1% (CHF 2.5 million). This translated into an increased commitment by the Bank’s staff and fixed-term external resources, as well as a substantial amount of overtime in order to prepare the IT migration. The Bank took on up to 35 temporary employees for this purpose. Nevertheless, on a year-on-year basis as at 31 December, staff numbers remained stable (five extra full-time equivalents).

BCGE | ANNUAL REPORT 2008 i trading in Great i refinacg Very n 12,571 n 2006 95 3 4 1 C C securit 31.12.2006 5 7 4 S O ( Comisn Long-term To tal HF Savings Equity Client natiol inter HF ecuri 4, 8, 3’ 75 ther 61 06 10 sound 3 milons milons stabily aset 0 9 6 ties comisn deposit (net 2007 98 comisn 34 51 13

12,498 trading bor owing

of 31.12.2007 struce 8,4 2’7 81 income 4 trade) prof it) ,4 1 3 6 3 2008 93 3 5 9 comisn 8 8 8 3 0

13,690 from 31.12.2008 8 2 9 4 lendig 4 ’7 ,3 ,9 0 6 9 4 8 7 i loans Client 12,571 n 31.12.2006 C Loans Total Fondati Mortgaes HF 6, 2, 1 , 1 5 5 milons growth 8 9 7 aset 9 3 9 to

clients 12,498 de 31.12.2007 1 2, 6, valoristn , 1 7 3 8 24 93

13,690 31.12.2008 6 2 ,7 ,9 29 92 27 8

BCGE | Business review 2008 | 33 34

The Bank’s modernisation goes full steam ahead A new branch was established in the La Praille-Acacias-Vernets district – a very special event, as it was 12 years ago that the last branch was opened – and thereby contributed to the 5. 6% increase (to CHF 94.9 million) in other operating expenses. This item was also influenced by the expenses gen - erated by the renovation of four branches and by the purchase of seventeen new ATMs. The out - sourcing of payment operations also pushed up costs as the two structures had to work in parallel over several months. The decrease of CHF 10.8 million in the gross profit was thus largely attributa - ble to the IT migration. The cos t/ income ratio remained below 7 0%, despite this burst of infrastruc - ture projects. IT migration also had an impact on the increased weight of fixed asset depreciation, which rose 29. 9% or CHF 3.2 million.

Increased cost of counterparty risks due to the deteriorating economic situation The economic situation also affected net profit through losses incurred by debtors, basically compa - nies and institutions which are experiencing problems and for which the Bank preventively funded part or all of the risk, even though no loan loss occurred. The valuation adjustments, provisions and losses item was allocated CHF 25.1 million, whereas it was zero in the two previous years.

Client confidence greatly expands the balance sheet The influx of new client funds and the general economic slowdown increased total available liquid - ity. The number of net new clients amounted to 12,600, more than double that gained in a normal year. Net new money amounted to over CHF 1.2 billion in the form of savings, current accounts and medium-term notes as well as in wealth management. This new reality goes to show the trust the public places in cantonal banks, and in BCGE in particular. This influx caused deposits to increase by 11% to CHF 9.4 billion, which explains the strong growth seen in the balance sheet (CHF 13.7 billion, +9. 5%). Overall, BCGE manages and has on deposit CHF 16.7 billion. The method used to estimate the value of assets managed and administered was changed for the 2008 financial year. As a result, no direct year-on-year comparison can be made

Financial soundness confirmed The Bank’s equity amounted to CHF 912 million, equal to 6. 7% of total assets. At 13 4%, the capital ratio shows that BCGE is financially very sound, which was confirmed when the Standard & Poor’s agency upgraded the Bank’s rating in December ( A/A-1/stable).

Increased financial contribution to public entities The Bank’s financial contribution to public entities amounted to CHF 30.1 million (CHF 29.4 million in 2007), up CHF 0.7 million or +2. 4%. In 2008, BCGE honoured its commitments on several fronts: it supported the economy through its loans, maintained its staffing levels and distributed 4 4% of its total profit to the public authorities.

BCGE | ANNUAL REPORT 2008 i to Increasd 31.12.2004 7.9 n 2. 2. 1. 1 CH . the Com Divden 5 8 6 0 Taxes G Special uar F mil ant public

ison 31.12.2005 18.2 1. 2. 3 8. 2 lions aloct e, . . 7 0 9 2 4 finacl Fondat for ion, authories

the 31.12.2006 24.4 14.0 3.6 3.6 1 2 .0 .2 Fo io s n ndatio avings de contribu

valoristn 31.12.2007 29.4 4. 3. 1. 3. 1 6 guarnte 3 4 0 8 . de 9 valoristn 31.12.2008 30.1 4.3 3. 1 4.6 1 .0 6 . 9 lesr For A f o th e t ha T on k n a B s e v gi E G C B 8,460 community. player e h t that 20 09, cur rent r numbe e nc de i v e ro f s e e s e exten t s i “client s ' n o ri g e same d e s a e l p in BCGE econ omic As the th e y onl date, shareholders” s t s o c of at ym o n o c e . expect s o t regional wo rld’s a 31 s ude l nc i 2. e e s trs ong g n i e b 7 Decmber situ ation , % t a h t econ omy . gr owt h i.e. n e v i G economy d e n i a t n i a m nt hme c ta a the e h t close rha s s e it 2008, e h t r e b m u n in is The to its no t c i m o n o c e the inco me for t a 8,460 to Ban k ant icpatin g f o r i e h t yield the h c whi l a u d i v i d n i int ends indivduals nk Ba to 8 0 0 2 , n o i t a u t i s on E G BC be 10-year on cor related any . l e v e l to ra h s s r e d l o h e the f l e ts i rem ain sub stant ial owned y t i r o i r p Federal n I rt pa s i w e i v n. a todi us c to a of BCGE s i very th e nment Gover f o ts i g n i e b s a h imp rovem ent e h t nts e i l c gr owt h active shares, d e u n i t n o c k c a l n e v i g he T player nd a of f o nd de i v di an bonds. o t Geneva’s, y t i l i b i s i v the increas in o t k s i r in its r de wi rc n i , e s a e th e r. t l n o o c pr ofit s. n rtur e rra g e gn i d fin ancing of and av ne e G 11%. ,s wa s a to eh T ti a

BCGE | Business review 2008 | 35 “Thanks to our knowledge of the field and our strict requirements, we have become Geneva’s leader in mortgages for private individuals and professionals.”

Didier Dupont is an expert adviser in property finance. He is part of a team completely dedicated to the financial needs of property professionals, be they developers, builders, managers or owners. Real estate and construction METAL RODS REINFORCE A CONCRETE WALL, GIVING IT STRENGTH AND ELEGANCE. IN THE SAME WAY, CONSTRUCTION AND ACQUISITION PROJECTS TAKE FORM WITH THE SUPPORT OF MADE-TO-MEASURE ADVICE FROM BCGE EXPERTS SO LID AND FINANCING SOLUTIONS PERFECTLY CONSTRUCTED FOR EACH BUILDER OR OWNER. Key facts of 2008 A more solid bank

38 Year after year, BCGE builds on its foundations. A key step in this process was taken with the upgrading of the Standard & Poor’s (S&P) rating of the Bank to A/A-1/Stable.

Improved rating On 12 December 2008, S&P announced its upgrading of the Bank. It increased its rating to A/A-1 Y (previously A-/A-2). These ratings are widely followed by professionals and have a considerable impact on refinancing conditions. T I In its report, S&P highlighted the strong market share the Bank holds in the canton, particularly in terms of mortgages, savings and corporate finance. The agency also emphasised the institution’s D growth in private banking in Geneva, Switzerland and France, as well as its role in international trade I finance and its steady income growth over the last few years. L S&P also highlighted the solid level of shareholders’ equity ratios, which are unlikely to fall. It indi -

O cated that the level of provisions had decreased considerably over the last few years and is at a satisfactory level. Lastly, the report stated that impaired loans had been drastically reduced. S The agency concluded its opinion with a “stable” outlook, which indicates its belief that the Bank’s results are sustainable.

No ‘subprime’, no hedge funds at BCGE BCGE holds a strong card in the face of the banking crisis: its portfolios do not contain any ques - tionable instruments and it has taken the necessary measures to counter the known and anticipated side effects of the crisis.

The Bank has maintained a prudent spread of assets, investing in the best equity investment funds and bonds of superior quality issuers. Our rejection of hedge funds as well as exotic products and derivatives continues to prove to be wise and has allowed us to protect our clients from the disarray and international swindles revealed in 2008, including, in particular, funds in the “Madoff empire”.

BCGE | ANNUAL REPORT 2008 f re s i n l t T n en s e o e h ues u n a mo gme r e mb t lso m at of mo t d o e o t nt g el le rt r mo he de attrac RETAIL BANKING ro o g al on e. f age wi d en rnisa re n in n ew d t s, ha t g li n o . a tion with f reta Mor n Fun ds gro e th hal w e of il wi ng tgag es ith an year f ba t de BCG F H C e v i t a n r e t l a th e e h t As fo r E G C B Sa vin gs Sp ectacu lar taken tio nal amounts Despite Dyn amism it gr owt h and d e t a m o t u a recp tion client he T 89 The served s Vt e n r e branch positioned i T K Creation For benefited l a r e v e s he n the i nk in g he n to . po sited an ey numbe r mach ines crea pr oper ties th e the A i Ban k r e b m u n h nc bra gr eters, nha th eir model E 4 . 9 take n ll Ba and int eg ral ’s advant ag e in de nset s i by are is f o first in the s . t c i r t s i d bran nk 20 09) cli e bi . n o i l l i b e stron gly facts e h t outstandi ng int rod uced can to n part satisf action . areas of the from th e e h t BCGE for tan o as ’s w limited o t pt e onc c time branch see n h t i w nt f o f of o a de vel opme nt in ’n o i g re s p it client s c Praile-Acais par t of in Ban k. of ut ’k n a B s over this ts h new s io k c o t s or E G C B h inter est have 20 07 in di To e t A ro cro s-bo rder mo rtg ages the of re ne e o in th i s th e in n e h t area’s of ne twork f , up ck availability re p v m o i ta e h t th e 12 e 6. vi b Ge The branch takes f of are ntri d e oduc mortg age s co nt inu es reorganisation its ben day-t o-d ay ri . s e c i v r e s r e t e k r a m to in il egu g n i k n a b t e N on -line Ba dua l p o t 2 an t ng n o i s n a p x e years, n BCGE n o i t c e s r e t n i bonuse. ba % e new the gr adualy 10 6 nu mber future nk ev d cs n 2 nking r e y a l p , creat ed c in off s a. o indivi duals pu t fo e h t con tinu ed b i of and and net bankin g in 00 n nc viewin g Fran ce the lend Avantage y of s t n e m t s e v n i A n I r economic 2 20 08. BC GE ep t t th t p n i ban kin g, n r ru t e of properties in g 007, , 8 0 0 2 of Carouge-Marché th Bank SM h n i ro beco ming s t c a r t n o c e 8 wit h f o 207 ing a . s adviser s, e of f o p to ba nkin g s m r e t d e mo re T t Es er of same Than ks he Netb ank ing e h t hi w a services c se gment e t ru o in n o as has , 3 a l ser vice n t ie n be s al a reco r puts site 4 i mo re hig her B devlopment e 20 08 s e b a % r i e h t th an AM T s an k f o and d n a created xce acou nts. ro co ts rc n i d e s a e time whol in mo re and wit h s e d mod er f o to rs e s i dv a ug h . s g n i v a s nt TM a di offered ption and strong wit h cr do ubled . l s g n i v a s in al one. s g n i v a s s g n i v a s th e lev so ng in loyalty s n o i t c n u f th eir s a i c a c A , br an ches o extr a e, t fam ilar branches. th c ued s mo re a i on tact s t a ncre explan ator y an and -b ord al e he new of y b 7. tr aining , t a competition Mortgages to ni sed n I number and services year pro gramme, p u ( app reciable in 7 com for t. t n u o c c a nu s t i s o p e d the clients ase d .4 2 clients d n a , 8 0 0 2 % over branch, wit h 200 e property mbe w d n a o t 4 r in c rt a he in it e t ru o % Fra .2 gre a are 8. h th is 1 are such 2008. reas in of r wo rk 5 s g n i v a s , k r o w t e n s r e d l o h 0 2( Many 23 0 in n , ) % Fou o w rg e located % the th erefo re of on 7 using ce serv ices f new 10 % s e d tly. fra nc s expansion. % wh ich e as ren ,0 0 the gr the carr ied r ro m e This more Carouge i n n i telr text b In terne t , s e n u e J ow yl b a r e d i s , n o c br anch 0 re e w r e v o ( Int enr et ova te d term ran rp hi ons ti a l e net Geneva . ) 7 0 0 2 in take n cli en rewards h c i h w was th mesag e d n a bein g the the op eratio ns th ches incr eas ou t 0 0 0 , 0 3 s n e e s in The a area, t mo del s i h t of y partic u out La ro m e s n ban kin g. n I bra nche by the property ba n a or incr easd. d e s a re c n i were d r clients re Praile-Acais- opening r e b o t c O egu lar s a h c n a r b in client ou who alert s th n e twe be in ki n in reques ) s t n e i l c y b s t n e i l c Switze rl and and a bl e e have larly div mo rtg age el b a r i s e d en g eq ui wh o % 1 1 are In adviser s s market, d (o pera fin ding id c us s i up t of ,8 0 0 2 20 08, . on ti Mor e i ben rmf o t ev a h t u now su h t re Th e ll e w e r ing va use the the al ue r to o t l s y s - - - .

BCGE | Key facts of 2008 | 39 40

Increasing popularity of branch investment and finance services BCGE’s wealth management products, such as the BCGE Rainbow fund or BCGE Best of, are offered at the head office as well as in the Bank’s branch network. In the branches, there has been an increase in total assets under management, account being taken of the decreases occasioned by the financial markets. This favourable upward trend has also materialised in finance products such as vehicle leasing or means of payment such as Maestro debit cards or Mastercard and Visa credit cards.

More and more cross-border BCGE clients Retirement capital, foreign exchange, payment operations and housing finance are just some examples of services that cross-border commuters appreciate having access to in their revenue cur - rency, thereby reducing exchange risk. BCGE has therefore made its range of services for cross-border commuters more dynamic, to be able to respond convincingly to their concerns.

Start-up of the pensions centre of competence In 2008, pension planning centre services were expanded. The concept embodied in BCGE Praevisio includes a personalised analysis as well as pension planning, wealth advice, and tax and inheritance optimisation. The pension products offered are chosen from the market with complete independ - ence, according to their performance and specific features. Given the uncertainty prevailing in the financial markets, clients have gone for secure products. This is particularly true for Epargne 3, invest - ments in which increased by 1 6% to CHF 249 million.

BCGE Check-up tailored to each client’s wealth situation The BCGE Check-up concept was launched in spring 2008. It offers clients a global advice approach that is original, professional and with high added value that allows clients to protect their wealth, structure it well and make it profitable. This concept will no doubt become the roadmap for bank- client relationships and will serve as a foundation for the banking of tomorrow.

A new federal player is not necessary Raising the spectre of a reduction in credit to SMEs, some groups have re-launched the debate on the Post Office bank’s banking licence. The Union of Swiss Cantonal Banks does not support this option. It believes that the Swiss banking services market offers an extensive range of choices, both in terms of service providers as well as products and services. The idea of associating the Post Office‘s public services to an entrepreneurial activity with the intention of enssuring the financing of this domain is not justified. Furthermore, with a banking licence, the risks would be the exclusive respon - sibility of the Confederation, which has already been assailed by requests to assist banks over the last few months.

BCGE | ANNUAL REPORT 2008 D e w d i T s h x u es hi t ce o c r ts p c u ug h pt h i e te of f w iona th as ne PRIVATE BANKING the er at ed , even ga l the gr v t ery i the owt v e pe hi

ASSET MANAGEMENT , difficu gher t dyna h rforma hi s in pe 2008. media, mism has ru o s . e c e l b a thr ough y g o l o d o h t e m The Increasing l a n o i t , s e t a d Pl easi ng Over years. Nume rous closely a v e n e G BCGE s d n u f g n i t a r g , h c i r u Z divso n. tors weeks, , g n i k n a B BCGE s A allow s prudent Org ani satio n wh o Again st th eir At wit h P K Management New marks 1 and t lt hat T ru de he rfor nce th e ey f o e s gained department appointed itself e con created o t ro bustness. valuab le 3,800 that man age ment p 1 ma to private o t Fur ther mor e, The of and inf rastru cture o t ri s s e c c u s beg innin g to geth er. BCGE’s notably o e n n a s u a L nc e t a r e n e g A e h t y l u J a d e s a b ( spread nc e the His o broaden f facts e b i a e t u t i t s n o c a gro wth nce from pl backg rou nd w e n mic of the continued es a d co investors d n a r b popularity y r a i d i s b u s ne w br oad d e t a c o l l a , 8 0 0 2 network an yna higher a banking the skil mp re t a h t w management exrcised Jean-Louis of an the d e t a c i d e d s i well ma among of ou tstand ing n i su as specialising The m cli ents of a the mm et d n a e u d re the d assets, ) a v e n e G t a h t of exper ience ndat s e i l p p a disarray e h t to is ne v l a i t n a t s b u s en t th is profile cor d th e s a of cost s a entrust adapted m select io n of t ri horizons of di scretio nary to carr y attracted oc l a t o t o t di visi on se of s a h o n a g u L n i n o i t a r g e t n i the er s i i of d the year, incr eas outperform branches. n es a k s i h t wo rld steering in t Platteau nd T I r a l u c i t r a p y g n i d n a p x e to 2 th h d e l i a t n e o t independent m in ea UN t ou t and w d e t a d i l o s n o c d n a he el their bu sin ess m r o f t a l p in di visi on ph ilosoph y be i 00 ar y t i v i t c a e th e its in as s r e g r a l es br of in of to relations xpe s a organisations r e b m u n 2 ar stock th is ket in to over oc redu ced, national inter very E G C B s 0 aff wealt h equity was its assets Pr ivate divso n hur times ea l l e w clear s 07 (see 8 ri u f o e h t s d n u f expan sive current ec e co en the p 700 o t man age ment . mark ets competitive dyn am ic o s ca exchang es “BC y l l a n o i t a n r e t n i ob tained r o f e h t e T ted s a nt page e t a v i r P of 3 ced ri h rc n o i t a e investm en t n to with e h t f o s a man agemen t of market GE and is or th e new t n u o m a ex s i h t e h t was aset p hedge r e k n A h g ru h o t the w e n o t su by G crisis ar pri vate t t, t y l t c i r t s B ro 78) independent e Grou p’s its o based swindles cc ess h c rn F e ra a e t e s i l a t i p a c and up clients str ategy . Group, led am an king BCG icu g n i k n a B t co wit h h application s r e n t r a p over managers to f o In losin g funds k n a B e market , m ves by r e d n u la led s i banking an the fu nds e h t E o w t ab ca in rl pa d e i l p p a tm a And rew r e d n u in the n i intnear l y r a i d i s b u s pr y by several d n Geneva. en decr easd rup in y r a i d i s b u s sen ra Executive alm ost and e t a v i r P 2008, be d n a l r e z t i w S ra l u c i t r a , p n o iva s s e n i s u b en t b t n e m e g a n a m way an 2007-2008 and Ph bl e d n a overall e is wealth t th ilo see to te s t i exotic e succ ess. . t n e m p o l e v e d in nat ional int er fal n e p o s pa ying xplai n expansio n of usi or ganisatio n prod op its Gilber t, o t even BCGE s s e c c u s 4 bank 2008. n g n i k n a B l h 0 the s n o i t a c o l suces perf orm ed y” a in e l b u o d Board, nu mber b % s t i n u o t n i managers s products , y tic ucts l l i w ru e t c e t i h rc a more al mo BCGE e This Best of ing so the d e s a b ( period. d mem ber ma e h t r e v o ava d e l l a c th eir f o by w o n st pro jects. heading di viden ds from n o i s i v i d has w e n merger expe of than ila nu con text na g of F H C n i worl Best e h T rt a n p e to th bl and in mand at es e h t boomed value n i e mb ben bu sines y c e n n A The e t a r e p o be e E G C B at t n e i l c lin e emen in other ri ’t n e m t r a p e d s 1 of of ) h c i r u Z qua d w t s a l protecting e enced simp lif ied under e l p i c n i r p d n a our the The . n o i l l i b ww.b Bank r discr etionary th e fi y n a p m o c pr ovides in recognise d with of nan lity w e f s d n u f e t a v i r P Private just t. previous Bo ard d n a in cg o t in Manag ement , rm f o staf f. demo nstrated ne maintained d n a Of e.ch BCGE 20 08 stit 2008. of ci a l l a m s s i h T . s r a e y a w bsol al L. n o y cou and d n a matt er rm f o the its th e u ,a v e n e G gn i k r o w of gn i k n a B Banking de w o l l a cli tions. as yt i v i t c a bench pe c x e Priv ate record clients by It ut Direc sd n u f rse e man mo re Ban k s pro et n I o t n e si h T was si h t e the t ts, of ly s i a a t ------.

BCGE | Key facts of 2008 | 41 42

Spectacular performance of wealth planning BCGE Private Banking has put in place a service specialised in financial planning that advises clients on preparing for retirement and estate planning, tax optimisation, making the most out of prop - erty, portfolio consolidation and company transfers. This service has been well received, with over 1,000 consultations.

Expansion of private banking in France Efforts made to complete its range of products allowed the Bank to offer its clients products that are best suited to the crisis situation that characterised 2008.

In particular, the investment management mandate coupled with life insurance has been a very pleasing success. The subsidiary has benefited from new IT applications that enable it to improve and rationalise its wealth management, and reporting processes.

Despite the difficult economic context, the Bank decided to maintain its plans for development by opening new offices in France in 2009 so as to reinforce its presence in these two geographical sectors.

Development of business support Business development was accompanied by strong growth in the volumes handled by the middle office support services, regrouped within the Management Assistance department. Its staff numbers have consequently been increased.

BCGE Rainbow Fund wins award The Bank continues to offer clients wishing to invest limited amounts the whole range of its BCGE Rainbow Fund, a particularly flexible and good value investment product, offering first-class assets with excellent diversification. These funds enjoyed considerable success, showing 5.9% growth in the amounts invested (net new money). In April, the ‘balanced’ sub-fund was rated fourth out of 53 by the Lipper institute based on performance over a year. Morningstar, the European leader in the area of investor information, has regularly rated the BCGE Rainbow Fund one of the best funds in Switzerland, awarding four stars to three of the four sub-funds with a long enough track record. In 2008, BCGE launched three new dynamic profiles in CHF, EUR and Swiss shares.

Reinforcement of the asset management group On 1 March 2008, the Bank integrated the expertise and activities of its subsidiary Synchrony Asset Management into the parent company, creating a specialised business unit called BCGE Asset Man agement. In accounting terms, this integration took effect on 1 January 2008. All the staff employed at the subsidiary were integrated into the parent company.

This new organisation allows the institutional management business of Synchrony Asset Manage - ment to be brought together with financial analysis and BCGE centralised management. The busi - ness unit enjoys concentrated analytical and commercial strength which enhances, on a larger scale, BCGE’s strategic positioning in this area. The assets under management through mandates for insti - tutional clients amounted to CHF 1.6 billion at the end of 2008.

BCGE | ANNUAL REPORT 2008 n O Fifth 31 l e l l a r a P lose fth fi and man aged satisf actor y, Ou tperfo rmance reg ular line o t th e responsible pension CHF fo r A been BCG E n I Ex cell ent over plement best as which r e v o fund, & s t i the h c u s December th e 1 BCGE wit h invests C invest ment rta ngs ni or M . 1 177.4 e n o n o i t i d e renamed star r e b o t c O d ne i ga As set asociat ed (sec ondary were second year. best hig h o t , n o i t n e t t a funds of th ose ra e y , in Synch ron y po sitio n for e h t in Le milon, + growth. fu nd Ma nageme nt given acord ance per for mance f o 0.9 rthi d Swiss 20 08. Temps best a , 8 0 0 2 worth e t a d n a m BCGE t i def ined 1 2 fu nds BC GE 9 k o o t wit h of Swis s % y nl O th e g n i v a h of e c a pl Swis y r a u n a J small two To gether, of its of One and MF Synchrony e h t CHF mark et sto ck th e h t f i f in Sy nchro ny a categ ory stocks ) 15 1 in equity wit h , e c n a m r o f r e p n i and Eur ope 0 Swis BC GE equity E G C B -36 .5 n o w com pared other BCGE’s al so pr esnce % 91.5 December e c a l p rms te , 9 0 0 2 mar ket medium th e of pr inciples 0 inte grated equ ities. long-term re m s u u n o funds Sy nchro ny fund. y rn h o c n y S milon. % Fund. nt tme s e nv i fund, over Equ ity th ir teen ( of man agemen t - e h t . ) % 4 3 respectively . fun d of envir onm ent e nc rfoma pe to ten 2008, of capitalisation y l k e e w In “t oxic” resrved e h t fu nd ot her The based This funds, particular, years fund. BCGE funds n I ra w a s d t e k r a M e c n a m r o f r e p fun d it funds BCGE h t o b of last fu nds came n o i t a c i l b u p or on fo r It It fu nds totaling Syn ch rony in ph ilosop hy. for group received shoul d par ticular ly th at in econ omic e c n i s r e ov s e i r o g e t a c equi ties , n i obta Synch ron y its companies; d n u F these in in institutional the resu lts and at pr evaild its 5 includes . 2 0 0 2 al so fourth CHF Han del szeitu ng s s i w S f o rs a e y categ ory . funds s thi gn u t i e z s l e d n a H a th e investment bonds fun d Ther efore, e s e h t fo und ation s achievd risky be t i Market 51.3 or ri upe s Synch ron y n I its ( t n e m n r e v o G y l r a e l c place contain + in poi nted a awar d investors, , 9 0 0 2 2.3 assets and pr odu cts. t n e m t s e v n i 20 08. fund This milon, 7 with Fun d fu nds in ). % as set d e m r o f r e p t u o , de gra th ey fr om ind exd two r e p p i L totalled orientated out 20 08. This Swis and d e h s i l b u p a n I rati ng Swis folows and to tal wer e performance al loca tions, indexed tha t s d n o B Cash rms te is a h c whi s d n u f ra w d a e d Smal In lon g-t erm CHF par ticular ly sevn fu nd CHF Equ ity, al l no t th e and towards thes of s a w the se 65.4 a funds s i s a h and is e h t 38 5.6 Finan ces dir ectly enc rfoma pe ocupational g n i t a r Monr ingstar, d e s ba no whic h an t i d re a d w a n e e b of million ,s e g a r e v a Mid principles funds e h t vison , str anger totalling ind exd tr ue million. 9.3 socialy f o hit on Caps ez i r p hav e sup yr e v 0% eh t are fo r on by tsi in a -

BCGE | Key facts of 2008 | 43 Key facts of 2008 Corporate business: steady growth in a tough environment

44 In 2008, corporate business grew in most areas, thanks particularly to the acquisition of new clients. The econo - mic environment was a demanding one, requiring strict watch to be kept on risk levels and maintenance of margins at a satisfactory level. The market showed itself to be very competitive, with margins under pressure, given an economic situation favourable to refinancing institutions. Abundant liquidity in many companies and worries arising from the financial crisis had a dampening effect on the demand for credit. There was, nonethe - less, a growth in franc-denominated loans of nearly CHF 203 million in amounts outstanding, or 7. 5%, for com - panies in the region.

Innovations and fine-tuning processes Businesses of all sizes are essential for the development of Geneva’s economy. In the context of the E mission entrusted to it, BCGE is focussed on developing the banking products and services most

T closely adapted to its clientele. Many innovations were therefore introduced in 2008, the main ones being described below. A Creation of an SME and independent professionals centre

R SMEs and independent professionals now have their own dedicated centre. Situated on the ground floor of the bank’s headquarters, it was opened on 4 February 2008 and complements the service they receive in the network’s branches. The SME and self-employed centre brings together a team O of around ten specialised relationship managers. Other than preparing business financing packages,

P they offer solutions aimed at optimising, financing and developing businesses.

R More advice and corporate financing To complete its financing and financial engineering advice business, BCGE advises company owners on running and financing projects such as the purchase of companies, strategic alliances and O corporate transfers. To complement this, the Bank founded a subsidiary called Capital Transmission

C in June. With a fund of CHF 50 million, this company’s mission is to participate in the financing of corporate takeover transactions (LBO, MBO, transfer) or expansion by acquiring a minority share or through mezzanine financing.

Strong growth of cross-border business Extensive knowledge of the economic network of the region has made BCGE much in demand by cross-border companies. Despite the unfavourable economic environment, the income of the France Corporate department continued to increase by focussing on quality dossiers with high added value and in niche positions. Although the number of new transactions dropped considerably during the year, profitability in this area, at constant exchange rates, was very pleasing and is explained by a higher proportion of direct transactions and the strong growth in mortgage amounts outstanding.

Buoyant commercial property loans The prices of buildings, flats and houses in Geneva remained constant. Construction prices decreased slightly in the second half of the year due to the drop in commodity prices. The increase in mortgage rates seen in the first half of the year disappeared in the second half of the year. BCGE remained true to its strategy of solid and productive long-term growth. In the slowdown in both transactions and con - struction, BCGE consolidated its mortgage accounts receivable from professionals at the 2007 level.

Trade finance: prudence at a time of high volatility The international financial crisis caused massive unrest on the commodity markets. After having reached historic highs, prices plummeted due to a major shrinkage of demand. The extreme volatility in energy, metal and cereal prices made it necessary to carry out some value corrections of client loan portfolios which caused drops in income for this sector. Our risk policy adapted to this exceptional international situation meant that we strongly underweighted our involvement in this area, thus lim iting the global risks associated with it.

BCGE | ANNUAL REPORT 2008 y t r e rp p o CHF d re i u q c a s A produced e t i p s e D Man age ment Ban k’s risk y l t n a c i f i n g i s Finan cial n I con firm ation A in day incr eas h t i w As th n I Retail Fin anci al The E G C B ticu larly e h T to from The tim es s e c i rv e s ro ugh dy nami c emer ging t a h w a e h t a rra g e s d management ban kin g firs t con siderab le p i h s r e n t r a p year 8 ful-service s k n a b an and rs n i a m e milon. banking ow n a re a e h t ng udi l nc i hig h s a w th e increasing thre e in advice o i l o f t r o p a positive ends in stituti ons: expect s th e rp yt r e p o , d o o g acou nt d n a f o trad ing t l u c fi i f d crisis services. o t cou ntr ies a reach ed nu mber quarte rs t n e d i f n o c t l u fc i i d f volu me s e c i v r e s of e h t to with bank, for n o i s n e p h t i w in y t r e rp p o slow dow n are y -toda y da net hi gh- risk cor por ate client s d e n i a m re number ’k n a B s th e companies and c i m o n o c e e h t roo m itW h attracting a of a marginal BCGE reach ed a v e n e G of of , t n e rm i n v o n e secon d slowdown d n a reco rd susta ine d new k n a B par ticpat es n i as ban knot es s d n u f the . s t l ru s e regar d t a of e h t well pr omp ted s n o i t a l re offers cred its loan d e s s u c o f ye ar ng i nk ba e h t bu sines. companies. d e g a n a m CHF hig h , s n o i t i d n o c half , s e i n a p m o c income. increasing y t i l i b a s a w as in to bu sines d n e sa w s t I a th e le vel of the 5 in no n-OECD of pr ovided , wide y r e v actively s s e n i s u b y l r a l u c i t r a p bilo n, h t i w th e f o f o , ons ti ra ope corporate sus taine d CHF by fin ancial n o Nevrt hels, canton o t of e h t e h t year econ omic , l u f t i u r f range interest. a to e h t r e h t o l l e s 96 3 n w o n k bu sine s y r e v ano ther in a v e n e G l a i c n a n i f con tinu e n o th at 2 s e i t i v i t c a ban ks, l a r e v e s th e eng ineerin g 1 milo n. of busi ness n i % l l a m s f l a h e b , s k n a b loan nts tme s e nv i y l r a l u c i t r a p The hit services Ban k’s e h t s a and incr eas th e y m o n o c e reco rd th e som e r a e y satisf actor ly s rp e i t r e p o E G C B trading demand r e b m u n d n o c e s f o The sto ck f o E G C B last in tr ansaction aset e h t of e h t h g ru h o t the of services amo unt . volu me in tw o s s e n i s u B interest mar ket n i room its nd a t b e D o t spo t e l e t n e i l c , f l a h ar ea and d e g a n a m f o s m r e t cou nterp arties t a y a t s mo nth s wit h , s e i t r e rp p o ns oa l of liabilt y a exchan ge also . n o i t a s n e p m o c of y r e v o c e R of e h t volum e un certain ty to rp . t i f o rt s g n o BCGE re n t r a P , corpora te spo t f o com panies s i companies g n i d a r t manages nd a of y l l u f s s e c c u s l a i c n a n i f g n i p o l e v e d man agemen t exchan ges of n O th e Club g n i r u d s i d n a volu me) r o f do cument ary s r fe o f ng ti c tra a very e h t rm o o year loa ns, on CFO positions a t u o k Wr o of s t e k r a m and e h T hard . r e h t o l a t o t e s e h t a wer e al yl l u f s s e c c u s . yn a p m o c - n i glo bal de t u b i r t n o c o t and in wit h with their kn a b - n o n size. deb t (ALM) . et a g i v a n rtss que e e u l a v Bu siness , d n a h fi d tl u c i f day- to- sub ject for sm a e t ban ks a %5 2 ( credit lev. staff. par and the f o ti -

BCGE | Key facts of 2008 | 45 46

Success of BCGE seminars Over 400 business and public authority leaders attended the various “BCGE L’essentiel de la finance” seminars in September on a number of different topics chosen in response to the partici - pants’ preferences.

For the second time, BCGE, the Geneva Chamber of Commerce, Industry and Services (CCIG) and the Cantonal Statistical Office (OCSTAT) organised their economics seminar. The occasion was used to present and publish an unprecedented study describing the structure of the Geneva economy. This event attracted a very large number of decision-makers.

BCGE (France) grows despite a threatening environment In a progressively more difficult economic context, Banque Cantonale de Genève (France) continued its development and even succeeded in increasing its net loans outstanding by over 3%. The staff numbers at the subsidiary remained stable, at 36 employees.

In terms of the financing of property professionals, the French subsidiary recorded a pleasing level of business during the first half of the year in the housing sector, despite the prospective slowdown in France. This slowdown, however, kicked in more clearly in the second half of the year. At the same time, the bank tightened its lending criteria, as it expected the financial situation of borrow - ers to deteriorate.

The financing of office and business premises developed positively over the financial year, even if the beginning of a slowdown became apparent and will inevitably be confirmed in 2009.

Banque Cantonale de Genève (France) also remained active in the financing of SMEs, particularly in the financing of company transfers with, nevertheless, an overall drop in the number of new projects in this context of general economic slowdown.

BCGE | ANNUAL REPORT 2008 B p v c e in e u ssfull b g i t li for co c a y n FINANCIAL INSTITUTIONS uthorit the side s ta rte Ge rable d ie ne v bu sin e AND PUBLIC AUTHORITIES s’ a ne a mounts munic ed s ss participating n I in to wns, Sta rt begin in safe r o t c e s - c i l b u p a In E G C B B K . s s e n public The . nd CGE: in ver y their financing. y Jul So ey ip a management public 2 and s t I of a its 00 8 y l l u f h t i a f pu bl ic utilty, 208, diff icult and s li tie operations, p e e d bus ine ss, to op erati ons facts . a long canto nal s, ta authorities SPFS banks and fa ith ful S F P S e c n a n i f th ck e g d e l w o n k market d e u n i t n o c e au th orit ies te le the establishes of S whi ch d ne i obta rm in t then offering a and of their cr at . s r e g a n a m te independent s, cond it io ns, ea the the undertake or can feder al is pa rtn er financial si 2 f o pri maril y o t t ng solutions on ti a s uthori a he SP FS Bank count 00 e h t contact, rg w o com pu blic m t I l a n o i g re wh ich aj sub sidi ary 8 resources. s e s i v d a nature the creat s t i foc uss ed on p o of e aimed r defines ut ilit ies. , s s e n i s u b t financing u their i ti hit ti mun icpalit ies ed on of to l ym o n o c e , l a n o t n a c it a at ie a on It the te ra ope bank lar ge an requirements In s, provides joint making projec t h t o b d just B as advice C b nu mber such. GE d n a e a s t i subsidiary, t on n i ter few the financ e prov support s s e n re a w a that s m r e t l a p i c i n u m the to mo nths, best of and i it s s wi S resp o d len ders gives es f o for to choices draws s n a o l s SP municipalities Swis s o t. e rk ma s n o i t a s i n a g r o f o it nd lu tio FS make arran ged in e h t up to ( g n i d n a t s t u o of th e se public ns the fina c i f i c e p s financial it e t I secon d t a page a s wa operational respected ncing over i authori ti es, lo red and n o rthe fore e s ru e t a e f 8), CHF half strategy. e h t d n a property n to ee which of 50 0 ,d e s i m i t p o partner Gen w e n ds pla th e ca ntons, f o e bl a million i n nvol funds e is u b hc a e year, ; suc va’ the to of s - - -

BCGE | Key facts of 2008 | 47 Key facts of 2008 Modernisatio n: new IT system and process optimisation

48 In 2008, BCGE took a huge step forward in terms of quality and modernisation by changing its IT system. Since 1 October 2008, the Bank’s state-of-the-art platform has offered even higher levels of performance. The migra - tion from the old system to the new was carried out on schedule and with success, and marked the end of three years of preparatory and implementation work. Without a doubt, this change represents one of the most stra - tegic projects the Bank has carried out in the last ten years. In parallel, organisational and production processes were optimised, particularly in the area of payment operations, which have been outsourced since last autumn.

Successful IT modernisation The Bank is now operating on the Finnova IT platform, a universal banking solution that is stan -

N dardised and proven. It has been adopted by twelve Swiss cantonal banks and eleven regional banks. This change enables the Bank to increase processing capacity, enabling it to handle in an optimum

O way the changing requirements of the banking market. It will also reduce IT costs for the BCGE

I Group by some CHF 5 million per annum.

T The IT migration was carried out by the IT Development department, entirely dedicated to this task, in close co-operation with IBM Switzerland’s Banking Competence Centre in Prilly, which will deal A with the hosting and integration of the new system, and Finnova. 359,635 accounts needed to be transferred and 36 new Finnova application modules coordinated with 65 third-party applications S (50 pre-existing and 15 new ones). All this had to be done through 32 interfaces. The Bank estimates I that the overall workload required for the preparation and migration processes, without adjustments or training (see below), but including all those involved, amounted to 28,000 man-days. N

This work required a considerable amount of training to be given in practical courses and e-learning R classes. 22 trainers gave 643 training classes to 816 staff members, amounting to a total of

E 4,400 man-days.

As expected, the IT migration resulted in some fine-tuning of the new platform. While the majority D of functions were perfectly operational from the outset, others needed to be adjusted or corrected and at times required more substantial and more complex work than foreseen. Some clients suffered

O inconveniences, which the Bank tried to reduce as much as possible and for which it has apologised. Based on the experience of other banks, this period had been estimated to take 3 to 6 months, which proved to be the case. M

The new IT platform brings about some changes for clients, particularly in the netbanking area as well as in the way bank statements are presented. In most cases, these changes result from improved functionality and an optimised IT system.

Preparation of the IT migration involved many of the Bank’s teams. A substantial number of profes - sionals from various areas were assigned to this work, full time or part time. Several hundred staff members collaborated on tests during many evenings and several weekends.

New IT system for Human Resources Like the rest of the Bank, the Human Resources department has changed its IT system. A portal was thus developed to continue some of the essential analytical management business (cost centres, hierarchy, timesheet management) and new salary management software was put into action at the end of the year.

BCGE | ANNUAL REPORT 2008 Major Rationalisation of Work and ing Lastly, Optimised ant e As Nume rous int erest- rate The • • • e h T Numerous improved. ni satio n Mod er In This client el Basle o t in ind epend ence tant in or der Share th rou gh Furthermore, ro utin g n e e b comp letely yt i u n i t n o c . Content the the the an line par ale positions e s i m i t p o part management majo r simplify n o i t a t n e m e l p m i steps op eratio n, int egrat ed Cou ntr y d e c n a h n e to automation integration digitisation tr ading to th e the work wit h of sytem ) pr ocesing ) str engt hen to rationalise best taken the Bank to The IT Manager) E G C B ident ical aces th at pro ces functional IT r i e h t and has production. cover mig ratio n th e the op eration s IT and security in principal con ditio ns wh ich invested op erato rs. ben has of way h t i w migration, of of a IT of Bank n o i t a r e p o of and and s i of a op eratio ns. secto r Basle Swit zerland ’s payment sytem and the e n o its larg e desk-top and most been wh ich ni satio n mod er service th anks f o s y a w e t a g carried on-line ensuring was manages tr ading pr oject improvements devlopments trad ing e h t condense f o located City are in This wh ich ran ge the proces fo r carr ied is n isation , mo der the e h t a d n a m r o f t a l p and to no w and to taly cant onal major out nisation moder carr ying consultation outsourcing publishing ro om has th e Stematch w e f totaly o t of is rp m i e v o and 60 operations best roo m securities equ ipped to wit nes ou t forms pr odu cts e h t Finn ova led investment kilomet res s k n a b aut omat ed and digitise administers op eratio ns. pro jects ban king d e w o l l a ou t integrated ban ks. on ar th e R O R pl atform al e: has s t i reconcilation 2 of to bu sines, n i of Ban k and th e operations. and wit h data incoming management s r e t u e R ( rp yt i v i t c u d o . specif icaly Octo ber alows payment rap id also d n a l r e z t i w S al inst itut ions away e h t Ban k has fo r filing Arp son client th e to in deriva ti ves filng ben devlo pmen t. ’k n a B s a th e stu dy ben paper evn GL-t rade from invest ed single 20 08, r re O d documents operations documents of main platform linked carried plat for m. made t u o h t i W larg e-scale in each documents. o t consumption s s e n i s u b and proces sytem enab les and ) g n i t u o R th e wo rld e v a h plat form . in to client s ot her. out to case OT C a in fo reign -exchan ge The to In and ensur e bu ndle a o w t in (Finnova) order sto ck in d n a par ticular, BCGE Sourcag , t b u o d through or ganisat ional of a (ov er d n a qu ality This wil order those secure l a n o i t a r e p o This disat er to l a n o i t a r e p o to mar kets. the kep S R O S of decision to be the e n o automate to ol to produced of specialsd AG, security definable ensu re reduced record counter) th es reduce th eir service at n o t n a c s s i w S ( f o allow s a The on e allows tr ansactio ns e h t subsidiary rs t n e e c pr oces, same s e i t i v i t c a to ols its sytem of high their by wil plat for m by of t s o m workflows STP tra ns actions com petit ive operational sof twar e streamlin it th e the alow adviser s. con tinu e volumes (st raight to t a h t number (Oracle ro p m i of sites. Bank. rre o d o t gu ar so and has ou r the ra e eb as in - - -

BCGE | Key facts of 2008 | 49 “International trade clients are very demanding in an area where innovation and original financial solutions are highly prized.”

Nicolas Défago is a risk and collateral manager within the BCGE Global Trade Finance department. Together with his eight colleagues, he identifies, assesses and monitors the various risks to which the Bank is exposed in international trade financing operations. Trade Finance JUST AS OIL IS REFINED TO MAKE PLASTIC, BCGE TRADE FINANCE SPECIALISTS ALLOW HUNDREDS OF GENEVA COMPANIES THAT TRADE IN COMMODITIES TO DEVELOP THEIR BUSINESS WITH MADE-IN-GENEVA INGENIOUS FINANCIAL REFINEMENT. Risk control that is built into the Bank’s strategy Ensuring the future of the Bank and its clients’ assets

52 As a full-service bank with a broad range of activities, BCGE needs effective risk management in order to identify, measure and minimise the various risks inherent in all its business areas and operations. Risk control occurs at a number of levels: from the front offices, which have responsibility for the risks associated with their business, to the back offices, as well as at the specialised second-level control departments.

Preventive control and portfolio control Preventive controls are carried out for each transaction with a set of competence provisions adapted in accordance with the operation types and amounts. A posteriori controls and centralised second- level controls are carried out for transaction portfolios, with the appropriate expertise and tools.

Control methods The method used is quasi-directly linked with transactions and the Bank’s positions. It replicates all the positions with or without exposure onto an ad hoc database, the financial datawarehouse (DWH). These positions are analysed and measured against amount limit and risk concentration stan - dards. Daily closing controls are adapted to credit risks, i.e. to counterparty default risks. Further - more, market risks are monitored both intraday and in daily closing terms by the Risk Control and Compliance department.

Coherence Control coherence is ensured by transferring all the Bank’s positions into the financial datawarehouse and by using coherent methods for compliance with limits, competences, regulations and calculated risks. They are tested on all levels.

Basic principle It goes without saying that the basic principle is to promote and authorise all profitable business that respects regulatory constraints and that involves a level of risk that is considered acceptable.

The acceptability of a risk depends, above all, on strict compliance with legal and regulatory stan - dards. Then, if the operation in question is in line with the business set out in the strategic business plan, framework risk limits are established to determine the maximum exposure that is acceptable. Within the framework, the risks are estimated and, if possible, calculated for each individual trans - action. The yield of the transaction is weighed up against the costs of the transaction and the risks incurred, measured by the amounts potentially at risk and the probabilities of occurrence.

Risk inventory The risk structuring used is standard: risk to image, legal risk, legal and regulatory risk, compliance risk, credit risk and market risk.

BCGE | ANNUAL REPORT 2008 e t a i d • • • • • • • • The Organisation The controls pillars: is pliance s e te omi c e h t ithoW ut Presn tatio ns Management) tr ated k s i r e h T Sa lie nt Con tro l fin ancial the Stat es, fr auds an worrying plummeting plunging e l a c s - e v i s s a m e h t rs e u m o u n e h t th e mo rtg ages, spa ce faling ble n e t . s u t a t s Risk first e c n a n i f increas fluctuations, Inntaelr e s n o p s re Unit ed d l r o w s e i t l u c fi i f d risk, the Section, t s e g g i b Com mitt e. facts of are a controls Com mitt e by in risk fo lowed doubt, first a financ ial y l r e t r a u Q th e prospects half handled for shar ehold ers’ d l r o w l a i c n a n i f ye ar, s e i c t p u r k n a b evnt s Stat es Control are in ni ng con cer Committee inter est two Unit ed o t h c a e which s k s i r or , s d u a r f commodity f o are 2008 reg ularly e b first by s a h evn are and e h t markets in met s within ra e carried ry a di i ubs s rs t r o p e for . e d a m fin ancial , s i s i r c Se ction, is 20 08 Stat es, rates d e c n e i r e p x e risng Risk was t s e g r a l h t i w in two in . d e s y l a n a the meets equ ity f o Eur ope charge fin anci al given evry Control, the the h c i h w in prices, in wer out e h T thir ds, ra e property from e h t s k n a b whic h pr oblem s mid-Se ptembe r November s s i w S year Operations o s l a e: every for rp d e c u d o to mo nth cover age D S U k s i R of to USD n a g e b e h T folowed th e particularly s e d o s i p e d n a each which of y l l ua us compliance ens ures risk s bail , k n a b rl t o n o C and month 0 5 the y l h t n o m 100 Execut ive to e h t and ou t transaction and n o i l l i b h t i w in industrial black and encompasses r o f discu s and h c i h w t e me to l a c i m ro t n s o a by the th e 20 08 specifically t a h t a Decmber, and d n a e h t 150, e h t larg e th e those Controls a rc t i d e swans, with fo f d a M monitori ng masive Bo ard drastic on t i the th e ra o B d n a g e b y l r ro e d s i d e c n a i l p m o C latest then d a h sectors, nu mber a so legal for 3 k s i r risk y monthl %0 full eith er as to market t o n s d n u f Divson. drop some plummeting f o int ervent ion new s. with h t i w s t n u o m a stat us, rt r o p e and study to of -50 ri D s r o t c e and n e e s of n o i t a u t i s be completely in dolar on regulatory e c n a i l p m o c metals. % d n a Presn tatio ns t n e m t r a p e d . s i s ba majo r risks control the the prevntive s i fo r specif ic fall r o f rp d e t n e s e d e c n u o n n a y n a m rate middle rate and examp le in n o ro m e of to he T ban ks, f o Oil equity of Swis USD risk e h t almost credit unexpected provisions. y k s i r sub jects r e h t o also M L A opera tional s m e l rb p o n a h t and of s i and p o t 40. are in t a market aut hor ities, d ru e t c u r t s recor ded n a c i r e m A the risks, y b t e s s (A n o i l l i b - i t l u m to at a s i h t 0 7 n e t the also “t op or s t n e m n r e v o g year, alow zero, . s r a e y The ad and , s k s i r . g n i t e e m on n i major indices mad e ris ks. d n a ten ” hoc e h t with considera th e third an the em i r p b u s n o ne c n o c e h T yt i l i b a i L events. de t i n U Forma l report. imme glo bal to fo r ra l l o d Com in some erh e t pillar ks i R ye k th e the m: ni - - - -

BCGE | Risk control that is built into the Bank’s strategy | 53 54

Salient facts concerning regulations The new regulations issued in Switzerland demonstrate a degree of serenity when set against the whirlwind of events, even if some of these regulations introduced in 2008 are the fruit of efforts that go back a long time. They compris e: • the start-up of Basle II reports on the use of bank equity so as to be better adapted to risks, • the new Due Diligence Agreement (CDB 2008) replacing that of 2003, • the FBC (Swiss Federal Banking Commission) circular (which became the FINMA circular) on market abuse and trading room best practice, • the process of merging the Swiss Federal Banking Commission with the Federal Office of Social Insurances to create FINMA . The merger became effective on 1 January 2009.

Salient facts concerning BCGE risks BCGE’s rating was upgraded to A while numerous banking ratings in Europe were dropping. The Bank’s good risk control was specifically highlighted in Standard & Poor’s comments that accompa - nied the upgrade.

BCGE has changed its central IT system. This is an event that occurs less than every ten years and thus inevitably resulted in compensatory manual work and some temporary disturbances to the quality of the service. These were principally caused by new procedures having to be learnt and con - figuration and programming adjustments.

Amounting to 2 8% of use of equity capital, loans to the Fondation de valorisation are close to the regulation limit of 2 5%, which will no longer require special dispensation from FINMA .

MARKET RISKS

BCGE Best of portfolios successfully confront market risks Checks carried out on BCGE Best of portfolios show that their compliance with strategic allocations is beyond reproach. Efficient frontier calculations highlight the soundness of these portfolios at a time of bear markets. Control reports are issued quarterly, structured according to allocation types and currencies.

The funds contained in BCGE Best of portfolios had no connection at all with Madoff funds. This affair has therefore not had any impact on the Bank or on its clients with investment management mandates.

Liquidity, repos and reverse repos Since spring 2008, controls on loan limits for other banks have been tightened in response to increased risks. Investments in money markets have been replaced by repos and reverse repos investments.

BCGE adopted an extremely prudent measure by massively increasing liquidity to over CHF 1.5 billion ( 11% of total assets) instead of a few hundred million in order to be prepared for all contingencies.

BCGE | ANNUAL REPORT 2008 Ukraine Two amo unt Cou ntr y th e ountry C Co untry and to Sa vings isued n i Indir ect Indir ect Management (CLG) Balan ce- sheet med ium- term New The Ba lan ce of e h T Pension rate par t, t o n that The Long-term portfoli o, , n o i t s e u q a 73 . use rd a e p s o i e d j long-term sensit ivty Coll aterals t c a p m i bonds bond partially national inter mo rtg age th e 7 th at by %. increas ed of risk, risk and of com mercial k s ri she et rn et ur fund risk the the posi tion, nat ional int er had and bu sines, f o investments ra e compensates the s i are Bank i.e. Credit and refin ancing du ratio ns inv estment of e h t y ghl hi department com e repl ace d con tract s an d on s t i o s l a Baltic found, the th e and trade Compliance l l a f div ersi fies capit al rr u t c n e of Risk refi nan cing limit s bo th risk baln ce rd o e t i n o m to d. e fi i rs e v di the a n i states. defaults li mited tr ade in ter m of them l a i c n a n i f and portfolio ran divson. credit asociated for fr om was are particular, tw o d n a withi n its shet wer e smo othly . the ren ewals and Thes with in susp ended department amount, to Geneva ru t u f e commi tments refina nc ing in y b place ng i v a e L moderate the s t e k r a m th e five was Brazil on ly fix ed-rate to e h t risk with in Gl obal th e use fo r years. s t n e m t i m m o c inc rease d rn ed, et ur Loan s o w t ex-USR par tly and unfortunate ly gave are de i s a the nat ional int er value of fo r n o on yield rate via . s t n e m t r a p e d Swap client Commodity asociated bonds economic 20 08. fr om outsi de ren ewed, e h t rise a , e nc ra F its eff ect by daily from by countries, to s t e s s a to Fren ch ban ks. current con tract s th e CH F a jus t n i financial larg e basi. Confederation the was force d Swiss rwhe e tr ading e h t before risk with du e 646 f o Fi na nc e bank ing sub sidiary , ac counts y e h T kept i.e. exten t y r o s l u p m o c e h t of to mil lion taken Cant onal the trading provisons the countries Rusia, rate s bu sines th e ’k n a B s to ra e Bank bus iness and nk Ba se ctor. les wer e red uced (at and e h t fel l. short-term cou ntr y activty Kazkhstan, Ban k very to fai r e e y o l p m e th an s doe . t r a p and t c e j b u s sa ving involved The in con sequen tly The rec ord uni t, va lue), 2008. qu ickly, Mor tgage ned 3 con tro led mark et in limit s a n I Bank % ry l e v ti a l e ac counts oil, and paper. e h t f o a of n o i s n e p in gene rating fo r los s. a sol d gas are to Byelorusia, its al so the yr a t n e m e l p p u s pric e y l k e e w cash. fixed amo unt . Bo nd Through adju sted. rest ricted by and its transaction by amounted nta c fi gni i s va luati on d n u f th e va riabl e- the rat es metals. Cent re tr o rp e a Risk yi eld Risk this sa h the to at

BCGE | Risk control that is built into the Bank’s strategy | 55 56

Major risks Major risks, in the regulatory sense of the term, are only regularly disclosed with regard to the Fondation de valorisation and the State of Geneva. Some banking limits or commitments towards international trade clients may sometimes occur at the use limit risk-weighted by 1 0%.

Credit risk check The classification of credit risks according to the different ratings is virtually unchanged from one year to the next. The Credit Expertise and Organisation department, part of the Operations and Controls division, centralises the expertise and training for credit controls. The previous classification, which had five categories, from A to E, has been fine-tuned. It now has ten categories, from A+ to E-. It should be noted that the Basle II Internal Rate Based (IRB) provisions only require seven cate - gories. In addition to these ten categories, there are four categories, from F to I, for distressed busi - nesses (see page 96). The Bank has acquired a new IT program, CreditMaster, from the Risk Solution Network company, which is used by a dozen cantonal banks. It analyses risk associated with corpo - rate loans. It complements the Credit+ program, which is already used for loans to individuals and small companies.

A systematic monthly control of compliance with loan granting criteria is carried out and regulation reporting on equity is made in accordance with the standard approach. The Bank has employed a full-time credit trainer and an in-depth course on this area has been put in place.

Compliance The coming into force of the new Due Diligence Agreement in July 2008 was marked with a train - ing course given to over 300 front-office staff with the help of an outside speaker.

The new IT system has made it necessary to completely overhaul the definition of business rules for the definition of compliance risks and for the monitoring of unusual movements. All this was done in the last quarter of 2008 and the fine-tuning continues. A feature of the new IT system is that com - puterised messages are automatically sent to those in charge when transactions require clarification, whether for a block due to the “Money Laundering Act” or to an operational block in accordance with the Due Diligence Agreement. The information is transferred to managers in the Compliance division if the response times are not strictly met. This entity closely controls compliance with regu - latory standards and codes of practice and intervenes when applicable. Several members of this divi - sion have completed or are completing the high-level training on this subject given by the University of Geneva.

BCGE | ANNUAL REPORT 2008 Le gal Legal , s d u a r f e h T Risk not na l In ter this This PUB LICA TIO N The high risk na l Inter ’k n a B s inf orm ation to ris ks risks r e h t e g o t reputation in and con trol are 2008. n o i t a t ru p e Control remained control led RE QUIR EMENT S is h t i w avilble divi sion e h t s a h stable and s e i t fl i u d c i f t o n on conti nues provi sions during n e e b th e CO NCER NING Ban k’s . d e g a m a d d e c n e i r e p x e the its are financial wor web site made k ; n I a EQ UITY for comprehensi ve y b , t c a f year. (w ww. bcge. c them. e m o s e h t The s s i w S e c n e s b a amount h /exig ences-p ublicat ions) . report d n a f o l a n o i t a n r e t n i ru s e o p x e of was the pre pa red provi sions o t , s k n a b s e v i t a v i r e d in is mid-2008. howev er dre c u d e dn a

BCGE | Risk control that is built into the Bank’s strategy | 57 “Contributing to the development of the regional economy is BCGE’s primary mission: I find helping to fulfil this noble mission on a daily basis fascinating.”

Narcisse Moix is a senior adviser in corporate finance within a department specialised in providing services to medium and large companies based in Geneva. Corporate banking JUST LIKE A WATCHMAKER WHO TRANSFORMS STEEL INTO ELEGANT TIMEPIECES, CORPORATE LOAN RELATIONSHIP MANAGERS HELP DIRECTORS TO SHAPE THEIR DAY-TO-DAY BUSINESS AND TO FINANCE THEIR INVESTMENTS AND THEIR PROJECTS PR EC IS E PRECISELY AND AT THE RIGHT TIME. Talents and skills 70% of employees are shareholders

60 As the canton’s twenty-second largest private sector employer and eighth in Geneva’s financial sector, BCGE is a leading player in Geneva’s banking job market. Whether in terms of training, prospects for development, working environment or social services, BCGE is an employer that offers one of the most attractive frameworks for professional growth in the Geneva market.

BCGE Group staff in full-time equivalents

9 3 3 6 4 9 Stable staff numbers 2 7 6 7 8 8 8 7 7 7 7 7 As in 2007, Group staff numbers in 2008 were stable overall ( +0. 6%), totalling 845 employees, or 789 full-time equivalents (FTEs).

With the integration of the Anker Bank and Synchrony Asset Management subsidiaries into the parent company in 2008, their staff members were employed with exactly the same conditions they had had before.

Banque Cantonale de Genève (France) maintained its staffing level unchanged from the previous year, with 36 employees.

Training as part of the strategy The main training focus was on the new IT system. The change in the IT platform required the involvement of all the Group’s employees so as to prepare them for the migration and the follow-up period. The tailored training courses, designed to meet individual needs, were delivered following 5 3 4 6 7 8 0 0 0 0 0 0 the blended learning method, which combines self-tuition via e-learning modules with attendance 0 0 0 0 0 0 2 2 2 2 2 2 at workshops concentrating on a specific activity. In addition to the new IT environment, the Bank also offered its employees new courses over our computer-assisted teaching platform.

In addition to the IT area, internal certification courses in wealth management and individual pension planning were the areas most focussed on in the year under review, in continuation of the pro - gramme undertaken in previous years. The arrival of a full-time trainer in credit business allowed an ambitious programme of credit-related training courses to be launched. Three full courses for those working with property finance for individuals and a full course for young advisers in training were given. This support of certain finance activities in the branch network and the tailored courses for credit specialists allowed the Bank to offer comprehensive and targeted training to its staff in an area in which there is limited training available.

In addition to this internal training, there was a continuing education programme for the Bank’s various business areas. This was principally provided by the ESBF (an organisation specialising in banking and finance), the University of Geneva, ISFB (an institute for bank training), Swisscanto, the central school of the DDPS (Federal Department of Defence, Civil Protection & Sports), and the BCL (Latin Cantonal Banks) training centre.

In addition, specific training programmes were created and adapted for management. Recently recruited or appointed management members are given a specific training course on BCGE strate - gies. A new course focussing on crisis management was added to the training syllabus. Furthermore, language training continued to be a well-supported area and an internship position at our Zurich offices was created in order to add to measures already in place in this respect.

BCGE Group department heads work together as teams to take each other on in an intensive man - agement seminar in the form of a contest. This year, it was in St. Gallen that the event took place, with the theme of team leadership.

BCGE | ANNUAL REPORT 2008 a Male as employnt Ful 61% 53 % s at Women at BCGE staff l/ Ful Men Par 39% Wom 47 % 31 31 part-ime t – t tim ime Dec en Decmbr 94 % 67% femal Men e Supervisory 33%

6 % embr r Senior 86 %

managers distrbuon 14 % 208 208

Board of 73 % Directors 27 % persons acount ri d u e q c a n O of Considerable was h c i h w e b ith in W of n I ow ners bear er s A Training Moreover, taken service, n e e is k n a B Competence) Pa rticip atio n o t s t n e d u t s dip loma scho ol n I apprentices responsible , 8 0 0 2 , n o i t i d d a on e char ge t n e m e l p m o c d l o s e n o 1 3 s e rc p i p t a n e subject fa f t s on d e w o l l a dip loma shar es shar e r e b m e c e D th es f o are th ey n i h t i w with of wo rk t s o m m e h t n o the new on staff e h t t a pensioners ent itled to began e h t é t i r u t a m “ reciv per plan s, th e a l l a next for on in on an d experts the r o j a m rp u G o s i h t numbers close in h rg h u t o m e h t (m atur ité), k n a B June t a h w re w e s l e v e l CHF a basi training receipt ban king , 8 0 0 2 same their pr eferent ial , e m i t bo nus generation th e to a relationship s r e y a l p o t pased 3, 000 fa f t s nu mber s e u n i t n o c g n i e b for th e y e h t and of t i f e n e b e l l e n o i s s e rf p o shar es ri u q e c a training moratorium s u n o b of r o n 8 of th e and final and divd ends. 4 sche me as other d e t i f e n e b bonuses n r a e l % employees of d e n i a r t n i and y a m abo ve wel the so of rm f o fin ancial apprenticeship bo nus. s n a l p basi. f o e h t o w t with o t to beneficaries acqu ired shar es decided n i y e h t Bank’ s e h t as r fe o f l a n o i s s e rf p o the plan s. have a t a as n a ra r e b e nin e r o The the rf m o s u n o b ’p ru o G s ” e l a i rc e m m o c For e b e h t described company. sub jects. d e s ra u h p c c i m e d a c a ann ualy, are management e v i f the Bank. Ban k tr aining to each d e s u are n a . k n a B ra h s s e continue shareholders opportunity . n a l p s s e n i s u b sub ject examinations of y r a n ro i d a r t x e ff a t s sel shar e s a g n i n i a r t preferential above. l l A in places yt i r u c e s , . t n e m rn o i v n e s A d n a . m e h t line ) 3 8 6 ( th es e s o h t d n a so to their n o o s g n i n i a r t devlopment. e v i re c e wit h In acqu ired, a of of f o n I e t u a H to d l e h lock- up 2008, o h w s s e l n u carers s a acquiring eigh ten e h t so , l a t o t s u n o b th em, conditions, th e y e h t as r u o f s e c a l p E G C B ’n o t n a c s t a s e l o c E yl l a n i F , 7,614 cur rent ly to t a tw o y e h t per iod with , n a l p net e v a h e h t ro m e build e h t mo nth s At Banque r re a e b o t fr e e d n w o shares of C F C the 31 e h t . k n a B 50,626 l a c i t n e d i d e t e l p m o c g n u o y s r e d l o h of rf e e n o i t s e G up al app licable shar es Decmber Bank. five 7 0 5 , 4 4 k n a B l a r e d e F ( cost s, , s re a h s to Cantonale a were f o n O team un iversity years , e l p o e p shares . e g r a h c f o In are o t y l r a l u g re e h t s e s r u o c in distributed e h t r. a s h e s August, re h e t t a h t g n i v a h whose scale. e t a c i f i t r e C given . and a 2008, r e h t o are pr opo rtio n de yr a d n o c e s E G C B s i h T f o stu dent s may s r a e y Genève held n i Tgn i k a st s i s s a leader ,7 0 0 2 eight re h t i e ,d n a h sevn ri e h t na l p free sa h no t by fo fo -

BCGE | Talents and skills | 61 62

Social support and social partners BCGE puts at the disposal of staff going through temporary personal difficulties some complemen - tary internal and external support services. For these purposes, the Bank has recourse to the Inter- company Social Service. BCGE has a seat on the committee of this external organisation, which provides the services of social workers to a certain number of companies, and has chaired this organ - isation for 2 years. In order to handle cases of harassment or professional misconduct, staff may also get in touch with an external mediator, in complete confidence.

The Human Resources Department operates a structured process of company assistance in the case of long-term absences. This regular follow-up is very well received by the staff concerned.

Pension fund BCGE provides an advantageous pension fund. It contributes two thirds to the savings contributions and covers death and disability risks. On certain conditions, staff members can choose whether or not to make contributions to the variable part. Early retirement is possible from the age of 58, and risk benefits are based on the guaranteed income. The plan also allows for phased-in retirement.

Banking services at preferential conditions Employees benefit from preferential conditions on a number of BCGE banking services. For example, on salary accounts, other preferential creditor accounts and mortgages, no margin is taken by the employer, and staff benefit from market rates, in line with a replication model developed by the Finance and Risk Control division.

Health, sport and leisure The BCGE environment is smoke-free. Staff are given the opportunity to be vaccinated against flu free of charge. The Bank provides employees and their families with sports facilities at its Training Centre, including a swimming pool, tennis courts, a children’s play area and a subsidised restaurant. A project to redevelop this site into a single training centre was launched and work is planned to begin in 2010.

Internal communication Apart from internal communications that are made through the normal managerial channels, the Bank has an Intranet linking all staff. Not just an essential means of communication, it is also a fundamental working tool, since it contains all internal guidelines, electronic documents and the information needed by everyone.

Every year, staff are called by the Executive Board to two information meetings, on the occasion of the yearly and half-yearly results. In addition, the setting of the year’s strategic objectives is the subject of a presentation to senior management. Three times a year, the CEO leads a discussion on management topics for managerial staff.

BCGE Group also produces a magazine for staff and their families, which is published three times a year. The Bank’s staff members regularly give colleagues presentations concerning an activity, a busi - ness unit or a project in progress. These meetings take place between midday and 2 p.m. on a voluntary basis. In 2008, there were four meetings of this type. Furthermore, the Bank organised three guided tours of exhibitions in Geneva museums for staff in 2008.

BCGE | ANNUAL REPORT 2008 d o i r e p fo s r e f On The new exten ded hig hest The Eq ual exclnce y t i , t n e m p o ceiv a BCG E Incentives year. s t n e m e rv p o m i a Huma n role sk ills . dif ferent new has e h t op portu niti es The f o pr opo rtio ns of ra e up e n o A an re h t a f , ideas in wo men Prix for Res ourc es bonus y l e s o l c to client inc entiv e no te, k e e w excellence Intrapreneur th e to s a d n a is generate in service, child ’s of in ro t . i d n e o m l l e w y l s u o i rv p e ( awar ded th e De partment 20 08 pla n t s o c fem ale s a com pany, fir st in to and . s n o i t c u rd e e h t improvements. BCGE is the to promote excut ives awarded bir thd ay. re h t o m , re h e t ra p m d o e C empl oy ees innovation form and int rod uced to gether . ) s y a d the of ex cel lenc e, e h T for e h t and an Ex ecutiv e who o t imagination The x i r P wit h y t i n u t r o p p o r, o e m r e h t r u F excptional senio r nit y pat er r e h t o contribute Prix e c i v r e S equ al inv olvi ng Board man agers. vice Ser s k n a b pay leav à and act o t a l inv olve to t a f o and e k a t Center the el è t n e i l C or creativty the e h t fr om e h t exmplary equ al awa rd re cruitment d i a p n u d n e al l e m a s th e is sta ff for op port unit ies f o s i to tim e of , e p y t d re a d w a ra p l a t n e achievment y t i n r e t a m employes in three attitude. the of of E G C B th e a proces s priz es, new e v a e l n i child ’s fo r , e v a e l s a h who n o i t i n g o rc e staf f of usua lly career of t a h t e n o productiv bir th help rec rui ting e h t member. n a c f o devel twic e kn a B fo r con eh t eb fo a - - -

BCGE | Talents and skills | 63 “Public finance is very demanding and teaches you to think quickly.”

Ronald Labbé is in charge of the public authorities financing department. Working closely with all the municipalities of the canton and major public utilities, his team provides financing for their projects as well as offering strategic advice on financial management, financial risk control and cash management. Public authorities FINANCING IS ESSENTIAL FOR AN URBAN COMMUNITY TO DEAL WITH THE NEEDS AND CHALLENGES OF MOBILITY. THAT IS EXACTLY WHERE BCGE FINANCE ADVISERS FOR PUBLIC AUTHORITIES COME IN, WORKING WITH PUBLIC AUTHORITIES IN INFRASTRUCTURE DEVELOPMENT PROJECTS AND ALLOWING THEM TO BENEFIT THE CANTON’S MOBILE INHABITANTS AND ECONOMIC PLAYERS.

Shar and eho corp l der orate i nformatio nan gover n ce

BCGE | Shareholder information and corporate governance | 67

e h t 1.1 1.1.3 1.1.1 1. Shar 1.3 1.2 2. 3 2. 2 2.1 2. 2. 5 2. 4 2. 6 3. 5 3. 4 3 2. 7 3. 5.3 3. 5.2 3. 5.1 3. 7 3. 6 8.1 8. e c n a n 9. 8.4 8.3 8.2 5. 1 5. 4. 3 4 6. 1 6. 7. 6. 4 6. 3 6. 2 e h T g n i r e b m u n g n i w o l l o f s e n i l e d i u g Group Scope Operational Cros Major Chan ges Aut hor ised Capital CAPITAL Pro fit Shar es Tr ansfer nal Int er Electio n BO ARD Con vertib le Wor king Com mitt es Alocat ion Inf orm ation Pow ers Sett ing RE MUNERA TIO N, Manag ement EXE CUTI VE Limit ation SHAR EHOLDE RS’ TAKING Agen da Gener al Quo rum Duration INDEPENDENT INFORMA TION Information Additional Independent GROUP eholde shar ing holdings shareholders t r o p re of structure and e t a c i d n i rem uner ation or ganisat ion and Metin g item s rest rictio ns AND OF CONTROL met hod s consolidation of in f o STRUCTURE and of fes par ticpat ion or th e the bo nds e h t and on structure DIR ECT ORS of BO ARD du ratio n auditors’ task s e b i r c s e d cert ificates con tract s con ditio nal SHAREHOLDER rep resntat ion r th e independent shar e audit X I S t a h t AUDITOR POLICY con tro l con vening in and wit hin PARTI CIPATI ON PARTI CIPATI ON Bo ard and s s i w S AND e h t capit al mandate and of fo basic op tion s e h t reg istrat ion mech anisms cert ificates app oint ment s g n i d n o p s rr e o c of th e e g n a h c x E capit al DEFENSIVE par ticpat ion rmation t n e m e g a n a m fes Direct ors auditors Bo ard of and STRUCTURE vot ing incr eas of RI GHTS of of r e t f a re e h ( AND the MEASURES no mines Direct ors pr ogr ammes rig hts s h p a r g a r a p d n a LOANS mandate an y r o s i v r e p u s ) X I S d h c i h w of f o co the e h t s e i l p p a auditor-in-charge s e l p i c n i r p rporate s e n i l e d i u g o t e h t f o o d e h t r a e y t o n E G C B nan gover t a y l p p a 1 3 . p u ro G r e b m e c e D o t .E G C B t I s i 8 0 0 2 d re u t c u r t s ce d n a s i g n i rd o c c a d re e b m u n o t g n ri o d c c a e h t e t a r o p r o C o t . t i s p a G re v o G 70 70 70 71 71 71 71 71 71 71 71 71 74 72 71 74 74 74 75 74 79 78 76 76 80 79 80 80 80 80 80 80 81 80 80 80 81 70 ni -

BCGE | Shareholder information and corporate governance | 69 Shareholder information and corporate governance

70

1. GROUP AND SHAREHOLDER STRUCTURE

1.1 Group structure

1.1.1 Operational structure The Banque Cantonale de Genève (hereafter BCGE) is a limited company established by public law according to Article 763 of the Swiss Code of Obli - gations. It has the status of a cantonal bank as defined by the Federal Banking Act. It was registered in the Geneva Trade Register on 17 December 1993 and conducts its business under the registered name of “Banque Cantonale de Genève SA”. The registered office and management of the Bank are in Geneva. The Bank is listed on the SIX Swiss Exchange. Only the 1,479,174 bearer shares are listed. The capitalisation is calculated on the basis of a price of CHF 220.

Stock number, bearer share 164268 ISN number, bearer share CH0001642682 Stock market capitalisation (31.12.2008) CHF 792 million, registered and bearer shares CHF 325 million (exact amount 325,418,280) million, bearer shares only

The organisation chart of the BCGE Group is on pages 16 and 17. The underlying principles of this organisation are as follows: • Bank Cantonale de Genève is organised in seven divisions, run by members of the Executive Board of which the composition and responsibilities are described on page 15 of this report. • Coordination of the divisions and benefits from synergies applicable across all divisions are ensured on the one hand by a matrix operating structure and on the other hand by the CEO and his office. • The underlying operation of the above is reinforced by various committees which have been allocated major responsibilities or controls by the Execu - tive Board. The principal committees are described in the table belo w:

Principal committees Responsibilities Chairman Deputy Chairman Credit Committee Decisions linked to credit business Claude Bagnoud Emile Rausis Investment Strategy Committee Investment strategy Constantino Cancela Jean-Luc Lederrey Asset and Liability Analyses and monitors the financial policy and Blaise Goetschin Eric Bourgeaux Management Committee monitors the balance-sheet and rate risks Risk Committee Analyses strategic risks and monitors related activities Eric Bourgeaux Emile Rausis IT Strategy Committee IT strategy and monitoring of its implementation Blaise Goetschin Jean-Marc Joris Credit Risk Commission Decisions linked to specific credit businesses Emile Rausis Bernard Matthey (litigation, workout) as well as non-strategic financial investments Strategic Organisation Committee Supports the Organisation department Jean-Marc Joris Philippe Bailat and the Organisation and IT division in the implementation of horizontal Bank projects

1.1.3 Scope of consolidation The scope of consolidation is shown on pages 9 4 and 9 9. It particularly includes, as at 31 December 200 8, the following companies (fully-owned subsidiaries ): • Banque Cantonale de Genève (France) SA (www.bcgef.fr), Lyon, share capital of EUR 15.25 millio n; • Capital Transmission SA, Geneva, share capital of CHF 2 million . • ArcLem Capital Transmission SA, Zurich, share capital of CHF 20 million .

BCGE | ANNUAL REPORT 2008 No 2.3 Ther e 2. 2 conditional Direct ors The 2. 1 2. The 1. 3 5% Total pu blic Shar es Municpalities City Canton Sh Information 1.2 a re hold ers cha nge s capit al BCGE of of votes are aut hor ities th e or Geneva of Auth orise d Ca pita l CAP ITAL Changes Cro s Major to vot es at is Geneva capit al of capital incr eas hav e on and pr esnt no t th e ho ldi ngs shareholders the of awar e capital bee n ST RUCT URE Ban k or in increas major no of th e the or made of th e cur rent ly pr ovison s con diti ona l capit al share 1, 479 ,17 4 shareholders th e to tality (conversion 147,270 69 1,8 69 538,636 to existen ce 5,963 Bea rer sha r capital (au tho rised the amo unt s in es of sha re th e cap ital shar es known or of Art icles ca pital 4, 241 ,65 2 1,208,106 4, 241 ,65 2 2,510,443 option to any incr eas) 523,103 r wit h egi ster in crease s CHF A to cro s sha r and aut hor isng ove r BCGE rights). vot ing 36 0,0 00, 000 . ed es B ho lding s or the as to rig hts. la st 5, 720 ,82 6 1,355,376 4, 933 ,52 1 3,049,079 at per mit Tot 529,066 th e 31 three excdin g al vot Decmber Bo ard a es ye ars. of 14 7,9 17, 400 14,727,000 69 ,18 6,9 00 53,863,600 2008 be va The 2.7 ith W to to Banque Restrictions www.bcge.ch/statuts). Ther e red There 2.5 a shar es Each shares e h T tionaly, Registered 2.6 The • • • 2. 4 596,300 lue ar e pr opo rtio nal 1, 479 ,17 4 1, 590 ,62 0 2, 651 ,03 2 a Ban que r shares in BCGE capit al referen dum . is ra r e b e sha shar e regard are are CHF are set P makin g a re Cantonale Convertible Profit Transfer Sh ares each r no no exclusively out has of Cant onale shares gr ants is ra h s s e on to bear er “B ” “A” par ticpat ion profit a com posed municpality in not par t a sharing 21 2,0 82, 600 21 2,0 82, 600 125,522,150 transfer par th e an d 26,155,150 60,405,300 the to tal reg istered restr ictions val ue are reg istered th e isued ra e de value regist ratio n sharing of re shar es, folowing held pa rticip atio n g. only bonds de of rig ht th e Genève in d e t s i l can sha certificates of 5, 720 ,82 6 CHF Genève. of P by any net is a cert ificates. re transferable certificates “A” r to each only CHF shar es, public obliged shar es, and n o convertible pr ofit s on e (LBCGE, tabl and of and be 50 36 0,0 00, 000 28 1,2 69, 500 179,385,750 e h t wit h options no mines, 26,751,450 75,132,300 e: authorities vot e registrat ion certi ficate s lifted each shar es, each each to “B ” of X I S . a pa betwen kep www.bcge.ch/loi-bcge), (o ne th e par r wit h reg istered s s i w S (Articles wit h bonds by val Tot al com pany . value ue a al at shar e th is of a fu ly change a least . e g n a h c x E par Geneva or par public of clause of of – options. paid -up : shar es % value nominees value CHF on e 2,010 Asociation, 23.69 86 .24 53.30 9.25 v in authorities. ote do es and the vot e) 10 0 of s of and e h T “A” are CHF Law CHF no t as bear er re t drs e i g e subject not registe wel art. app ly % on 50 50 Addi 20.87 78 .13 49.83 cap ital listed. 7.43 the 4, as - -

BCGE | Shareholder information and corporate governance | 71 72

3 TO 3.2 BOARD OF DIRECTORS Michel Terrier Secretary of the Board The Board of Directors is composed of 11 non-executive members. They born 22 July 1944, Swiss are independent within the meaning of Circular FINNA 200 8/24: Moni - He was appointed to the Board of Directors in June 2000 by toring and Internal Control – Banks. The Board of Directors is chaired by the Association of Geneva Municipalities. Mr Michel Mattacchini. Professional career Holder of a federal banking diploma (CFC), after training with Banque Pasche SA in Geneva, he joined the Banque Scandinave en Suisse in 1965, which Michel Mattacchini subsequently became Banque Edouard Constant SA. He left that institutio in Chairman 1999 after being head of the cash management department (stock market, born 20 February 1946, Swiss foreign exchange, bank listings). He is also active as a financial consultant. He was elected to the Board of Directors at the 2001 General Meeting by the bearer shareholders. He has been Chairman of the Board of Directors since 1 June 2002. Ion Bals Professional career Board member Holder of a federal banking diploma (CFC) and an Executive MBA from born 24 June 1942, Swiss INSEAD (Fontainebleau), his banking career has been with Swiss Bank Cor - He was elected to the Board at the 2001 General Meeting poration in Geneva and Basle and later in New York. He was subsequently by the bearer shareholders. He is also a member of the placed in charge of the business division (multinationals), Swiss companies, “Appointments and Remuneration” Committee. real-estate, networks, branches, Rhône-Alpes and institutional investors. Professional career From 1999 to 2001 he was responsible for recovery management at UBS After studying electronic engineering at the Federal Polytechnic he was in French-speaking Switzerland. He retired from UBS SA in 2001 and con - Managing Director of Orbisphère from 1985 to 1999 and Chairman of the tinued working as an independent director and consultant. Board of Directors of Orbisphère from 1992 to 1999. Other activities Other activities Director and Chairman of 022 Télégenève SA, Geneva. Director and Chair - Member of the Fondation immobilière Patrimoine. Member of the Board man of BISA, Boulangerie Industrielle SA. Director of Parking Plaine de of H. Dudley Wright Foundation in Geneva. He is also a member of the Plainpalais SA and Parking de Villereuse SA. Director of TV Léman Bleu SA. Board of Directors of Omnisens, a start-up company operating on the site of the Federal Polytechnic in Lausanne.

Jean-Claude Rivollet Deputy Chairman Asma Benelmouffok born 12 August 1941, Swiss Board member A member of the Board of Directors since 2002, he was born 1 February 1966, Swiss elected at the General Meeting by the bearer shareholders. She has been a member of the Board of Directors since April Professional career 2004 when she was appointed by the State Council to repre - He has held a federal diploma as a chartered accountant since 1970. Until sent the Canton’s registered shareholders. She is also Chair - 1982 he worked with the audit company Bourquin Frères et Béran SA. woman of the “Appointments and Remuneration” committee. From 1982 to 1988 he worked as a self-employed chartered accountant Professional career in Geneva. Since 1989 he has been a managing director of Fiduciaire She holds a law degree from the University of Geneva and passed the d’Expertise et de Révision SA in Geneva. Geneva bar exam in 1991. She has practised import-export law abroad and Other activities was appointed legal consultant to UEB, a subsidiary of BNP, in 1993. From Chairman of the Banque Cantonale de Genève pension fund. Director of 1998 onwards she was Director of the Legal and Recovery (workout) TV Léman Bleu SA. departments and created a unit to combat money laundering. She also played an active role in the merger of BNP and PARIBAS and has been a member of the Board of BNP PARIBAS (SUISSE) SA since 2001, where she is Director of Legal Affairs and Workout. Since April 2004 she has run her own business negotiation and mediation company. Other activities Member of the Board of Directors of NBAD Private Bank (Suisse) SA.

BCGE | ANNUAL REPORT 2008 Al lia nc e, of n o i t a s i wor ked mast er’s y l r e m r o f n i ret ired was e v nè e G det ermin ing rm f o of actio ns • • • No Not e h S Pro ouvrière ru d o G A Oth She Pro He Oth A P e c i v and leagu e th ro has has e is mem ber civl , a v e n e G Dir fe sio na l fesi onal fesional th e e: th e last er er or is has any any 2005 prnt de i s e elcted s d l o h ector ac tiv iti es ac tiv iti es a has 1 8 9 1 thr servant, Geneva IC in membe r of n o i t a d n u o F close operat d n a fo r as e a nd a ben de in Reute rs , n i 20 08. degre e Mr on financial ca r car car a (lat er of a ban king th e relat re h w Genève o t e g r a h c y g e t a r t s ional to comp uter a levs a ee r eer eer the a m o l p i d Jo seph Stat e She e H n bo r Bo ard Mari ane City n bor Board narBer d th e mem of 2006, Appointed n bor Board Fabienne r mbe me , 1 0 0 2 Grens ionships he th e Asitan ce of posit FID) Socialist year s a w the in Execut ive André ber was trained Council the e h of Geneva Cou ncil 22 27 f o rd a o B ec onomi cs and ion – s 9 of Memb er member Ziegler, d n a she e nc na i F Cant onal pr with fu ndin g a Member d e t n i o p p a Geneva d e k r o w February at Boa rd engineer n i app oint ed h rc a e s re the within May February ecding Clerc Grob et-Wel lne r r e b m e m of fin ancial & th e is BCGE Knapp r e t u p m o c n i party Executive to as of in Ci e e c n i s the Gran d also Com mitt e in BCGE k s i r 19 47, the an a Citizen s of May Gran d the rBoa d fo r or Workers’ Octo ber r o f and social on ti a i oc s s A and ticket. com mison the FIR and a t a a period Boar d , t n e m e g a n a m . 1 0 0 2 o t or 1965, f o Boar 1946, sciences to BCGE ren tal member 2002. s u o i r a v Cou ncil e h t Da ri er Swi s any tr uste works pension e h t e h t Cou ncil. financial on. i s s omi c th e g n i r e e n i g n e d worker (A T AC-Gen eva). under President of BCGE Group of e c i p s o H 20 00. t n e d i s re P of Swis ra o B d University) Swis pr oper ties BCGE l a n o t n a C Bo ard He ntsc h. Direc tors an d as a v e n e G fro m Asloca- Geneva in reviw of for fr om Gr company fo r fund at a oup 19 97 or consultan t the f o Ton ti a x a fre ela nc e Swe dish of of the mat ters y l r a l u c i t r a p of HEC e l a r é n é G company 19 76 a ri s D r o t c e of A Control Direct ors rm f o f o the n o i s s i m m o c BCGE l a i c o s (LIP since and Pa rl iamentary by Social r mbe me Banque in e h t the tax to Lausan ne. re- elcted Gr of L F P E reg arding I) in ec onomi st. 2006. 19 92, . s e c i v r e s G O U oup commission Studies Committe. since State e d l a i nc na i F banking since y b by r o f Ca ntona le company of s a e v è n e G e h t th e ét i s r e v i n U ( do o w r e h S f o a 19 80. Council the l l e w 20 02. as sis ta nt mem ber Institute She in av e n e G Geneva imp ort s e H st r e p x e org an Tnsra ei l mi E A during 20 01 s a sa w dn a and She col has de in a - - - , s e i t i d o m more s t n e m A B M risk In S U , h c i r u Z g n i w o l l o F P Has P r o t c re i D O He P ben e c n i S O a n a e c O l i t n u ( kn a b Trade ban king , d n a l r e z t i w S s s i w S yl e v i t c e p . s re , a v e n e G t n e m e g a 7 9 9 1 and e e t t i m ro fe rofe rofe the th e 2001 ho lds d n a r r held sio na siona si on a in in s act ac t a than rm f o g n i r ri t e t a SA, ) 8 0 0 2 . 2 1 . 1 3 d n a : litigation. s a d e k n i l the con sultan t. n o d n o L iv iv l i t n u he . d n a l r e z t i w S g n i p p i h S and t i rd C e d n a e h i i a a l l l yl e v i s s e c c u s . t t e h t Geneva. l a i c n a n i f i i ca ca ca g n i n i a r t 30 es es h c n re F deg ree dip loma founded area D A E S N I re re re s i A fin ance n i n a m r i a h C d a e h 5 9 9 1 years e e e rf m o and He n bor Board Patrick of Ge neral He n bo r Bo ard Ton He n bor Board Mourad Mun icpal o t y l n i a m r r r r e y w a l e s s i u S d n a 6 9 9 1 of the l a i rc e m m o c was was was , A S fr om is w a l Sch urin k national inter n i f o e h t he , s t c u rd p o 31 12 5 f o as . ) u a e l b e n i a t n o F ( CFT “Appointments n i also n i law member Memb er Member s s e n i s u b m ro F appo in ted October e v i t c a e t a r o p r o c app oint ed Mage Me eti ng app oint ed ru h C , s a worked re e h w a d e n i a t b o a r t e f e C July May t a e h t Sekkiou e h t t ri C d e th e f o Cou ncil Advisory lawyer Chairman l a r e n e g fro m e h t T F C . S U Nyenr ode 2 8 9 1 l a i r c e m m o c 1949, l e n r e K n i 19 46, e h d n a e m i t i r a m a v e n e G e s s i u S for Bo ston by d n a e h t 1957, e H V. B , . s e c i v r e S in , s t n e i l c trading to of rm f o s a w to to r e g a n a m bear er Services, o t Cargill Geneva l a n o i t a n r e t n i Swis s a h s d l e i f th e Swi s Geneva. of g n i k n a b g n i d l o H th e th e and 4 0 0 2 , m ra d e t t o R rG p u o A n o Bu siness Swis Univer sity the a v e n e G r a b Bo ar d d e i d u t s Bo ard h c n a r b Bo ard t s i l a i c e p s t r o p s n a r t and shar eholders & Remuneration” in e h t t n e m t r a p e d f o an d Control since a s r e n t r a P e h d n a Amsterdam, f o g n i k n a b , A S ) d n a l r e z t i w S ( management e h national inter l a n o i rg e by of s a w s s i w S of Univer sity Dutch d n a k r o w t e n t a s a w e t a i c o s s a th e 19 87, l a i c n a n i f as , g r u o b m e x u L Directo rs Direct ors r a m e v a N n i s s e n i s u b Committe. d n a a wel e n n a s u a L , A S State n a k n a b s Vk l o e h t d n a and r e g a n a m t n e m e g a n a m f o ho lds l a i c n a n i f n r e t n i as Paris . a v e n e G d n a Committee and g n i d a r t is l a ri e c m m o c n o i n U Coun cil . s n o i t a r e p o n i freight. n i consultancy tw o in in al so s l o o h c s , A S h t l a e w 4 0 0 2 s r e b m a h c a and an 20 06 20 06 se i t i s r e v i n U n i d n a mast er’s n i deg res a d n a Execut ive ,g r u o b i r F eg n a r r a k n a B ,a v e n e G f o member Geneva. ro t c re i D av e n e G in e h by roe c n I at n i na m 20 06 mo c mo c mr o f wa l sa h eh t th e th e ro F for fo ni in in - - - -

BCGE | Shareholder information and corporate governance | 73 74

3.4 Election and duration of appointments The eleven directors are elected or appointed as follow s: • Registered shareholder s: - five members appointed by the State Council, which elects the Chairman - two members appointed by the city of Geneva - one member appointed by the other Geneva municipalities • Bearer shareholder s: - three members elected individually by the bearer shareholders at the General Meeting

The duration of a director’s appointment is four years and can be renewed twice. In case of being appointed during a term, the duration of the appoint - ment is limited to the duration of the term. The appointment ends on the day of the General Meeting following the date on which a director has reached his/her seventieth birthday at the latest. The procedures for appointing and putting forward candidates are governed by article 11 of the Bank’s Articles of Association* and article 12 of the LBCGE**.

Year first Current term Number of times Eligible Director appointed ends reappointed for reappointment Michel Mattacchini 2001 2010 2 no Ion Bals 2001 2010 2 no Asma Benelmouffok 2004 2010 1 yes Bernard Clerc 2002 2010 1 yes Mariane Grobet-Wellner 2000 2010 2 no Fabienne Knapp 2006 2010 0 yes Patrick Mage 2006 2010 0 yes Jean-Claude Rivollet 2002 2010 1 yes Ton Schurink 2006 2010 0 yes Mourad Sekkiou 2006 2010 0 yes Michel Terrier 2000 2010 2 no

3.5 Internal organisation Chairman or Secretary. It may hold extraordinary meetings if business so requires or at the request of four of its members or of the auditors. The 3.5.1 Allocation of tasks within the Board of Directors Board can only make decisions if the majority of its members are present. • Chairma n: Michel Mattacchini Decisions are made by simple majority of the members present and the • Vice-chairma n: Jean-Claude Rivollet Chairman casts the deciding vote if there is a tie. Minutes are taken of each • Secretar y: Michel Terrier meeting, signed by the Chairman of the meeting and the Secretary and approved at the next meeting. The members of the Board of Directors 3.5.2 Committees of the Board of Directors must be able to consult files relating to the points placed on the agenda The Board of Directors can appoint standing committees responsible for twenty-four hours before the meeting starts at the latest. The Chief Exec - examining the various activities of the Bank and reporting to it. Currently, utive Officer or his replacement participates with a consultative vote in the only one such committee has been appointed, named “Appointments meetings of the Board of Directors but does not take part in the votes or and Remuneration”. Its role is to give notice of the appointment of the elections. He/she may require the presence of other members of the members of the Management and Executive Boards as well as the remu - Executive Board or third parties if he/she thinks it necessary. In 2008 this neration of the members of the Executive Board, the Board of Directors was the case at each meeting of the Board of Directors. Should there be and the Head of Internal Audit. It is made up of three members of the conflicts of interest, the members of the Board of Directors must decline Board of Directors. to make any comment whenever they are directly or indirectly involved.

3.5.3 Working methods The Board of Directors can set up standing or ad hoc committees to study The Board of Directors meets at least fifteen times a year. In 2008 it met particular subjects. These committees have no decisional power and are 24 times at meetings that lasted an average of 4 hours. It is chaired by the responsible for reporting to the Board of Directors. The Chairman of the Chairman of the Board of Directors or, in his /her absence, by the Vice Board of Directors is generally present at all the committee meetings.

BCGE | ANNUAL REPORT 2008 13. 12. 11 . 10 . 14. 9. 8. 7. 6. 5. 3. 4. 2. Direct ors 1. t n e m e g a n a m f o 2 1 The Schurink, 15. 16. 17 . 12 The 3. 6 Board least t i 18 . ww w a L t e m e h t w of of cancelation inv es tment CHF postponing of the app rovin g th e invest ment relat ion th e sett ing th e th e po lices insu rance, Control the risk gr an ting approval th e neces sary, to th e str ategic the notification the man agemen t th e no tificat ion th e th e Rem uner ation ” “Appoi ntments po wers n o c b . once th e of be g n i w o l l o f the the 0 1 e h t c. e g pur chase po licy str ategic str ategic inf orm ation appointment gen eral ann ual appointment appointment, gen eral salries n al int er po lices, Po wers 2,000,000 Directors. decid e accomplished members. LBCGE . s e m i t n a B Executive Boar d a h cred it / wh en and to Committe t s year large with and q u t a d n a of the e u any on cash hol dings bu dget and of by by debts fr amewo rk po licy aud it t du ties o of 1 par ticular ly n a C s : s r e b m e m th e fr amewo rk fr amewo rk of e h T to and fin ancial and n: and the th e and opi nion sums necsar y th e pu rchase the th e l a n o i t a s i n a g r o debts, Direc tors or o t man agemen t, cust ody com mitt e and decide to It Boar d Ban k within of n e e t t i m m o c Control on transfer pr opo sal saving s in or mets mem bers relatin g dep uty 16 l a if “Appointments “Ap poin tmen ts be of on by as of e and the Remune ration” the the transfers pr ior d th e of observance internal wel l recivd of risk-cred it s e th e in plan s under on of a m s A G members wit h it acou nts or the form commitment of of th e the when relat ion : e v è n e Bo ard Committee rat es mem bers of of th e pr opo sal no tificat ion as to the tr ansfer of op eratio n op eratio n of appointment Art icles Boa rd capital two of salries reg ard s t n e s rp e art. audit th e of of , k fo u f o m l e n e B limit s s n o i t a l u g re fo reign -exchan ge remuneration c wb w . w in th e an rea l of ratification, debts to and th e 18 directors Execut ive as of of appointment Direct ors Execut ive of and and to of of es tate of real- estate of goods sta nding to of out-of-court wel the ch. and . e g area of credits of of Di rec tors cover was ho lding s th e by th e s t i risk for cred it, Asociat ion Remuneration” Rem uner ation ” c a th e th e 3 h Executive as th e / social three-yea r sub jec t s t r o p re of o l Execut ive of of e d i rv p o amounts the man agemen t as for i all Bo ard. c b - ot her are Execut ive Execut ive fo r its of Bo ard pertaining risk the “Ap poin tmen ts commi ttee members ri a h C , rat es, the eg subject the being asets on the Chairman welf are wh ich requires def ined op eratio ns, con tro l to presnt settlements, t a controls asets Bank, Boar d a 2 It t a h t and members . the higher Bo ard cou ntr ies plan n o I per manen t s g n i t e e m reviw s Add ition aly, decis ive of it Bo ard Bo ard res ponsi bil itie s of committe com mitt e mem bers to e h t is un der s l a B it aft er of is a after regulations of respo nsible considered the to decison it. compos ed than financial the rd a o B in in th es d n a do of In and pr ior and prior Art icle f o tasks 2008 the basi so Tno of eh t th e fo at 8. 7. 6. 5. 4. Manageme nt 8. 3. 2. 1. 9. 7. 6. 5. 4. 3. 2. 1. reg ulatio ns The th e 21. 20. 19. Art icles equ ity sup ervisng n al int er l a n r e t n i n ed go ver g n i t t e s the the the in ceilng use investment rd a o B Bo ard e h t o t resp onsib le the f o d n a , s n a o l sett ing com panies to to cor rectly to to wit h to to man agemen t to to to of the as ratifying or periods powers the ensure app oint take gu arant e ensu re pr epare th e dr aw pr epare the other directors e s o rp p o no i t a d i l o s n o c appointment most maintenance pur chase appointment k n a B by s e i t i r u c e s legal general of f o Bo ard staff h s a c and does the int erest pr ovide e h t of deciso ns of and regu lation s ro t i d u a up sensitive proposal imp lement ed Direct ors and sr o t c re i D per that s a th at by Asociat ion ob ligatio ns prohibition Bank th e and rep resntat ives risk no t holdings, s e i r a l a s pension r o f th e com pliance by t n e m e g a n a m with not s r o t c re i d duties law, of organi sati onal building and th at of the framework t n e m t s e v n i th e law, ann ual shar ing n o i t a c i f i t a r inclu ded sub mit rat es fo r necsar y Direct ors apply for th e holdings fo r of of and Bank shares th e transfer th e str uctu res for th e of th e f o on an fund excutives represntatives Ban k wh ich in as Art icles 2 renewal r o f and the deciso ns of bu dget to l l a . appointments th e fo lowin g has Ban k amount th e Art icles wit h Add ition aly, wel in for the negotiable e h t on g n i d l o h do cumen ts Executive of , s t n e m t s e v n i included to of n i th e of str ategic a e h t th e regul ati ons str ategic ot her staff sufficiently the risk op eratio ns, regu lation s as purchase make e c n ra o d c c a and capital th e ’k n a B s of and best of scop e t n e m t n i o p p a and of real not of Asociat ion proposal limits du ties: and real Ban k or ganisat ion un its s e i n a p m o c Asociat ion th e sub mit deciso ns pr actise in commerci al excding of estate and Board goods securities, fr amewo rk ff a t s man agemen t of of estate and units the provi de Ban k’s the and as of high e g n a h c x e - n g i ro e f represntatives con solidat ion. fin ancial on wh ere h t i w dir ector s scope t p e c x e th e of pr opo sal it employer which are sale for during liqu idity, to for profile or of the f o senio r d e d u l c n i Ban k for or defined e h t CHF of the th e which regu lation s th e of agents th ey s e v i t a t n e s rp e re CHF pr ovided of Executive nal int er powers f l e s t i is th e plan s shares closed s e n i l e d i u g Bank, and Bo ard consolidation in fo r pr ofesio n not are 5,000,000. man agemen t fo r with 3,000,000 are shareh older s’ Ban k economic are ho lding in d n a n i no t or ganisat ional of intended of th e no t to of in article of reg ulatio ns periods authorised by the e h t th e the sn o i t a r e p o Board. com ply decide e h t financial the senio r Direct ors th e Council f o ep o c s Ban k Bank This circles Bank fo at 22 eh t for o are n: of

BCGE | Shareholder information and corporate governance | 75 76

9. determining the necessary rules for the application of risk management Committee policy and submitting these for approval by the Board of Directors Among other things the Control Committee aims to supervise compliance 10. setting limits for country and interest-rate risks, bank and market risks with the legal, Articles and regulatory provisions applicable to the Bank, as and submitting these limits to the Board of Directors for approval well as bank usages, and to ensure liaison and coordination between the 11. regularly submitting to the Board of Directors reports on business Board of Directors, internal audit and the independent auditor. It is made development (financial statements, analyses, major transactions and up of three members, two directors appointed by the Board of Directors events, etc) and any other reports that may be requested by the Board and the third member appointed by the State Council. The member of the 12. establishing a quarterly list of all the major risks defined by Article 21 Control Committee appointed by the State Council cannot be a civil par. 1 of the Federal Banking Ordinance 1 on the form drawn up by the servant. He/she is subject to banking secrecy. Its current members are Federal Banking Commission for the attention of the Board of Directors. Patrick Mage and Fabienne Knapp, both directors, and, since 2009, appointed by the State Council, Denys Chamay, Chairman of the Inde - pendent Oversight Advisory Committee of the BIT. Jean-Blaise Conne, a 3.7 Information and control mechanisms chartered accountant and a partner in PricewaterhouseCoopers, occupied The Board of Directors periodically evaluates information resources, their this function until the end of 2008. content and their adequacy to its needs, as well as the internal control system. It evaluates its efficiency and whether it is adequate for the activ - Its powers and responsibilities are governed by Art. 24 ff of the Bank’s ity and the Bank’s size. It sets up an information system among the Bank Articles of Association 2. In 2008 the Control Committee met for 24 ordi - units of which the Chairman of the Board is the guarantor. The Executive nary meetings. Board informs the Board of Directors of the progress of the Bank’s business at each meeting and reports on the issues that require it. The Chairman of Internal audit the Board of Directors, the Executive Board, the control committee, inter - Internal audit is an independent unit of the Executive Board, directly report - nal audit and the independent auditor must provide the Board of Directors ing to the Board of Directors. It carries out regular controls on all the Bank’s with any information that would enable it to perform its supervisory func - business and that of its subsidiaries and therefore has an unlimited right tion, particularly on the progress of business and operations in various to information. Its organisation, its field of activity and its operation are sectors, including subsidiaries. This becomes a reality in the following ways governed by Articles 29 and 30 of the Bank’s Articles of Association and among other s: by the Charter on Internal Audit approved by the Board of Directors. • The Chairman of the Board of Directors is provided with weekly reports of the Executive Board’s meetings The Internal Audit issues, for the Executive Board, the Control Committee and • Report from the Chairman of the Executive Board at each meeting of the Board of Directors, detailed reports on its controls and carries out quar - the Board of Directors on the progress of business terly reporting following up on recommendations made. The Internal Audit • Quarterly reports on risk control and major risks by the risk manage - meets the professional quality criteria of the ASAI (Swiss Internal Audit Asso - ment and compliance manager ciation). As at 31 December 2008, the department had a staff of 10 full-time • Monthly report of results by the CFO equivalent auditors. The Head of Internal Audit is Mrs Monique Seiss Baudry, • Reports on control tasks carried out within the Group by the internal audit who holds a master’s degree in economics from the University of Geneva. manager and quarterly monitoring of the resulting recommendations • Oral report on the activity of the control committee at each meeting, by its Chairman • Half-yearly presentation of Balanced Scorecards of the divisions by 4 TO 4.2 EXECUTIVE BOARD their managers (MDG) • Half-yearly report of the independent auditor The Executive Board is made up of 7 members, chaired by Mr Blaise Goetschin. It is appointed for an indefinite period but its members are obliged to resign at the latest at the end of the calendar year during which they have reached the age of sixty-five.

Blaise Goetschin Chief Executive Officer born 1 September 1957, Swiss

Professional career

1 Which has become Art. 83 ff of the OFR He holds a degree from the HEC at Lausanne University and began his pro - 2 www.bcge.c h/statuts fessional career in 1982 as an auditor with PriceWaterhouse in Geneva. In

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Cent rale r e c i ff O e h t of Bo ard h c i r u Z Finan ce g n i k n a b s a , A S to 8 8 9 1 SA, of of Ri sk s n o i t a r e p o f o e u q n a B s a w and Ban ks, of rm o F the e l o h w r e re a c B B A n a in 20 00 d n a d n a Banque e e t t i m m o c the he , d n u f Luxembourg e h t r e b m e m a th e since Zurich. l o o h c S Puly , Board n e v i g of Co ntrol e v i t u c e x e n o Ti s s i m s n a r French r e b m e m e h s a was f o d l r Wo Chairman de n e h t f o 8 9 9 1 Ex ecuti ve and High er n o t n a C th e manager mem ber d n a f o t e s s A h t i w m ro F rè i c n e o F y t u p e d e e t t i m m o c e l a n o t n a C e u q n a B Ge ne va, s a w 1 Lett res e h t mem ber Ca ntona le an . d n a l r e z t i w S y t i l i b i s rn o p s e Decmb er of Risk f o Geneva l a r e n e g n i f o t e s s a o t Ty r u s a re auditor G M P K the Div isio n e e t t i m m o c r e g a n a m f o t n e m e g a n a M Inst itut e 8 9 9 1 s i r a P f o gn i k a e p s - h c n re F e h t n i f o , 0 0 0 2 Con trol and of de of e c i v e h t of Geneva ,e s s i u S - o c n a r F e l a n o t n a C the e h t e h t Bo ard tn e m e g a n a m Vd u a , A S ra o B d of th e the André d n a Cham ber Gage r e g a n a m o t r e b m e m e d member s i r a P y t e i c o S de with Swis s ,t n e d i s re p 20 00. et a r o p r o c th e ev i t u c e x E rt e n e C e h fo r 0 0 0 2 (C FO) Bo ard Board .a v e n e G f o n I Divson ev è n e G Ge nè ve r o f s d l o h o t f o Finan f o of s a w Bo ard Train Price s a & 59 9 1 ae s A ek a t sub ro c ,A S eh t eh t th e Cie ro f ed eh na fo fo of of of of ni a a - - - - - resp onsib ilty nt. rtme pa de SA, of d e t n i o p p a f o mem ber re è i c n o F d n a diploma He P He Ot ith W Prof r e b m e M O rm f o 1995 , n o i t a d n u o F tio n fro m man ager t n e m t r a p e d Lon don . Claud e ) e c n a r F ( ence Invest ment a v e n e G keting gic Consumer rd i b becam e of g n i t e k r a M with Ban king ro f t her he r BCGE th e e h t is e e Planning is and si si (UAPG) . t i d re c - l a i rc e m m o c y t i s r e v i n U Citibank in 19 94 a a Chair man an a 9 9 9 1 to cti cti ona ona Tech nical Manager o t n a c s s i w S graduate Ger man y Bag nou d v v a of 1997 , A S MBA and from l a i r t s u d n I In of and i i , e s s i u S - o c n a r F in l l t t f o mem ber i i ca ca Bank e e to the 20 00, o t Com mitt e h t i w o t s s th e 19 91 re e ree Manager f o y t u p e D y t u p e D n I Br anch e h t fo r of 19 95. n bor Head Claude n bo r Bra nch Hea d Joh an in IMD and he . 0 0 0 2 e h t r r Swiscanto , a n o z i r A ( e h t y a M of Sup ervisor y for in th e Com mison Duseldorf. th e P J of with beg an was he y r o s i v r e p u S and th e Brussels, e l Tb a r e f s n a r a Lausanne, of . s e c i v r e S . t n e m e g a n a m e u q n a B Deutsche 1 28 From the of of Saving s n a g r o M 201 Master Netw ork was n a m r i a h C narBe r d Cor por ate n a m r i a h C e H January at th e Bagnoud Netwo rk Marketing Cit icorp becam e Bo ard May Corporate the of n o i t c e s Higher his , Ln o y th e n e h t sectio n ) A S U 19 96 BCGE Capit al he Supra and Re tail pr ofesio nal ri e a c é h t o p y H Bo ard Citibank Fou ndat ion From of 19 63, of n I of Bank e t a v i r P Executive s wa Divson . t n e w Ale xan der r e b m e m rd a o B Din ers head 1964, national Inter e h to School f o th e from Divson . r o f n o i s n e P th e 0 9 9 1 f o Execut ive Div isio n head Manager Cantonal Transm ison 19 99 1991 e h t Ba nki ng of d nte poi a n a g e b n I Intenr ational Division Dutch e h t Transf erable e h t Unio n n o of 1997 Private Dixence k n a B Clu b Swis 9 9 9 1 f o ra d o B e h in of th e y r o s i v r e p u S o t he f o Devlopment l a r e n e g to Epar gne carer d n u F th e e u q n a B Busines s i h u d d e n i o j Bo ard Kroo n e m o c e b of 1994 was e h t Deu tschland with to Banks com mercial- credit n i an d e h Bank Management ind ustr ies, f o n o t n a C l a n o i s s e rf p o Geneva 1999, to SA, , n o i t a d n u o F . a v e n e G rd a o B SA. in as Private the e h t d i d Pensio n the . t e k r a m he respo nsible 3, charg e e h t Colective in an e l a n o t n a C in Memb er Put eaux, d a e H gained Citibank rd a o B Marketing ice -Chair manV a L Geneva. a e v uti c e x E acou ntan t Geneva f o e d Emp loyers’ Programme l a i rc e m m o c g n i n i a r t rè e i v a r G Banking tr ade in n I a v e n e G Fun d of . e v è n e G n I f o Frankf urt . r e re a c f o from y a M further f o th e 6 9 9 1 Foundation. of y g e t a r t S fo r and US He and ei n g a p m o C and dep artm ent e d Fou ndat ion ot n a c s s i w S rBoa d and th e real-est at e in e s r u o c th e la i r t s u d n I was & Thunder 2 0 0 2 T,m s i r u o wit h mem ber Asocia n i ev è n e G services Geneva e H e h holds (1999). 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BCGE | Shareholder information and corporate governance | 77 78

Jean-Louis Platteau Jean-Marc Joris Global Head of the Private Banking Division Head of the Operations and born 14 August 1963, Belgian Information Technology Division born 10 september 1968, Belgian

Professional career Professional career He holds three Masters degrees in management engineering, management He holds a degree in business and finance from the ICHEC, Brussels and in and tax management from the Universities of Brussels (Solvay Business 1993 worked in the capital markets department of Dexia Luxembourg. School) and Louvain (UCL-Institute of Administration and Management). From September 1993 to June 1997 he was a project manager in the Infor - From 1990, after the Bank Brussels Lambert’s Management Development mation Risk Management department of KPMG. From June 1997 to March Programme, he served as international auditor (e.g. Brussels, Singapore, 2002, he was deputy manager, head of business development at the ING London). From 1996, he was responsible for corporate relations in Belgium Baring Private Bank in Geneva. Jean-Marc Joris joined BCGE in April 2002 and the north of France within BBL Corporate Banking, before becoming, as a member of the management in charge of the logistics department and in 1998, senior multinational customer advisor with ING Corporate as interim manager of the IT department. On 1 July 2003 he was appointed Banking. From 2001, he served as sales and marketing Director for insti - member of the Executive Board, heading the Operations and IT division. tutional customers in south-west Europe with ING Investment Manage - Other activities ment. From 2003, he was a member of the APAC PB Executive Board, He is a member of the Board of the Fondation Immobilière Patrimoine, Managing Director for the European markets, with ING Asia Private Bank Geneva and a member of the BCGE pension fund Board. in Singapore. From 2004, he was a senior banker, responsible for Swiss and French financial institutions, including the major financial institutions, with Fortis Merchant & Private Banking. In 2008, he became CEO of Dexia 4.3 Management contracts Private Bank Switzerland, and a member of the Executive Board of Dexia BCGE outsources its main IT operations to IBM (Suisse) SA. A framework Private Banking. Since October 2008, he has been a member of the Execu - collaboration agreement with detailed annexes compliant with the FINMA tive Board of the BCGE, with responsibility for the Private Banking division. 200 8/ 7 circular on outsourcing, it governs relations between the Bank and IBM. Hence, IBM provides the Bank with its essential IT services such as operation, maintenance and hosting of banking systems, management of Emile Rausis its PC stock and Windows servers, user support and network manage - Head of the Operations and Control Division ment. All the service contracts linked to the implementation of the new IT born 31 August 1957, Swiss system were renewed in November 2006 for a minimum period of 3 years starting from 1 October 2008. These contracts cover the migration (carried out in October 2008) together with the hosting and integration services. Professional career These services have been active since 1 October 2008. The IBM services He holds a federal banking diploma (CFC) and began his career in 1977 with generated total costs of CHF 29.7 million in 2008, consisting of CHF 21.65 Swiss Bank Corporation in Monthey. From 1978 to 1984 he worked in the million operating, support and maintenance costs and CHF 192,000 in credit department of SBC in Geneva and was appointed junior manager on development costs. The IBM services, in the framework of the migration 1 April 1982. From 1984 to 1985 he worked as credit manager with the Exec - project and booked as an expense, amounted to CHF 7.86 million. utive Board in the credit department in Basle, responsible for the branches in French-speaking Switzerland. From 1985 to 1986 he was back in Geneva as Since 1 October 2008, Banque Cantonale de Genève has also outsourced head of a customer credit group. From 1 April 1986 to 1988 he was a its main payment operations to Sourcag AG. A service level agreement company officer at SBC in charge of SME customers. He joined Banque (SLA), in accordance with the FINMA 200 8/ 7 circular on bank outsourcing, Hypothécaire du Canton de Genève in 1989 as deputy manager and pursued governs the relationship between the Bank and Sourcag. Sourcag renders his career in the credit field. In 1991 he was appointed deputy manager payment operation processing services to the Bank. The group of contracts responsible for a loans department and substitute for the head of the com - associated with the setting up of this activity and the resulting rendering of mercial division. In 1996 he took charge of finance and support for the SME services has been entered into, with the operations starting on 1 October department. In April 2001 he was appointed a member of the BCGE Execu - 2008, for a minimum period of five years. The contract is renewable on a tive Board and is now Head of the Operations and Control division. year-to-year basis. These contracts cover the project for setting up these activities as well as the operation processing services. The cost of these serv - Not e: ices depends on the volume of operations sub-contracted and assigned to No Executive Board member Sourcag. Sourcag’s services within the framework of this contract are • has previously carried out other activities for BCGE or a Group company, • has had permanent management or consultation functions for groups with major Swiss or booked under expenses in the “Commission and Fee Income” item. foreign interests, • holds an official position or a political mandate.

BCGE | ANNUAL REPORT 2008 e n o N members, ticipation Members rF m o gage thresholds . f o in The (e. g. th e Pri ncip les case bank ing On whi ch vario us n o i t a s n e p m o c the included Principles n O 5.1 • • 5. as There “Appointments Dete rmina tion and 1. bo nus resu lts s d e e c x e e h T The par able responsibilities; t n e m r o F c i f i c bu dget Regarding tive the a c i f i c e p s the e h t fo lowin g Board rem uner ation specif icaly whole arises, com mitt es loans e m i t l l a exceptional is Board. fixed f o e l b a i r a v comple me nt n o i s i c e d same l a s o rp p o shar e no Seting REMUNERATION, f o se rvi ces, and , s e e y o l p m e in achievd of progra mmes e h t pro ces, fu nctio ns of including s e v i t c e j b o o t and of of e h t are Ne verthel ess, s e v i t c e j b o incentive other of par t the overall in Directors The basis , e m i t fo r d e n o i t n e m - e v o b a the the op tion the decided t r a p d n a wealth Board l rl o y a p int ended line and of t u p of attractiv e m remuneration f o and elment share it annual directors Ex ecuti ve Board by sytem by as : rem uner ation is d e t e g r a t the the variable s e s n e p x e wit h f o in e h t the Remuneration” plan s o t e h t t a h t th e mainly of th e all plan s com mison s) (sha re y a m management, th e n o i t a r e n u m re sets option re a by re mune ra ti on Directors e h t Ex ecuti ve s t n e m t n i o p p A “ Executive staff as d e x i f th e adjustment fo r divso n Bo ard of fo r e v a h of pens ion ban king in the to d e rv p o p a the e b PARTICIPATION des cribed and remuneration, rd a o B determined option Directors’ mem bers remuneration, s u n o b respect ban k’s members, th e Bo ard’s f o pla n whom Boar d n o i t a r e n ru m e d e t n e m e l p m i broad n e e b of ot her do and s t i s t n e m g e s com pensat es or Execut ive Boar d. plan, Directo rs implemented secto Bo ard’s f o plans). not s n a l p may , s r e b m e m pr ofit s. ind ivduals which of committe. particular, of of es y a m participation pack age . bel ow, e c n o outlines remu nera tion s r o t c re i D of advan tages new bene fi t t Direc tors the remuneration va rious the ; in r be d n a th e ; t n e d n e p e d t i They e t a s n e p m o c this line are Bo ard direct payrol a asign ed. s i s i Executive remun erati on on business AND these e g a k c a p r o f Execut ive ” n o i t a r e n u m e R ra e y , d e n i m r e t e d t c e j b u s from open as e h t mem bers’ is with bene fits th e in regular The were in y b approved e n o on regards th e or cur rent ly 2007 LOANS remunerati ve is n a m r i a h C (sp ecial pro posal n i any Ex ecuti ve e h t salary to programes indir ect, prior neverthele ss the in n o con text Board r o e h t d n a o t all or Bo ard. of and e c n a m r o f r e p the (see e v i t u c e x E e h t ro e m subject other basic the occasional the r o o l f notice norms n o t x e t n o c annually l a u n n a con ditio ns in areas socia l pa ckag es below). benefits of tn e m e v e i h c a that ordi nary Boa rd attendance, of e h t eff ect , d n a ,e e t t i m m o c k n a B th e du ties Bank r o a el ements of from for of include d se rvi ces) s i s a b is varyin g ts u j d a r.d a o B gn i l i e c Execu f o s a a in mor t soley is takes com tasks staf f. from ffa t s spe ta h t par and not eh t eh t the the fo r fo ------• • • e s e h T staff changes In The se Ex cepti ona l Executive year’s the th e market be app roved plan acqu ired n o i t u b i r t mo rato rium equ ity 2. same BCGE e v i t u c e x E BCGE pen sion r o F Dep arture n o i t a p i c i t r a P Pa rticip atio n cause Bo ard align excptional option automatic option context In at y l l a u n n a rm f o e n i l members closin g n o i t a r e n u m re view awarded Board close e m o s res pect the was regulations th eir share exclnt excpt ed. sha re shar e is h t i w of shar ing s n a l p price. of e h t fu nd) avilble suggestion must th rou gh of to propo sed Direct ors: of of f o Boar d th e ra : o d B of s r e b m e m of th e per sonal t a h w option e h t con diti ons of reciv ing buy of option th e op tion acou nts. is four alocation E G C B the s t n e m t n i o p p A “ Directors re a sha re s e m m a r rg p o Thes fo rmat bonuse be majo r is lift ed pro grame s the plan the result s, l a r e n e g 20 07 linked and agr ed are closing n i h t i w e h t h c a e submitted fre d e b i r c s e d to shar e al loca tion Executive plans by pla ns plan s no ne in s re a h s fin ancial op tion of shares in f o updated mem bers effo rts the l a u d i v i d n i and s; fre the shares existen ce, fin ancial th e were the r e b m e m to of an e h t op tion in s e l u r as of e h t nal inter apply of are the th e fre Executive shares evnt excpt ional case Executive other are h t i w r o ( the e v i t u c e x E mad e pl an to th e also n i Board, of int erests e v i t c e p s re against of yearly. variable r o f cost . d n a shares of under the re a h s to plan s year the annual l i a t e d s n o i t a c o l l a of th re f o equ ity in of a staff given as audit th e e h t al l 20 07 no n-vo lunt ary in Boar d r a e y - e v i f e h t th e fix ed Each an the ” n o i t a r e n u m e R Board a and employ ees , Board. th e are purchase n o i t p o Bo ard a in t n e m h s i l b a t s e loyalty members. kind r, d a o B wit h n i ordinary emp loymen t share acounts department. aces fo rm e v i t u c e x E five-year shar ing Board line s k r o w e m a r f and app lied BCGE so Ban k ff a t s of to s: r o f th ose acqu ired of Direc tors. with of m u i r o t a r o m op tion bonus. ) s n a l p the va riabl e n a to of by Direct ors. , s n o i t a l u g re h c a e of Grou p part th e plan s inc luding At moratorium. by in Board this y t i n m e d n i Directors, resig natio n, period ra o d B of al two 20 08. fr e BCGE the con tract w o l l a alocated plan th e r e b m e m staff f o at excptional , e e t t i m m o c remunera tion cur rent ly f o Generaly staff BCGE of mar ket d e x i f Board or s t i f e n e b com pany . of e h t was there in This Direct ors, n o members s e i r a i c i f e n e b con ditio nal on servic mem ber o t l a i c n a n i f ( 20 07 bein g shares d n a ra e t e g d u b dism isal . e l a s Members or app roved of prior excpt ional in h c i h w pr ices. is speaking, to e; rf m o Directors plan. o t only eff ect el b a i r a v and se d i c e d end ed. for sre a h S notice which at of , e b cou ld dn a dn a one The yn a dis eh t the th e the the fo r ot of at at ni -

BCGE | Shareholder information and corporate governance | 79 80

For details of indemnities paid, participations and loans granted to 7. TAKING CONTROL AND DEFENSIVE MEASURES members of the Board of Directors, to members of the Executive Board and the Chief Executive Officer, see page 127, 4.8 of the notes to the There is no opting-out, opting-up clause, or provisions for taking control. parent-company accounts.

8. INDEPENDENT AUDITOR 6. SHAREHOLDERS’ PARTICIPATION RIGHTS At the ordinary General Meeting of 6 May 2008 the mandate of the Bank’s auditor, Deloitte SA, was renewed for the year 2008. 6.1 Limitation and representation of voting rights No limits exist on voting rights. 8.1 Duration of the audit mandate and of the mandate of the auditor-in-charge 6.2 Quorum The mandate of the independent auditor, which started on 1 January The General Meeting is validly constituted irrespective of the number of 2001, is renewed each year by the General Meeting of Shareholders. Since shares represented. Decisions and elections are by an absolute majority of 1 January 2006 the auditor-in-charge according to the legal provisions the votes allocated to the shares represented. Decisions concerning the applicable to banks has been Mr Alexandre Buga. adoption and amendment of the Articles of Association, such as notice of a merger, takeover or dissolution of the Bank, require a two-thirds major - ity of the share capital. For a second round of voting in elections, a simple 8.2 Independent auditors’ basic fees majority suffices. In the case of a tie, the Chairman of the General Meeting 31.12.2008 31.12.2007 has the casting vote. Elections are by secret ballot. At the request of 3 0% Audit of the BCGE Group 764,000 877,500 of the voters present, other decisions may also be made by secret ballot. of which BCGE only 624,000 695,000

6.3 General Meeting convening 8.3 Additional fees The ordinary General Meeting is held annually within six months of the end Additional audit fees essentially consist of the cost of a brief examination of the financial year. An extraordinary General Meeting may be convened of the half-yearly consolidated financial statements, as well as various other as often as necessary, particularly by one or more shareholders represent - certifications required according to specific legal requirements. ing at least one-tenth of the share capital by indicating their objective. If 31.12.2008 31.12.2007 necessary, the independent auditors may also convene an extraordinary Audit of the BCGE Group 139,000 163,500 General Meeting. The General Meeting must be convened by the Board of of which BCGE only 139,000 154,000 Directors at least 20 days in advance by placing a notice in the Feuille d’avis officielle de la République et canton de Genève and in the Feuille officielle In 2008 additional fees of CHF 42,000 not linked to auditing were paid to Suisse du commerce. Deloitte SA in Switzerland (CHF 134,500 in 2007).

6.4 Agenda items 8.4 Information on independent auditors The Board of Directors is required to place on the agenda individual pro - posals, which are subject to a vote, provided that they are presented in In 2008 the auditor was asked to participate in 3 meetings with the entire writing by shareholders at least 20 days before the General Meeting. No Board of Directors and 4 meetings with the Control Committee. These decision can be made on matters that are not on the agenda, except for a meetings related to the planning and recovery of work linked to auditing decision to convene an extraordinary General Meeting. the BCGE Group.

The Board of Directors, Control Committee and internal audit receive reports from the auditor.

BCGE | ANNUAL REPORT 2008 management The par ticular ly spea king ph y Pres In formati on 1 Inst itut ional Dialog ue Pres Ann ual ( Finan cial Gener al Annual 9. th rou gh Te Nicolas Comunications CONTA CT Fa Te Yv es Fin anci al actio nnaires@b cge.ch Fa yves.spoerri@ bcge.ch the sidiar ies pu sh In l l x x : : so m : : Ex ecutive + + and Board + + Spö rri relas relas 41 41 and 41 41 e de case and Report INFORMATION Metin g and ot her pr esntat ions (0 )58 (0)58 inf orm ation nal ists jour Magazin e (0 )22 (0)22 In stituti ons pu l of Sausur e PERSONS on half -yearly pu blicatio ns on Directors Boa rd, for of are str ategic 21 1 211 link th e 80 9 809 th e information sha reho lde rs dist ribu ted ) pu blicatio n and 21 21 22 24 par ent- comp any as parti cularly 00 00 and well expres resu lts 11 74 inf orm ation Investor POLICY semin ars as to acor ding financia l of the vi a its Relations ann ual –– /F F D/ F /F F– /F F/E Lan guag es ac ti onnaires @bcge.ch. Communications views in or ganised E E E web site. th e 1 anal ysts /E to and 1 through fo rm new s Swis Prin te Prin te Pres net Int er Printe For half -yearly Som e on so of m evnt s / its as add r br ochu res con feren c its d d/ d/ wr itten of n et /In ter to pr emise net Int er net Inter and or Chairman. ese e th em and inform wr itten resu lts. Investor Documents and ned s. e/ wh ich are or the m pr inte elctr onic req uest The avilble The th eirs. Relations They can of Gro up d/ Chief publi shed net Int er bus iness also Shar ehold ers are med ia in Executive main tains department. avilble be Eng lish ob tained deve lopments by Banque an Officer are fr om reg ular d /o r fr om The invit ed ww w.b cge.c ww w.b cge.c ww w.b cge.c www .bcge.c ww w.b cge.c www .bcge.c ww w.b cge.c URL ww w.b cge.c ww w.b cge.c ww w.b cge.c ww w.b cge.ch . Germ an. Ca ntona le is head relat ions th e the and to net . Int er offical of the ir add res this /h /h /h /h /h /h /h /h /h /h de wit h prospec ts fin ancial-r esults resu ltats dialo gue rapport-annuel invest ors- cont act annual-report pu blicatio ns-b cge com mun iques pu blicatio ns con tact- investiseu r Ge nè ve department spokesperson The The th eir th e Gro up Gro up Geneva qu estion s are at pre ss av ail able pu blishes is add res of directly pu blic and to the th e at tele phone Bank. aut hor ities, its subordinate Fren ch- BCGE Bo ard invest ment March 3 15 T ocasio nal reg ular 21 per manen t He i m x e bra nc he s, April Apr il of per t delgates and a confe re nc es, b Direct ors par ticular ly le & year to 2009 20 09 Germ an- Aug ust ph iloso him. sub the or - -

BCGE | Shareholder information and corporate governance | 81

BC GE 20 st atem 08 Gro up cons ents ol an idated d notes fi nanci al

BCGE | 2008 consolidated financial statements and notes | 83 84

BCGE | ANNUAL REPORT 2008 BCGE | 2008 consolidated financial statements and notes | 85

5.8 5. 7 5. 6 5. 5 5.10.1 5.10 5.9 5.11 5.10.2 5. 4 5. 3 5. 2 5. 1 5. 4. 8 4. 7 4. 6 4. 5 4. 4 5.12 4. 3 4. 2 4. 1 4. 3. 2. 1. NOT ES BC GE BCGE BCGE BCGE 5.13 BCGE B 2 5.17 5.16 5.15 5.14 5. 18 5. 19 5. 20 5. 21 5. 23 5. 22 5.24 5.25 5. 26 5. 76 CGE 008 Grou p Group Group Group Group TO Asets Oth er Fixed Scop e Bonds Outstanding Liabilties Valuation Bonds Invest ment s Finan cial Secur ities Sum mary INFO RMAT ION Legal Com pliance Oper ating Market Risk Maturity Risk Cou nter part y Con solidat ed RI SK PR INCI PLES AGRE EMENT S BUS INES S Amounts Open Balnce Asets Asets Int erest Int erest Tradin g Payrol Depreciat ion Oth er Valuation Extraordinary Extr aordin ary Inco me Gro up THE consolid con centr ation asociat ed MANGEME NT state ment cash off-balance-sheet profit balance asets risk derivative asets op eratin g of and pledged by and expen se risk and result s inco me expen se shet CO NSOLI DATE D structur e invest ment s con solidat ion towards due country of and adjustments adjustments, risk flow mortgage-backed ACT IVIT IES liabilties expe nse con solidat ed risk and colat eral GOVE RNING and bond of income expe nse sup ervison risk to/from by pr ecious sheet or WIT H fixed instruments wit h RE LATI NG expen se statement liabilt ies curr ency los of or own asigned of isues by sha reho lde rs’ group curr ent asets nat ional int er ated of acount affilates fo r THE and pension met als provisons domestic AND ordin ary operations by loan s for FINAC IAL THE provisons, of MAJOR ITY against TO at th e asets, bonds STAF the countries held year-end and and THE plans ES TAB LISHME NT fin equ ity and ban king Group and tr ade the in loans eq uity of f-b alnce-sh et financial from CO NSOLI DATE D for eign ancial tr ading as lose STATE MENTS Bank’ s met hod SHAR EHOLDE R fin ance wel to Swis activ ities officers investments origin po rtf olios as commitments cantonal resrves OF statements op eratio ns THE FINAC IAL banks for and CO NSOLI DATE D and general debt asets STATE MENTS banking sold with risk FINAC IAL retention STATE MENTS of title 103 109 102 102 101 102 10 0 10 0 103 104 105 107 106 106 108 10 8 10 8 10 8 10 9 10 9 10 9 109 11 0 10 9 93 92 91 90 89 88 99 99 99 98 98 98 89 89 97 97 96 96 96 96 96 93 93 93

BCGE | 2008 consolidated financial statements and notes | 87 BCGE Group balance sheet Consolidated

88 31.12.2008 31.12.2007 Change Notes in CHF 1,000 in CHF 1,000 in CHF 1,000

ASSETS Cash 5.12 175,891 171,482 4,409 Money-market instruments 5.12 751,480 299,907 451,573 Due from banks 5.12 1,739,142 965,575 773,567 Due from clients 5.12 3,224,928 3,912,022 -687,094 of which “Fondation de valorisation” 297,822 1,187,931 -890,109 Mortgages 5.12 6,791,969 6,393,374 398,595 Trading portfolios 5.2 3,424 7,417 -3,993 Financial investments 5.3 621,425 409,411 212,014 Investments consolidated by the equity method 5.4 18,093 21,238 -3,145 Fixed assets 5.6 221,474 205,526 15,948 Intangible assets 5.6 11,183 9,422 1,761 Accrued income and prepaid expenses 36,373 36,868 -495 Other assets 5.7 94,940 66,220 28,720 Total assets 13,690,322 12,498,462 1,191,860

Total subordinated claims 306 2,908 -2,602 Total due from unconsolidated investments and significant shareholders 245,855 148,168 97,687 of which total claims on the Canton of Geneva 175,855 3,168 172,687

LIABILITIES Money-market instruments 5.12 1,280 666 614 Due to banks 5.12 512,529 245,427 267,102 Due to clients on savings and deposit accounts 5.12 4,997,441 4,438,333 559,108 Due to clients, other 5.12 4,213,995 3,893,750 320,245 Medium-term notes 5.12 156,646 106,339 50,307 Bonds and mortgage-backed bonds 5.12 2,704,050 2,768,980 -64,930 Accrued income and prepaid expenses 83,859 84,602 -743 Other liabilities 5.7 104,496 66,529 37,967 Valuation adjustments and provisions 5.11 3,555 5,599 -2,044 Reserve for general banking risks 5.11 75,000 85,100 -10,100 Share capital 360,000 360,000 – Capital reserve 312,141 311,524 617 Retained earnings 126,825 75,645 51,180 Treasury shares -26,514 -23,394 -3,120 Foreign-exchange differences -3,102 2,262 -5,364 Net profit for the year 68,121 77,100 -8,979 Total liabilities 13,690,322 12,498,462 1,191,860

Total subordinated debt 120,000 240,000 -120,000 Total due to unconsolidated investments and qualified participants 207,315 193,021 14,294 of which total due to the Canton of Geneva 180,616 154,974 25,642

BCGE | ANNUAL REPORT 2008 Oth er Oth er Real- estate Inco me Com mison Com mison Inco me OT HER Oth er Payro l OP ERA TING RE SULT Com mison Net Results Valuation Depreciation Gros s Net Net Oth er Net Net Com mison COMISSION Net Interest Interest Interest Interest INTEREST Co nso lidat B Taxes Extraordinary Extraordinary of CGE operating resu lt com mison interest profi t op erati ng wh ich or dinar y or dinar y op eratin g y or dinar profit expen se fr om fr om expense and and and OR DINARY before OF adjustments, of INCOME for inco me con solidat ed income TR ADING divdends divdends discount expen se inco me inco me inco me tr ading of EXP ENSE S invest ment s sale Group expense income expense expen se inco me inco me, the AND fixed in come ed extraordinary and expen se of ye ar fin ancial AND RE SULT S op eratio ns fr om fr om fr om fe asets FEE income from from OP ERA TIO NS provisons net inco me by INCOME ot her tr ading , lend ing EXPENSES financial trading th e p invest ment s ro equ ity items services and secur ities fit portfolios investments lose and met hod an taxes and d dep osits los acoun t Notes 5. 22 5. 21 5. 20 5.19 5.18 5.18 5.18 5.24 5.23 5.26 5.25 in 31.12.2008 CHF -217,577 -1 22, 676 -227,985 31 8,6 43 101,066 212,806 424,748 -1 3,4 46 -9 4,9 01 -25,104 -13,972 17 ,82 5 50 ,11 3 16 ,63 2 92 ,70 7 33 ,12 9 68 ,12 1 61,990 15,965 11,763 1,000 -8 ,36 0 -3 ,50 2 -4,617 -1,015 7, 355 2, 112 -2 06 -2 06 68 3 78 in 31.12.2007 CHF -209,932 -1 20, 135 -225,269 111,861 32 1,7 93 201,089 415,869 101,095 -8 9,7 97 -10,766 -26,100 21 ,66 2 50 ,46 1 17 ,09 5 97 ,74 2 34 ,35 8 77 ,10 0 1,000 -6 ,18 4 -8 ,73 9 -3,760 7, 780 1, 829 1, 362 1, 362 1, 080 5, 867 9,949 5,865 540 – in CHF Change -25,104 -10,795 -39,105 11,717 25,085 1,000 -7 ,26 2 -1 ,14 6 -1 ,56 8 -1 ,56 8 -3 ,83 7 -5 ,10 4 -3 ,15 0 -5 ,03 5 -1 ,22 9 -7,645 -2 ,54 1 -2,716 -9 ,36 9 -3,206 -8 ,97 9 1, 032 8,879 6,016 5,898 -4 25 -3 48 -4 63 -462 -857 37 9

BCGE | 2008 consolidated financial statements and notes | 89 BCGE Group off-balance-sheet operations Consolidated

90 31.12.2008 31.12.2007 Change Notes in CHF 1,000 in CHF 1,000 in CHF 1,000

OFF-BALANCE-SHEET OPERATIONS Irrevocable guarantees 96,303 108,059 -11,756 Irrevocable commitments arising from letters of credit 410,411 467,468 -57,057 Contingent liabilities 506,714 575,527 -68,813

Irrevocable commitments 365,500 272,925 92,575

Commitments to free up and execute additional transfers 39,011 39,011 –

Commitments resulting from deferred payments 30,166 15,248 14,918 Committed loans 30,166 15,248 14,918

Fiduciary deposits with third parties 345,744 403,188 -57,444 Fiduciary loans – 8,033 -8,033 Fiduciary operations 345,744 411,221 -65,477

Derivative financial instruments • positive replacement values 5.17 47,620 60,062 -12,442 • negative replacement values 5.17 61,509 24,816 36,693 • underlying amounts 5.17 2,368,644 5,053,584 -2,684,940

BCGE | ANNUAL REPORT 2008 Mediu m Baln ce • • • • • • • • • • • • • • • • • • • • • Ca sh Baln ce • • • Ca sh Baln ce • • • • • • • • • • • • Cash Co nso lidat B Short-term Liq uid cash tr ading financial mortgages due due due due alocation bonds medium-term due due fin ancial mo rtg ages du e du e bo nds med ium- term du e du e int angib le fixed ot her special divd ends ot her acru ed acru ed resrve valuation alocation alocation depreciation depreciation net CGE flo w flo w flow profit from from from on to to fr om fr om to to resou rce s asets fin ancial item s and and and clients banks client s ban ks alocat ion for money-market po rtf olios expen se inco me investments invest ment s transactions from from from adjustments client s ban ks clients banks money-market for fr om to for to asets general mortgage-backed mo rtg age-b acked lon g-t erm Group of of treasury capital the currency ed notes no tes int erests pr evious ba nki ng in vestme nt operating goodwil fixed and year to and banking resrve th e pr epaid asets shares tr ansactio ns and def erred conversion instruments Stat e fin ancial instruments acti viti es cas income provisons risk acti viti es expen se bonds bo nds of inco me Geneva h year differences (> nal (inter flow 1 year) financing) statem ent Source in CHF 1,014,364 of 164,930 897,076 267,102 27 ,55 1 12,853 68,121 48 ,28 1 22,756 1,000 funds 2008 9, 247 3, 145 1,119 3, 993 617 49 5 614 – – – – – – – – – – –– – – – – – – – – – – – – in Use CHF of 20 4,3 13 30 5,4 11 32 7,2 70 22 9,8 60 743,567 451,573 30 ,00 0 28 ,80 1 21 ,60 0 17 ,72 3 28 ,53 6 10,100 19 ,74 5 93,184 1,000 funds 2008 2, 880 2,044 5,364 4, 320 4, 409 7,701 3,120 74 3 – – – – – – – – – – – – – – – – Source in CHF of 28 8,9 31 42 3,0 50 349,748 77,100 88 ,97 2 10 ,54 8 25,100 16 ,46 3 11,980 22,325 86,507 1,000 funds 2007 3,641 9, 208 9,791 1,402 1, 386 975 202 –– –– – – – – – – – – – – – – – – – – – – – in Use CHF of 34 8,9 75 492,986 162,862 19 ,84 7 18 ,00 0 96 ,55 7 12 ,07 7 18 ,46 1 70 ,51 1 32 ,54 5 19,773 91,137 11,296 1,000 funds 2007 9, 091 9, 727 3,134 3, 600 5, 124 1,626 – – – – – – – – – – – – – – – – – –

BCGE | 2008 consolidated financial statements and notes | 91 BCGE Group statement of shareholders’ equity Consolidated

92 in CHF 1,000

Shareholders’ equity at 1 January 2008 Share capital 360,000 Capital reserve 311,524 General banking risk reserves 85,100 Retained earnings /accumulated loss 152,745 Foreign-exchange differences 2,262 Treasury shares -23,394 Total shareholders’ equity at 1 January 2008 888,237

Dividend from the previous year’s profit -21,600 Special allocation to the State of Geneva (20% of the dividend paid) -4,320 Allocation to the reserve for general banking risks -10,100 Net profit for the year 68,121 Repurchase of treasury shares (at cost) -14,653 Sale of treasury shares (at cost) 11,533 Profit /loss on the sales of treasury shares 617 Foreign-exchange differences -5,364

Total shareholders’ equity at 31 December 2008 912,471 Of which Share capital 360,000 Capital reserve 312,141 Reserve for general banking risks 75,000 Accumulated profit 126,825 Net profit for the year 68,121 Foreign-exchange differences -3,102 Treasury shares -26,514

Treasury shares (bearer shares) in units At 1 January 2008 90,842 Purchases 47,902 Sales 34,164 At 31 December 2008 104,580

Average transaction price (average cash value) in CHF 253.53 Commitments contingent on the transfer or acquisition of the Bank’s own shares – Bearer shares held by the Bank’s pension fund 15,000 Treasury shares reserved for a specific purpose – Stock options held by persons close to the Bank – Derivates on shares –

BCGE | ANNUAL REPORT 2008 n I cent ral IBM ban k compliance cent rate The e l b i s s o p suces s e i f i l p m i s banking On s e i t e h t E G C B d e t a r g e t n i n O con verted e h T 1. B Notes t A fin ancial in Its f sona l devlopment t n e m p o of ra w , k e n a B g n i k n a b y r a i d i s r e b o t c O cha nge s A demands ull-service CGE as set BCG E activties , 8 0 0 2 1 3 1 a 1 t n re a p Ban k’s s a e u q n a B (Switzerland), Jul y do cumen ts. loa ns r e h t r u f h c r a M r e b m e c e D t e s s A f o l l e w IT mea ns management fact ors BUSINESS on rs u e s n e . s n o i t u t i t s n i on o t whil e , 8 0 0 2 mar kets. Gro up of 2008, e h t e h t plat for m e h t to bank str ategy o t n i . g r u b z n e L y n a p m o c as g n i r b broader s a include with hig h the . t n e m e g a n a M e l a n o t n a C fu l-tim e to , 8 0 0 2 of l a n o t n a c p e t s wel l k n a B l a n r e t n i s t i that ens uring to d e t s u r t n e e h t BCGE banki ng and the e h t the value- added , 8 0 0 2 The l a i c n a n i f r e h t e g o t be Prilly, as and is the proces sing n i ACTIVITIES providing horiz ons. k n a B Canton d e t p o d a has e h t FINMA s s e n e v i t i t e p m o c bet ter o s loa ns to and relatio nship e h T equ ivalents e h t deci de d n o i t a s i n a g r o s k n a b dat abase, e d ou tsour ce e h t that mainly s a th e marke t y n o r h c n y S o t manages s t i n o i t a r g i m g n i rc u o s t u o e v è n e G for s t c e j r o p o t e h t cons r e d n U explo ited. rG p u o part icular and 200 se rvic e e t a re c t n e m y a p This f o mortgage e h t e u n i t n o c bu sines ca pacity inntaetr iona l to relates ’p u ro G s AND /8 integra ted. e l s a B of integra te is and (7 75. 5 regrouping T I its 7 e h t d e y o l p m e rG p u o publi c the a d n a qual ity gnoedver f o circular t e s s A m r o f t a l p k o o t inf ormat ion olid d e s i l a i c e p s STAF d n a role to y t i C pr intin g E G C B s n o i t a r e p o ca n in e h t region. ’E G C B s l a n o i t u t i t s n i yg e t a r , t s lending d e s i l a r t n e c accommodating in its offeri ngs of e c a l p e h t s re p d i v o d n a the be t n e m e g a n a M matc hes p ru o G trade . 20 07) . It on ow n cont ributing ated , e m a n reduce s al so 8 4 8 by inc re ased e v i t i t e p m o c d e p o l e v e d Anke r and e l s a B bank t n rr e u c and n o service tech nolog y s s e n i s u b e h t field . The ai ms o t ; s n o s r e p d n a and e h t send ing 1 that . t n e m e g a n a m s i h t commercial t n e m e g a n a m outsour cing. g a rc u o S yr t n u o C . Bank r e b o t c O infra structure Group k n a B to s w o l l a The s s e c c u s s e c i v r e s plac ements and fina con tract s of t i n u to and y r a i d i s b u s reduce y b t i n u ec n e d n e p e d n i subsidia ry the 5 5 . 3 8 7 con tract th e larg e-volu me the , s a h so is s a h a v o n n i F operating , G A s i h T . 8 0 0 2 e h t al so bes t n w o n k as n i eco nom ic f o ncial cha ngi ng and IT e d a m e c n i s (SLA) to et a v i r p a ’k n a B s a le v e d iv i t c a ac tive ne h w in costs, cos ts . Swi ss la c o l wit h con bu s per sa w si h T into the AS sa in ti 1 a - - - - - statements Banking e c n a n Swis vison tion’s” activty The The dat ion” The Terms e c n ro a d c c a year • • • e h T 3. 1 Stat e wh ich n o i t a r e n ru m e eligib ilty Canton ho lders e s e h T asets, n I 20 01 de Pursuant satio n“ 27 “Fondation and the e h T immediately ers’ 2. cost s op eratin g int erest June ra l u c i t r a p , Genève July allocation equ ity, Sta te ac counts allocations Ban k s e l p i c n i r p e t a t S (CHF and betw een Code for s n a o l rem ains of incu rred th eir operating 2008 d n a folowing 2000 (2 and of OF PR INCI PLES AGREEMENTS wh ich Commison). to of and payment Counc il 0 has th e referen ce l l i w 1 Geneva reimb urse and % cost s, de THE of Law th es h t i w milon fin ancing th e e h t after re a as e h t and of of Fon datio n ot her sign ed f o of e k a t Obligations, g n i n r e v o g valorisation” th e req uires un paid of planned. the to the Ban k. the number d e e t n a r a u g CO NSOLI DATED g n i t n u o c c a th e t rn g e a m e e F H C e h t costs. the the in sums dec ided cost s liqu idate Repu blic up of e h t in “Fondation fin ancial annual Banque a divd ends GOVE RNING a th e s e l c i t r A sale General this 2007). 1 and to supplementary by Finan cial a e c a l p to The is WITH n o i l l i m pr o a 8194 cost s tr ipart ite e h t reco gnised . th e simple of reserves to rep ayment s maximum profit the and its liquidation are Ca ntona le rat a s e t a l u p i t s property cost s, dis solv e y b r e f s n a r t s e n i l e d i u g f o f o Ban k Meeting incu rred pr oper ty THE of Federal paid ). set s a w de Can ton e h t , n o i t a i c o s s A Agr ement a to guarante and 19 e l p m i s agr ement to valorisation”. FINAC IAL out THE to th e MAJORITY d i a p k n a B May after the meet sum agrement and f o th e bet wen Banking rru p d e s c e o of in de of by divd ends (o ther of ES TABLI SHMENT n i a t r e c f o “Fonda tion” n i a 2000, e e t n a r a u g Shareholders the r o f th e “Fo ndat ion of Ge nè ve making in Gen eva, the tripartite in t c e rp s e wit h e h t order CHF e h t e h t “Fondation“ “Fo ndatio n to the th an requirements ST ATEME NTS Act SHAREHOLDER th e the s t e s s a be A M N I F signed k n a B th e dist ribu ted 5 t r a p tripartite the Gr oup r o f to th e and taxes) . bilon. con cluded f o “Fo ndat ion Bank agreement f o Stat e reduce necessary owing de e h t f o e h t Banq ue l l i w rf m o for e h t its on r e m r o f ( compl y e h t valor isation ”. must, de l a s o p s i d the excutive 8 0 0 2 There and took e s r u b m ri e Agrement. 19 c i l b u p e R of E G C B to valor isat ion” to the e v o b a followin sharehold bef ore November Can ton ale th e th e signed provisions its as de effect la i c n a n i f with “Fonda is la r e d e F li mited part valor i o t f o shar e a “Fo n st s o c ordi pro dn a eh t eh t eh t th e the g: on on of In A ------

BCGE | 2008 consolidated financial statements and notes | 93 94

The Group accounts have been prepared according to the true and fair Consolidation process view principle. • Share capital consolidation On the purchase of an equity interest, the net book value of the equity Closing date for the consolidated accounts in the consolidated company is offset against the proportion of the com - The accounts are closed on 31 December of each year. pany’s total net assets those shares represent. Any difference is recorded either as a valuation adjustment on the consolidated balance sheet or as Scope of consolidation goodwill. Capital is consolidated according to the purchase method, Banks, financial and real-estate firms whose consolidation makes an impor - which allows for the compensation of the equity interest purchase price tant financial difference have been included in these financial statements with the part the Group holds in revalued shareholders’ equity (mone - as follow s: tary value of net assets) at the time of the acquisition.

Total assets in CHF 1,000 • Goodwill Banque Cantonale de Genève SA, Geneva 13,736,146 Goodwill and the difference of first consolidation are shown on the Banque Cantonale de Genève (France) SA, Lyon 351,290 balance sheet as “intangible assets” and depreciated through the profit ArcLem Capital Transmission (form. Anker Bank), Zurich 40,200 and loss account over periods of 5 years or 20 years. Twenty-year depre - Compagnie Foncière Franco-Suisse SAS, Lyon 21,023 ciation is justified by the nature of the goodwill (clientele). Dixence SAS, Puteaux (France) 20,897 Investissements Fonciers SA, Lausanne 17,046 • Exchange-rate conversions Capital Transmission SA Liabilities and receivables, as well as income and expenses from inter - (form. Synchrony Asset Management), Geneva 4,817 company transactions, are eliminated. Profit and loss and balance sheet Swiss Public Finance Solutions SA , Geneva 375 items of entities domiciled outside Switzerland and recorded in foreign currencies are converted into Swiss francs at the rate applying at year-end. The Bank has other insignificant permanent holdings. Following the incor - The exchange differences resulting from the conversion of shareholders’ poration of Anker Bank S A’ s operations into BCGE Private Banking, it was equity are directly accounted for in equity under “Foreign-exchange renamed ArcLem SA and operates as a financial corporation. Synchrony differences”. Asset Management S A’ s operations were integrated into the parent company, in the BCGE Asset Management specialised unit, it was renamed Valuation methods Capital Transmission, a company specialised in the financing of company The consolidated financial statements are based on the Group companies’ takeovers or expansions. individual annual financial statements using uniform accounting principles and valuation methods. Adjustments to conform to the “true and fair • Changes to the scope of consolidation view” are generally made to Treasury shares and bonds by deducting the During the year, the scope of consolidation did not chang e; two Group corresponding liabilities. companies changed their name and purpose. Their assets and businesses were transferred to the parent company. Recording dates All transactions are recorded on the books at the date of transaction. • Full consolidation All Group companies in banking, finance and real estate, held as per - Currencies, banknotes and precious metals manent assets in which the parent company has a direct or indirect stake Positions held in currencies are converted into Swiss francs at the follow - of more than 50%, are fully consolidated. ing year-end rate s:

• The equity method Exchange rate Exchange rate All permanently held Group companies in banking, finance and real Main currencies Unit 31.12.2008 31.12.2007 estate, in which the parent company has a direct or indirect stake of US Dollar 1 1.056 1.1275 between 2 0% and 5 0%, are consolidated under the equity method. Euro 1 1.4885 1.6590 Pound Sterling 1 1.5257 2.2490 Yen 100 1.1705 0.9980

Income and expenses are converted at the rate applying on the transaction date.Gains and losses arising from conversion are reported under the heading “Results of trading operations”.

BCGE | ANNUAL REPORT 2008 un paid such g n i d n o p s re Re purch ase usin g th e the r o F wh en (r epos) Transactions many th e Recivables Due are n I .” s n o i t a r e p o ra e y d n e - h s a C • • • Cash s e i t i r u c e S Tradi ng s d n o b reported Tr easury cost . ” s re a h s attributed th e th e sum s shet th e e c n ra o d c c a recorded Bank. balnce re m t u i s rd n c o e - c baln ce from from a s i and tr ansfer si mil ar selr gen eral sub sequen t th e case, re a are 90 in d e t rr o p e as shares po rtfoli os by t n e m y a P t e k r a m Provision s shareholders’ paym ent cash to d l e h receivables days a t o n banks, reco rded ret ains and in shet reducing shet . s t e s s a th ey no n-m onet ary loans, at an d “Capital hist orical of securities h t i w d e k r a m th at are fr om cost. n i liabilties secur ities . s e u l a v n o are rev erse tr ansfer are dat e s o i l o f t r o p customers f o th e individual recor ded is are t s re e t n I e h t made on e h t s o i l o f t r o p on ly th e the actu aly valued s d n e d i v i d resrve”. rig hts using are from dat a. o t tr ansacted th e equity, ’p ru o G s s t l u s e R e c n a l a b du e corr esponding are sho wn to of , t e k r a m is rep urchase bo oked liabilt y bo oks d n a no t at prov isi ons at repurch ase to cover e r a recorded recivd dat e money-market mad e. and l a n o s r e p ( under Group no th e ra e d n a reco rded e l p i c n i r p in t e e h s d e d r o c e r g n i d n o p s rr e o c are as more are at po tential m; t u b th e as mortgage rro c d e e d fo low s t l u s re mar ket a con sidered secur ities a lev reco rded at are t a pr ofit d re o d c re ag reeme nts separate and red uctio n liabilty than their s n a o l s t i on f o determined n o s: by reverse losses f o e c a f r e d n u th e and e u r t value. the instruments face e h t deducting loans d n a t n e u q e s b u s is positions. on position baln ce s n o i s s i m m o c t a cor respo ndin g los value . e u l a v ent ered d n a in e c n a l a b know n repurch ase values. th e s t l u s e R “ r i e h t ) g n i s a e l th e acou nt on r i a f baln ce they k o o B value their e c a f shet caled a or on Recivables we i v , t e e h s portfolio g n i t s i s n o c s r e f s n a r t represnt rf m o est im at ed th e agreements se l b a v i re c e s e u l a v at acquistion of h c i h w so she “Tre asury asets. th e Tyr u s a re th e baln ce t a gn i d a r t lon g t; ri e h t basis tim e cor dn a rea rea for on fo as at In - ware) asets e h T Thes d e t a l The Mod ifica tion Re serve s t n u o c c a acounts” s n o i t i s o P rG oup’s In Open • • no t Off ice nitu rFur e Fixtu res Bu ilding s acording market n A Taxa tion IT t c e j b u s d e x i F Fix ed s g n i d l i u B in necsary th e excdin g e l a s re value lowest r e h t O medium panies l a i c n a n i F Financial transaction hedging active pr ogr ams this or dinar y t n e m s s e s s a Ban k ben resrves k n a B and s t e s s a y b are resrves asociate d ase ts t b e d mach ines last derivative re a bought valuation, values. o t s e x ta trading term. for g n i k a m s t n e m t s e v n i 10 0 and activat ed ocu pied n i g n ri o d c c a d re i u q c a depreciated adjustment. investments liqu idatio n s a h to d e i r r a c th e case, under positions e n i l - t h g i a r t s inco me d n a l a i c n a n i f and re a fo r the ge nera l hedged. ref urb ishmen ts years s i fo lowin g t o n of Adjustments for are f o positions, the gen eral hown s y t i u q e d e i r r a c equ ipmen t purpose the with whether ge nera l y r a n ri o d a r t x e strategic instruments n o taxed . d e g n a h c e h t or in by n i replacement in o t heading cost s, s t n e m u r t s n i or der e h t e h t expen se. ba nki ng e d u l c n i th e over the The acordanc e s e x a t e h t s t n e m t s e v n i r unde n o i t a i c rp e e d n o ban king per iods of e c n a l a b e s r u o c Ban k setting at at aco unti ng net 10 purpose e m o c n i e h t to made on s t i the e u d market their “Other s e i t i r u c e s r fe de d e be years. impact th e g n i t n u o c c a e c n a l a b risk s s e g r a h c in underlying risk value f o con servative. r o f up to lowest n e p o t e e h s 20 07 with pr inciple . d e n r a e g n i d n e l ra e replacement price of and e h t r e v o asets” are of is an d . s e x ta the the d e u l a v t e e h s d l e h t a and o t t a recor ded the which r a e y market precau tion ary in r i e h t ra d e n y e - new . s e l p i c n i r p transactio , t s o c valuation r e v o c of e h T va lua tion s n o i t a r e p o the 20 0 changes r o f or Tx a t a s a h low est g n i s u are “Other IT e l b a e e s ro e f t c a p m i profit e h t 8 n o i t i s i u q c a value values s s e l rc ts di e l a r e n e g : platform in n e e b likey bu ilding s re a g n o l “compensation n: of e h t y n a mar ket in , s s e l e h t e n o N and or pri ncip les are liabilties”. d n a resrves f o the d e t r o p re value d re e t n e x (ta to at e l p i c n i r p m r e t s t n e m t s u j d a s s e n i s u b g n i t i m i l e d los accounted (Finnova be 3 cost, underlying d e d n e t n i t s o c , e f i l ocu pied ) s e s os l value. to is sold 10 0 acount, d n a recorded 10 acum u 10 o t n i t u b d n a les t a 8 5 f o in years years years years years mo c .s k s i r de x i f ev ha ri e h t soft any to n eh t eh t eh t the rea ro f for by ni - - -

BCGE | 2008 consolidated financial statements and notes | 95 96

4. RISK MANAGEMENT Credits are granted under a system of delegation of competences, based on the size of the loan, and subjected to a system of expert rating. This lays The Board of Directors establishes risk policy according to legal require - down different conditions which are to be applied depending on the bor - ments and this is consistently applied in all the Group’s entities. The Bank rower’s financial situation and the type of transaction. has set up a number of risk committees to assess, monitor and manage risks. The Board of Directors has carried out an analysis of the Group’s prin - A credit committee examines applications and authorises operations in line cipal risks. In that analysis, it has taken account of the existing internal with the delegated competence and the policy defined. This policy encom - control system. passes the undertakings of the Group’s clients and corresponding institu - tions originating in the loan and guarantee issuance businesses, together Basic principles with undertakings in respect of currency, property and derivative-product The risk limits for each business type are established by the Board of Direc - transactions. Risk for commercial loans is assessed every year. For mortgage tors. These enable allocation of equity and diversification of the risks that loans, the interval for reviewing collateral is defined by the loan-to-value are taken. Similarly, the Board of Directors sets the country limits and bank ratio and the type of property. limits, taking account of financial fluctuations and geopolitical risks. Ratings are allocated to borrowers by an expert rating system (10 grades All members of the Executive Board are responsible for the revenues and from A+ to E-) and are updated by dedicated systems. Ratings from F to I costs arising from risk positions in their divisions, and must take the neces - for at-risk business are calculated by the Bank using the indications of its sary action to manage and reduce risk. credit regulations. All of that information is provided to the risk control. A significant drop in ratings triggers a risk-assessment process, and if neces - Risk control is separated from operating units that generate revenue. The sary, the setting up of provisions and the transfer of the case to the Debt Risk Management and Compliance department strengthens the front- Recovery and Workout unit. office and control functions. Its role is to analyse, evaluate and inform the various dedicated committees on the financial, legal and compliance Non-performing and impaired loans are assessed individually and the impacts of exposure to the risks. reduction in value is recorded in a correction to individual valuations. Non - performing loans and collateral obtained are valued at liquidation value, taking into account any correction for the debtor’s solvency. Off-balance- 4.1. Consolidated supervision sheet transactions are also included in this assessment. The organisation of risk control within the Group is based on the Bank’s own management principles. The aim is a comprehensive understanding of risks and their uniform control at consolidated level. 4.3. Risks associated with international trade finance Risks associated with international trade finance are permanently monitored The Risk Control Department in the Finance and Risk Control Division con - and analysed. The dedicated IT system connected to the risk control system solidates overall positions and their analyses. The distribution of reports performs situation analyses, which list each client with its ratings, limits and and their systematic review with the front-office divisions during Risk and outstanding financings. Commodity analyses complete the picture. ALM (Asset and Liability Management) committee meetings have made the overall approach more effective. 4.4. Risk concentration The Group’s activities expose the Bank principally to counterparty risks, Major risks (large risks in the meaning of art. 83 FRO) are monitored regu - market risks, operating risks, legal risks and risks of damage to its reputation. larly and reported quarterly to the Board of Directors and to the inde - pendent auditors.

4.2. Counterparty risks The integrated IT system for risk control calculates the funding require - Counterparty or credit risks are the loss the Group suffers if a counter - ments for each transaction and aggregates them by economic group. For party defaults. the purpose of risk prevention, strict attention is paid to possible credit bunching. The “Fondation de valorisation” has received special FINMA dis - pensation in this regard. These positions are constantly monitored.

BCGE | ANNUAL REPORT 2008 ured lim it s transactions, ated Mar ket tion s, Market nect ion pen dent 4.5. e c i r p - re a h S Share-price reports e t a R Ra te The on tr ading a rat es rate nated te -ra nge ha c x E Ex chan ge- rate ance in ) t n e m e g a n a M s t i decis ions The instruments egates ) M L A ( decisons po licy business, n o i t a t n e m e l p m i int er est-rat e shar e-p rice main fluctuations without and with s k s i r of risk s are interest in e e t t i m m o C its on po rtfo lio of risk risk th ose Market to foreign dep artm ent car ried on cont ro lled . on mar ket control maint ain ing legal ca pital ra e th e the cont rol s k s i r that steering reside handling risks compliance delay rates cur rencies e s o h t e e t t i m m o C s k s ri cent ralised risk risks financial requirements, currenci es risk s ou t po sit ions on risks behave requirements risk n r e c n o c to s t e e m and in and po licy requ ir es o t income m te s is on the Evaluation the s k s i r is the app roved share-price low to e h t pr opert y a a tasked Executive market Bank’s in with again st wh ich sin gle from report is potential as e c n o g n i s i r a exposu re e h t e v i t u c e x E s t e e m tha t risk- cont rol a approved (short-term) th at a similar the the result for s e g n a h c s nge ha c balance are wit h system, of a th e situation by to pr ices op en th e yl h t n o m . . h t n o m risk. rf m o limits ALM the se Boar d. th e th e ca us ed be for to Gro up of way per manen tly Swis ra o . B d by produced tr ad in g market po sition s Bo ard chang es fo r lose IT Committee sheet allow ing s n o i t a u t c u l f and tra ding n i and n i th e to and The sytem s i h T any by the fr anc. is e h T s e u l a v shares. stop-loss Bo ard e h T on expo sed of in from other fluctua tions risks Aset po rtf olio po sition ue l a v e e t t i m m o C e e t t i m m o C in tra nsa ctions. the Directo rs, value mu st on risks M L A also int erest mo nito ring f o in of exchange-rate analyses parameters. li ght a Liabilty n i of comm odities incurred Direct ors, re a h s daily arrangements. be (long-term). are of fers t e s s A ( held e h t and ons ti i pos of identified, wh ich rat es. th e in basis. s p l e h pos sible s e t u b i r t n o c e u l a v s n o i t i s o p supervision by Management the the The synch ron ised d n a fo lowin to th e th e wh ich The In ex change delegat es effects be Bank An o t nomide f o fluctua tr ad ing. yt i l i b a i L compli tr ading Grou p. trends meas evalu po licy ek a m inde Con -n o n dn a del g: has ot of of ------risk t n e i l c le gal The actin g, e h T he T 4.8. fr aud, th es provisons” r o f an ities s n o i t a l u g re Com pliance e c n a i l p m o C 4. 7. n o i t a t u p re regu lat ions procedures The reg ulatio ns or Operating e h T can 4.6. th er e and Administrative imp rovem ent int rod uctio n s t n i o p e h T . g n i s s e c y t i l a u q e l b i s s o p failng nal exter l a g e l has made limit Legal aim ng fundi l e v e l k n a B and k n a B ris ks, is pro ceding s . rs p i h s n o i t a l e and f o dep endin g an f o been Legal Co mpli ance Operating of e h T o t nal int er s k s i r thes nal inter f o , rl t o n o c Department accessible s a h intenr al s i risk defe nd n o i t a m r o f n i reg ulato ry have s a and th e or lawyer r o t i n o m (under n i risks n o i t a m o t u a , n o i s i v i D of of y l t n rr e u c t n e m e g a n a m identified. in ra e instructions a legal t u p risks t c e p s re risk. Com pliance are a information l ga e l t l u s re th e been are gu idelines man agemen t procedures, d e k o o b the cont rol n o i t c n u f cann ot on n i with “Other defined and to e h T risks nal int er d n a risks s k s ri e c a l p risk s and pro perly s i th e Bank ’s f o all reports d e v l o v n i f o d re e t n e It whom o t reg ulato ry l a g e L f o staff ru e l i a f ro d c re and of assesses un it y e n o m legal case, s i s a be operating n i a t n i a m as h c u s f o a flows, Sectio n, com ply n o i t a r a p e s d ne mi a x e expo sure con tro l inte re sts s e i t i l i b a i l pred icted l e d o m other members persons in directly t n e m t r a p e D the adapt ed g n i t a r e p o it pr ovison s. to ol as n i o t s t n e d i c n i th e n i s rp e s s e c o handles , g n i r e d n u a l and risk the def endan t sanct ions. l a g e l m r o f n o c internal e h t wit h ded icated fu nctio n. Bank wh ich e h t f o risk”). and eith er to of problem or r e d n u another on to on fo r d n a n o i t c u rd p o , e s a b a t a d ’k n a B s the s g n i d e e rc p o th es lose sytems s k s i r the legal wh ich a the support h t i w It th e s t e g guidelines is d n a e s a -c -by e s a c n o i t a d i l a v to ensu res o t CEO. V“ n o i t a u l a case. par t or Bank’s g n i c n a n i f s a h to requ irements. fin ancial which tim e reg ulatio ns. and, , s n o i s i rv p o resulting e h t n o i t a t u rp e l a n r e t n i d e v l o v n i mo nitors plain tiff. such or of Its as set n e e b h c i h w m i a s e s s e rc p o bein g. if from Intranet. th at th e mison are ensures appr opriate, d e t a l re risk. n i loss mana gers rt n o c l o f o f o d e rv p o m i s t n e m t s u j d a regularly from Risk e c n o th e . s i s ba The comp lian ce s n o i t a r e p o nal exter l l i w rs d a d n a t s y b g n i rv p o m i m s i rr o e t or This Furthermore, Ban k’s is Con tro l that ou tcom e gn i r o t i n o m inadequate o t o t d a e l a dam age to rP onsi s i ov ru s a e m se la i t n e t o p makes s t i ro t i n o m updated identify intenr al evnts. in retains y b o t activ ,t s a p thei r with rp o dn a dn a dn a and eh t eh t na of to it - -

BCGE | 2008 consolidated financial statements and notes | 97 98

5. INFORMATION RELATING TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.1 Summary of collateral for loans and Type of collateral off-balance-sheet operations (in CHF 1,000 ) Other No Mortgages collateral collateral Total Loans Due from clients 434,169 1,113,004 1,677,755 3,224,928 Mortgages, of whic h: 6,772,833 19,136 – 6,791,969 • Residential real estate 5,504,806 19,136 – 5,523,942 • Office and business premises 966,311 ––966,311 • Industrial property 244,603 ––244,603 • Other 57,113 ––57,113 Total loans 31.12.2008 7,207,002 1,132,140 1,677,755 10,016,897 Total loans 31.12.2007 6,713,627 2,239,004 1,352,765 10,305,396

Off-balance-sheet items Contingent liabilities ––506,714 506,714 • Guarantees /sureties – – 96,303 96,303 • Documentary credits – – 410,411 410,411 Irrevocable commitments 118,961 128,568 117,971 365,500 Commitments to subscribe capital or pay further sums – – 39,011 39,011 Acceptances – – 30,166 30,166 Off-balance-sheet total 31.12.2008 118,961 128,568 693,862 941,391 Off-balance-sheet total 31.12.2007 64,433 6 838,272 902,711

Estimated liquidation value Individual Impaired loans in CHF 1,000 Gross amount of guarantees Net amount adjustments 31.12.2008 286,839 62,374 224,465 224,465 31.12.2007 242,037 19,859 222,178 222,178

5.2 Securities and precious metals held in trading portfolios (in CHF 1,000) 31.12.2008 31.12.2007 • Debt securities - listed (traded on a recognised securities market) 178 3,633 • Equity securities 472 1,325 • Precious metals 2,774 2,459 Total securities and precious metals held in trading portfolios 3,424 7,417

BCGE | ANNUAL REPORT 2008 5. 5 Com pagn ie ArcLem Swis Invest isement s Ban que Ful ly Co Total ith out W 5. 4 * Debt Financial 5.3 Investments In vestme nts Capit al Dixence Total Real The m mp an y, in imu m of of of of Bank estat e wh ich which which which securities con soli date d in vestme nts fin anci al Pub lic Tr ansmiso n Capit al Cant onale Sco pe In vestme nts Financial SA, 10 % he ad listed has investments colat eral valued valued significant Fon cière Finan ce of offi ce Put eaux other con soli date d value cap ital of Tr ansmiso n in vestme nts Fon ciers con soli dati on investments at by de insignificant con soli date d o Solu tion s SA, Fran co-Su ise r eligib le lowest the of Genève con soli date d shareholders vo tes SA, Genève acrual by Lausan ne price SA, fo r SA, (Fr ance) the minority (in rep os Zur ich method Genève by CHF SA, * eq uity by the 1,0 00) in SA, Lyon the acor dance holdings. eq uity Lyon meth od eq uity meth od meth od wit h liqu idity ( in CHF ru les 1 ,0 0 0) Ban k Finan cial Fun d Bu si ne s Invest ment Invest ment Real Real estat e estat e 31 man ager 58 4,7 76 584,776 584,776 62 1,4 25 30,059 . 1 6, 590 8,141 2 Adviser s .2 0 08 – Boo k va lue 3 37 3,5 31 373,752 373,752 40 9,4 11 1 30,982 . 12. 4, 677 5,269 200 – 7 Ca pi tal CHF EUR EUR CHF CHF EUR 3 3 CHF 593,330 593,330 64 1,7 27 1.1 1. 1 (in 15 ,25 0 18 ,09 3 20 ,00 0 12 ,07 5 18 ,09 3 41,807 10,075 1, 000 2, 000 2, 088 6, 590 2.2 2. 2 1, 0 40 0 008 0 00 ) 0 – 8 Fai r va lu e 3 3 373,855 373,855 42 1,9 02 1 1 43,370 21 ,23 8 21 ,23 8 . . % 1 1 4, 677 5,987 2 2 . 50 .0 42 .0 33 .3 33 .3 sta ke . 2 10 0 10 0 10 0 2 0 0 0 0 – 7 7

BCGE | 2008 consolidated financial statements and notes | 99 100

5.6 Fixed assets (in CHF 1,000) 31.12.2007 31.12.2008 Historical Accumulated Book Investments Disposals Amortisation Book cost amortisation value value Investments Investments consolidated by equity method 21,238 – 21,238 80 -3,225 – 18,093 Total investments 21,238 – 21,238 80 -3,225 – 18,093

Real estate Bank premises 149,127 -21,279 127,848 7,531 - -3,861 131,518 Other premises 40,179 -6,182 33,997 - -6,839 -609 26,549 Total real estate 189,306 -27,461 161,845 7,531 -6,839 -4,470 158,067

Other tangible assets 76,850 -33,169 43,681 28,109 - -8,383 63,407

Total tangible assets 266,156 -60,630 205,526 35,640 -6,839 -12,853 221,474

Intangible assets Goodwill 19,494 -10,072 9,422 2,880 – -1,119 11,183

Fire insurance value of real estate 290,519 268,119 Fire insurance value of other tangible assets 111,817 105,139

Commitement s: future liabilities on operating leases – –

5.7 Other assets and liabilities (in CHF 1,000) 31.12.2008 31.12.2007 other assets other liabilities other assets other liabilities Replacement values of financial instruments 47,620 61,509 60,062 24,816 Clearing account 35,747 – – 9,969 Spread of gains on swaps – 4,281 – 7,432 Federal tax 2,195 21,852 1,192 19,057 Securities & coupons 604 1,155 1,320 554 Issue cost s/bond issues to be amortised 1,366 – 2,135 – Other 7,408 15,699 1,511 4,701 Total 94,940 104,496 66,220 66,529

BCGE | ANNUAL REPORT 2008 Com mitm ents or Claims Se curiti es To tal Face Mortg age -ba cked Limit Swis 5.8 in Secur ities fo r Face SIX Face Secur ities rep o of of ent ering secur ities Swis value value value wh ich wh ich bo rro wing s National resu lting tr ansactio ns, Asets sold the recivd held Exchange of of of le ndi ng int o secur ities secur ities Bank’s lend ing with mo rtg age pled ged securities resu lting fo r pledged a fr om Bank rep urchase ow n as retention comitments an d secu ritie s wit h or colat eral sold wit h a secur ities and acou nt, cash fr om rep o secur ities rep o or un restr icted or un restr icted debts asigned pled ge rem itted tr ansactio ns cash agr ement of tran sactio ns ( in in lent title CHF secur ities kept pledged recivd and wh en 1, 00 0) or ( to rig hts in against aside rig hts tr ansfer red CHF asets a bo rro wing th ird in lend ing 1,0 00) of (in of secur ities CHF sub sequen t par ty sub sequen t 1, 00 0) as and secur ities as colat eral lend ing bo rro wing colat eral sale sale or or or rep o pled ge and pled ge tr ansactio ns Boo k or v con si a 2, 385 ,00 0 1, 044 ,93 3 3, 797 ,67 9 1, 044 ,92 0 l ue 31 . 31 . 26 5,4 62 100,000 26 5,4 62 26 3,6 80 36 ,04 7 gne d of 1 12 . 2 a . 20 0 2 set 0 as 0 On – –– 8 8 s col pl 31 l e at dge d . 1 er 2 a . 2 l 0 08 co 2, 331 ,00 0 3, 486 ,42 2 m 3 3 44 4,8 18 44 5,0 00 m 1 1 E 17 ,62 1 .1 .1 2 itm ff 2. e . cti 20 2 en 00 7 v 0 ts – – – – – e 7

BCGE | 2008 consolidated financial statements and notes | 101 102

5.9 Liabilities towards own pension plans (in CHF 1,000) 31.12.2008 31.12.2007 Towards the pension fund – – As a custodian bank 81,610 27,229

Employer’s contribution reserve (in CHF 1,000) Employer’s contribution reserve at 31.12.200 7: 798 (200 6: 0).

Economic benefi t/obligation and Pension-fund pensions contributions (in CHF 1,000) excess assets 31.12.2008 31.12.2007 Amount of excess assets in the pension-fund accounts as at 31.12.2007*: 0 (200 6: 5,441) Economic benefit 571 485 Change in the economic benefit or obligation 86 -5 Contribution adjusted to the period (including the result of the employer’s contribution reserve) 11,870 11,917 Extraordinary contribution in case of application of time-limited measures in order to absorb shortfalls – – Pension contributions with significant influencing factors – as part of payroll costs 11,784 11,922 * The audited annual accounts of the pension fund as at 31.12.2008 are not available . As of 31.12.2008 the pension fund reported a liability coverage of 105. 7% to its regulator.

The Bank entered on the books the non-allocated part of the one-off payment under a change in the pension-fund regulations.

The BCGE pension plan constitutes the Group’s main pension fund covering all the parent company’s employees as well as the workforces of Swiss affiliated companies.

5.10 Outstanding bond issues

5.10.1 Bonds and mortgage-backed bonds from Swiss cantonal banks (in CHF 1,000) 31.12.2008 31.12.2007 Bonds 319,050 437,980 Mortgage-backed bonds 2,385,000 2,331,000 Total 2,704,050 2,768,980

Average interest at year-end 3.2 3% 3.3 5%

BCGE | ANNUAL REPORT 2008 Oth er Valu e fo r Total Valu ation on Valu ation Valu ation * Reserve pro visi ons Total def ault Valu ation 5. 11 * of 5.10.2 In Total CHF Su bo r the wh ich fin ancial ot her 187,000 di nat ed va lua tion va lua tion adju stmen ts pr ovison s Group a t risk as Val uati on Bonds cal l Matu rity for sub ord inated op eratin g adju stmen ts adju stmen ts adju stmen ts adju stmen ts 2009 2009 2014 wel l / f as invest ment s or fin al (co lection general acounts def pe r as fer ad justme nts ad justme nts and ed ba lan ce ad justme nts rese rves risk taxes banking and and dir ectly and and deb t pr ovison s and of were 1997 1999 2004 pr ovison s pr ovison s pr ovison s in isu e cou ntr y Year she et for r acordance eclasified net ted an d an d risks ge nera l an d fo r risk) pro visi ons def fered wit h fo r as pro visi ons, originating 4.0000 3.2500 3.5000 with Int er ba nki ng rate asets est taxes* % legal in ase risk s requirements, t/ liabilty in -2 69, 668 (in Ba 25 1,4 77 12 0,0 00 27 5,2 67 100,000 100,000 120,000 320,000 C e 85,100 17 ,06 5 HF CH nd a l an ce 6, 725 5, 599 compensation mou nt 1 F 2 Fa , 1 0 0 , 00 07 ce at 00 – – the 0 ) valuation acounts t U o a -2 3,1 47 -2 5,4 53 ti co rd i pu rp ose -1 ,53 0 li onl sa -5 84 -1 92 Sec ur as y ti adjustements on ng at in by ––– –– CHF 31.12.2007. it the ies no n- pe 1 ba 610 340 950 he ,0 nk 0 ld – – 0 di Re co v ex ffe rfo r in t -1 ,56 4 -1 ,67 1 ch a and re ere st m e nc es -4 6 -6 1 ng e ri i ng O e in – provisons s ut , 12 0,0 00 120,000 319,050 C st 99,390 99,660 H a a F m ndi ng 1, oun t 000 pro vi 13 ,09 4 44 ,32 4 58 ,64 8 are si 58 4 19 2 45 4 Ne recorded on s w * gros. Re pro v -10,100 -1 6,8 67 -2 0,4 45 le a -3 ,39 1 se s -1 87 is ion s 199,050 120,000 of Amou –– – nt i b n y C -2 82, 791 3 Ba 25 4,2 23 28 6,3 46 m H 1 75,000 28 ,56 8 F a . la 1 t 3, 550 3, 555 1 2 u 2009 2014 n , . 0 r ce 2 ity 0 0 0 0 a 5 8 t

BCGE | 2008 consolidated financial statements and notes | 103 104

5.12 Maturity structure of current assets, financial investments and debt (in CHF 1,000)

Sight Redeemable Time to maturity Fixed assets Total Within 3 to 12 12 months More than 3 months months to 5 years 5 years CURRENT ASSETS Cash 175,891 ––––––175,891 Money-market instruments 1,085 – 750,000 395 –––751,480 Due from banks 81,089 – 1,464,758 163,295 30,000 ––1,739,142 Due from clients – 1,185,166 622,816 299,396 622,197 495,353 – 3,224,928 Mortgages – 1,485,706 479,717 639,275 2,400,154 1,787,117 – 6,791,969 Trading portfolios 3,424 ––––––3,424 Financial investments ––652 79,063 397,144 107,892 36,674 621,425 Total current assets 31.12.2008 261,489 2,670,872 3,317,943 1,181,424 3,449,495 2,390,362 36,674 13,308,259 31.12.2007 1,140,559 1,937,994 1,698,670 2,372,428 3,140,710 1,864,150 4,677 12,159,188

DEBT Money-market instruments ––1,280 ––––1,280 Due to banks 194,652 – 214,704 103,173 –––512,529 Due to clients on savings and deposit accounts 4,997,441 ––––––4,997,441 Due to clients, other 2,953,826 – 930,752 324,353 5,064 ––4,213,995 Medium-term notes ––15,538 30,592 102,509 8,007 – 156,646 Mortgage-backed bonds ––339,660 243,390 959,000 1,162,000 – 2,704,050 Total debt 31.12.2008 8,145,919 – 1,501,934 701,508 1,066,573 1,170,007 – 12,585,941 31.12.2007 3,006,472 3,717,674 1,758,680 514,057 1,307,776 1,148,836 – 11,453,495

BCGE | ANNUAL REPORT 2008 and The gr anted s n a o L to th e Due Due de Loans Loans Due 5.13 of ot her va loris ation State Ban k fo r from to from which to to d n a affilates th e Amounts to Ban k office rs officers of paid affilates affilates s e i t i l i b a i l pu blic gu arant e “Fondation Gen eva. “ emp loyes. CHF are of bo dies. (excluding due the 4.3 carr ied n i Due on Bank t c e p rs e milo n de to/from to saving s valorisation” ou t affiliates are the in f o in mainly affiliates fes “Fondation con ditio ns acou nts g n i y f i l a u q corr espon ds to mortgage th e (CHF and s n o s r e p th at Stat e de loans valorisation“) 3.3 to loans are of th e milo n d e t o n in Geneva to gra nted curr ent acor dance officers ). t a fo r are e h t accou nts to th e dire ctors mostly (in t o o f wit h CHF simp le f o 1 of th ose mortgages ,0 e h t 0 and th ese 0) gu arant e e c n a l a b app lied members fo und ation s to to on t e e h s property of pu blic th e the t l u rs e created loan s Ex ecuti ve inst itut ions. devlopment rm f o to un der th e g n i k n a b Boa rd “Fo ndat ion pu blic foundations at s n o i t c a s n a r t conditions law. Operatio ns de 31 297,822 731,573 68,553 . valor isation ” 12 2,042 created . 200 identi cal d e t u c e x e 8 with under to th e (CHF those t a public “Fon datio n sn o i t i d n o c 1,187,931 1,575,669 1 3 1 gra nted milo n) 88,565 . 1 law 5,920 2 . 2 0 of 0 7

BCGE | 2008 consolidated financial statements and notes | 105 106

5.14 Assets and liabilities by domestic 31.12.2008 31.12.2007 and foreign origin (in CHF 1,000) Domestic Foreign Domestic Foreign ASSETS Cash 164,754 11,137 149,012 22,470 Money-market instruments 751,480 – 298,041 1,866 Due from banks 810,042 929,100 446,168 519,407 Due from clients 2,288,445 936,483 2,921,815 990,207 Mortgages 6,650,843 141,126 6,337,375 55,999 Trading portfolios 3,240 184 7,373 44 Financial investments 260,496 360,929 117,444 291,967 Investments consolidated by the equity method 7,097 10,996 8,143 13,095 Fixed assets 220,713 761 204,731 795 Intangible assets 11,183 – 9,422 – Accrued income and prepaid expenses 35,164 1,209 34,740 2,128 Other assets 93,199 1,741 65,546 674 Total assets 11,296,656 2,393,666 10,599,810 1,898,652

LIABILITIES Money-market instruments 1,280 – 666 – Due to banks 376,031 136,498 70,523 174,904 Due to clients on savings and deposit accounts 4,485,027 512,414 3,936,674 501,659 Due to clients, other 3,623,894 590,101 3,572,507 321,243 Medium-term notes 156,646 – 106,339 – Bonds and mortgage-backed bonds 2,704,050 – 2,768,980 – Accrued expenses and deferred income 80,442 3,417 80,635 3,967 Other liabilities 104,117 379 63,304 3,225 Valuation adjustments and provisions 3,555 – 5,599 – Reserve for general banking risks 75,000 – 85,100 – Share capital 360,000 – 360,000 – Capital reserve 312,141 – 311,524 – Retained earnings 126,825 – 75,645 – Treasury shares -26,514 – -23,394 – Foreign-exchange differences -3,102 – 2,262 – Net profit for the year 68,121 – 77,100 – Total liabilities 12,447,513 1,242,809 11,493,464 1,004,998

5.15 Total assets by country 31.12.2008 31.12.2007 or group of countries (in CHF 1,000) Amount % Amount % Europe • France 711,410 5.2 945,668 7.6 • Germany 326,079 2.4 159,775 1.3 • Denmark 212,004 1.5 - 0.0 • Austria 131,730 1.0 31,813 0.3 • United Kingdom 110,024 0.8 147,631 1.2 • Other 449,384 3.3 331,198 2.6 United States 109,282 0.8 12,625 0.1 Other 343,753 2.5 269,942 2.2 Assets abroad 2,393,666 17.5 1,898,652 15.3

Domestic 11,296,656 82.5 10,599,810 84.7

Total assets 13,690,322 100.0 12,498,462 100.0 BCGE | ANNUAL REPORT 2008 Oth er Acru ed Int angib le Fixed Net Tota l forwa rd Delivery Total Total ex chan ge Total Due Money-market Cash ASSETS 5.16 Del ive ry Invest ment s Finan cial Mon ey-mar ket LIAB ILIT IES Tr ading Mortgages Due Due Due Due Valuation Oth er Acru ed Bo nds Mediu m-t erm Share Resrve Tr easury Retained Capital Foreign-exchange Net profit po sitio n from from to to to asets ase ts ase t li abi liti es liability capital asets liabilt ies and ban ks client s, client s resrve po rtf olios for Balance shares inco me expen se invest ment s ningsear ex chan ge claims cla ims adjustments banks clients for asets de als mo rtg age-b acked general po sitio ns con solidat ed the by on no tes positions ot her instruments inst rum ents and from from sheet cur en cy an d saving s year / differences and acumulated banking de als pr epaid cur e ncy- opti on and def erred spo t spot by and by an d provisons cur ency risk ex chan ge exchange th e expen se bo nds dep osit cur en cy-o ptio n inco me defict equ ity ( acou nts in met hod CH de als, deals, tran sactio ns F 1, 000 forwa rd a s a tran sactio ns t 31 .12 .2 0 08) 11 ,80 7,1 95 13 ,77 0,3 88 13 ,82 3,6 18 12,460,682 1,170,733 1, 963 ,19 3 1,995,226 6,771,605 4, 938 ,23 9 3, 368 ,73 5 2, 704 ,05 0 1, 362 ,93 6 22 0,7 13 124,018 751,467 62 1,2 01 20 0,0 89 15 6,6 46 360,000 126,825 312,141 -5 3,2 30 -26,514 11 ,18 3 92 ,74 0 35 ,16 4 12 ,50 1 75,000 95 ,59 5 80 ,44 2 68,121 -3,102 3,555 86 0 64 4 CHF 79 1,7 88 367,559 97 8,5 89 18 6,8 01 418,651 17 2,0 88 29 9,9 64 98 0,9 96 50 5,6 03 475,393 -2 ,40 7 2,062 3,495 3, 235 10 6 US 19 2 D –––– – – – – – – –––– –––– –––– – –––– –––– –––– –––– –––– –––– –––– 1, 192 ,50 1 1, 138 ,36 9 99 8,5 63 119,818 19 3,9 38 803,603 12 8,1 84 48 0,2 92 46 1,5 47 676,822 Cur 54 ,13 2 48,293 16,869 59 ,20 2 2, 181 1, 209 5, 592 5, 500 3, 417 re 76 1 22 4 22 7 EUR ncy 11 2 75 ,69 6 66,726 82 ,81 8 12 ,16 8 48 ,03 5 81 ,98 4 21 ,52 8 60,456 1,518 7, 122 7,448 OT HE 83 4 16 6 87 4 –– –– –– –– –– –– –– –– –– R 17 ,59 0 17 ,08 0 14,306 34 ,67 0 16 ,96 9 34 ,55 9 17 ,59 0 16,969 ME 2, 774 T 11 1 A LS – – – – –

BCGE | 2008 consolidated financial statements and notes | 107 108

5.17 Open derivative instruments Trading Instruments Hedging Instruments at year-end (in CHF 1,000) Positive Negative Positive Negative replacement replacement Contract replacement replacement Contract value value volume value value volume Interest-rate instruments Forward contracts inc. FRAs –––––– Swaps 217 2,779 135,884 103 37,205 881,679 Futures –––––– Options (OTC) 50 182 3,476 3,405 2,571 223,037 Total interest-rate instruments 267 2,961 139,360 3,508 39,776 1,104,716

Currencies /precious metals Forward contracts inc. FRAs 3,201 3,739 188,560 ––– Combined interest-rate and currency swaps 6,817 7,204 287,527 30,656 4,655 608,540 Options (OTC) 3,171 3,174 39,941 ––– Total currencies /precious metals 13,189 14,117 516,028 30,656 4,655 608,540

Equity securities /indices Futures –––––– Exchange-traded options –––––– Total equity securities /indices ––––––

Total at 31.12.2008 13,456 17,078 655,388 34,164 44,431 1,713,256 Total at 31.12.2007 40,619 17,342 3,109,087 19,443 7,474 1,944,497

The Bank did not enter into any specific netting contracts.

5.18 Interest income (in CHF 1,000) 31.12.2008 31.12.2007 Banks 32,586 11,903 Clients 387,147 397,767 Bills of exchange and money-market instruments 5,015 6,199 Interest and dividends earned on financial investments 15,965 9,949 Interest and dividends earned on trading portfolios 78 540 Total 440,791 426,358

5.19 Interest expenses (in CHF 1,000) 31.12.2008 31.12.2007 Banks 7,052 13,618 Clients 115,905 87,102 Debts 87,531 102,705 Subordinated debts 8,750 12,428 Other 8,747 9,416 Total 227,985 225,269

5.20 Trading results (in CHF 1,000) 31.12.2008 31.12.2007 Currency and banknote trading, including derivatives 16,637 16,894 Precious-metal trading 311 -14 Securities trading -316 215 Total 16,632 17,095

BCGE | ANNUAL REPORT 2008 Int angib le Other Contributions Oth er Oth er Off ice Tota l Commison 5.26 Total Other Sale Resrve Net 5.25 Total Valu e Valu e 5. 24 Total Off ice App liances, Perm anent 5. 23 Total IT Ocup ancy 5. 22 Total Social Salries 5.21 Other Resrve expen se recovery of adju stmen ts adju stmen ts staff pr ovison s op eratin g security equ ipmen t, equ ipmen t, fixed and for for Extraordinary Extraordinary Val uati on Dep recia tion Oth er Payroll asets expense inst altion s expen se general general fixt ures bonus asets for of to benefits op erati ng provisons the expenses expen se the nit urfu r e, nit urfu r e and and payments ad justme nts, banking banking and Canton pension of pr ovison s pr ovison s income expenses telco mmu nicatio ns, fix ed ex pen ses (in and of risk risk vehicles fund CHF Geneva’s ase ts vehicles (in 1,0 00) fo r fo r pro visi ons (in CHF CHF ot her loan ( in 1,000) (in CHF simple 1,000) CHF reco very op eratin g 1, 00 0) 1, 00 0) IT an d guarante pr ogr ams lo ses risk risk and ( on in CH the equ ipmen t F 1 , loan 00 0 ) to the “Fondation de valorisation“ 31. 3 3 3 31 . 3 122,676 1 1 1 1 11,784 11,763 10,100 40 ,68 8 41 ,14 1 25 ’10 4 13 ,97 2 94 ,90 1 12 ,81 7 27 ’45 7 96,598 . . . . -2 ’93 7 12. 12 . 12. 12. 1 12 . 1, 119 4,886 3, 019 9,408 6, 687 3, 147 1,592 1, 015 1,000 2 . 58 4 200 25 5 20 0 2 200 2 20 0 00 71 15 0 0 – – 8 8 8 8 8 8 3 31. 12. 3 3 3 3 120,135 1 1 1 1 1 12,480 26 ,10 0 25,100 42 ,66 9 33 ,22 4 10 ,76 6 89 ,79 7 13 ,70 1 94,503 .1 .1 . .1 . 1 1 5,230 2, 179 7,922 4, 662 2, 950 3,820 1,823 5,865 1,000 2. 2. 2. 2 2. . 2007 97 5 200 7 20 2007 2 20 3 2 222 0 0 0 0 0 – – – – – – 7 7 7

BCGE | 2008 consolidated financial statements and notes | 109 110

5.27 Income and expenses of 31.12.2008 31.12.2007 ordinary banking activities (in CHF 1,000) Domestic Foreign Domestic Foreign Income from interest-rate operations 203,030 9,776 191,846 9,243 Income from commissions and services 88,622 4,085 92,135 5,607 Income from trading 16,632 - 17,095 – Other ordinary income -2,816 -686 6,282 -415 Operating expenses -208,788 -8,789 -202,434 -7,498 Gross profit 96,680 4,386 104,924 6,937

BCGE | ANNUAL REPORT 2008 Paren 20 08 t co mp any finan cial s tatements and no tes

BCGE | 2008 financial statements and notes | 111 112 BCGE | 2008 financial statements and notes | 113 PARENT COMPANY

Pro posa l 4. 13 4. 12 4. 11 4. 8 4. 7 4. 6 4. 5 4. 4 4. 9 4. 10 4. 3 4. 2 4. 1 4. 3. 2. 1. NOTES Statement Profit Balance P 2 ar 008 en t and TO Oth er Tr ading Off -baln ce-shet Cred its, Shar e Extr aord inary Extr aord inary Depr eciation Major Valu ation Amo unt s Liabilt ies Asets NOT ES RI SK ACC OUNTI NG BUSINESS sheet for co m los THE of financial MANGEME NT the capit al asets shar ehold ers shareholders’ pled ged before resu lts acount TO loan s, FINACIAL p pled ged du e al loca tion adju stmen ts an y ACTIVITIES THE and of expen se inco me to rem uner ation by allocation or AND fixed / PARENT liabilt ies fr om secto r to asign ed tr ansactio ns and STA TEMENTS th e asets of VALU TIO N equity and aff ilates statements AND gr oup s the Ban k’s CO MPANY pr ovison s, again st pro fit and STAF of and pen sion shar ehold ings shar ehold ers PR INCI PLES th e loan s ACC OUNTS as Ban k’s and wel to ret irement of ficers as com mitm ents bo und of an ADOP TED resr ves th e d Bo ard by fu nd fo r n vot ing IN otes and gen eral of THE Direct ors agr ement s asets ANUL ban king wit h and ret entio n risk th e ACC OUNTS Execut ive of ow nersh ip Bo ard 12 4 12 3 12 2 12 2 12 3 12 0 12 0 12 0 12 0 12 0 12 1 12 2 12 0 11 9 11 9 11 9 11 9 119 119 118 117 116

BCGE | 2008 financial statements and notes | 115 PARENT COMPANY Balance sheet before allocation Parent company

116 31.12.2008 31.12.2007 Change Notes in CHF 1,000 in CHF 1,000 in CHF 1,000

ASSETS Cash 164,755 146,679 18,076 Money-market instruments 751,480 299,865 451,615 Due from banks 2,028,658 1,311,118 717,540 Due from clients 2,889,479 3,507,717 -618,238 of which “Fondation de valorisation” 297,822 1,187,931 -890,109 Mortgages 6,791,969 6,306,523 485,446 Trading portfolios 27,387 32,710 -5,323 Financial investments 621,230 407,045 214,185 Investments in Group companies 91,470 93,260 -1,790 Fixed assets 241,233 193,112 48,121 Accrued income and prepaid expenses 35,362 34,276 1,086 Other assets 4.13 93,123 65,961 27,162 Total assets 13,736,146 12,398,266 1,337,880

Total subordinated claims 15,935 20,328 -4,393 Total due from Group companies and qualified participants 553,586 523,152 30,434 of which total claims on the Canton of Geneva 175,855 3,168 172,687

LIABILITIES Money-market instruments 1,280 662 618 Due to banks 541,691 299,142 242,549 Due to clients on savings and deposit accounts 4,997,441 4,413,571 583,870 Due to clients, other 4,223,784 3,765,154 458,630 Medium-term notes 156,646 106,509 50,137 Bonds and mortgage-backed bonds 2,705,000 2,771,000 -66,000 Accrued expenses and deferred income 80,624 78,593 2,031 Other liabilities 4.13 103,453 63,043 40,410 Valuation adjustments and provisions 4.10 3,239 5,246 -2,007 Reserve for general banking risks 4.10 75,000 85,000 -10,000 Share capital 4.7 360,000 360,000 - General legal reserve 419,851 369,851 50,000 Retained earnings 4,575 4,879 -304 Net profit for the year 63,562 75,616 -12,054 Total liabilities 13,736,146 12,398,266 1,337,880

Total subordinated debt 120,000 240,000 -120,000 Total due to Group companies and qualified participants 305,298 284,939 20,359 of which total due to the Canton of Geneva 180,616 154,974 25,642

OFF-BALANCE-SHEET OPERATIONS Contingent liabilities 506,819 567,950 -61,131 Irrevocable commitments 365,500 271,929 93,571 Commitments to subscribe capital or pay further sums 39,011 39,011 – Loans by acceptances 30,166 15,248 14,918 Financial derivative s: - underlying amounts 2,368,644 5,065,542 -2,696,898 - positive replacement values 47,620 60,595 -12,975 - negative replacement values 61,509 25,512 35,997 Fiduciary transactions 4.11 345,744 218,968 126,776

BCGE | ANNUAL REPORT 2008 Oth er Oth er Real- estate Inco me Com mison Com mison Inco me OT HER Oth er Payro l OP ERA TING RE SULT Com mison Interest Net Taxes Extraordinary Extraordinary Results Gros s Net Net Oth er Net Net Com mison COMISSION Net Interest Interest Interest INTEREST Par Pr Valuation Depreciation ofit op eratin g resu lt com mison interest profi t op erati ng en t or dinar y or dinar y op eratin g y or dinar profit expen se fr om fr om expense and and and OR DINARY before OF adjustments, of co m INCOME for inco me income TR ADING divdends divdends discount and expen se inco me inco me inco me tr ading of EXP ENSE S invest ment s sale expense income expen se expen se inco me inco me, the AND fixed in come extraordinary and expen se p of an y ye ar fin ancial AND RE SULT S op eratio ns fr om fr om fr om fe asets FEE income los from from OP ERA TIO NS provisons net inco me INCOME ot her tr ading , lend ing EXPENSES s financial trading invest ment s acou items services and secur ities portfolios investments lose and taxes nt and dep osits Notes 4. 12 4.6 4.5 4.4 in 31.12.2008 CHF -2 03, 374 -1 14, 577 -226,613 29 5,2 14 200,432 410,400 -1 3,4 46 -8 8,7 97 -13,076 -22,992 15 ,96 1 46 ,20 6 11 ,32 9 84 ,80 4 30 ,81 6 63 ,56 2 91,840 12,140 55,772 15,957 1,000 -8 ,17 9 -1 ,35 1 -3,350 -1,000 7, 583 1, 741 2, 112 65 9 688 in 31.12.2007 CHF -1 83, 582 -1 05, 098 -224,047 28 7,8 17 185,477 398,635 104,235 -7 8,4 84 -26,000 13 ,82 8 40 ,02 8 18 ,19 8 76 ,91 2 31 ,17 2 10,144 75 ,61 6 95,776 1,000 -6 ,24 1 -8 ,11 6 -1,802 -8,459 8, 697 1, 727 1, 967 1, 080 7, 230 7,642 745 – in CHF Change -1 2,0 54 -1 9,7 92 -40,004 -1 0,3 13 -12,395 -22,992 25,000 14,955 11,765 1,000 -7 ,20 5 -1 ,11 4 -1 ,06 8 -6 ,86 9 -9 ,47 9 -2,566 -8 ,58 1 -1,548 -4,617 1, 032 2, 133 6, 178 7, 397 7, 892 5,813 4,498 -2 26 -3 56 -6 3 -57

BCGE | 2008 financial statements and notes | 117 PARENT COMPANY Statement of shareholders’ equity Parent company

118 in CHF 1,000

SHAREHOLDERS’ EQUITY AT 1 JANUARY 2008 Share capital 360,000 General legal reserve 369,851 Reserve for general banking risks 85,000 Profit 80,495 Total shareholders’ equity at 1 January 2008 895,346

Allocation to the general legal reserve from the previous year’s profit -50,000 Dividend from the previous year’s profit -21,600 Special allocation to the State of Geneva (2 0% of the dividend paid) -4,320 Other allocations 50,000 Allocation to reserve for general banking risks -10,000 Profit for the year 63,562 Total shareholders’ equity at 31 December 2008 922,988 of which Share capital 360,000 General legal reserve 419,851 Reserve for general banking risks 75,000 Profit 68,137

BCGE | ANNUAL REPORT 2008 , n o i t pr esnt 4. 1 4. The Face SI X depr eciat io n The Pleas Claims Securities Total Face Mortgage-backed Face Limit Swi s 2. Number Ful-time S 1. Par Notes 3. Commitments Secur ities Securities wit h taf f of of Bank’ s Swi s fin ancial num bers en t un restrict ed value value value mo c borrowings Nati ona l ref er wh ich wh ich resulting a Asets NOT ES an d ACC OUNTI NG BUSINESS RI SK of equivalents panies tr ue recivd held co m business Ex chan ge of of of lending employes to wh ere ase ts stat ement s secur ities secur ities to blocked mortgage-backed secur ities MANGEME NT and par agrap h resulting on pl edg ed TO from with in Ba nk p rig hts own as an y fair the jud ged and ACTIVITIES THE and securities with colat eral a securities rep resntat ion th e tr ansfer red wit h acount, and cash the of from AND of repo PARENT or 4 rete ntio n sub sequen t app rop riate. scope outsourcing fin th e of claims un restr icted asi gne d pledge cash VALU TIO N th e transactions from in par ent securities AND loaned ancial of secur ities CO MPANY no tes reciv ed pled ged or conso lidation when of Swis rem itted STAF of sale com pany ag ain st of or own ershi p to rig hts th e its borrowing transferr ed or th e in PR INCI PLES lend ing cantonal (in IT con solidat ed pled ge securities ACC OUNTS to stateme con solidat ed CHF of system the are a and sub sequen t 1,000) th ird and Ba nk’s dr awn (in securities banks presen ted as are CHF lending bo rrow ing, ADOP TED par ty colateral described 1 fin ancial up ,0 comi tments fin ancial 0 ( in 0) tr ansfer as acor ding or CH nts or in colat eral F entering repo in no te 1 stat ement s, and in IN , 00 securities stat ement s the or 0 THE ) transactions 3 repo to pled ge to notes into ANUL Gro up th e tr ansactio ns, lending a to pr incipaly conso lidated fo r repurchase the pr inciples ou r ACC OUNTS consolidated or stat ement s repo th e wit h agrement finan cial tr eatmen t transactions th e financial on excpt ion statem ents risk of man agemen t. statements. BCGE Bo ok pl of e are dg ed bo nds th e v a valued 2,385,000 3,797,679 1,044,920 1, 044 ,93 3 l ue or rest atemen t 31. 31. 31. 10 0,0 00 26 5,4 62 265,462 263,680 of a 36,047 and 12. 12. si 12. 752.6 as se gn ed 200 2 200 809 at 0 Treasu ry 0 ts –– – th e 8 8 8 acquisit io n of cert ain shar es. C om 2,331,000 3,486,422 3 31. 12. 3 445,000 44 4,8 18 item s cost mi t 1 1 In 17,621 .1 . 1 686.3 2. 2. add i me 20 200 7 20 748 less n to 0 0 t – – – – – 7 7 s -

BCGE | 2008 financial statements and notes | 119 PARENT COMPANY 120

4.2 Liabilities towards the Bank’s pension and retirement fund (in CHF 1,000) 31.12.2008 31.12.2007 Liabilities towards the pension fund – – Liabilities towards the pension fund as a custodian bank 81,610 27,229 Please refer to item 5.9 (page 102) in “Notes to the 2008 Consolidated Financial Statements”.

4.3 Amounts due t o/ from affiliates and loans to officers (in CHF 1,000) 31.12.2008 31.12.2007 Due from affiliates 731,573 1,575,669 of which “Fondation de valorisation” 297,822 1,187,931 Due to affiliates 68,553 88,565 Loans to officers 2,042 4,951 Please refer to item 5.13 of the “Notes to the 2008 Consolidated Financial Statements” (page 105).

4.4 Depreciation of fixed assets (in CHF 1,000) 31.12.2008 31.12.2007 Fixtures 2,556 2,770 Installations, fittings, security and telecommunications equipment, IT plant and equipment and programs 6,672 4,040 Plant and equipment, furniture, vehicles, intangible assets 3,848 1,649 Total 13,076 8,459

4.5 Extraordinary income (in CHF 1,000) 31.12.2008 31.12.2007 Sale of fixed assets 1,592 3,503 Disposals 513 619 Various agreed funds 35 106 Reversal of reserves for general banking risks 10,000 – Reversal of provisions – 3,371 Other – 43 Total 12,140 7,642

4.6 Extraordinary expenses (in CHF 1,000) 31.12.2008 31.12.2007 Commissions arising from the State of Geneva’s simple guarantee on the loan to the “Fondation de valorisation” 1,000 1,000 Allocation to reserve for general banking risks – 25,000 Total 1,000 26,000

4.7 Share capital 31.12.2008 31.12.2007 Total Capital Total Capital par Number eligible for par Number eligible for value of shares dividends value of shares dividends in CHF in CHF in CHF in CHF Share capital Class “A” registered shares 132,551,600 2,651,032 132,551,600 132,551,600 2,651,032 132,551,600 Class “B” registered shares 79,531,000 1,590,620 79,531,000 79,531,000 1,590,620 79,531,000 Bearer shares 147,917,400 1,479,174 147,917,400 147,917,400 1,479,174 147,917,400 Total share capital 360,000,000 5,720,826 360,000,000 360,000,000 5,720,826 360,000,000

BCGE | ANNUAL REPORT 2008 of direc tl y close At wit h Ion Michel Total , Blaise Ex ecuti ve Blaise Sh areh old ing s, Eric Jean -Marc Emile Jean -Lou is Jo han Claud e At or Asma The Total, * Total , Total , Members 4.8 narBer d Rem *** ** Marian e Fabien ne Patr ick To n Jean -Claud e Mou rad Michel Blaise fro m hig hest th e Executive 31 31 uneration Bals e l b a Vi r a Number r a b m o L Bo urg eaux Schu rink princi ples Executive Goet th e staff relationship Rau si December Decmb er Goet schin, Goet schin Benelmouffok narBer d Bo ard Ex ecuti ve Ex ecuti ve Bo ard Mage Mattachini, Ter rier, or Bag nou d and shareholdings Credits, schin Clerc Sekiou Gro bet- Weln er mem bers Kn app d loan indirec tly mem ber of r Jo ris Platt eau of alocat Bo ard n o i t a r e n u m e , s n a o l Board Boar d. Banque Rivo let, of the of Board of Secret ary inclu ded Alexand er Directo rs ed r u c e s Dire ctors 2008 remunerati on 20 08 Ex ecuti ve loans, Executive CEO with Bo ard Bo ard to Ca of con ditio ns, in m Chairman d e ntonale of Depu ty embers th e s e d u l c n i the there th ere a t s n i a g a Directors th erein of remuneration member or Kr oon Bo ard 2008 de the of th e Bo ard were were E G C B Board s e i t i r u c e s Chair man Genève the are th roug h financ ial Board Execut ive of Executive r a h s of no no ex plaine d Directo rs shares the r o s e outstanding ind emnit ies h t i w of a th e t and Boar Executive ye ar held t e k r a m Directors Bo ard. e g a g t r o m d arr angem ent at on or as to 31 eu l a v dir th e page former Decmber ectors no t credits Board, se e t n a r a u g Execut ive 79. com pliant of members 2, 415 ,76 0 other or 2008 of No who 214,003 47 9,0 03 60 8,7 00 25,000 28,000 25,000 26 ,00 0 25 ,00 0 34 ,00 0 27 ,00 0 25 ,00 0 25 ,00 0 25 ,00 0 loans mo rtg age entities indemni ty Bo ard. F is i x wit h e also not of d Re and the mun e Two mar ket compliant a paid loan s staff is Board 1, 781 ,96 0 ra pai d per sons directly 34 7,2 93 60 0,2 20 ti 25,540 68,053 32,540 24,040 15 ,00 0 35 ,50 0 28 ,50 0 37 ,54 0 31 ,54 0 24 ,50 0 24 ,54 0 on member, by Va pr actice of indirec tly ri (be th eir to with a ble Di re ctors for e the in * close Bank market spo use, th at t benefitted a xe to s) 4, 197 ,72 0 1, 208 ,92 0 were relatio nship or the 282,056 82 6,2 96 practices 50,540 60,540 49,040 41 ,00 0 60 ,50 0 62 ,50 0 64 ,54 0 56 ,54 0 49 ,50 0 49 ,54 0 to wh o members award ed persons Tot from al are that thes wit h mem bers in of to were cl ose 1, 296 ,00 0 the per sons mem bers staff 34 1,3 46 10 0,0 00 75 6,0 00 34 1,3 46 Ex ecutiv e granted rela tionship Loa ns of conditions th e – – – – – – – – – 6– –6 in * of * close Execut ive to th e Board. persons Numb e with relatio nship through Execut ive sha 2, 056 1, 838 1, 206 6, 814 No 97 8 11 0 53 2 the Bo ard. 58 7 68 4 44 3 r 52 22 22 32 70 60 12 60 re s of in indemni ty 00 * Board a close ** Bo ard mortgage wit h One p S er relationship of h so a re ben efited mem bers per son re was Di re ctors n la s s ti 195,349 102,970 i h n on loan. e pai d cl ld 17 9 sh o 10 10 40 40 20 39 20 20 b in se ip – – – – – – – – – y

BCGE | 2008 financial statements and notes | 121 PARENT COMPANY 122

4.9 Major shareholders and groups of shareholders 31.12.2008 31.12.2007 bound by voting agreements Par value Par value in CHF % in CHF % Registered shares with voting rights State of Geneva 125,522,150 34.87 125,522,150 34.87 City of Geneva 60,405,300 16.78 60,405,300 16.78 44 municipalities of Geneva 26,155,150 7.27 26,155,150 7.27

Bearer shares with voting rights State of Geneva 53,863,600 14.96 53,863,600 14.96 City of Geneva 14,727,000 4.09 14,727,000 4.09 Other shareholders 79,326,800 22.03 79,326,800 22.03

On 31 December 2008, the State of Geneva held 49.8 3% of the Bank’s shares (bearer and registered) and held 53. 3% of the voting rights.

4.10 Valuation adjustments and provisions, as well as reserves for general banking risks (in CHF 1,000) Recoveries, non Changes to performing Utilisation allocation interest, Balance at according to (new exchange New Releases of Balance at 31.12.2007 purpose allocation) differences provisions provisions 31.12.2008 Valuation adjustments and provisions for default risks (collection and country risks) 240,683 -22,734 589 -505 31,458 -5,838 243,653 Valuation adjustments and provisions for financial investments 16,445 -1,530 1113,088 – 28,005 Valuation adjustments and provisions for other operating risks 6,371 -204 303 -32 100 -3,299 3,239

Other provisions – -571 ––571 –– Total valuation adjustments and provisions 263,499 -25,039 893 -536 45,217 -9,137 274,897

Less valuation adjustments directly netted with assets -258,253 -271,658 Total valuation adjustments and provisions as per the balance sheet 5,246 3,239

Reserve for general banking risks 85,000 ––––-10,000 75,000

The above changes in the valuation adjustments in the parent company accounts are presented net as required by law.

4.11 Off-balance-sheet transactions (in CHF 1,000) 31.12.2008 31.12.2007 Fiduciary transactions Fiduciary deposits with third parties 345,744 210,935 Fiduciary loans – 8,033 Total fiduciary transactions 345,744 218,968

BCGE | ANNUAL REPORT 2008 Precious Total Oth er Isuin g Secur ities Clearin g Rep lacement 4.13 Total Foreign-exchange 4.12 Securities Feder al Alocat ion trading cost s tax Other Trading metals acou nt and trading of adm inistr ation / pr ofit s value bo nds cou pon s operations asets trading results trading of on fin ancial and swap s by / banknote liabilities sector inst rum ents (in trading, (in CHF CHF 1,0 00) 1,0 00) including derivatives o th e 47 ,62 0 93 ,12 3 35 ,74 7 r 5, 667 1, 366 2, 119 as se 60 4 ts - 3 1. 1 2.2 0 ot 0 he r 8 10 3,4 53 li 15 ,07 1 61 ,50 9 21 ,50 6 a 1, 086 4, 281 bi l it ie s - - 3 1.1 ot 11,329 16,152 -5,127 he r 2 60 ,59 5 65 ,96 1 . 2 304 2, 135 1, 300 1, 105 008 a se t 82 6 – – s 31. 12 .2 0 o 07 th er 3 1 l 18,198 15,384 25 ,51 2 63 ,04 3 18 ,11 7 i . ab 1 2,836 1, 459 9, 969 7, 432 2 . il 2 55 4 i -22 0 t i 07 e – s

BCGE | 2008 financial statements and notes | 123 PARENT COMPANY 124

PROPOSED APPROPRIATION OF AVAILABLE EARNINGS (in CHF 1,000) The Board of Directors will propose at the Ordinary General Meeting, to be held on 21 April 2009, that the profit be allocated as follow s:

31.12.2008 31.12.2007 Net profit for the year 63,562 75,616 Retained earnings brought forward 4,575 4,879 Earnings available for distribution 68,137 80,495

Allocation to general legal reserve -37,000 -50,000 Dividend of 5% to holders of registered shares (A and B) and bearer shares -18,000 -18,000 Supplementary dividend of 1% to holders of registered shares (A and B) and bearer shares -3,600 -3,600 Special allocation to the State of Geneva (2 0% of the dividends paid) -4,320 -4,320 Retained earnings carried forward 5,217 4,575

BCGE | ANNUAL REPORT 2008 Credits

Concept and design alternative – www.alternative.ch

Photography Cover and pages 6, 7, 20, 21, 28, 29, 36, 37, 50, 51, 58, 59, 64 and 65 Jean-Daniel Meyer – www.le-studio.ch Pages 4, 14, 16, 17, 19, 72, 73, 76, 77 and 78 Loris von Siebenthal – www.myimage.ch Pages 2, 14, 72 and 73 Fred Merz – www.rezo.ch

Photolithography rs solutions

Printing ATAR Roto Presse SA

Printed on PEFC certified paper (Programme for the Endorsement of Forest Certification schemes) Banque Cantonale de Genè ve SA Telephon e: +41 (0)58 211 21 00 E-mai l: [email protected] www.bcge.ch

23 branches in Geneva Head offic e: Quai de l’Ile 17 CP 2251 - 1211 Geneva 2 Switzerland

Main branche s: Ile, Servette-Wendt, Trois-Chêne, Grand-Lancy

Private Banking in Switzerland Quai de l’Ile 17 CP 2251 - 1211 Genève 2

Avenue de la Gare 50 CP 159 - 1001 Lausanne

Lintheschergasse 19 CP 4068 - 8001 Zurich

Piazza Rezzonico 6 CP 5833 - 6900 Lugano

Banque Cantonale de Genè ve (France) SA Place Louis-Pradel 20 F - 69001 Lyon Telephon e: +33 (0)4 72 07 31 50

Avenue Gambetta 46 F - 74000 Annecy Telephon e: +33 (0)4 50 66 03 06 www.bcgef.fr

SPFS, S wiss Public Finance Solutions Rue Céard 12 1204 Genève Telephon e: +41(0)22 750 12 12 [email protected] 281