Rolf Aeberli, Chief Executive Officer of Banca del Gottardo: “The half-year result meets our expectations at the operating level. In addition, it reflects a range of special factors associated with our transition to the new strategic orientation. When I consider this fundamental repositioning and the challenges it poses for our employees, I am very satisfied with these figures."
The special factors in question arise from the various measures undertaken in connection with the bank's repositioning and affect the after-tax result, either positively or negatively, as follows:
- CHF 70 million net capital gains from the sale of Dreieck Industrie Leasing and Banca del Gottardo (Monaco), which are both no longer part of the bank’s core business
- CHF 21 million in provisions following a revaluation of various credit and process risks
- CHF 12 million in provisions for the ongoing transformation process
- CHF 5 million for the outsourcing of selected IT areas and the migration to a new IT platform
Pleasing operating result
Net revenues were down 2% from the first half of 2005 to CHF 232 million, reflecting in particular the sale of the former subsidiaries, whose contribution was no longer included. Interest income in particular declined (-13%) as a result of the sale of Dreieck Industrie Leasing, while commission and service fee activities were up 2% despite a reduction of assets under management. Income from trading operations remained stable at last year’s high level.
First-half operating expenses rose 3.5% to CHF 161 million, but excluding special factors expenses decreased to CHF 155 million. At 66% (excluding special factors), the cost/income ratio remained at last year’s level.
Positive net new money inflow
Net new asset growth in private banking outperformed the comparable period last year to reach CHF 399 million. The bank is thus well on its way to achieving its stated goal of one billion francs in annual net new money starting in 2008. Client assets under management (excluding custody services) amounted to CHF 33.8 billion overall at the end of June 2006, compared to CHF 38.7 billion at the end of 2005, a difference to be ascribed principally to the sale of Banca del Gottardo (Monaco). The volume of custody business, which is not counted as client assets under management and comprises in the main funds held for Swiss Life, increased by CHF 4.1 billion during the reporting period to reach CHF 42.1 billion at the end of June 2006 (+11%). Total assets under control thus amounted to CHF 75.9 billion.
Ratings confirmed – bank’s individual rating to be discontinued
In the course of its regular review Standard & Poor's confirmed its long-term BBB+ rating and short-term A-2 credit rating for Banca del Gottardo, citing among other factors the latter’s solid business and improved asset quality. Following its decision to steadfastly focus on private banking - which makes an individual rating no longer necessary - and as a wholly-owned subsidiary of Swiss Life Holding, the bank will no longer require a rating of its own.
The bank’s strategic reorientation is proceeding successfully and according to plan. Since October 2005, when it announced its decision to focus on private banking in its core markets of Switzerland and Italy, a new organisational structure has been introduced and most key positions have been filled. In addition Banca del Gottardo has already implemented or introduced the following measures:
- Creation of a Products & Services division to provide support for private banking front-office areas in product development, marketing, sales support and Wealth Management Advisory
- Comprehensive programme to enhance private banking with expanded service offering, new IT tools and considerable investment in development and further training of client advisors
- Analysis of current product range, definition of bank's core offering and meticulous implementation of principles of open product architecture
- Grouping of existing retail banking business within one centralised team; introduction of
needs-based product standards as well as appropriate pricing
- Reorientation of credit business in accordance with new strategic criteria (e.g. combination with private banking relationship, risk-adjusted pricing)
- Service optimisation and enhancement of Banca del Gottardo’s market presence and brand positioning
CEO Rolf Aeberli: “The measures we have initiated, which are due to be concluded by the end of 2006, are beginning to show tangible effects, meaning we now expect a solid result for the year as a whole even if market volatility should increase.”
Attachment: Key Figures of Balance Sheet and Income Statement for the first half of 2006
Banca del Gottardo’s 2006 fiscal year result will be announced on 2 March 2007.
Banca del Gottardo
Media Relations: Franco Rogantini
Tel. +41 91 808 33 60
Fax +41 91 923 94 33
Viale S. Franscini 8