Felix R. Ehrat, Chairman of the Board said: "The very pleasing operating result confirms that our bank has a solid base. Our former CEO, Marco Netzer, played a key role in laying the foundations. We now need to build on them and systematically implement the strategic decisions we have taken, in order to create the conditions for continued sustained growth of the Group."
Sharp rise in client assets
The Banca del Gottardo Group recorded a 12.5% rise in client assets under management (excluding custody services), from CHF 34.4 billion a year ago to CHF 38.7 billion at the end of December 2005. The performance-related increase contributed CHF 2.3 billion to this increase. Net new money in the Private Banking business line was CHF 440 million.
Rolf W. Aeberli, CEO of Banca del Gottardo: "The net new money inflow in Private Banking is a move in the right direction. It reinforces my conviction that we are on course to achieve our medium-term goals." The remaining CHF 1.6 billion are due to the growth of new client money in other business areas. The volume of custody business, which is not counted as part of client assets under management, rose by an impressive CHF 31.3 billion during the reporting period, to stand at CHF 38 billion on 31 December 2005. "The overwhelming majority of this money is held in custody at Banca del Gottardo on behalf of Swiss Life - a further indication that the interests of parent company and subsidiary coincide," added Rolf W. Aeberli. Total client assets thus reached CHF 76.7 billion at year-end (end-2004: CHF 41.1 billion).
Higher commission income, very good trading result
Client assets under management are the most important revenue base for the sustainable business development of the Banca del Gottardo Group. During the reporting period, the Bank generated consolidated net revenues of CHF 492.9 million, an increase of 9.5% over the prior year (2004: CHF 450.3 million). Of this, fee and commission income accounted for CHF 262 million, up 7% on the year-back figure. At CHF 145.8 million (+1.2%), interest activities were a stable source of revenue. The results from trading operations were particularly notable, rising 47.5% year-on-year to CHF 76.2 million.
Further improvement in cost structure
Operating expenses amounted to CHF 335.5 million, an increase of 8.4% on the previous year. This was primarily due to one-off costs associated with the outsourcing of the majority of IT and back office services, as well as ongoing projects forming part of the Bank's strategic realignment. The cost/income ratio stood at 68%. "The planned expansion of our earnings base will lead to a further improvement in the cost/income ratio", explained Rolf W. Aeberli.
Group net profit was CHF 82.8 million, a rise of 17.3% compared with 2004. Banca del Gottardo Italia made a CHF 1.4 million (EUR 0.9 million) contribution to this welcome result. The figure is better than expected and confirms the importance of the fledgling Italian onshore business within the strategy pursued by the Banca del Gottardo Group.
Healthy capital base
The consolidated balance sheet total rose by 43.4% year-on-year, to CHF 15.2 billion. This sharp rise is mainly due to the high level of client sight deposits on the balance sheet date. Consolidated shareholders’ equity before distribution of earnings was CHF 1,031 million, an increase of 2.8% over the prior year.
Personnel and organisational changes in management
As announced in October 2005 at the time the new strategy was made public, a new organisational structure will be introduced on 1 July 2006. On this date, Roberto Botta will assume responsibility for the Private Banking South business line. He joins Banca del Gottardo from BNP Paribas, where he currently is head of private banking for Central and Southern Europe. The newly created Products & Services area will be headed by Franco Polloni, who has held a number of management positions within the Banca del Gottardo Group over the years. This business unit brings together a range of specialist teams that will provide support to client-facing staff with a competitive service offering and a targeted marketing strategy. This area will also assume responsibility for all credit activities of the Bank. Private Banking North will be managed pro tem by Rolf W. Aeberli until further notice.
CV Franco Polloni
CV Roberto Botta
The Banca del Gottardo Group's interim financial statements will be published on
10 August 2006.