BCV Group has delivered very solid 2015 results. In an environment that remained mixed, revenues rose 2% to CHF 1.026bn and operating expenses fell slightly to CHF 514m.Operating profit was up 5% to CHF 399m, reflecting a positive business trend.Net profit increased 14% to CHF 336m, driven in part by the Bank’s sale of its stake in Swisscanto.As a sign of its confidence in the Bank’s prospects going forward, BCV’s Board of Directors will propose a CHF 1 increase in the ordinary dividend to CHF 23 per share, as well as a special distribution of CHF 10 per share out of paid-in reserves, at the upcoming Annual Shareholders’ Meeting. If the proposals are approved, the Group will pay out a total of CHF 284m to shareholders.
Solid top-line growth
Total revenues were up 2% year-on-year, surpassing the CHF 1bn mark to reach CHF 1.026bn. In an environment marked by negative interest rates, net interest income before loan impairment charges/reversals[1] remained firm, dropping just 3% to CHF 489m. As loan impairment reversals were lower than in 2014, the item net interest income fell 6% to CHF 490m. Fee and commission income edged down 3% to CHF 332m. There was a sharp rise in customer-driven trading income, which grew 41% (+CHF 44m) to CHF 151m as a result of the high level of forex trading since the Swiss National Bank dropped the EUR/CHF currency floor. Other ordinary income increased 33% to CHF 53m, owing to a financial-asset disposal and a one-off dividend paid by SIX Group SA.
Operating profit up 5% to CHF 399m
Operating expenses were down yet again, with a 1% decline to CHF 514m. Personnel costs fell 1% to CHF 337m, other operating expenses decreased 1% to CHF 177m, and depreciation and amortization contracted 5% to CHF 76m. Despite the costs relating to the settlement reached with the U.S. Department of Justice as part of the 2013 USA/Switzerland tax program, operating profit rose 5% to CHF 399m.
Net profit rises 14% to CHF 336m
Extraordinary income came in at CHF 29m, mainly due to the Bank's sale of its stake in Swisscanto. This helped drive net profit up 14% to CHF 336m. The cost/income ratio improved from 60% to 57%.
Continued growth in customer-driven business volumes
Total assets expanded 4% to CHF 43.4bn. Mortgage lending rose 2% (+CHF 477m) to CHF 24.5bn. Other loans fell 13% (–CHF 740m) to CHF 4.9bn, primarily reflecting a decline in Trade Finance and Large Corporates, as well as liquidity-management activities.
On the liabilities side, customer deposits continued to expand, rising CHF 345m (+1%) to CHF 28.9bn.
Growth in AuM
The Group's assets under management (AuM) were up 2% (+CHF 1.6bn) to CHF 88bn. Net new money for the period amounted to CHF 2.5bn. This figure reflects onshore fund inflows of CHF 3.6bn and the expected outflows of offshore funds (–CHF 1.1bn).
Solid financial position
The Bank’s CET1 capital ratio rose to 17.6% and shareholders’ equity amounted to CHF 3.4bn, attesting to BCV’s financial solidity. Rating agency Moody’s raised BCV’s long-term deposit rating by two notches, from A1 to Aa2, while Standard & Poor’s reaffirmed BCV’s AA rating. BCV is one of only a handful of banks not backed by a formal government guarantee to be rated AA.
Key events in 2015
CHF 275m paid out to shareholders
In accordance with the distribution strategy that was renewed for another five years as from the 2013 reporting period, BCV returned a total of CHF 32 per share, or CHF 275m, to its shareholders in April 2015.
New Board member
The Vaud Cantonal Government appointed Peter Ochsner to BCV's Board of Directors. Mr. Ochsner, who has extensive auditing experience and in-depth knowledge of the banking sector, will take up his position on 1 July 2016.
Agreement reached on US tax issue
BCV and the US Department of Justice (DoJ) signed a non-prosecution agreement (NPA) in December with respect to BCV’s participation as a category 2 financial institution in the 2013 USA/Switzerland tax program. Under the terms of the agreement, BCV paid a settlement of USD 41.7m, an amount that was fully covered by existing provisions.
Half-yearly publication of financial results
Beginning this year, BCV will report its financial results on a half-yearly rather than a quarterly basis, which means that only results at 30 June and 31 December will be released. The information-exchange agreement between the Bank and the Vaud Cantonal Government has been revised to take account of this change; the new version took effect on 1 January 2016.
Proposed dividend increase and CHF 284m payout
As a sign of its confidence in the Bank’s prospects going forward, BCV’s Board of Directors will propose a CHF 1 increase in the ordinary dividend to CHF 23 per share at the upcoming Annual Shareholders’ Meeting. It will also propose a special distribution of CHF 10 per share out of paid-in reserves. If these proposals are approved, BCV will return CHF 284m to its shareholders; the Canton of Vaud will receive CHF 190m in distributions, together with CHF 65m in cantonal and municipal taxes for 2015, for a total of CHF 255m.
Outlook
Barring a significant deterioration in the financial markets and the overall economic climate, business development is expected to trend along the same lines as in 2015. However, as net and operating profit were pushed up by non-recurring items in 2015, the 2016 figures are expected to come in lower year-on-year while nevertheless remaining robust.
Lausanne, Switzerland, 18 February 2016
Please note: Financial results are presented in accordance with the new Swiss accounting rules for banks, applicable from the 2015 financial year. 2014 figures have been adjusted to facilitate like-for-like comparison.
2016 calendar
- 1 April Publication of the 2015 Annual Report (electronic version)
- 21 April Annual Shareholders’ Meeting in Lausanne
- 25 April Ex-dividend date
- 26 April Dividend record date
- 27 April Dividend payment
- 18 August Half-year 2016 results
Contacts
Christian Jacot-Descombes, Press Officer
Phone +41 79 816 99 30
Email christian.jacot-descombes@bcv.ch
Gregory Duong, Investor Relations
Phone +41 21 212 20 71
Email gregory.duong@bcv.ch
Note to editors:
This press release is being issued outside the trading hours of the SIX Swiss Exchange in order to comply with the principles of ad hoc disclosure pursuant to the SIX listing rules.
The above text is a translation of the original French document; only the French text is authoritative.
[1] Under the new Swiss accounting standards for banks, loan impairment charges/reversals are now factored into net interest income.