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Banca del Gottardo on course after repositioning
Lugano (ots) - Banca del Gottardo increased its first-half net
profit 2006 over the same period last year to CHF 83 million.
Excluding capital gains realised from the sale of companies no longer
part of the bank's core business and exceptional expenses arising
from its repositioning, net profit was CHF 51 million. In comparison,
net profit in the first half of 2005 was CHF 44 million. Net new
asset growth in private banking was CHF 399 million in the first half
of 2006. Banca del Gottardo expects solid results for the year as a
whole and believes it is on the way to achieving its medium-range
strategic and financial objectives.
Results for Banca del Gottardo, a member of the Swiss Life Group, for the first half of 2006 reflect both excellent market conditions in the first four months as well as the bank's efforts to reposition itself. With a consolidated net profit of CHF 83 million (CHF 51 million excluding special factors), Banca del Gottardo's figures are well above those of the same period in 2005 (CHF 44 million).
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
- 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
- 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."
Banca del Gottardo's 2006 fiscal year result will be announced on 2 March 2007.
Banca del Gottardo, with head office in Lugano (Switzerland), is a company of the Swiss Life Group, a leading provider of pensions and life insurance in Europe. The Bank has a well expanded national and international network. With subsidiaries, branches and representative offices in Zurich, Geneva, Lausanne, Bellinzona, Chiasso, Locarno, Bergamo, Milan, Rome, Treviso, Turin, Athens, Luxembourg, Madrid, Paris, Hong Kong and Nassau (Bahamas). Banca del Gottardo is positioned to offer top-of-the-line global financial services, delivered by a team of highly qualified specialists to its local and international clientele.
Values in CHF million 30.06.2006 30.06.2005 dev. %
Result from interest activities 61.9 71.1 -12.9%
Result from commission
and service fee activities 128.2 125.8 1.9%
Result from trading operations 36.8 36.5 0.7%
Other ordinary results 5.0 3.5 43.0%
Net revenues 231.9 236.9 -2.1%
Personnel expenses -88.0 -96.2 -8.6%
Other operating expenses -73.1 -59.4 23.1%
Total operating expenses (1) -161.1 -155.6 3.5%
Gross Profit (1) 70.8 81.3 -13.0%
Extraordinary income 100.4 0.7
Depreciations, valuation adj., provisio -59.3 -24.0 147.5%
Taxes -28.9 -13.8 108.5%
Net Income (2) 83.0 44.2 87.9%
Assets under management CHF bn 33.8 37.1 -8.9%
Custody assets CHF bn 42.1 17.7 137.8%
Total assets under control CHF bn 75.9 54.8 38.5%
Net New Money (private banking) 399 33 1109.1%
Shareholder's equity 1'019 990 2.9%
Personnel full-time equivalents 972 1'207 -19.5%
(1) Including extraordinary expenses as at 30 June 2006 (2) Including extraordinary factors as at 30 June 2006
ots Orginaltext: Banca del Gottardo Internet: www.presseportal.ch
Banca del Gottardo
Viale S. Franscini 8