BSI SA

Banca del Gottardo posts solid 2006 performance

    Lugano (ots)  - In 2006 Banca del Gottardo's consolidated net income increased by 17% to CHF 97 million. The Bank's reorientation had an overall neutral impact on net profit: the sale of non-core businesses resulted in capital gains, but these were offset by substantial extraordinary charges. Operating expenses were reduced in 2006 and the cost/income ratio was maintained at the level of the previous year. After encouraging net new money inflows in the first half, the total for the whole year was CHF 240 million following staff departures in summer. Implementation of the new strategy is on track, and the Bank is confident of further progress this year. It confirms its stated goals for 2008.

    For Swiss Life Group company Banca del Gottardo, 2006 was marked by a repositioning, led by a largely overhauled management team. Consolidated net income amounted to CHF 97 million, 17% higher than its 2005 level of CHF 83 million.

    Rolf Aeberli, Chief Executive Officer of Banca del Gottardo, commented: "We achieved solid results in 2006, given that our staff faced a significantly higher workload due to the changes in our strategy and structure. Primarily during the summer months, we also lost some client advisors, due to recruitment efforts staged by competitors. This impacted our financial performance. In the meantime, we have succeeded in filling the resulting vacancies with skilled new staff. We performed well in the market in 2006 in spite of the environment being challenging for us."

    Operational profitability intact

    In 2006 the sale of two subsidiaries and substantial extraordinary charges were included in the ordinary accounts, which needs to be taken into consideration when assessing the development of net revenues and operating expenses. However, these special factors had a neutral impact on the overall results. The net income posted thus reflects the Bank's operational profitability and the effectiveness of the strategic measures already initiated.

    Net revenues in 2006 were down 9% compared with the previous year, as earnings from the two subsidiaries sold were no longer included in the results. Operating expenses in 2006 were down 3% on the previous year. Excluding special factors, the cost/income ratio remained at the previous year's level of 65%.

    Non-recurring factors had an overall neutral influence on net income

    Non-recurring factors due to the Bank's strategic reorientation impacted the 2006 after-tax result as follows:

    - CHF 72 million net capital gain from the sale of Dreieck
        Industrie Leasing and Banca del Gottardo (Monaco), no longer
        part of the Bank's core business

    - CHF 24 million in provisions following a reassessment of credit
        and process risks

    - CHF 44 million in costs, provisions and value adjustments for
        strategic projects

    - CHF 3 million for other extraordinary factors

    Loan loss provisions in the second half consisted mainly of value adjustments to loans booked in foreign locations, particularly Italy, whereas in the first half they were concentrated in Switzerland. The review of the loan book as part of the reorientation process is thus complete.

    The extraordinary value adjustments are due mainly to expenses incurred for the strategic reorientation of the Bank and adjustments to the IT strategy. Banca del Gottardo decided in October 2006 that it would not migrate to the new B-Source IT platform, as originally planned. However, processing and infrastructure services will continue to be outsourced to B-Source and Banca del Gottardo will remain a shareholder in B-Source.

    Banca del Gottardo expects that extraordinary charges due to the reorientation will be lower in 2007 and that they will not recur in future years. It will thus not use up all its announced 2005-2008 budget for the restructuring of CHF 120 million before taxes and will conclude the reorientation ahead of plan in financial terms, too.

    Positive net new money inflow due to the good outcome in the first half

    Following an encouraging net new money inflow of CHF 399 million in Private Banking in the first half of 2006, staff departures in the second half triggered a substantial loss of assets. However, this was kept within bounds by rapid initiation of client retention measures. The net new money inflow for the entire year thus amounted to CHF 240 million. A degree of negative impact on the net new money inflow is to be expected in the first months of the current year, too. Banca del Gottardo confirms its target, which is to attract net new money of CHF 1 billion in Private Banking every year from 2008.

    Client assets under management amounted to CHF 35.8 billion at the end of 2006, compared with CHF 38.7 billion at end-2005. The drop is mainly due to the sale of Banca del Gottardo (Monaco). Including the custody business  - which consists chiefly of assets held for Swiss Life - assets under control totalled CHF 89.3 billion at end-2006, compared with CHF 76.7 billion at end-2005. The custody business itself was up 41% on the previous year, highlighting the excellent collaboration between Banca del Gottardo and Swiss Life.

    Capital adequacy

    In addition to the ordinary dividend of CHF 150 million (2005: CHF 96 million) due for 2006, Banca del Gottardo paid CHF 100 million in capital back to the Swiss Life Group during the year, as planned. At end-2006, its capital ratio (BIS Tier I) was 13.1% (previous year: 11.6%), which means that it is adequately capitalised and has enough funds to implement its growth strategy. Return on equity amounted to 9.8% in the reporting year, compared with 8.1% in the previous year.

    Changes to the Board of Directors

    At the Annual General Meeting on 20 April 2007, Gerold Bührer and Bruno Pfister will resign from the Board of Directors of Banca del Gottardo. The Bank is very grateful to both of them for their contribution. Carla Speziali, Mayoress of Locarno, and Thomas Müller, CFO of the Swiss Life Group, have been proposed for election to the Board of Directors. Rolf Dörig will take up the position of Deputy Chairman.

    50 Years - Looking Forward

    This year, Banca del Gottardo will be celebrating its 50th anniversary and Swiss Life its 150th. To mark the occasion, the Bank will be staging several client and staff events, among others, with the slogan "50 Years - Looking Forward". It will also be involved in social and cultural sponsorship. In keeping with its commitment to Ticinese architecture and architects, such as Mario Botta, who designed the head office building in Lugano, the Bank will be announcing details of a new architecture award under its auspices in May. It will offer some of the highest prize money in Europe.

    Rolf Aeberli, CEO, said: "We have successfully completed the repositioning and the measures introduced are beginning to take effect. This means that in 2007 - fifty years after the Bank was founded - we will once again be able to concentrate all our energy on our client business. We are confident that our Bank will continue to grow and we confirm the targets announced for 2008."

    Banca del Gottardo's 2006 Annual Report will be published on 20 April 2007.

    Banca del Gottardo, which celebrates its 50th Anniversary in 2007, specialises in comprehensive private banking services in its core markets of Switzerland and Italy. It is headquartered in Lugano and has 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. Banca del Gottardo belongs to the Swiss Life Group, which is listed on the SWX Swiss Exchange and is one of the leading suppliers of pension and life insurance solutions in Europe. http://www.gottardo.com

Key Figures

                                  CHF million    31.12.2006    31.12.2005    dev. %
Result from interest activities              126.2          145.8        -13.4%
Result from commission and
service fee activities                            253.8          262.0         -3.1%
Result from trading operations                 61.5            76.2        -19.2%
Other ordinary results                                5.9              9.0        -34.4%
Net revenues                                            447.4          493.0(1)    -9.2%

Personnel expenses                                 -177.7         -193.7         -8.3%
Other operating expenses                        -147.5         -141.8         +4.1%
Total operating expenses                        -325.2         -335.5         -3.0%
Gross Profit                                            122.2          157.5(1)  -22.4%

Extraordinary income                                103.0            14.2    
Depreciations, valuation adj.,
provisions                                              -102.2          -65.9
Taxes                                                        -26.0          -23.0
Net Income                                                 97.0            82.8         17.2%

Assets under management        CHF bn          35.8            38.7(2)
Custody assets                      CHF bn          53.5            38.0
Total assets under control  CHF bn          89.3            76.7
Net New Money (private banking)                 240              440
Shareholder's equity                                  943            1031
Personnel full-time equivalents                 987            1101

Banca del Gottardo prepares its financial statements in accordance with local accounting standards. Results for the Banking segment are included in the Swiss Life Annual Report under IFRS.

(1) Including Dreieck Industrie Leasing and Banque du Gothard
      (Monaco)
(2) Including Banque du Gothard (Monaco)

ots Originaltext: Banca del Gottardo
Internet: www.presseportal.ch

Contact:
Banca del Gottardo
Christian Moser, Head Marketing & Communications a.i.
Tel.:    +41/91/808'14'04
E-Mail: marketing@gottardo.com

As of 1 June 2007:
Dario Ballanti, Head Marketing & Communications



Weitere Meldungen: BSI SA

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