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EANS-Adhoc: Bank Sarasin + Cie AG
6-month report/Half year results 2009
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1H 2009 results of Bank Sarasin & Co. Ltd: Growth despite the financial crisis Impressive net new asset growth of almost CHF 5 billion (+14% p.a.) - Steep increase in assets under management to CHF 80 billion - Net profit on target, at CHF 54 million (38% higher than the adjusted figure for H2 2008)
Assets under management up 15% to CHF 79.9 billion - Net new assets confirm growth dynamic Since 31 December 2008 the assets managed by the Sarasin Group have risen from CHF 69.7 billion to CHF 79.9 billion as of 30 June 2009. This was the result of dynamic net new asset growth of CHF 4.8 billion, reflecting the high quality of the bank's CRM team that was substantially expanded over the course of last year as well as the attractive range of Sarasin fund products. Sarasin investment funds attracted net inflows of CHF 604 million in the first six months of 2009, bucking the general sector trend. The market performance of CHF 3.2 billion, coupled with the currency translation effect of CHF 2.6 billion, also made a positive contribution to the assets under management.
Tight management helps to keep costs under control at CHF 230.3 million Operating expenses were cut from CHF 254.8 million by 10% and stood at CHF 230.3 million in 2H 2009 (1H 2008: CHF 210.0 million). This was despite further investments in selective growth initiatives such as the opening of representative offices in Switzerland (Bern), in central and eastern Europe (Vienna and Warsaw), as well as in India (Delhi and Mumbai). Careful review of business cases and the deferral of various projects since the start of the year are showing their effect. General administrative expenses fell sharply to CHF 61.8 million, 22% lower than the second half of 2008. Despite the significant expansion of Sarasin´s CRM team in 2008, personnel costs were trimmed by 4% to CHF 168.5 million, mainly due to lower bonus accruals. The headcount remained virtually unchanged at 1,540 employees and is not expected to rise significantly over the course of the current financial year.
Income solid, at CHF 315.1 million The performance on the revenue front was solid: operating income for the first half of 2009 was 2.5% higher, at CHF 315.1 million (1H 2008: CHF 307.5 million). The drive to diversify the bank´s sources of earnings, undertaken as part of the group's growth strategy, had a positive impact here: Sarasin managed to once again improve not just the net interest income by 5% to CHF 67.8 million, but also achieved a 51% rise in income from trading operations, to CHF 62.8 million. Despite this, the bank´s risk profile remains low, as confirmed by the 25% reduction in the average Value at Risk in the trading operations compared with the prior-year period. The income from commission & service fee activities was 16% lower than last year, at CHF 170.5 million, due to the impact of the smaller average asset base due to the poor market performance. The cost income ratio I rose from 68.3% (1H 2008) to 73.1% (1H 2009). Group profit is on target, at CHF 53.9 million. This represents a 38% increase on the 2H 2008 adjusted result of CHF 39.1 million (1H 2008: CHF 75.3 million).
Capital strength bolstered by issuing COTOs The resolution approved by shareholders at the bank´s AGM 2009 to issue Cash or Title Options (COTO) in place of normal dividends has created additional capital: By the end of July 58% of all shareholders (measured by share capital), including Sarasin´s majority shareholder Rabobank, have already decided to exercise their COTOs and subscribe to new shares. By taking up this offer, Rabobank, along with the other shareholders, confirms its confidence in the Sarasin Group. At the same time this helps to bolster Bank Sarasin´s capital base, which not only gives Sarasin an important competitive advantage in the current market environment but also provides greater room for manoeuvre.
Christoph Ammann, Chairman of the Board of Bank Sarasin & Co. Ltd "The Board´s decision to consistently push ahead with our growth strategy, while at the same time moderating its pace to accommodate the challenging market conditions in the current year, is paying off. I am delighted that so many shareholders have already decided to exercise their COTOs. The subsequent strengthening of our capital base reflects the trust and confidence they place in our bank. It is vital that we preserve this trust as it is a fundamental prerequisite for the long-term success of the Sarasin Group."
Joachim H. Straehle, CEO of Bank Sarasin & Co. Ltd "After very challenging conditions during the first three months of 2009, we are particularly pleased with the strong result achieved in the first half of 2009. The excellent net new assets growth is running at the same level as in the first half of 2008, confirming the high quality of our CRM team which we invested in last year as a platform for future growth. We are also selectively exploiting available growth opportunities: the opening of new representative offices in Switzerland, central and eastern Europe and India show that we are moving forward while taking on board regulatory requirements, and breaking into attractive markets that hold excellent potential for us."
Assets managed according to sustainable principles exceed CHF 10 billion for the first time The assets managed according to sustainable principles by the Sarasin Group rose by 68% in the first half of the year to reach CHF 10.1 billion on 30 June 2009. This figure takes into consideration the decision taken last year to switch the portfolio management mandates of private clients in Switzerland to a sustainable investment style. The number of mandates managed purely according to sustainable principles rose by 44% during the first half of the year, while the associated volumes climbed by as much as 65%. The positive development of Sarasin´s sustainability investment funds also shows that investors are particularly comfortable with this investment approach: net new asset growth in the first six months came to CHF 117 million, bucking the general sector trend. The volume of assets managed by third parties using Sarasin Sustainability Research rose by 7% in the first half of 2009 to CHF 23.4 billion.
Outlook for 2H 2009: targets and strategy still the same Bank Sarasin´s goals for the financial year 2009 are unchanged. Sarasin is confident of reaching and probably even exceeding its net new asset growth target of CHF 7.0 billion set in the budget. With market conditions remaining challenging, it is still difficult to provide an accurate earnings forecast. Based on the half-year figures presented here and assuming that markets will improve in the second half of the year, the bank expects its full-year operating profit to be more or less in line with the previous financial year 2008, which means it is still on track to meet its profit target as well.
Tight cost management remains a vital competitive factor here. This means that Sarasin also will be selective when further expanding the network of its locations: in the second half of 2009 the bank plans to open a third branch in the German market. Sarasin is also considering opening a representative office in China, which, along with India, is one of the two main growth drivers of the global economy. The bank will exploit opportunities to recruit more client advisors at a moderated pace. Sarasin plans to keep its headcount at roughly the current level over the course of this financial year. In the long term, the goal is to further increase the ratio of client advisors as a percentage of the total workforce.
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ots Originaltext: Bank Sarasin + Cie AG
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