Translation – The German version is binding.
Press release
Berne, 13 August 2014
New organisation for Valiant with stronger client focus
Interest income and interest margin up – increase in client deposits – higher gross
profit but lower half-year results due to special income in the previous year –
changes in Executive Board and organisation
In the first half of 2014, Valiant was able to improve its operating results and gross
profit. Half-year results were lower than in 2013, however, due to one-off effects.
The market strategy launched in spring is taking shape, leading to changes in
Valiant’s Executive Board.
In March, Valiant communicated its ambitious medium-term goals for 2017. The Bank is
moving in the right direction as regards achieving these goals. It is pleasing to note that
the interest margin was increased by 2 basis points to 102 basis points and net interest
income by 1.2 per cent to CHF 130.6 million in the first half of the year. The fact that client
deposits grew more strongly than mortgages and the coverage ratio for client deposits
improved from 80 per cent as at the end of 2013 to 81.5 per cent as at
30 June 2014 is also a positive development. Attracting new client deposits, boosting
efficiency and improving profitability remain top priorities.
Stronger growth in client deposits than in lending
Valiant recorded an increase of CHF 266.9 million in client deposits in the first half of
2014. Client loans fell slightly by 0.4 per cent to CHF 21.7 billion as at 30 June 2014 due
to the ongoing cautious risk policy and the closing of low-margin operations. Mortgages,
however, were up by 0.6 per cent. Valiant still has a high-quality credit portfolio and
increased the average residual maturity of fixed-interest mortgages (duration) from 2.8
years to 3.1 years.
Total assets were practically unchanged at CHF 25.5 billion (+ CHF 28.7 million, + 0.1 per
cent).
Improvement in operating performance – interest income and interest margin up
Despite the ongoing phase of low interest rates and the cautious lending climate, net
interest income was increased by 1.2 per cent to CHF 130.6 million and the interest
margin by 2 basis points to 102 basis points. The current positive trend suggests that
margins will be somewhat higher in the second half of the year.
Although the capital markets delivered a positive performance in the first six months of the
year, clients remain reluctant to engage in securities and investment business. As a result,
net commission and fee income was down by CHF 2.5 million year-on-year at CHF 31.3
million.
At CHF 6.0 million, net trading income was also slightly below the prior-year figure of
CHF 6.7 million.
Other ordinary income was down a full 71.7 per cent year-on-year at CHF 10.5 million due
to the one-off special income of CHF 22.5 million recorded in 2013 (sale of individual
business activities of RBA-Holding).
Operating expenses fell once again by 5.4 per cent or CHF 6.3 million to CHF 110 million.
Adjusted for the one-off effect, the gross profit rose by 1.2 per cent or CHF 0.8 million to
CHF 68.3 million.
At CHF 49.3 million, the operating result (result before extraordinary items and taxes) was
CHF 18.2 million or 26.9 per cent lower than the same period in 2013. Adjusted for the
one-off special income, the operating result is CHF 4.5 million or 10.2 per cent higher than
in the previous year. As a result of the special income, the half-year profit was 35.4 per
cent lower at CHF 42.2 million.
The cost/income ratio increased from 58.3 per cent to 61.7 per cent as at 30 June 2014.
With a total capital ratio of 15.2 per cent and a capital ratio of 14.2 per cent including the
anti-cyclical capital buffer as at 30 June 2014, Valiant has a strong equity base that clearly
exceeds regulatory requirements. This solid capital base gives Valiant stability and
flexibility.
Market Strategy 2014+
At the beginning of 2014, the Board of Directors and Executive Board launched “Market
Strategy 2014+”, a project aimed at developing a comprehensive marketing strategy on
the basis of Valiant’s positioning.
The key elements of Market Strategy 2014+ are defining a new client segmentation,
developing corresponding service offerings for each segment and boosting the efficiency
of the sales organisation. To ensure the successful implementation of this segmentation,
increase sales efficiency and continue to cover differing client needs in the digital age, the
Executive Board is to strengthen its client focus. The structure is to be adapted as of 1
January 2015.
2
Greater efficiency thanks to flatter hierarchy
The Valiant Bank Executive Board will now comprise six members, in other words, one
more than previously. There will be three members of the Executive Board with
responsibility for a client-focused area. The new organisation will enable Valiant to
strengthen the client areas at the highest level of operational management and thus focus
even more strongly on clients and their needs. Valiant has eliminated a level of
management and done away with the matrix organisation
Private and Business Clients, including the Private retail clients, the Wealthy private
clients, Self-employed individuals and small companies segments, will be managed by a
single person. Recruitment for this position is currently under way. Markus Gygax will
head the area on an interim basis.
At the level of the Executive Board, the new Sales Channels business area is being
created for multi-channel management. This area will be responsible for ensuring that
Valiant can offer the clients of today, who want personal support in the branches but who
also feel at home in the digital world, a uniform experience. The position of area head is
also vacant; Stefan Gempeler has assumed the role on an interim basis. The vacancies
are to be filled by two expert managers.
Martin Gafner, the current Head of Clients/Markets and Deputy CEO, will in future be
responsible for Companies and Investment Advice, which handles high-net-worth private
clients, medium-sized companies and institutional clients.
CFO Ewald Burgener is responsible for Finance and Infrastructure.
Stefan Gempeler heads Products and Operations, which drives product development. It
comprises the middle office departments and now also Credit Office, which from 2015 will
no longer be managed at Executive Board level. Bernhard Röthlisberger will remain as
Head of Credit Office, but will no longer be on the Executive Board. The Board of
Directors and Executive Board would like to thank him for his dedication and look forward
to continuing to work with him in the future.
Focus on client needs
For Jürg Bucher, Chairman of the Board of Directors, this new organisation is another
important step in the right direction: “The sales organisation sends out a clear signal that
we are adapting our management and organisation to the challenging and in some cases
new market conditions. The foundations are being laid for meeting the diverse client
requirements, achieving our ambitious medium-term goals and bringing Valiant back on
the path to success.”
CEO Markus Gygax focuses on the needs of clients: “These changes at Executive Board
level will give significantly greater weight to the market and are geared to the
requirements of modern clients, who still want personal support but are also at home in
the digital world.”
3
US tax programme: Valiant would be ready to conclude an agreement
In December 2013, Valiant was the first bank to proactively provide information regarding
participation in the US tax programme in category 2. The decision was made as a
precautionary measure and to ensure that due diligence is exercised. A bank of Valiant’s
size cannot guarantee that all clients with a relationship to the United States fulfilled their
tax obligations to the US in the past.
After some intensive project work, Valiant would now be ready to conclude an agreement
with the United States. All required documents have been prepared, communication with
the US Department of Justice has taken place and the independent examiner has written
his report. The key outcome is that the time-consuming work carried out over the last few
months has confirmed the statements made in December 2013: Valiant never focused on
foreign clients or offered offshore services. Valiant had neither branch offices nor a sales
network outside Switzerland. However, there were a very small number of clients who had
not properly declared their assets in the United States.
The provisions that were made in 2013 will cover the expenses stemming from the US tax
issue. The 2014 results will not be impacted by the US tax programme.
Outlook
Valiant believes that interest rates will remain low. The Bank is not seeking growth purely
for growth’s sake and is therefore maintaining its cautious risk policy.
Valiant wants client deposits to continue growing more strongly than lending. Another
priority is to boost the profitability of commission and fee business. Valiant has confirmed
the medium-term goals for 2017 that were communicated in March. The measures
initiated as part of Market Strategy 2014+ will play a key role in boosting efficiency and
earnings.
Valiant expects to see a marked increase in the operating result in 2014. Group profit
should also be above the prior-year level.
4
Balance sheet data
Total assets
Client loans
Client deposits
Variation
30.06.2014
31.12.2013
in CHF million
in CHF million
in %
25,481
21,676
17,671
25,452
21,769
17,404
+0.1
-0.4
+1.5
30.06.2014
30.06.2013
Variation
in CHF 1,000
in CHF 1,000
in %
130,578
31,275
5,974
10,480
110,034
129,031
33,731
6,681
37,043
116,326
+1.2
-7.3
-10.6
-71.7
-5.4
68,273
68,273
90,160
67,460
-24.3
+1.2
49,322
49,322
67,473
44,773
-26.9
+10.2
42,237
42,237
65,382
42,682
-35.4
-1.0
Income statement data
Net interest income
Net commission and fee income
Net trading income
Other ordinary income
Operating expenses
Gross profit
- recognised
- adjusted (one-off special income)
Operating result
- recognised
- adjusted (one-off special income)
Group profit
- recognised
- adjusted (one-off special income)
Further information
The 2014 Half-Year Results (Balance Sheet and Income Statement) and speeches (from
11 a.m.) can be found at www.valiant.ch/medienmappe. The video of the media
conference will be available via the same link from 5 p.m.
Contact for enquiries
031 320 96 00
Stephan Michel, Head of Marketing and Corporate Communications
031 320 96 01
Valérie Bodenmüller, Head of Corporate Communications
About Valiant
Valiant is an independent, supra-regional bank active exclusively within Switzerland for SMEs,
retail clients and high-net-worth private clients based in the German and French-speaking part
of the country. Valiant has total assets of CHF 25.5 billion, employs around 1,000 staff and
manages more than 400,000 clients. It is active in the cantons of Aargau, Basel-Land, BaselStadt, Berne, Fribourg, Jura, Lucerne, Neuchâtel, Solothurn, Vaud and Zug.
Valiant calendar
4 March 2015
21 May 2015
Results conference for media and analysts (Lucerne)
Annual General Meeting of Valiant Holding AG (Lucerne)
5