Valartis Group - 2011 Full Year Results
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Valartis Group AG /
Valartis Group - 2011 Full Year Results
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Despite consolidated losses of CHF 17.2 million, Valartis Group made further
progress in 2011 in implementing its new strategic focus on the wealth
management business for high-net-worth private clients and institutional
investors ("Private Banking Plus") and reported a good segment result of CHF
16.1 million for the business segment "Private Clients" (33% up on the previous
year).
In a difficult market environment, net inflow of funds almost quadrupled from
the previous year and totalled CHF 862 million for 2011. Assets under management
rose despite negative market and currency effects to CHF 6.8 billion. At the
same time, net commission income rose by 11% to CHF 52.2 million and costs
reduced by 7% despite intensified marketing initiatives and significant
investment in infrastructure expansion. In the past financial year the risk
profile of the proprietary bond investments was also improved and a further
streamlining of the business portfolio was concluded with the sale of Valartis
Bonus Card AG in December 2011.
Non-operating special factors such as the negative performance of an associated
company already announced as part of the 2011 half-year figures amounting to CHF
23.5 million as well as the loss on interest rate hedging transactions and a
widening of the credit spreads in the European bonds markets weighed on the
overall result and led to a gross loss, before depreciation, valuation
adjustments and provisions of CHF 18.5 million.
Positive net new money trend for Private Banking
The strategic business refocusing that the Group launched in 2008 with an
emphasis on the wealth management business proved successful in 2011. For the
first time since this refocus four years ago, the business segment "Private
Clients", which includes the private banking activities of the three Valartis
banks in Switzerland, Austria and the Principality of Liechtenstein, was the
Group's primary source of earnings. Although the economical, political, and
regulatory conditions, along with the necessary organisational adaptations which
go along with such external conditions, have undergone significant changes over
the past few years, Valartis Group's "Private Banking Plus" business case
developed successfully.
The Valartis Group's ability to acquire business, in particular, developed in a
satisfactory way in 2011. Thanks to intensified and successful market
development initiatives, the Group attracted net new funds of CHF 862 million
(previous year: CHF 220 million). Due to market and currency conditions, assets
decreased by CHF 304 million, with assets under management reaching CHF 6.8
billion at the end of 2011 (previous year: CHF 6.3 billion).
Gross loss due to one-off factors
Taking into consideration all three business segments ("Private Clients",
"Institutional Clients" and "Corporate Center"), Valartis Group ended the year
with a gross loss under IFRS of CHF 18.5 million. Operating income, including
all non-operating positions and one-off factors, was CHF 63.2 million (down
35%), while administrative expense was CHF 81.7 million (down 7%).
Historically low interest rates and movements in exchange rates caused income
from interest and dividend to fall by 17% to CHF 41.2 million. However, this
decrease also reflects a significantly reduced risk profile in our proprietary
bond investments compared with 2010, as less risk also means less net interest
income.
The income from commission and service fee business rose by 11% to CHF 52.2
million despite the difficult market environment. The share of income from the
wealth management and investment business increased, while transaction-based
income was unchanged compared with the previous year. The average commission
margin rose from 74 basis points in 2010 to 80 basis points in 2011.
With the reduction of a trading portfolio, which led to a decrease in the risk
profile on proprietary bond investments, a loss was unfortunately realised on
hedging interest rate risks. Although there was a positive net effect from
interest income from the bond portfolio of CHF 7.7 million, income from trading
showed a loss of CHF 20.4 million. In addition, other ordinary income also
posted a loss, primarily due to the reason we reported in the 2011 first-half
report, which was a non-cash effective impairment charge on the associated
company Eastern Property Holdings Ltd. The loss for other ordinary income was
CHF 9.8 million.
On the expense side, a focus on business activities of the core business helped
to reduce personnel and administrative expense by 7%.
The eligible core capital increased by 5% to CHF 171 million compared to the
previous year. The required regulatory capital stood at CHF 126 million, while
eligible regulatory capital amounted to CHF 197 million. Thus, the BIS tier-1
ratio had improved to 10.9% at the end of 2011, and the capital adequacy ratio
rose from 142% to 156%. In view of the loss and the increasing capital
requirements, the Board of Directors has decided not to recommend a dividend to
the Annual Shareholders' Meeting of 8 May 2012.
Target is focused growth
In order to keep up in an increasingly competitive environment, the key success
factor for Valartis Group will be to achieve a critical mass in client assets
under management while also lowering its cost base further. Following a thorough
analysis, Valartis Group accordingly redefined its medium-term goals.
With another increase in commission income and in the earnings volume on an
annual basis, together with strict cost controls, the operating cost-to-income
ratio is to be lowered, the capital base strengthened, and thus the BIS tier-1
ratio increased further. At the same time, Valartis Group wants to optimise the
breadth of its market presence and its services, and to position itself as a
niche private banking boutique by offering product combinations tailored to
client needs and by operating a highly automated banking business.
This also provides the context for the sale of Valartis Bonus Card AG, active in
the credit card and customer loyalty business, which resulted in further
focusing of the business portfolio. On 19 December 2011, Valartis Group
completed the sale of all shares of Valartis Bonus Card AG to the Lugano-based
banking group Cornèr Banca SA.
Investing in the future
Valartis Group continued to invest in its technical infrastructure in 2011 as
part of its business strategy. In the first half of the year, the processes and
procedures in securities trading as well as in the back office were highly
automated. This will enable Valartis Group to increase client assets without
having to add personnel in the back or middle offices and thus, along with
further cost reduction measures that are planned, to reach a sustainable
decrease in the cost-to-income ratio. In addition, Valartis Group expanded and
strengthened its various management team layers. Along with these measures, the
organisational structure of the business segment "Institutional Clients" was
streamlined in the past year. With a series of complementary activities, a
state-of-the-art technical infrastructure and a well-functioning compliance
unit, Valartis Group now has a solid foundation for future growth.
Dates and information
Annual results press conference 3 April 2012, 10:30 a.m. Widder Hotel, Zurich
Annual Shareholders' Meeting 8 May 2012, 5:00 p.m. World Trade Center,
Zurich
The 2011 Valartis Group Annual Report can be downloaded in PDF format from our
homepage at www.valartisgroup.ch.
If you have any questions, please contact:
Gustav Stenbolt, CEO Valartis Group, or
George M. Isliker, Group CFO/CRO
Phone +41 43 336 81 11
Valartis Group - "Private Banking Plus"
Valartis Group is an internationally active banking and finance group with
offices in Zurich, Geneva, Vienna, Liechtenstein, Luxembourg, Singapore, Moscow
and St Petersburg. The Group's holding company, Valartis Group AG, is domiciled
in Baar, canton of Zug, and is listed on the Swiss stock exchange SIX Swiss
Exchange.
Valartis Group focuses on the wealth management business for high-net-worth
private clients and institutional investors: "Private Banking Plus". In addition
to traditional wealth management and investment advisory, Valartis Group
develops, manages and markets innovative niche investment products and provides
specialised advisory and banking services within corporate and structured
finance. The Group's core markets include Central and Eastern Europe, the Middle
East and selected countries in North and South America as well as Asia.
Media Release including Key Figures (PDF):
http://hugin.info/143135/R/1599577/504749.pdf
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originality of the information contained therein.
Source: Valartis Group AG via Thomson Reuters ONE
[HUG#1599577]
Unternehmensinformation / Kurzprofil:
Datum: 03.04.2012 - 07:00 Uhr
Sprache: Deutsch
News-ID 131284
Anzahl Zeichen: 10641
contact information:
Town:
Zürich
Kategorie:
Business News
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