Annual report - Hong Kong Monetary Authority

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Annual report - Hong Kong Monetary Authority
142nd Annual report
2014
“What sets BSI apart are the origins which shape our
approach to private banking.
To our clients we offer all the certainties derived
from over 140 years of Swiss private banking
experience, together with the characteristics born of
our Latin roots: the passion and that human touch
we bring to each professional relationship.
Together these characteristics ensure the flexibility
and responsiveness critical to serving clients in a
changing world.
BSI is excited about the future and committed to
creating an even more dynamic and innovative
international Bank to meet the evolving needs of our
clients wherever they are in the world.”
Stefano Coduri
Group CEO
BSI – Contents
Contents
Annual report as submitted to the Ordinary General
Shareholders’ Meeting of 21 April 2015
Highlights 2014
5
Foreword
7
Corporate governance
Human resources
10
BSI and Corporate Responsibility 19
Our identity
27
Management report 2014
31
Group financial statements
Consolidated balance sheet as of 31 December 2014
Consolidated profit and loss statement 2014
Consolidated cash flow statement 2014
Notes to the 2014 Group financial statements
Report of the statutory auditor on the consolidated
financial statements
37
BSI Ltd. financial statements
Parent Bank balance sheet as of 31 December 2014
Parent Bank profit and loss statement 2014
Notes to the 2014 Parent Bank financial statements
Report of the statutory auditor on the financial
statements
77
Glossary of selected terms and abbreviations
88
Contacts 91
18
This is a translation into English of the Annual Report issued in the Italian language
and is intended solely for the convenience of English-speaking readers. This report
includes information specifically required by Swiss law. In the event of contradictions or inconsistencies between the Italian and the English version of the Annual
Report, the Italian version shall prevail.
3
BSI – Highlights 2014
Highlights 2014
BSI Group
2014
2013
CHF 1’000
CHF 1’000
Profit and loss statement
Net operating result
871’435
863’070
Operating expenses
-698’657
-666’510
Gross profit
172’778
196’560
-42’310
-796’301
-193’615
-144’658
Depreciation of fixed assets
Value adjustments, provisions, and losses
Extraordinary income / expenses
Taxes
Net result for the year
78’574
39’755
-13’180
-17’311
2’247
-721’955
23’995’419
24’871’343
1’672’978
1’720’895
CHF million
CHF million
92’330
89’376
Balance sheet
Total assets
Shareholders’ equity, including net result for the year
Client assets
Total
Headcount (in FTEs)
Total
Unit
Unit
1’928
1’989
1’280
1’335
648
654
of which:
in Switzerland
abroad
Capital ratios (Basel III)
%
%
Total Capital Ratio
17.08
18.17
CET1 Ratio
16.29
17.35
BSI Ltd.
2014
2013
CHF 1’000
CHF 1’000
Profit and loss statement
Net operating result
692’069
625’883
Operating expenses
-520’502
-471’703
Gross profit
171’567
154’180
Net result for the year
-21’068
-737’121
20’226’108
19’102’055
1’493’495
1’538’163
Balance sheet
Total assets
Shareholders’ equity after appropriation of net result for the year
5
“For us, the commitment to art
represents an opportunity to share
a passion with our clients and
with the communities we work in.”
Stefano Coduri
Group CEO
BSI and Art
Since its establishment in 1873, BSI has been at the
forefront in promoting and popularising moments
of great interest in the field of art, a theme to which the
supplements to this Annual Report are dedicated.
A commitment that comes from the belief that the value
of any asset, not just financial or real estate, is a
valuable treasure to the communities in which the Bank
conducts its business. Among the numerous artistic
activities promoted by the Bank in 2014 is “Allegro Giusto”,
an exhibition of BSI Art Collection works at Villa Maraini,
prestigious seat of the Istituto Svizzero di Roma.
“Allegro Giusto” is an expression, on one hand, of the art
collector’s spirit that distinguishes BSI and on the other, of
the willingness to cooperate by creating cultural synergies
with important cultural institutions, such as the Istituto Svizzero di Roma.
BSI Art Collection
The contemporary art collection of the Bank, the BSI Art Collection, was founded in 2000 with the aim to connect the financial institution to the universe of art. It takes shape over
the years through a substantial series of acquisitions designed
to locate some of the most influential post-war art personalities, such as Daniel Buren, John Chamberlain, Tony Cragg,
Mario Merz and Giulio Paolini. These artists of recognised international importance form the starting core at the origin of
the growth of a collection that develops between different
generations and nationalities, drawing a time line that from
the avant-gardes that matured in the mid-1960s reaches our
present day. The expansion of the collection over the years is
meant chiefly to decorate the branch offices of BSI around the
world. Painting, sculpture, graphics, photography, video and
site-specific projects, such as Palazzo BSI in Lugano, give life
to a mixture of expressive languages, respecting the coherence with the project’s source. However, the collection also
includes works that are severed from a precise target, by virtue of size or specific techniques that require more attention
from the conservative and expository point of view. The commitment aimed at fostering creative avant-garde expressions
of very young artists, still in the process of rising to fame,
merges with the desire to reinterpret the personality of previous generations. In line with this goal, the works of the BSI Art
Collection often are lent out to temporary exhibitions at cultural institutions of recognised importance.
Palazzo BSI, Lugano © Claudio Bader
© Peggy Guggenheim Collection, Venice
Palazzo Venier dei Leoni, Venice, view from the Grand Canal
BSI institutional
collaborations
The commitment that BSI has been carrying on
for years in the art world today represents a vital
element for the Bank and a unique opportunity
to share this passion with our clients and with
the communities in which the Bank operates.
The support to primary cultural institutions like
the Peggy Guggenheim Collection in Venice and
the Istituto Svizzero di Roma, of which BSI is a
partner and encourages the development of its
artistic projects internationally, is in keeping
with this philosophy.
Peggy Guggenheim Collection, Venice
Since 2001, BSI, as Institutional Patron of the Peggy Guggenheim
Collection in Venice, has the opportunity to actively participate
in the contemporary dialogue between business and culture and
support the growth of the museum and its schedule of events.
One of the exhibition halls reserved to temporary art displays is
dedicated to BSI. The Peggy Guggenheim Collection is a museum
of modern art. It was found in the 20 th century in Venice by the
Swiss-born American Heiress, Peggy Guggenheim (1898-1979).
Palazzo Venier dei Leoni, an unfinished 18th century building on
the Grand Canal, bought by the collector in 1949 and her home for
over thirty years, houses masterpieces of Cubist art, crossing over
to Futurism, Metaphysical Painting, European Abstraction, Surrealism and American Abstract Expressionism. The exhibition has
come to include the most important European and American
avant-garde artworks of the 20 th century. The collection, the result
of the advice of friends, artists and art critics such as Marcel
Duchamp, Herbert Read, Nellie van Doesburg and Howard Putzel, is one of the most important worldwide. The museum hosts
temporary exhibitions every year and displays 26 paintings of the
Gianni Mattioli Collection on permanent display, including some
masterpieces of Italian Futurism. In the Garden of Sculptures Patsy
R. and Raymond D. Nasher, as in the other outdoor spaces of
the museum and on the terrace overlooking the Grand Canal, the
works from the Peggy Guggenheim Collection and the Solomon
R. Guggenheim Foundation mix with works on permanent display
of the Nasher Sculpture Centre in Dallas and other foundations
or galleries, further enriching the exhibition. Since October 2012,
the collection also hosts eighty Italian, European and American
artworks from after World War II, a legacy of American collector
Hannelore B. Schulhof and her husband Rudolph B. Schulhof.
The Peggy Guggenheim Collection, property of the Solomon R.
Guggenheim Foundation, is part of the international circuit of
Guggenheim museums (New York, Venice, Bilbao and soon to
open in Abu Dhabi) and uniquely combines an internationally
acclaimed, permanent collection and a rich programme of exhibitions and activities.
Villa Maraini, Istituto Svizzero di Roma, Rome
© Agostino Osio
Istituto Svizzero di Roma, Rome-Milan
The Istituto Svizzero di Roma (ISR), of which BSI has been a partner
since 2005, is a foundation created by the Swiss Confederation in
1947 with the mission of promoting scientific and artistic exchanges between Switzerland and Italy. The head office in Villa
Maraini in Rome was donated by the Countess native of Lugano,
Carolina Maraini-Sommaruga with the express mandate that the
villa was “to be perpetually at the service of culture, in a sign of
cooperation between Italy and Switzerland”. Since its foundation, the Institute has been attracting scholars and artists in Switzerland and has been the focal point of Swiss artistic and scientific
activities in Italy. With its two offices in Rome and Milan, the Institute is the main cultural centre of Switzerland in Italy and favours
dialogue and exchange with cultural actors present on the territory thanks to a varied participation that attracts an evergrowing
and qualified audience. Its distinctive feature is the coexistence
among people from different academic and artistic disciplines. A
cultural outpost in the heart of the Mediterranean, today it embarks
on a path to adapt its activities to contemporary reality, institutionally
as much as from a historical and social point of view. Facing the
challenges of the present and the transformation produced by the
crisis, the Institute experiments with artistic and research formats
that aspire to become repeatable models, new practices and cultural and institutional rules. The fruitful intersections that the Institute has built with the Swiss system of artistic institutions, universities, schools of specialization, self-managed youth spaces, artists
and researchers, allow it to cross-over and become a landmark for
Italian cultural production and, at the same time, to promote the
productions of young artists and researchers, as well as the most
interesting models of cultural organisation in Switzerland throughout Italy.
Villa Maraini
The impressive Villa Maraini was designed by Swiss architect from Ticino Otto Maraini (1863-1944), brother of Emilio
Maraini (1853-1916), an industrialist from Lugano known for
having introduced with extraordinary success in Italy the
production of sugar made from beets. The Villa, donated
in 1946 by the widow of Maraini, Carolina Maraini Sommaruga (1869-1959), to the Swiss Confederation, is situated on
an artificial hill and is surmounted by the Belvedere Tower,
which offers a 360° view on Rome and its surroundings.
The construction harks back to the tradition of Roman villas. The decoration of the building consists of originals
and copies of Antique sculptures, as well as fragments of
sculptures and other excavation findings.
Villa Maraini, Istituto Svizzero di Roma, Rome
© Agostino Osio
BSI – Foreword
Foreword
2014 was surely a challenging and eventful year for the BSI
Group. We kept our attention to client needs unchanged
and we still focussed on improving our performance.
From a macroeconomic perspective, in 2014 the United
States declared the end of the economic and financial crisis announcing a return to normal monetary policy conditions and an imminent rise in interest rates, the first since
2006. At the same time, Europe adopted a strong monetary stimulus policy to speed up economic recovery and
fight the risk of deflation. Last year was marked by the
drop in oil prices and strong appreciation of the dollar as
a direct result of the different monetary policies adopted
by the United States and the other world’s economic powers, especially those in the Eurozone.
In this global scenario, the Swiss economy confirmed its
solidity, even in a decidedly difficult context, with a moderately strong growth in 2014 with positive influence primarily of foreign trade, which gave income growth its highest boost since 2008. The Swiss financial sector remained
under strong external pressure centred mainly on tax matters and the introduction of new domestic and international regulations. In early 2015, Switzerland reached an agreement with Italy about the Voluntary Disclosure in which
Switzerland is not to be treated as part of the Italian fiscal
black-list.
In the above-mentioned macroeconomic scenario, between 2014 and the start of 2015, BSI lived through two
really important events. First, the agreement signed by the
Generali Group and BTG Pactual, an important international banking group based in Brazil, for the sale of the
Bank. This is very positive and puts an end to a period of
shareholder structure uncertainty that had lasted for over
two years. During this period, our business kept on growing thanks to loyal clients and staff. Once finalised, the
share transfer will enable us to continue growing and further
strengthen our brand globally, supported by a strategic,
long-standing, dedicated shareholder like BTG Pactual.
Over the past 16 years, BSI has become one of the main
players in the international wealth management sector
thanks to the support and the investments made by the
Generali Group, to which we are grateful. The Bank’s intense activity linked to taking part in the U.S. Tax Program
(Program for Non-Prosecution Agreements or Non-Target
Letters for Swiss Banks) also continued in 2014. This led to
us being, on 30 March 2015, the first category-2 bank to
reach a Non-Prosecution Agreement with the U.S. Department of Justice. On reaching this NPA, BSI settled its
pending matters with the DOJ as far as Private Banking
cross-border activities carried out in the past with U.S.
clients are concerned, and paid USD 211 million. That payment was recognised in 2014 and does not affect BSI solidity. In 2014, the BSI Group’s Total Capital Ratio was 17.1%.
This agreement with U.S. authorities facilitates the completion of BSI acquisition by BTG Pactual SA, still awaiting
the approval of some relevant authorities. In 2014, we also
worked hard to transform BSI and launched a two-year operational excellence programme to streamline and refocus
on the business with the aim of increasing productivity and
remaining competitive in the long term. That programme
is already producing tangible results, even though the
positive impact will be fully effective as of 2016. Amongst
other things, implementing this programme has involved
both a review of the markets and segments the Bank operates in and introduction of measures to reduce operational
and staff costs. On the latter front, in particular, there has
been a reduction in staff that, though painful, was necessary after a number of other measures had been implemented. In agreement with the Staff Committee and social
partners, the Bank has implemented a Social Plan envisaging socially responsible and financially sustainable measures to prevent social dumping and protect the staff affected by these measures. The plan has been considered
acceptable by all internal and external counterparties involved in its implementation.
Despite this extremely complex scenario, our attention for
client needs remained unchanged.
As at 31 December 2014, we recorded a 3.3% increase in
Assets under Management, which exceeded CHF 92 billion compared to CHF 89.4 billion at the end of 2013, especially thanks to the good performance of Assets under
Management.
Despite a still difficult general context with a continuing
low interest rate level, operational performance has improved, confirming BSI’s solidity and the effectiveness of
the Bank’s strategic choices. Excluding legal and audit
costs connected to the Bank taking part in the U.S. Tax Program, adjusted gross profit improved considerably, reaching CHF 208.9 million, with a 6.3% increase year-on-year.
Net profit was affected by the payment related to the
Non-Prosecution Agreement and reached CHF 2.2 million,
but without compromising the Bank’s solidity. From a strategic point of view, in 2014 BSI continued to get stronger
on traditional markets where it further consolidated its historical position, achieving significant results mainly in Italy
and Switzerland, on high-growth markets in Latin America,
Central-Eastern Europe and the Middle East.
7
BSI – Foreword
2014 was still a challenging year but full of extremely important, satisfactory events in terms of the results achieved.
All this enables us to look to future challenges positively,
with the aim of carrying on supporting our clients at such
a delicate time and further fostering the business, including expanding the range of products and services offered. 2015 will see the change in shareholding thanks to
which BSI will be the reference point of the BTG Pactual
Group in international asset management for private clients maintaining its brand, synonymous with quality and
tradition. Even under a new shareholder, extreme focus
on clients, based on a needs-centric service model, something that has always characterised BSI, will be our Bank’s
distinctive mark. An element that will enable us to be competitive in the future, too.
We would like to seize this opportunity to thank our clients
for the trust they put in our Bank, year after year, and our
staff for the commitment, professionalism and dedication
they show each day to ensure our clients’ and our Bank’s
success.
Alfredo Gysi
Chairman of the
Board of Directors
8
Stefano Coduri
Group Chief Executive Officer
BSI – Foreword
9
BSI – Corporate governance
Corporate governance
In line with FINMA Circular 2008/24 “Supervision and internal control in the banking sector”, the corporate governance principles of BSI Ltd. are described in the Articles
of Association of 19 April 2012 as well as the General Management Regulations of 1 January 2012.
Ordinary General Meeting
The duties and responsibilities of the Ordinary General
Meeting, which is held within four months of the end of
the financial year, include the approval and amendment
of the Articles of Association; the appointment of members
of the Board of Directors and the external auditor; the
approval of the annual report, and the Group and BSI Ltd.
financial statements including resolutions regarding the
appropriation of profit, the discharge of the Board members and other decisions attributed to it by national law
(art. 6 and 9 of the Articles of Association). The Ordinary
General Meeting, for which minutes are taken, is generally
chaired by the Chairman of the Board of Directors or by
the Vice-Chairman (art. 7 of the Articles of Association).
The share capital of BSI is equal to CHF 1.84 billion and is
divided into 18.4 million registered shares (nominal value
of CHF 100). The capital is fully paid up and is held by a
sole shareholder: Participatie Maatschappij Graafschap Holland N. V. of Diemen, which is in turn wholly owned directly
and indirectly by Assicurazioni Generali SpA of Trieste. The
employees of BSI Ltd. do not hold any of the Bank’s share
capital.
Board of Directors
and the Board committees
The duties, responsibilities, composition and function of
the Board of Directors and its committees are regulated
by federal law, and in particular by FINMA circular 2008/24
“Supervision and internal control in the banking sector”,
and are defined in the Articles of Association (art. 10-14)
and in the General Management Regulations of the Bank
(art. 1-10). The Board of Directors is responsible for the
ultimate supervision, monitoring and control of the Bank’s
management in accordance with the Swiss Federal Law on
Banks and Savings Banks, as well as the applicable articles
of the Swiss Code of Obligations. Thus, the Board of Directors is responsible for instituting, regulating, maintaining, supervising and checking on a regular basis that there
is a suitable internal control system for BSI Ltd. and the
Group.
10
At least one-third of the Board of Directors must comprise
members who satisfy the requirements for independence
stipulated in the FINMA provisions. The Board is formed
every year at the meeting following the Ordinary General
Meeting. The members are elected for a period of three
years and may be re-elected. Their term of office expires
on the day of the third Ordinary General Meeting following
their appointment. The Board of Directors makes the appointments required in the Articles of Association. In particular, it appoints the Chairman and Vice-Chairman. It has
the authority to appoint up to two Vice-Chairmen. The Board
of Directors also appoints a secretary, who may also not
be a member of the Board.
The composition of the Board of Directors, which in 2014
consisted of eight members until 18 April 2014 (when R.
Respini’s term ended), and then of seven, meets the independence requirements set out in FINMA Circular
2008/24. Meetings of the Board of Directors are called by
the Chairman or, if he is unavailable, by the Vice-Chairman.
The Board must meet at least four times each year. For decisions to be valid, a majority of the Board members, including the Chairman or the Vice-Chairman, must be present. The Board of Director’s decisions are made based on
an absolute majority among members present. In the case
of a tied vote, the Chairman or the Vice-Chairman has the
casting vote. The Board of Directors may also make decisions by correspondence.
The General Management Regulations provide for a decision-making procedure for extremely urgent cases: the
Chairman, or if he is not available, the Vice-Chairman, with
at least two other members of the Board, may make urgent
decisions by unanimity under certain conditions. Minutes
of decisions made under this procedure must be written
down at the latest during the following meeting of the
Board of Directors, with an indication of the members who
took the decision. The Chairman or, if he is not available,
the Vice-Chairman convenes the Board of Directors at
least ten days before the meeting date with a communication indicating the agenda. The Chairman or, if he is not
available, the Vice-Chairman chairs the meeting, to which
members of the Group Executive Board may also be invited. Any member of the Board of Directors, the Group Executive Board, the Group CEO or, in his absence, the Deputy
Group CEO may convene meetings of the Board, indicating
their reasons.
BSI – Corporate governance
The Board of Directors must, as a committee, satisfy the
requirements necessary to execute its tasks in terms of
professional competences, experience and availability.
For this purpose, the Board of Directors evaluates and
documents in writing the achievement of objectives and
its working methodology. This self-evaluation was done,
as in the previous year, with the support of an external consultant.
The tasks and main powers of the Board of Directors include issuing and modifying the necessary regulations and
general directives for organising, managing and supervising the activities of BSI Ltd. and the Group, as well as setting the competencies for the Bank’s governing bodies, if
these tasks have not been delegated to the Group Executive Board. Furthermore, the Board of Directors decides the
medium-term plan for the Bank’s corporate policy, management principles and global risk control as well as approving its risk management policy. It also approves the
structure of the general organisational chart and designates the persons authorised to represent the Bank. The
Board of Directors prepares the annual report, the annual
accounts and the Group accounts, which are presented to
the Ordinary General Shareholders’ Meeting for approval,
together with a proposal for the appropriation of profit. As
part of its monitoring and control duties, the Board of Directors, with the support of the Audit & Risk Committee,
examines the reports of the External Auditor and Internal Audit, the quarterly Global Risk Report, the trend in
large exposures, the financial result, the trend in client assets under management, the Bank’s liquidity and the shareholders’ equity at Bank and Group level. Finally, the Board
of Directors appoints the Chief Audit Executive, who is
responsible for internal auditing at Group level.
The Appointments & Remuneration Committee, appointed by the Board of Directors, comprises at least two members. It is responsible for approving the principles governing employees’ fixed and variable remuneration, and the
global plan for promotions and development. In particular,
this Committee sets salaries for the members of the Board
of Directors. It also approves the employment contracts
and sets the remuneration of the Group Executive Board
and the Chief Audit Executive. The duties and responsibilities of the Committee are defined in specific regulations.
The Board of Directors appoints an Audit & Risk Committee, comprising at least three members. They supervise
and assess the integrity of the annual financial statements,
compliance with legal requirements and regulations, the
effectiveness of the internal and external audits, and the
adequacy and effectiveness of the control system of BSI
Ltd. and the Group. The duties and responsibilities of the
Audit & Risk Committee are defined in specific regulations.
The Committee meets at least four times each year. Together with the Group Executive Board, Internal Audit and
the External Auditor, the Audit & Risk Committee examines
the annual financial statements. The responsibility for the
tasks assigned to the Committee remains with the Board
of Directors.
11
BSI – Corporate governance
As at 1 January 2015, the composition of the Board of Directors was as follows:
Board
of Directors
Alfredo Gysi
Mandate
expires
Audit & Risk
Committee
Chairman1
2017
Carsten Schildknecht
Vice-Chairman1
2016
Eugenio Brianti
Vice-Chairman1
2016
Member
Luigi Butti
Member1
2016
Vice-Chairman
Fabio Corsico
Member1
2016
Pierre Genecand
Member1
2015
Nicola Mordasini
Member1
2017
1
Appointments
& Remuneration
Committee
Vice-Chairman
Chairman
Chairman
Independent member in accordance with FINMA Circular 2008/24.
Alfredo Gysi has been Chariman of the Board of Directors
of BSI Ltd. since 1 January 2012; he was born in Sorengo
(Switzerland) on 3 October 1948 and studied in Italy and
Switzerland. After earning an undergraduate degree, he
went on to obtain a doctorate in mathematics from Milan’s
Università Statale in 1973. From 1994 to 2011 he was Chief
Executive Officer of BSI Ltd. He is Chairman of the Board
of Directors of B-Source SA Lugano, and, since March 2011,
he has been a member of the Bank Council of the Swiss
National Bank (SNB), holding the chair of its Risk Committee. He is Chairman of the Foundation Board for the faculties of Università della Svizzera Italiana in Lugano, a
member of the Board of Directors of that university, and
a member of the Foundation Board of the Swiss Institute
in Rome. An art and music lover, he sits on the Consulting
Committee of Venice’s Peggy Guggenheim Collection as
well as the Board of the Foundation “Milano per la Scala”.
Carsten Schildknecht was born in Karlsruhe (Germany) on
23 February 1968. After graduating in Mechanical Engineering and Business Administration, he obtained his PhD
from Darmstadt Technical University in Germany. In April
2013, he became Generali’s Group COO, taking on the
following responsibilities: IT Infrastructure & Systems, Operations & Business Services, Procurement, Premises & Facilities Management, Operational Excellence Program &
Cost Management, and Operational Governance & Control. Before joining Generali, he spent twelve years at Deutsche Bank, including eight as Global COO of the Private
Wealth Management unit. In this capacity, he managed the
integration and turnaround of Sal. Oppenheim, the private
bank Deutsche Bank acquired in 2009. He served as Chairman of Sal. Oppenheim’s Supervisory Board and member
of Deutsche Bank’s supervisory boards in Switzerland, Luxembourg and Austria. He joined Deutsche Bank in 2000
after working for seven years at McKinsey & Company, where he focused on the Automotive & Assembly, Innovation
& Technology Management, and Operations Effectiveness
practices.
12
Eugenio Brianti was born in Trieste (Italy) on 4 June 1953
and is a Swiss citizen. After finishing high school in Lugano,
he studied at the University of Parma, where he received a
doctorate in economics and business in 1979. He worked
briefly at UBS before starting at BSI in 1980. Over the years
he has held various positions, including the coordination
of the development and control office for the Swiss branches.
In 1989, he became manager of the St. Moritz branch, and
a year later he was appointed manager of the Chiasso
branch. In 2003, he took on the position of head of Private
Banking for Ticino and Graubünden. In 2005, he was
appointed Executive Vice President, and in 2008 Senior
Executive Vice President. He is a member of the Board of
Directors of BSI since 1 January 2011 and he was appointed
Vice Chairman of the Board on 1 July 2013. Until the end
of June 2013, he sat on the Board of FINMA, the Swiss
Financial Market Supervisory Authority. He is Chairman of
the Board of Directors of Funicolare Lugano-ParadisoMonte San Salvatore SA, Vice Chairman of the Board of
Directors of Autolinee Regionali Luganesi, and sits on the
Board of Lugano-based Finnat Gestioni SA and Turinbased Banca Patrimoni Sella & C. SpA.
Luigi Butti was born in Vacallo (Switzerland) on 25 November 1940. After graduating from the Business College of
Maria-Hilf (canton of Schwyz), he honed his professional
skills at various credit institutions and brokers, such as Credit Suisse in Zurich, Rued, Blass & Cie in Zurich, and Hirsch
& Co. in New York. He began his career at BSI Ltd. in 1969
as a relationship manager, and then took over responsibility for the financial division and private clients department.
In 1990, he was appointed Senior Executive Vice-President,
and in 1998 he became Deputy CEO of BSI Ltd., a position
he held until 2004, when he became a member of the
Board of Directors of BSI Ltd. He is also a member of the
Cardiocentro Ticino Foundation, Lugano, and since 2011
he has been Chairman of the San Salvatore Foundation,
Lugano.
BSI – Corporate governance
Fabio Corsico was born in Turin (Italy) on 20 October 1973.
He holds a Classical High School Diploma (grade: 46/60)
and a degree in Political Science (grade: 110/110).
In 1997, he served at Italy’s Defence Ministry in the Office
of the Diplomatic Advisor to Minister Beniamino Andreatta,
preparing international dossiers and working at the Military Centre for Strategic Studies. From 1998 to 2001, he
worked at Olivetti/Mannesmann, first in Ivrea and then in
Rome. More specifically, at Infostrada, one of the group’s
companies, he served in the Communications and Human
Resources departments before becoming Head of Public
Affairs. In the same period, he represented the Company
in Assinform (Italy’s association of information technology
companies) and AIP (the Italian association for industrial
policies). In 2001, he went to Italy’s Finance Ministry as the
Chief of Technical Staff under Minister Giulio Tremonti.
Meanwhile, he sat on the Committee for the introduction
of the Euro.
In 2003, he joined Enel as Head of Institutional Affairs as
well as relations with the Local Community and Confindustria (the Italian industrial employers’ association).
Since February 2005, he has been serving as Head of External Relations, Institutional Affairs and Development of
the Caltagirone Group. He sits on the Board of Cementir
Holding, Grandi Stazioni, “Il Gazzettino”, BSI Ltd., and Terna. Starting from 2009, he has been Credit Suisse AG’s
Senior Advisor for Italy. In addition, since 2008 he has been
a Director of Fondazione CRT (where he previously chaired
the Appointments Committee and now the Investments
Committee) as well as Vice Chairman of Fondazione Sviluppo e Crescita.
He was a member of the Board of Avio (2009-2010), Biverbanca and Consum.it (2008-2012), Alleanza Assicurazioni
(2009-2011), Alleanza Toro Assicurazioni (2011-2013), Cueim CRT (2010-2013), as well as Chairman of Orione Investimenti (2010-2012) and a Director of Turin’s Teatro Regio
(2010-2013). He served also on the Board of Energia (20122014) and Perseo (2013-2014). He was among the founding
members of Aspen Junior Fellows as well as the Consiglio
per le Relazioni Italia Stati Uniti Juniores (Italy-United
States Relations Junior Committee), and sat on the Board
of the “Zero” and “Formiche” magazines. Currently, he is
the Managing Director of the Centre for American Studies
and Fondazione Rosselli.
assists small- and medium-sized businesses in managing
their employees’ pension funds. Until 2003, he was Vice
Chairman of the Swiss Insurance Brokers Association (SIBA).
From 2003 to 2011, he sat on the Board of HSBC Private
Bank Suisse and HSBC Guyerzeller Bank. From 2014, he
has been the director of the Gstaad Palace hotel in Gstaad,
Switzerland.
Nicola Mordasini was born in Bellinzona (Switzerland) on 7
July 1950. After graduating from the University of Geneva
with a degree in economics, he started his professional
career in 1974 at Banca del Gottardo. He held numerous
positions in various sectors of this bank. In October 1991,
he was appointed Senior Executive Vice President with responsibility for the activities of Private & Commercial
Banking. In 1998, he took on the position of Vice-Chairman
of the Executive Board, again with responsibilities related
to clients and affiliates. He held this position until the beginning of 2008, when he was appointed to the Board of
Directors of BSI Ltd. He is a member and, since 2012, the
Chairman of the Audit & Risk Committee. Lastly, he has
held and still holds various mandates with boards of companies and foundations.
Pierre E. Genecand was born in Geneva (Switzerland) on
26 March 1950. He has many years of experience in the
international banking and insurance sector, particularly in
portfolio management for life insurance and pension funds.
He spent most of its career at Gesrep SA, a Geneva-based
manager of insurance portfolios for private and institutional clients. He took the company’s reins in 1982 and chaired
its Board of Directors from 1992 to 2005. Among his other
roles, he was Chairman of Patrimonia Foundation, which
13
BSI – Corporate governance
Group Executive Board
The Group Executive Board (hereinafter: GEB) is responsible for the operational management of the Bank. Its
members are appointed by the Board of Directors. It
manages the Bank, in particular, by carrying out the following tasks. It decides the short- and medium-term objectives within the general framework set by the Board of
Directors, takes all measures needed to achieve these objectives, presents proposals in support of decisions taken
by the Board of Directors, and proposes to the Board of
Directors the general policies and strategies of the Bank.
In carrying out its functions, the GEB represents the Bank,
drafts the medium-term plan and the annual budget
(both of which are submitted to the Board of Directors for
approval), implements the risk management policy, monitors trends and prepares the quarterly report on liquidity
and shareholders’ equity, appoints Assistant Vice Presidents and Assistant Treasurers, signs agreements with
professional associations, establishes the human resources
policy, and issues provisions required for the execution of
the General Management Regulations. The GEB is required
to keep the Board of Directors informed of business trends
and the Bank’s situation by presenting to the Board and
commenting upon respective reports and documents. The
GEB acts as a collective body in carrying out its functions.
Its tasks, responsibilities and reporting duties are defined in
the General Management Regulations (art. 11-16).
The GEB is supported in its activities by several permanent committees with decision-making powers: the Financial Risk & Capital Allocation Committee, the Operational Risk & Compliance Committee, the Operational
Efficiency Committee, the Business Policy & Development
Committee, the Credit Committee and the Counterparty
& Broker Committee.
Lastly, the GEB proposes the composition of the Group
Advisory Board, which is approved by the Board of Directors. The Group Advisory Board is a committee with advisory powers chiefly in relation to strategic issues surrounding business development at BSI Ltd. and the Group.
14
As at 1 January 2015, the composition of the Group
Executive Board was as follows:
Stefano Coduri, Group CEO
Rajiv Pradhan, Deputy Group CEO, Corporate Services
Nicola Battalora, Senior Executive Vice President,
Group Investments Solutions & Capital Markets
Hanspeter Brunner, Senior Executive Vice President,
BSI Asia
Gérald Robert, Senior Executive Vice President,
BSI Latin America, Middle East & Eastern Mediterranean
Renato Santi, Senior Executive Vice President,
BSI Switzerland
Compensation 2014 (CHF gross amounts) of the members of the Group Executive Board
2014
CHF
Annual base salary
3’643’000
Short term incentive
(including deferred payments)
3’541’800
Others (allocation 2014, deferred payments)
Total
515’374
7’700’174
The disclosed amounts refer to six members of the Group
Executive Board (GEB). All the amounts but the ones related to “Others” do not include the employer contributions
to social securities as well as all other additional insurances
and unemployment. The accrued “Others” amounts are
deferred and paid by installments according to the rules of
the plans.
With respect to previous year there is one member of the
GEB less, who retired as from April 2014 and who has not
been replaced.
The pension scheme changes from a defined benefit to a
defined contribution plan as of 1 January 2015. This change
is applied to all employees in Switzerland (hence including
the five GEB members with a Swiss contract) with a significant impact on cost reduction.
BSI – Corporate governance
Stefano Coduri, born in Mendrisio (Switzerland) on 25
May 1964, has been CEO of BSI since 1 January 2012. After obtaining a degree in Finance and accounting from
the University of St. Gallen, he joined BSI in 1989 and has
spent his entire career at the Bank. He was appointed to
the Executive Board in 2004. He successfully led the most
important projects involving the Bank in recent years, including the integration of Banca Unione di Credito (BUC),
acquired in 2006, and Banca del Gottardo, acquired in
2007, and the implementation of a new IT platform for the
entire BSI Group. Before taking over his present position,
Stefano Coduri was Head of Banking Platform (group operations), a position that enabled him to acquire a wealth
of experience in various segments of the Bank, including
Private Banking, Product Management and Organisation.
Nicola Battalora, born in Lugano (Switzerland) on 10 January 1962, has been CEO of BSI Group Investments Solutions & Capital Markets since January 2014. After graduating in Business Administration from the University of St.
Gallen, he started his career in 1987 as Assistant to the
General Manager of the Ticino Tourism Office. Nicola Battalora joined the BSI Group in 1989, working in the Offshore
Banking Operations unit at the headquarters in Lugano as
well as the Control of Overseas Subsidiaries unit, where
he served until 1992. Then, he took on various roles at the
offices in Guernsey, London (obtaining the Securities &
Financial Derivatives Representative Certification), and
Nassau, where he was Senior Vice President for several
years. This way, he acquired an extensive experience in
the international banking industry. Before taking over his
present position, from 2005 to 2010 Nicola Battalora filled
the role of Managing Director of BSI Bank Ltd. Singapore;
since 2010 he is CEO of BSI Luxembourg and, at the same
time, from July 2012 to January 2014, CEO of BSI Europe.
Hanspeter Brunner, born in Steckborn (Switzerland) on 12
April 1952, has been CEO of BSI Asia since 2010, overseeing Singapore operations and heading up the strategic
development of BSI in the Asian markets. He has thirty
years’ experience and an in-depth knowledge of the private banking sector. Hanspeter Brunner worked directly
in the Asian markets for over 25 years, first with Credit Suisse and then with RBS Coutts, holding positions such as
CEO of RBS Coutts International and Executive Chairman
of RBS Coutts Asia. He thus acquired a deep knowledge
and understanding of the Asian private banking landscape. During his career, he was awarded several titles,
including “Outstanding Private Banker Asia Pacific” in 2008
by Private Banker International and “Asian Private Banker
of the Year 2010” by the Asian Private Banker publication
in 2011. A Swiss citizen, Hanspeter Brunner became a Singapore Permanent Resident in 2007 and held numerous
extra-professional positions such as a Board member of
the Association of Foreign Banks in Switzerland, Council
member of the British-Swiss Chamber of Commerce in
Switzerland and President of the Swiss Business Council in
Hong Kong.
Rajiv Pradhan, born in New Delhi (India) on 11 June 1955,
has been Head of BSI Corporate Services, which comprises the departments of Finance, Risk Management, Group
Credit Officer, Legal & Compliance and Banking Platform,
since 2011. He was appointed Deputy Group CEO in April
2014. After obtaining a degree in Economics from the London School of Economics, a professional qualification as a
Chartered Accountant at Peat Marwick in London, and an
MBA from INSEAD of Fontainebleau, he began his professional career as an internal auditor of Olivetti Group subsidiaries worldwide. He then continued his professional
development at Hermes Precisa International (Yverdon /
Lausanne), a company then acquired by Olivetti Group. He
has been at BSI since 1987, holding many important roles in
the Group Accounting, Budgeting, Planning, Operations and
Logistics. In 2001 Rajiv Pradhan was appointed as member
of BSI Executive Board and Head of Operations & Logistics, a position he held until 2004. In 2005 he became
CEO of B-Source, a company providing Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) services, which during those years was wholly
owned by the BSI Group. In 2008 he was appointed as
Chief Financial & Risk Officer and in 2011 Head of BSI Corporate Services.
Gérald Robert, born in Rome (Italy) on 14 November 1957,
has been CEO of BSI Latin America, Middle East & Eastern Mediterranean since July 2012. In this capacity, he
heads the development of the markets in Latin America,
Middle East, and the Eastern Mediterranean. After graduating in International Politics and Economics from George
Washington University, he obtained a Master’s Degree
with major in economics and finance from Johns Hopkins
University in Washington D.C. and worked as Research Associate at the U.S. Department of State in Washington,
D.C. From 1983 to 1985 he worked for the Banker Trust
Company of New York as a private banking relationship
manager for Europe and Latin America. In 1985 he joined
the New York branch of BSI as Account Manager and was
responsible for maintaining and developing private banking clients in Latin America and Europe. In 1987 he moved
to Venezuela, where he managed the local representative
office until 1990, when he became Senior Representative
of BSI in Argentina. From 1993 to 2001, he was BSI Montecarlo’s Director and then Head of Romandie.
15
BSI – Corporate governance
Renato Santi, born in Mendrisio (Switzerland) on 27 October 1969, has been CEO of BSI Switzerland since 1 January
2013. Renato Santi started working for BSI in 1994 and has
spent his entire career with the Bank. In 2011 he joined the
Bank’s Executive Board as the head of the Personal Banking division. Renato Santi is a graduate in economics from
the University of St. Gallen. In the course of his career at
BSI he has successfully taken charge of various strategic
development projects. Since entering the management of
BSI Ltd.’s Private Banking division in 1996 and subsequently
becoming Head of the division in 2002, Renato Santi has
been responsible for Product Management (Lugano), Corporate Services at BSI Ifabanque (Paris) and Strategic Marketing & Support Services (Lugano).
Internal Audit
Internal Audit is the department that, at Group level, performs independent evaluations and reviews of the internal control system, thereby contributing to the ongoing
adjustment of the control system as needed. It coordinates its activities with those of the External Auditor. Internal Audit reports directly to the Board of Directors and
thus to the Audit & Risk Committee.
Internal Audit reports periodically to the Committee on
the activities it has carried out, and it also reports to the
Board of Directors once a year. Written reports on the
results of audits conducted by Internal Audit are produced and sent to the Chairman of the Board of Directors
and the Audit & Risk Committee. A copy is also sent to
the members of the Group Executive Board and to the
External Auditor. The scope, authorities and responsibilities of Internal Audit are defined in the General Management Regulations and in the Group Internal Audit Regulations. The Chief Audit Executive, who is appointed by
the Board of Directors, is Mr Nicola Guscetti. He has held
this position since 1 January 2012.
External Auditor
The External Auditor checks the Group accounts and the
annual reports of the Bank in accordance with legal provisions and regulations in force in Switzerland. Pursuant to the
Code of Obligations, BSI appointed Geneva-based Ernst &
Young SA as External Auditor. The Lead Auditor is Mr Mario
Mosca.
16
BSI – BSI Ltd. Organizational chart
BSI Ltd. Organisational chart
(situation as of 1.1.2015)
Board of Directors
Internal Audit
Nicola Guscetti
Group Chief
Executive Officer
Stefano Coduri
1
Merchant &
Investment Banking
Strategic Planning
& Corporate Finance
Vincenzo Piantedosi
Fabio Casati
Group HR, Organisation & Internal
Communication
Group Executive
Office
Vincenzo Martino
David Matter
Corporate Services
Group Investments
Solutions & Capital
Markets
BSI Switzerland
BSI Asia
BSI Latin America,
Middle East & Eastern
Mediterranean
Rajiv Pradhan
Nicola Battalora
Renato Santi
Hanspeter Brunner 1
Gérald Robert
1
1
1
1
Member of the Group Executive Board.
1
17
BSI – Human Resources
Human Resources
Headcount
In 2014 the number of people employed by the BSI Group
decreased from 2,042 as at 31 December 2013 to 1,983 as
at the end of 2014.
Reducing the headcount is part of a broader cost-cutting
effort launched in early 2014, which aims to streamline complexity and reposition the Bank within the existing business
model.
People employed in Switzerland are 1,332, whereas our
presence in Asia slightly decreased to 310 employees.
Overall, the staff outside Switzerland amount to 651 employees.
Remuneration policy
BSI’s remuneration policy always aims at upholding competitiveness in the market and maintaining fairness within
the Bank, as well as a balance between short-term and longterm incentive plans. In the first few months of 2014, BSI
revised this policy, emphasising the importance of merit
in the award of variable pay.
Under the guidance of the Appointments and Remuneration Committee, we aligned our policy with modern market practices.
We introduced significant Key Performance Indicators and
updated a number of compensation models, encouraging
employees to create value in order to provide clients with
an excellent service.
The transformation of BSI
During 2014, we worked hard to transform BSI, reducing its
complexity and refocusing operations to enhance the service rendered to clients, improve profitability, and remain
competitive over the long term.
We launched a radical and necessary transformation that
will certainly allow us to take on new challenges in the private banking industry.
As part of this process, we had to reduce our headcount,
gradually cutting 160 positions across our global operations. This effort started in autumn 2014 and is on track to
be completed by the end of 2015.
True to our tradition and culture, we did our best to minimise the number of layoffs and helped the people affected
with job placement services and a Social Plan that met with
the approval of the social partners and the employees concerned.
18
Before going ahead with this restructuring effort, we slashed
costs by reducing pension benefits – adopting defined-contribution plans, in line with market standards – as well as reviewing the variable pay plans.
Staff Committee
The co-operation between the Staff Committee and the
Human Resources Department was characterised mainly
by the joint efforts towards curbing costs by cutting down
on complexity, reconsidering the Bank’s geographical presence, and reducing the headcount.
This collaboration went through all the steps necessary to
define a Social Plan and the related redundancy schemes
that accompanied the restructuring.
Employees, represented by the Staff Committee, presented the Bank with several topics for discussion and proposals, which were addressed in the above document.
Last but not least, BSI set up a Joint Supervisory Committee, which is still active, to guarantee principles, measures
and instruments are implemented consistently throughout
the various stages of the restructuring.
Training & development of resources
The “BSI and Corporate Responsibility” report illustrates
in detail, among other initiatives, the many initiatives
started to develop human resources at BSI. From the training viewpoint, activities were continued in 2014 especially within the scope of the Private Banking Business
Academy to follow evolving regulatory and tax contexts
and business development projects. Besides the usual
training initiatives related to the company’s Competency
Model and open to all the Group’s employees, we launched
an additional Management Skill development programme
that bolstered our offerings for employees with management responsibilities.
Training of young recruits continues to reflect BSI’s long
tradition, with the management of 15 apprentices and by
accurately and timely meeting the requests for training
placements for university students.
BSI – BSI and Corporate Responsibility
BSI and Corporate Responsibility
We are a bank first and foremost. But since our inception
in 1873, we have always sought special relationships – not
only with the clients who entrust us to protect and grow
their assets, but also with our people – our greatest asset,
and with enriching the broader communities in which we
live.
Thanks to this sense of corporate responsibility, for over
140 years now BSI has been achieving long-term sustainability while ensuring excellence and stability. Considering
the current scenario, rife with challenges, this is nothing less
than a success. As a global organisation which cherishes the
symbiotic relationships with our stakeholders, we find it imperative to cultivate an environment which promotes transparency, accountability, and commitment to the highest
standards of governance and ethical behaviour – this is the
very reason we have chosen to voluntarily report on our
business activities through annual reports and financial
statements.
To BSI, Corporate Responsibility is far from simple donations; it is holistically represented through integrating a
responsible approach across three dimensions: Business,
Social and Environmental – precisely aligned with the objectives of our mission.
In the Business dimension, we speak about responsible
client practices, the extra mile we take to build and maintain mutually rewarding client relationships as well as the
long-term orientation that guides the overall management
of the company since its inception.
The Social domain relates to the responsibility we have
towards people and the community. Ensuring the well-being of our staff through excellent working conditions and
employee friendly policies such as gender equality and
diversity inclusion programs all contribute to a happy and
motivated, hence, sustainable workforce.
For more than 140 years, we have forged meaningful relationships with numerous communities by combining our
success with a variety of social contributions. Apart from
strategic sponsorships and partnerships, we develop and
support various corporate philanthropy and employee volunteering projects.
Business Dimension
We Value Our Clients
At BSI, our priority is building sustainable long-term relationships with clients based on mutual trust and the certainty the Bank is not just a reliable consultant that can
offer integrated wealth management solutions and grasp
opportunities, but also a company that establishes robust
partnerships spanning generations. Through an approach
that is both multicultural and glocal, we strive to provide
world-class services to our clients, knowing that what differentiates us from the competition are custom-tailored
solutions. We are constantly looking to further develop
and improve the quality of our services, consistently with
the goal of providing the client with a positive and comprehensive experience. This is also why we decided to
align ourselves with the MiFID (Markets in Financial Instrument Directive), an EU directive aimed at safeguarding
clients and fostering competition in investment services.
Sustainable and Responsible Investing (SRI)
Sustainable and Responsible Investing (SRI) is widespread
among those institutions and private investors that seek a
greater awareness of their long-term social and environmental impact on the world we live in. The goal, besides earning a financial return, is making a positive impact
on Society. For instance, other things being equal, it is
more sensible to invest in companies looking to reduce
environmental risks, rather than those generating considerable air and water emissions. Similarly, it is better to reward
companies aware of the social impact of their operations,
as they can create both social and financial value. Investing
in microlending is another option for obtaining a financial
and social return.
BSI is on the front line of SRI. In 2014, along with other
Swiss banks, it founded the Swiss Sustainable Finance organisation, which aims to make finance more sustainable
and responsible. Furthermore, BSI has acquired extensive
experience in SRI practices, which allows it to create comprehensive portfolios of stocks, bonds and funds offering
Social and Environmental added value. The ultimate goal
of these investments is making a positive impact on society while reducing portfolio risks.
Finally, the Environmental dimension refers to sustainable
environmental practices such as energy conservation, paper optimisation and reduction of greenhouse gases –
achieving a win-win situation of environmental preservation and operational cost savings.
19
BSI – BSI and Corporate Responsibility
By conducting an Environmental, Social and Governance
(ESG) analysis, we can thoroughly assess nearly 4,000
companies, screening out those involved in controversial
activities and investing in select businesses representing
models of “Corporate Citizenship”. Clients can use these
analyses right away to make well-informed and knowledgeable decisions throughout the investment process. In
advising our clients, we present them with investment opportunities that both deliver returns and raise awareness
about social and environmental issues, providing solutions.
Social Dimension
We value our employees
BSI greatly values the well-being of each employee. We
have an unwavering commitment to promote and guarantee an excellent work environment, allowing people to realise their full potential. New hires are welcomed into the
BSI family since the very first day, with introductory presentations and occasions to socialise – such as the Welcome
Day – designed to foster a sense of belonging. Furthermore,
the Bank frequently hosts cross-functional team-building
sessions to promote social bonding and robust interpersonal
relationships.
Ideal conditions for a workforce capable of excellence
We believe it is crucial for the workforce to be fit and happy
in order to make a positive and sustainable contribution to
BSI’s business and corporate culture. Besides an attractive
and competitive compensation package, all employees in
Switzerland are entitled to health insurance and coverage,
free annual vaccinations, and paid annual leave. Furthermore, we strongly advocate for employee work-life balance,
offering flexible work hours as well as sabbatical and unpaid
leave to meet the needs and demands of our staff.
At the canteen in Lugano’s office, employees can choose
every day from a wide variety of servings of the highest
standards. The Bank offers also considerable discounts on
meals. If possible, ingredients are sourced from non-profit
organisations employing disabled people.
Diversity & Inclusion
BSI is a global organisation that promotes and supports
diversity and inclusion. To this end, in 2013 it arranged for
a series of initiatives spanning all levels of the organisation
and focusing on gender, ethnic and generational diversity.
In 2014, BSI set up a group of Ambassadors including representatives of the main areas of interest, which meet to
discuss these topics and propose new initiatives.
20
Young People’s Program
The Young People’s Program assesses the leadership and
professional potential of young employees through a rigorous pre-selection process. It aims to offer a customised
training plan involving dedicated activities and opportunities for professional growth within the BSI Group.
Easier access to top management
BSI continues to promote a constant dialogue between
the members of the Group Executive Board (GEB) and the
staff. During meals and coffee breaks, employees can
informally discuss important topics with members of the
GEB at a more personal level.
Training and development
At BSI, we are aware of the importance of training for continuous improvement as a key factor to promote highly
skilled professionals. This is why we have developed a wide
range of training and development activities aimed at providing our staff with the expertise required to work more
competently and efficiently.
BSI offers both internal training activities, managed by the
Training & Development unit and reserved to employees,
and external ones, tailored to the specific needs of each
employee and organised by external training providers
under the supervision of the Training & Develompment unit.
Promoting the all-round growth of our staff is one of our
priorities: our initiatives in this sense are designed to help
employees develop their professional and management
skills.
Leadership Series
Ensuring the growth of our leaders in their quest for excellence is high on the agenda of BSI. We expect our managers to run the company in order to improve performance
and serve as models, being understanding and flexible with
employees. As part of training activities for the Bank’s management, besides the long-running Leadership Program,
BSI introduced “Being an Effective Manager”, an initiative
aimed at providing key instruments for those employees
that are preparing to manage resources. In addition, through
“Manager as Coach”, the company supports using coaching to help employees grow.
BSI – BSI and Corporate Responsibility
360° Feedback
To further promote a culture of feedback, BSI repeated the
“360° Feedback” initiative. The main purpose of this development instrument is helping managers become more
efficient in their management.
It is based on the observation of some behaviours of BSI’s
Competency Model and emphasises the concept of “leading by example”.
BSI first introduced “360° Feedback” in 2013 for all members of the Group Advisory Board, and then extended it
to a larger group of managers in Asia. Now it involves the
Bank’s Senior Management.
Internal work opportunities and job rotations
We know that our employees need their work to stimulate
them and offer opportunities for personal growth and satisfaction. Therefore, we proactively support the staff open
to new challenges within the Bank and implement rigorous
recruitment processes designed to ensure that employees
are given preference in the filling of internal positions. Job
rotations re-energise employees, helping them to better
understand the Bank’s functioning, involving them in its
operations, and allowing them to acquire new skills. Furthermore, BSI offers also international mobility opportunities for both professional and personal growth.
Career and education
For decades now, BSI’s Apprenticeship Program has been
part and parcel of the Bank’s history. It offers high-school
graduates the opportunity to attend a highly specialised
and selective three-year training programme providing
them with the competencies required to advance their career. Furthermore, our Internship Program offers short-term
internships allowing university students to acquire specific
professional skills that will represent a solid foundation to
start working in the financial industry. Staying true to our
responsibilities towards local communities, we give precedence to Swiss nationals in admission to the above training
programmes.
Workplace Health and Safety
The health, safety and well-being of our employees continue to be of utmost importance and will never be compromised. Providing a safe, secure and conducive environment
for our employees to work in allows them to thrive and prosper – a key ingredient in ensuring the continued success
and sustainability of our business. BSI practices a strong
security culture and disseminates vital information frequently
to raise awareness of main risks and highlight rules of conduct to be observed. Extensive policies and measures are
put in place to protect both our employees’ and the Bank’s
interests in seven areas, namely: fire protection, intrusion protection, access control, data protection, people
protection, buildings protection and critical assets protection. Comprehensive site audits are carried out in all BSI
offices biennially to ensure compliance, identify potential
risks and ensure the physical safety of all employees and
guests at our premises. Each year, our assessment evaluations have shown excellent results. On top of carefully
planned fire evacuation procedures which are practiced
regularly, all BSI offices have a team of employees who
serve as medical and red-aid representatives. These employees have undergone training and are equipped with
the proper skills and knowledge to react in an emergency.
They are also qualified to administer CPR and perform basic
life-saving methods.
Since 2013, BSI has been providing its employees, and especially the Private Banking staff, with training on data protection to shield the Bank and its clients from social engineering and IT security attacks.
Career opportunities
Annual assessments
Employees are BSI’s key resource and best investment. We
promote a merit-based environment that properly rewards
achievements, without forgetting to provide robust support
and coaching to who should need specific help. Besides an
open and constant dialogue, BSI carries out semi-annual
and annual performance assessments. The assessment session serves as a motivational tool, allowing for a constructive and transparent discussion about the balance between
the expectations of the individual and those of the organisation. It reveals the employee’s strengths as well as his or
her areas for improvement, allowing to define a custom
development plan.
21
BSI – BSI and Corporate Responsibility
Community Investment
BSI plays an important role in the cultural life of all the communities it serves. We believe that the value of all assets,
besides financial and real estate ones, is key for our community. We support activities that contribute to the cultural,
economic and scientific development of the community
not just through sponsorship, but also as an enthusiastic
and proactive participant in the conceptual, organisational
and promotional aspects. Our ultimate aim is to promote
awareness of the importance of culture, art and science
both for our day-to-day lives and the sustainable development of our society.
BSI and Music
Young Talent Scholarships
As part of our commitment towards music support, we
have been providing scholarships for the development of
exceptional young musicians since 2004, paving the way
for their international careers. Scholarship recipients are
also given the opportunity to participate in the musical
events organised and sponsored by BSI. Our 2014 scholarship recipient was the Argentine pianist Tomás Alegre.
Martha Argerich Project
Promoted by BSI and Swiss radio channel “Rete Due”, this
event is part of the Lugano Festival, which, since 2002, reunites the great Argentine pianist with a host of excellent
performers and talented young musicians in Lugano.
BSI Engadin Festival
Since 2009, we have been a firm supporter of the Engadin
Festival, an exclusive classical music festival and one of the
key musical events in the wonderful Alpine region for 74
years.
OSI and OSR
In recognition of the cultural value and significance homegrown orchestras bring to a country, BSI is a long-term supporter of the Orchestra della Svizzera Italiana (OSI). We also
provide support to the Orchestre de la Suisse Romande
(OSR) by sponsoring their annual gala concert.
BSI and Art
BSI Art Collection
The BSI Art Collection was created in 2000 with the vision
of showing our commitment to the world of contemporary
art, and has grown over the years through a noteworthy
series of acquisitions that aims to identify some of the
most influential personalities in art from the period following the Sixties. Throughout our journey, expansion of the
collection was conducted mainly to adorn and enrich BSI
offices around the world. Paintings, sculptures, drawings,
photographs, videos and site-specific artworks breathe life
into a blend of expressive languages.
22
Peggy Guggenheim Collection
Interested in the evolution of artistic and cultural expressions, since 2001 we have been supporting Venice’s Peggy
Guggenheim Collection, contributing to its activities, while
also promoting other international art projects.
BSI and Architecture
Aware of how important it is to live in an environment characterised by beauty and sustainability, in 2007 BSI set up
the BSI Architectural Foundation. Its goal is promoting architectural expertise, training and research activities.
It presents a biennial architectural award called the BSI
Swiss Architectural Award to honour architects from around
the world who share our vision for contemporary architecture which advances the use of sustainable materials. The
winner assumes the role of a ‘visiting professor’ for one semester in one of the top architectural universities, imparting
knowledge and sharing real world experiences with young
architectural undergraduates.
Bilateral relations
Fondazione del Centenario della
Banca della Svizzera Italiana
The Fondazione del Centenario della Banca della Svizzera
Italiana was established to commemorate BSI’s 100th anniversary, and bestows monetary recognition to persons or
institutions which have furthered the development of Italian-Swiss relations and contributed to the betterment of
understanding between the Swiss and Italians.
Istituto Svizzero di Roma
Starting from 2005, we have been partnering with the Istituto Svizzero di Roma (ISR). Swiss academics and artists
have been representing half of the ISR ever since its foundation, and in 2005 the institute became – together with
the branch in Milan – the reference for Switzerland’s art and
science in Italy. The ISR promotes the dialogue and exchange between the cultural institutions operating in Italy
and actively participates in the network of the several international institutes and academies in Rome.
Finance and Entrepreneurship
The BSI GAMMA Foundation (Global Asset Management
Methods and Applications) was established on the 125th
anniversary of BSI and strives to promote the development and empirical research in asset management, the
functioning of capital markets, and the role and form of
public regulation in fund management. Since its inception,
the Gamma Foundation has organised more than thirty
conferences and supported more than fifty research projects.
BSI – BSI and Corporate Responsibility
BSI, in partnership with the Startup Promotion Centre and
the Swiss Post, created an award for entrepreneurs in the
Ticino region in 2009, and has been supporting it ever
since. In 2014, the StartCup Ticino award went to Ecker
Technologies, a start-up based in Ticino that has developed GONDOLA®. This is a medical device for the treatment of gait disorders in people suffering from neurological diseases, and especially Parkinson. Designed to be
used at home, it allows the patient to continue benefiting
from the treatment over time.
In addition, in 2014 BSI granted the long-running “BSI Pietro Balestra Award” – assigned every year to the best student in quantitative studies at USI’s department of economics – to Matteo Pirovano.
Finally, once again in 2014 BSI supported Uni2grow. This
NGO comprises a socially-oriented IT services provider
whose earnings go to fund university scholarships in Cameroon. In 2014, BSI was a customer of Uni2grow’s IT company and routinely made available its logistical infrastructure to the association for its operations.
Blood donations
Twice yearly, blood donation drives for The Red Cross Ticino are organised by Human Resources and open to all
Lugano-based employees. Each year, about 150-200 blood
donations are received.
Economic growth
BSI has been actively contributing to the economic development of Lugano and the Ticino region since it was established. Noteworthy examples include the major role we
played in founding USI (Università della Svizzera Italiana) –
Lugano’s main university, and the Swiss Finance Institute – a
world-leading research and training centre in banking and
finance. Both institutions have proved vital to the development of the Ticino region.
Additionally, BSI is one of the founders of the Tecnopolo,
often referred to as the “cradle of technological innovation
in Ticino”.
We have also been supporting the historical Mount San
Salvatore funicular with the objective of preserving significant landmarks and promoting tourism in Lugano.
Cultural donations
BSI supports the Cologni Foundation for Artistic Craft
Professions, an organisation which promotes the training
of new generations of young artisans and strives to save
existing, outstanding craft professions from the threat of
oblivion.
Another initiative supported by the bank is “Vacation at the
Museum” of the Museo Cantonale d’Arte (Lugano): a series of creative workshops organised in the summertime in
Lugano. These workshops are aimed at bringing children
closer to the world of art.
BSI is also a donor of the “Fondation de l’hermitage” in
Lausanne, a 19th-century residence which hosts temporary
fine arts exhibitions.
Sport support
Thanks to our exclusive yachting sponsorship with skipper
Giovanni Soldini and his Maserati crew, they have been extremely successful in their record-breaking bids round the
world.
Chief among the team’s countless achievements is the record
they set on a legendary route – the Gold Route from New
York to San Francisco via Cape Horn, which large ships started sailing halfway through the 19th century laden with gold
seekers. Such a feat requires outstanding technical skills, a
strong team spirit, and an unwavering determination to
achieve excellence – all characteristics that perfectly reflect
the commitment and values we offer to our clients, as well as
the passion driving us all.
The Bank also has a history of supporting young sporting
talents to aid in their talent development. For several years,
we have contributed to the Association for Talent in Life –
an organisation which nurtures young sports talents and
provides funding for their sporting and professional development.
Also in 2014, we supported an initiative by FTIA (Ticinese
Federation for disabled integration) which introduced sailing into their sports curriculum with the aim of participating in the Special Olympics 2014.
BSI has been supporting the Golf Tour for years now, proving
it constantly pays attention to golf – a sport that perfectly
matches its own values: a long history, a staunch sporting
spirit, dynamism, professionalism, expertise, and the passion
to take on challenges and accomplish ambitious goals.
23
BSI – BSI and Corporate Responsibility
Other donations
BSI provides financial support to a large number of NGOs
operating in several areas, including Telethon, Associazione Triangolo (a volunteer association assisting cancer patients), and Magic Table (one of Switzerland’s leading food
banks).
Other initiatives
Throughout 2014, BSI ASIA has contributed to and supported a number of key events across the region that have
driven an agenda of change and empowerment. We reaffirmed our ongoing commitment to Habitat for Humanity
sponsoring their Gala fundraising dinner and pledging our
financial and manpower support of 6 houses for needy
families in the Southeast Asia Region.
BSI Asia were the key sponsors for the Samarpana Festival
of South Asian Classical Music and Dance held in Singapore. Furthermore we supported two fundraising Galas
that raised support and awareness for the rural poor in India (Mystic Eye Gala) and an organization driving awareness and change to various social causes in India (Act for
Hope Gala)
Closer to home, in Singapore we made a donation to Food
from the Heart, a local charity donating food to needy families. We also supported the support charity Pharmacist
with a financial contribution to aid their independent charity work.
Our Latin America, Middle East and Eastern Mediterranean offices actively support various communities and charity organizations through a bundle of initiatives.
Since establishing itself as a branch in 2012, BSI Bahrain
has supported various local charities, artistic events and
welfare activities in Bahrain. This was done through strategic alliances with various organizations like the Shaikh
Ebrahim Center for Culture and Research, the Ministry of
Culture and its affiliates. In the spirit of cultural exchange
and the appreciation of classical music, BSI Bahrain, in collaboration with the Minister of Culture, has hosted the internationally renowned violinist, Renaud Capuçon at a local
concert, which brought together all those who truly appreciate musical talents.
Despite only commencing operations in 2013, our Turkey
office has embarked on meaningful sponsorships centred on the preservation of art, music and culture. It sponsored “Art Walk Istanbul”, an art project showcasing the
different faces of Istanbul’s vibrant art scene and organised a cultural visit for staff to the historical island of Yassiada which symbolises the start of democracy and modern Turkish Republic history. It also supported a classical
music concert performed by the Turkish National Youth
Orchestra featuring Violinist Shlomo Mintz and conductor Cem Mansur, bringing together the best young musicians in the country.
24
Last but certainly not least, BSI Servicios S.A. in Montevideo
embraces a strong culture of charitable giving, and supports a list of beneficiaries which centres on the elderly,
disabled and underprivileged. One example to highlight is
Asociación de Usuarios de Protesis Infantiles, a non-profit
state association which extends aid to children and aims to
improve their quality of life by providing them with prosthetic fittings. Financial aid focused on music support and
environmental sustainability is also provided to selected
associations such as Centro Cultural de Música, a non-profit institution dedicated to supporting local Uruguayan musicians and providing opportunities for their talent development and Repapel, an eco-friendly organisation which educates the public on sustainable development and seeks to
raise awareness on how adaptations in personal consumption habits can significantly minimise impacts on the environment.
In 2014, Luxembourg-based BSI Europe focused its support to social, sporting and cultural activities on a number
of initiatives aimed, among other things, at emphasising
the company’s Swiss identity.
First, the Bank has supported the Luxembourg charity Femmes Developpement, which supports the construction of
children’s villages, schools and health centres, as well as
Rwanda’s rural population – especially widowed mothers
who survived the genocide in the 1990s – through activities
such as microlending.
Another worthwhile initiative was the contribution to Les
Pimpampel, a charity based in the Grand Duchy that operates in the paediatric clinic at Luxembourg’s hospital. It
organises several “smart” entertainment activities for hospitalised children and buys all kinds of material to make
the stay at the clinic more enjoyable for both children and
parents.
Last year, BSI Europe contributed also to sporting activities as a sponsor of Dudelange’s T71, a local basketball
association. The association brings together several male
and female junior and youth teams.
Finally, true to its tradition, BSI supported also cultural activities. It donated to the charity Nei Stëmmen (New Voices), contributing to the staging of a series of performances of Mozart’s Don Giovanni in several theatres across
Luxembourg. Specifically, the donation went to pay for the
lodging of the orchestra’s young members, who are all
students at the Conservatorio della Svizzera Italiana. On
the night of the first show, the Bank, together with the
Swiss Embassy in the Grand Duchy, hosted a gala for its
clients and a number of Luxembourg and Swiss public officials and personalities.
BSI – BSI and Corporate Responsibility
Finally, BSI supported the stand of the Swiss Confederation
at the Fair of Nations, which is held annually in Luxembourg.
The stand is managed by the Grand Duchy’s Swiss Society.
The following table shows the 2015 goals that BSI set for
itself in 2012. Most have already been achieved or exceeded:
In Italy, BSI Europe’s local branch has been contributing to
causes that go beyond banks’ areas of expertise, participating in initiatives that help the young, support Italy’s artistic
and economic heritage, and promote the growth of skills
typical of its industry.
Besides the partnership between BSI and the Swiss Institute
in Rome, which dates back to 2005, and our sponsorship of
Venice’s Peggy Guggenheim Collection, we work as sponsors and partners with several institutions and associations:
FAI, Fondo Ambiente Italiano (the Italian National Trust); IED,
the European Institute of Design; Associazione Amici della
Scala di Milano; UNISG, the University of Gastronomic
Sciences in Pollenzo; LIDE Italia, a Group of Business Leaders; AIPB, the Italian Private Banking Association.
Chief among the projects BSI supported in 2014 were “Postcard” – an event promoted by IED Milano and The Italian
Project aimed at supporting young emerging artists, helping
them lay the foundations for their professional future as well
as promoting the development of a sector that is key for
Italy – and “Fa.re Musica per tutti”, a concert organised by
Conductor Mattia Rondelli to affirm that culture is at the
core of human dignity.
Area
Environmental Dimension
Our Environmental Responsibility
Protecting the environment as an essential good is crucial
for BSI. This is why, as a dynamic and established financial
institution, BSI is committed to making decisions that balance economic and environmental interests. BSI is aware
that certain actions taken to meet market demand and compete successfully have an irreversible impact on the planet.
Therefore, it believes it is its duty to promote environmental
sustainability through well-grounded and sensible operating
procedures.
Since 2009, BSI has been rigorously recording and disclosing
data for the purposes of preparing the Corporate Social
Responsibility Report. The data exclusively concern Switzerland, as this is where the majority of BSI’s offices and operations are located.
Electricity
Paper
Water
Waste
BSI 2015 Goal
Results as of 30 June,
2014 compared
to 30 June 2013
5% reduction in energy Average reduction
consumption per capita over the last 2 years
(2013-2014): 6%
Maintaining the share of 100% Achieved in 2013
electricity from renewa- and 2014
ble sources
5% reduction in total
Average reduction
paper consumption
over the last 2 years
(2013-2014): 19%
Exclusive use of recycled 100% Achieved in 2013
paper
and 2014
5% reduction in water
Average reduction
consumption per capita
over the last 2 years
(2013-2014): 12%
Waste sorting over 65% Average separate waste
collection for 2013-2014:
48%
Concerning energy consumption, the Bank introduced
multiple improvements: it replaced halogen lighting with
LED in several offices (-50% energy consumption), installed motion-activated lights (20% energy saving), and in
some facilities, lighting and air-conditioning systems automatically turn off after a set period of time if left unattended, both on business days and at weekends. Furthermore, the utilities that supply electricity to BSI in Switzerland
are committed to generate energy from renewable sources
such as water, sun, wind, biomass, biogas and geothermal
power.
Another area showing huge potential is paper consumption.
Since 2013, BSI has been using exclusively recycled paper,
which has a limited and controlled impact on the environment. Some practices aimed at reducing waste, such
as electronic filing, using iPads, double-sided and monochrome printing, and recycling single-sided printouts will
be implemented across the Group during 2015, also by
implementing the “follow-me-printer” project. This involves
rationalising the number of both centralised and decentralised printers in individual offices. Besides the above
actions, an internal initiative led to replace several subscriptions to the print editions of newspapers and magazines
with the corresponding digital ones starting from 1 January,
2015.
25
BSI – BSI and Corporate Responsibility
In addition, during 2014 the Bank rolled out various video
conferencing systems and desktop-sharing solutions to
promote remote meetings and reduce travelling for both
business trips and commutes. A further step was installing
“Jabber”, an instant messaging and VoIP application that
easily connects all employees and facilitates the exchange
of information and documents, on all computers of the
staff in Switzerland. In early 2015, BSI will roll out another
application, “Webex”, which will enable private and group
discussions also with people outside the bank, allowing
to share the desktop and make conference calls securely
and easily.
In March 2014, new restrictions on business trips became
effective, causing a considerable decline in travelling and
the associated environmental impact. In 2014, BSI also reduced its vehicle fleet.
26
Recycling is another environmentally-friendly practice spread across the entire Group. PET and glass bottles, cardboard and paper, toner cartridges, fluorescent tubes and
batteries are collected and recycled, spent printer ink cartridges and waste electronic equipment are handed back
to suppliers to be regenerated and disposed of. Believing
that education is key to promote environmentally sustainable behaviours, BSI has structured its internal organisation to allow for the proper sorting and disposal of the
above material.
BSI – Our Identity
Our Identity
What distinguishes BSI today and throughout our history
is our unwavering belief in how we should conduct ourselves as a business, based on the principles of solidity,
transparency and good governance. It is a commitment
reflected in the trust of our clients and the loyalty of our
staff. This is how it has always been at BSI. A commitment
unchanged since 1873. We are “Swiss Bankers with Passion”
and we believe that the reason for over 140 years of success and achievements is this unique marriage of cultures
and traits: on the one hand, the rational thinking on which
each decision is based and, on the other, the personal commitment to each client.
Our History
Our journey started in the second half of the 19th century
and after over 140 years, our commitment to the principles of private banking is as strong today as it was on the
very first day. Since the beginning we knew how a great
private bank should be. Since then we have consistently
demonstrated an innate ability to adapt to changing circumstances and contexts without ever compromising our
core values. We’re proud of our long history – and are excited about the chapters still to be written.
Banca della Svizzera Italiana, with its head office in Lugano,
was founded in 1873 thanks to the financial support of
Kreditanstalt in Zurich, Basler Bankverein and Banca Generale di Roma, and with the participation of local backers
in Ticino (Carlo Battaglini, Annibale Bollati, Luigi Enderlin,
Rodolfo Landerer, Pasquale Lucchini, Giuseppe Soldini,
Pasquale Veladini, Giovan Battista Ferrazzini and Clemente Maraini sen.). A few years after its founding, the Bank
moved to the 18th century home of the Marquis of Riva,
which it still owns and uses as its head office. In the final
decades of the 19 th century, the institution was active on
the domestic market. In particular, it supported initiatives
to develop regional transport and the hotel and catering
sector. Nonetheless, the Bank was also active in Italy
thanks to the personal relationships of its directors. The
Bank survived the banking crisis of 1914, although two cantonal institutions – Banca Cantonale Ticinese in Bellinzona
and Credito Ticinese in Locarno – did not. Banca Popolare
Ticinese in Bellinzona was also forced into liquidation. Following this crisis, Banca della Svizzera Italiana continued
to grow its presence in the Swiss market, and later, starting
in the 1960s, it also expanded internationally. In the early
1990s the Bank restructured its business and organisation,
specialising in wealth management for private Swiss and
international clients. The Bank, which has meanwhile changed
its name to BSI, has expanded again in recent years through
client acquisition and also thanks to the recovery of banks
operating in the Ticino financial centre. At the same time,
the Bank has undergone a major international expansion,
especially in Asia, the Middle East and Latin America, in
order to diversify its market presence.
Key dates
1873 Founding of the Bank with the name Banca
della Svizzera Italiana.
1874 Opening of an agency in Locarno, transformed
into a branch in 1914.
1879 Opening of an agency in Bellinzona, later sold to the
new company Banca Popolare Ticinese in 1884.
1881 The Bank begins issuing banknotes, a function it
maintains until the Swiss National Bank is founded
in 1907. Opening of an agency in Mendrisio,
transformed into a branch in 1955 (closed midway
through the 1990s).
1905 Opening of an agency in Chiasso, transformed into
a branch in 1924.
1908 Acts as an agency for the Swiss National Bank in
the Sottoceneri region of Ticino.
1914 Opening of a branch in Bellinzona.
1935 Opening of a branch in Zurich.
1969 Swiss Italian Banking Corporation Ltd, Nassau,
is founded, marking the start of the Bank’s
international expansion.
1971 Acquisition of Adler Bank Basel AG, Basel.
1973 Opening of a branch in St. Moritz.
On the occasion of the Bank’s centenary,
Fondazione del Centenario della Banca della
Svizzera Italiana is founded.
1975 Acquisition of a majority stake in Banque Romande
in the French-speaking part of Switzerland.
1976 Acquisition of a significant stake in Compagnie
Monegasque de Banque, Monaco.
Opening of a representative office in Caracas.
1980 Acquisition of a participation in Domus Bank, Zurich.
1990 Opening of BSI Finanziaria SpA, Milan, which in
2002 becomes Banca BSI Italia SpA, Milan,
and which is later sold to Banca Generali, Milan.
1993 Separation of assets and liabilities related to
commercial activity, founding of the company
SBSI Holding SA, Lugano.
1994 The asset management company in Monaco
is transformed into a bank (today’s BSI SAM Monaco).
1995 Founding of Boss Lab SA, an IT services
company for financial institutions and which later
becomes B-Source.
27
BSI – Our Identity
1998
2000
2005
2006
2008
2010
2011
2012
On the occasion of the 125th anniversary of BSI,
the BSI Gamma Foundation is created, a
foundation that supports academic research
in the financial field.
The company’s name is changed to BSI Ltd.
Opening of offices in Lausanne, which are later
transformed into a branch.
Opening of BSI Bank Ltd, Singapore.
Acquisition of Banca Unione di Credito, Lugano.
Acquisition of Banca del Gottardo, Lugano.
Licence obtained for operating in the Kingdom
of Bahrain.
Opening of an agency in Crans-Montana.
Sale of 51% of B-Source and IT migration from the
BOSS system to Avaloq.
BSI expands its Asian business and opens a
branch in Hong Kong.
Incorporation of Patrimony 1873, a wholly
controlled wealth management company.
The Middle East business continues to grow with
the representative office in the Kingdom of
Bahrain being upgraded to a branch.
2013 BSI celebrates 140 years of success and service in
the private banking sector.
BSI opens a representative office in Istanbul.
The Italian branch of BSI Europe S.A. in Milan starts
operations.
2014 Opening of BSI Bank (Panama) SA in Panama.
The agreement to sell 100% of BSI to the BTG
Pactual Group is signed (transaction subject to
approval by competent authorities).
Shareholders
1910 Acquisition of a majority share package by
Banca Commerciale Italiana, Milan.
1983 Irving Trust Co., New York, takes over the share
package from Banca Commerciale Italiana.
1988 Unigestion SA, Geneva, obtains the share
package from Irving Trust Co. and later sells
a minority stake to Tayio Kobe Bank.
1991 Swiss Bank Corporation, Basel, becomes the
majority shareholder.
1998 Assicurazioni Generali, Trieste, becomes the
sole shareholder.
28
Chairmen of the Board of Directors
– Pasquale Veladini, 1873-1874
– Pasquale Lucchini, 1874-1892
– Clemente Maraini, 1893-1905
– Giacomo Blankart, 1905-1920
– Adolfo Soldini, 1920-1927
– Otto Maraini, 1927-1944
– Marco Antonini, 1944-1955
– Antonio Lory, 1955-1966
– Carlo Pernsch jr., 1966-1974
– Ettore Tenchio, 1975-1983
– Gianfranco Antognini, 1983-1991
– Franco Masoni, 1991-1993
– Alberto Togni, 1993-1998
– Hugo von der Crone, 1998-2004
– Giorgio Ghiringhelli, 2004-2011
– Alfredo Gysi, since 1 January 2012
Executive directors
– Giacomo Blankart, Director 1873-1888
– Innocente Gianinazzi, Director 1888-1918
– Carlo Pernsch sen., Director 1918-1926
– Guido Petrolini, Director 1926-1927
– Adolfo Hediger, 1928
– Antonio Lory, Director 1928-1942 and
Managing Director 1943-1955
– Carlo Pernsch jr., Director 1943-1955 and
Managing Director 1956-1966
– Gianfranco Antognini, Senior Executive Vice President 1966-1968 and Managing Director 1969-1983
– Giorgio Ghiringhelli, Chief Executive Officer 1983-1994
– Alfredo Gysi, Senior Executive Vice President and
Chief Executive Officer 1994-2011
– Stefano Coduri, Group CEO, since 1 January 2012
Our Mission
BSI’s objective is to accompany its clients – year after year,
generation after generation – in all the important decisions
that concern the growth and protection of their wealth.
BSI’s objective is to provide a multicultural and international
work environment, where people can grow and create, and
enjoy the respect, confidence and flexibility necessary to
perform well.
BSI’s objective is to contribute, through its own resources,
to the economic, social and cultural growth of the main communities in which it conducts business.
BSI is able to pursue these objectives being part of one of
the world’s largest financial groups and thanks to its resources,
always in accordance with financial stability standards.
BSI – Our Identity
Our Vision
We aspire to rank first in the hearts and minds of our clients
when it comes to outstanding private wealth management
advice and services.
We serve clients in different parts of the world, building
personalised, trust-based, family-like relationships that last
from generation to generation, since 1873.
We are committed to providing expertise, discretion and
flexibility in banking also leveraging on our multicultural
understanding and global networking.
Our Values
Our values represent who we are, our DNA. They make us
unique, different from our competitors.
Our values are a beacon that guides our decisions in times
of great changes that are transforming our bank on a constant basis. They always remind us of who and what we are,
and they motivate our actions as we pursue our objectives.
Our ability to remain unique depends directly on the extent to which our values are reflected in what we do.
Competence
At BSI, we are constantly enhancing our competencies to
provide high-quality private wealth management products
and services to our clients. We leverage a wide range of
specialist competencies to look for innovative solutions.
Aspiring to be a learning organisation, we develop the expertise required to continuously improve our products and
processes.
Partnership
At BSI, we value long-term relationships and strive to engage in professional and personal relationships for our
benefit and that of our partners. Our partnerships with clients, colleagues, suppliers, stakeholders, and the entire
community give us the energy necessary to create a shared
future. As a bank that puts its clients at the centre, we listen
carefully to find solutions that benefit all stakeholders. We
appreciate feedback as an opportunity to learn and we
give it to others in a constructive way.
Integrity
BSI’s relations with its clients and employees are based on
complete transparency, trust, and compliance with applicable laws. We keep our promises, ensure our commitment, and represent a partner our clients, employees and
stakeholders can rely on. Integrity is a value that underpins
all our relationships, and through co-operation we promote
trust and transparency – which are the starting point for a
long-term partnership.
Care
Caring for our clients, employees and stakeholders means
always being aware of the crucial importance of our actions and of how we take them. We listen empathetically
to make our clients understand that we are really committed to helping them in achieving their personal wealth
management goals. We work with our colleagues for their
benefit and that of the clients. We do our best to meet the
needs of our clients. We firmly believe in the importance
of the sense of civic duty. Therefore, through our proactive
commitment, we promote the economic and cultural growth
of the communities we serve.
Flexibility
At BSI, we respect the different needs of our clients and
acknowledge the importance of a tailor-made approach.
Our flexibility allows us to deal with unforeseen circumstances as well as complex projects amid the uncertainty and
challenges that characterise our wealth management business. We listen to others and proactively strive to understand different ideas and perspectives in order to achieve
shared goals. We can change our minds and encourage
colleagues to consider other points of view – all for the sole
purpose of providing our client with an optimal solution.
Code of conduct
Purpose
This Code of conduct establishes the principles and practices that each employee is expected to comply with, in
order to preserve BSI’s first-class reputation, maintaining
the highest standards of ethics, integrity, responsibility
and professionalism at all time.
The Code of conduct is subordinated to the Ethical Code
of the Generali Group and constitutes its implementation
at individual employee level.
29
BSI – Our Identity
Principles
Integrity
All BSI employees are expected to conduct themselves
with honesty, integrity and professional diligence, in observance of the ethical principles and standards of behaviour required by this Code of conduct.
Reputation. Reputation is our main value and requires that
we continuously maintain the highest standards of ethics
and professionalism.
Responsible behaviour. An ethical behaviour entails acting
in good faith, responsibly and with due care and prompts
us to act with honesty and competence at all times.
Transparency. We are fully committed to communicating
in a fair, accurate and timely manner, in order to maintain
the highest level of transparency.
Loyalty. We strive to uphold a fair relationship with clients,
business partners, competitors, service providers as well
as with each other.
Conflicts of interest. We endeavour to identify and avoid
or manage any potential conflicts of interest for the protection of our clients and employees.
Confidentiality
Discretion and confidentiality are fundamental hallmarks
of the relationship between BSI and our clients and stakeholders.
Data protection. We resort to the highest standards of information security for continuous data protection.
Discretion. Confidential and sensitive information can be
internally shared on a strictly “need to know” basis.
Banking secrecy. We refrain from any communication to
third parties without an explicit consent or the existence
of a legal obligation.
Compliance
In our activity we always strive to comply with all laws,
regulations and policies.
External and internal regulations. Each employee is required to know and comply with the external and internal
laws, rules and regulations relevant to his / her specific
area of expertise.
Fighting financial crime. All employees are required to
commit to the fight against corruption, money laundering
and terrorism financing in their specific area of expertise.
Cross-border business. When performing cross-border
business, we are always aware of and act in compliance
with the local regulations of the countries where we operate.
Taxation. Tax reporting must comply with applicable laws,
regulations and treaties. No BSI employee will assist clients in acts aimed at breaching their fiscal obligations.
30
Commitment
Everyone contributes to the Bank’s success.
Fairness. Each employee is granted equal treatment, fair
evaluation and recognition of individual efforts.
Training. Continuing training represents a right and a duty
for each employee.
Access to top management. Access to management is
promoted through our “open door” policy.
Risk approach
We do recognise risk as an important feature of our business and actively manage it.
Awareness. All employees must retain a constant level of
risk awareness, in order to ensure a controlled and conscious risk-taking.
Active risk management. All recognised risks have to be
managed in a rigorous and active way.
Adherence to the Code of conduct
All BSI employees adhere to and follow the spirit and purpose of this Code of conduct.
The Code applies to all circumstances: no waivers or exceptions will be granted.
Line managers are expected to be diligent in the exercise
of their supervisory responsibilities.
Every employee is encouraged to report violations to the
relevant line manager, Legal & Compliance or Human Resources department. Reports will always be treated with
utmost confidentiality.
Disciplinary measures
Violations of this Code will not be tolerated in any circumstances.
Appropriate disciplinary measures will apply in the case
of violation, which may include reprimands, warnings, demotion and dismissal.
Where a violation is perceived to amount to criminal behaviour, competent authorities will be informed.
BSI – Management Report 2014
Management Report 2014
2014 was surely a challenging and eventful year for the
world economy and the BSI Group.
The year of monetary divergence
In macroeconomic terms, 2014 was characterised, on the
one hand, by some events that were hard to predict at the
start of the year, and on the other, by the emergence of a
divergence between the monetary policies of the United
States and the European Union caused by the differing
strength of economic growth in the two areas. The US
economy showed some upside with growth which continued at solid levels and a rise in employment, leading the
Federal Reserve to announce the end of monetary stimuli and the return to normality in terms of interest rates. In
the eurozone, on the other hand, the economy continued
to be a concern in terms of both growth and the risk of a
deflationary spiral, which led the European Central Bank
to adopt Quantitative Easing measures in its turn. On top
of this divergence between the monetary policies of the
FED and the ECB, we saw muted global economic growth,
a scenario of low or even negative interest rates, and the
generalised slump in the prices of key raw materials, causing oil to plunge.
The divergence in monetary policies between the US and
the other major economies affected also foreign exchange
markets, with the dollar appreciating against all the main
currencies – and especially the euro. In this context, the
Swiss economy achieved moderately sustained growth in
2014 with a positive impact above all from foreign trade,
which provided its highest contribution to income growth
since 2008. Private consumption grew moderately with
consumer inflation always close to zero. In 2014, Switzerland’s financial industry confirmed its resilience also in the
face of especially critical circumstances. It remained under strong external pressures concerning mainly tax matters and the introduction of new domestic and interna-
tional regulations. In early 2015, Switzerland reached an
agreement with Italy about the Voluntary Disclosure in
which Switzerland is not to be treated as part of the Italian
fiscal black-list. This is a crucial step in allowing Swiss
banks to freely access the Italian market. In the asset management industry, margins contracted further, mainly because of the increase in costs due to regulatory changes
and the participation of several banks in the Program for
Non-Prosecution Agreements or the Non-Target Letters
for Swiss Banks (U.S. Tax Program) entered into between
Switzerland and the United States in August 2013, as well
as growing pressures on revenues.
Looking ahead, these factors – especially the regulatory
changes being introduced at the international level – will
continue characterising the competitive landscape also in
the near future. They will force the Swiss asset management industry to revise its strategy in order to maintain its
global leadership and improve profitability.
A year that saw important changes for BSI
2014 was surely a challenging and eventful year for the BSI
Group. We kept our attention to customers’ needs unchanged and continued focusing on improving operating
performance. This effort is proving effective and enabled
us to increase Assets under Management and operating
results, confirming the solidity of the business and the effectiveness of our strategic choices even amid extremely
challenging conditions. 2014 marked a historic moment for
BSI, with the announcement of the agreement between the
Generali Group and BTG Pactual, an important international banking group based in Brazil, for the acquisition of the
Bank in July. This is very good news for both our customers
and our employees. After obtaining the authorisation from
the relevant authorities, we started working together with
Generali and BTG Pactual to finalise the transaction. Furthermore, the Bank continued participating actively in the
Program for Non-Prosecution Agreements or Non-Target
Letters for Swiss Banks (U.S. Tax Program) which was jointly
announced by the U.S. and Swiss Governments on 29 August, 2013. Thanks to proactive and productive dialogue
31
BSI – Management Report 2014
with the U.S. Department of Justice (DOJ), on 30 March 2015
BSI was the first “category 2” bank to reach a Non-Prosecution Agreement (NPA) with the DOJ under the U.S. Tax
Program. By entering into the NPA, BSI has resolved its liability with the DOJ arising from its legacy U.S. private banking cross-border business.
“BSI’s 2014 results reflect a year in which
the Group consolidated and strengthened
its operations, increasing adjusted gross
profit1 by over 6%.
Given our solid position, we are well
equipped for future challenges.”
Rajiv Pradhan
CEO Corporate Services
Finally, during 2014 we continued working hard on executing our strategy, diversifying our customer base and
launching a two-year operational excellence programme
aimed at further improving the Bank’s profitability. The
programme, which will take its full impact starting from
2016, produced its first positive effects in the reporting
period.
Report on the business and
implementation of strategy
In 2014 too BSI further consolidated its historic position
by leveraging its excellent reputation in asset management and a value proposition tailored to specific markets
and customer segments. In addition, it expanded further
in high growth markets in Latin America, Asia, Central and
Eastern Europe, and the Middle East. Today, BSI has a
widely diversified customer base: no market accounts for
more than 20% of total Assets under Management.
As for traditional markets, during the year we saw growth
in specific customer segments and markets, as well as our
relations with customers focus on tax compliance – which
is still key to BSI’s strategy. Our Italian operations grew
strongly in terms of both customers and presence. In early
2015, we opened our second Italian branch in Como. In
Montecarlo, BSI centralised all operations into a single location. As a result, the local associate now has ample room
to conduct and develop its business and is more visible. In
Switzerland, we continued executing our domestic strategy and also optimised our presence by closing the
branch in St. Moritz, where the Bank deemed unnecessary
to keep a permanent presence due to the highly seasonal
base of its activities. We also registered remarkable growth
in the external asset manager segment and further developed the innovative Family Office model of our associate
Patrimony 1873. In 2014 too we continued to invest in
methods and technological support to offer an increasingly dedicated, tailored, high-quality advisory process
complying with local and international laws. In Luxembourg, with the aim of satisfying new customer needs, BSI
Europe reviewed its business model, enhancing the Private Banking & Wealth Management structure while strengthening the custody and depositary bank services. In addition,
again in Luxembourg, one of the biggest international centres in the sector of Fund Management, the Bank launched
BSI Fund Management Company, aimed at expanding its
Fund offering through a dynamic structure updated with the
latest ongoing regulatory changes.
“2014 started in the best way possible, with
the coming into full operation of the new
affiliate in Panama, which now represents a
fundamental element for BSI’s growth on
Latin American markets. During the year we
also strengthened our presence on Middle
East markets with the establishment of a new
team of senior managers, as well as recording
a significant increase in business in Turkey.”
Gérald Robert
CEO BSI Latin America, Middle East & Eastern Mediterranean
Adjusted gross profit does not include CHF 36.1 million in legal and audit costs
related to the Bank’s participation in the U.S. tax program.
1
32
BSI – Management Report 2014
“2014 was the year of the creation of the new
Group Investments Solutions & Capital
Markets Region. Our asset management,
capital markets and product management
services were centralised in order to optimise
our in-house know-how and to guarantee
concerted and innovative solutions for
increasingly demanding and challenging
clients.”
Nicola Battalora
CEO BSI Group Investments Solutions & Capital Markets
Important results were achieved also in high-growth markets. In Latin America, BSI Panama became fully operational after obtaining the necessary authorisations from
the Superintendencia de Bancos and Superintendencia de
Mercado de Valores – República de Panamá. During its
first year of operations, BSI Panama reported a strong inflow of new assets and operating results in line with expectations. Asia continued to contribute significantly to
the Group’s growth in terms of both assets under management and revenues. In 2014, the Singapore branch almost
doubled its net profit compared to 2013, while the Hong
Kong branch continued its growth. The Asian market continues to prove attractive for private banking, and BSI is
gradually establishing its presence in the region, further
enhancing its position with local customers.
From an operational viewpoint, 2014 saw the introduction of a new pricing model, which is simpler, more effective, transparent and focussed on customer needs. Furthermore, the Group continued implementing measures
to gradually conform to the new regulatory environment.
Chief among them are the laws on liquidity requirements
and operating risks, the FATCA law, the new directives on
derivatives and the implementation of the groundwork
for Italy’s Voluntary Disclosure. The Bank also started preparing to transpose the new Swiss accounting standards,
which will become effective in 2015. More generally, BSI
continued accompanying customers towards a tax compliance model.
Operation Excellence Programme
With regards to the implementation of the operational
excellence programme launched in 2014 aimed at increasing profitability and remain competitive in the long term,
BSI started focussing its strategy on the markets and segments in which it can compete more effectively. To this
end, it sold BSI Trust Corp. Bahamas, as well as 65% of
Thalia to Bi-Invest. However, the Bank still owns a significant 35% interest in Thalia and is a strategic partner of the
new buyer. The programme also entailed measures to reduce operating and personnel costs. Focusing on the latter,
the Bank started reducing its workforce with the goal to
eliminate 160 positions globally by 2016 through lay-offs,
early retirement offers, outplacements, and reductions in
working hours. This decision was painful but necessary, as
the Bank had already implemented a series of measures
aimed at minimising the number of job cuts. During this
delicate process the Bank worked hand in hand with the
Personnel Committee and the social partners in setting up a
socially responsible work termination plan with appropriate financial and social measures for the personnel concerned. Both the Personnel Committee and the social partners have considered the plan satisfactory. The operational
excellence programme will continue until the end of 2015.
The economic effects will be seen in full from 2016.
Non-Prosecution Agreement with the
American Department of Justice
During 2014, BSI worked hard to reach an agreement with
the U.S. Department of Justice (DOJ) as part of its participation in the Program for Non-Prosecution Agreements
or Non-Target Letters for Swiss Banks (U.S. Tax Program).
Since joining the Program, on 23 December 2013, BSI has
provided ample cooperation to the DOJ pursuant to the
U.S. Tax Program and in full compliance with Swiss laws.
Following a proactive and productive dialogue with the
U.S. DOJ, on 30 March 2015, BSI was the first “category 2”
bank to reach a Non-Prosecution Agreement (NPA) with
the DOJ. By entering into the NPA, BSI has resolved its
liability with the DOJ arising from its legacy private banking cross-border business and paid USD 211 million. This
payment was recorded in the 2014 financial statement. In
2013, the Bank had already made some preliminary provisions in view of this payment. Despite this, BSI remains a
solid and well-capitalised bank, with a Total Capital Ratio
of 17.1% and a Shareholder Equity of CHF 1.7 billion.
33
BSI – Management Report 2014
Change in Ownership
On 14 July 2014, after successfully concluding negotiations, the Generali Group and BTG Pactual entered into a
final agreement under which BTG Pactual will acquire
100% of BSI. The completion of Banco BTG Pactual’s acquisition of BSI remains subject to some approvals by the
competent authorities and other closing conditions. The
agreement with US authorities will certainly facilitate the
approval process. The transaction is on track to close
within the first half of 2015.
Although the sale of BSI took over two years, and in spite
of challenging market conditions, the Bank’s activity remained solid, thanks mainly to the loyalty of customers and
employees as well as the strategic choices made by the
management. The change in ownership will open up further growth prospects for both BSI’s customers and employees. Once the acquisition is finalised, BSI will be able
to further strengthen its brand globally thanks to a dedicated long-term strategic shareholder such as BTG Pactual.
BSI and BTG Pactual are in fact strongly complementary in
terms of vision and strategy and are a perfect combination
of strategic competences, geographical presence and
customer diversification. BSI will have the opportunity to
continue growing and offering customers innovative and
tailored investment solutions together with a solid international network, always adopting a customer-focused approach. BSI thanks the Generali Group for these 16 years
during which, thanks to the constant support and investments made, the Bank has established itself as one of the
main international players in wealth management.
Changes on the Board of Directors and
on the Group Executive Board
2014 saw the confirmation of Alfredo Gysi as chair of the
Board of Directors and of Nicola Mordasini as director,
while Renzo Respini left the Board. Renzo Respini, once a
director at Banca del Gottardo, joined BSI’s Board after
the Bank acquired its former employer in 2008. We want
to thank Renzo Respini for its outstanding contribution to
the Board and BSI during all these years. He participated
in all the board’s activities as well as Banca del Gottardo’s
integration with BSI with the utmost dedication and professionalism. Furthermore, he strived to strengthen the
bond between BSI and the community in the Ticino region.
In 2014, BSI also tweaked the structure of the Group Executive Board (the Bank’s governing body) to align it with
the Group’s new strategies in the face of new market conditions. In this sense, the BSI Europe Region was transformed into the new Region Group Investments Solutions
& Capital Markets, and was placed under Nicola Battalora. The new structure will have the main task of reorganising the asset management business of the Group, of
coordinating the Capital Markets activities and managing
BSI products and services. This structure is also responsible for BSI Europe (Luxembourg) and Oudart SA in Paris.
The management of market areas such as France, Germany, Montecarlo, Spain and Great Britain, have been reallocated to the BSI Switzerland Region, under the management of Renato Santi.
Financial data
“The wealth of relations with our clients is
not just a legacy of the past; it represents also
the commitment to accompanying the client
today and tomorrow in a world of constant
economic, financial, political and legal change.
Making our services more focused in our
quest towards excellence is a choice, but also
a necessity imposed by the competitive
landscape.”
Renato Santi
CEO BSI Switzerland
34
At 31 December 2014, assets under management were
up 3.3%, standing at CHF 92.3 billion compared to 89.4
billion at the end of 2013, thanks above all to the good
performance of managed assets. The figure also includes
the lowering to CHF 1.9 billion in the scope of consolidation of deriving mainly from the sale of 65% of Thalia. In
a very challenging context, which was marked by growing
competitive pressure, the net new money was negative
for CHF 0.6 billion, primarily as a consequence of the
progressive migration of our customer base towards a
tax compliance model. Despite the difficult situation, which
was marked by the continuing low level of interest rates,
modest volatility and significant pressure on margins, operating performances improved, thus confirming business resilience as well as the effectiveness of BSI’s strategic
choices.
BSI – Management Report 2014
Operating income slightly improved to CHF 871.4 million
from 863.1 million. Interest income rose by 3.1% to CHF
197.0 million, while income from commission and service
fee rose by 1.7% to CHF 512.9 million and income from
trading operations to CHF 149.3 million, compared to
148.1 million at 31 December 2013. Income from other
activities went down to CHF 12.3 million. Excluding the
impact of the legal and audit costs connected to the
Bank’s participation in the U.S. Tax Program, which totalled CHF 36.1 million, adjusted operating costs fell to
CHF 662.6 million, slightly down on the 666.5 million recorded in 2013. The net reduction in costs in 2014, despite
the ongoing investments and the increase in costs for adjustment to the new laws, shows the first tangible results
of the two-year operational excellence programme. Adjusted gross profit was CHF 208.9 million, up by 6.3% on
196.6 million in the previous year. Net profit was significantly affected by the payment connected to the Non-Prosecution Agreement and stood at CHF 2.2 million, but did
not affect the solidity of BSI. The Total Capital Ratio of the
BSI Group stood at 17.1% at the end of 2014, with Shareholder Equity of CHF 1.7 billion.
“In 2014 we moved from uncertainty (sales
process) to expectations (BTG Pactual).
Through the integration of working groups,
BSI, in cooperation with BTG, is preparing
for the closing of the sales transaction.
Many contacts have already been established
with our new BTG colleagues globally.
In Asia itself we are eagerly looking forward
to working closely with BTG as part of a new
family. Again, my gratitude goes to my
colleagues worldwide and our clients for their
loyalty and support.”
Looking to the future
In perspective, BSI intends to continue satisfying its customers’ needs, accompanying them in decisions relevant
to their wealth management in line with what the Bank
kept doing over 140 years of history. BSI can confidently
look forward to the challenges it will face in the next few
years with the objective of further increasing the assets
under management and giving a further boost to the commercial activity aimed at supporting the net acquisition of
new assets, also by expanding the range of products and
services offered to customers.
BSI intends to focus on the areas and markets in which it
has shown it can excel. Alongside Switzerland and Italy,
which are its historic markets, BSI purports to further bolster its operations in fast-growing regions such as Asia,
Latin America, the Middle East, and Eastern Europe. In
2015, BSI will continue supporting its customers, accompanying them towards a tax compliance model. 2015 will
also be the year that will see the conclusion of the implementation of the operational excellence programme and
the change in ownership. BSI will retain its brand and serve
as the BTG Pactual Group’s reference for the international
wealth management of its private client base.
BSI’s historic attention to its customers under a service
model centred on their needs remains the Bank’s hallmark
and will allow it to continue competing effectively in the
future.
Lugano, 20 April 2015
For the Board of Directors
Alfredo Gysi, Chairman
The Group Executive Board:
Stefano Coduri, Group CEO
Nicola Battalora
Hanspeter Brunner
Rajiv Pradhan
Gérald Robert
Renato Santi
Hanspeter Brunner
CEO BSI Asia
35
Allegro Giusto is an allusion to the
title of the renovation project of Villa
Maraini. Thanks to a watermarked
superficial ornamentation partly
consisting of glazed tiles, the outer
structure of the Villa reflects the
colours of light and gives the whole
building an aura of grandeur and
magic. An Allegro Giusto, indeed.
Allegro Giusto – Works
from BSI Art Collection
Preparations for a
new building – Design
Bosshard Vaquer
The works of great international artists of the BSI Art Collection for the first time on display in Rome, visible to the
public from 16 October 2014 until 20 June 2015 in the fascinating setting of Villa Maraini, seat of the Istituto Svizzero di
Roma. The opportunity is given by the commencement in
2016 of major renovation works that will significantly transform the spaces of the building based on a project by the architectural studio Bosshard Vaquer of Zurich, winner of an international competition. Anticipating this important event,
with Allegro Giusto. Works from BSI Art Collection. Preparations for a new building, the same architects – not new
to projects that depart from existing contexts to redefine
and develop them, even within public commissions – have
redesigned the shared spaces of the Istituto Svizzero di
Roma. Their idea was to have them “converse” with a selection of contemporary artworks of the BSI Art Collection,
through a system of libraries that host the artworks and
part of the library of the Institute. Not a simple decorative
design, but rather an exercise at reconfiguring and transforming the function of a place and of the artwork, where
the works are in dialogue with the environments in the
day-by-day. The exhibition has in fact aesthetic and functional solutions that anticipate the start of the works in
2016 drawing on certain key reflections: how is it possible
and what does it mean to renovate an historic building
with a contemporary language? How does contemporary
art fit in this context? The relationship between visual and
spatial language – art, design, architecture, building materials, decoration – between the traces of past and present,
has produced questions and solutions that have changed
with the change of the way we perceive the world, social
organisation and taste.
Putting on display works of contemporary art in a building
of the early twentieth century, as Villa Maraini, means adding a unit of measure, determining differences that demonstrate the changing and negotiable nature of the architectural space. Furthermore, it means sparking the potential
of art and of a collection, which can indicate the path pursued in transforming the Villa, not only in purpose but in
the atmosphere, in energy, in the daily dialogue that an artwork is always capable of inspiring. For this reason, works
from the BSI Art Collection have been chosen in keeping
with the spaces available in the Istituto Svizzero and to represent the two souls of the collection. The result is an uninterrupted communication between past and present, while
at the same time reflecting the intent of the new exhibition
of Villa Maraini. On the one hand, there are the artists historically associated with BSI, as Armleder, Barry, Buren,
Halley – who worked on site-specific projects for some
branch offices of the Bank – or even Melotti, Paolini, Merz,
Cragg, Boetti, Chamberlain, Carroll. On the other, young artists of international fame were chosen, such as Vo, Kuri and
Epaminonda, and artists of the so-called post web generation as Price and Domanovic.
BSI – Group financial statements
Group financial statements
Consolidated balance sheet as of 31 December 2014
38
Consolidated profit
and loss statement 2014
39
Consolidated cash flow
statement 2014
40
Notes to the 2014
Group financial statements
41
Report of the statutory auditor on the consolidated financial statements
74
37
BSI – Group financial statements
Consolidated balance sheet as of 31 December 2014
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
Cash and cash equivalents
2’978’959
5’851’944
-49.1
Money market paper
2’344’818
2’271’822
3.2
Due from banks
2’811’877
2’593’366
8.4
173’314
155’776
11.3
16.4
Notes
Assets
of which due from reverse repo transactions
Due from customers
3.1
7’333’146
6’301’043
Mortgage loans
3.1
4’334’721
4’019’905
7.8
Securities and precious metals held for trading
3.2
1’264’425
1’363’932
-7.3
Financial investments
3.3, 3.8
1’649’631
1’407’290
17.2
3.4, 3.6, 3.7
47’826
54’727
-12.6
Fixed assets
3.7
361’112
375’008
-3.7
Intangible assets
3.7
11’363
8’141
39.6
67’869
79’782
-14.9
3.18
789’672
544’383
45.1
23’995’419
24’871’343
-3.5
Total subordinated assets
67’888
62’371
8.8
Total amounts receivable from non-consolidated
participations and qualified shareholders
22’452
20’492
9.6
Non-consolidated participations
Accrued income and prepaid expenses
Other assets
Total assets
Liabilities
Money market paper liabilities
4’417
2’240
97.2
Due to banks
740’791
524’094
41.3
Due to customers in savings and investment accounts
633’983
554’873
14.3
19’450’257
21’068’976
-7.7
659’510
898’658
-26.6
800
-100.0
99’036
89’015
11.3
242’573
196’840
23.2
54.2
Due to customers, other
3.17
of which due from the trading portfolio
Medium-term notes
3.17
Loans with issuers of property bonds and other
3.17
Accrued expenses and deferred income
Other liabilities
3.18
863’300
559’682
Value adjustments and provisions
3.10
288’084
153’928
87.2
Reserves for general banking risks
3.10, 3.11
85’689
146’152
-41.4
Share capital
3.11
1’840’000
1’840’000
Capital reserve
3.11
Reserve and retained earnings
3.11
of which minority interests
-254’958
145’200
-100.0
311’498
-181.8
1
Net result for the year
Total liabilities
Total subordinated liabilities
Total liabilities to non-consolidated
participations and qualified shareholders
100.0
2’247
-721’955
100.3
23’995’419
24’871’343
-3.5
116’984
118’527
-1.3
45’729
22’321
104.9
Off-balance sheet business
Contingent liabilities
3.1, 4.1
2’134’081
2’140’989
-0.3
Irrevocable commitments
3.1, 4.5
161’048
128’844
25.0
Contingent liabilities for calls and margin liabilities
3.1
3’066
654
368.8
3.1, 4.6
2’775
5’719
-51.5
Positive replacement value
3.18, 4.2
691’718
434’720
59.1
Negative replacement value
3.18, 4.2
738’399
466’124
58.4
4.2
46’686’890
43’023’066
8.5
4.3
1’945’743
1’728’535
12.6
Loan commitments
Derivative financial instruments
Contract volumes
Fiduciary transactions
38
BSI – Group financial statements
Consolidated profit and loss statement 2014
2014
2013
Change
Notes
CHF 1’000
CHF 1’000
in %
5.1
205’386
202’950
1.2
12’143
10’389
16.9
-20’554
-22’195
-7.4
196’975
191’144
3.1
-2.4
Income and expenses from ordinary banking operations
Interest and discount income
Interest and dividend income from financial investments
Interest expenses
Result from interest activities
Commission income from lending activities
Commission income from securities and investment transactions
Commission income from other services
Commission expenses
Result from commission and service fee activities
Result from trading operations
5.2
Result from the sales of financial investments
8’697
8’915
529’080
513’190
3.1
74’904
78’644
-4.8
-99’826
-96’661
3.3
512’855
504’088
1.7
149’316
148’103
0.8
204
465
-56.1
9’293
18’859
-50.7
of which from participations consolidated using the equity method
8’094
11’640
-30.5
of which from non-consolidated participations
1’199
7’219
-83.4
Net income from real estate
2’591
3’143
-17.6
Other ordinary income
2’875
3’738
-23.1
-2’674
-6’470
-58.7
12’289
19’735
-37.7
871’435
863’070
1.0
Income from participations
Other ordinary expenses
Other ordinary result
Net operating result
Personnel expenses
5.3
-426’403
-424’808
0.4
Other operating expenses
5.4
-272’254
-241’702
12.6
-698’657
-666’510
4.8
172’778
196’560
-12.1
Operating expenses
Gross profit
5.5
Net result for the year
Gross profit
Depreciation of fixed assets
Value adjustments, provisions and losses
172’778
196’560
-12.1
3.7
-42’310
-796’301
-94.7
3.10
-193’615
-144’658
33.8
-63’147
-744’399
-91.5
Result before extraordinary items and taxes
Extraordinary income
5.6
82’626
89’686
-7.9
Extraordinary expenses
5.6
-4’052
-49’931
-91.9
Taxes
5.7
-13’180
-17’311
-23.9
2’247
-721’955
100.3
Net result for the year
39
BSI – Group financial statements
Consolidated cash flow statement 2014
2014
2013
Sources
of cash
Uses
of cash
Sources
of cash
Uses
of cash
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
Cash flow provided by operating activities
(internal financing)
Net result for the year
Depreciation of fixed assets
Value adjustments and provisions
2’247
721’955
42’310
796’301
134’156
109’261
Accrued income and prepaid expenses
11’913
Accrued expenses and deferred income
45’733
Other items
58’329
11’328
8’345
35’134
Dividend
Subtotal
30’000
294’688
115’490
Cash flow provided by equity transactions
Reserves for general banking risks
Translation differences arising from profit consolidation
60’303
3’541
10’139
Subtotal
6’806
50’164
3’265
3’235
2’416
22’639
25’417
Cash flow provided by changes in fixed assets and in participations
Participations
5’829
Real estate
Other fixed assets
Intangible assets
Subtotal
Total
98
4’690
1’484
24’735
29’415
219’789
82’810
18’391
109’804
Cash flow provided by banking activities
Medium- and long-term activities ( > 1 year)
Due to customers
Medium-term notes
800
Loans with issuers of property bonds and other
2’560
Due from banks
Due from customers
Mortgage loans
46’076
31’634
123’618
441’978
45’653
Financial investments
179’835
132’534
62’945
Short-term activities
Money market paper liabilities
Due to banks
Savings and investment accounts
2’177
168
216’697
570’505
79’110
Due to customers
Medium-term notes
Loans with issuers of property bonds and other
61’534
1’637’110
1’549’329
800
571
10’021
Money market papers
72’996
681’222
Due from banks
172’435
1’053’720
Due from customers
908’485
314’063
Mortgage loans
269’163
Securities and precious metals held for trading
99’507
Financial investments
Cash and cash equivalents
Total
40
397’047
367’980
62’506
2’872’985
329’676
1’961’856
219’789
82’810
BSI – Group financial statements
Notes to the 2014 Group financial statements
1. Commentaries regarding the
Group’s business activities
The following notes refer to the situation as at 31 December 2014.
General information
The Group’s Parent Bank, BSI Ltd., is based in Lugano and
operates in Switzerland and internationally through a network of nine branches (Bellinzona, Chiasso, Geneva, Locarno, Lausanne, Zurich, Bahrain, Hong Kong and Nassau),
one agency (Crans-Montana) three representative offices
(Istanbul, Montevideo and Panama), five banks (Luxembourg, Monte Carlo, Nassau, Panama and Singapore) and
affiliated companies. For the scope of consolidation and
the major non-consolidated holdings, please see tables
3.5 and 3.6. BSI Ltd. is wholly owned by Assicurazioni Generali SpA, Trieste, through its direct associated company
Participatie Maatschappij Graafschap Holland N.V., Diemen (NL).
The principal activity of the BSI Group
The BSI Group is active primarily in asset management for
private and institutional clients and the operations closely
related to it such as investment funds, the placing of fiduciary deposits and trading in securities, precious metals
and foreign exchange. The Group also offers its clients
credit services.
BSI Ltd. carries out trading in currencies and securities (shares,
bonds and derivatives), including own account trading and
third-party trading within pre-defined limits. BSI Ltd. also
performs issuing activities and acts as a market maker.
Balance sheet transactions
Balance sheet transactions have a complementary role.
They account for 22.6% of the Group’s net operating result
(2013: 22.1%). Lending activities mainly involve the granting of Lombard loans, loans largely covered by guarantees
and mortgages, and unsecured loans. Overall, secured loans
account for 94.0% of total loans (2013: 93.8%). Bank deposits are made only at leading Swiss or OECD country institutions. BSI Ltd. holds a bond portfolio, booked as “Financial investments”, as a medium- to long- term investment.
Headcount
At the end of 2014 the Group had 1,927.95 full-time equivalent (FTE) employees (2013: 1,989.45), of whom 647.50 were
employed abroad (2013: 654.20). The Parent Bank had
1,340.15 full-time equivalent employees (2013: 1,378.75),
of whom 110 were employed abroad.
Control and risk management
Principles
Risk management forms an integral part of the corporate
policy of the BSI Group. In compliance with Swiss and international laws and regulations, the Bank has established
a structure for monitoring and managing risks for the BSI
Group.
Structure and responsibilities
The Bank’s internal control and risk management structure
adequately reflects the size and complexity of the business
the Bank conducts. This structure includes processes and
controls that ensure the delegation of authorities and the
segregation of critical functions.
The Board of Directors monitors whether the Bank has a
clear global risk management process. It approves risk policies and limits and is informed quarterly in writing of the
situation with respect to risks for the BSI Group.
As part of its monitoring and control duties, the Board of
Directors appoints an Audit & Risk Committee to assist in
supervising and assessing the integrity of the annual accounts, the compliance with legal and regulatory requirements, the effectiveness of the internal and external audits, and the adequacy and effectiveness of the control
system of BSI Ltd. and the Group.
The Group Executive Board is responsible for implementing
the risk management process for the entire banking organisation. It defines the principles, risk strategies and policies,
global limits and performance of the powers assigned by
the Board of Directors.
To ensure that risk is managed effectively, the Group Executive Board has set up various Committees with specific
responsibilities relating to the management of credit risks,
counterparty risks, market risks, liquidity risks, operational
risks and compliance risks. The members of the Group Executive Board are generally members of the various Committees, which are made up of risk management experts for
the Bank’s various areas of business.
Risk Management, in cooperation with the control units of
the Bank’s various business areas, conducts various controls
independent of the line. The control units intervene directly in cases of non-compliance with limits, and they periodically inform Risk Management of the current status of risks
over which they have authority.
41
BSI – Group financial statements
Risk Management analyses the risk data and information at
Group level, consolidates them and produces a quarterly
Global Risk Report for the attention of the Group Executive
Board and the Board of Directors.
The Legal & Compliance unit is responsible for managing
legal and reputational risks and for ensuring that the BSI
Group complies with regulatory and legal requirements.
Balance sheet guidelines
The Bank has a reference model for managing the consolidated balance sheet, approved by the Board of Directors
and Group Executive Board. The reference model explicitly sets the risk appetite and the guidelines for the trend
in the principal asset and liability items on the basis of solvency, liquidity, risk and profitability. In particular, within
the balance sheet guidelines the Bank has defined some
measures which have allowed it to improve the level of solvency and to mitigate and optimise the risk exposure.
Credit risks
Credit risk is the risk that a counterparty’s creditworthiness
deteriorates and the counterparty becomes insolvent or
does not pay back its liabilities. Credit risk also includes
other risk categories such as counterparty risk, delivery
risk, concentration risk and country risk. Credit risks are
present in interbank portfolios and in the Bank’s own portfolios as well as in client loan portfolios.
The Bank has set out various internal policies that define
the principles for managing risk, the rules for calculating
and limiting risk, the responsibilities for authorising credit
lines and overdrafts, and the reports to be submitted to
the managing bodies and the Board of Directors.
In particular, the Bank has a “Credit Policy” which defines
the principles for regulating risk on the portfolio of credits
due from private clients, the calculation rules and the risk
appetite for each type of credit. The Bank creates provisions for credits that could generate a financial loss.
The Credit Office ensures centralised administration at Group
level, monitoring all consolidated positions and managing
control processes. Two specific committees exist on a higher
decision level: the Credit Committee, which is responsible
for loans to private and institutional clients, and the Banks
and Brokers Committee, which is responsible for counterparty risk (for states, banks, brokers, custodian banks and
correspondent banks). The analysis, control and management of portfolio credit risks are the responsibility of the
Financial Risks & Capital Allocation Committee (FinRisk).
42
The Bank measures and checks credit risk every day. Using
a limit system, it defines the maximum levels of risk acceptable with respect to groups of counterparties and checks
that the regulatory requirements on high risks are observed.
The independent control is carried out by the Credit Office
unit, both at the consolidated level and at the Bank and
the main affiliates.
In its lending to clients, the Bank aims to diversify risks and
maximise the risk-return ratio. To this end, the Bank uses
internal models to assess credit risk.
The client loans portfolio is primarily made up of loans
guaranteed by pledges on assets or securities as well as
mortgage loans, especially for residential property in Switzerland, Singapore and London. The Bank applies internal
policies that govern the lending values of guarantees to
these loan categories, in accordance with the principles of
prudence. Exceptions to the policies are submitted and
approved by the Board of Directors.
Trade credits are a secondary part of the loan portfolio, as
are credits connected to trade finance operations and to
the financing of public bodies.
The Bank has maintained a cautious approach to the credit
risk in the interbank portfolio, placing particular attention
on the selection and diversification of bank counterparties
and issuers, including government issuers, and keeping
the duration of exposures lower than 12 months.
The Bank has a “Country Risk Policy” (relating to the risk on
balance sheet assets) and the country exposure is decided
on the basis of the approach of the “final risk”: if there are
forms of cover (pledges, mortgages, guarantees) the domicile of the cover is taken into consideration rather than the
debtor’s domicile.
The Bank maintained a close watch on country risk in 2014
and adopted various measures for limiting its exposures to
high-risk countries.
Market risk
Market risk is the risk of losses arising from unexpected
changes in interest rates, exchange rates, share prices or
the prices of precious metals and commodities, as well as
the corresponding expected volatility. Market risk can have
an impact on the Bank’s profit and loss statement and the
value of its assets.
Risks related to the balance sheet structure (interest rate
and exchange rate) are managed by the FinRisk and monitored by Risk Management, in accordance with the principles and maximum limits stipulated in the “Market risk
policy – balance sheet/ALM”. In the case of Asset & Liability
Management (ALM), derivative products are also used. Positions without known maturities are replicated on the basis
of historical analyses. The FinRisk Committee is also re-
BSI – Group financial statements
sponsible for managing credit risks and allocating capital
for the Bank’s various balance sheet activities.
The Bank carries out trading operations both for its clients
and on its own account using all financial products and
their derivatives. The trading portfolio is governed by a
“Market Risk Policy – Trading”, which defines the organisational structure, responsibilities, limit systems and maximum acceptable risk. The Proprietary Trading Committee
is responsible for managing and monitoring market risk
related to trading activities, based on the restrictions set
by the FinRisk Committee.
In addition to its trading portfolio, the Bank has an investment portfolio, which allows it to diversify balance sheet
assets and to optimise any excess liquidity. The investment
portfolio is divided into a range of portfolios on the basis
of the type of product and strategy. The risks of the investment portfolio are managed by the Investment Proprietary
Committee, which operates on the basis of restrictions set
by the FinRisk Committee and the “Market Risk Policy – Investments”.
Liquidity risks
Liquidity risks arise when financing becomes difficult or
costly due to market liquidity crises or reputational problems. Liquidity risks also arise when it is difficult to meet
the Bank liabilities in a timely fashion due to the lack of very
liquid assets.
Liquidity risks are managed by the FinRisk Committee, which
assigns the operational management to Treasury and the
control to Risk Management.
The Bank has a “Liquidity Risk Policy” which defines the risk
governance principles, the calculation rules and the respective limits which take account of the new qualitative
and quantitative requirements of the Basel III regulatory
context. In its balance sheet management guidelines, the
Bank has also adopted the defined indicators of the new
Basel III international framework for liquidity risk management. The indicators cover two separate but complementary objectives. The aim of the first indicator, the Liquidity
Coverage Ratio, is to increase the short-term resilience of
the liquidity risk profile, thereby ensuring that there are
sufficient high-quality liquid assets to cover an acute stress
situation over one month. The second indicator, the Net
Stable Funding Ratio, has a longer-term time horizon and
aims to guarantee that assets and liabilities are composed
sustainably in terms of maturities.
Operational risks and internal controls
Operational risk is the risk of direct or indirect losses resulting from inadequate or failed internal processes, people and
systems or from external events. The operational risks include compliance and legal risks, but exclude strategic,
business and reputational risks.
The management of operational risks at BSI is the task of Risk
Management. It is based primarily on the collection and central analysis of operational losses, the identification and
analysis of risks inherent in processes through Risk & Control
Self-Assessment, and the management of corrective measures.
The Bank creates provisions for events that could generate a
financial loss. The heads of the different areas of the Bank have
selected risk indicators, which are used and monitored in order
to identify any increase in the level of risk within the Bank with
a certain amount of advance.
Some risk and compliance elements are also used for the
annual evaluation of staff in private banking areas, through
an individual and team risk score card.
The Operational Risk and Compliance Committee governs
the management of operational and compliance risks and
coordinates the implementation of strategies for managing
and mitigating operational and compliance risk.
The Bank’s risk mitigation controls have a three-defence
lines structure.
–The first line of defence consists of the direct checks
which are intrinsic to undertaking operations, as well as
the checks undertaken by independent units. The former
aim to guarantee the correct undertaking of operations,
the later monitor and guarantee the correct undertaking
of operations by the operational units.
– The second line of defence under Risk Management and
Global Compliance consists of the targeted checks aimed
at verifying the correct implementation and effectiveness of the checks of the first line of defence. The results
of the checks are reported to the Group Executive Board.
– The third line of defence is an independent check undertaken by the Group Internal Audit, which reports
directly to the Board of Directors.
The status and outcome of the main operational checks at
BSI are reported each quarter in the Global Control Report, for the attention of the Group Executive Board, the
Audit & Risk Committee and the Board of Directors.
43
BSI – Group financial statements
Processing of clients’ electronic data
The processing of clients’ electronic data (Client Identifying Data, CID) is defined as any type of information which
is saved electronically and which, directly or in combination with other information, can enable the identity of a
client to be deduced.
The Bank has implemented a governance structure for the
handling of CID at Group level, based on the “need-to-know”
principle, where access to information is guaranteed only for
operational business reasons and is periodically reviewed.
The governance structure defines rules, responsibilities and
internal checks to maintain an adequate security level for
the CID. It includes procedures for the selection, monitoring and training of staff with access to the CID. The location used to store CID lists, the IT systems which use the
CID and staff of the Bank or of third parties who have access to the CID are also an integral part of the governance
structure.
The Bank has defined a procedure for the management,
monitoring and mitigation of the additional risks caused by
critical situations, including increasing security measures.
Stress testing
“Stress testing” indicates a series of qualitative and quantitative techniques with which the Bank assesses its vulnerability to exceptional but still plausible events. Stress testing techniques are an instrument which is complementary
to other Risk Management approaches and measures.
These techniques help better define the Bank’s risk profile,
assess the adequacy of the limits, check the accuracy of
the risk evaluation models, the robustness of the hypotheses on correlations and the effectiveness of the risk attenuation and mitigation systems.
Risk Management regularly carries out systematic stress
tests on the main portfolios and activities of the Bank to
assess the robustness of the risk limits, the adequacy of
the capital, and the liquidity reserves overall. The stress
scenarios are regularly reviewed, updated or concluded by
Risk Management, on the basis of the trend in risk factors
(prices, volatility, exchange rates, interest rates, etc.) and
the macroeconomic situation.
44
Main risks
During 2014, the Bank’s Board of Directors carried out an
internal assessment of the main risks, among which the
following should be noted:
– Compliance risk: risks linked to the “regularisation” of
customers’ assets and cross-border activities;
– Credit risk: risk of bankruptcy of a counterparty and risk
of default of an issuer;
– Operational risk: risks linked to information technology,
internal and external fraud and eligibility and conduct
risks;
– Balance sheet risk: market risks (interest rate and exchange rate risks) and liquidity risks and their impact on
the balance sheet and the profit and loss statement;
– Strategic risk: risks of inadequate management of capital,
with possible impact on the growth of assets; risk of increased erosion of margins following changes in the business model and changes in the regulatory framework.
Capital Adequacy
As at the end of 2014, the BSI Group and the Bank respected the limits specified by the Ordinance on Capital
Adequacy (CAO) with respect to minimum capital and
risk concentration. Quantitative data on capital and credit
risk are provided in the attached tables 6.1-6.6. On the
basis of FINMA Circular 2011/2 on capital buffers and capital planning, and in consideration of the size and the risks to
which the Bank and the BSI Group are respectively exposed,
the Bank is in category 3 and so the minimum target for own
capital is set at 12.0%.
At the end of 2014, for the BSI Group the Total Capital
Ratio was 17.1% (table 6.1) and the ratio of own funds available to own funds required was 216.0% (table 6.2).
Additional information about the calculation methods used
by the Bank is provided below.
Credit risk
In order to calculate its requirements of own capital for
credit risk, the Bank applies the approach defined as ASBRI (Standard International Approach). This approach is
based on ratings provided by external agencies recognised
by FINMA. In particular, the Bank uses the ratings provided
by Standard & Poor’s and Moody’s to assess the quality of
counterparties and the ratings provided by Standard &
Poor’s and Moody’s for credit instruments.
Off-balance sheet positions in derivatives are calculated as
credit equivalents using the market value method (art. 57
CAO). The Bank also applies the “comprehensive” approach
to transactions with financial collateral (art. 62 CAO). At
31 December 2014 these credit risk requirements totalled
around 31% of the available eligible capital.
BSI – Group financial statements
Non-Counterparty risk
As at 31 December 2014, these requirements amount to
around 1.7% of the available eligible capital.
Market risk
The Bank applies the standard method to the calculation
of capital requirements for market risk, as defined by the
FINMA Circular 2008/20 (art. 84 CAO). As at 31 December
2014, these requirements amount to around 7.3% of the
available eligible capital.
Operating risk
To calculate the regulatory requirement for operating risks,
the Bank uses the standard method, weighting gross revenues with factors varying from 12.0% to 18.0%, depending
on the business lines in question, as defined in the FINMA
Circular 2008/21.
As at 31 December 2014, the regulatory capital for the BSI
Group’s operating risks amounted to around CHF 109 million, which is about 6.3% of the available eligible capital.
In accordance with the Programme, the NPA requires the
Bank to continue cooperating with the DOJ throughout
the term of the agreement, which is four years, in compliance with the Programme and Swiss laws.
Outsourcing
BSI outsources the management, development and maintenance of its information technology environment and
back-office activities to B-Source SA, a service provider in
which BSI holds a 49% stake. BSI Ltd. outsources the management of hedge fund products to Thalìa SA, in which
BSI has a 35% stake. BSI Ltd. has also outsourced to Finaclear AG part of the administrative and IT services tasks
for some specific products (Genera products). The Bank
complies with the legal provisions on outsourcing contained in FINMA Circular 2008/7.
Value added tax (VAT)
The Bank belongs to the VAT group of Generali Personenversicherungen AG and is thus jointly and severally liable
for commitments arising from this tax.
Legal and compliance risk
The Legal & Compliance unit is responsible for managing
legal risks and ensuring that the BSI Group complies with
regulatory and legal requirements. Legal risk can be divided into (a) the risk that the BSI Group,
or someone acting on its behalf, fails to meet an obligation
owed to a third party or fails to respect the rights of a third
party, and (b) the risk of financial or other loss or injury resulting from the BSI Group not being able to enforce its rights
and claims against third parties. Regulatory and compliance risk is defined as the risk of financial, reputational or other loss or injury resulting from a
breach of applicable laws and regulations or the departure
from internal or external codes of conduct or market practice. As part of the so-called “Programme for Non-Prosecution
Agreements or Non-Target Letters for Swiss Banks” (the
“DOJ Programme”), on 30 March 2015, BSI entered into a
Non-Prosecution Agreement (NPA) with the US Department
of Justice (DOJ).
Through the NPA, BSI settled claims with the DOJ arising
from its US legacy for private banking operations, paying
211 million dollars. For said amount, the Bank booked the
necessary provisions.
45
BSI – Group financial statements
2. Accounting and valuation
principles
General principles
The accounting, balance sheet entry and valuation criteria
conform to the provisions of the Swiss Code of Obligations, the Swiss Banking Law and the directives of the Swiss
Financial Market Supervisory Authority FINMA. The Group
accounts show a true and fair view of the Bank’s asset, financial and economic situation.
Recording of transactions
All transactions are recorded in the books of Group companies on the execution date. Transactions with future execution date are recorded in the balance sheet, except for
BSI Monaco SAM, for which they are booked in accordance
with the value date principle.
Scope of consolidation
The Bank fully consolidates all the companies operating in
the banking and finance sector in which it directly or indirectly holds most of the votes or the capital (50%).
Special purpose entities (SPE) in which the Bank does not
hold the majority of votes or capital are fully consolidated
if circumstances indicate a business relationship in which
the Bank controls the majority of the profit of the entity or
the risks connected to the entity’s activities.
A list of fully consolidated participations, participations entered in the balance sheet in accordance with the equity
principle, relevant participations entered in the balance
sheet at the purchase value minus the necessary amortisation and depreciation, and changes to the scope of
consolidation are shown in tables 3.5 and 3.6.
Consolidation method
The capital of the companies involved in banking and finance in which BSI Ltd. has a direct or indirect majority of
the voting rights or capital is fully consolidated in accordance with the purchase method. The purchase price is offset against the market value of the assets at the time of
acquisition. The resulting difference from the first consolidation is entered in the balance sheet under “Intangible
assets” and amortised in compliance with FINMA’s accounting provisions.
Participations between 20% and 50% are consolidated at
equity and are shown in the balance sheet with the net asset value for the Bank’s share.
Minor companies and companies held with a view to a subsequent sale are entered in the balance sheet at their purchase price after deduction of the necessary depreciation.
Group-internal transactions and related internal profits are
eliminated.
Conversion of currency
Foreign currency transactions are recorded at the exchange rate of the trade date. Profits or losses arising from
revaluations are recorded into the profit and loss account.
Foreign currency denominated balance sheet items are
converted into Swiss francs at the rate of the balance sheet
closing date.
Foreign currency denominated profit and loss items of
Group companies are converted into Swiss francs at the
average exchange rate for the year. Conversion differences are booked directly within the consolidated shareholders’ equity.
Closing rate
Denomination
Currency
1
USD
Annual average rate
31.12.2014
31.12.2013
2014
2013
0.990
0.890
0.920
0.923
1
EUR
1.202
1.228
1.213
1.229
100
JPY
0.828
0.848
0.864
0.946
1
GBP
1.544
1.472
1.511
1.446
46
BSI – Group financial statements
Cash and cash equivalents, money market
papers, due from banks and liabilities
These items are recorded in the balance sheet at the nominal value or purchase cost less any adjustments for doubtful debts. Any discounts are recorded in the appropriate
liabilities items.
Due from customers and mortgage loans
Due from customers and mortgage loans are recorded in
the balance sheet at their nominal value.
Loans for which the debtors or guarantors are unlikely to
meet their future obligations are considered by the Bank
to be non-performing loans. A loan is therefore deemed
to be non-performing if certain indicators show that the
capital and/or interest due in accordance with the contract
will probably not be paid. Non-performing loans are valued individually, and specific value adjustments are booked
to cover the identified value losses. The Bank creates provisions for the interest on the credit positions for which
clients have not respected the contractual terms for more
than 90 days.
Off-balance sheet liabilities such as guarantees and derivatives are also considered in this valuation.
The Bank determines the provisions’ amounts based on
the liquidation value of the collaterals.
Provisions are created for non-performing interest in accordance with the rule described above and directly deducted from the corresponding items under “Assets”.
Loans are no longer considered non-performing if the
amount due (interest and principal) is fully settled, the contractual obligations are re-established and the solvency
criteria are fulfilled.
Loans are amortised by debiting the corresponding individual provisions if the loans are considered entirely or partially impaired or if the decision is taken not to recover
them.
Securities lending and borrowing
Securities lending and borrowing operations for which the
Bank acts as principal are shown in the notes to the annual accounts. The commissions collected and paid for these
transactions are booked in the corresponding items of the
profit and loss statement.
Repo and reverse repo transactions
These transactions are booked as loans collateralised with
securities or secured with pledged securities accounts.
They are entered under “Due from / to banks” and valued
at their nominal value. Interest amounts collected or paid
are recorded in the corresponding items of the profit and
loss account.
Securities and precious metals held for trading
Securities and metals held by the Bank for trading are revalued at market price on the balance sheet date. The result of the revaluation is entered in the profit and loss account under “Results from trading operations”. Any relevant accrued interest and dividends are reported as “Results from trading operations”, minus any financing costs,
which are recorded as “Result from interest activities”.
Financial investments
The balance sheet value of securities purchased as longterm investments is calculated according to the following
principles:
– Debt securities intended to be held to maturity are valued at the purchase price. If the purchase was made at
a price other than at par, the premium or discount is
spread over the residual term to maturity and debited or
credited to “Interests and dividend income from financial investments”;
– Debt securities which are not intended to be held until
maturity and shares are booked at the lower of purchase
price and market value. Any value adjustments are recorded as “Sundry ordinary expenses”. In the event of a
recovery in market value, shares are revalued to the extent that their revalued amount does not exceed the purchase price. Such revalued amounts are posted to “Sundry ordinary income”.
Properties that have been acquired as a result of lending
transactions and are intended to be sold are booked under
this item and valued at the lower of purchase price and sale
price.
The result deriving from the securities related to this asset
item are entered under “Interest and dividend income
from financial investments”.
47
BSI – Group financial statements
Non-consolidated participations
Minority participations between 20% and 50% in the banking and finance sector are entered in the balance sheet in
accordance with the equity method.
Companies in which the Bank has a participation of less
than 20% or whose size or activities do not have a significant influence on the Bank are valued at purchase price,
minus the required depreciation.
Intangible assets
The BSI Group has been applying FINMA’s new accounting
guidelines since 2013. The amortisation period was shortened to a maximum of 5 years.
The current value is revised every year. If this valuation
identifies a change in useful life or a fall in value, the residual accounting value is amortised in accordance with a
plan corresponding to the new useful life.
Accruals and deferrals
Interest income, interest expenses and all other income
and expenses not settled during the accounting period are
accrued or prepaid in order to match the correct profit and
loss period.
Pension plans
The accounting treatment complies with Swiss GAAP ARR
16 relating to the presentation of accounts.
Further details are provided in table 3.9 in the notes to the
Group accounts.
Fixed assets
Fixed asset acquisitions are capitalised and valued at their
purchase price, if their intended use is for more than one
accounting period and their purchase price exceeds a minimum of CHF 5,000. Any new investment in already existing fixed assets is capitalised if it leads to permanent increases in the market value or significant lengthening in
the useful life of such assets.
Thereafter, fixed assets are recorded at their purchase cost
less accumulated depreciation. Depreciation is calculated
on the basis of assets’ expected useful lives. Fixed assets
are reviewed annually for any impairments in value: if such
analysis shows the need to shorten the depreciation period or to decrease the value, the rates of depreciation are
adjusted or an extraordinary depreciation charge is booked
in the profit and loss statement.
Profits realised on the sale of fixed assets are booked as
“Extraordinary income” and losses as “Extraordinary expenses”.
Taxes
Taxes relating to the current accounting period are estimated in accordance with local tax legislation and recorded as costs for the period to which they relate. Direct
taxes on current year profits payable, but not yet paid, are
recorded as “Accrued expenses”.
Provisions for deferred taxation relating to any future release of amounts from the reserve for general banking
risks are reported as “Value adjustments and provisions”.
Tax credits on tax losses carried forward are entered in the
balance sheet in the item “Other assets” up to an amount
calculated based on the profits forecast for a maximum
period of three years.
The accounting treatment is in compliance with Swiss
GAAP ARR 11 relating to the presentation of accounts.
Asset
Duration of use
Bank premises
50 years
Structural renovation
of premises
10 years
Internal restructuring
or improvements
(own property)
5 years
Internal restructuring or
improvements (third-party property)
5 years1
Furnishings
10 years
Miscellaneous non-IT
installations and vehicles
5 years
Hardware and software
In accordance with
expected useful life
Special projects
In accordance with
expected useful life
Duration of the rental contract.
1
48
Value adjustments and provisions
Specific provisions and value adjustments are made with
respect to all identified risks in accordance with the principle of prudence. The value of such items is deducted
from the balance sheet assets to which they relate. Value
adjustments and provisions proving to be financially unnecessary during the financial year are released and credited to the profit and loss statement. Provisions for latent
risk or other risks are booked as liabilities in the balance
sheet under “Value adjustments and provisions”.
BSI – Group financial statements
Reserves for general banking risks
This item was created in accordance with FINMA directives
on the presentation of accounts. Movements in the reserves for general banking risks are posted to “Extraordinary income” or “Extraordinary expenses”.
Contingent liabilities, irrevocable commitments,
contingent liabilities for calls and margin liabilities
Off-balance sheet items are stated at nominal value. Any
provisions for identified risks are included under “Value
adjustments and provisions”. A guarantee is in place to the
government of Singapore for the business operations conducted by the subsidiary BSI Bank Ltd., Singapore. Following the application of the banking agreement on deposit
guarantees, the Bank has an irrevocable commitment in
respect of privileged deposits.
Derivative financial instruments
Derivative financial instruments are normally treated as
trading operations with the exception of the transactions
described in the following paragraphs.
Replacement values
For over the counter transactions (OTC), replacement values are recorded in the balance sheet as “Other assets” if
positive and as “Other liabilities” if negative. In either case,
gains or losses are recorded in the Bank’s profit and loss
statement as “Results from trading operations”.
Client assets
The value of client assets under management is calculated
with reference to the total value of all client positions at
year end. Fund units held by the Bank’s clients are double
counted: once as units held by clients and again as funds
under management. Any funds held by correspondent
banks and brokers are excluded as are securities belonging to the Group. Funds managed by the Group but deposited at third party banks are also included.
Events following the balance sheet date
After the balance sheet date, no event took place that
would lead to a correction of the financial statements.
Trading transactions
They are periodically valued with reference to market or
trading prices or, alternatively, are based on calculations
entailing the discounted future cash flows or option pricing models.
Hedging transactions
The Bank uses derivative financial products for asset and
liability management (ALM) purposes. Hedges and their
underlying positions are valued in the same way. Any net
income earned on these transactions is credited to the
same item as income arising from the hedged transactions. The Bank enters into global hedge transactions with
respect to interest rate risk. Profits on these transactions
are accrued as interest income. Accrued interests payable
and receivable are recorded in the balance sheet under
“Other liabilities” and “Other assets”. Positive and negative replacement values in connection with hedges are also
recorded under “Other assets” and “Other liabilities”.
The use of derivatives for ALM purposes is documented
together with the objectives and strategies employed and
kept on file until such time as the transactions expire. The
effectiveness of the hedge is periodically controlled. Whenever the value of a hedge exceeds the value of the hedged
item, the excess is treated as a normal trading position.
49
BSI – Group financial statements
3. Information on the balance sheet
3.1 Breakdown of loan collateral and off-balance-sheet business
Type of collateral
Secured by
mortgage
Other
collateral
Unsecured
Total
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
Loans
Due from customers
493’323
6’145’485
694’338
7’333’146
4’250’138
75’303
9’280
4’334’721
3’540’349
11’341
713
3’552’403
618’188
4’516
4’271
626’975
91’600
59’447
4’296
155’343
4’743’461
6’220’788
703’618
11’667’867
4’173’926
5’505’762
641’260
10’320’948
21’151
424’037
1’688’893
2’134’081
125’693
1’367
33’988
161’048
Contingent liabilities for calls and margin liabilities
3’066
3’066
Loan commitments
2’775
2’775
Mortgage loans
Residential properties
Commercial and industrial properties
Other
Total at 31.12.2014
31.12.2013
Off-balance sheet business
Contingent liabilities
Irrevocable commitments
Total at
31.12.2014
31.12.2013
146’844
425’404
1’728’722
2’300’970
4’729
423’849
1’847’628
2’276’206
Estimated
realisable value
Gross of guarantees
amount
received
Net
amount
Individual
specific
provisions
Impaired loans
Total at
31.12.2014
168’513
67’492
101’021
100’482
31.12.2013
202’097
82’122
119’975
118’522
50
BSI – Group financial statements
3.2 Securities and precious metals held for trading
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
Debt securities
557’848
637’184
listed
545’569
627’193
Securities and precious metals held for trading
unlisted
Equities
Precious metals
Total
of which eligible as repurchase transactions
in compliance with the liquidity regulations
12’279
9’991
327’941
337’031
378’636
389’717
1’264’425
1’363’932
13’229
21’252
3.3 Financial investments
Book value
Financial investments
of which valued on an accrual basis
of which valued according to the lower value principle
Equities
of which qualified participations 1
Precious metals
Real estate
Total
of which eligible as repurchase
transactions in compliance with the
liquidity regulations
Market value
31.12.2014
31.12.2013
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
1’403’583
1’200’924
1’431’116
1’225’010
1’402’344
1’199’716
1’429’875
1’223’802
1’239
1’208
1’241
1’208
29’141
29’346
29’934
29’867
17’967
16’907
17’967
16’907
204’689
166’016
204’689
166’016
12’218
11’004
12’218
11’520
1’649’631
1’407’290
1’677’957
1’432’413
785’580
854’579
–
–
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
At least 10% of capital or votes.
1
3.4 Non-consolidated participations
Without market value
47’826
54’727
Total
47’826
54’727
51
BSI – Group financial statements
3.5 Information on relevant participations
3.5.1 Scope of consolidation
Business
Share capital
31.12.2014
31.12.2013
Change
million
participation
in %
participation
in %
participation
in %
100.00
-100.00
A. Fully consolidated participations
Anderfin SA, Lugano
Asset management company
CHF
BSI Bank Ltd., Singapore
Bank
USD 214.00
100.00
BSI Bank (Panama) SA, Panama
Bank
USD
10.00
100.00
BSI Investment Advisors (Panama) Inc.,
Panama
Investment company
USD
0.41
100.00
100.00
BSI Europe SA, Luxembourg
Bank
EUR
35.40
100.00
100.00
EUR
2.50
100.00
EUR
15.00
100.00
BSI Fund Management SA, Luxembourg Fund management company
BSI Monaco SAM, Monte Carlo
Bank
BSI Asset Managers SAM, Monte Carlo Asset management company
0.10 1
100.00
100.00
100.00
100.00
EUR
2.00
99.98
99.98
USD
10.00
100.00
100.00
USD
1.00 1
100.00
-100.00
Investment company
USD
0.01 1
100.00
-100.00
BSI Trust Corporation (Malta) Ltd.,
La Valletta
Trust company
EUR
0.05
100.00
100.00
EOS Servizi Fiduciari SpA, Milan
Fiduciary company
EUR
4.25
100.00
100.00
Oudart SA, Paris
Asset management company
EUR
5.50
100.00
100.00
Oudart Gestion SA, Paris
Asset management company
EUR
1.00
100.00
100.00
Oudart Patrimoine SARL, Paris
Asset management company
EUR
0.06
100.00
100.00
Solidia Finance et Patrimoine SA,
Paris
Asset management company
EUR
0.31 2
Patrimony 1873 SA, Lugano
Asset management company
CHF
5.00
Thalìa SA, Lugano 3
Investment company
CHF
2.00 1
BSI Overseas (Bahamas) Ltd., Nassau
Bank
BSI Trust Corporation (Bahamas) Ltd.,
Nassau
Trust company
Alpine Services Ltd., Nassau
100.00
100.00
-100.00
100.00
100.00
-100.00
B. Participations valued at equity
Atacama Investments Ltd.,
British Virgin Islands
Investment company
USD
0.09
44.16
44.16
B-Source SA, Bioggio
Systems development and
business operations
CHF
2.40
49.00
49.00
Cross Factor SpA, Milan
Investment company
EUR
1.03
20.00
20.00
Thalìa SA, Lugano 3
Investment company
CHF
2.00
35.00
Share capital at the time the sale or the demerger took place.
1
2
3
Share capital at the time of integration.
Valued at equity as of 01.06.2014.
52
35.00
BSI – Group financial statements
3.5.2 Changes to the scope of consolidation
Participations new to the scope of consolidation
BSI Bank (Panama) SA, Panama
BSI Fund Management SA, Luxembourg
Participations no longer in the scope of consolidation
Anderfin SA, Lugano: in liquidation
Alpine Services Ltd., Nassau: sold
BSI Trust Corporation (Bahamas) Ltd., Nassau: sold
Solidia Finance et Patrimoine SA, Paris: integrated in Oudart Patrimoine SARL, Paris, effective on 01.01.2014
Changes to participations percentage
Thalìa SA, Lugano: participation reduction from 100% to 35%
Participation valued at equity for the first time
Thalìa SA, Lugano
Capital increase
BSI Bank (Panama) SA, Panama: capital increase from USD 6.5 mln to USD 10.0 mln
BSI Europe SA, Luxembourg: capital increase from EUR 31.47 mln to EUR 35.40 mln
EOS Servizi Fiduciari SpA, Milan: capital increase from EUR 0.75 mln to EUR 4.25 mln
Oudart Patrimoine SARL, Paris: capital increase from EUR 0.04 mln to EUR 0.06 mln
Reduction of capital
Thalìa SA, Lugano: reduction of capital from CHF 4.80 mln to CHF 2.00 mln
3.6 Significant non-consolidated participations
3.6.1 Significant non-consolidated participations and entered under “Non-consolidated participations”
Business
Share capital
31.12.2014
31.12.2013
Change
participation
in %
participation
in %
million
participation
in %
Banca Patrimoni Sella & C. SpA, Turin
Bank
EUR
28.00
5.68
BSI Bank (Panama) SA, Panama 1
Bank
USD
10.00
BSI Laran SA, Lugano
Investment company
CHF
0.10
100.00
100.00
Dynamic Securities SA, Athens
Securities broker
EUR
6.99
19.95
19.95
5.68
100.00
-100.00
Fully consolidated in 2014.
1
3.6.2 Significant non-consolidated participations and entered under “Financial investments”
(at purchase price, minus the required depreciation)
Business
Share capital
31.12.2014
31.12.2013
Change
participation
in %
participation
in %
million
participation
in %
IFA SA, Paris 1
Investment company
EUR
15.79
51.00
51.00
BSI Investment Advisors (Hong Kong)
Ltd., Hong Kong 1
Investment company
USD
43.00
100.00
100.00
In liquidation.
1
53
BSI – Group financial statements
3.7 Analysis of investments
in CHF 1’000
2014
Book
Acquisition Depreciation
value
price
to date 31.12.2013
Changes
to the
scope of
consolidation
Investments
Disposal
Book
Deprevalue
ciation 31.12.2014
Participations valued
at equity
36’078
36’078
1’386
332 1
-245
Other non-consolidated
19’779
-1’130
18’649
-5’786
271
-1’787
-1’072
10’275
Total non-consolidated
participations
55’857
-1’130
54’727
-4’400
603
-2’032
-1’072
47’826
-883
-5’564
187’416
Bank premises
271’222
-80’836
190’386
3’477
Other real estate
58’336
-36’730
21’606
641
Total real estate
329’558
-117’566
211’992
4’118
Other tangible fixed assets
395’307
-232’291
163’016
Total tangible assets
724’865
-349’857
375’008
1’052’694
-1’048’854
3’840
22’259
-22’213
46
Goodwill
Total costs
Other intangible assets
6’536
-2’281
4’255
Total intangible assets
1’081’489
-1’073’348
8’141
37’551
-1’018
21’229
-883
-6’582
208’645
22’017
622
-33’188
152’467
26’135
-261
-39’770
361’112
-7
-615
389
-2’829
-46
-2’829
7’446
80
-807
10’974
7’446
73
-1’468
11’363
Fire insurance value
of the real estate
294’393
292’710
Fire insurance value of
other tangible fixed assets
137’256
139’793
96
127
Off-balance sheet lease agreements:
commitments arising from future lease payments
Including value increases.
1
54
BSI – Group financial statements
3.8 Assets pledged and securities repurchase and reverse repurchase agreements
A. Assets pledged as security for own liabilities
Including assets subject to retention of
title and excluding securities repurchase
and reverse repurchase agreements
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
Change
in %
Book
value
Pledged
amount
Book
value
Pledged
amount
Book
value
Pledged
amount
300’216
102’647
235’860
52’761
27.3
94.6
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
1’862’608
1’585’713
17.5
1’862’608
1’585’713
17.5
4’066’244
3’362’467
20.9
2’007’276
1’662’683
20.7
B. Securities repurchase and reverse repurchase agreements 1
Book value of own account securities lent or transferred
as collateral for securities lending operations or for repurchase
and reverse repurchase transactions
of which securities with no restrictions
on rights of sale or subsequent pledging
Book value of securities received as collateral in accordance
with securities lending agreements and securities received
in accordance with securities borrowing agreements and with
reverse repurchase agreements with no restrictions on rights of
sale or subsequent pledging
of which securities sold or pledged as collateral
Amounts paid or received in cash are booked under the balance sheet subheading in the item “Due from banks” or “Due to banks”.
1
3.9 Commitments to pension institutions and notes on pension plans
Commitments to Group pension institutions
A. Staff at the Bank and the Swiss subsidiaries
Staff at BSI Ltd., as well as companies/entities incorporated
under the Swiss law that are affiliates or associates of the
Bank or in which the latter has interests to protect, except
for apprentices, interns, volunteers and staff on fixed-term
contracts of more than three months or hired as consultants, are insured by the “Fondazione di Previdenza BSI SA”
(Foundation). Staff on fixed-term contracts of more than
three months or hired as consultants, either on a fixedterm or open-ended basis, are enrolled in an occupational
pension scheme offered by a leading insurer.
Until 31 December 2014, the Foundation, which ensures
employees are enrolled in the mandatory occupational
pension schemes in accordance with the Swiss Federal
Law on occupational old-age, survivors’ and disability insurance (LPP) and the relevant ordinances, applied a defined-benefit plan, whereas the regulation introduced on
1 January 2015 establishes a defined-contribution one.
Under the new plan, the old-age pension is calculated by
applying the conversion rate to the assets accumulated
by the insured person at the date of retirement.
Under both the former and the new regulation, disability
and survivors’ benefits are determined based on the final
salary before the insured event.
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
60’509
82’591
The “Fondo per prestazioni a carattere sociale di BSI SA”
(Fund) is represented by a complementary defined-contribution plan. The Fund insures all employees already
enrolled in the Foundation’s scheme whose annual fixed
insured salary is over four times the maximum simple AVS
old-age pension or whose initial contribution to the Foundation resulted in a surplus.
Both the Foundation and the Fund set the normal retirement age at 64.
As at 31 December 2014, the responsible actuary determined the vested benefits accounts and the actuarial
provisions considering the regulatory changes concerning the Foundation and the Fund effective from 1 January
2015 as well as by applying the 2.75% technical rate and
the LPP 2010 generational tables. Based on these actuarial estimates, as at 31 December 2014 the coverage ratio
for the Foundation was 101.9% (31 December 2013: coverage ratio 94.1%, technical rate 3%, LPP 2010 periodic tables) and 108.1% for the Fund (31 December 2013: coverage ratio 101.3%, technical rate 3%, LPP 2010 periodic
tables).
55
BSI – Group financial statements
In accordance with Article 57, paragraph 1 and 2 of the
Ordinance concerning occupational old-age, survivors’
and disability insurance (OPP2), BSI Ltd. commits to guar-
antee the liquidity the Foundation and the Fund hold with
BSI Ltd. by establishing a collateral deposit.
Employer’s contribution reserve
in CHF 1’000
Nominal
value
Use
Other
Waiver
value
of use adjustments
Lending
value
Balance sheet
31.12.2014 31.12.2014 31.12.2014 31.12.2014 31.12.2014 31.12.2014 31.12.2013
Pension fund / Pension institution
BSI Ltd. Pension Foundation
(booked in “Other assets”)
-11’000
BSI Ltd.’s Social Insurance Fund
(booked in “Other assets”)
2’000
Total
2’000
11’000
2’000
2’000
2’000
13’000
Change
from previous financial year /
with impact Contributions
on financial adjusted for
result
the period
Pension
insurance
costs
included in
the costs
of staff
Pension
insurance
costs
included in
the costs
of staff
2014
2013
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
19’394
19’394
22’450
-11’000
Financial assets / liabilities and pension insurance costs
Financial
Financial
Cover share paid share paid
surplus /
by the
by the
deficit organisation organisation
31.12.2014 31.12.2014 31.12.2013
CHF 1’000
CHF 1’000
CHF 1’000
Pension funds / Pension institutions
BSI Ltd. Pension Foundation
without cover surplus / deficit
BSI Ltd.’s
Social Insurance Fund
without cover surplus / deficit
Total
5’803
5’803
8’434
25’197
25’197
30’884
B. Employees of foreign branches and affiliates
Employees of foreign branches and affiliates have occupational pension insurance in their respective countries
according to local laws. The relevant costs are entered
under “Personnel expenses”.
Pension insurance costs included in the costs of staff
56
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
2’411
1’927
BSI – Group financial statements
3.10 Value adjustments and provisions and reserves for general banking risks
in CHF 1’000
2014
31.12.2013
Changes
Recoveries,
to the
doubtful
scope of
Use
interest,
consolida- according Reclassificacurrency
tion to purpose
tions differences
New
provisions
charged
to P/L
10’737
-40
6
-8’368 1
2’335
12’797
171’485
-4’876
390’211
2’813
5’693
-2’183
108’135
Situation
Provisions for deferred taxes
Value adjustments and provisions
264’811
Value adjustments and provisions
for default risks (credit and country risks)
125’135
Value adjustments and provisions
for other business risks
Value adjustments for financial investments
Provisions for restructuring
-478
-53’528
-23’023
-300
609
-2
3’784
397
267
-138
Other provisions
135’016
-478
-30’367
Total value adjustments
and provisions
275’548
-478
-53’528
Value adjustments set off
directly against assets
-121’620
–
–
Total value adjustments
and provisions as per balance sheet
153’928
–
–
Reserves for general banking risks
146’152
Release
credited
Situation
to P/L 31.12.2014
-605
2
4’181
20
9’000
9’569
156’792
-2’088
268’744
12’757
171’491
-13’244
392’546
–
–
–
–
-104’462
–
–
–
–
288’084
-160
2’859
-63’162
85’689
300
9’149
The CHF 2.3 million release has been accounted for under “Extraordinary income”.
1
57
BSI – Group financial statements
3.11 Presentation of share capital and statement of shareholders’ equity
3.11.1 Presentation of share capital and shareholders with voting rights above 5%
31.12.2014
31.12.2013
Capital
with
dividend
rights
Total
nominal
value
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
1’840’000 18’400’000
1’840’000
1’840’000 18’400’000
1’840’000
Total
nominal
value
Number
of shares
Number
of shares
Capital
with
dividend
rights
A. Share capital
Share capital
31.12.2014
31.12.2013
Nominal Participation
CHF 1’000 percentage
Nominal Participation
CHF 1’000 percentage
B. Shareholders
Shareholders with voting rights
Participatie Maatschappij Graafschap
Holland N.V., Diemen (NL)1
1’840’000
100.00
1’840’000
100.00
Company directly and wholly owned by the Assicurazioni Generali Group, Trieste.
1
3.11.2 Statement of shareholders’ equity
CHF 1’000
Shareholders’ equity at 1 January 2014
Share capital
1’840’000
Capital reserve
145’200
Reserve and retained earnings
311’498
Reserves for general banking risks
Net result for the previous year
Total shareholders’ equity
Creation of reserves for general banking risks charged to P/L
Net result for the current year
Translation differences arising on profit consolidation
Total shareholders’ equity at 31 December 2014
146’152
-721’955
1’720’895
-60’303
2’247
10’139
1’672’978
of which:
Share capital
Reserve and retained earnings
Reserves for general banking risks
Net result for the current year
58
1’840’000
-254’958
85’689
2’247
BSI – Group financial statements
3.12 Maturity structure of current assets and third-party liabilities
in CHF 1’000
Residual maturity
on demand
subject
to notice
due within due within due within
3 months 3-12 months 1 to 5 years
due after
5 years
fixed
Total
–
–
2’978’959
Current assets
Cash and cash equivalents
Money market papers
Due from banks
2’978’959
–
–
–
–
–
1’158’905
1’185’913
1’207’385
775’697
782’719
Due from customers
Mortgage loans
Securities and precious
metals held for trading
Financial investments
–
46’076
–
2’344’818
–
2’811’877
2’059’807
3’891’175
857’627
485’343
39’194
–
7’333’146
–
373’507
1’609’542
486’289
1’129’628
735’755
–
4’334’721
1’264’425
–
–
1’264’425
233’586
–
165’904
131’608
764’018
342’297
12’218
1’649’631
Total 31.12.2014
5’259’689
2’433’314
8’032’911
3’437’134
2’425’065
1’117’246
31.12.2013
7'967'939
2’563’429
6’383’031
3'735’556
2'336’434
811’909
–
–
12’218 22’717’577
11’004
23’809’302
Third-party liabilities
Money market paper liabilities
Due to banks
Due to customers in savings
and investment accounts
Due to customers, other
Loans with issuers of
property bonds and other
457’105
4’417
233’686
50’000
–
633’983
–
–
–
17’684’376
579’554
858’396
186’430
141’501
–
–
4’417
–
740’791
–
633’983
–
19’450’257
99’036
–
–
99’036
–
Total 31.12.2014
18’141’481
1’213’537
1’096’499
236’430
141’501
99’036
– 20’928’484
31.12.2013
19’578’175
1'259’698
910’360
279’640
123’110
89’015
–
22’239’998
3.13 Due from and to the Group’s bodies, due from and to affiliated companies
Due from the bank’s bodies
Due from affiliated companies
Due to affiliated companies
–The conditions applied to loans to the Bank’s senior
management are the same as those applied to staff
loans. Due to their lower credit risk, employees receive
an interest rate reduction depending on the type of loan.
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
17’005
16’912
0.5
100’782
113’312
-11.1
30’577
2’346’498
-98.7
–All transactions with affiliated companies were carried
out at arm’s length. Revenues of CHF 1.5 million are included under the item “Result from interest activities”
(2013: CHF 1.0 million), while revenues of CHF 3.0 million
received from companies linked to the Generali Group
are recognised under “Result from commission and service fee activities” (2013: CHF 2.6 million).
59
BSI – Group financial statements
3.14 Analysis of Swiss and foreign assets and liabilities
31.12.2014
31.12.2013
Switzerland
Abroad
Switzerland
Abroad
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
2’914’230
64’729
3’803’831
2’048’113
2’715
2’342’103
1’451
2’270’371
362’721
2’449’156
100’541
2’492’825
Due from customers
1’085’801
6’247’345
1’178’950
5’122’093
Mortgage loans
3’136’508
1’198’213
3’085’011
934’894
Securities and precious metals held for trading
405’597
858’828
491’384
872’548
Financial investments
174’593
1’475’038
126’800
1’280’490
Assets
Cash and cash equivalents
Money market papers
Due from banks
Non-consolidated participations
Fixed assets
Intangible assets
Accrued income and prepaid expenses
15’031
32’795
16’018
38’709
352’212
8’900
367’541
7’467
2’287
9’076
3’462
4’679
11’623
56’246
16’475
63’307
Other assets
207’003
582’669
171’931
372’452
Total assets
8’670’321
15’325’098
9’363’395
15’507’948
Liabilities
Money market paper liabilities
4’417
2’240
Due to banks
191’290
549’501
163’708
Due to customers in savings and investment accounts
560’003
73’980
476’343
78’530
4’914’717
14’535’540
4’542’670
16’526’306
Due to customers, other
Medium-term notes
360’386
800
Loans with issuers of property bonds and other
99’036
89’015
Accrued expenses and deferred income
127’047
115’526
94’141
102’699
Other liabilities
233’758
629’542
209’080
350’602
Value adjustments and provisions
278’466
9’618
145’250
8’678
Reserves for general banking risks
85’689
146’152
1’840’000
1’840’000
Share capital
Capital reserve
Reserve and retained earnings
of which minority interests
Net result for the year
Total liabilities
145’200
-254’958
311’498
1
2’247
-721’955
7’982’676
16’012’743
7’355’127
17’516’216
3.15 Assets by country / groups of countries
31.12.2014
31.12.2013
CHF 1’000
Participation
in %
CHF 1’000
Participation
in %
Switzerland
8’670’321
Other OECD countries
8’127’932
36.1
9’363’395
37.6
33.9
10’287’929
41.4
698’507
2.9
254’188
1.0
Caribbean and Latin America
3’055’801
12.7
2’335’635
9.4
Other
3’442’858
14.4
2’630’196
10.6
23’995’419
100.0
24’871’343
100.0
Other European countries
Total
60
BSI – Group financial statements
3.16 Assets and liabilities by currency
Equivalent in CHF 1’000
CHF
USD
EUR
JPY
294
Other
Total
Assets
Cash and cash equivalents
Money market papers
Due from banks
2’841’618
7’551
125’035
39
1’370’049
814’885
4’461
2’978’959
159’845
2’344’818
36’045
1’357’373
920’422
9’741
488’296
2’811’877
996’619
4’295’901
1’254’342
91’725
694’559
7’333’146
3’128’147
199’229
219’810
3’218
784’317
4’334’721
Securities and precious metals held for trading
31’503
456’090
355’531
357
420’944
1’264’425
Financial investments
16’897
792’733
635’016
28
204’957
1’649’631
Non-consolidated participations
15’979
24’594
7’233
352’961
1’216
6’935
Due from customers
Mortgage loans
Fixed assets
Intangible assets
Accrued income and prepaid expenses
Other assets
20
47’826
361’112
2’287
1’592
7’484
12’301
21’507
31’191
82
2’788
67’869
11’363
553’557
142’757
53’657
5’706
33’995
789’672
7’987’953
8’670’592
4’431’541
111’151
8’801’774
6’871’720
6’728’951
142’415
8’780’998
12’426’514
7’462’873
458’702
16’768’951 21’097’106 11’894’414
569’853
Total balance sheet assets
31.12.2014
31.12.2013
Spot, forward and option contracts not yet delivered
Total assets
2’794’182 23’995’419
2’326’483
24’871’343
1’987’081
31’116’168
4’781’263 55’111’587
Liabilities
Money market paper liabilities
558
1’629
2’084
3
143
4’417
114’910
277’026
126’843
835
221’177
740’791
3’360’019
8’623’909
5’721’616
60’165
1’684’548
19’450’257
Accrued expenses and deferred income
138’750
78’970
21’796
9
3’048
242’573
Other liabilities
9’535
31’364
863’300
Due to banks
Due to customers in savings and investment accounts
Due to customers, other
602’073
Loans with issuers of property bonds and other
31’910
633’983
99’036
99’036
564’225
163’318
94’858
Value adjustments and provisions
52’937
231’005
4’142
Reserves for general banking risks
85’689
85’689
1’840’000
1’840’000
-254’958
-254’958
Share capital
Reserve and retained earnings
of which minority interests
Net result for the year
288’084
1
1
2’247
2’247
Total balance sheet liabilities
31.12.2014
31.12.2013
Spot, forward and option contracts
not yet delivered
Total liabilities
Net position per currency
6’506’450
9’474’893
6’003’249
70’547
6’271’833
8’649’807
8’195’324
52’360
10’433’580
11’101’582
6’168’089
563’067
16’940’030 20’576’475 12’171’338
633’614
-171’079
520’631
-276’924
-63’761
1’940’280 23’995’419
1’702’019
24’871’343
2’731’107
30’997’425
4’671’387 54’992’844
109’876
118’743
61
BSI – Group financial statements
3.17 Unredeemed bonds and structured products
A. Unredeemed bonds
Issuer
Average
weighted yield
Maturity
5.25%
23.12.2021
BSI Ltd., Lugano
Amounts in
CHF 1’000
99’036
Total
Subordinated loan
99’036
Maturity schedule of unredeemed bonds
Maturity
Issuer
Total
due within
from
from
from
from
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
BSI Ltd., Lugano
after
5 years
CHF 1’000
CHF 1’000
99’036
99’036
B. Structured products
Issuer
Average
weighted yield
Amounts in
Maturity
CHF 1’000
BSI Ltd., Lugano (CHF)
2015
2’606
Unsubordinated,
structured products
BSI Ltd., Lugano (CAD)
2016
2’172
Unsubordinated,
structured products
BSI Ltd., Lugano (EUR)
2015-2016
70’088
Unsubordinated,
structured products
BSI Ltd., Lugano (HKD)
2015
2’131
Unsubordinated,
structured products
BSI Ltd., Lugano (SGD)
2015
8’302
Unsubordinated,
structured products
BSI Ltd., Lugano (USD)
2015-2017
70’047
Unsubordinated,
structured products
BSI Overseas (Bahamas) Ltd., Nassau (CHF)
5.68%
2015-2016
36’213
Unsubordinated,
structured products
BSI Overseas (Bahamas) Ltd., Nassau (EUR)
2.94%
2015-2017
130’752
Unsubordinated,
structured products
2015
27’496
Unsubordinated,
structured products
2015-2017
53’503
Unsubordinated,
structured products
2015
17’420
Unsubordinated,
structured products
BSI Overseas (Bahamas) Ltd., Nassau (EUR)
BSI Overseas (Bahamas) Ltd., Nassau (USD)
2.57%
BSI Overseas (Bahamas) Ltd., Nassau (USD)
Total
420’730
Maturity schedule of structured products
Maturity
due within
from
from
from
from
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
Issuer
BSI Ltd., Lugano
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
after
5 years
Total
CHF 1’000
CHF 1’000
79’945
61’665
13’736
BSI Overseas (Bahamas) Ltd., Nassau
232’883
11’283
21’218
265’384
Total
312’828
72’948
34’954
420’730
These amounts are included in “Due to customers, other”.
62
155’346
BSI – Group financial statements
3.18 Other assets and other liabilities
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
-84.6
Other assets
Contribution reserve with BSI Ltd. Pension Foundation
and BSI Ltd.’s Social Insurance Fund
2’000
13’000
Replacement values for derivatives from trading activities
653’117
411’132
58.9
Replacement values for derivatives from hedging activities
38’601
23’588
63.6
Netting account
43’535
10’920
298.7
Other assets
52’419
85’743
-38.9
789’672
544’383
45.1
Replacement values for financial instruments deriving from trading activities
647’997
396’050
63.6
Replacement values for financial instruments deriving from hedging activities
90’402
70’074
29.0
Other liabilities
124’901
93’558
33.5
Total other liabilities
863’300
559’682
54.2
Total other assets
Other liabilities
63
BSI – Group financial statements
4. Information on off-balance sheet business
4.1 Breakdown of contingent liabilities
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
271’084
214’677
26.3
1’770’646
1’831’279
-3.3
92’351
95’033
-2.8
2’134’081
2’140’989
-0.3
Irrevocable commitments
Performance guarantees
Other contingent liabilities
Total
4.2 Derivative financial instruments outstanding
Trading instruments
Hedging instruments
Replacement value
Contract
Replacement value
Contract
positive1
negative1
volumes2
positive1
negative1
volumes2
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
3’193
3’198
122’181
4’148
55’862
1’681’125
10
11
59’220
484’440
476’601
26’231’497
33’387
34’403
4’557’867
Interest rate instruments
Swaps
Futures
Currencies and precious metals
Forward contracts
Swaps
1’066
Options (OTC)
84’634
79’332
99’036
9’840’879
Equities / indices
Futures
Options (OTC)
1’593
861
53’966
23’630
32’197
3’483’639
55’617
55’797
442’528
Credit derivatives
Credit default swaps
137
114’952
Total at 31.12.2014
653’117
647’997 40’233’910
38’601
90’402
6’452’980
411’132
396’050
23’588
70’074
5’501’043
1
2
31.12.2013
37’522’023
No value is entered for products traded for the client’s account in a recognised stock market with daily margining.
Credit component of the underlyings or the nominal values of own transactions and transactions with clients.
4.3 Fiduciary transactions
Fiduciary deposits with other banks
Total
64
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
1’945’743
1’728’535
12.6
1’945’743
1’728’535
12.6
BSI – Group financial statements
4.4 Client assets
Held by funds
Assets under management
of which deposited with third parties
Change
31.12.2014
31.12.2013
CHF million
CHF million
in %
4’986
6’247
-20.2
19’003
18’135
4.8
868
507
71.2
Other assets
68’341
64’994
5.1
Total client assets
92’330
89’376
3.3
4’885
5’244
-6.8
-627
2’181
of which double counting
Net inflow / outflow 1
1
2014 Net new money was calculated by deducting capital outflows from inflows (cash or securities from outside the BSI Group). Intra-group transactions were excluded. Net new money thus does not include interest or dividends received from clients related to assets under management. Moreover, it does not include the
performance impact or other changes in the portfolios occurred during the year.
As at 31 December 2014, the BSI Group had assets under
management deposited at other banks for a total of CHF
868 million (2013: CHF 507 million) for which other banks
act solely as custodians. Client assets do not include deposits for which BSI acts solely as custodian, totalling CHF
1,692 million as at 31 December 2014.
4.5 Irrevocable commitments
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
33’988
33’732
0.8
Other irrevocable commitments
127’060
95’112
33.6
Total
161’048
128’844
25.0
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
Deferred payment liabilities
2’775
5’719
-51.5
Total
2’775
5’719
-51.5
Deposit guarantees
4.6 Loan commitments
65
BSI – Group financial statements
5. Information on the profit and loss statement
5.1 Income from refinancing included in Interest and discount income
Total
2014
2013
Change
CHF 1’000
CHF 1’000
in %
691
692
-0.1
5.2 Results from trading operations
2014
2013
Change
CHF 1’000
CHF 1’000
in %
80’669
86’134
-6.3
7’874
2’689
192.8
Securities transactions
59’496
54’591
9.0
Other trading income
1’277
4’689
-72.8
149’316
148’103
0.8
Foreign exchange and banknote transactions
Precious metal transactions
Total
5.3 Personnel expenses
2014
2013
Change
CHF 1’000
CHF 1’000
in %
345’889
336'373
2.8
Social security contributions
31’866
29'085
9.6
Contributions to pension funds in favour of the staff
27’896
33'078
-15.7
20’752
26'272
-21.0
426’403
424’808
0.4
Salaries
Other personnel expenses
Total
5.4 Other operating expenses
Premises, machinery and furnishing
IT expenses
2014
2013
Change
CHF 1’000
CHF 1’000
in %
32’854
32’174
2.1
102’134
103’861
-1.7
Other office expenses
137’266
105’667
29.9
Total
272’254
241’702
12.6
66
BSI – Group financial statements
5.5 Domestic and foreign consolidated gross profit of the Group
2014
2013
Switzerland
Abroad
Switzerland
Abroad
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
Result from interest activities
160’344
36’631
156’631
34’513
Result from commission and service fee activities
327’653
185’202
333’233
170’855
Result from trading operations
119’893
29’423
120’190
27’913
11’478
811
22’095
-2’360
Net operating result
619’368
252’067
632’149
230’921
Personnel expenses
-282’071
-144’332
-281’120
-143’688
Other operating expenses
-229’900
-42’354
-195’928
-45’774
Operating expenses
-511’971
-186’686
-477’048
-189’462
107’397
65’381
155’101
41’459
Other ordinary result
Gross profit
5.6 Extraordinary income and expenses
Extraordinary income
2014
2013
CHF 1’000
CHF 1’000
82’626
89’686
Release of value adjustments and provisions
4’876
7'860
Release of reserves for general banking risks
63’162
43'512
9’333
36'849
761
535
Gain on the sale of participations
Recovered losses
Profit from sale of fixed assets
1’852
31
Other extraordinary income
2’642 1
899
Extraordinary expenses
-4’052
-49’931
Creation of reserves for general banking risks
-2’859
-47'053
Losses on sale of participations
-1’099
-1'992
Losses on sale of fixed assets
-57
-40
Other extraordinary expenses
-37
-846
78’574
39’755
Total
Including CHF 2.3 million for deferred taxes.
1
5.7 Taxes
2014
2013
CHF 1’000
CHF 1’000
Creation of deferred tax assets
-83
-29
Release of deferred tax assets
493
2’794
New provisions for deferred taxes
6
6’072
Release of provisions for deferred taxes
-6’083
-5’108
Current year tax liability
15’295
12’959
Tax credits on tax losses carried forward in the balance sheet
Total
Tax credits on tax losses not on balance sheet
3’552
623
13’180
17’311
1’109
6’894
67
BSI – Group financial statements
6. Information required in accordance with FINMA Circular 2008/22
on Capital Adequacy Disclosure
6.1 Presentation of available shareholders’ equity
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
1’840’000
1’840’000
Available shareholders’ equity
Share capital
Reserves for general banking risks
85’689
Capital reserve
Reserve and retained earnings
Group loss / profit brought forward
Net result for the year
Subtotal of basic shareholders’ equity
- Goodwill
- Other intangible assets
- Other amounts arising from shareholders’ equity
Total basic shareholders’ equity (CET1)
146’152
145’200
311’498
-254’958
2’247
-721’955
1’672’978
1’720’895
-389
-3’840
-10’974
-4’301
-2’300
1’659’315
1’712’753
1’659’315
1’712’753
+ Additional shareholders’ equity (AT1)
Total basic shareholders’ equity (T1)
Total additional shareholders’ equity (T2)
Total available shareholders’ equity
Total risk-weighted positions
79’229
80’113
1’738’544
1’792’866
10’068’463
9’824’725
CET1 Ratio
16.29%
17.35%
Total Capital Ratio
17.08%
18.17%
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
533’594
529’144
6.2 Presentation of required shareholders’ equity
Credit risks (in accordance with the standard approach)
of which equities and shares in collective investment schemes
Risks not linked to counterparties
Market risk (in accordance with the standard approach)
30’902
126’650
111’681
30’069
37’796
of which relating to equities
17’253
36’504
of which relating to currencies and precious metals
61’451
13’998
of which relating to commodities
10’460
9’925
109’139
107’386
Items not deducted in accordance with 3 threshold 1
Total required shareholders’ equity
Ratio of available shareholders’ equity to required shareholders’ equity
Basilea III pursuant to art. 40 CAO.
68
31’706
29’866
of which relating to bonds (general and specific market risk)
Operating risks (in accordance with the standard approach)
1
25’923
6’228
6’865
805’477
785’978
215.84%
228.11%
BSI – Group financial statements
6.3 Credit risk by type of counterparty
in CHF 1’000
Governments
and central
banks
Banks
and
securities
traders
1’287
2’585’507
Due from customers
507’522
990’713
Mortgage loans
103’398
45’450
1’596’354
1’859’557
Corporations
under
public law
Individuals,
Equities
small and
and
medishares in
um-sized collective
Corpora- companies investment
tion
(retail)
schemes
Other
Total
Loan commitments
Balance sheet / loans
Liquidity
2’978’959
Due from banks
Financial investments 1
Other assets / positive replacement values
Total at 31.12.2014
31.12.2013
122’085
102’998
158’766
3’242’548
2’431’616
790
1’016’796
3’168’287
236’465
54’603
2’978’959
2’811’877
1’981
7’333’146
218’088
4’150’986
4’334’721
185’919
5’468
594’202
646
160’263
29’093
2’214’029
6’075’429
396’667
4’596’295
5’731’994
185’919
789’672
1’278’640
5’750’344
506’301
4’072’783
5’322’863
163’481
3’585
521’084
1’757
357’610
110’497
994’533
127’060
161’048
3’199’028 22’399’361
6’029’230
23’123’642
Off-balance sheet
Contingent liabilities
Irrevocable commitments
33’988
Contingent liabilities for calls
and margin liabilities
3’066
Loan commitments
2’285
3’066
490
2’775
Total at 31.12.2014
3’585
526’435
35’745
358’100
237’557
1’161’422
9’689
460’538
35’032
401’460
211’217
1’117’936
1
31.12.2013
Including money market paper and reclassification of hedge fund portfolios.
69
BSI – Group financial statements
6.4 Credit risk mitigation
in CHF 1’000
Covered
by recognised
Covered
financial by guarantees
guarantees and derivatives
Covered
by other
guarantees
Total
576’219
532’112
6’433’559
105’399
3’824’465
4’271’869
Loan commitments / Counterparty risk
on balance sheet closing
Balance sheet / loans
Due from banks
387’594
Due from customers
387’594
5’325’228
Mortgage loans
342’005
Financial investments 1
619’040
Other assets / positive replacement values
Total at 31.12.2014
31.12.2013
619’040
85’624
54
6’588
92’266
6’140’451
1’300’712
4’363’165
11’804’328
5’304’215
939’123
4’023’791
10’267’129
438’732
4’106
3’009
445’847
Off-balance sheet
Contingent liabilities
Irrevocable commitments
1’358
1’358
Contingent liabilities for calls and margin liabilities
Loan commitments
Total at
31.12.2014
440’090
4’106
3’009
447’205
31.12.2013
396’691
11’125
3’786
411’602
1
Including money market paper.
6.5 Breakdown of credit risk
in CHF 1’000
Weighting of regulated risk
0%
20%
35%
50%
75%
> = 250%
Total
100%
150%
5’897
13
2’811’877
1’438
7’333’146
Loan commitments /
Counterparty risk on
balance sheet closing
Balance sheet / loans
Liquidity
2’978’959
Due from banks
Due from customers
Mortgage loans
Financial investments 1
Other assets / positive
replacement values
Total at
31.12.2014
31.12.2013
2’978’959
349’744
1’141’392
5’961’732
26’478
550’840
1’314’831
302’814
3’136’447
1’749’102
125’292
141’949
142’391
193’600
59’019
788’065
4’379
59’415
572’626
11’014
4’334’721
20’538
181’358
4’150’986
124’106 1’489’348
193’823
22’399’361
146’242
189’882
23’123’642
2’074’696
6
397’432
11’732’326 1’435’553 3’439’267 3’984’938
12’963’833
1’615’015
3’071’657
3’596’528
441’983
8’841
1’116
440’669
1’358
33’988
5’672
102’222
1’540’485
789’672
Off-balance sheet
Contingent liabilities
Irrevocable commitments
Contingent liabilities for calls and
margin liabilities
Loan commitments
2’285
Total at
31.12.2014
443’341
45’114
1’116
440’669
31.12.2013
405’703
54’900
1’144
422’074
Including money market paper and reclassification of hedge fund portfolios.
1
70
101’924
994’533
125’702
161’048
3’066
3’066
490
2’775
231’182
12
234’043
1’161’422
61
1’117’937
BSI – Group financial statements
6.6 Geographical credit risk (domicile of the collateral)
in CHF 1’000
Switzerland
Oceania
North
America
Latin
America
Europe
Caribbean
Asia
Africa
Other
Total
Loan commitments
Balance sheet / loans
Due from banks
502’465
56’384
137’294
8’199
1’258’477
220’861
628’160
37
2’811’877
Due from customers
1’165’405
140’270
660’157
163’458
2’115’304
1’482’869
1’518’804
86’879
7’333’146
Mortgage loans
3’137’714
165’914
771’819
1’374
257’900
4’334’721
65’676
528’154
2’803’822
206’829
368’420
4’150’986
6’296
8’644
425’322
93’902
Financial investments 1
178’085
Other assets / positive
replacement values
211’085
35’816
484
789’672
268’626 1’500’163
179’780 7’374’744 2’005’835 2’809’100
87’400
19’420’402
4’839’963
294’527
684’108
209’953
7’294’956
1’589’907
2’281’893
76’391
17’271’698
Contingent liabilities
494’713
1’204
20’443
24’068
225’676
85’102
130’797
12’530
994’533
Irrevocable commitments
161’048
Total at
31.12.2014
5’194’754
31.12.2013
8’123
Off-balance sheet
Contingent liabilities for
calls and margin
liabilities
Loan commitments
161’048
361
2’705
57
490
3’066
2’228
2’775
Total at
31.12.2014
656’179
1’204
20’443
24’068
228’871
85’102
133’025
12’530
1’161’422
31.12.2013
601’749
10’840
13’354
19’662
206’575
190’075
69’446
6’236
1’117’937
Including money market paper and reclassification of hedge fund portfolios.
1
6.7 Impaired client loans by geographical region
in CHF 1’000
Switzerland
Oceania
North
America
Latin
America
Europe
Caribbean
Asia
Africa
Other
Total
Impaired loans
(gross amount)
62’002
8’664
222
76’023
21’602
168’513
Total at
31.12.2014
62’002
8’664
222
76’023
21’602
168’513
31.12.2013
93’412
8’461
685
81’032
18’507
202’097
Individual value adjustments
12’471
1’502
222
64’686
21’601
100’482
Total at
31.12.2014
12’471
1’502
222
64’686
21’601
100’482
31.12.2013
29’955
1’299
699
68’062
18’507
118’522
6.8 Contract volumes for credit derivatives in the Bank portfolio
2014
2013
Seller
Buyer
Seller
Buyer
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
207’294
241’246
249’081
294’199
207’294
235’234
249’081
279’160
Derivatives
Credit default swaps
of which from the trading portfolio
of which from the investment portfolio
6’012
15’039
71
BSI – Group financial statements
6.9 Presentation of the most important features of regulatory capital instruments
Share capital
1
Issuer
2
Identification (e.g. ISIN)
3
Law applicable to the instrument
Subordinated loan
Tier 2
BSI Ltd.
BSI Ltd.
n/a
CH0145635766
Swiss
Swiss
Prudent basis
4
Consideration during transitional Basel III regulations (CET1 / AT1 / T2)
CET1
T2
5
Consideration after the Basel III transitional phase (CET1 / AT1 / T2)
CET1
-
6
Calculated at the individual / consolidated / individual and consolidated level
7
Equities / debt securities / hybrid financial instruments / other instruments
Equities
Debt securities
8
Amount calculated on regulatory treasury funds (based on the last treasury
fund statement)
CHF 1’840 million
CHF 79.2 million
9
Nominal value of the instrument
CHF 1’840 million
USD 100 million
Share capital
Loans with issuers
of property bonds
and other loans
Individual and consolidated Individual and consolidated
10
Accounting item
11
Original issue date
1873
23.12.2011
12
Unlimited or with maturity
n/a
with maturity
13
Original maturity date
n/a
23.12.2021
14
Rescindable by the issuer (with consent from the Supervisory Authority)
n/a
15
Period of notice of termination to be chosen / conditional period of notice of
termination / reimbursement amount
16
Subsequent termination clauses, if applicable
17
Fixed / variable / first fixed then variable / first variable then fixed
yes
23.11.2016 at 100%
of the notional value
n/a
every 6 months
Coupons / dividends
dividend
first fixed, then variable
n/a
5.25% until 23.12.2016,
then Libor +4%
n/a
no
completely
discretionary
mandatory
18
Nominal coupon and reference index, if any
19
Presence of a “dividend stopper” (waiver of dividends on an instrument
involves cancellation of dividends on ordinary shares)
20
Payment of interests / dividends: completely discretionary /
Partially discretionary / mandatory
21
Presence of a set-up clause or another reimbursement incentive
n/a
no
22
Not cumulative or cumulative
n/a
n/a
23
Convertible or non-convertible
n/a
non-convertible
24
If convertible: conversion activation (including through PONV)
n/a
n/a
25
If convertible: total in any case / total or partial / partial in any case
n/a
n/a
26
If convertible: conversion rate
n/a
n/a
27
If convertible: mandatory / optional conversion
n/a
n/a
28
If convertible: type of instrument resulting from the conversion
n/a
n/a
29
If convertible: instrument issuer resulting from the conversion
n/a
n/a
30
Presence of depreciation clause
n/a
no
31
Depreciation activation
n/a
n/a
32
Total / partial
n/a
n/a
33
Lasting or temporary
n/a
n/a
34
In case of temporary depreciation: description of the depreciation mechanism
n/a
n/a
35
Ranking in case of liquidation (specify the instrument with immediately
35 higher ranking)
AT1
not subordinate
36
Presence of features that prevent full recognition pursuant to Basel III
No
No PONV
37
If present, description of these features
n/a
n/a
72
BSI – Group financial statements
6.10 Risk-weighted assets based on ratings provided by external agencies
in CHF 1’000
Risk-weighted assets 1
Rating
2
0%
20%
50%
100%
150%
852’262
5
164’371
20
38’550
2
23
87’489
2
3’501’553
3’538’963
3’566
2
213’244
363’671
27’274
4’010
37
60’224
Counterparties
Central governments and central banks
With rating
Without rating
Public entities
With rating
Without rating
Financial sector
With rating
Without rating
Businesses
With rating
Without rating
1
2
102’215
7
15’544
3’266
438
4’744’899
32’236
Before the risk management measures (Art. 61 CAO).
Based on Moody’s and S&P’s ratings.
73
BSI – Group financial statements
Report of the statutory auditor on the consolidated financial statements
Ernst & Young Ltd
Route de Chancy 59
P.O. Box
CH-1213 Geneva
74
Phone
+41 58 286 56 56
Fax
+41 58 286 56 57
www.ey.com/ch
BSI – Group financial statements
75
This exhibition, with selected works from
the BSI Art Collection and with books of the
Institute, offers a welcome opportunity to
experience the new idea of habitability
that develops in some key areas of the main
building. Industrial shelves, used as
scaffolding, are also a prelude to future
architectural projects, and form the
framework for the artwork and books,
acquiring value from the daily use made of
them by guests and visitors.
Bosshard Vaquer
“Allegro Giusto is the title of the project with
which we won the competition for the renovation
of Villa Maraini. It reflects the desire of the Istituto
Svizzero di Roma to open to the public the
magnificent Villa more than a century old and to
fill all of its floors with life, thanks to the activities
of the artists and scholars who stay there
for their annual projects”, claim the architects
Bosshard Vaquer.
Soon after their first meeting, Daniel Bosshard and Meritxell
Vaquer understand that, despite their different experiences,
their academic training at the ETH in Zurich and the UPCETS in Barcelona provides a common cultural framework
that allows them to be understood and complement each
other in the way they interpret architecture. Their professional collaboration begins in 2001, after winning the competition for the new mortuary Dietlikon. In the following
years, they work on several architectural projects for the
restoration of protected and monumental buildings, such as
the award-winning renovation of the Sihlfeld cemetery in
Zürich and the Concert Hall of St. Gallen. The renovation
works of Villa Maraini conducted on behalf of the Istituto
Svizzero di Roma are part of this series of projects, which
are conceived and developed from existing contexts. The
same attitude applies to the most ambitious project that they
have achieved so far: a residential building, with apartments,
offices and shops in the nascent Europaallee in Zurich.
The exhibition features works from the BSI Art Collection by artists such as:
John Armleder, Robert Barry, Alighiero Boetti, Andy Boot, Daniel Buren, Lawrence Carroll,
John Chamberlain, Henri Chopin, Tony Cragg, Aleksandra Domanovic, Haris Epaminonda,
Ceal Floyer, Ryan Gander, Peter Halley, Channa Horwitz, Gabriel Kuri, Fausto Melotti,
Mario Merz, Giulio Paolini, Steven Parrino, Manfred Pernice, Diego Perrone, Riccardo Previdi,
Seth Price, Patrick Tuttofuoco, Danh Vo.
In these supplements: (© Photo Agostino Osio)
Daniel Buren
Peinture aux formes
indéfinies, 1966
Painting on cotton canvas
with orange and white stripes
62 x 95,5 x 2 cm
John Chamberlain
Gabriel Kuri
Untitled (Hook Kiss), 2009
Two slabs of marble,
ashed cigarette butts
150 x 101 x 3 cm
Fausto Melotti
Informations
Giulio Paolini
Orfeo, 1988
Two casts and whole plaster
fragments and one in
fragments, matt white base.
Base 100 x 70 x 70 cm,
overall measures
156 x 70 x 70 cm
Manfred Pernice
Studio Lite XI, 1989
Addapuss, 1989
Happy Birthday II, 1989
Studio Lite IX, 1989
Studio Lite IV, 1989
Ordinary Wall, 1989
Studio Lite III, 1989
Downtown, 1989
888 Light, 1990
Flores Awning, 1990
888 Lite IV, 1990
Inka Dinka Dew, 1990
Photographs printed on
Ektacolor Professional paper
51 x 61 cm
Composizione, 1984
Brass, 84,5 x 25 x 24 cm
Untitled, 2008
Wood, lacquer, spray-painting,
metal, 201 x 82 x 82 cm
Riccardo Previdi
Le guglie, 1970
Brass, 100 x 32 x 29 cm
Scultura n. 24, 1935 (1968)
Iron and gypsum
90 x 90 x 4,8 cm
Mario Merz
Peter Halley
Untitled (BSI Painting 2), 2003
Acrylic, pearly, metallic acrylic
and Roll-a-Tex on canvas
207 x 175 cm
Preparations for
a new building
Design Bosshard Vaquer
from 16 October 2014
to 20 June 2015
Istituto Svizzero di Roma
Villa Maraini
Via Ludovisi 48
00187 Rome
Open on Saturdays and
during public events of
the Istituto Svizzero di
Roma. Open to the public
free of charge on all other
days (booking required
by phone: +39 06 420 421
or by email:
[email protected]
www.bsiartcollection.com
www.istitutosvizzero.it
Tony Cragg
Minster, 1992
Used industrial objects.
Base surface 250 x 250 cm ca.
H towers: 285, 275, 260, 215 cm
Allegro Giusto
Works from
BSI Art Collection
Senza Titolo
(Luoghi senza strada), 1994
Metallic structure,
clamps, slates, neon
Ø 400 x 200 cm ca.
Broken Display, 2012
Bamboo, steel, wire,
UV print, synthetic felt
130 x 150 x 20 cm
Seth Price
Highrise - SPR 10/005, 2009
Vacuum cord in PETG, car paint
243,8 x 121,9 cm
Patrick Tuttofuoco
Map #2, 2006
Painted steel, wood,
plastic, bamboo, Plexiglas
H 260 cm
BSI – BSI Ltd. financial statements
BSI Ltd. financial statements
Parent Bank balance sheet as of 31 December 2014
78
Parent Bank profit and loss statement 2014
79
Notes to the 2014 Parent Bank financial statements
80
Report of the statutory auditor on the financial statements
86
77
BSI – BSI Ltd. financial statements
Parent Bank balance sheet as of 31 December 2014
(before approval by the General Shareholders Meeting)
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
Cash and cash equivalents
2’911’939
3’806’230
-23.5
Money market paper
1’061’164
1’307’937
-18.9
Due from banks
2’867’993
2’229’276
28.7
173’314
155’776
11.3
Due from customers
5’100’729
4’242’719
20.2
Mortgage loans
3’905’707
3’639’541
7.3
Securities and precious metals held for trading
1’196’922
1’227’810
-2.5
Financial investments
18.1
Notes
Assets
of which due from reverse repo transactions
1’628’262
1’378’739
Shareholdings
349’000
328’026
6.4
Fixed assets
370’348
386’539
-4.2
Accrued income and prepaid expenses
Other assets
7
Total assets
Total subordinated assets
Total amounts receivable from Group companies
and qualified shareholders
46’801
45’424
3.0
787’243
509’814
54.4
20’226’108
19’102’055
5.9
67’888
62’371
8.8
753’962
604’832
24.7
97.2
Liabilities
Money market paper liabilities
Due to banks
Due to customers in savings and investment accounts
Due to customers, other
of which due from the trading portfolio
4’417
2’240
3’014’954
3’246’833
-7.1
602’074
530’908
13.4
13’797’976
12’928’618
6.7
403’747
463’626
-12.9
800
-100.0
99’036
89’015
11.3
124’048
95’028
30.5
Medium-term notes
Loans with issuers of property bonds and other
Accrued expenses and deferred income
Other liabilities
7
811’898
533’970
52.0
Value adjustments and provisions
2
278’210
136’480
103.8
Reserves for general banking risks
2, 4
73’537
97’137
-24.3
Share capital
3, 4
1’840’000
1’840’000
General legal reserve
4
Loss / Balance brought forward
4
273’054
-100.0
-398’974
65’093
-712.9
-21’068
-737’121
-97.1
20’226’108
19’102’055
5.9
116’984
118’527
-1.3
2’489’754
2’860’983
-13.0
2’062’365
2’071’193
-0.4
35’318
34’630
2.0
361
654
-44.8
2’775
5’719
-51.5
Positive replacement value
708’687
450’559
57.3
Negative replacement value
745’366
478’687
55.7
47’191’525
44’075’512
7.1
2’410’416
2’222’660
8.4
Net result for the year
Total liabilities
Total subordinated liabilities
Total liabilities to Group companies and qualified shareholders
Off-balance sheet business
Contingent liabilities
Irrevocable commitments
Contingent liabilities for calls and margin liabilities
Loan commitments
Derivative financial instruments
Contract volumes
Fiduciary transactions
78
1
BSI – BSI Ltd. financial statements
Parent Bank profit and loss statement 2014
Notes
2014
2013
Change
CHF 1’000
CHF 1’000
in %
164’306
164’419
-0.1
10’754
7’788
38.1
-23’622
-24’901
-5.1
151’438
147’306
2.8
-0.5
Income and expenses from ordinary banking operations
Interest and discount income
Interest and dividend income from financial investments
Interest expenses
Result from interest activities
Commission income from lending activities
8’569
8’614
386’048
385’643
0.1
22’826
16’658
37.0
Commission expenses
-108’834
-114’521
-5.0
Result from commission and service fee activities
308’609
296’394
4.1
121’240
120’330
0.8
-59.5
Commission income from securities and investment transactions
Commission income from other services
Result from trading operations
8
Result from the sale of financial investments
207
511
Income from participations
87’130
46’931
85.7
Net income from real estate
2’590
3’229
-19.8
Other ordinary income
23’821
17’425
36.7
Other ordinary expenses
-2’966
-6’243
-52.5
Other ordinary result
110’782
61’853
79.1
Net operating result
692’069
625’883
10.6
Personnel expenses
-287’982
-276’368
4.2
Other operating expenses
-232’520
-195’335
19.0
Operating expenses
-520’502
-471’703
10.3
171’567
154’180
11.3
Gross profit
Net result for the year
Gross profit
171’567
154’180
11.3
Depreciation of fixed assets
-41’151
-768’918
-94.6
Value adjustments, provisions and losses
Result before extraordinary items and taxes
-179’610
-141’738
26.7
-49’194
-756’476
-93.5
Extraordinary income
9
38’965
42’831
-9.0
Extraordinary expenses
9
-2’407
-17’544
-86.3
Taxes
Net result for the year
Appropriation of profit
Net result for the year
-8’432
-5’932
42.1
-21’068
-737’121
-97.1
31.12.2014
31.12.2013
Variazione
CHF 1’000
CHF 1’000
in %
-21’068
-737’121
-97.1
Balance brought forward
-398’974
65’093
-712.9
Balance sheet loss
-420’042
-672’028
-37.5
-273’054
-100.0
Proposal of the Board of Directors
General legal reserve compensation
Loss to be carried forward
-420’042
-398’974
5.3
Total
-420’042
-672’028
-37.5
79
BSI – BSI Ltd. financial statements
Notes to the 2014 Parent Bank financial statements
Accounting and valuation criteria
The accounting, recognition and valuation criteria conform to the provisions of the Swiss Code of Obligations,
the Swiss Federal Act on Banks and the relevant Ordinance, and the Guidelines of the Swiss Financial Market
Supervisory Authority FINMA. Please refer to the “Accounting and valuation principles” attached to the Group’s
accounts, which are also valid for the accounts of the Parent Bank.
1. Fiduciary transactions
Fiduciary deposits with other banks
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
1’534’249
1’356’970
13.1
876’167
865’690
1.2
2’410’416
2’222’660
8.4
Fiduciary deposits with Group banks and associated banks
Total
2. Value adjustments, provisions and reserves for general banking risks
in CHF 1’000
2014
Recoveries,
doubtful
Use
interest,
Situation according Reclassificacurrency
31.12.2013 to purpose
tions differences
Value adjustments and provisions
for default risks and other business risks
258’058
-52’858
Value adjustments and provisions
for default risks (credit and country risks)
120’481
-22’976
Value adjustments and provisions
for other business risks
Value adjustments for financial investments
-300
169’754
-4’812
382’455
2’358
4’856
-2’147
102’272
579
-2
3’784
397
133’214
-29’882
Total value adjustments
and provisions
258’058
-52’858
Value adjustments set off
directly against assets
-121’578
–
136’480
–
Reserves for general banking risks
80
-577
4’181
9’000
Other provisions
97’137
300
Situation
31.12.2014
12’313
Provisions for restructuring
Total value adjustments
and provisions as per balance sheet
New
provisions
Release
charged credited to
to P/L
P/L
9’000
9’560
155’898
-2’088
267’002
12’313
169’754
-4’812
382’455
–
–
–
–
-104’245
–
–
–
–
278’210
-23’600
73’537
BSI – BSI Ltd. financial statements
3. Presentation of share capital and shareholders with voting rights above 5%
31.12.2014
31.12.2013
Capital
with
dividend
rights
Total
nominal
value
CHF 1’000
CHF 1’000
CHF 1’000
CHF 1’000
1’840’000 18’400’000
1’840’000
1’840’000 18’400’000
1’840’000
Total
nominal
value
Number
of shares
Number
of shares
Capital
with
dividend
rights
A. Share capital
Share capital
31.12.2014
31.12.2013
Nominal Participation
CHF 1’000 percentage
Nominal Participation
CHF 1’000 percentage
B. Shareholders
Shareholders with voting rights
Participatie Maatschappij Graafschap
Holland N.V., Diemen (NL)1
1
1’840’000
100.00
1’840’000
100.00
Company directly and wholly owned by the Assicurazioni Generali Group, Trieste.
4. Statement of shareholders’ equity
CHF 1’000
Shareholders’ equity at 1 January 2014
Share capital
General legal reserve
Reserves for general banking risks
Balance brought forward
Net result for the previous year
Total shareholders’ equity (before appropriation of profit)
Release of reserves for general banking risks credited to P/L
Net result for the current year
Shareholders’ equity at 31 December 2014 (before appropriation of profit)
1’840’000
273’054
97’137
65’093
-737’121
1’538’163
-23’600
-21’068
1’493’495
of which:
Share capital
Reserves for general banking risks
Loss brought forward
Net result for the current year
1’840’000
73’537
-398’974
-21’068
81
BSI – BSI Ltd. financial statements
5. Pension liabilities
Commitments to Group pension institutions
All the Parent Bank’s staff, except for apprentices, interns,
volunteers and staff on fixed-term contracts for more than
three months or hired as consultants, are insured by the
“Fondazione di Previdenza BSI SA” (Foundation). As at 31
December 2014, there were 1,266 employees covered by
the pension scheme and 937 drawing pension benefits (as
at 31 December 2013, there were 1,291 employees covered and 927 drawing benefits). Staff on fixed-term contracts of more than three months or hired as consultants,
either on a fixed-term or open-ended basis, are enrolled
in an occupational pension scheme offered by a leading
insurer.
Costs incurred by the Bank for pension plans are included
in “Personnel expenses”.
Until 31 December 2014, the Foundation, which ensures
employees are enrolled in the mandatory occupational
pension schemes in accordance with the Swiss Federal
Law on occupational old-age, survivors’ and disability insurance (LPP) and the relevant ordinances, applied a defined-benefit plan, whereas the regulation introduced on
1 January 2015 establishes a defined-contribution one.
Under the new plan, the old-age pension is calculated by
applying the conversion rate to the assets accumulated by
the insured person at the date of retirement. Under both
the former and the new regulation, disability and survivors’
benefits are determined based on the final salary before
the insured event.
82
31.12.2014
31.12.2013
CHF 1’000
CHF 1’000
59’307
82’591
The “Fondo per prestazioni a carattere sociale di BSI SA”
(Fund) is represented by a complementary defined-contribution plan. The Fund insures all employees already
enrolled in the Foundation’s scheme whose annual fixed
insured salary is over four times the maximum simple AVS
old-age pension or whose initial contribution to the Foundation resulted in a surplus.
Both the Foundation and the Fund set the normal retirement age at 64.
As at 31 December 2014, the responsible actuary determined the vested benefits accounts and the actuarial provisions considering the regulatory changes concerning the
Foundation and the Fund effective from 1 January 2015 as
well as by applying the 2.75% technical rate and the LPP
2010 generational tables. Based on these actuarial estimates, as at 31 December 2014 the coverage ratio for the
Foundation was 101.9% (31 December 2013: coverage ratio 94.1%, technical rate 3%, LPP 2010 periodic tables)
and 108.1% for the Fund (31 December 2013: coverage
ratio 101.3%, technical rate 3%, LPP 2010 periodic tables).
In accordance with Article 57, paragraph 1 and 2 of the
Ordinance concerning occupational old-age, survivors’ and
disability insurance (OPP2), BSI SA commits to guarantee
the liquidity the Foundation and the Fund hold with BSI
Ltd. by establishing a collateral deposit.
BSI – BSI Ltd. financial statements
6. Other balance sheet information
Assets pledged as security for own liabilities
Due from the Bank’s bodies
Due from affiliated companies
Due to affiliated companies
–The conditions applied to loans to the Bank’s senior
management are the same as those applied to staff
loans. Due to their lower credit risk, employees receive
an interest rate reduction depending on the type of loan.
– All transactions with affiliated companies were carried
out at arm’s length. Revenues of CHF 2.4 million received from companies linked to the Generali Group are
recognised under “Result from commission and service
fee activities” (2013: CHF 2.2 million).
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
300’216
235’860
27.3
17’005
16’912
0.5
100’630
113’230
-11.1
30’546
34’073
-10.4
– BSI delegates the operation, development and maintenance of its IT systems as well as back-office activities to
the service company B-Source SA, which is 49%-owned.
These services are purchased at arm’s length and carried
out in accordance with the provisions of FINMA Circular 2008/7.
7. Other assets and other liabilities
31.12.2014
31.12.2013
Change
CHF 1’000
CHF 1’000
in %
Replacement values for derivatives from trading activities
669’885
426’971
56.9
Replacement values for derivatives from hedging activities
38’802
23’588
64.5
Netting account
42’058
10’655
294.7
Other assets
36’498
48’600
-24.9
787’243
509’814
54.4
Replacement values for derivatives from trading activities
654’082
408’269
60.2
Replacement values for derivatives from hedging activities
91’284
70’418
29.6
Other liabilities
66’532
55’283
20.3
811’898
533’970
52.0
Other assets
Total other assets
Other liabilities
Total other liabilities
83
BSI – BSI Ltd. financial statements
8. Results from trading operations
Foreign exchange and banknote transactions
Precious metal transactions
Securities transactions
Other trading operations
Total
2014
2013
Change
CHF 1’000
CHF 1’000
in %
66’921
72’045
-7.1
7’870
2’688
192.8
45’423
40’908
11.0
1’026
4’689
-78.1
121’240
120’330
0.8
9. Extraordinary income and expenses
Extraordinary income
2014
2013
CHF 1’000
CHF 1’000
38’965
42’831
Release of value adjustments and provisions
2’665
2’570
Net release of reserves for credit risks
2’147
2’758
Release of reserves for general banking risks
Gain on the sale of participations
23’600
9’352
36’849
Recovered losses
761
535
Profit from sale of fixed assets
230
31
Other extraordinary income
210
88
-2’407
-17’544
Extraordinary expenses
Creation of reserves for general banking risks
Losses on sale of participations
Total
84
-15’204
-2’407
-2’340
35’558
25’287
BSI – BSI Ltd. financial statements
Report of the statutory auditor on the financial statements
Ernst & Young Ltd
Route de Chancy 59
P.O. Box
CH-1213 Geneva
86
Phone
+41 58 286 56 56
Fax
+41 58 286 56 57
www.ey.com/ch
BSI – BSI Ltd. financial statements
87
BSI – Glossary
Glossary of selected terms
and abbreviations
ALM
Asset and liability management. Optimisation of assets
and liabilities in order to guarantee security, an appropriate risk level and liquidity.
Balance sheet
A document that shows the assets and liabilities of a company at a specific point in time.
Clearing system
Settlement system for payment transactions. The centralised system simplifies the settlement of accounts between
counterparties, allowing them to exchange and offset
debit and credit claims against each other. In the securities
sector, clearing systems help to streamline and speed up
the processing of stock market transactions.
BCBS
Basel Committee on Banking Supervision.
Commodities
Commodities are goods that can be readily exchanged for
units of other goods, e.g. metals, raw materials, plant
products, animal products and energy related products.
Commodities and future contracts on commodities (especially futures) are traded on commodities exchanges (e.g.
Chicago Board of Trade www.cbot.com).
Bearish
Negative expectation regarding the performance of financial products on a financial market (expectation of falling
prices).
Consolidation
The adjustment and combination of the financial statements of different (subsidiary) companies in the form of
consolidated group financial statements.
Benchmarking
Benchmarking means the comparison of a company’s performance with that of competitors. The performance indicator of competitors is called benchmark. The aim of this
kind of comparison is to identify scope for improvement
and competitive disadvantages, as well as to increase the
competitiveness of the company.
Corporate bonds
Corporate bonds are bonds issued by companies. They
are different from bonds issued by governments and sovereign entities.
BA
Federal Act on banks and savings banks of 8 November
1934.
Breakeven point
The point at which income equals expenses and thus neither a profit nor a loss is made. The profit zone (where income exceeds expenses) is above the breakeven point and
the loss zone (where expenses exceed income) is below it.
Buy-out
Purchase of a company or part of a company, where at least
a majority of the share capital is purchased.
Cash flow statement
Statement of all cash inflows and outflows during a business period. These are usually subdivided into cash flow
from (for) operating activities, from (for) investing activities, and from (for) financing activities. The balance of the
cash flow statement shows the change in liquidity during
the period under consideration.
CDB 08
Agreement on the Swiss banks’ code of conduct.
88
Credit rating
A measurement of the ability and willingness of a debtor
(e.g. bond issuer) to repay its debt. Specialised rating
agencies (e.g. Standard & Poor’s, Moody’s, etc.) assess the
creditworthiness of companies and publish their assessments in the form of ratings. Banks also have a rating system for borrowers.
Credit risk
The credit risk is the probability of a debtor being unable
to meet its financial obligations, i.e. to pay interest and
principal at face value on time. If the debtor’s credit rating
falls, the risk of default rises and this is reflected in a falling
bond price and a rising yield to maturity.
Custody
Custody refers to both the safekeeping and administration
of securities on behalf of clients. Custody includes the actual custody account management, while administration
focuses on tasks related to dividend and interest payments, equity-related transactions and share voting rights.
Depreciation / amortisation
Reduction in value of assets which is charged to the profit
and loss statement as an expense. A classic example is the
BSI – Glossary
depreciation in the value of an industrial machine. The value of a machine is depreciated on the basis of its estimated useful life.
acquired, such as client loyalty and employees’ expertise.
The term is also used to refer to the difference between
the earning power of a company and its current value.
Derivative financial instruments
Financial instruments whose price does not directly depend on the economic value, as is the case for stocks and
bonds, but is instead derived from the price of another
instrument, generally a financial instrument. Derivatives
exist on almost every type of financial instrument. There
are even derivatives on derivatives. Derivatives are (leveraged) marginal instruments and can thus be used for speculative purposes. They are very efficient for controlling a
portfolio’s risk.
Hedge
Operation aimed at eliminating a risk factor in a portfolio
(equities, currencies, interest rates, etc.). Derivatives (options, futures, etc.) are often used for this purpose, as they
allow a hedge to be made with less capital due to the leverage effect.
Duration
Measurement of sensitivity for the risk of a bond yield fluctuation. A negative correlation exists between interest
rates and bond prices. Investors should choose a duration
for their bonds in view of changes in interest rates. Duration changes are a function of the amount of interest, maturity and yield of the bond.
EBA
European Banking Authority.
ECB
European Central Bank.
FED
Federal Reserve System, the central banking system of the
United States.
FINMA
Swiss Financial Market Supervisory Authority.
Fixing
It represents the procedure through which a reference or
opening price is established. It is used for some assets,
above all where there is no market close price (such as currencies and interest rates), and for structured products
where the prices at which the product starts its life are set
(Fixing Date).
Future
Standardised contract that guarantees the delivery of an
underlying at a fixed price on a given date in the future.
Unlike forward transactions, which are entered into by two
specific parties, futures can be traded on stock exchanges.
Goodwill
Difference between the price paid for a company and the
fair value of the acquired company. Goodwill thus represents the intangible value of a company, which is not reported in the balance sheet as long as the company is not
Hedge funds
Hedge funds are investment funds that can use investment
strategies generally not permitted for investment funds
that comply with investment fund regulations (such as
UCITS). The strategies commonly used are arbitrage, long /
short positions, hedging and others. UCITS regulations are
gradually expanding so that investment funds can use
most of the strategies deployed by hedge funds.
Initial public offering (Going public)
Transformation of a privately held company into a public
company. When an IPO is launched, shares are offered
publicly for the first time, usually via a stock exchange. As
a result, both old and newly issued shares are made available for public trading.
Issue
Issue of new securities (e.g. bonds, shares) to investors. An
issue can take the form of a fixed-price placement or can
be sold at auction. Securities are often issued with the help
of an investment bank.
Joint Venture
A form of cooperation by several companies to achieve a
common aim. This can take the form of contractual collaboration or the creation of a company. Unlike mergers, joint
ventures do not require the participating companies to
give up their independence. Joint ventures are often set
up for a defined period of time only.
London Interbank Offered Rate (LIBOR)
Money market interest rate resulting from the average interest rate quoted by different banks in London. Due to
the considerable importance of London as a financial centre, the Libor is the most important money market rate and
the reference interest rate for the euro money market, or
for loans in euros and for many other financial products.
Long Position
Purchase of a position. This can involve securities of all
kinds, derivatives, commodities, etc.
89
BSI – Glossary
Mergers and acquisitions
A general term created by investment banks to describe
all forms of business combinations between companies. A
merger involves the actual merging of two companies to
form a new entity, for example by means of merger of
equals or consolidation. On the other hand, an acquisition
refers to the purchase and sale of companies, business
units or equity interests and their integration in the acquiring company.
Money market
Financial market for short-term liquidity and securities.
Maturities of less than a year are considered to be shortterm.
Mortgage
Loan backed by property, through a lien on the property
itself or on a mortgage note.
Outsourcing
Operation to move a service hitherto carried out by a company in-house to a new or existing external company. This
operation generally enables a company to convert fixed
costs to variable costs and to improve efficiency.
Over-the-counter (OTC)
A transaction carried out directly between two parties
without the involvement of a stock exchange or other financial intermediary. OTC transactions are thus more individualised than exchange-traded products.
Pricing
Definition of an equilibrium price both through models
(CAPM, Black&Scholes, APT) and through matching supply and demand.
Provisions
Liabilities created in the balance sheet through charges to
the profit and loss statement to cover future commitments,
the amount and timing of which are currently not absolutely certain. Unlike reserves, provisions are always related to
a specific transaction or event.
SBA
Swiss Bankers Association.
Short Position
Sale of a position. This can involve securities of all kinds,
derivatives, commodities, etc.
SNB
Swiss National Bank.
Spread
Difference between the price or yield of one or more financial instruments. For instance, it may reflect the difference
between the purchase and sale prices of two bonds or the
short-term (2 years) and long-term (10 years) yields of two
bonds.
Structured products
Structured products are financial instruments composed
of derivative and non-derivative financial instruments. This
special composition makes it possible to follow a specific
investment strategy.
Swap
Financial contract governing an exchange of payments. As
comparable obligations can be bought and sold, a swap is
similar to an exchange of obligations. In an interest rate
swap, fixed and variable interest-rate obligations are exchanged, while in a currency swap, obligations in one currency can be exchanged for obligations in another currency.
Underlying
It indicates the financial instrument that will be exchanged
on the basis of a derivative instrument (options, futures,
forwards, etc.).
Volatility
A measure of risk. It may be calculated on historical prices
(historical volatility) or on the basis of expectations through
the price of derivative instruments (implied volatility). As a
rule, high volatility reflects significant price fluctuations.
Warrant
Put and call options issued by financial institutions. Contrary to options traded on Eurex or other organised stock
exchanges, warrants come in many maturities, sizes and
strike prices set by the issuer. Often, it takes many warrants
to exercise a right, which is why their price is very low.
Securities
In general, a financial instrument that uses capital for financing debt (bonds) or equity (shares). This term is sometimes applied more broadly to any type of financial instrument, from structured products to investment funds.
In cooperation with IBF (Institute of Banking & Finance)
Wikifinance, University of Zurich.
90
BSI – Contacts
Contacts
Switzerland
Phone
Fax
BSI Ltd. – Head Office
Via Magatti 2, CH-6900 Lugano, www.bsibank.com
+41(0)58 809 31 11
+41(0)58 809 36 78
Patrimony 1873 SA – Affiliated company
Via Peri 21b, CH-6901 Lugano, www.patrimony1873.com
+41(0)91 912 72 72
+41(0)91 912 72 70
Bellinzona
BSI Ltd. – Branch
Viale Stazione 9, CH-6500 Bellinzona, www.bsibank.com
+41(0)58 809 65 11
+41(0)58 809 65 85
Chiasso
BSI Ltd. – Branch
Corso S. Gottardo 20, CH-6830 Chiasso, www.bsibank.com
+41(0)58 809 61 11
+41(0)58 809 62 39
Crans-Montana
BSI Ltd. – Agency
Immeuble Le Scandia, 7, Rue Centrale, CH-3963 Crans-Montana, www.bsibank.com
+41(0)58 809 19 16
+41(0)58 809 02 82
Geneva
BSI Ltd. – Branch
8, Boulevard du Théâtre, CH-1204 Geneva, www.bsibank.com
+41(0)58 809 12 12
+41(0)58 809 12 45
Lausanne
BSI Ltd. – Branch
3, Avenue de Rumine, CH-1005 Lausanne, www.bsibank.com
+41(0)58 809 41 41
+41(0)58 809 41 43
Locarno
BSI Ltd. – Branch
Piazza Grande 7, CH-6600 Locarno, www.bsibank.com
+41(0)58 809 63 54
+41(0)58 809 63 08
Zurich
BSI Ltd. – Branch
Schützengasse 31, CH-8001 Zurich, www.bsibank.com
+41(0)58 809 81 11
+41(0)58 809 83 68
Como
BSI Europe S.A. – Italian branch secondary office
Piazza Alessandro Volta 56, I-22100 Como, www.bsieruope.it
+39 02 722 22 71
+39 02 869 29 41
Genoa
EOS Servizi Fiduciari S.p.A. – Affiliate local unit
Via XX settembre 33, I-16121 Genova, www.eosfiduciaria.it
+39 010 553 10 06
+39 010 566 16 6
La Valletta
BSI Trust Corporation (Malta) Ltd. – Trust company
35, St. Zachary Street, VLT 1132 Malta, www.bsitrustma.bsibank.com
+356 212 25 817
+356 212 25 865
Luxembourg
BSI Europe S.A. – Bank
122, rue Adolphe Fischer, L-1521 Luxembourg,
www.bsieurope.com
+352 46 1566 1
+352 46 1566 227
BSI Fund Management SA – Affiliated company
44F, rue de la Vallée, L- 2661 Luxembourg, www.bsi-fundmanagement.com
+352 28 66 181
+352 26 45 96 24
BSI Europe S.A. – Italian branch
Via Paleocapa 5, I-20121 Milan, www.bsieurope.it
+39 02 722 22 71
+39 02 869 29 41
EOS Servizi Fiduciari S.p.A. – Affiliated company
Via Paleocapa 5, I-20121 Milan, www.eosfiduciaria.it
+39 02 636 96 21
+39 02 290 63 197
AEON Trust Società Italiana Trust Srl – Trust company
Via Paleocapa 5, I-20121 Milan
+39 02 636 96 201
+39 02 290 63 045
BSI Monaco SAM – Bank – Affiliated company
35 Boulevard Princesse Charlotte, MC-98000 Monaco, www.mc.bsibank.com
+377 92 16 89 89
+377 97 97 11 30
BSI Asset Managers SAM
Europe Résidence, Place des Moulins, MC-98000 Monaco, www.mc.bsibank.com
+377 97 97 39 79
+377 97 97 39 80
Oudart S.A. – Affiliated company
10A, rue de la Paix, 75002 Paris, France, www.oudart.com
+33 1 4286 2500
+33 1 4286 2525
Bahrain
BSI Ltd. – Branch
Bahrain Financial Harbour, West Tower, 14th Floor
P.O. Box 11321, Manama, Kingdom of Bahrain, www.bsibank.com
+973 17 155 155
+973 17 107 777
Istanbul
BSI Representative Office Turkey – Representative office
Suzer Plaza, Askerocagi cad. No: 6, Kat: 21,
Daire: 2101, Elmadag / 34367 Sisli, Istanbul,Turkey, www.bsibank.com
+90 (212) 244 90 42
+90 (212) 244 91 87
Hong Kong
BSI Ltd. – Branch
20th Floor, Two Exchange Square, Central, Hong Kong, www.bsibank.com
+852 3126 0088
+852 3126 0288
Singapore
BSI Bank (Singapore) Ltd. – Bank
7 Temasek Boulevard, #32-01 Suntec Tower One 038987, Singapore,
www.bsibank.com
+65 6521 1888
+65 6521 1605
Lugano
Europe
Milan
Monaco
Paris
Middle East
Asia
91
BSI – Contacts
Contacts
Latin America & Caribbean
Montevideo
Nassau
Panama
BSI Servicios SA – Representative office
Antonio D. Costa 3571, Piso 2, 11300 Montevideo, Uruguay
+598 2 628 93 22
+598 2 628 93 30
BSI Consultores SA – Affiliated company
Antonio D. Costa 3571, Piso 1, 11300 Montevideo, Uruguay
+598 2 628 53 00
+598 2 628 76 90
BSI Ltd. – Branch
Goodman’s Bay Corporate Centre,West Bay Street and
Sea View Drive, P.O. Box CB-10956, Nassau, Bahamas, www.bsibank.com
+1 242 502 22 17
+1 242 502 23 17
BSI Overseas (Bahamas) Ltd. – Bank
West Bay Street and Sea View Drive, P.O. Box N-7130, Nassau, Bahamas
www.bs.bsibank.com
+1 242 502 22 00
+1 242 502 23 00
BSI Bank (Panama) SA – Bank
Torre Generali, Piso 14, Ave. Samuel Lewis y Calle 54, Obarrio,
Apartado 0832-1637, WTC-PA, Panama, www.pa.bsibank.com
+507 366 9800 / 01
+507 264 3588
BSI (Panama) SA – Representative office
Torre Generali, Piso 14, Ave. Samuel Lewis y Calle 54, Obarrio,
Apartado 832-1637, WTC, Panama
+507 265 70 00
+507 264 35 88
BSI Investment Advisors (Panama) Inc. – Affiliated company
Torre Generali, Piso 14, Ave. Samuel Lewis y Calle 54, Obarrio,
Apartado 832-1637, WTC, Panama
+507 366 9800 / 01
+33 1 4286 2525
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92

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