2009 - Willkommen bei der St.Galler Kantonalbank · Following the severe recession of 2009, the global economy found its way back to growth in 2010. Driven by govern- ... Dr. Thomas

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Annual Review 2010Annual Review 2010

Hyposwiss Private Bank Ltd.

Bahnhofstrasse/Schützengasse 4

P.O. Box 3180, CH-8021 Zurich

T +41 44 214 31 11, F +41 44 211 52 23

[email protected], www.hyposwiss.ch

Picture concept in this Annual Review

In our Annual Review we give an account of our per-formance. Our clients, staff, owners and business partners expect clear statements, audited figures and in-depth analyses. We meet these expectations, directly and honestly. And with five succinct, pithy statements we underline our commitment to our values as a traditional Swiss private bank – accuracy, trustworthiness and security. That’s also how we act on your behalf: thinking in a straightforward yet entrepreneurial way, and with a convincing performance ethos.

Editorial

Review of the year

Bank governing bodies

Organisation

Key figures 2010

Finance sectionFinance section

Overview

Balance sheet details

Income statement details

Personnel

Income statement 2010

Balance sheet as at 31 December 2010

Appropriation of disposable profit

Cash flow statement

Auditor’s report

3

4

5

7

9

11

12

14

16

17

18

21

22

23

ContentsContents

“We treat your money as if it were ours. Because it is yours.”

Expect the expected

Hyposwiss Zurich | Annual Review 2010Hyposwiss Zurich | Annual Review 2010 3

Dear Clients

Ladies and Gentlemen

2010 was a turbulent year, but Hyposwiss Private Bank still

succeeded in building on the income figures of the previous

year. We consider this a success, since the financial markets

remained volatile. After a few spectacular months at the

start of the year, the financial markets became susceptible

to setbacks. “Directionless”, to use stock market speak. This

trend was dominant in Switzerland in particular. In other

industrialized countries such as Germany and the US, equity

indices ended the year in clearly positive territory thanks to

a strong surge in the fourth quarter. Not to mention emerg-

ing markets such as Malaysia and Taiwan, both of which

enjoyed a spectacular year. Regional differences were quite

simply enormous. “Uneven”, as market jargon would have it.

Hyposwiss Private Bank maintained a stable flight path

amidst this turbulence. In a difficult interest rate environ-

ment, it increased operating income by 3.6 % to CHF 77.6

million. At CHF 21.7 million, net income broadly matched

the previous year’s figure. The unpredictable market envi-

ronment kept clients on a cautious footing. Accordingly, the

equity market activity of our clients remained low, although

a slight increase was evident in the second half of the year.

A notable positive development was the net new money

inflow of CHF 0.6 billion, an impressive rise of 7.6 %. This

provides further testimony of the confidence placed in us

by our clients.

The Investment Center launched three new funds in this

difficult financial year: two bond funds in CHF and EUR

and – in keeping with the market environment – the

conservatively structured Multi Defendo umbrella fund.

In the middle of 2010, we launched an advertising cam-

paign as part of a multi-media marketing strategy for the

first time in our history. Based around the core concept of

“Taking the excitement out of banking”, the campaign

conveys how the traditional values of a private bank –

diligence, trustworthiness and security – constitute our

guiding principle. Our commitment to these values is

summed up succinctly and neatly in the new slogan:

“Hyposwiss – expect the expected”. In addition, the campaign

shows the confident way in which we are positioning our-

selves in the Swiss private banking industry – an industry

which is having to redefine itself. We are also developing

and challenging our staff. It is therefore only logical that

we have made long-standing staff member Andreas Moser

our new Head of Private Banking and a member of the Ex-

ecutive Board. His track record and wide experience of the

private banking industry will enable him to drive forward

growth in our core business. This new appointment forms

part of a wider generational handover. At the end of the

year, we retired Alexander Iten and Anton Schaad from the

Executive Board. We would like to thank them for the dedi-

cation they have shown as Head of Private Banking and

Head of Products respectively. Both will continue to put

their expertise at the disposal of the bank, to the benefit of

all our clients.

The current year will bring fresh challenges. In the late sum-

mer we will be moving to our new premises in the “Apollo”

office building in Zurich. Designed by the Zurich architect

Theo Hotz, this office building received an award from the

City of Zurich for the high quality of its architecture. Its

distinguishing characteristics include a light, window-

dominated frontage and clean form lines. Transparency and

stringency – an appropriate fit. We will bring our two loca-

tions in Zurich together under one roof at the building.

The new location will also provide more space for our clients

and employees.

Finally, on behalf of all our staff, I would like to thank you

our clients, for the trust you continue to place in us. Our

continuing goal is to provide you the very best financial

advice and service. It is your right to “expect the expected”.

Roland Ledergerber Siegfried R. Peyer

Chairman CEO

EditorialEditorial

4 Hyposwiss Zurich | Annual Review 2010Hyposwiss Zurich | Annual Review 2010

Following the severe recession of 2009, the global economy

found its way back to growth in 2010. Driven by govern-

ment aid packages and the very expansionary monetary

policies pursued by all the central banks – along with high

levels of demand in Asia – global trade levels recovered

rapidly. It was to be expected, however, that the above-

average growth rates of the first half of 2010 would not be

sustainable. From the middle of the year onwards, eco-

nomic growth eased off sharply, especially in the USA. The

debt problems experienced by a number of industrialized

countries were another factor influencing the financial

markets. These repeatedly impacted on sentiment, bringing

exchange rate developments increasingly into the central

banks’ focus. With its interventions in the currency markets,

the Swiss National Bank was one of the front-runners in

this respect. The net effect was a sharp see-sawing of prices

on the equity markets. On balance, equities made little

progress over the year for the Swiss investor. With interest

rates falling further, bonds performed well over the year.

The most striking development, however, was the meteoric

rise in the price of gold.

The performance of our discretionary mandates in 2010

was substantially affected by currency developments. In

mandates whose reference currency is the Swiss franc,

gains on equities and bonds were offset by the apprecia-

tion of the franc and the associated losses on foreign

currencies, with the overall result that no great increase in

value was possible. On the other hand, mandates with

the euro as reference currency benefited from its weak-

ness. These closed the year with handsome gains, which in

the higher-risk profiles amounted to more than 10 %.

Overall, we can also look back on a good investment year

with further performance gains for the funds of the

St.Galler Kantonalbank Group, which are likewise managed

by Hyposwiss Zurich. Three new funds were launched in

2010. The bond funds in francs and euros will be used

as portfolio building blocks in the fund mandates. In Sep-

tember, a new umbrella fund was launched under the

name Multi Defendo, which has a conservative risk profile.

Roland Ledergerber

Chairman

Board of DirectorsBoard of Directors

Dr. Rico Jenny

Vice-Chairman

Theodor Horat

Stefan Klinger Yves Burrus Jean-Luc de Buman

Review of the YearReview of the Year


Board of DirectorsBoard of Directors Expiry

Roland Ledergerber, St. Gallen, Chairman 2013

Dr. Rico Jenny, Erlenbach, Vice-Chairman 2011

Theodor Horat, Obfelden 2013

Stefan Klinger, St. Gallen 2013

Yves Burrus, Genf 2011

Jean-Luc de Buman, Cully 2013

Executive BoardExecutive Board

Siegfried R. Peyer, CEO

Dr. Thomas Stucki, Deputy CEO, Director

Andreas Moser, Director

Stefan Betschart, Director

AuditorsAuditors

PricewaterhouseCoopers AG

Members of senior managementMembers of senior management

Managing Directors

Hans Bucher, Markus Holenstein, Alexander Iten, Caterina

Minelle, René Wyss

Executive Directors

Gabriele Bosshard, Hansjürg E. Christen, Oliver Egli, Kurt

Frischknecht, Marcel Jörger, Dr. Milan Kormanak, Michael

Lenhardt, Rolf Müller, Daniel Reichmuth, Alex Rinder-

knecht, Alfred Rüttimann, Daniel Schibli, Alfred Steininger,

Giuseppe Stella, Günter Stessel, Markus Straubinger,

Heinz von Dach

Directors

Hans-Ulrich Abt, Nicandro Barile, Julia Barreca, Ricco

Brusch, Stella Dombrowsky, Philipp Dubin, Philipp Ess,

Manuel Graf, Margrith Goydke, Yves Guenot, Christian

Gwerder, Birgit Heim, Caroline Hilb Paraskevopoulos, Roger

P. Hugentobler, Doris Ingold, Karl Keller, Johannes Kobelt,

Adrian Koller, Ueli Lott, Oliver Lyhs, Marco Magnani, Guido

Malgaroli, Luca Marchetti, Urs Merz, Sonja Pellegrino

Isenegger, Pascal Schmid, Urs Schneider, Stefan Spörndli,

Roger Stalder, Patrick Unternährer, Anneliese Weber,

Konstantin Zalad

Executive BoardExecutive Board

Siegfried R. Peyer

CEO

Andreas Moser

Private Banking

Stefan Betschart

Services & Logistics

Dr. Thomas Stucki

Investment Center

Bank governing bodies Bank governing bodies as at January 1 2011as at January 1 2011

Expect the expected

“The difference between banking and gambling is a good night’s sleep.”


* Member of the Executive Board

** Member of the Extended Executive Board

*** Accounting, Controlling, Human Resources,

Marketing / Communications, Corporate Development

MD: Managing Director

ED: Executive Director

DI: Director

AD: Associate Director

Investment Center

Dr. Thomas Stucki, MD *(Deputy: Marcel Jörger, ED)

Investment Strategy

Caroline Hilb Paraskevopoulos, DI

Sales Support

Christian Gwerder, DI

Portfolio Management

Marcel Jörger, ED **

Switzerland / Germany / Austria

Andreas Moser, MD *, a.i.

Central & Eastern Europe /Middle East

Konstantin Zalad, DI, a.i.

External Asset Manager

Oliver Egli, ED **

Latin America / Iberia

Michael Lenhardt, ED **

Senior Client Partners

Caterina Minelle, MD **

Equity & Fund Analysis

Alfred Steininger, ED

Services & Logistics

Stefan Betschart, MD *(Deputy: Giuseppe Stella, ED)

Loans

Alex Rinderknecht, ED **

Taxes

Guido Malgaroli, DI

Cash Desk

Philippe Bertholet, AD

Private Banking

Andreas Moser, MD *(Deputy: Siegfried R. Peyer, CEO)

Internal Services

Johannes Kobelt, DI

Business & IT Services

Giuseppe Stella, ED **

Executive Board

Siegfried R. Peyer, CEO *(Deputy: Dr. Thomas Stucki, MD)

Assistant to the CEO

Regula Schumacher, AD

Legal&Compliance, Risk

Daniel Schibli, ED **

Organisation as at January 1 2011as at January 1 2011

Business Management ***

Hansjürg E. Christen, ED **

Hedge Funds

Stephen Rufino(Location Geneva)

“Luck shouldn’t be part of your portfolio.”

Expect the expected


Key financial figures 2010Key financial figures 2010

KeyKey figures 2010figures 2010in CHF 1 000 20102010 2009 2008

Net interest income 11 534 11 628 20 962

Net commission and fee income 50 105 52 285 70 479

Net income from trading positions 9 429 9 268 8 146

Other ordinary income 6 494 1 705 1 080

Operating income 77 562 74 886 100 667

Personnel expenses 34 286 32 523 33 316

Other operating expenses 19 023 18 540 15 148

Total operating expenses 53 309 51 063 48 463

Gross profit 24 253 23 823 52 204

Depreciation of fixed assets 818 1 145 1 279

Value adjustments, provisions and losses 67 237 7 679

Operating profit 23 368 22 441 43 246

Extraordinary income 4 344 4 956 843

Taxes 6 030 5 808 9 047

Net profit for the year 21 682 21 589 35 042

Shareholders’ equity (after appropriation of profit) 112 510 110 828 109 238

Assets under management (incl. double counts) 9 602 254 9 051 175 9 159 648

Cost/income ratio (%) 69.8 68.9 48.80

Employees (number of FTEs) 162 175 171

“Global: Yes. Players: No.”

Expect the expected


Overall, the 2010 financial year developed satisfactorily,

but the financial crisis of 2008 and the associated uncer-

tainty in the markets continue to leave their marks. None-

theless, operating income improved to CHF 77.6 million

from CHF 74.9 million the previous year, an increase

of 3.6 %. Operating expenses rose by CHF 2.2 million to

CHF 53.3 million, while gross profit increased by 1.8 %

to CHF 24.3 million.

Depreciation of fixed assets experienced a slight year-on-

year decline to CHF 0.8 million, while the value adjust-

ments, provisions and losses item contains CHF 0.1 million

of negative settlement differences.

The extraordinary income contains the sum of CHF 4.3 mil-

lion resulting from the reversal of value adjustments no

longer required. The net income figure of CHF 21.7 million

for the year permits the distribution of a dividend of

CHF 20.0 million to our shareholder.

At 70 %, the cost/income ratio including depreciation of

tangible assets is around the same level as the previous year.

At the end of the financial year, the balance sheet total of

Hyposwiss Private Bank amounted to CHF 1 926.9 million.

This equates to an increase of CHF 104.3 million, or 5.7 %

compared with the prior year figure of CHF 1 822.6 million.

The bank’s reported shareholders’ equity after the appro-

priation of profit amounted to CHF 112.5 million,

resulting in a self-financing level of 5.9 %.

Assets under management increased over the course of

the financial year from CHF 9.1 billion to CHF 9.6 billion.

Of this figure, CHF 636.7 million is accounted for by

the investment funds managed by the Investment Center

of Hyposwiss Private Bank. A net new money inflow of CHF

618 million was recorded during the financial year. One cli-

ent opened a custody account portfolio in December,

thereby generating some CHF 1.2 billion of new money for

the bank. In keeping with FINMA’s bank accounting

and financial reporting accounting guidelines (RRV/BAG),

however, this sum was classified as custody assets and

not included in the calculation of client assets. It is there-

fore not contained in the net new money figure.

Finance SectionFinance SectionOverviewOverview


Assets Assets

Total loans to customers, namely amounts due from cus-

tomers and mortgage loans, rose from CHF 520.0 million

to CHF 871.6 million. Amounts due from customers are

largely secured by collateral loan business or are covered

by pledged fiduciary investments.

In detail, fixed advances and loans increased from

CHF 256.7 million to CHF 582.5 million. This pleasing in-

crease is attributable to a number of large individual

collateralized loans. Current account receivables had de-

clined by CHF 11.9 million to CHF 22.4 million as at the

end of December. Despite the continued backdrop of fierce

competition for Swiss real estate financing,

the portfolio of mortgages increased from CHF 229.1 million

to CHF 266.7 million.

The bank primarily holds its financial investments as a

liquidity reserve. These amounted to CHF 9.2 million as at

the balance sheet date, a decline of CHF 0.8 million on

the previous year.

In the reporting year, investments were already being

channelled into fixed assets in view of the bank’s planned

move into a new office building in 2011. These increased

from CHF 1.3 million to CHF 2.7 million.

Balance sheet detailsBalance sheet details

Due from banks

992 811

Cash and cash equivalents

22 680

0.5 %

Loans to customers

871 643

Mortgages

266 719 30.6 %

Current account receivables

22 416 2.6 %

Fixed advances and loans

582 50866.8 %

Securities trading portfolio, financial investments and participations

9 294

1.6 %

51.5 %

45.2 %

1.2 %Other assets

30 489

Of which loans to customersOf which loans to customersTotal 871 643 (in CHF 1 000)

AssetsAssetsBalance sheet total 1 926 917 (in CHF 1 000)


Liabilities Liabilities

Customer deposits entrusted to Hyposwiss Private Bank

amounted to CHF 1.5 billion as at the end of the reporting

year. The largest item was “Other amounts due to cus-

tomers at sight”, at CHF 1.4 billion. Amounts due to cus-

tomers in savings and deposit accounts amounted to CHF

44.4 million at the year end. A further CHF 151.5 million

was attributable to fixed-term deposits with our bank.

As a consequence of the higher client lending compared

to the previous year, amounts due to banks rose by

CHF 65.3 million to CHF 198.4 million. Of this sum,

CHF 183.5 million was assumed by our parent company

for refinancing purposes.

The share capital remained unchanged at CHF 26.0 million,

while disclosed reserves after appropriation of profit

amounted to CHF 84.5 million.

Other amounts due to customers at sight

1 352 98887.3 %

Medium-term notes

2300.0 %9.8 %

Due to customers in savings and deposit accounts

44 449

Time deposits

151 460

2.9 %

Customer deposits

1 549 127

LiabilitiesLiabilitiesBalance sheet total 1 926 917 (in CHF 1 000)

Due to banks

198 39810.3 %

Other liabilities

46 882

Shareholders’ equity

132 510 6.9 %

80.4 %

Of which customer depositsOf which customer depositsTotal 1 549 127 (in CHF 1 000)

2.4 %


Income statement detailsIncome statement details

Taxes

6 030 7.4 %

41.9 %

Net profit

21 682

Personnel expenses

34 286

26.5 %

Net commission and fee income

50 10561.2 %

Extraordinary income

4 344

Net interest income

11 53414.1 %

Net other ordinary income

6 494 7.9 %

5.3 %

Depreciation and provisions

885 1.1 %

ExpensesExpensesTotal 81 906 (in CHF 1 000)

IncomeIncomeTotal 81 906 (in CHF 1 000)

Other operating expenses

19 023 23.2 %

Net income from trading position

9 429 11.5 %


Net interest income in the reporting year declined by the

negligible amount of CHF 0.1 million to CHF 11.5 million.

Income was boosted by the growth in business volume,

with loans to customers increasing strongly. Mortgage

interest showed a year-on-year decline of CHF 0.1 million

to CHF 5.9 million.

Income from commission and fees was once again over-

shadowed by the repercussions of the severe financial crisis

that shook the markets some two years ago. Against this

backdrop, net commission and fee income in the reporting

year came in at CHF 50.1 million, or 4.2 % below the prior-

year figure. It should be noted, however, that the services

provided by the Investment Center for the parent company

were reported in this income figure in 2009, and amounted

to CHF 3.8 million. Owing to the restructuring of the Service

Level Agreement (SLA), this item is being reported under

“Net other ordinary income” from 2010 onwards. Income

from the deposit business came in at a healthy CHF 15.5

million, a year-on-year rise of 16.0 %. At CHF 17.1 million,

income from the securities and investment activities was

up only modestly (+0.8 %).

Even though clients kept their holdings of fiduciary invest-

ments at a very high level, commission income declined

by CHF 1.8 million year-on-year to CHF 3 million. Due to

the very low prevailing interest rate environment, an

increasing number of special terms were granted to ensure

that the interest income earned covered the commission

charged. These kept interest income to a minimum.

Income from trading positions, which is largely dictated

by foreign exchange trading, came in at CHF 9.4 million,

a very slight year-on-year rise.

The significant rise in “Net other ordinary income” to

CHF 6.5 million is a consequence of the SLA with the parent

company as mentioned above.

At CHF 34.3 million, personnel expenses were up CHF 1.8

million on the previous year, or 5.4 %. This increase should

be viewed in the context of last year’s complete out-

sourcing of the securities processing, payment transactions

and trading businesses to the parent company.

At CHF 19.0 million, other operating expenses were up by

CHF 0.5 million or 2.6 % on the previous year.

Expenses of CHF 0.1 million from settlement differences

were included under value adjustments, provisions and

losses.

Extraordinary income contains the sum of CHF 4.3 million

for the reversal of value adjustments that are no longer

required.


PersonnelPersonnel

Promotions

As at 1 January 2011, the following promotions were made

at senior management level:

Members of the Extended Executive Board

Hansjürg E. Christen, Oliver Egli, Marcel Jörger,

Michael Lenhardt, Alex Rinderknecht, Daniel Schibli,

Giuseppe Stella

Managing Director

Markus Holenstein, Caterina Minelle,

Andreas Moser, René Wyss

Executive Director

Kurt Frischknecht, Daniel Reichmuth,

Alex Rinderknecht

Director

Marco Magnani, Guido Malgaroli,

Sonja Pellegrino Isenegger, Pascal Schmid,

Patrick Unternährer

Compensation model

In the spring of 2009, the bank’s compensation system was

enhanced with a long-term participation program for the

Executive Board and key members of senior management

(Long Term Incentive Plan, LTI). As a rule, participants will

be awarded a number of options each year as part of their

variable compensation, with the actual number of options

awarded being at the discretion of the Board of Directors.

The options cannot be exercised for four years from the

date of receipt (i.e. a vesting period of four years applies),

but may then be exercised over the following six years.

The aim of the program is to retain the services of key staff

members over the long term and to promote entrepreneur-

ial conduct, as the LTI enables participants in the plan to

share in the company’s success by exercising their options,

provided they have stayed with the firm and the bank’s

enterprise value has increased.

The basis for determining the value of the options will be

an annual valuation of the bank by a recognized manage-

ment consultancy firm. The options issued in 2010, which

may be freely exercised in 2014, currently have a slightly

positive fair value, and we are accordingly creating a pro-

vision amounting to CHF 0.1 million.

The options issued in 2009 still have no positive fair value.

In addition to this program, a proportion of the variable

compensation (members of senior management 25 %,

Associate Directors 20 %) has been paid in the form of

shares in St. Galler Kantonalbank ever since the bank

became part of St. Galler Kantonalbank Group. These shares

are subject to a vesting period of three years.

Zurich, February 24, 2011

For the Board of Directors: For the Executive Board:

Roland Ledergerber, Chairman Siegfried R. Peyer, CEO


Income statement 2010Income statement 2010

Income and expenses from ordinary banking businessIncome and expenses from ordinary banking businessin CHF 1 000 20102010 2009

Interest and discount income 16 303 17 099

Interest and dividend income on trading position 3 1

Interest and discount income on financial investment 224 287

Interest expenses 4 996 5 759

Net interest income 11 534 11 628

Commission income from lending activities 140 219

Commission income from securities and investment activities 53 885 55 045

Commission income from other service fee activities 609 525

Commission expenses 4 529 3 504

Net commission and fee income 50 105 52 285

Income from trading positions 9 429 9 268

Income from disposal of financial investments 0 0

Participation income 14 17

Other ordinary income 6 483 1 688

Other ordinary expenses 3 0

Net other ordinary income 6 494 1 705

Operating income 77 562 74 886

Personnel expenses 34 286 32 523

Other operating expenses 19 023 18 540

Total operating expenses 53 309 51 063

Gross profit 24 253 23 823

Depreciation and amortisation of fixed assets 818 1 145

Value adjustments, provisions and losses 67 237

Subtotal 23 368 22 441

Extraordinary income 4 344 4 956

Taxes 6 030 5 808

Net profit for the year 21 682 21 589


Balance sheet as at 31 December 2010Balance sheet as at 31 December 2010 before appropriation of profitbefore appropriation of profit

Assets Assets in CHF 1 000 20102010 2009

Cash and cash equivalents 22 680 10 810

Due from banks 992 811 1 255 260

Due from customers 604 924 290 978

Mortgages 266 719 229 072

Securities trading portfolios 59 61

Financial investments 9 193 10 005

Participations 42 42

Fixed assets 5 546 4 575

Accrued income and prepaid expenses 3 703 10 790

Other assets 21 240 10 997

Total assets 1 926 917 1 822 590

Total receivables from group companies and qualified participants

827 332 1 134 061


LiabilitiesLiabilitiesin CHF 1 000 20102010 2009

Liabilities from money market securities 706 268

Due to banks 198 398 133 130

Due to customers in savings and deposit accounts 44 449 37 034

Other amounts due to customers 1 504 448 1 480 581

Medium-term notes 230 370

Accrued expenses and deferred income 15 428 10 622

Other liabilities 21 574 15 441

Value adjustments and provisions 9 175 14 317

Reserves for general banking risks 1 700 1 700

Share capital 26 000 26 000

General statutory reserves 45 500 45 500

Other reserves 37 000 35 000

Retained earnings brought forward 627 1 038


Total liabilities 1 926 917 1 822 590

Total liabilities to group companies and qualified participants

195 116 126 657

Off-balance-sheet transactions

Contingent liabilities 36 280 48 324

Irrevocable commitments 6 013 8 116

Derivative instruments 501 147 311 130

positive replacement values 13 768 7 914

negative replacement values 12 786 8 367

Fiduciary transactions 2 078 631 1 930 305

“Never trust a banker who says, ‘Trust me.’”

Expect the expected


Appropriation of disposable profitAppropriation of disposable profit

Appropriation of disposable profit Appropriation of disposable profit in CHF 1 000 20102010 2009


Retained earnings brought forward from previous year 628 1039

Profit at the disposal of the AGM 22 310 22 628

The Board of Directors proposes the following appropriation:

a) Distribution of a dividend 20 000 20 000

b) Allocation to the general statutory reserve 0 0

c) Allocation to the other reserves 2 000 2 000

d) Balance brought forward to new account 310 628

Total 22 310 22 628

Following authorisation of this proposal, total shareholders’ equity is as follows:

Share capital 26 000 26 000

General legal reserve 45 500 45 500

Other reserves 39 000 37 000

Reserves for general banking risks 1 700 1 700

Retained earnings brought forward to new account 310 628

Total 112 510 110 828


Cash flow statement 2010Cash flow statement 2010

in CHF 1 000 20102010 2009

Source Application Balance Balance Source Application Balance


Depreciation on fixed assets 818 1 145

Value adjustments and provisions 5 143 5 612

Reserves for general banking risks

Accrued income and prepaid expenses 7 087 4 676

Accrued expenses and deferred income 4 806 4 701

Dividend in the previous year 20 000 30 000

Cash flow from operating activities (internal financing)

34 394 25 143 9 251 22 734 44 989 -22 255

Participations

Fixed assets 1 789 33

Cash flow from fixed asset operations 0 1 789 -1 789 0 33 -33

Liabilities from money market securities 438 16

Due to banks 65 268 75 762

Due from money markets instruments

Due from banks 262 449 709 567

Securities trading portfolios 2 42

Interbank transactions 328 157 0 328 157 42 785 345 -785 303

Medium-term notes 140 565

Due to customers in savings and deposit accounts

7 415 12 056

Other amounts due to customers 23 867 678 405

Mortgages 37 647 28 876

Due from customers 0 313 946 127 912

Customer business 31 282 351 733 -320 451 818 373 29 441 788 932

Financial investments 812 1 995

Capital market business 812 0 812 1 995 0 1 995

Other assets 10 243 17 090

Other liabilities 6 133 0 9 075

Other balance sheet items 6 133 10 243 -4 110 17 090 9 075 8 015

Cash flow from banking business 366 384 361 976 4 408 837 500 823 861 13 639

Liquid assets 11 870 -11 870 8 649 8 649

Total source of funds 400 778 868 883

Total application of funds 400 778 868 883


Auditor’s reportAuditor’s report

Auditor’s report on the annual accounts

In our capacity as auditor we have audited the annual

accounts of Hyposwiss Private Bank Ltd, consisting of bal-

ance sheet, income statement, cash flow statement and

notes to the accounts (pages 17 to 39 of the annual

report), for the financial year ended 31 December 2010.

Responsibility of the Board of DirectorsResponsibility of the Board of Directors

The Board of Directors is responsible for preparing the an-

nual accounts in compliance with the legal requirements

and articles of association. This responsibility includes the

design, implementation and upkeep of an internal control

system to allow the preparation of annual accounts that

are free of significant false statements as a result of viola-

tions or errors. Furthermore, the Board of Directors is re-

sponsible for the selection and application of appropriate

accounting methods and for making appropriate estimates.

Auditor’s responsibilityAuditor’s responsibility

Our responsibility is to issue an audit opinion on the annu-

al accounts based on our audit. We conducted our audit

in compliance with Swiss law and with the Swiss auditing

standard. On the basis of these standards, audits are to

be planned and performed in such a way that material

misstatements in the annual accounts are reasonably cer-

tain to be recognised.

An audit includes the performance of audit activities to

obtain audit evidence for the valuations contained in

the annual accounts and other information. The choice of

audit activities is a matter for the dutiful discretion of

the auditor. This incorporates an assessment of the risks of

significant false information in the annual accounts as

a result of violations or errors. In assessing these risks, the

auditor takes into account the internal control system

(to the extent that it is significant for the preparation of

the annual accounts) in order to define the appropriate

audit activities for the circumstances, but not, however, to

issue an audit opinion on the effectiveness of the internal

control system. The audit also incorporates an assessment

of the appropriateness of the accounting methods used,

the plausibility of the estimates made and an evaluation

of the overall picture presented by the annual accounts.

We are of the view that the audit evidence obtained by us

provides a sufficient and appropriate basis for our audit

opinion.

Audit opinionAudit opinion

In our view, the annual accounts for the financial year

ended 31 December 2010 are in compliance with Swiss law

and the articles of association.

Reporting due to additional statutory regulations

We confirm that we meet the statutory requirement in

respect of authorisation according to the Federal Act on

Licensing and Oversight of Auditors (Revisionsaufsichts-

gesetz, RAG) and independence (Article 728 SCO and Arti-

cle 11 RAG) and that there are no circumstances inconsist-

ent with our independence.

In compliance with Article 728a (1) figure 3 SCO and

the Swiss Audit Standard 890 we confirm that an internal

control system exists for the preparation of the annual

accounts that has been designed in accordance with the

guidelines from the Board of Directors.

We further confirm that the application for the appropria-

tion of net retained profits is in compliance with Swiss

law and the articles of association and recommend that

the annual accounts be adopted.

Zurich, February 24, 2011

PricewaterhouseCoopers AG

Beat Rütsche Thomas Kleger

Audit specialist Audit specialist

Chief Auditor

The following Auditor’s report refers to the 2010 annual report, which is available from The following Auditor’s report refers to the 2010 annual report, which is available from

Hyposwiss Private Bank Ltd.Hyposwiss Private Bank Ltd.

Publishing details

© 2010 Hyposwiss Private Bank Ltd.

Concept and text

IRF Communications AG, Zurich

Design

TGG Hafen Senn Stieger, St. Gallen

Image campaign motifs

walker Werbeagentur

Hyposwiss Private Bank Ltd.Bahnhofstrasse/Schützengasse 4 P.O. Box 3180, CH-8021 Zurich, SwitzerlandT +41 44 214 31 11, F +41 44 211 52 [email protected], www.hyposwiss.ch

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