PRESS RELEASE (N° 116)

Bondpartners SA, Lausanne: half-year accounts affected by exchange rates despite stable revenues

BPL sustained an accounting net loss of CHF 1,8m for the first six months of the year under review, mainly reflecting the cap scrapping on euro in January. Apart from the adverse effect caused by the Swiss franc noticeable rise, revenues are in line with those of last year and the balance sheet continues to show extremely strong figures which confirm the Company’s resilience.

The first half of 2015 was characterized by lower trading volumes, nevertheless accompanied by significantly higher operating margins, while liquidity shortage, which has been affecting bond markets, continued and volatility returned to both debentures and shares.
Economic growth slowed down in a number of emerging countries, and accelerated in developed ones. The events which took place in Greece as well as China’s economy rebalancing, among other hazards, governed the markets and have momentarily placed further stress.

The half-year individual accounts are presented for the first time according to the banking accounting principles issued by the supervisory authority (FINMA).

The parent company incurred a net accounting loss of CHF 1.8 million (vs a gain of CHF 1,7m for the first 6 months of 2014)

Still when compared with the first half of 2014, the statutory balance sheet total has decreased by 22% to CHF 136.89 million, mainly due to the decline of pending/overlapping transactions and the reduction of current sight accounts due to non-banking customers.

The balance sheet was composed by 93% of current assets (stable figure compared with previous periods), namely cash and due from banks (CHF 60.36 million -32%), due from customers (CHF 13.24 million -34%) and investment/trading portfolios except own shares (CHF 53.68 million -7%).$

Total liabilities nearly amounted to CHF 55.82 million (-39%). Total commitments, irrespective of their maturity, are covered 2.3x by the current assets.

With regard to individual shareholders’ equity, its total came to CHF 72.14 million (-4%) and represents 53% of the total balance sheet after deduction of the reserve for own shares and the provision for latent taxes. Thereupon, the reserve for general banking risks reached CHF 34.76 million (-2%) and other reserves amounted to CHF 33.8 million (+3%). Open reserves and capital per share totalled therefore CHF 1.310,-.

The capital adequacy of basic individual shareholders’ equity (solvability ratio/Tier 1) reached 37.8%, percentage in line with previous figures. Required capital is covered 5 times by eligible capital.

In terms of profit and loss accounts, global gross income from interest differential business posted CHF 1.24 million (-4%) and income from commission business came to CHF 1.08 million (+15%). Income on securities transactions (dealing and financial investments) as well as valuation of own-account equities have proceeded 9% to CHF 3.61 million, while foreign exchange result showed a pronounced negative result of CHF -4.20 million (vs a gain of CHF 0.27m for the first half of 2014). Finally, operating expenses remained under control at CHF 3.33 million (-3%).

Of course, the performance of the first half of 2015 was strongly dominated by the BNS’ decision to abandon the floor rate against euro and to intensify its policy regarding negative interest rates. The semester was also significantly influenced by the ECB’s quantitative easing program as well as by the momentum and conditions of the FED’s key rates raising. Therefore, except for geopolitical events which have continued to cause disturbances since the beginning of the year and despite the continuation of the Greek tragedy, the central banks’ interventionism has have and will surely still have wide impacts on exchange rate issues as well as repercussions on BPL’s investment positions and transactional activities. Bonds and shares markets have experienced a recrudescence of volatility and revenue forecasts are then difficult to make for the rest of the financial year. These are again the circumstances in which the substantial reserves available to the Company are greatly valued.

Bondpartners’ bearer shares were delisted from SIX’s “domestic standard” segment on July 8th 2015 and duly transferred for quotation to BEKB’s OTC-X trading. Furthermore three new managers have been appointed by the Board.

Nota Bene: for detailed figures, please refer to French text (cf “Communiqué de presse No 116” and half year figures, also published in this website).