Annual Review 2009 - Hyposwiss Privatbank AG

Annual Review 2009

Folk musicians pursuing new paths
Five folk musicians from the Canton of Appenzell share a
125-year tradition with the whole world. Streichmusik
Alder (the “Adler String Ensemble”) combines traditional
folk music with new elements taken from other musical
genres and cultures. But one thing never changes – the
native Appenzellers invariably wear their traditional costume
when performing and always play their traditional
instruments. For the audience this means a sparkling
mix of tradition, individual passion and the courage to
innovate.

Annual Review 2009

Picture concept in this annual review
The last financial year was dominated by the efforts to
overcome the global financial crisis and the shift towards
a tentative recovery. Companies around the world
were forced to cut operating costs and usher in strategic
realignments. We too felt the effects of the crisis, but
have remained true to our values: personalized and professional
advice to our clients, sustainable investments
and innovative products. This year’s picture concept has
been chosen with this outlook in mind. Streichmusik Alder
is one of the oldest folk music ensembles in Switzerland,
and its musicians are masters of their instruments. And this
is what allows them to continue to pursue new musical
journeys of discovery – without ever forgetting their roots.
Hyposwiss Private Bank Ltd.
Bahnhofstrasse/Schützengasse 4
P.O. Box 3180, CH-8021 Zurich, Switzerland
T +41 44 214 31 11, F +41 44 211 52 23
info@hyposwiss.ch, www.hyposwiss.ch

Contents
Editorial
Review of the year
Bank governing bodies
Organisation
Key figures 2009
Finance section
Overview
Balance sheet details
Income statement details
Personnel
Income statement 2009
Balance sheet as at 31 December 2009
Appropriation of disposable profit
Cash flow statement
Auditor’s report
5
6
7
11
15
19
20
22
24
25
26
31
32
33

“Simple but spirited”
The history of Streichmusik Alder stretches back a long
way. Indeed, right back to the inception of Appenzell
folk music as we know it today. In 1884, the two brothers
Ulrich and Johannes Alder formed their musical ensemble
and gave birth to the now widely celebrated Appenzeller
folk music genre. Their idea? Simple but spirited. Around
400 pieces now make up the ensemble’s repertoire, created
over generations. Time and again, the old tunes are
recrafted and combined with other musical genres, with
dance or accompaniment. The hybrids that result enthral
the public and win new admirers. Simple, proven – and
yet more modern than so much of the new.

Editorial
Dear Clients
Ladies and Gentlemen
In our last Annual Review we likened the profound
tremors that were convulsing the financial markets
with the great Goldau landslide of 1806. The process of
adjustment to a “new financial order”, the low interest
rate environment and a security-driven mindset on the
part of many clients have left deep marks on our business
results too. Operating income declined to CHF 74.9
million (-25.6 %), while operating expenses rose by 5.4 %
on the back of further investment in our information
technology platform. Net profit for the year was down
38.4 % to CHF 21.6 m. Assets under management at the
year-end amounted to some CHF 9.1 bn, virtually
unchanged from the end of 2008. On the plus side, our
clients enjoyed positive returns on their investments and
we were able to win a number of prestigious new clients
for Hyposwiss Private Bank. On the other hand, a number
of entrepreneurs withdrew financial reserves in order to
use these for commercial purposes.
One bright spot last year was the recovery in the financial
markets. Thanks to the good work of our specialists in the
Investment Center, our clients were able to participate
in this development. The funds and mandates managed
by us were for the most part at least on a par with their
corresponding benchmarks.
The next few years promise to bring structural changes
both for our business and for the Swiss private banking
industry generally. In the last financial year we ushered
in a raft of projects and measures designed to ensure that
our bank is fully equipped for the challenges of the
future too.
Investment in our IT platform allowed us to offer you a
modern e-banking application. Furthermore, thanks
to shared banking software we are now in a position to
procure services in the areas of trading, securities operations
and payment transactions from our parent company
St. Galler Kantonalbank, without making any compromises
when it comes to quality and flexibility. This will allow
us to gear the organizational and management structure
of the bank around our principal activities – providing
financial advisory and asset management services – in a
future-oriented way.
On a staff level, we were once again able to recruit
further proven specialists last year. Particularly worthy of
mention here are the appointment of Michael Lenhardt,
Head of Private Banking Latin America/Iberia, and Marcel
Jörger, Head of Portfolio Management and deputy to the
Chief Investment Officer. To underline our appeal as an
employer, and with the interests of our clients very much
in mind, we supplemented our compensation model for
key staff by introducing long-term participation incentives
back in 2008 – earlier than many of our competitors.
In keeping with the establishment of a holding structure
for the two sister companies Hyposwiss Zurich and
Geneva, we strengthened our Board of Directors with the
appointment of Yves Burrus and Jean-Luc de Buman. At
the same time, Dr. Franz Peter Oesch stepped down from
the Board. We are grateful to Dr. Oesch for his commitment
to the well-being of the bank and its clients.
Finally, on behalf of all our staff I would like to thank
our clients for the continued trust they have placed in
our bank throughout a turbulent financial year.
Siegfried R. Peyer
CEO
Hyposwiss Zurich | Annual Review 2009 5

Review of the Year
2009 was something of a rollercoaster for investors. Up
until March, equity markets continued their unbroken
downward spiral of the previous year, with the key equity
indices losing a further 30 % of their value. At this point
a number of indicators emerged which made it clear
that the financial system would come through the crisis,
thanks to the support of governments and central banks.
As stock markets had partially factored in a doomsday
scenario, they now rebounded accordingly. As the year
progressed, there were increasing signs that the global
economy was stabilising and this in turn lent further
upward momentum to share prices. Viewed in overall
terms, by year-end markets had gained a handsome 20 %
in industrialised nations and considerably more than
50 % in emerging markets, which had previously taken
such a beating. At the same time, there was a decline
in credit spreads in the bond markets, which also helped
this asset class enjoy a pleasing performance even
though interest rates were languishing at historic lows.
In the currency sphere, the fortunes of the US dollar
reflected general market sentiment. In the early part of
the year it benefited from its status as a “refuge currency”
and rose in value. As the year progressed and the
Board of Directors
Roland Ledergerber
Chairman
Dr. Rico Jenny
Vice-Chairman
6 Hyposwiss Zurich | Annual Review 2009
situation in financial markets increasingly improved,
the fundamental problems of the greenback – such as
America’s twin deficits – rose to the fore once again and
the dollar came under pressure.
The performance of our discretionary mandates in 2009
was the highest of the new millennium to date. Only
in 2005 was a similar level of performance achieved. The
combination of good overall equity market developments,
positive yields in the bond markets and stable
currencies all played their part in this healthy development.
As a result, a proportion of last year’s losses were
made good. For the most part our portfolio managers
outperformed their benchmarks. One of the main contributory
factors here was the shrewd selection of investment
themes, such as emerging markets and equities
offering high and stable dividend yields. The funds of
SGKB Group managed by Hyposwiss Zurich also enjoyed
a good investment year and were able to generate significant
performance gains. The three funds Danube Tiger,
Multi Spectra and Hyposwiss Switzerland were all able
to cement their positions in the top tier of competitive
rankings.
Theodor Horat
Stefan Klinger Yves Burrus Jean-Luc de Buman

Bank governing bodies
Board 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, Geneva 2011
Jean-Luc de Buman, Epalinges 2013
Executive Board
Siegfried R. Peyer, CEO
Anton Schaad, Deputy CEO, Managing Director
Alexander Iten, Managing Director
Dr. Thomas Stucki, Managing Director
Stefan Betschart, Managing Director
Auditors
PricewaterhouseCoopers AG
Executive Board
Siegfried R. Peyer
CEO
Dr. Thomas Stucki
Investment Center
Anton Schaad
Products
Stefan Betschart
Services/Logistics
Members of senior management
Managing Director
Hans Bucher
Executive Directors
Gabriele Bosshard, Hansjürg Christen, Oliver Egli,
Markus Holenstein, Marcel Jörger, Milan Kormanak,
Michael Lenhardt, Guido Lustenberger, Caterina Minelle,
Andreas Moser, Rolf Müller, Alfred Rüttimann,
Daniel Schibli, Roland Schneiter, Alfred Steininger,
Giuseppe Stella, Günter Stessel, Markus Straubinger,
Heinz von Dach, René Wyss
Directors
Nicandro Barile, Julia Barreca, Ricco Brusch,
Stella Dombrowsky, Philipp Dubin, Hans Peter Ehrler,
Philipp Ess, Kurt Frischknecht, Manuel Graf,
Margrith Goydke, Yves Guenot, Giacomo Hagenbuch,
Birgit Heim, Caroline Hilb, Roger P. Hugentobler,
Doris Ingold, Karl Keller, Adrian Koller, Ueli Lott,
Oliver Lyhs, René Merz, Urs Merz, Daniel Reichmuth,
Alex Rinderknecht, Urs Schneider, Roger Stalder,
Barbara Voegeli, Anneliese Weber, Konstantin Zalad
Alexander Iten
Private Banking
Hyposwiss Zurich | Annual Review 2009 7

Local roots, global demand
Be it in Japan, Cuba, Russia or Herisau in the Canton of
Appenzell: The Alder family are true to their traditional
roots wherever they are in the world. The differences
could hardly be greater: On the one hand the snowcovered
hills of Appenzell, sprinkled with the occasional
small town or village. On the other, Abu Dhabi, modern
metropolis in the United Arab Emirates. The native
Appenzellers perform their show in English with considerable
verve, their wit and charm causing merriment
amongst audiences worldwide. Streichmusik Alder has
become a veritable ambassador for Switzerland.

Organisation as at 1 February 2010
* Member of the Executive Board
** Member of the Extended Executive Board
CEO: Chief Executive Officer
MD: Managing Director
ED: Executive Director
DI: Director
Private Banking
Alexander Iten, MD*
(Deputy: Andreas Moser, ED**)
Switzerland / Germany /
Austria
Andreas Moser, ED**
External Asset Manager
Oliver Egli, ED
Central & Eastern Europe /
Middle East
Konstantin Zalad, DI, a.i.
Latin America / Iberia
Michael Lenhardt, ED**
Senior Client Partners
Markus Holenstein, ED
AD: Associate Director
Legal & Compliance, HR
Daniel Schibli, ED**
HR/Reception
Ueli Lott, DI
Investment Center
Dr. Thomas Stucki, MD*
(Deputy: Marcel Jörger, ED)
Investment Strategy
Caroline Hilb, DI
Equity & Fund Analysis
Alfred Steininger, ED
Portfolio Management
Marcel Jörger, ED
Sales Support
Dr. Thomas Stucki, a.i.
Executive Board
Siegfried R. Peyer, CEO*
(Deputy: Anton Schaad, MD)
Products
Anton Schaad, MD*
(Deputy: Roland Schneiter, ED)
Loans
Alex Rinderknecht, DI
Trading Desk
Roland Schneiter, ED
Taxes
Hans Peter Ehrler, DI
Cash Desk
Philippe Bertholet, AD
Lombard Lending / Fund
Distribution / Pricing
Oliver Lyhs, DI
ALM / Treasury
Anton Schaad, MD
Assistant to the CEO
Regula Schumacher, AD
Business Development
& Finance
Hansjürg E. Christen, ED
Services / Logistics
Stefan Betschart, MD*
(Deputy: Giuseppe Stella, ED)
Business & IT Services
Giuseppe Stella, ED
Business Development
& Finance
Hansjürg E. Christen, ED
Internal Services
Giacomo Hagenbuch, DI
Risk Officer
Adrian D. Koller, DI
Securities Operations
Guido Lustenberger, ED
Payment Transactions
René Merz, DI
Hyposwiss Zurich | Annual Review 2009 11

Tradition in a new guise
The Appenzellers frequently astonish audiences, for
example with their “Flamenco and Appenzell” routine.
Their projects strike an unconventional chord and always
fascinate, while the combinations they fashion make for
unprecedented spectacles. The audience appreciates the
familiar sounds of double bass and hammered dulcimer,
yet a short time later is spellbound by the passion and
elegance of flamenco. This modern interpretation is
ideally suited to the framework of traditional music and
its instruments. What emerges is a fresh and emotional
product, yet one that is equally reassuring and rooted.

Key figures 2009
Key figures 2009
in CHF 1 000 2009 2008 2007
Net interest income 11 628 20 962 24 303
Net fee and commission income 52 285 70 479 86 775
Net trading income 9 268 8 146 9 181
Other ordinary income 1 705 1 080 792
Operating income 74 886 100 667 121 051
Personnel expenses 32 523 33 316 35 599
Other operating expenses 18 540 15 148 18 660
Administrative expenses 51 063 48 463 54 259
Gross profit 23 823 52 205 66 792
Depreciation on fixed assets 1 145 1 279 1 464
Value adjustments, provisions and losses 237 7 679 927
Operating profit 22 441 43 246 64 401
Extraordinary income/expenses 4 956 843 4 400
Taxes -5 808 -9 047 -14 078
Net profit for the year 21 589 35 043 54 723
Shareholders’ equity (after appropriation of profit) 110 828 109 238 104 195
Assets under management (incl. double counts) 9 051 175 9 159 648 10 828 692
Cost/income ratio (%) 68.9 48.8 45.6
Employees (number of FTEs) 175 171 164
Hyposwiss Zurich | Annual Review 2009 15

With joy and humour
Inseparable from his double bass, Ueli Alder has long
been a pillar of Streichmusik Alder. Now 87, he is the
most experienced musician of the ensemble. His two
sons Hansueli and Walter have followed in his footsteps
and today accompany him on the violin and accordion.
But Ueli Alder adds more to the music with his double
bass than just rhythm and verve. With his humorous
interludes on the stage, he provides a constant source
of merriment. These musicians’ passion is plain for all to
see. And passion and humour in turn give rise to values
and performances that enthuse audiences and transcend
generations.

Finance section
Overview
2009 was a turbulent year overall for Hyposwiss.
The financial crisis and the associated market turmoil
continued to have serious repercussions. Operating
income declined by CHF 25.8 million or 25.6% to
CHF 74.9 million. As the bank’s computer system saw
the implementation of a major new software release
last year, operating expenses simultaneously rose by
CHF 2.6 million to CHF 51.1 million. At CHF 23.8 million,
gross profit was therefore significantly lower than the
CHF 52.2 million posted in 2008.
Depreciation of fixed assets saw a slight decline year-onyear
to CHF 1.1 million while value adjustments, provisions
and losses amounted to CHF 0.2 million and can be
attributed to negative settlement differences.
Thanks to the reversal of a number of value adjustments,
created last year but no longer required, an exceptional
gain of CHF 5.0 million net was booked.
The net income figure of CHF 21.6 million permits the
distribution of a dividend of CHF 20.0 million to our
shareholder.
At 68.9 %, the cost/income ratio including depreciation
of tangible assets is significantly above the prior-year
level.
At the end of the financial year, the balance sheet total
was CHF 1 822.6 million. This equates to an increase of
CHF 586.3 million or 47.4 % compared with the prioryear
figure of CHF 1 236.3 million. The growth in the
balance sheet total is primarily attributable to the huge
increase in customer deposits. The bank’s reported equity
capital after the appropriation of profits amounted to
CHF 110.8 million, resulting in a self-financing level of
6.0 %.
Assets under management fell over the course of the
financial year from CHF 9.2 billion to CHF 9.1 billion. Of
this figure, CHF 100.0 million is accounted for by the
investment funds managed by the Hyposwiss Investment
Center. A net new money outflow of CHF 856.2 million
was recorded during the financial year.
Hyposwiss Zurich | Annual Review 2009 19

Balance sheet details
Assets
Total loans to customers, amounts due from customers
and mortgage loans fell from CHF 619.1 million to
CHF 520.1 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 declined by CHF 134.0
million to CHF 256.7 million. Current account receivables
declined by CHF 6.2 million to CHF 34.3 million as at
the end of December. Despite the continued backdrop
of strong domestic competition for real estate financing,
the portfolio of mortgage loans increased from
CHF 200.2 million to CHF 229.1 million.
Assets
Balance sheet total 1 822 590 (in CHF 1 000)
Securities trading portfolio, financial investments and participations
10 108
1.0 %
Other assets
26 362
Loans to customers
520 050
Of which loans to customers
Total 520 051 (in CHF 1 000)
29.0 %
Current account receivables
34 309 6.6 %
Mortgage loans
229 072 44.0 %
20 Hyposwiss Zurich | Annual Review 2009
1.0 %
The bank primarily holds its financial investments as a
liquidity reserve. These declined by CHF 2.0 million and
totalled CHF 10.0 million as at the balance sheet date.
No significant investments in fixed assets were undertaken
in the reporting year. These accordingly declined
by CHF 1.1 million to CHF 4.6 million in keeping with the
ordinary depreciation applied.
1.0 %
68.0 %
49.4 %
Liquid assets
10 810
Due from banks
1 255 260
Fixed advances and loans
256 669

Liabilities
Customer deposits entrusted to Hyposwiss reached CHF 1.5
billion as at the end of the reporting year. The largest
balance sheet item was “Other amounts due to customers”,
at CHF 1.3 billion. Amounts due to customers in savings and
deposit accounts came to CHF 37.0 million. Of the “Other
amounts due to customers”, CHF 185.9 million was attributable
to fixed-term deposits with our bank.
Liabilities
Balance sheet total 1 822 590 (in CHF 1 000)
Other liabilities
40 648
Of which customer deposits
Total 1 517 985 (in CHF 1 000)
Shareholders’ equity
130 827 7.2 %
Due to customers in savings and deposit accounts
37 034
Time deposits
185 874
2.2 %
12.0 %
As a consequence of lower client lending, amounts due to
banks declined by CHF 75.8 million to CHF 133.1 million.
CHF 124.5 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 81.5 million.
2.0 %
7.3 %
0.0 %
83.3 %
86.0 %
Due to banks
133 130
Customer deposits
1 517 985
Medium-term notes
370
Demand deposits
1 294 707
Hyposwiss Zurich | Annual Review 2009 21

Income statement details
Expenses
Total 79 842 (in CHF 1 000)
Income
Total 79 842 (in CHF 1 000)
Taxes
5 808 7.0 %
Depreciation and provisions
1 382 2.0 %
Other operating expenses
18 540 23.0 %
Extraordinary income
4 956
Net other ordinary income
1 705 2.0 %
Net trading income
9 268
12.0 %
22 Hyposwiss Zurich | Annual Review 2009
6.0 %
15.0 %
27.0 %
41.0 %
65.0 %
Net profit
21 589
Personnel expenses
32 523
Net interest income
11 628
Net fee and
commission income
52 285

Net interest income amounted to CHF 11.6 million in the
reporting year, equivalent to a year-on-year decline of
CHF 9.3 million. This result was significantly affected by
the dramatic decline in interest rates during the financial
year, lower loans to customers and the weakness of key
conversion rates. Mortgage interest showed a year-onyear
decline of 0.7 million to CHF 6.0 million.
The turbulence in the financial markets was reflected
in significantly lower net fee and commission income.
This declined by CHF 18.2 million or 25.8 % in the financial
year to CHF 52.3 million. The most severe slump in
income was recorded in the funds and fiduciary business.
Revenues here were around 50 % lower than in 2008.
Like other banks, Hyposwiss felt the effect of clients’
reluctance to undertake new investments. Even though
clients kept their holdings of fiduciary investments at
a high level, commission income declined by CHF 3.9
million year-on-year to CHF 4.9 million. Due to the
exceptionally low prevailing interest rate environment,
clients were increasingly granted special terms to ensure
that the interest income earned covered the commission
charged.
Net trading income amounted to CHF 9.3 million, as
opposed to CHF 8.1 million in 2008. This pleasing result is
primarily due to foreign exchange trading developments.
Administrative expenses rose in the reporting year by
CHF 2.6 million to CHF 51.1 million. Amongst other
things, this was the result of an increase in social security
expenses payable (AHV and pension fund contributions;
new regulations pertaining to family compensation fund
contributions). As a result of the implementation of a
comprehensive new release in the new Avaloq Banking
System, there was a sharp CHF 3.4 million increase
in “Other operating expenses” to CHF 18.5 million.
Expenses of CHF 0.2 million from settlement differences
were booked under value adjustments, provisions and
losses.
Extraordinary income contains a net CHF 5.0 million
including interest for the reversal of value adjustments
that are no longer required.
Hyposwiss Zurich | Annual Review 2009 23

Personnel
As at 1 January 2009, the following promotions were
made at senior management level:
Executive Director
Hansjürg Christen, Oliver Egli,
Alfred Steininger, Günter Stessel
Director
Julia Barreca, Caroline Hilb, Urs Merz
24 Hyposwiss Zurich | Annual Review 2009
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 entrepreneurial
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
management consultancy firm. The options issued in
2009 currently have no positive fair value, so no charge
to personnel expenses was required for the 2009
financial year.
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.
We would like to take this opportunity to thank all of
our employees wholeheartedly for their commitment and
hard work on behalf of our clients.
Zurich, February 25, 2010
For the Board of Directors: For the Executive Board:
Roland Ledergerber, Chairman Siegfried R. Peyer, CEO

Income statement 2009
Income and expenses from ordinary banking business
in CHF 1 000 2009 2008
Interest and discount income 17 099 33 786
Interest and dividend income on financial investments 288 337
Interest expenditure -5 759 -13 161
Net interest income 11 628 20 962
Commission income from lending activities 219 318
Commission income from securities and investment activities 55 045 73 827
Commission income from other service fee activities 525 514
Commission expenses -3 504 -4 180
Net fee and commission income 52 285 70 479
Net trading income 9 268 8 146
Income from disposal of financial investments 0 -29
Investment income 17 32
Other ordinary income 1 688 1 084
Other ordinary expenditure 0 -7
Net other ordinary income 1 705 1 080
Operating income 74 886 100 667
Personnel expenses 32 523 33 316
Other operating expenses 18 540 15 148
Administrative expenses 51 063 48 463
Gross profit 23 823 52 205
Profit for the year
Gross profit 23 823 52 205
Depreciation on fixed assets -1 145 -1 279
Value adjustments, provisions and losses - 237 -7 679
Operating profit (before extraordinary items and taxes) 22 441 43 246
Extraordinary income 4 956 843
of which write-backs from reserves for general banking risks 0 0
Taxes -5 808 -9 047
Net profit for the year 21 589 35 043
Hyposwiss Zurich | Annual Review 2009 25

Balance sheet as at 31 December 2009 before appropriation of profit
Assets
in CHF 1 000 2009 2008
Liquid assets 10 810 19 459
Due from banks 1 255 260 545 693
Due from customers 290 978 418 890
Mortgage loans 229 072 200 197
Securities trading portfolios 61 103
Financial investments 10 005 12 000
Participations 42 42
Fixed assets 4 575 5 687
Accrued income and prepaid expenses 10 790 6 113
Other assets 10 997 28 087
Total assets 1 822 590 1 236 271
Total receivables from Group companies
and qualified partners
26 Hyposwiss Zurich | Annual Review 2009
1 134 061 433 811

Liabilities
in CHF 1 000 2009 2008
Liabilities from money market securities 268 283
Due to banks 133 130 208 892
Due to customers in savings and deposit accounts 37 034 24 978
Other amounts due to customers 1 480 581 802 176
Medium-term notes 370 935
Accrued expenses and deferred income 10 622 15 323
Other liabilities 15 441 24 516
Value adjustments and provisions 14 317 19 929
Reserves for general banking risks 1 700 1 700
Share capital 26 000 26 000
General statutory reserves 45 500 45 500
Other reserves 35 000 30 000
Profit brought forward 1 038 996
Net profit for the year 21 589 35 043
Total liabilities 1 822 590 1 236 271
Total liabilities to Group companies
and qualified partners
126 657 177 493
Off-balance-sheet transactions
Contingent liabilities 48 324 62 275
Irrevocable undertakings 8 116 4 619
Derivative financial instruments 311 130 305 139
Positive gross replacement values 7 914 10 853
Negative gross replacement values 8 367 10 861
Fiduciary transactions 1 930 305 3 417 215
Hyposwiss Zurich | Annual Review 2009 27

A musical crescendo
The concert, with its fusion of string music and flamenco
dancing, becomes more furious with every minute that
passes. The Appenzellers demonstrate their accomplishments
and complement the dancing with some breathtakingly
rapid solos. The audience is utterly absorbed
in the music and enjoys a heady evening with unexpected
combinations. Now that the first step has been taken,
this surely won’t be the last joint musical performance
by Appenzellers and Andalusians. And yet the Alders are
already preparing themselves for new horizons.

Appropriation of disposable profit
Appropriation of disposable profit
in CHF 1 000 2009 2008
Net profit for the year 21 589 35 043
Balance brought forward from previous year 1 039 995
Profit at the disposal of the AGM 22 628 36 038
The Board of Directors proposes the following appropriation:
a) Distribution of a dividend 20 000 30 000
b) Allocation to the general statutory reserve 0 0
c) Allocation to the other reserves 2 000 5 000
d) Balance brought forward to new account 628 1 038
Total 22 628 36 038
Following authorisation of this proposal, total shareholders’
equity is as follows:
Share capital 26 000 26 000
General statutory reserve 45 500 45 500
Other reserves 37 000 35 000
Reserves for general banking risks 1 700 1 700
Balance brought forward to new account 628 1 038
Total 110 828 109 238
Hyposwiss Zurich | Annual Review 2009 31

Cash flow statement
in CHF 1 000 Year under review Previous year
32 Hyposwiss Zurich | Annual Review 2009
Source Application Balance Source Application Balance
Net profit for the year 21 589 35 043
Depreciation on fixed assets 1 145 1 279
Value adjustments and provisions 5 612 7 923
Reserves for general banking risks
Accrued income and prepaid expenses 4 676 279
Accrued expenses and deferred income 4 701 12 155
Dividend in the previous year 30 000 50 000
Cash flow from operating activities
(internal financing)
22 734 44 989 -22 255 44 245 62 434 -18 189
Participations 62
Fixed assets 33 198
Cash flow from fixed asset operations 0 33 -33 62 198 -136
Liabilities from money market securities 16 245
Due to banks 75 762 3 627
Due from banks 709 567 361 485
Securities trading portfolios 42 103
Interbank transactions 42 785 345 -785 303 3 627 361 833 -358 206
Medium-term notes 565 395
Due to customers in savings
and deposit accounts
12 056 8 576
Other amounts due to customers 678 405 371 522
Mortgage loans 28 876 10 929
Due from customers 127 912 5 434
Customer business 818 373 29 441 788 932 396 462 395 396 067
Financial investments 1 995 1 000
Capital market business 1 995 0 1 995 1 000 0 1 000
Other assets 17 090 0 14 333
Other liabilities 0 9 075 3 913
Other balance sheet items 17 090 9 075 8 015 3 913 14 333 -10 420
Cash flow from banking business 837 500 823 861 13 639 405 002 376 561 28 441
Liquid assets 8 649 8 649 10 116 -10 116
Total source 868 883 449 309
Total application 868 883 449 309

Auditor’s report
The following Auditor’s report refers to the 2009 annual report, which is available from
Hyposwiss Private Bank Ltd.
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
balance sheet, income statement, cash flow statement
and notes to the accounts (pages 25 to 48 of the annual
report), for the financial year ended 31 December 2009.
Responsibility of the Board of Directors
The Board of Directors is responsible for preparing the
annual 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 violations or errors. Furthermore,
the Board of Directors is responsible for the selection
and application of appropriate accounting methods and
for making appropriate estimates.
Auditor’s responsibility
Our responsibility is to issue an audit opinion on the
annual 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 certain 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 opinion
In our view, the annual accounts for the financial year
ended 31 December 2009 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 (Revisionsaufsichtsgesetz,
RAG) and independence (Article 728 SCO and
Article 11 RAG) and that there are no circumstances
inconsistent 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 appropriation
of net retained profits is in compliance with
Swiss law and the articles of association and recommend
that the annual accounts be adopted.
Zurich, 25 February 2010
PricewaterhouseCoopers AG
Beat Rütsche Thomas Kleger
Audit specialist
Chief Auditor
Audit specialist
Hyposwiss Zurich | Annual Review 2009 33

Publishing details
© 2010 Hyposwiss Private Bank Ltd.
Concept and text
IRF Communications AG, Zurich
Design
TGG Hafen Senn Stieger, St. Gallen
Images
Ammann & Siebrecht, St. Gallen
Translation
BMP Translations AG, Basel

Hyposwiss Private Bank Ltd.
Bahnhofstrasse/Schützengasse 4
P.O. Box 3180, CH-8021 Zurich, Switzerland
T +41 44 214 31 11, F +41 44 211 52 23
info@hyposwiss.ch, www.hyposwiss.ch