Annual Review 2010 - Hyposwiss Privatbank AG

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Annual Review 2010

Picture concept in this Annual Review
In our Annual Review we give an account of our performance.
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.
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
info@hyposwiss.ch, www.hyposwiss.ch

Contents
Editorial
Review of the year
Bank governing bodies
Organisation
Key figures 2010
Finance 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

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

Editorial
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 emerging
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 environment,
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 environment
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 campaign
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 ourselves
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 Executive
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 dedication
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 summer
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, windowdominated
frontage and clean form lines. Transparency and
stringency – an appropriate fit. We will bring our two locations
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
Hyposwiss Zurich | Annual Review 2010 3

Review of the Year
Following the severe recession of 2009, the global economy
found its way back to growth in 2010. Driven by government
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 aboveaverage
growth rates of the first half of 2010 would not be
sustainable. From the middle of the year onwards, economic
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.
Board of Directors
Roland Ledergerber
Chairman
Dr. Rico Jenny
Vice-Chairman
4 Hyposwiss Zurich | Annual Review 2010
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 appreciation
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 weakness.
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 September,
a new umbrella fund was launched under the
name Multi Defendo, which has a conservative risk profile.
Theodor Horat
Stefan Klinger Yves Burrus Jean-Luc de Buman

Bank governing bodies as at January January 1 2011
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, Genf 2011
Jean-Luc de Buman, Cully 2013
Executive Board
Siegfried R. Peyer, CEO
Dr. Thomas Stucki, Deputy CEO, Director
Andreas Moser, Director
Stefan Betschart, Director
Auditors
PricewaterhouseCoopers AG
Executive Board
Siegfried R. Peyer
CEO
Dr. Thomas Stucki
Investment Center
Members 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 Rinderknecht,
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
Andreas Moser
Private Banking
Stefan Betschart
Services & Logistics
Hyposwiss Zurich | Annual Review 2010 5

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

Organisation as at January 1 2011
Legal&Compliance, Risk
Daniel Schibli, ED **
Private Banking
Andreas Moser, MD *
(Deputy: Siegfried R. Peyer, CEO)
Switzerland / Germany /
Austria
Andreas Moser, MD *, a.i.
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
Caterina Minelle, MD **
* 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
Executive Board
Siegfried R. Peyer, CEO *
(Deputy: Dr. Thomas Stucki, MD)
Investment Center
Dr. Thomas Stucki, MD *
(Deputy: Marcel Jörger, ED)
Investment Strategy
Caroline Hilb Paraskevopoulos, DI
Equity & Fund Analysis
Alfred Steininger, ED
Portfolio Management
Marcel Jörger, ED **
Sales Support
Christian Gwerder, DI
Hedge Funds
Stephen Rufino
(Location Geneva)
Assistant to the CEO
Regula Schumacher, AD
Business Management ***
Hansjürg E. Christen, ED **
Services & Logistics
Stefan Betschart, MD *
(Deputy: Giuseppe Stella, ED)
Loans
Alex Rinderknecht, ED **
Taxes
Guido Malgaroli, DI
Cash Desk
Philippe Bertholet, AD
Business & IT Services
Giuseppe Stella, ED **
Internal Services
Johannes Kobelt, DI
Hyposwiss Zurich | Annual Review 2010 7

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

Key financial figures 2010
Key figures 2010
in CHF 1 000 2010 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
Hyposwiss Zurich | Annual Review 2010 9

“Global: Yes.
Players: No.”
Expect the expected

Finance Section
Overview
Overall, the 2010 financial year developed satisfactorily,
but the financial crisis of 2008 and the associated uncertainty
in the markets continue to leave their marks. Nonetheless,
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-onyear
decline to CHF 0.8 million, while the value adjustments,
provisions and losses item contains CHF 0.1 million
of negative settlement differences.
The extraordinary income contains the sum of CHF 4.3 million
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 appropriation
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 client
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 therefore
not contained in the net new money figure.
Hyposwiss Zurich | Annual Review 2010 11

Balance sheet details
Assets
Total loans to customers, namely amounts due from customers
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 increase
is attributable to a number of large individual
collateralized loans. Current account receivables had declined
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,
Assets
Balance sheet total 1 926 917 (in CHF 1 000)
Securities trading portfolio, financial investments and participations
9 294
0.5 %
Other assets
30 489
Loans to customers
871 643
Of which loans to customers
Total 871 643 (in CHF 1 000)
45.2 %
Current account receivables
22 416 2.6 %
Mortgages
266 719 30.6 %
12 Hyposwiss Zurich | Annual Review 2010
1.6 %
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.
1.2 %
51.5 %
66.8 %
Cash and cash equivalents
22 680
Due from banks
992 811
Fixed advances and loans
582 508

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 customers
at sight”, at CHF 1.4 billion. Amounts due to customers
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.
Liabilities
Balance sheet total 1 926 917 (in CHF 1 000)
Other liabilities
46 882
Of which customer deposits
Total 1 549 127 (in CHF 1 000)
Shareholders’ equity
132 510 6.9 %
Due to customers in savings and deposit accounts
44 449
Time deposits
151 460
2.4 %
9.8 %
The share capital remained unchanged at CHF 26.0 million,
while disclosed reserves after appropriation of profit
amounted to CHF 84.5 million.
2.9 %
10.3 %
0.0 %
80.4 %
87.3 %
Due to banks
198 398
Customer deposits
1 549 127
Medium-term notes
230
Other amounts due to
customers at sight
1 352 988
Hyposwiss Zurich | Annual Review 2010 13

Income statement details
Expenses
Total 81 906 (in CHF 1 000)
Income
Total 81 906 (in CHF 1 000)
Taxes
6 030 7.4 %
Depreciation and provisions
885 1.1 %
Other operating expenses
19 023 23.2 %
Extraordinary income
4 344
Net other ordinary income
6 494 7.9 %
14 Hyposwiss Zurich | Annual Review 2010
5.3 %
Net income from trading position
9 429
11.5 %
14.1 %
26.5 %
41.9 %
61.2 %
Net profit
21 682
Personnel expenses
34 286
Net interest income
11 534
Net commission
and fee income
50 105

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 prioryear
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 investments
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 outsourcing
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.
Hyposwiss Zurich | Annual Review 2010 15

Personnel
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
16 Hyposwiss Zurich | Annual Review 2010
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 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 2010, which
may be freely exercised in 2014, currently have a slightly
positive fair value, and we are accordingly creating a provision
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 2010
Income and expenses from ordinary banking business
in CHF 1 000 2010 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
Hyposwiss Zurich | Annual Review 2010 17

Balance sheet as at 31 December 2010 before appropriation of profit
Assets
in CHF 1 000 2010 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
18 Hyposwiss Zurich | Annual Review 2010
827 332 1 134 061

Liabilities
in CHF 1 000 2010 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
Net profit for the year 21 682 21 589
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
Hyposwiss Zurich | Annual Review 2010 19

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

Appropriation of disposable profit
Appropriation of disposable profit
in CHF 1 000 2010 2009
Net profit for the year 21 682 21 589
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
Hyposwiss Zurich | Annual Review 2010 21

Cash flow statement 2010
in CHF 1 000 2010 2009
22 Hyposwiss Zurich | Annual Review 2010
Source Application Balance Source Application Balance
Net profit for the year 21 682 21 589
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
Due from money markets instruments
65 268 75 762
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 report
The following Auditor’s report refers to the 2010 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 17 to 39 of the annual
report), for the financial year ended 31 December 2010.
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 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 (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, February 24, 2011
PricewaterhouseCoopers AG
Beat Rütsche Thomas Kleger
Audit specialist Audit specialist
Chief Auditor
Hyposwiss Zurich | Annual Review 2010 23

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