Annual Review 2008 - Hyposwiss Privatbank AG

Net interest income fell in the year under review by
CHF 3.3 million to CHF 21.0 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 stagnated at prior-year
levels at CHF 6.7 million.
The exceptional crisis on the financial markets was reflected in
the lower net fee and commission income. These reached a
figure of CHF 70.5 million in the financial year and were thus
CHF 16.3 million or 18.8% below the outstanding prior-year
result. The biggest earnings slump was recorded in the securities
business. Receipts here were around one-third lower than
the figure for 2007. Hyposwiss was also exposed to customers’
reluctance in this difficult economic environment to make new
investments in securities. This was exacerbated by the fact that
the market for structured products recorded a massive fall-off.
The sharp price losses and resulting reduction in client assets
impaired the portfolio-dependent earnings. The prior-year
value for fiduciary commissions was exceeded thanks to the
dramatic increase in assets.
Net trading income fell from CHF 9.2 million to CHF 8.1 million.
The decline in our customers’ transaction volumes led to lower
foreign exchange earnings.
Administrative expenses fell during the year under review by
CHF 5.8 million to CHF 48.5 million. Despite a higher number
of staff, personnel expenses were reduced by CHF 2.3 million
to CHF 33.3 million. This is due first and foremost to lower
performance-related remuneration.
After investments in the new Avaloq Banking System had
sharply increased other operating expenses the previous year,
this slid back in the year under review by CHF 3.5 million
to CHF 15.1 million. Savings were also made in the area of
marketing and communications.
The massive collapses on the international share markets meant
that individual collateral loans were not sufficiently covered
by the underlying securities. Net value adjustments of
CHF 7.2 million were formed in order to allow for this. The
value adjustments for default risks in place as at the balance
sheet date amounted to 2.0% of the loans.
Extraordinary income contains the capital gains from the
sale of our shareholding in Pfandbriefbank Schweizerischer
Hypothekarinstitute.
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