Table of Contents
Report of the Board of Directors 3 Financial Statements for the Year Ended 31st December, 2009
Balance Sheet 5 Off-Balance Sheet 5 Income Statement for the year ended 31st December, 2009 6 Allocation of Net Income 7 Notes to the Financial Statements 8 Auditors' Report 22
Board of Directors and Management 24
REPORT OF THE BOARD OF DIRECTORS FOR THEYEAR ENDED 31st DECEMBER 2009
The net income for the year amounts to CHF 7.193 million compared to CHF 10.884 million for 2008, a reduction of CHF 3.691 million or 34%. The operating revenues for 2009 amount to CHF 34.295 million compared to CHF 41.319 million in 2008, a reduction of CHF 7.024 million or 17%. Operating expenses amount to CHF 22.968 million in 2009 compare to CHF24.268 million in 2008, a reduction of CHF 1.300 million or 5%. During the year the balance sheet footings grew significantly, amounting to CHF 948.886 million at year end compared to CHF 596.613 at the end of 2008, an increase of CHF 352.273 million or 59%. The reduced result and the increase in the balance sheet total are the consequence of exceptional circumstances in 2009 and result from thefinancial crisis in the latter part of 2008. The historic drop in interest rates, accompanied by the uncertainties surrounding the global financial sector had the combined effect of reducing the bank's interest margin at the same time as swelling the level of customer deposits. The average exchange rate of the Swiss franc to the US dollar in 2009 was 1.08 compared to 1.20 in 2008. Approximately twothirds of the bank's revenues are generated in US dollars. Depreciation of fixed assets amounts to CHF 1.180 million compared to CHF 0.860 million in 2008, an increase of CHF 0.320 million or 37% and corresponds to the impact of the acquisition of the office premises during the year. Valuation adjustments, provisions and losses amount to CHF 0.374 million compared to CHF 0.822 million in 2008, areduction of CHF 0.448 million, the 2008 level being higher following a specific loss in that year of CHF 0.550 million. The extraordinary income of CHF 2.449 million is comprised essentially of the profit on the sale of part of the office premises occupied by the bank prior to the acquisition of the new building. The extraordinary expenses include a first time charge of CHF 0.500 million in respect ofthe bank's initial recognition of its liability for paid vacation for employees and the constitution of a general banking reserve amount of CHF 1.400 million. At 31st December, 2009 shareholders' equity amounts to CHF 108.616 million, 11% of balance sheet footings.
ALLOCATION OF RESULTS BALANCE SHEET
The increase in the balance sheet total of CHF 352.273 million is explained by the growth incustomer current account balances which grew from CHF 238.588 million at the end of 2008 to CHF 590.670 million at 31st December, 2009, an increase of CHF 352.082 million or 148%.This inward flow of liquidity has been employed to increase loans to customers by CHF 114.703 or 64% from CHF 180.128 million to CHF 294.831 million, to increase liquidity with the Swiss National Bank by CHF 84.455million or 73% from CHF 116.131 million to CHF 200.586 million, to increase amounts due from banks by CHF 81.839 million, to increase fixed assets by CHF 33.611 and corresponding to the acquisition of the new office premises at 18, cours des Bastions and finally to an increase in the the financial investments amounting to CHF 32.573 million. The Board of Directors proposes to apply the net income forthe year of CHF 7.193 million as follows: CHF 0.700 million to the legal reserve CHF 6.493 million to retained earnings
The interest margin in 2009 amounts to CHF 6.750 million compared to CHF 10.166 million in 2008, a reduction of CHF 3.416 million or 34%. This reduction is the direct consequence of the fall in interest rates between 2008, when the US dollar one month LIBOR...