Financial year close to break-even despite a significant foreign exchange loss attributable to the scrap of currency ceiling against euro. A 20% dividend will be proposed at the upcoming AGM.
Given the circumstances, the financial year 2015 can be regarded as reasonable with our core business activities hitting the hoped for targets, despite the deterioration of the markets and the precarious currency exchange rate situation. Bondpartners ended the year under review practically in balance. The abolition of the currency peg against the euro and the strengthening of the Swiss franc weighted on the results and generated exchange rate losses. While volumes were falling, margins improved significantly as did trading and brokerage products. Costs for their part were held down. In line with the scale of BPL’s equity position, solvency ratios remained well above the regulatory requirements. At the organisational level, the management team was reinforced and the development of information technology continued, as did our efforts to win institutional client business. Finally, our bearer shares were withdrawn from the Swiss Stock Exchange at the Company’s own request last July. They are now listed on the OTC-X electronic trading platform of the Cantonal Bank of Bern.
Financial statements presented according to accounting standards and guidelines applicable to banks and securities dealers (BAG).
The balance sheet total stood at CHF 122.8 million, a decrease of 20%, principally attributable to the decline of receivables from banks and particularly the reduction of customer deposits under administration of independent portfolio managers. This is also the case for receivables and commitments arising from trading operations (pending transactions/overlaps at the end of the year) which significantly lessened as compared to the previous year.
Turning to assets, cash and liquid assets stayed stable at CHF 3.5 million, while sight and term deposits with banks retreated by 30.5% to a total of CHF 52.5 million as did receivables from clients and nonbanking institutions which were down 34.5% at CHF 4.8 million. In this regard, total receivables from securities trading reached CHF 8.2 million (-52%). Following with securities held for own account, the trading portfolio contracted by 9% to CHF 52 million while financial investments remained unchanged at 0.5 million (own shares being excluded). Current assets amounted to CHF 113.4 million (-21%) representing 92.5% of the balance sheet, a consistent percentage compared to the previous financial years, no matter how large the size of the balance sheet, while fixed assets, essentially consisting of two buildings owned by the Company (total land 4,625 m2), remained identical at just above CHF 9 million.
Concerning liabilities, commitments to banks decreased by 35% to CHF 6.1 million, while total commitments from trading operations (pending transactions on the closing date, to be seen in parallel with receivables from aforesaid operations, giving a net positive balance of CHF 0.07 million) came to CHF 8.2 million (-46%). In terms of commitments to clients (current accounts at sight with a credit balance and non-banking correspondents) reached CHF 34.7 million (-42%) including other commitments (mortgages on the two aforementioned buildings) which stood at CHF 2.7 million (unchanged). Reserves for general banking risks remained consistent at CHF 41.7 million when compared to accumulated provisions and said reserves in 2014. The other reserves, including the general statutory reserve and voluntary reserves amounted to CHF 36.5 million (+3%). The reserve for own shares (own equity capital) appears negative and amounted to CHF 3.9 million (unchanged). Total liabilities equaled to CHF 40.7 million (-41%), with total individual equity at CHF 80.9 million (-2%) or 66% of the parent company balance sheet, a higher percentage compared to previous financial year.
The prudential standards recommended by the Basel Committee are bountifully filled. Qualifying equity capital on an individual basis amounted to CHF 73.8 million against a capital requirement of CHF 13 million, leaving a surplus of CHF 60.8 million. The core solvency ratio (Tier 1+2) stood at nearly 45%.
Profit and loss account
The net profit published by the parent company came to CHF -0.03 million (vs CHF +2.84 million in 2014). Total ordinary income reached CHF 10.5 million (+5%), excluding currency exchange effects which had a negative impact of CHF -2.78 million (vs CHF +0.57 million as for the previous year). The net trading income (transactions and valuations linked to the dealing and financial investments portfolios) reached CHF 6.42 million (+13.5%), volumes having receded by 30%, nevertheless in an environment more favorable for margins which showed a 50% enlargement, while the deficit in liquidity on the bond markets and the accentuation of volatility (notably concerning corporate and high yield debt) continue to be well present. The gross interest income declined 11.5% to CHF 2.18 million, in a rate environment which, generally, remained at historically low levels while coupons endured unattractive levels among issuers enjoying a better credit quality. The gross brokerage income advanced by 3.5% to reach CHF 1.86 million, reflecting markets, again affected by volatility and the geopolitical situation. Interest and commission expenses, banking and settlement fees included, stood overall at CHF 0.79 million, down 17% over the previous financial year. Total operating costs eased by 2% to CHF 6.48 million. The gross profit accordingly reached CHF 0.34 million (2014: CHF 3.02 million). A constitution of CHF 0.05 million was charged to the income statement, whereas a release occurred in 2014 for CHF 0.7 million.
The financial markets have made a truly calamitous start to 2016 in an anxiety-provoking climate. We are witnessing a toxic combination of events, both old and more recent, which are amplifying the downturn that began in the summer of 2015 and heightening risk aversion. The gap between the issuing institutions, the economic slowdown in China and fears of a hard landing of global growth, the consistently low price of oil and the destabilisation of the banks, the intensification of geopolitical tensions, the immigration problem, the US Presidential elections and the potential grenade of a “Brexit” about to explode have, among other factors, continued to adversely impact trends and accentuate volatility. In other words, the background is not particularly encouraging and for the time being, the year looks likely to be turbulent in a context of latent insecurity and exacerbated uncertainties. Forecasts are therefore hard to make. While it is true that the present market upheavals are penalising the valuation of BPL’s proprietary positions, they do nevertheless improve the margins on its transactions and affirm its ability to trade in a deteriorated environment in terms of liquidity and prices. It may be recalled that substantial equity has been set aside and built up on the precautionary principle in order to precisely contend such turmoil and preserve the sustainability of this business.
Statutory accounts as at 31.12.15/31.12.2014
(Audited Accounts according to rules BAG/FINMA)
Statutory income statement
|Income from trading operations||6.421.617,-||5.655.667,-|
|Results from currencies and forex||-2.786.513,-||574.032,-|
|Commission income from securities trading and investment activities||1.861.475,-||1.802.305,-|
|Net interest income||1.883.107,-||2.077.085,-|
|Total operating expenses||-6.484.718,-||-6.620.031,-|
|Result of the period||-34.088,-||2.844.413,-|
Statutory balance sheet
|Cash and amounts due from banks||55.993.443,-||79.157.967,-|
|Amounts due from customers and non banking counterparts||4.821.585,-||7.368.983,-|
|Trading portfolios assets||52.002.696,-||57.139.070,-|
|Financial investments and precious metals||472.450,-||472.450,-|
|Tangible fixed assets||7.900.000,-||7.900.000,-|
|Amounts due to banks||6.068.657,-||9.331.826,-|
|Amounts due to customers and non banking counterparts||34.661.557,-||60.139.499,-|
|Accrued expenses and deferred income||925.000,-||1.256.000,-|
|Reserves for general banking risks||41.721.322,-||11.422.572,-|
|Statutory reserve and voluntary retained earnings reserve||36.550.000,-||35.550.000,-|
|Total balance sheet||122.826.256,-||153.615.758,-|
|Total current assets||113.377.074,-||144.152.184,-|
|TTotal shareholders’ equity||80.945.319,-||82.670.177,-|
About Bondpartners: BPL is a Swiss financial company founded in 1972 in Lausanne, whose business hinges on three main axes: the inter-professional dealing of securities, the market making and market keeping, and the execution of orders issued by independent managers. It is authorized and supervised by the Swiss Financial Market Supervisory Authority (FINMA) as a dealer in securities.
Tel. +41 021 613 43 43