annual report 2012

ANNUAL REPORT 2012

1 40th

AnnuAl report 2012

1 40th

Our Bank’s 140-year history reminds us that BSI’s uniqueness lies in its ability to forge trusted relationships by combining our expertise and security with a strong personal touch for the benefit of our clients. This is our DNA, a solid base upon which we have obtained excellent results, allowing us to look towards the future with optimism.

Stefano CoduriGroup CEO

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5 __ HIGHLIGHTS 2012

7 __ FOREWORD

10 __ CORPORATE GOVERNANCE 18 __ OUR ORGANISATIONAL STRUCTURE

20 __ HUMAN RESOURCES

22 __ OUR IDENTITY

31 __ MANAGEMENT REPORT 2012

37 __ GROUP ACCOUNTS Consolidated balance sheet as of 31 December 2012 Consolidated profit and loss statement 2012 Consolidated cash flow statement 2012 Notes to the 2012 Group accounts Report of the statutory auditor on the consolidated financial statements

75 __ BSI AG ACCOUNTS Parent Bank balance sheet as of 31 December 2012 Parent Bank profit and loss statement 2012 Notes to the 2012 Parent Bank accounts Report of the statutory auditor on the financial statements

84 __ GLOSSARY OF SELECTED TERMS AND ABBREVIATIONS

88 __ CONTACTS

Annual Report as submitted to the ordinaryGeneral Meeting of 18 April 2013

A company of the Generali Group

Contents

This is a translation into English of the Annual Report issued in the Italian language and is intended solely for the con-venience of English speaking readers. This report includes information specifically required by Swiss law. In the event of contradictions or inconsistencies between the Italian and the English version of the Annual Report, the Italian version shall prevail.

“For BSI, investing in culture has always had a precise significance: helping to broaden the consciousness that science and art play a fundamental part in the every- day life and the sustainable development of society.BSI Architectural Foundation was constituted for the purpose of fostering knowledge, training and studies in this fascinating discipline, which is capable of com-bining technology and aesthetics in the service of a changing society. For BSI, a commitment to the field of architecture is a patrimony of the whole Group. Communicating research and innovation in its various forms is a challenge to us and a continuous stimulus which we seek purposefully.We are proud to work with the Academy of Archi-tecture and the Archivio del Moderno of Mendrisio (Università della Svizzera italiana) and, through its pa-tronage, with the Federal Office of Culture of Berne. This cooperation not only strengthens our relation-ship with the world of architecture in Switzerland and with the architect Mario Botta in particular, in his role as President of the Jury of the Award, but also ena-bles us to help bring important issues to the attention of the international public, which are not purely con-centrated on aesthetics but extend to the search for sustainability in works in the context in which they are embedded”.Alfredo GysiChairman of the Board of Directors of BSI

BSI Swiss Architectural Award

“In the wake of what, rightly, we can describe as a success story that began in 2007, the BSI Swiss Architectural Award is garnering increasing plaudits and emerging as a landmark in the cultural debate and among awards dedicated to contemporary architec-ture. The prestige of the Jury and Advisors, the grow-ing interest expressed by experts and international public opinion and above all the quality of the works presented have given this award a considerable di-mension. Its international dimension took us first to Latin America, with Solano Benitez (Paraguay, winner in 2008), then to Africa, with Diébédo Francis Kéré (Burkina Faso/Germany, winner in 2010), and then to India with Studio Mumbai, a team of architects and craftsmen, the winners of the third edition. But the credit for this success is also attributable to the far-sightedness of the objective of the Award: to sustain architecture that is attentive to the context in which it is set and sensitive to environmental issues, without neglecting the aesthetic factor on which the discipline of architecture rests. An ambitious goal achieved by the BSI Architectural Foundation togeth-er with the Academy of Architecture and the Archivio del Moderno of Mendrisio (Università della Svizzera italiana) and sponsored by the Federal Office of Cul-ture in Bern.For all these reasons, BSI decided to promote and support this award. And today more than ever, faced with the difficulties of the historical period we are traversing, we are convinced of the validity of this choice, which represents BSI’s commitment to the cultural sphere. A commitment that seeks to contrib-ute positively to the sustainable development of the communities where we operate. An award with which this institution is increasingly identified”.Stefano CoduriGroup CEO BSI

Mar

io B

otta

“The BSI Swiss Architectural Award is to be assigned biennially for a period of 10 years, subject to further extension. This appears to be a long time as evi-denced by the important changes which we are wit-nessing. Economic shifts of enormous proportions, the ever increasing political, social and economic importance of countries and regions outside Europe and the United States, and the seemingly unstoppa-ble ascent of new technologies are just a few premo-nitions of what are likely to be far-reaching paradigm shifts over a relatively short period of time. In these turbulent times, architecture has its specific place and function. Its continued relevance demonstrates that human beings will always continue to give form, shape and content to space, to express these values, creating culturally meaningful traces of their existence. It is of particular significance that the 2008, 2010 and 2012 awards recognised the achievements of archi-tects from South America, Africa and India”.Felix R. EhratPresident of BSI Architectural Foundation

“Architecture means much more than just building ed-ifices. It shapes our living space and therefore has a role in how we feel in a given environment. Architects do not design and build for the purposes of material ob-jects, but always for people. In this way they contrib-ute to the identity of a society and the development of a country by endowing it with a face. The award offers the candidates, members of the ju-ry and the general public opportunities to meet, ex-change ideas and engage in fruitful discussions. For these reasons the BSI Swiss Architectural Award has become a special event for our national architecture as well as internationally, offering local architecture the opportunity to become known worldwide and so become part of the current debate”.Jean-Frédéric JauslinDirector of the Swiss Federal Office of Culture

“In seismology (a discipline with which we have es-tablished a tragic familiarity in recent years), at least three detector stations are necessary to determine the epicentre of an earthquake. If we apply this prin-ciple to a much less ominous field, this rule justifies us in seeing the BSI Swiss Architectural Award, as a kind of reliable “seismograph” which gives us a reading of the state of contemporary architecture. And if we approach it in this way, the reading we receive is two-fold: on the one hand it is heartening to our discipline to observe the quality of the works submitted to the attention of the jury: a level of quality that is guaran-teed, thanks to the selection procedure adopted, by the panel of advisors who identify the candidates. On the other hand this also leads one to reflect the fact that the winners actually come from countries outside “old” Europe, or with only partial links to it (as was the case of Diébédo Francis Kéré). And this, of course, is not due to any bias on the part of the different juries that have selected the short lists (immune, I believe, from the influence of any form of Orientalism), but the objective value of the winners. They, however, display different conceptual approaches and work with differ-ent formal languages: in short they have very different “poetics” which cannot be reduced to a common de-nominator, except, perhaps, for a particular concern with the craft component of the construction process and its consequent enhancement”.Mario BottaPresident of the Swiss Architectural Award Jury

THE PRIZE“This award represents an opportunity to recognise and raise the international profile of architects who can make an outstanding contribution to contempo-rary architectural culture. It is also a good occasion to reflect critically on ideas that favour first an ethical and then an aesthetic approach. The names selected can be considered as some of the most important ar-chitects working internationally today. Their sensitiv-ity and professional commitment in their countries of origin highlight their diverse hopes (both fanciful and realistic), in contrast to the contradictions and confu-sion that are rife today in the debates within the field”. Mario BottaPresident of the Swiss Architectural Award Jury

“For an artist to work with an architect is a moment of pure exchange. It is where the tensions and pos-sibilities of modernity come together. For an artist to design an architectural award is a strange role and it is also a moment to play. This award is precise and compact. It is designed to show a reflection of growth. A growth of ideas, a growth of new structures and a growth of new relationships. It is also designed to last, to be polished and to be thought of as a gift and a thank you from artist to architect”. Liam GillickConceptual Artist

PARTnERS

BSI Established in Lugano in 1873, BSI AG is one of the oldest banks in Switzerland and specialises in private wealth management. The bank places great emphasis on establishing and maintaining ongoing personal re-lationships with clients, while at the same time offering global asset management services with world-class products. Aware of the impact that its operations can have on the local areas in which it operates, BSI is at the forefront of promoting, through its foundations, partnerships and sponsorships, events and projects that contribute to the cultural, economic, and scien-tific development of our society. It is present in the major financial markets worldwide, in Europe, Latin America, the Middle East and Asia.

BSI ARCHITECTURAL FOUnDATIOnBSI Architectural Foundation was created by BSI for the promotion of knowledge, education and research in the field of architecture. It presents a biennial archi-tecture award (BSI Swiss Architectural Award) and sponsors activities and projects as part of that event, including exhibitions and publications.

ACADEMy OF ARCHITECTURE OF MEnDRISIO,UnIvERSITà DELLA SvIZZERA ITALIAnAThe Academy of Mendrisio aims to create a “new” architect able to make sense of the territory, critically transform it without erasing its identity, respond to the demands of living space creatively and effectively. The study curriculum is built on the integration of de-sign with historical-humanistic and technical-scientif-ic disciplines. The Academy of Architecture maintains relations and cooperates with numerous national and international institutions and schools, and is active in research, especially into the areas of history and urban studies.

ARCHIvIO DEL MODERnO, MEnDRISIO The Archivio del Moderno is an independent research institute that supports the Academy of Architecture of Mendrisio. Instituted in 1996, it was constituted as a Foundation on 20 February 2004 by the Uni-versità della Svizzera italiana. The objectives of the institute are: on the one hand the acquisition, protec-tion, preservation and valorisation of archives of archi-tecture, urban planning, engineering, design, art and photography; on the other the promotion of scientific research in fields such as the history of modern and contemporary architecture, art, design, the territory and civil engineering.

Limited edition by Liam Gillick 10 copies for BSI, Chromed steel Produced by Flury Modellbau GmbH, Egliswil

Any architect aged under 50 in the year in which the Award is launched, of any nationality, may enter, provided that they have designed at least three significant works that meet the aims of the competition.

FIRST EDITIOn2007-2008

JURyPresident

Mario BottaMendrisio (Switzerland)

Members

Emilio Ambasznew york (USA)

Valentin BearthChur (Switzerland)

Davide Croffvenice (Italy)

Wenjun ZhiShanghai (China)

Secretary

Nicola NavoneMendrisio (Switzerland)

ADvISORSLaurent Beaudouinnancy (France)

Gonçalo ByrneLisbon (Portugal)

Alberto Campo BaezaMadrid (Spain)

Massimo CarmassiFlorence (Italy)

Roberto CollovàPalermo (Italy)

Kenneth Framptonnew york (USA)

Dan S. HanganuMontreal (Canada)

Kengo KumaTokyo (Japan)

Paulo Mendes da RochaSão Paulo (Brasil)

Boris Podreccavienna (Austria)

Anant RajeAhmedabad (India)

Bruno ReichlinMendrisio (Switzerland)

Chang Yung HoBeijing (China)

WInnERSolano BenitezAsunción (Paraguay)

CAnDIDATES 3LHD(Saša Begovic , Marko Dabrovic , Tanja Grozdanic , Silvije novak)Zagreb (Croatia)

Manuel e FranciscoAires MateusLisbon (Portugal)

David AdjayeLondon (Great Britain)

Jesús AparicioMadrid (Spain)

Gion A. Caminadavrin (Switzerland)

Alfonso Cendronvenice (Italy)

Dominique CoulonStrasburg (France)

Richard Francis-JonesSidney (Australia)

Sean GodsellMelbourne (Australia)

Thomas HeatherwickLondon (Great Britain)

Rick JoyTucson (USA)

Alberto KalachMexico City (Mexico)

Francisco MangadoPamplona (Spain)

Luis L. Mansilla,Emilio Tuñón AlvarezMadrid (Spain)

Rahul MehrotraMumbai (India)

Quintus Miller, Paola MarantaBasel (Switzerland)

Marco Navarra(NOWA)Caltagirone (Italy)

Office dA(Monica Ponce de Leon,Nader Tehrani)Boston (USA)

Valerio OlgiatiChur (Switzerland)

Promontorio Architects(João Perloiro, João Luís Ferreira, Paulo Perloiro,Paulo Martins Barata,Pedro Appleton)Lisbon (Portugal)

Saša Randic , Idis TuratoRijeka (Croatia)

João Alvaro RochaMaia (Portugal)

Enric Ruiz Geli(Cloud 9)Barcelona (Spain)

S-M.A.O.(Juan Carlos Sancho,Sol Madridejos)Madrid (Spain)

Beniamino ServinoCaserta (Italy)

Shuhei EndoOsaka (Japan)

The next ENTERprise(Marie-Therese Harnoncourt,Ernst J. Fuchs)vienna (Austria)

Antonio Jimenez TorrecillasGranada (Spain)

Shu WangHang Zhou (China)

SECOnD EDITIOn 2009-2010

JURyPresident


Members

Valentin BearthChur (Switzerland)

Solano BenitezAsunción (Paraguay)

Barry Bergdollnew york (USA)

Luis Fernandez GalianoMadrid (Spain)

Secretary


ADvISORSEmilio Ambasznew york (USA)

Laurent Beaudouinnancy (France)

Gonçalo ByrneLisboa (Portugal)

Alberto Campo BaezaMadrid (Spain)

Massimo CarmassiFlorence (Italy)


Dan S. HanganuMontreal (Canada)

Kengo KumaTokyo (Japan)

Boris Podreccavienna (Austria)

Bruno ReichlinMendrisio (Switzerland)

Wenjun ZhiShanghai (China)

WInnERDiébédo Francis KéréGando (Burkina Faso)Berlin (Germany)

CAnDIDATES Iñaqui Carnicero, Ignacio Vila,Alejandro VírsedaMadrid (Spain)

Adam Caruso, Peter St JohnLondon (Great Britain)

Davide Cristofani, Gabriele LelliFaenza (Italy)

João Pedro Falcão de CamposLisbon (Portugal)

Dietmar FeichtingerParis (France)vienna (Austria)

Arturo Franco DíazMadrid (Spain)

Sou FujimotoTokyo (Japan)

José Fernando GonçalvesPorto (Portugal)

Erich Hubmann, Andreas Vassvienna (Austria)

Bjarke IngelsCopenhagen (Denmark)

Junya IshigamiTokyo (Japan)

Christian KerezZurich (Switzerland)

Andrea Liverani, Enrico MolteniMilan (Italy)

Fabio MarianiRimini (Italy)

João Mendes RibeiroCoimbra (Portugal)

MGM - Morales Giles MariscalJosé Morales Sanchez,Sara de Giles Dubois,Juan Gonzalez MariscalSeville (Spain)

Hiroshi NakamuraTokyo (Japan)

nARCHITECTSEric Bunge, Mimi Hoangnew york (USA)

Willem Jan Neutelings,Michiel RiedijkRotterdam (The netherlands)

Mauricio Pezo, Sofia vonEllrichshausenConception (Chile)

Joshua Prince-Ramusnew york (USA)

Bernard QuirotPesmes (France)

Jurij Sadar, Boštjan VugaLjubljana (Slovenia)

Markus SchererMerano (Italy)

José Selgas, Lucia CanoMadrid (Spain)

URBANUSXiaodu Liu, Yan Meng, Hui WangShenzhen (China)

Tiantian XuBeijing (China)

THIRD EDITIOn2011-2012

JURyPresident


Members

Gonçalo ByrneLisbon (Portugal)

Marco Della TorreComo (Italy)

Diébédo Francis KéréGando (Burkina Faso)Berlin (Germany)

Mohsen MostafaviCambridge, Mass. (USA)

Secretary


ADvISORSSolano BenitezAsunción (Paraguay)

Barry Bergdollnew york (Stati Uniti)

Ole BoumanRotterdam (The netherlands)

Luis Fernandez GalianoMadrid (Spain)


Sean GodsellMelbourne (Australia)

Kengo KumaTokyo (JApan)

Shelley McNamaraDublin (Ireland)

Rahul MehrotraMumbai (India)Boston (USA)

Valerio OlgiatiFlims (Switzerland)

Eduardo Souto de MouraPorto (Portugal)

Shu WangHang Zhou (China)

WInnERStudio MumbaiMumbai (India)

CAnDIDATES Alejandro AravenaSantiago (Chile)

architecten de vylder vinck taillieu (Jan de Vylder, Inge Vinck, Jo Taillieu)Ghent (Belgium)

Atelier Bow-Wow(Yoshiharo Tsukamoto,Momoyo Kaijima)Tokyo (Japan)

Nuno Brandão CostaPorto (Portugal)

Angelo BucciSão Paulo (Brazil)

Marcus Donaghy, William DimondDublin (Ireland)

Ecosistema urbanoMadrid (Spain)

Antón García-Abril(Ensamble Studio)Madrid (Spain)

Anna HeringerSalzburg (Austria)

LTL Architects(Paul Lewis, Marc Tsurumaki,David Lewis)new york (USA)

Gurjit Singh MatharooAhmedabad (India)

Alberto MozóSantiago (Chile)

muf architecture/artLondon (Great Britain)

Hiroshi NakamuraTokyo (Japan)

Mauricio Pezo,Sofia von EllrichshausenConcepción (Chile)

Smiljan RadicSantiago (Chile)

Camilo RebeloPorto (Portugal)

Enric Ruiz-Geli (Cloud 9)Barcelona (Spain)

José María SaezQuito (Ecuador)

Joaõ Pedro Serôdio,Isabel FurtadoPorto (Portugal)

Dominic StevensCloone (Ireland)

Jonathan WoolfLondon (Great Britain)

Alejandro Zaera PoloLondon (Great Britain)Barcelona (Spain)

Ke Zhang (standardarchitecture)Beijing (China)

Lei Zhangnanjing (China)

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The BSI Swiss Architectural Award is more than just a prize; it is the expression of the composite work of many people who, over and above their individual specialisations, identify with a common project for the greater social good.

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Alfredo Gysi, Chairman of the Board of Directors of BSI

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BSI Group

Profit and loss statementNet operating result

Operating expenses

Gross profit

Depreciation of fixed assets

Value adjustments, provisions, and losses

Extraordinary income / expenses

Taxes

Net Group profit

Balance sheetTotal assets

Shareholders’ equity, including net Group profit

Client assetsTotal

Headcount (in FTEs)

Total

of which: in Switzerland

abroad

Capital ratios (Basel II)Total capital (Tier 1 and 2)

Tier 1 capital

BSI AG

Profit and loss statementNet operating result

Operating expenses

Gross profitNet profit Balance sheet Total assets

Shareholders’ equity after appropriation of profit

Dividend (proposal of the Board of Directors)

in CHF 1’000

in %

2011

CHF 1’000

834’151

-668’582

165’569

-105’939

-21’259

43’311

-23’570

58’112

32’164’674

2’463’585

CHF million

77’746

Unit

1’964

1’346

618

%

14.59

13.78

2011

CHF 1’000

643’765

-463’828

179’937

90’113

18’659’769

2’270’109

30’000

1.63

2012

CHF 1’000

865’038

-667’997

197’041

-105’231

-41’104

34’290

-13’985

71’011

24’286’931

2’476’115

CHF million

86’262

Unit

1’963

1’317

646

%

16.96

16.22

2012

CHF 1’000

656’677

-494’800

161’877

30’867

20’023’067

2’260’080

30’000

1.63

HIGHLIGHTS 2012

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The BSI Group ended 2012 on a positive note, giving renewed impetus to the implementation of its growth strategy. This was amidst a fragile world economy, volatile financial markets and major changes in the wealth management sector.

In 2012 the world economy continued to grapple with the effects of the crisis that began in 2007. Global growth slowed due to economic weakness in the euro area es-pecially but also in the emerging economies, China in par-ticular, whose growth rates, while still high, decelerated. Conditions on financial markets improved partly due to the ECB’s actions in support of the euro. Nonetheless, investors remained wary primarily because of persistent uncertainty concerning the euro crisis, the slowdown in the Chinese economy and doubts about the sustainability and solidity of the recovery in the US economy.

Although slowing, the Swiss economy turned out to be one of the best performers among the developed coun-tries. On the monetary front, the Swiss National Bank continued to defend the minimum exchange rate of 1.20 francs to the euro with the goal of limiting the strong appreciation in the Swiss currency, which remained high throughout the year against both the euro and the dollar.

The Swiss banking sector overall continued to face politi-cal pressure centred predominantly on taxes. In 2012 the European Union established the regulatory compatibility of Switzerland’s proposal to introduce a final withholding tax for the assets of European clients held at Swiss banks. This proposal allows for the regularisation of assets not declared in the past as well as the introduction of a tax for the future that fully respects client privacy. Also in 2012, tax agreements to this effect were ratified by Austria and the United Kingdom, while the tax agreement signed with the German government became the centre of political debate in Germany, and despite being approved by the Bundestag was rejected by the Bundesrat. Other negoti-ating tables with important European partners, including Italy, are still open, and it is hoped that some positive conclusions will be reached.

Nationally, discussions continued in an effort to define a strategy for the Swiss financial centre in line with the most recent international developments such as recommendations from the Financial Action Task Force (FATF) for combating money laundering concerning the extension of bank diligence in conjunction with stepping up the fight against money laundering. In today’s times, marked by sweeping changes, we believe in maximum cooperation between the banking world, regulatory and government institutions to respond efficiently and lastingly to the chal-lenges that lie ahead for the financial centre.

In 2012, BSI succeeded in improving its performances significantly thanks to the effectiveness of our strategic choic-es, our attractiveness in the wealth management sec-tor and the professionalism of our staff, which has not only retained existing clients but acquired new ones as well. In terms of shareholder structure, the Generali Group has announced its plan to sell the Bank to focus on its core insurance business.

In 2012, net new money totalled CHF 7.5 billion (2011: CHF 6.7 billion), an all-time high for the BSI Group. Assets under management reached CHF 86.3 billion, up 11.0% from 2011’s CHF 77.7 billion, despite the continued strength of the Swiss franc against the euro and the dollar. Growth in volumes and cost containment helped improve margins significantly. Gross profit rose by 19.0% with respect to the previous financial year, settling at CHF 197 million (2011: CHF 165.6 million), while net profit grew by 22.0%, com-ing in at CHF 71 million compared to CHF 58.1 million in 2011. Also in 2012, BSI reinforced its position as a solid bank, with shareholders’ equity of CHF 2.5 billion and a total capital ratio of 17.0% (2011: 14.6%), further strength-ening the Group’s capital base.

Foreword

8 __ BSI Annual Report 2012

This positive trend reflects the effectiveness of BSI’s strategy, based on three main pillars: geographical di-versification, through which we have been able to take advantage of the development opportunities offered by more dynamic markets such as Asia, Latin America, Eastern and Central Europe and the Middle East and to consoli-date our position on the more traditional markets; the de-velopment of specialised service models for specific cli-ent segments; and increased operating efficiency along with strict risk control and capital management.

Overall, the important goals reached in 2012 demonstrate that the BSI Group has laid down a solid foundation for sustainable long-term growth. In this 140th year of our Insti-tution, the BSI Board of Directors and Executive Board are determined to continue on the path of growth success-fully followed for so many years. We would like to thank our clients for the trust they place in our Institution, and we would like to take this opportunity to extend our appreciation and thanks to our staff, who dedicate every day, with unwavering commitment and professionalism, to provid-ing the services that our clients demand and deserve. Thank you again.

Alfredo Gysi Stefano CoduriChairman of the Group Chief Executive Officer

Board of Directors


Corporate governanCe

In light of the new structure that was implemented at BSI AG effective 1 January 2012, the corporate governance principles of the Bank, which were amended to meet the new organisational situation, have been included in the updated versions of the General Management Regulations as well as in the Articles of Incorporation.

orDInArY GenerAl MeetInGThe duties and responsibilities of the Ordinary General Meeting, which is held within four months of the end of the financial year, include the approval and amendment of the Articles of Incorporation; the appointment of mem-bers of the Board of Directors and the external auditor; and the approval of the annual report, and the Group and BSI AG financial statements including resolutions re-garding the appropriation of profit, the discharge of the Board members and other decisions attributed to it by national law (art. 6 and 9 of the Articles of Incorporation). The Ordinary General Meeting, for which minutes are ta-ken, is generally chaired by the Chairman of the Board of Directors (art. 7 of the Articles of Incorporation). The share capital of BSI is equal to CHF 1.84 billion and is divided into 18.4 million registered shares (nominal value of CHF 100). The capital is fully paid up and is held by a sole shareholder: Participatie Maatschappij Graafschap Holland N. V. of Diemen, which is in turn wholly owned directly and indirectly by Assicurazioni Generali SpA of Trieste. The employees of BSI AG do not hold any of the Bank’s share capital.

BoArD oF DIreCtorSAnD tHe BoArD CoMMItteeSThe duties, responsibilities, composition and function of the Board of Directors are regulated by federal law, and in particular by FINMA circular 2008/24 “Supervision and internal control in the banking sector”, and are defined in the Articles of Incorporation (art. 10-14) and in the new General Management Regulations of the Bank (art. 1-10).

The Board of Directors is responsible for the ultimate su-pervision, monitoring and control of the Bank’s manage-ment in accordance with the Swiss Federal Law on Banks and Savings Banks, as well as the applicable articles of the Swiss Code of Obligations.Thus, the Board of Directors is responsible for instituting, regulating, maintaining, supervising and checking on a re-gular basis that there is a suitable internal control system for BSI AG and the Group.

At least one-third of the Board of Directors must com-prise members who satisfy the requirements for inde-pendence stipulated in the FINMA provisions. The Board constitutes itself every year at the meeting following the Ordinary General Meeting. The members are elected for a period of three years and may be re-elected. Their term of office expires on the day of the third Ordinary General Meeting following their appointment. The Board of Di-rectors makes the appointments required in the Articles of Incorporation. In particular, it appoints the Chairman and Vice-Chairman. It has the authority to appoint up to two Vice-Chairmen. The Board of Directors also appoints a secretary, who may also not be a member of the Board.

The composition of the Board of Directors, which for 2012 has nine members, is in compliance with the independen-ce requirements fixed by the FINMA Circular 2008/24 (margin no. 20-24). Meetings of the Board of Directors are called by the Chairman or, if he is unavailable, by the Vice-Chairman. The Board must meet at least four times each year. For decisions to be valid, a majority of the Board members, including the Chairman or the Vice-Chairman, must be present. The Board of Director’s de-cisions are made based on an absolute majority among members present. In the case of a tied vote, the Chairman or the Vice-Chairman has the casting vote. The Board of Directors may also make decisions by correspondence, using the usual methods of telecommunication. The new General Management Regulations stipulate a new deci-sion-making procedure for extremely urgent cases: the Chairman, or if he is not available, the Vice-Chairman, with at least two other members of the Board, may make urgent decisions by unanimity under certain conditions. Minutes of decisions made under this procedure must be written down at the latest during the following meeting of the Board of Directors, with an indication of the members who took the decision.

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The Chairman or, if he is not available, the Vice-Chairman convenes the Board of Directors at least ten days before the meeting date with a communication indicating the agenda. The Chairman or, if he is not available, the Vice-Chairman chairs the meetings, to which members of the Group Executive Board may also be invited. Any member of the Board of Directors, the Group Executive Board, the Group CEO or, in his absence, the Group Deputy CEO may convene meetings of the Board, indicating their re-asons.

The Board of Directors must, as a committee, satisfy the requirements necessary to execute its tasks in terms of professional competences, experience and availability. For this purpose, the Board of Directors evaluates and documents in writing the achievement of objectives and its working methodology. This self-evaluation was done, as in the previous year, with the support of an external consultant.

The tasks and main powers of the Board of Directors include issuing and modifying the necessary regulations and general directives for organising, managing and su-pervising the activities of BSI AG and the Group, as well as setting the competencies for the Bank’s governing bodies, if these tasks have not been delegated to the Group Executive Board. Furthermore, the Board of Di-rectors decides the medium-term plan for the Bank’s corporate policy, management principles and global risk control as well as approving its risk management policy. It also approves the structure of the general organisational chart and designates the persons authorised to represent the Bank.The Board of Directors prepares the current annual re-port, the annual accounts and the Group accounts, which are presented to the Ordinary General Meeting for ap-

proval, together with a proposal for the appropriation of profit. As part of its monitoring and control duties, the Board of Directors, with the support of the Audit & Risk Committee, examines the reports of the external auditor and Internal Audit, the quarterly Global Risk Report, the trend in large exposures, the financial result, the financial positions, the Bank’s liquidity and the shareholders’ equity at Bank and Group level. Finally, the Board of Directors appoints the Chief Audit Executive, who is responsible for internal auditing at Group level.

The Board of Directors appoints an Audit & Risk Commit-tee, comprising at least three members. They supervise and assess the integrity of the annual financial state-ments, compliance with legal requirements and regula-tions, the effectiveness of the internal and external audits, and the adequacy and effectiveness of the control system of BSI AG and the Group. The duties and responsibilities of the Audit & Risk Committee are defined in specific re-gulations. The Committee meets at least four times each year. Together with the Group Executive Board, Internal Audit and the external auditor, the Audit & Risk Commit-tee examines the annual financial statement. The respon-sibility for the tasks assigned to the Committee remains with the Board of Directors.

The Appointments & Remuneration Committee, appoin-ted by the Board of Directors, comprises at least two members. It is responsible for approving the principles go-verning employees’ fixed and variable remuneration, and the global plan for promotions and development. In par-ticular, this Committee sets salaries for the members of the Board of Directors. It also approves the employment contracts and sets the remuneration of the Group Execu-tive Board and the Chief Audit Executive. The duties and responsibilities of the Committee are defined in specific regulations.

At the meetings of 19 January 2012, 19 April 2012 and 25 September 2012, the Ordinary General Meeting appointed the following new members to the Board of Directors: Mr Ilan Hayim, Mr Pierre E. Genecand and Mr Mario Greco.


the Year in 2004. In the same year he was also appoin-ted to the Board of Managing Directors of Allianz AG. In 2005 he became the CEO of EurizonVita of the Sanpaolo IMI Group, and thus CEO of Eurizon Financial Group. In 2007 he became the Vice CEO Global Life for Zurich Financial Services, and one year later was appointed CEO and member of the Executive Committee. In 2010 he was appointed CEO General Insurance for Zurich Insurance Group. He held this position until 4 June 2012. He is currently CEO of the Fondazione Assicurazioni Generali and of Generali PPF Holding B.V., and is also chairman of the Board of Directors of Generali (Schweiz) Holding AG. On 1 August 2012, he was appointed Group CEO of Assicurazioni Generali.

Ilan Hayim was born in Geneva, Switzerland, on 3 Novem-ber 1951. He obtained a degree in economics at the HEC business school of the University of Geneva in 1975 and worked there as an assistant for three years. He then held positions at various banking institutions in Switzerland: Paribas (Switzerland), Banca della Svizzera Italiana (as General Manager of the Geneva branch from 1988 to 1992), Banque Unigestion, Union Bancaire Privée, HSBC Guyerzeller initially as a Member of the Executive Board, then as Deputy CEO and finally as Chief Executive Of-ficer. In 2006, he was appointed Vice-Chairman of the Board of Directors of HSBC Private Bank (Suisse) SA, Geneva, and he retained this role until the end of 2011. He joined the Board of Directors of BSI AG, Lugano, on 20 January 2012.

Alfredo Gysi was born in Sorengo, Switzerland, on 3 Oc-tober 1948 and studied in Italy and Switzerland. After earning an undergraduate degree, he went on to obtain a doctorate in mathematics from Milan’s Università Statale in 1973. From 1994 to 2011 he was Chief Executive Of- ficer of BSI AG. He is Chairman of the Association of Fo-reign Banks in Switzerland and a Member of the Board of Directors and the Committee of the Board of Directors of the Swiss Bankers Association (SBA). Since March 2011, he has been a member of the Bank Council of the Swiss National Bank (SNB). He is Chairman of the Foundation Board for the faculties of Università della Sviz- zera Italiana in Lugano, a member of the Board of Direc-tors of that university, and a member of the Foundation Board of the Swiss Finance Institute. A great lover of art and music, Mr Gysi is Vice-Chairman of the Fondazione dell’Orchestra della Svizzera Italiana.

Mario Greco was born in Naples on 16 June 1959. He received a degree in economics in Rome in 1983 and went on to obtain a Master’s Degree in International Eco-nomics and Monetary Theory at the University of Roche-ster in New York in 1986. He started his professional career in 1986 at McKinsey & Company. He became a partner in 1992 and continued working there until 1994. He worked primarily as a financial consultant at banks and insurance companies. In 1995 he became the head of the Claims Division at RAS, in the following year he took on the position of General Manager, and in 1998 he became the Managing Director. In 2000 he was appointed the Chief Executive Officer of Ras, a position he held until 2005. He obtained some major results and awards for the company and for himself, including Insurance CEO of

Alfredo Gysi

Mario Greco

Ilan Hayim

Eugenio Brianti Luigi Butti

Pierre Genecand

Tiziano Moccetti

Nicola Mordasini

Renzo Respini

1 Vice-Chairman until 16 January 2013.

2 Independent member in accordance with FINMA Circular 2008/24.

Appointments & Remuneration

Committee

Vice-Chairman

Chairman

Audit & RiskCommittee

Vice-Chairman

Member

Member

Chairman

Mandateexpires

2014

2015

2014

2013

2013

2015

2013

2014

2014

1, 2

2

2

2

2

2

2

Boardof Directors

Chairman

Vice-Chairman

Vice-Chairman

Member

Member

Member

Member

Member

Member

As at 1 January 2013, the composition of the Board of Directors was as follows:

__ 13

Tiziano Moccetti was born in Caslano, Switzerland, on 4 December 1938. After earning a degree in medicine from the University of Zurich, he specialised in internal medicine and cardiology. He deepened his knowledge of various sectors at university and specialist hospitals in Zurich, returning to Ticino in 1972 to the Ospedale Civico in Lugano as chief cardiologist and medical director. As a Professor at the Faculty of Medicine of the University of Zurich since 1981, he has written more than 300 inter-national scientific publications in the field of cardiology. He is a member and Director of the Cardiocentro Ticino Foundation, Lugano, which he founded in 1995. In addi-tion, he is Chairman and member of various associations and committees for health, in particular cardiology, in Switzerland and abroad. He has held a seat on the Board of Directors of BSI AG since 1985.

Nicola Mordasini was born in Bellinzona, Switzerland, on 7 July 1950. After graduating from the University of Geneva with a degree in economics, he started his professional career in 1974 at Banca del Gottardo. He held numerous positions in various sectors of this bank. In October 1991, he was appointed Senior Executive Vice President with responsibility for the activities of Private & Commercial Banking. In 1998, he took on the position of Vice-Chair- man of the Executive Board, again with responsibilities related to clients and affiliates. He held this position until the beginning of 2008, when he was appointed to the Board of Directors of BSI AG. Lastly, he has held and still holds various mandates with boards of companies and foundations.

Renzo Respini was born in Sorengo, Switzerland, on 2 July 1944. After studying law, he qualified as a lawyer and notary. He has been the Public Prosecutor, and from 1983 to 1995 he was a State Councillor for the Canton of Ticino in charge of the Department of Law, Economics and the Military, and subsequently for the Department of Home Affairs. Until 1999, he was a member of the Council of States in Berne. He is currently joint principal of a law firm and notary’s office in Lugano and Locar-no. He holds positions on the Board of Directors of Alp Transit Gottardo SA, Lucerne, and on the boards of other small and medium-sized companies in Ticino. He is also active in various cultural and humanitarian associations that operate in Switzerland and internationally. He was a Member of Banca del Gottardo’s Board of Directors until early 2008, when he was appointed to the Board of Directors of BSI AG.

Eugenio Brianti was born in Trieste, Italy, on 4 June 1953 and is a Swiss citizen. After finishing high school in Lu-gano, he studied at the University of Parma, where he received a doctorate in economics and business in 1979. He worked briefly at UBS before starting at BSI in 1980. Over the years he has held various positions, including the coordination of the development and control office for the Swiss branches. In 1989, he became manager of the St. Moritz branch, and a year later he was appointed manager of the Chiasso branch.In 2003, he took on the position of head of Private Banking for Ticino and Graubünden. In 2005, he was na-med Executive Vice President, and in 2008 Senior Exe-cutive Vice President. Since 1 January 2011 he has been a member of the Board of Directors of BSI and a member of the Board of Directors of FINMA, the Swiss financial market supervisory authority, by appointment of the Swiss Federal Council. He is Chairman of Funicolare Lugano-Paradiso-Monte San Salvatore SA, Vice-Chairman of Società Autolinee Regionali Luganesi and a Member of Finnat Gestioni SA.

Luigi Butti was born in Vacallo, Switzerland, on 25 Novem-ber 1940. After graduating from the Business College of Maria-Hilf (canton of Schwyz), he honed his professional skills at various credit institutions and brokers, such as Credit Suisse in Zurich, Rued, Blass & Cie in Zurich, and Hirsch & Co. in New York. He began his career at BSI AG in 1969 as a relationship manager, and then took over responsibility for the financial division and private clients department. In 1990, he was appointed Senior Executive Vice-President, and in 1998 he became Deputy CEO of BSI AG, a position he held until 2004, when he became a member of the Board of Directors of BSI AG. He is also a member of the Cardiocentro Ticino Foundation, Lugano, and since 2011 he has been Chairman of the San Salva-tore Foundation, Lugano.

Pierre E. Genecand was born in Geneva, Switzerland, on 26 March 1950. He has many years of experience in the international banking and insurance sector, particularly in portfolio management for life insurance and pension funds. He spent most of his career working at Gesrep SA, a Geneva-based company that operates in insurance portfolio management for private and institutional clients. He managed the company from 1982 and was its Chair- man from 1992 until 2005. Among his other roles, he has been Chairman of the PatrimoniA Foundation, an entity that supports small and medium-sized companies in the area of pension funds. Until 2003 he was Vice-Chairman of the Swiss Insurance Brokers Association (SIBA). From 2003 until 2011 Pierre Genecand was also a member of the Board of Directors at HSBC Private Bank Suisse and at HSBC Guyerzeller Bank.


Group exeCutIve BoArDThe Group Executive Board (hereinafter: GEB) is responsi-ble for the operational management of the Bank. Its mem-bers are appointed by the Board of Directors. It manages the Bank, in particular, by carrying out the following tasks. It decides the short- and medium-term objectives within the general framework set by the Board of Directors, takes all measures needed to achieve these objectives, presents proposals in support of decisions taken by the Board of Directors, and proposes to the Board of Directors the general policies and strategies of the Bank. In carrying out its functions, the GEB represents the Bank, drafts the medium-term plan and the annual budget (both of which are submitted to the Board of Directors for appro-val), implements the risk management policy, monitors trends and prepares the quarterly report on liquidity and shareholders’ equity, appoints Assistant Vice Presidents and Assistant Treasurers, signs agreements with profes-sional associations, establishes the human resources po-licy, and issues provisions required for the execution of the General Management Regulations. The GEB is required to keep the Board of Directors informed of business trends and the Bank’s situation by presenting to the Board and commenting upon respective reports and documents. The GEB acts as a collective body in carrying out its functions. Its tasks, responsibilities and reporting duties are defined in the General Management Regulations (art. 11-16).

The GEB is supported in its activities by several perma-nent committees with decision-making powers: the Finan-cial Risk & Capital Allocation Committee, the Operational Risk & Compliance Committee, the Operational Efficiency Committee, the Business Policy & Development Commit-tee, the Credit Committee and the Counterparty & Broker Committee.

Lastly, the GEB proposes the composition of the Group Advisory Board, which is approved by the Board of Direc-tors. The Group Advisory Board is a committee with adviso-ry powers chiefly in relation to strategic issues surrounding business development at BSI AG and the Group.

As at 1 January 2013, the composition of the Group Exe-cutive Board was as follows:

Stefano Coduri, Group CEOGianni Aprile, Deputy Group CEO, Strategic Planning & Corporate FinanceNicola Battalora, Senior Executive Vice President, BSI EuropeHanspeter Brunner, Senior Executive Vice President, BSI AsiaRajiv Pradhan, Senior Executive Vice President, Corporate ServicesGérald Robert, Senior Executive Vice President, BSI Latin America & Middle EastRenato Santi, Senior Executive Vice President, BSI Switzerland

CoMpenSAtIon 2012 (CHF GroSS AMountS) oF tHe MeMBerS oF tHe Group exeCutIve BoArD

Annual base salary

Short term incentive

Long term plan (deferred payment)

Total

The disclosed amounts refer to seven members of the Group Executive Board. One member of the Board left (retirement) at the end of June 2012 and two ones (new appointments) joined in July 2012. All the amounts but the ones related to the long term plan, do not include the employer contributions to social securities as well as all other additional insurances and unemployment. The long term plan amounts are deferred and paid by instalments according to the rules of the Plan.

Stefano Coduri, born in Mendrisio, Switzerland, on 25 May 1964, has been CEO of BSI since 1 January 2012. After obtaining a degree in finance and accounting from the University of St. Gallen, he joined BSI in 1989 and has spent his entire career at the bank. He was appointed to the Executive Board in 2004. He successfully led the most important projects involving the Bank in recent years, inclu-ding the integration of Banca Unione di Credito (BUC), ac-quired in 2006, and Banca del Gottardo, acquired in 2007, and the implementation of a new IT platform for the entire BSI Group. Before taking over his present position, Stefano Coduri was Head of Banking Platform (group operations), a position that enabled him to acquire a wealth of expe-rience in various segments of the Bank, including private banking, product management and organisation.

2012

CHF

3’583’265

3’924’336

2’507’224

10’014’824

__ 15

Gianni Aprile, born in Zurich, Switzerland, on 18 October 1951, has been CEO of BSI Strategic Planning & Corpo-rate Finance since January 2013 and deputy CEO of the BSI Group since 2007. After obtaining degrees in eco-nomics and sociology from the University of Geneva, in 1978 he received a Master’s Degree in econometrics and he began his career as scientific researcher at the Federal Polytechnic of Zurich and the University of Geneva, where he earned a PhD in economics and social sciences in 1983. After three years at Paribas Suisse as Head of In-ternal Control and Risk Treasury Management, he joined BSI in 1987, where he successfully filled important roles of responsibility inside the BSI Group. In 1999 he was appointed General Director. Before taking over his pre-sent position, Gianni Aprile was Head of Private Banking Switzerland of the BSI Group, Head of Corporate Center, Head of Financial Services, thus acquiring a wealth of experience in various segments of the Bank, including asset management, products and services, logistics and operations. Gianni Aprile also fills other important institutional positions: he is Chairman of the Board of Directors of Patrimony 1873, member of the Board of Directors of B-Source and member of the Scientific Board of Univer-sity of Applied Sciences and Arts of Southern Switzerland (SUPSI).

Nicola Battalora, born in Lugano (Switzerland) on 10 January 1962, has been CEO of BSI Europe since July 2012 and Head of BSI Luxembourg since 2010. After graduating in Business & Administration at the St. Gallen University, in 1987, he began his professional career as General Manager Assistant at the Ente per il Turismo Ticinese. Nicola Battalora joined the BSI Group in 1989 and started work in the Offshore Banking Operations unit at the Lugano head office. He subsequently worked in the Control of Overseas Subsidiaries unit until 1992, gaining considerable experience in international banking. Subse-quently Mr Battalora obtained Securities & Financial De-rivates Representative Certification in London and had various roles in the offices of Guernsey and Nassau, where he spent a long period as Senior Vice President. Before taking over his present position, Mr Battalora filled the role of CEO BSI Bank Ltd. Singapore from 2005 to 2010.

Hanspeter Brunner, born in Steckborn (Switzerland) on 12 April 1952, has been CEO of BSI Asia since 2010, over-seeing Singapore operations and heading up the strategic development of BSI in the Asian markets. He has thirty years’ experience and an in-depth knowledge of the private banking sector. After the degree, Mr Brunner worked di-rectly in the Asian markets for over 20 years, first with Cre-dit Suisse and then with RBS Coutts, including positions such as CEO of RBS Coutts International and Executive Chairman of RBS Coutts Asia. He thus acquired a deep knowledge and understanding of the Asian private banking landscape. During his career, Mr Brunner was classified “Outstanding Private Banker Asia Pacific” in 2008 by Pri-vate Banker International, and “Asian Private Banker of the Year 2010” by the Asian Private Banker publication in 2011. A Swiss National, Hanspeter Brunner became a Singapore Permanent Resident in 2007 and has held numerous extra-professional positions in both Singapore and Hong Kong as a Board member of the Association of Foreign Banks in Switzerland, Council member for the British Swiss Chamber of Commerce, and the President of the Swiss Business Council.

Rajiv Pradhan, born in New Delhi (India) on 11 June 1955, has been CEO of BSI Corporate Services since 2010, with responsibility for the departments of Finance, Risk Management, Group Credit Officer, Legal & Compliance, Group Investment Services, Capital Markets and Banking Platform. After obtaining a degree in Economics from the London School of Economics, a professional qualification as a Chartered Accountant at Peat Marwick in London, and an MBA from INSEAD of Fontainebleau, he began his professional career as an internal auditor of Olivetti Group subsidiaries worldwide. He then continued his professional development at Hermes Precisa International (Yverdon/Lausanne), a company then acquired by Olivetti. He has been at BSI since 1987, holding many important roles in the Group Accounting, Budgeting, Planning, Operations and Logistics. In 2001 Rajiv Pradhan was appointed as a mem-ber of BSI Executive Board and Head of Operations & Logistics, a position that he kept until 2004. In 2005 he became CEO of B-Source, a company providing Informa-tion Technology Outsourcing (ITO) & Business Process Outsourcing (BPO) services, which during those years was wholly owned by the BSI Group. In 2008 he was appointed Chief Financial & Risk Officer of BSI Group and has assu-med his current position from 2010.


Gérald Robert, born in Rome (Italy) on 14 November 1957, has been CEO of BSI Latin America & Middle East since July 2012 and since 2001 he has been Director at BSI and Branch Manager in Geneva, as well as Area Manager of Latin America. In this role, he is responsible for mana-ging both domestic and international banking for Gene-va branch in addition to Latin America worldwide. After graduating in International politics and economics from George Washington University, he studied for a Master of Arts at the John Hopkings University of Washington D.C., specialising in Economics and Finance, and worked as Research Associate for the Department of state arms and control and disarmament agency. From 1983 to 1985 he worked for the Banker Trust Company of New York as a private banking relationship manager for Europe and Latin America. In 1985 he joined the New York branch of BSI as Account Manager and was responsible for maintai-ning and developing private banking clients in Latin America and Europe. In 1987 he moved to Venezuela, where he has managed the bank since 1989 and in 1990 he became Senior Representative of BSI in Argentina. From 1993 to 2001 he was Director of BSI Monte Carlo.

Renato Santi, born in San Vittore, Switzerland, on 27 Oc-tober 1969, has been CEO of BSI Switzerland since 1 January 2013. Santi started working for BSI in 1994 and has spent his entire career with the bank. In 2011 he joined the bank’s Executive Board as the head of the Personal Banking division. Renato Santi is a graduate in economics from the University of St. Gallen. In the course of his career at BSI he has successfully taken charge of va-rious strategic development projects. Since entering the management of BSI AG’s Private Banking division in 1996 and subsequently becoming head of the division in 2002, Santi has been responsible for Product Manage-ment (Lugano), Corporate Services at BSI Ifabanque (Pa-ris) and Strategic Marketing & Support Services (Lugano).

InternAl AuDItInternal Audit is the department that, at group level, per-forms independent evaluations and reviews of the inter-nal control system, thereby contributing to the ongoing adjustment of the control system as needed. It coordina-tes its activities with those of the external auditor. Internal Audit reports directly to the Board of Directors and thus to the Audit & Risk Committee. Internal Audit reports pe-riodically to the Committee on the actions it has carried out, and it also reports to the Board of Directors once a year. Written reports on the results of audits conducted by Internal Audit are produced and sent to the Chairman of the Board of Directors and the Audit & Risk Committee. A copy is also sent to the members of the Group Executive Board and to the external auditor. The scope, authorities and responsibilities of Internal Audit are defined in the General Management Regulations and in the Group In-ternal Audit Regulations. The Chief Audit Executive, who is appointed by the Board of Directors, is Mr Nicola Gu-scetti. He has held this position since 1 January 2012.

externAl AuDItorThe external auditor checks the Group accounts and the annual reports of the Bank in accordance with legal provi-sions and regulations in force in Switzerland. The exter-nal auditors’ mandate as defined in the Swiss Code of Obligations was granted for the last financial year to the Geneva branch of Ernst & Young in Lancy, Switzerland. It was renewed by the Ordinary General Meeting of BSI AG on 31 March 2011 for the period 2011-2013. The head auditor is Mr Didier Müller.

__ 17

BSI AG – ORGANISATION CHART

(situation as of 1 January 2013)BOARD OFDIRECTORS

INTERNAL AUDIT

Nicola Guscetti

CORPORATE SERVICES

Rajiv Pradhan 1

GROUP HR, ORGANISATION & INTERNAL COMMUNICATION

Vincenzo Martino

STRATEGIC PLANNING & CORPORATE FINANCE

Gianni Aprile 1

GROUP ExECUTIVE OFFICE

David Matter

MERCHANT &INVESTMENTBANKING

Vincenzo Piantedosi

BSI EUROPE

Nicola Battalora 1

BSI SWITZERLAND

Renato Santi 1

BSI ASIA

Hanspeter Brunner 1

BSI LATIN AMERICA& MIDDLE EAST

Gérald Robert 1

GROUP CHIEF ExECUTIVE OFFICER

Stefano Coduri 1

1 Members of the Group Executive Board.


oUr organIsatIonaL strUCtUre

After the consolidation of the new organisation structure in three regions based on Private Banking activities was completed and the structure of Corporate Services and the staff units were strengthened in 2011, the year 2012 saw an additional organisational optimisation. This in-volved separating the activities focused on the markets of Latin America and the Middle East from BSI Switzerland and defining a new dedicated region to them. Additionally, the Institutional & Family Office division was transformed into an independent legal entity, wholly owned by BSI AG, called Patrimony 1873. This represents an additional fine-tuning of the service excellence offered in integrated asset management for wealthy clients, through the use of dedicated tools entirely organised to guarantee wide-ranging protection and management of risks, as well as continual monitoring of investments. This new structure is compatible with both the original objective – to guarantee greater client focus depending on the specific market area, both with respect to individual needs and to devel-oping specific opportunities for private and institutional clients – and the ongoing improvement of internal pro-cesses and services.

BSI SwItzerlAnDThe BSI Switzerland region continued its strategic devel-opment activities in the Private Banking segment in the following key geographical areas. A branch will be opened in the Italian market, which has always been of central importance to BSI. This strategic choice will strengthen the banking services offered in Italy. Consequently, the EOS Servizi Fiduciari SpA and BSI Wealth & Family SIM SpA units were assigned to BSI Switzerland. In the Swiss domestic market, measures were also taken to accelerate the pace of growth in the regions of Zurich and French-speaking Switzerland by enhancing the current advisory and wealth management process. Activities also con-tinued to strengthen the offering and service model for the growth segment of External Asset Managers in the three main Swiss cities. Additionally, the Personal Bank-ing service model was further developed towards an efficient, innovative, multi-channel model dedicated to clients in this segment. Moreover, it was clear that BSI’s international outlook and the attractiveness of the Swiss financial centre are appreciated by foreign clients. In par-ticular, entrepreneurs and professionals from the rapidly developing markets in Central and Eastern Europe value the opportunity to diversify their assets and investments geographically, and they appreciate the excellent service provided. Against this backdrop, the central role of the staff units was confirmed, especially of the CEO CH Of-fice, Investment Solutions and Wealth Planning, which act as specialist competency centres for the entire Swiss structure.

In particular, the CEO CH Office provided structured sup-port in terms of reporting and controlling, coordinated management for all the project activities that impact the front office structures, and the basis for integrated use of the different marketing resources. The Investment Solutions unit, which is responsible for managing and administering mandates as well as providing specialist support in the area of investment advice, contributed to the development of the range of products and services dedicated to various client segments and made it possi-ble to better personalise advisory activities at the invest-ment level. Finally, thanks to the Wealth Planning unit, which is specialised in tax, company, succession, pension and insurance planning, it is possible to offer clients first-class advice in a highly complex, constantly changing regulatory environment.

BSI europeThe region BSI Europe retains responsibility for the Eu-ropean affiliates BSI Monaco SAM, BSI Luxembourg SA and Oudart SA, as well for Spain and Germany, which are assigned to the Geneva and Zurich branches respectively. The structure includes the CEO Europe Office, whose mission is to provide targeted, coordinated support that is focused on business development and related manage-ment tools, the optimisation of processes, and controlling and reporting activities.

BSI ASIA The Bank continued to develop its operations in Asia in 2012. BSI Bank Ltd (Singapore) is the main affiliate out-side Lugano, with over 250 employees. BSI obtained a banking license from the Hong Kong Monetary Authority (HKMA), allowing the Bank to best take advantage of growth opportunities in North Asia. BSI Asia is moving ahead with its development in a key region for the success of the Bank’s growth and business diversification strategy.

BSI lAtIn AMerICA & MIDDle eAStIn view of the need to increase geographical focus on international markets, the new Latin America & Middle East region was set up in 2012. It has taken on activities in these areas that were previously covered by BSI Switzer-land. The Latin America & Middle East region is responsi-ble for client management activities in Latin America (via its local presence in Argentina, Uruguay and Panama),

__ 19

the Middle East, Turkey and the Eastern Mediterranean. The BSI Group’s presence was developed further in the Middle East with the transformation of the representative office in Bahrain into a branch. In addition, the Bank has applied to obtain authorisation to open a representati-ve office in Istanbul. Approval is expected to be granted in early 2013. This is another major step in the Group’s international expansion strategy, and it reflects the im-portance that BSI attaches to the Turkish market, which offers significant growth potential in wealth management.

CorporAte ServICeSThe Corporate Services division includes the departments of Finance, Risk Management, Group Credit Office, Le-gal & Compliance, Banking Platform, Group Investment Services, and Capital Markets. The division provides sup-port services for the BSI Group. This includes the risk framework and risk policies, as well as financial manage-ment, including the consolidated financial statements. In addition, the division provides logistics and IT services, and also defines banking processes. It is responsible for investment policy, provides analyses and strategies, de-velops products and services for clients, and manages all activities on the financial markets. Additionally it provides support to the committees of the Group Executive Board.In addition to its ordinary activities in 2012, the Finance unit improved the analytical accounting instruments that support management. Risk Management prepared the Bank for the implementation of the Basel III requirements, and also focused on improving the management of capi-tal. A new organisational structure was defined for the Group Credit Office, which also consolidated its operat-ing processes. The Legal & Compliance unit monitored and integrated the recent developments in the regulatory environment, including the implications of the tax agreements. Following the major IT migration that was completed during the previous year, the Banking Platform consolidated and stabilised the new IT platform. Group Investment Services obtained positive results in its investment fund management and provision of services to the various units of the Group. The Capital Markets unit contributed positively to the Group’s results, whilst expanding its foreign exchange services by offering a 24-hour service.

MerCHAnt & InveStMent BAnkInGThe main objective of the Merchant & Investment Banking division is to provide highly specialised services and iden-tify investment opportunities for institutional and private clients at international level. The division supports Private Banking by analysing and implementing corporate finan-ce and extraordinary financing solutions, as well as acting as a point of reference for private equity operations and

estate planning. In addition, the division is responsible for monitoring the affiliate BSI Overseas (Bahamas), and it recently strengthened its service offering with the ope-ning of BSI Merchant in Milan.

StrAteGIC plAnnInG & CorporAte FInAnCeThe objective of the new Strategic Planning & Corporate Finance division is to provide corporate financial advisory services to individual, corporate and institutional clients, in particular as regards mergers and acquisitions, IPOs, feasibility studies and business plans. It also acts as a centre of competence for the various business areas with regard to corporate development. In addition, the division has responsibility at Group level for strategic planning. Specifically, the division undertakes ongoing analyses of the business model and different strategic options, coor-dinates business plans and monitors the implementation and the returns from its various activities.

Group HuMAn reSourCeS, orGAnISAtIon & InternAl CoMMunICAtIonThe Human Resources, Organisation and Internal Com-munication division has been entrusted with the funda-mental mission of developing and managing the Group’s human resources. This involves: selection, recruitment and internal mobility measures to ensure the Bank has the right staff; remuneration policies; and all administra-tive services relating to compliance with legal provisions. Moreover, in addition to the traditional but also, at times, advanced activities of training, developing and managing new staff, the division also manages the internal organi-sation and its compliance with business objectives, and ensures that the Mission, Vision, Values and Competen-cies are in line with the corporate culture by defining and managing internal communication policies.

Group exeCutIve oFFICeThe Group Executive Office supports the CEO in the ex-ercise of his duties, and in particular, in the drafting and coordinating of strategic decisions; the Group’s internal control activities; relations with the shareholder, the au-thorities and other entities and institutions; and exter-nal communication activities. For all these activities, the department acts as a comprehensive service centre at Group level. The Group Executive Office thus consists of the following services: General Secretariat, Strategic Planning & Marketing, Media Relations, and Group Inter-nal Controls.


HeADCountIn 2012 the number of full-time equivalent (FTEs) em-ployees at the BSI Group remained largely unchanged, at 1,962.55 on 31 December 2012 compared with 1,964.40 at the end of 2011. The number of FTE employees in Switzerland reduced slightly, from 1,345.95 to 1,317.15, while the Bank’s presence in Asia continued to grow, with 316.50 employees as at 31 December 2012 compared with 310 at the end of 2011. The total number of employees outside Switzerland as at 31 December 2012 was 645.40. reMunerAtIon polICYBSI has a careful remuneration policy that aims to uphold the Bank’s competitiveness in the market and maintain fairness within the Bank, as well as a balance between short- and long-term incentivisation in order to create value for the company over time.

orGAnISAtIonThe activities associated with corporate organisation in 2012 focused on constantly fine-tuning the processes for the new Corporate Governance and the publication of Human Resources Policies in support of it.

trAInInG & DevelopMentTraining & Development activities in 2012 were primarily focused on the management of organisational develop-ment projects linked to the Group’s first climate survey conducted in the autumn of 2011. The participation rate in the survey was very high (87%). The careful analysis of the results produced action in individual sectors, under the coordination of Human Resources. In addition, the survey resulted in some cross-divisional initiatives, such as the Young People Program and a course on Gender Diversity (WhatWomenWant@BSI). In addition to the usual team-building and outdoor activities based on spe-cific requests and the management of numerous indi-vidual development plans launched in the previous year, the year 2012 also saw the start of the BSI Leadership Academy. All internal management training programmes will now fall under the BSI Leadership Academy with the completion of the courses that had been launched previously under the Leadership Programme. In addition, 2012 saw the start of a course focused on BSI Asia, as well as the first International Leadership Programme, which was held in Lugano. Managers from all BSI loca-tions attended this event. In the area of technical and professional training, the BSI Private Banking Business Academy offered educational activities aimed at adapting regulatory and fiscal competencies to the changing environment, in addition to its usual catalogue of internal training courses on banking behaviour and managing ad hoc training programmes.

HUman resoUrCes

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InternAl CoMMunICAtIonInternal Communication made a major change to its traditional approach by placing increasing emphasis on multimedia channels and launching a monthly newsletter from the Group Executive Board for all employees. In ad-dition, Internal Communication acts as an interface for all the initiatives set up to disseminate the Bank’s Mission, Vision, Values and Competencies throughout the organi-sation in order to maintain a strong corporate culture and identity. In particular, several informal gatherings between top management and employees were organised. These events were met with widespread satisfaction.

BSI StAFF CoMMItteeIn 2012 the staff committee continued its important work representing staff’s information and participation rights. To meet the needs of employees and to give due attention to environmental and traffic issues, the Bank decided to promote the corporate Arcobaleno programme once again as part of the internal project “Environmental sustainability in cooperation with the Staff Committee”. The corporate Arcobaleno programme allows employees to use all public transport within the zones indicated on their travel pass, or to obtain an annual pass at a discount.

Companies with a strong identity have the ability to pros-per across various economic cycles, during various tech-nological phases and in various parts of the world, while also helping to develop the societies in which they oper-ate. These are companies, such as BSI, that have been able to reinvent themselves over time while maintaining a distinct identity.

our HIStorY The Banca della Svizzera Italiana, with its head office in Lugano, was founded in 1873 thanks to the financial support of Kreditanstalt in Zurich, the Basler Bankverein and the Banca Generale di Roma, and with the participa-tion of local backers in Ticino (Carlo Battaglini, Annibale Bollati, Luigi Enderlin, Rodolfo Landerer, Pasquale Luc-chini, Giuseppe Soldini, Pasquale Veladini, Giovan Battista Ferrazzini and Clemente Maraini sen.). A few years after its founding, the Bank moved to the 18th century home of the Marquis of Riva, which it still owns and uses as its head office. In the final decades of the 19th century, the institution was active on the domestic market. In particu-lar, it supported initiatives to develop regional transport and the hotel and catering sector. Nonetheless, the Bank was also active in Italy thanks to the personal relation-ships of its directors. The Bank survived the banking cri-sis of 1914, although two cantonal institutions – Banca Cantonale Ticinese di Bellinzona and Credito Ticinese di Locarno – did not. The Banca Popolare Ticinese di Bellinzona was also forced into liquidation. Following this crisis, the Banca della Svizzera Italiana continued to grow its presence in the Swiss market, and later, starting in the 1960s, it also expanded internationally. Total assets rose from CHF 102 million in 1950 to more than CHF 1 bil-lion in 1970 and to CHF 9.2 billion in 1990. This growth was also accompanied by an increase in the number of employees, from 357 in 1970 to 1,761 in 1990, of whom 1,638 were working in Switzerland. In the early 1990s the Bank restructured its business and organisation, specialising in wealth management for private Swiss and international clients. The Bank, which has meanwhile changed its name to BSI, has expanded again in recent years through client acquisition and also thanks to the recovery of banks in general operating in the Ticino finan-cial centre. At the same time, the Bank has undergone a major international expansion, especially in Asia, in order to diversify its market presence.

keY DAteS 1873 Founding of the bank with the name Banca della Svizzera Italiana. 1874 Opening of agency in Locarno, transformed into a branch in 1914. 1879 Opening of agency in Bellinzona, later sold to the new company Banca Popolare Ticinese in 1884.1881 The Bank begins issuing banknotes, a function it maintains until the Swiss National Bank is founded in 1907. Opening of agency in Mendrisio, transformed into a branch in 1955 (closed midway through the 1990s). 1905 Opening of agency in Chiasso, transformed into a branch in 1924. 1908 Acts as an agency for the Swiss National Bank in the Sottoceneri region of Ticino.1914 Opening of branch in Bellinzona. 1935 Opening of branch in Zurich. 1969 Swiss Italian Banking Corporation Ltd, Nassau, is founded, marking the start of the Bank’s international expansion.1971 Acquisition of Adler Bank Basel AG, Basel. 1973 Opening of branch in St. Moritz. On the occasion of the bank’s centenary, the Fondazione del Centenario della Banca della Svizzera Italiana is founded. 1975 Acquisition of a majority stake in Banque Romande in the French-speaking part of Switzerland. 1976 Acquisition of a significant stake in Compagnie Monegasque de Banque, Monaco. Opening of a representative office in Caracas. 1980 Acquisition of a participation in Domus Bank, Zurich. 1990 Opening of BSI Finanziaria SpA, Milan, which in 2002 becomes Banca BSI Italia SpA, Milan, and which is later sold to Banca Generali, Milan.


oUr IdentIty

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CHAIrMen oF tHe BoArD oF DIreCtorS• Pasquale Veladini, 1873-1874• Pasquale Lucchini, 1874-1892• Clemente Maraini, 1893-1905• Giacomo Blankart, 1905-1920• Adolfo Soldini, 1920-1927• Otto Maraini, 1927-1944• Marco Antonini, 1944-1955• Antonio Lory, 1955-1966• Carlo Pernsch jr., 1966-1974• Ettore Tenchio, 1975-1983• Gianfranco Antognini, 1983-1991• Franco Masoni, 1991-1993• Alberto Togni, 1993-1998• Hugo von der Crone, 1998-2004• Giorgio Ghiringhelli, 2004-2011• Alfredo Gysi, since 1 January 2012

exeCutIve DIreCtorS• Giacomo Blankart, Director 1873-1888• Innocente Gianinazzi, Director 1888-1918• Carlo Pernsch sen., Director 1918-1926• Guido Petrolini, Director 1926-1927 • Adolfo Hediger, 1928• Antonio Lory, Director 1928-1942 and Managing Director 1943-1955• Carlo Pernsch jr., Director 1943-1955 and Managing Director 1956-1966• Gianfranco Antognini, Senior Executive Vice President 1966-1968 and Managing Director 1969-1983• Giorgio Ghiringhelli, Chief Executive Officer 1983-1994• Alfredo Gysi, Senior Executive Vice President and Chief Executive Officer 1994-2011• Stefano Coduri, Group CEO, since 1 January 2012

1993 Separation of assets and liabilities related to commercial activity, founding of the company SBSI Holding SA, Lugano. 1994 The asset management company in Monaco is transformed into a bank (the current BSI SAM Monaco).1995 Founding of Boss Lab SA, an IT services company for financial institutions and which later becomes B-Source. 1998 On the occasion of the 125th anniversary of BSI, the BSI Gamma Foundation is created, a foundation that supports academic research in the financial field. 2000 The company’s name is changed to BSI AG. Opening of office in Lausanne, which is later transformed into a branch.2005 Opening of BSI Bank Ltd, Singapore. 2006 Acquisition of Banca Unione di Credito, Lugano. 2008 Acquisition of Banca del Gottardo, Lugano. Licence obtained for operating in the Kingdom of Bahrain. 2010 Opening of an agency in Crans-Montana.2011 Sale of 51% of B-Source and IT migration from the BOSS system to Avaloq.2012 BSI expands its Asian business and opens a branch in Hong Kong. Incorporation of Patrimony 1873, a wholly controlled wealth management company. Middle East business continues to grow with the representative office in the Kingdom of Bahrain being upgraded to a branch.

SHAreHolDerS1910 Acquisition of a majority share package by Banca Commerciale Italiana, Milan.1983 Irving Trust Co., New York, takes over the share package from Banca Commerciale Italiana. 1988 Unigestion SA, Geneva, obtains the share package from Irving Trust Co. and later sells a minority stake to Tayio Kobe Bank. 1991 Swiss Bank Corporation, Basel, becomes the majority shareholder. 1998 Assicurazioni Generali, Trieste, becomes the sole shareholder.


our vAlueSOur values represent who we are, our DNA. They make us a unique Bank, different from the competition.Our values are a beacon that guides us in the midst of the great changes that are transforming our company on a constant basis. They always remind us of who we are, inspiring our actions as we pursue our objectives.

CoMpetenCe

Our craft is private wealth management. We carry out our business earnestly, reliably and discreetly, to offer our clients – year after year, generation after generation – a high-quality service based on a variety of special com-petencies and characterised by a balanced risk/return profile.

A broad range of specialised competencies. BSI has many in-house competencies. These enable us to provide, as sole partner, a broad range of advisory services that meet all our clients’ wishes.Knowing our clients. For us, knowing our clients means listening and paying attention to their requirements and recommending only high value added solutions that cater to their real needs.Complete discretion. BSI understands the importance of the confidentiality of client information. Our discretion is also reflected in our sober style and choices.Long-term view. BSI recommends prudent and long-term asset management, with the goal of protecting clients’ capital.

FAMIlY

BSI is not a family – but for its employees it might as well be one. For us, that means cooperation, trust, growth and mutual help are at the forefront of our mindset. We favour stable, long-term personal and professional relationships among our employees, and between our employees and our clients.

Teamwork. BSI encourages teamwork. When needed, employees know they can easily find colleagues that can help to quickly and effectively handle any problem or un-foreseen event.Direct access to top management. At BSI it is easy to in-teract with top management, which means we can meet clients’ needs in a fast and timely manner.People enhancement. BSI supports the professional growth of its people. Thanks to this approach, our employees en-joy the confidence and peace of mind necessary to build and nurture long-term relationships.

our MISSIonOur Mission, the first pillar of our identity, is an expression of our reason for being and our long-term objective. The main characteristic of our Mission is to address a wide range of stakeholders. It reflects the link that we have with them as well as our long-term management concept.

BSI’s objective is to accompany its clients – year after year, generation after generation – in all the important decisions that concern the growth and protection of their wealth.

BSI’s objective is to provide a multicultural and internation-al work environment, where people can grow and create, and enjoy the respect, confidence and flexibility necessary to perform well.

BSI’s objective is to contribute, through its own resources, to the economic, social and cultural growth of the main communities in which it conducts business. BSI is able to pursue these objectives being part of one of the world’s largest financial groups and thanks to its resources, always in accordance with financial stability standards.

our vISIonOur Vision expresses our medium-term objective. To-gether with the other elements of our identity, it guides our strategic decisions.

We aspire to rank first in the hearts and minds of our clients when it comes to outstanding private wealth management advice and services.

We serve clients in different parts of the world, building personalised, trust-based, family-like relationships that last from generation to generation, since 1873.

We are committed to providing expertise, discretion and flexibility in banking also leveraging on our multicultural understanding and global networking.

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FlexIBIlItY

BSI does not sell off-the-peg clothing but tailor made suits. Informality, autonomy and entrepreneurship allow us to provide our clients with personalised solutions which effectively meet their needs.

Personalisation. BSI’s advisors can provide flexible solu-tions designed to meet clients’ specific needs, allowing them to access financial markets as and when they want.Managing uncertainty and complexity. At BSI, the autono-my granted to people goes hand in hand with their innate ability to manage unforeseen events and complex projects. This helps us deal with market and industry changes.Open architecture. At BSI there are no marching orders. Based on the best-in-class principle, our advisors can offer the best products available, without restrictions linked to BSI’s own product offerings.Delegation of power and responsibility. At BSI, people work with a large degree of autonomy in the ongoing devel-opment of new organisational and commercial solutions.

CoDe oF ConDuCt purpoSe

This Code of conduct establishes the principles and prac-tices that each employee is expected to comply with, in order to preserve BSI’s first-class reputation, maintain-ing the highest standards of ethics, integrity, responsi-bility and professionalism at all time.The Code is subordinated to the Ethical Code of the Gen-erali Group and constitutes the realisation of the group ethical principles at individual employee level.

prInCIpleS

InteGrItY: All BSI employees are expected to conduct themselves with honesty, integrity and professional dili-gence, in observance of the ethical principles and stand-ards of behaviour required by this Code of conduct.Reputation. Reputation is our main value and requires that we continuously maintain the highest standards of ethics and professionalism.Responsible behaviour. An ethical behaviour entails acting in good faith, responsibly and with due care and prompts us to act with honesty and competence at all times.Transparency. We are fully committed to communicating in a fair, accurate and timely manner, in order to maintain the highest level of transparency.Loyalty. We strive to uphold a fair relationship with clients, business partners, competitors, service providers as well as with each other.Conflicts of interest. We endeavour to identify and avoid or manage any potential conflicts of interest for the protection of our clients and employees.

Continuity. BSI works hard to retain its employees and values their individual knowledge. A low staff turnover fa-cilitates the development of strong, stable relationships amongst employees and with our clients.

InteGrItY

Our history speaks for us. BSI’s relationship with its cli-ents and employees is based on the utmost clarity, in-tegrity and honesty. Our integrity also manifests itself in our ongoing commitment to align our business to the ever-changing environment of the market and its legal obligations.

Compliance with applicable law. All of the bank’s activities are conducted with the will to conform to applicable law. BSI’s great attention to the regulatory aspect promotes the confidence that clients expect.Transparency. Integrity for BSI also means clarity and transparency in its actions, fully protecting the interests of its clients and employees. Always.

CAre

At BSI people are not numbers. Taking care of our clients means being aware at all times that what we do and how we do it is of great importance to them. It means always having their interests at heart and meeting their needs. We apply the same beliefs to ourselves internally and the main communities in which we operate.

Dedication. For BSI, client satisfaction is key. That is why we are always willing to take care of their needs and try to find solutions that best reflect their expectations.Respect. All our clients, even the smallest ones, are impor-tant to us and deserve our respect. The same respect that we have for all of our people at every level.Empathy. We are always there to listen to our clients and reassure them. This is how we lay the groundwork for a solid relationship based on trust, for us one of the most valuable assets.Citizenship. BSI is aware of the impact of its activities and is responsibly committed to fostering society’s economic and cultural growth.


ConFIDentIAlItY: Discretion and confidentiality are fun-damental hallmarks of the relationship between BSI and our clients and stakeholders.Data protection. We resort to the highest standards of in-formation security for continuous data protection.Discretion. Confidential and sensitive information can be internally shared on a strictly “need to know” basis.Banking secrecy. We refrain from any communication to third parties without an explicit consent or the existence of a legal obligation.

CoMplIAnCe: In our activity we always strive to comply with all laws, regulations and policies.External and internal regulations. Each employee is re-quired to know and comply with the external and internal laws, rules and regulations relevant to his/her specific area of expertise.Fighting financial crime. All employees are required to commit to the fight against corruption, money laundering and terrorism financing in their specific area of expertise. Cross-border business. When performing cross-border business, we are always aware of and act in compliance with the local regulations of the countries where we operate.Taxation. Tax reporting must comply with applicable laws, regulations and treaties. No BSI employee will assist cli-ents in acts aimed at breaching their fiscal obligations.

CoMMItMent: Every one contributes to the Bank’s suc-cess.Fairness. Each employee is granted equal treatment, fair evaluation and recognition of individual efforts.Training. Continuing training represents a right and a duty for each employee.Access to top management. Access to management is promoted through our “open door” policy.

rISk ApproACH: We do recognise risk as an important feature of our business and actively manage it.Awareness. All employees must retain a constant level of risk awareness, in order to ensure a controlled and con-scious risk-taking.Active risk management. All recognised risks have to be managed in a rigorous and active way.

ADHerenCe to tHe CoDe oF ConDuCt

All BSI employees adhere to and follow the spirit and purpose of this Code of conduct.The Code applies to all circumstances: no waivers or ex-ceptions will be granted.Line managers are expected to be diligent in the exercise of their supervisory responsibilities.Every employee is encouraged to report violations to the relevant line manager, Legal & Compliance or Human Re-sources department. Reports will always be treated with utmost confidentiality.

DISCIplInArY MeASureS

Violations of this Code will not be tolerated in any cir-cumstances.Appropriate disciplinary measures will apply in the case of violation, which may include reprimands, warnings, demo-tion and dismissal.Where a violation is perceived to amount to criminal be-haviour, competent authorities will be informed.

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our pASSIonS: BSI MoMentSTaking care of our clients means being aware at all times that what we do and how we do it is of importance to them. It means having their interests at heart and respon-ding to their needs at all times. It also means sharing with them those passions that go beyond the world of banking itself. “BSI Moments”, such as the BSI Swiss Architectural Award, the BSI Art Collection, the BSI Gamma Foundation con-ferences and the recent open-sea record set by Giovanni Soldini, are part of our DNA and the long-term relationships of trust that we promote.

We are aware of the importance of our activities, and we do our utmost to contribute to the economic and cultural growth of the communities in which we operate.We do all this through a wide variety of initiatives, especially in the world of culture. Below we present to you a brief look at some of our passions in 2012 – “BSI Moments”.

BSI ArCHIteCturAl FounDAtIon The BSI Architectural Foundation promotes knowledge, training and research in the field of architecture. Specifi-cally, it presents a biennial architecture award (BSI Swiss Architectural Award) and sponsors activities and projects as part of that event, including exhibitions, publications and presentations. The Award, which is now in its third year, has taken on a leading international role. This is due to its objectives, the highly-esteemed jury and the excel-lent quality of the candidates, who are selected by an advisory committee comprising internationally-renowned architects and architecture critics. The first edition, which concluded in autumn 2008 with the victory of Paraguayan architect Solano Benitez, reve-aled an exceptional talent to the public and to the media who had previously been practically unknown outside the Americas. The second year’s award in autumn 2010 honoured “the essential, intelligent architecture that makes no conces-sion to any superstructural components” of the works of Diébédo Francis Kéré (Burkina Faso/Germany).In 2012 the jury granted the award unanimously to Stu-dio Mumbai (India), which bases its work on the dialogue between landscape and architecture using an original process founded upon a high level of artisan expertise.

In 2012 the BSI Swiss Architectural Award was presen-ted at the 13th International Architecture Exhibition at the Venice Biennale with a supporting event aimed at cele-brating the importance of an award designed to promote and influence contemporary architecture. The event BSI Swiss Architectural Award 2007-2012 documented the first three years of this award. It included an exhibition open to the public at the Fondazione Querini Stampalia and a roundtable that featured the first three winners, along with the president of the jury, Mario Botta.

BSI GAMMA FounDAtIonFounded in Lugano by BSI AG in 1998 on the occasion of the Bank’s 125th anniversary, the BSI Gamma Foundation promotes theoretical and empirical research in the re-alm of wealth management, the workings of the financial markets, and the role and types of public regulations for investment fund management. The BSI Gamma Founda-tion has organised more than 30 conferences and sup-ported more than 50 research projects, which have been presented at conferences held in Europe’s major financial centres.In 2012 two important conferences on socially responsi-ble investment (SRI) were held in response to the growing interest in this subject.The future of socially responsible investment was held at the Six Convention Point in Zurich on 2 February, with the support of NCCR Finrisk and the Geneva Finance Rese-arch Institute. The first conference dealt with the costs and benefits of an approach that includes socially re-sponsible investing. It also looked at whether it is pos-sible to invest sustainably and in a socially responsible manner. These questions were examined on the basis of the research carried out by Philipp Krüger (Geneva Finance Research Institute), Alberta Di Giuli (ESCP Eu- rope), Meir Statman (Santa Clara University) and Jero- en Derwall (Tilburg University), and the two roundtables conducted by Stefano Montobbio (BSI) and Loriana Pel-lizzon (Università Cà Foscari in Venice).


The second conference The Creation of Shared Value-Sustainability and Finance, held at the Auditorium Santa Margherita in Venice, was an attempt to remove any linge-ring uncertainty or confusion regarding these new types of investments.The event, in collaboration with the Italian Forum for Su-stainable Finance, the Ca’ Foscari University of Venice and Guggenheim Intrapresae, was part of the programme for the “First Italian SRI Week”. The distinguished spea-kers included Carlo Rubbia, winner of the Nobel Prize for physics, and the American economist Jeremy Rifkin, au-thor of the recent book The Third Industrial Revolution as well as other SRI experts from around the world: Angela De Wolff, James Gifford, Harry Hummels, Rory Sullivan and Massimo Sterpi.

FInAnCIAl ConFerenCeSIn addition to its work to actively promote basic and applied financial research, the Bank also organises and sponsors conferences on current financial issues through the BSI Gamma Foundation. These conferences offer financial players, academic professionals and institutional and pri-vate clients the opportunity to meet each other. These initiatives focus on current financial topics. The purpose is to expand the knowledge of investors regarding the new challenges they face, against the backdrop of a rapidly changing environment, and to inform them of the measu-res our investment managers have taken to tackle these challenges.

GIovAnnI SolDInI’S oCeAn CHAllenGeSince 2012 BSI has combined forces with Maserati and Generali to support Italian skipper Giovanni Soldini in his bid to break a number of sailing records with his VOR70 yacht named “Maserati”.In the first half of the year the skipper and his team at-tempted to break three North Atlantic records. In January, Soldini set a new record for the historic route taken by Christopher Columbus from Cadiz to San Salvador in the Bahamas. In March, he sailed from Miami to New York, a route for which there is no benchmark record time to beat for monohulls. Although Soldini could have registered his time as a record for this route, he chose not to do so for reasons of good sportsmanship. During his journey he was not able to record what he felt was his best time due to tropical storms, calm spells and sudden squalls along the route.

Soldini did not have better luck for his crossing from New York to Cape Lizard: the crossing started out very well, with Soldini and his crew gaining 200 miles on the record held by Mari Cha IV. After successfully navigating past the Terranova iceberg, where the Titanic sank about 100 years ago, the record was lost in the second half of the crossing due to the low atmospheric pressure and the unpredictable weather.These highlights for the year were followed by an event organised in September at the Monte Carlo Yacht Club, where Giovanni Soldini and his crew spoke to guests of BSI and Maserati about their experiences, giving them some insight into the thrill of sailing the Maserati.The most ambitious challenge started in December, with the all-important objective of Maserati to beat the recordfor the historic, even mythical route from New York to San Francisco via Cape Horn. The extreme difficulty of this route lies in the rounding of Cape Horn, known as a “sail-ors’ graveyard” due to the incredibly dangerous sea gen-erated by the clash of two oceanic currents and treacher-ous headwinds. Giovanni Soldini and the Maserati team managed to set a new record, shaving ten days off the time achieved in 1998 by Frenchman Yves Parlier aboard Aquitaine Innovations. Maserati crossed the finish line un-der the Golden Gate Bridge on 16 February 2013, setting the new world record for the historic Golden Route in 47 days, 42 minutes and 29 seconds.

BSI Art ColleCtIonEstablished in 2000 as a result of the Bank’s desire to become a collector of avant-garde contemporary art, this diverse collection is enriched each year by new acquisi-tions.From the beginning, the collection has defined its identity along eclectic lines: it looks at the different languages of modern and contemporary art without focusing on a specific geographical region, artistic medium or historical period.Many of its works are permanently displayed in curated projects in the various BSI branches in Switzerland and around the world.In addition to placing the entire art collection in an elec-tronic archive, BSI was also busy in other areas in the field of art in 2012. For example, at the local level the Bank exhibited new acquisitions in its Lugano office and contributed to the exhibition of works on the Baroque painter Giovanni Serodine at the Pinacoteca Züst in Ran-cate. The Bank also financed the catalogue for the exhibi-tion “Alberto Garutti. Didascalia”, the first retrospective of one of Italy’s most important contemporary artists at PAC, the Padiglione d’Arte Contemporanea in Milan.

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This sponsorship allowed BSI to gain international visibi-lity, especially in Italy, and BSI Art Collection was able to add to its collection with a work by this artist.BSI is also proud to continue the partnership it has had for many years with the Swiss Institute in Rome and the Peggy Guggenheim Collection in Venice, as part of its support programme for art and culture.

FonDAzIone Del CentenArIoFounded in 1973 to commemorate the first one hundred years of BSI, the Fondazione del Centenario aims to pro-mote Italo-Swiss relations by recognising people or orga-nisations who have helped develop relationships between the two countries or promote their common cultural herita- ge. Some of the people honoured in this way are: Riccardo Bacchelli, Remo Rossi, Gianfranco Contini, Bruno Caizzi, Edwin Loehrer, Giuseppe Martinola, Dante Isella, Giovanni Spadolini, Vittore Branca, Giancarlo Vigorelli, Romano Amerio, Cornelio Sommaruga, Carlo Bo, Rocco Filippini, Father Giovanni Pozzi, Arturo Colombo, Enrico Decleva, Carlo Bertelli, Marco Müller and Giorgio Orelli. In recent years the prize was awarded to the photographer Frank Horvat (2010) and the writer Fleur Jaeggy (2011). The Foundation has also supported the publication of histori-cal research such as “Svizzera, terra d’asilo” (Switzerland, Country of Refuge) by Renata Broggini (1993) and “Rifor- me Rivoluzioni e Risorgimento” (Reform, Revolution and Revival), edited by Marino Viganò (2007).The 2012 award of the Fondazione del Centenario was granted to Carlo Ossola, director of the Institute of Italian Studies at the Università della Svizzera Italiana (USI) and professor at the Collège de France in Paris, in recognition of his work as a specialist in the Italian language, a literary critic and a philosophy historian, and for his role in crea-ting the Institute of Italian Studies in Lugano. In addition, the Fondazione presented an anastatic reprint by Forni Editore of the “Imperial Dictionary of Europe’s Four Main Languages” by Giovanni Veneroni (Frankfurt, 1700), at the Parliament Building in Berne on 30 May, in the same vein as the republication of Stefano Franscini’s “Svizzera italiana” in 1973.The Fondazione concluded 2012 with an evening to com-memorate the journalist and author Ennio Flaiano on 20 November in Lugano, at which his important literary and cinematographic contributions were remembered on the occasion of the fortieth anniversary of his death. The bo-ok “Ennio Flaiano, una verità personale”, by Gino Ruozzi, Carocci 2012, was also presented at the event.

MArtHA ArGerICH proJeCtThe eleventh edition of the Martha Argerich Project took place in June 2012. This event is now considered to be an important part of the international music scene. In addi-tion to the great Argentine pianist, a wide array of artists, who are now regulars at the event, created a harmonious spirit that left behind indelible memories.The highlight of the eleventh event was the presentation by one of the musicians of themes and materials of other composers in the form of variations, fantasies, paraphra-sing, reminiscing, etc.Designed as a showcase for ensemble music, the event is presented as a workshop, with artists invited to play rarely performed compositions alongside masterpieces of the repertoire. This has created a unique formula, based around a group of musicians who are particularly keen to share their abilities and expertise and take part in a stimulating exchange of experiences.

BSI enGADIn FeStIvAlThe 72nd edition of the Engadin Festival, for which BSI was the main sponsor for the fourth year in a row, marked a sort of rebirth for the Festival. Since 2012 the event has returned to focusing on top-quality classical music. The event also has a new visual design, which is more similar to BSI’s. This rebranding of the BSI Engadin Festival is based on a combination of carefully selected stars from the world of classical music and intimate, romantic locations in which the public and the musicians are very close. This proximity creates a special atmosphere, thanks in particular to the splendid mountain backdrop of the Engadine.The 2012 event was a great success not only with the public but also with institutions and the media, in keeping with the organisers’ objectives to make this festival one of the most exclusive in Switzerland.


Support For tAlenteD YounG MuSICIAnS AnD ClASSICAl MuSICBSI has been providing financial support for the training and artistic development of outstanding young musicians since 2004. These young musicians are given the op-portunity to take part in events organised by BSI. The players granted a scholarship in 2012 were the Chinese tenor Chen Chen, the Greek violinist Jonian Ilia Kadesha and the Argentine pianist Tomas Alegre. The common objectives of excellence held by BSI and the Académie de Musique et de Théâtre Fondation Prince Rainier III form the basis of an important partnership initiated in 2006, which led to the creation of the BSI Monaco Music Ma-sters project. The project is a series of international master classes that give talented young musicians from Monaco and elsewhere the chance to benefit from the advice of great masters in exclusive training sessions. BSI’s commitment to classical music continued in 2012 with its support of the Orchestre de la Suisse Romande and the Orchestra della Svizzera Italiana as well as co-operation with the St. Moritz Festival da Jazz, the Mon-tebello Festival in Bellinzona and the Settimane Musicali di Ascona.

BSI AlBuM, A SHowCASe oF ColleCtIonS“In the Heart of Africa” and “The Lord of the Northern Hemisphere” are the titles of two exhibitions of private collections that were on show in the display windows of BSI throughout Switzerland. Both exhibitions have been well received on account of their authenticity and origi-nality. In line with the BSI Album concept, the exhibitions of-fer the public the chance to admire rare and valuable artefacts in the windows of BSI, on view day and night, which “unfold”, like old-fashioned albums, as people walk past. They include a catalogue, distributed free at the BSI branches involved in the programme.

prIze For tHe BeSt entreprenuerIAl IDeAThe Prize for the Best Entrepreneurial Idea in the Canton of Ticino 2012 was awarded on Ticino Economy Day, which took place on 25 October at the Palazzo dei Con-gressi in Lugano. The award was launched in 2009 by the Start-up Promotion Centre in collaboration with BSI and the Fondazione AGIRE (Agency for regional innovation in the canton of Ticino). The Start-up Promotion Centre’s specialist committee chose the project named Newscron, a new and revolu-tionary news aggregator that is extremely intuitive, quick, intelligent and easy to use.

GolFBSI takes great care to constantly maintain and foster relations with clients, sharing exclusive moments and com-mon interests with them. In promoting BSI Golf, BSI aims to demonstrate its constant interest in the noble game of golf, which precisely reflects its own values: longstand-ing tradition, a pronounced sporting attitude, dynamism, professionalism rooted in experience, and passion for the challenge of attaining ambitious objectives. The golf events organised by BSI take place during the year at some of Europe and Asia’s most prestigious golf clubs, such as at the ones in Lugano, St. Moritz, Crans Montana and Lu- cerne, as well as at the Golf du Domaine Impérial in Gland and in Italy at the Circolo Golf in Bogogno and the Golf Barlassina Country Club. BSI Asia hosts various golf days around the region from Singapore’s Sentosa Golf and Coun- try Club and Indonesia’s Royal Jakarta Golf and Country Club to scenic courses in Bali, Vietnam and Mission Hills Golf and Country Club in Hai Kou, China. The golf links are the perfect location to host tournaments and award prizes, offering a unique opportunity for networking. To strengthen its commitment to young people in the Zurich area, BSI has decided to become the main sponsor of the juniors section of the Swiss Golf Bubikon club, lo-cated in Zurich Oberland. Promoting talented young gol- fers is a major objective not only of the Bubikon golf club, where more than 140 juniors, subdivided into various categories, train weekly. This objective also extends beyond the Swiss border with support for the promising young golfer Liebelei Elena Lawrence, who has scored numer-ous successes in major European competitions and is currently training for the 2016 Olympic Games in Rio de Janeiro.

Born in Asunción (Paraguay) in 1963. He graduated from the Faculty of Architecture at the National University of Asunción in 1986. He was awarded the National prize for architecture 1989-1999 by the college of Paraguayan architects; he reached the finals of the second Premio Mies van der Rohe de arquitectura latinoamericana; he represented Paraguay at the Biennali in Venice, São Paolo and Lisbon. He has been invited at the following universities: in Argentina, at the National Universities of Rosario, Mar del Plata, Santa Fe, Oberà, La Plata, Tucuman, Resistencia and Buenos Aires, at the Catho-lic Universities of Cordoba and Posadas, Torcuato Uni- versity in Tella and Palermo University in Buenos Aires; in Brazil, in San Pãolo, at the Mackenzie University, the Escola da Cidade, the Federal University of São Car- los, Umuarama and Belo Horizonte; in Chile, at the Catholic University of Santiago, the Andrés Bello Na- tional University and the University Diego Portales; in Ecuador, at the Catholic University of Quito; in Panama, at the Isthmus School of Architecture; in Peru, at the Ricardo Palma University and at the Catholic University in Lima; in Spain, at the Escuela Tecnica Superior de Arquitectura in Madrid; in the United States, at Arizona State University, Berkeley University of California, San Francisco University and Harvard University Graduate School of Design. He founded the Gabinete de Arqui- tectura, a professional architectural studio, which he currently shares with his partners Alberto Marinoni and Gloria Cabral. His recent works include: leisure facilities in Ytú (Paraguay), 1997-1998, this work reached the finals of the second Premio Mies van der Rohe de arquitectura latinoamericana; 4 vigas, a tomb in Piribebuy (Paraguay), 2000-2001; the Unilever office in Villa Elisa (Paraguay), 2000-2001; Casa Esmeraldina, Asunción (Paraguay), 2002; Casa Fanego, Asunción (Paraguay), 2003 (with Sergio Fanego); Casa Abu&Font, Asunción (Paraguay), 2005-2006; Casa Las Anitas, San Pedro (Paraguay) 2007-2008; Alambra building, San Lorenzo (Paraguay).

FIRST EDITION2007–2008

The winner: Solano Benitez (Paraguay)

JURY’S MOTIVATION “The reflections that animated the work of the jury have led to the award of the BSI Swiss Architectural Award 2008 to the architect Solano Benitez of Asunción (Paraguay). His architectural research, developed in a problematic political and economical context, be-set by objective operative difficulties and distant from the construction methods dictated by globalisation, appeared of outstanding quality. For the majority of his projects, Solano Benitez uses simple materials available locally, which enable him to create expres-sive forms of great impact and with an intense poetic charge. The poverty of the means used is inversely proportional to the emotions which the architecture succeeds in conveying. The environmental values pe-culiar to that Latin-American context are strengthened in their identity through architectures embodied in an original vocabulary, new typologies and unexpected qualities as housing.This is a great lesson of architecture, which reaffirms the supremacy of innovation through a simple and po-etic approach, even when faced with the complexity of the problems induced by the new challenges. The expressive capacity of humanity, to which architec-ture continues to bear exemplary witness, receives in Solano Benitez’s work further confirmation of the need to seek beyond processes and models already known for new languages, intelligent uses of materials and renewed hopes capable of attributing to the work of man poetic forms which radiate a surprising beauty”. Mario BottaPresident of the BSI Swiss Architectural Award Jury

Sol

ano

Ben

itez

ABU&FONT HOUSEASUNCIóN (PARAGUAY)2005-2006Numbers say that in South America a family is victim-ised by violence and insecurity every second. If we weigh this sequence of pain, by measuring closely, the number of times life is brought to an end, we’ll get the total of those needing protection. Built to protect: a house against all bleakness, sun and rain, against indifference, fear and solitude, a house as a resistance tool, where life resides again. A mother and her many children, and her life prolonged, an-other seven families and twenty something grandchil-dren, can gather together here any Saturday; this is the essential brief… And after the exodus, new hope again. Life feels persistent, while architecture adapts and transforms itself. A totally clear ground floor only contains fragments of the services, with doors opening into the space outside, so that house and grounds are one. Strictly speaking this inner and outer space are matched, making the open gaps fulfil its name’s command. Two Vierendeel beams 14 m long support the house, its weight downloaded onto four columns standing at its edges. The beams are set 11 m apart with longitudinal beams connecting them and extending beyond them to rest on brackets, the projections balancing the inner tensions. The whole ensemble is closed by a reinforced ceramic flat-slab, which supplements tension in the lower part of the ensemble. The other two floors have the private quar-ters, dormitories and intimate living rooms, prepared against the Paraguayan heat. An underground level brings us closer to the temperatures below ground, far cooler in summer and warmer in winter, providing much-needed relief in a place where temperatures oscillate between +47 and –2 ºC. The top floor, by contrast, seeks to combat the extremes by increasing the volume of air. It has a section 5 m high, creating a spatiality unusual in contemporary homes, but to get and maintain this preserved space it absorbs all the energy put into the house. Where there isn’t much, austerity is necessary, and the strategy to get it is to operate only using the essential. Ceramic brick is the cheapest construction material in our country and it’s used across its whole potential, in floor, wall and ceiling. A cement polish covers everything which is likely to come into contact with water. Glass and metals compose structures capable of supporting large doors, while wooden veneer panels are used to enclose or expand functions and spaces. The house

UNILEVER HEADQUARTERSVILLA ELISA (PARAGUAY)2000-2001The project grew out of an architectural competition based on the criteria of project and price for the reha-bilitation of a section of a derelict factory as the cor-poration headquarters. Given the heat in Paraguay, with 45 to 47 ºC daily at this latitude, creating shade is a big issue, and to do this with the traditional tech-niques of brick building would have made the proposal unfeasible. So we had to develop a system of prefabricated ceramic panels, using the ground and gravity as allies. Once we got the panels, we devised a sequence in which they were to be installed, with the same logic used for building bridges, making each part once erected support the next. This approach, looking at the materials as matter, enabled us to im-agine new forms with the parts we already had, re-gardless of standard protocols. It ensured the new techniques would be able to respond to new stresses never achieved before in traditional building. Walls of prefabricated ceramic panels set on the ground as brise-soleils; tiles used as flooring to protect the waterproofing membrane and cast shadows so as to avoid the overexposure of the roof to the sun; panes of glass assembled without any metal framework and erected to compose volumes: these are just some of the features of an approach which embodied the greatest austerity as a value. Contrary to what might be thought, it produced a new richness. As a scale of reference, the company needed to budget for the construction work only 17% more than was earmarked for the furniture and equipment in the building’s 2500 m2 of floor space.

costs 50% less than the standard market rate. Each aspect of it is approached on the same principle, re-quiring the defining materials to act at the same time as fundamental structures, without ornament. There is no need for anything else because there is no money to buy it. For everything else… there’s Photoshop.

4 VIGASTOMBA DEL PADREPIRIBEBUY (PARAGUAY)2000-2001“… I’m building a project that took me ten years. Im-agine a square 9 m long in a very unusual landscape: two of the sides are bordered irregularly by a small creek of crystalline waters and small falls, and cross-ing diagonally, a smaller stream creating a little island which ends where the two streams rejoin. This square is formed by four concrete beams held by one column. As you can imagine, due to humidity the site is particu-larly heavily overgrown and the beams intersect with the luxuriant growth of trees and big ferns without dis-turbing any of the species in the place, being defined on the outside by this interlaced concrete structure. On the outer face of each beam, amambay leaves, of ferns very characteristic of these creeks, stamp their outline in the concrete, where it was executed with the help of the maestro Solanito, my eldest son. The inner face of the beams is covered with mirrors, mak-ing the space earlier described disappear once we’re inside. Within the square, skirting the roots, caressedby the sound of the waters of the stream, there is a grave, in reinforced concrete: my father’s tomb. I tackled this project systematically and periodically through the next ten years following his death, and abandoned it with the same frequency as the urge to tackle it again arose in me, in this way fulfilling his re-quest to be buried in our country house at Piribebuy, 84 km from Asunción, in a place named by him as Los Pilinchos, a subsidiary of heaven. The circumstance of dealing over the years with the topic of death, and in particular of someone so dearly loved, make me pass through every state of melancholy imaginable – as the only evidence of my inefficiency as an architect. The access, across the signs of the beams, through

the four interrupted spaces in the perimeter, makes the place disappear, thickening the air with a great centripetal force, where everything present becomes integrated, waiting for the moment when someone sits by my father’s grave, the moment when every presence is captured by the mirrors, with their end-less repetition of the space, which they now transform into a centrifugal integrator. Remember the height of the beams is standard handrails, about 1.10 m, so by standing in this space our view ranges beyond the 81 m2 in which we’re inscribed. In the mirror I’m out “there”, in front of me, outside myself, living in anotherdimension, watching myself and everything else, or just allowing me to live in a different world, which is not my own, on a plane of equality and simultaneity. Maybe in the mirror we could find a machine which allows us to live in some other way with our relatives… our beloved absent ones, snatched away by obscene death… Those who are an impossible love, because we can never find either time or space that will allowthem to be. This small work, I think, has a particular exorcist quality for me and I expect it to have an over-all positive effect in the management of my relations with my own ghosts. I would like you to know that this “Morel invention” is still producing its fruits – although highly influenced by my dear Brazilian brothers, I’m now tempted to explain it in the following way: 4 beams, 4 columns, 4 mirrors… and a grave”.

Unilever HeadquartersVilla Elisa (Paraguay)2000-2001

Gabinete de Arquitectura: Solano Benitez, Alberto Marinoni

Associate collaborator: José Luis Ayala

Collaborators: Silvia Ortiz, Silvio Vázquez,Sergio Flores, Oliver Ortiz, Adriana Sbetlier, Giovanna Pederzani, Gabriela Abente, Raúl Vera, Marina Tomboli, Maria José Vargas, Miguel Duarte, Margarita Ruiz Díaz

Structures: Federico Taboada, Luis Caló

Photo: Enrico Cano

Abu&Font HouseAsunción (Paraguay)2005-2006

Gabinete de Arquitectura: Solano Benitez, Alberto Marinoni, Gloria Cabral

Collaborators: Berenice Gomez, Carlos Agüero, Clara Bazet, Cristina Cabrera, Diego Cazal, Gerardo Esteche, Guillermina Iglesia, Javier Pineda, Jazmin Torrents, José Castelleti, Juan Pablo Carrón, Laura Alviso, Lisandro Villanueva, Lorena Silvero, Mara Corvalan, Natalia Ferreira, Nicolas Aransiva, Olivia Villalba, Olivia Zorraquin,Pilar Burró, Silvio Vazquez

Structures: Enrique Granada

Photo: Enrico Cano

4 vigasFather’s gravePiribebuy (Paraguay)2000-2001

Gabinete de Arquitectura: Solano Benitez, Alberto Marinoni

Collaborators: Silvia Ortiz, Silvio Vázquez,Oliver Ortiz, Adriana Sbetlier, Giovanna Pederzani,Gabriela Abente, Raúl Vera

Structures: Federico Taboada

Photo: Enrico Cano

At a time when the concept of ethics must be part of every architect’s vision, Solano Benitez demonstrates that this is no obstacle to creative freedom: on the contrary, it constitutes a magnificent and stimulating challenge. This is a lesson which clearly extends well beyond the field of architecture.

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J.-F Jauslin, Director of the Swiss Federal Office of Culture

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The BSI Group ended 2012 on a positive note, giving renewed impetus to the implementation of its growth strategy. This was amidst a fragile world economy, volatile financial markets and major changes in the wealth management sector.

2012 was a complicated year for the global economy, which is still in the grip of the financial crisis that began in 2007. Global growth has slowed, due mainly to the weakness of the eurozone, but also to a slowdown in emerging economies, China in particular, although eco-nomic expansion remains strong in these areas. Concerns have focused on Europe, particularly Greece, due to uncertainty over the sustainability of Greece’s public fi-nances, fuelling scepticism towards other countries in the southern part of the eurozone. It was only in the second half of the year when confidence begin to build, following efforts by the European Central Bank (ECB) to shore up the economic and financial stability of the eurozone, together with decisions taken at the European level and action by national governments. The Swiss economy, though also slowing, emerged as one of the most successful of the developed countries.

The European sovereign debt crisis has impacted the performance of government bonds in heavily indebted countries, with spreads against the German Bund peak-ing at an all-time high before narrowing again towards the end of the year. The equity markets remained vola-tile, although performed well on the whole. Nevertheless, investors have remained cautious.

The foreign exchange market was less volatile than in the recent past, at least for the currencies of industrialised countries. The Swiss National Bank continued to defend the minimum exchange rate of CHF 1.20 to the euro in a bid to curb the sharp rise in the Swiss currency, which remained high all year. The Swiss franc also remained strong against the US dollar.

Against this economic and financial backdrop, the Swiss financial centre continued to face a stricter international regulatory environment, to which Switzerland responded

effectively. In 2012, the European Union ruled that the Swiss proposal to introduce a withholding tax on the as-sets of European customers held with Swiss banks was compatible with EU legislation. Tax agreements have been ratified with Austria and the United Kingdom, al-though the agreement reached with the German govern-ment was rejected by the Bundesrat. Negotiations also continued with major European partners such as Italy, as did negotiations with the United States over an agree-ment to simplify the application of the Foreign Account Tax Compliance Act (FATCA).

The global economic and financial situation, together with changes under way in the wealth management sector in Switzerland and new trends in the distribution of global wealth, are redefining a competitive landscape in which the BSI Group, which celebrates its 140th anniversary this year, is well placed to seize further growth opportunities.

report on ACtIvItIeS AnD tHe IMpleMentAtIon oF StrAteGY The year 2012 was important for BSI. On one hand, the results show an increase in profits, proving that the in-vestments made in recent years, combined with careful cost discipline, are delivering the expected results. On the other hand, the significant rise in net new money is a testimony to the strategic decisions made and BSI’s excellent reputation in wealth management. In the same year our shareholder, the Generali Group, announced plans to sell the Bank in order to focus on its core busi-ness of insurance.

management report 2012

Positive results and strong net new money inflows in 2012 reflect the effectiveness of strategic decisions made in recent years. BSI remains an attractive and highly reputable bank amid uncertainty in today’s climate, thanks to its strong integrity and sound operational management.

Gianni AprileDeputy Group CEO

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In 2012, the growth strategy continued to be implement-ed in three directions:• geographical diversification, to seize the development opportunities offered by the most dynamic markets and to consolidate our position in traditional markets; • development of service models dedicated to each cu- stomer segment, tailoring our products and services across all markets to effectively meet clients’ specific needs; • improved operating efficiency, mainly through a careful cost management policy, as well as rigorous capital and risk management, to ensure long term sustainable growth.

With the twofold objective of being closer to clients and staying ahead of the changes in the international asset management sector that are shaping the competitive landscape, BSI is successfully implementing an expan-sion policy, both at the international level and in the Swiss market, and is adapting its products and services offering accordingly.

In 2012, BSI consolidated its presence in high growth markets, namely Asia, Latin America, Eastern Europe and the Middle East, which continued to be the most dynamic areas for the development of wealth management services, despite the global economic slowdown.

The business received a further boost from Asia, where BSI – already established in Singapore, the Bank’s second largest office after the headquarters in Lugano – opened a branch in Hong Kong. The Hong Kong branch, which be-

came fully operational this year, is able to offer customers the entire range of investment and banking services thus significantly contributing to the group’s growth. With over 315 employees in Singapore and Hong Kong, Asian markets represent a key growth area for BSI, one that the Group continues to focus on with a view to capital- ising on the major growth opportunities offered by these dynamic markets. BSI has also expanded its operations in the Middle East, with the transformation of the Bah-rain office into a branch, enabling the Group to roll out its products and services offering to key Middle Eastern markets. In addition, BSI received the go-ahead in early 2013 to open an office in Istanbul, from where the Group will be able to develop the Turkish market, which offers interesting growth opportunities in the wealth manage-ment sector. In 2012, the teams specialising in Latin America, where BSI has been firmly positioned for some time, were further expanded. Latin America, together with Central and Eastern Europe, are two more regions that the Group intends to develop and where it has already shown it can compete successfully.

As a testimony to the strategic decisions underpinning the substantial investment made by BSI in growth mar-kets in recent years, in 2012 these regions made a significant contribution to the Group’s net new money inflow, representing around one third of the CHF 86.3 billion in assets under management at 31 December 2012.

Even though the traditional markets showed only moder-ate increase in wealth, they remain key for BSI and repre-sent the majority of assets under management. In these markets, the Group is looking to consolidate its position, leveraging its excellent reputation for wealth manage-ment with a specialist value proposition able to address the needs of customers in light of the new competitive landscape and global economic context, particularly with regard to cross-border activities.

BSI aims to be the most admired private bank in Asia. Admired for our wealth management knowledge, expertise and rigour; for providing bespoke solutions to clients in Asia; for a culture that attracts and inspires the best talent in the region.

Hanspeter BrunnerCEO BSI Asia

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The creation of the new Latin America & Middle East region testifies to the importance of these markets. In 2012, we boosted BSI’s ongoing growth there. We are also looking to the future with confidence, given the growth initiatives that we have already launched, such as the transfor-mation of the Bahrain office into a bank and the opening of a representative office in Istanbul.

Gérald RobertCEO BSI Latin America & Middle East

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In 2012, BSI further consolidated its position in the do-mestic market. Local structures were strengthened, espe-cially in French-speaking Switzerland (Geneva and Laus-anne), and an innovative offering for Swiss clients was set up. Moreover, a multi-service, multi-channel strategy was adopted. On the basis of this strategy, specialised service models were designed for client segments. All segments showed good results, including External Asset Managers and Personal Banking, the division dedicated to affluent clients. Last year also saw the founding of Patrimony 1873, an independent wealth management company that offers Family office services and consolidation of internationally diversified assets designed to meet new and increasingly complex client requirements, not only in terms of wealth management. Finally, while continuing to privi-lege relationships and personal advice, BSI aims to of-fer clients a series of additional services that exploit the potential of new technologies. Thanks to its new IT plat-form, BSI has set up a new multi-channel client service models, with Integrated Wealth Advisory, that combines the advisory services of the Bank’s experts with innovative interactive support. This results in a more personalised, higher-quality offering.

In a rapidly changing world, BSI has been able to draw on its 140 years of experience in Swiss banking to achieve growth, even in traditional markets. This success is founded in the expertise and skills of its relationship managers and its ability to innovate and look to the future.

Renato SantiCEO BSI Switzerland

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In Europe, the Luxembourg affiliate changed its name from BSI Luxembourg to BSI Europe, a change which reflects the BSI Group’s strategic refocusing on the tradi-tional markets. Leveraging its EU passport, BSI Europe is set to gradually become a European competence centre as well as a platform for products and services to be used to serve the EU markets. The first major step in this direction was made with a licence granted from the relevant authorities to operate directly in Italy and the subsequent transformation of BSI Wealth & Family SIM into a branch of BSI Europe. The year 2013 will thus see the BSI Group re-establish a local banking presence in Italy after an absence of many years. The Italian market has always represented one of the key markets for the BSI Group. The new bank branch will take its place alongside the BSI structures already operating in Italy, such as EOS Servizi Fiduciari and BSI Merchant. The aim is to gain greater proximity to clients by offering a com-prehensive range of products and services.

operational efficiency was improved with the migration in April of the Hong Kong affiliate to the “B-Source Master platform powered by Avaloq”, thus completing the trans-fer of the entire BSI Group to the same IT platform. This brings substantial advantages in terms of efficiency and productivity, as well as cost containment. In 2012, efforts to optimise the front/back office relationship continued, testifying not only to the more efficient service and con-trol structures but also to increased client focus. Finally, in terms of operations, BSI has implemented the changes due in the international portfolio management sector following agreements signed between Switzerland and leading European countries, such as the UK and Austria, on the introduction of a withholding tax on European clients’ assets deposited in Swiss banks and following new recommendations from Financial Action Task Force (FATF) for combating money laundering.

The European banking platform in Luxembourg, the new branch in Italy, the structures in Monaco and Paris, and the major efforts to overhaul and round out the specific offering for every European reference market underpin BSI’s ambi-tions for growth in the target European markets.

Nicola BattaloraCEO BSI Europe

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There were some key new appointments to the Bank’s Board of Directors in 2012. In April, Pierre E. Genecand was appointed as a new member of the Bank’s Board of Directors. This underlines the importance of French-speaking Switzerland for the BSI Group. In September, Mario Greco, Group CEO of Assicurazioni Generali, was appointed as a member of the Board of Directors and as Vice-Chairman.

In line with the development of the Bank’s strategy, in par-ticular with regard to geographic diversification, a num-ber of important changes were made to the structure of the Group executive Board, the BSI Group management body. The new Latin America and Middle East Region was created in 2012 to further boost growth in these major markets. Gérald Robert, who took on the position of CEO BSI Latin America & Middle East, is responsible for the new region. In June, Stefano Loffredi, head of the Group’s International business and CEO of BSI Europe, stepped down from his operational role on reaching re-tirement age. Responsibility for the region of Europe was entrusted to Nicola Battalora, who accepted the position of CEO BSI Europe. Another major change took place at the start of 2013: Gianni Aprile, formerly CEO of BSI Switzerland and Deputy CEO of the Group, gave up his role at the helm of the Swiss region to take responsibil-ity for building and managing the new Strategic Plan-ning & Corporate Finance division. This new structure is dedicated to supporting the Group’s development at this particularly dynamic time in the market. Aprile retains his role as Deputy CEO of the BSI Group, but is replaced as CEO for BSI Switzerland by Renato Santi, who takes over responsibility for the Swiss region.

Thanks to the measures it has taken, BSI is a banking group with solid roots in Switzerland and a strong interna-tional profile. Geographical diversification, together with service model specialisation, represents an important competitive advantage for the BSI Group, as it allows us to be ever closer to clients’ changing requirements world-wide and to achieve excellent results, even in weak eco-nomic phases. The BSI Group is today well positioned to continue to offer investment and wealth management solutions that effectively meet its clients’ increasingly complex needs with maximum customisation, anywhere in the world.

FInAnCIAl DAtAThe BSI Group’s financial results reflect the sustainability of the strategic choices adopted by the Group despite the atypical environment.

Against a backdrop of ongoing uncertainty in the world’s economies, financial market volatility and a strong Swiss franc compared with the other main currencies (euros and US dollars), assets under management (AuM) on 31 December 2012 amounted to CHF 86.3 billion, up 11.0% compared with CHF 77.7 billion the previous year. Net new money totalled CHF 7.5 billion compared with CHF 6.7 billion in 2011, setting an all-time record for BSI. The exceptional net new money inflow underlines the efficiency of the strategic choices made and the attractiveness of the BSI brand in the wealth management sector. Rapidly developing countries, such as Asia, Latin America, the Middle East and Eastern Europe, made a key contribution to net new money. Switzerland and the traditional markets also performed well thanks to the development of new channels and segments.

Our focus is growth and we achieved a 19% increase in gross profit in a still uncertain operating environment, whilst continuing to strengthen capital ratios to support our future plans.

Rajiv PradhanCEO Corporate Services

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Lugano, 5 April 2013

For the Board of DirectorsAlfredo Gysi, Chairman

The Group Executive Board: Stefano Coduri, Group CEO

Gianni AprileNicola Battalora Hanspeter BrunnerRajiv PradhanGérald RobertRenato Santi

The Group’s operating income in 2012 came to CHF 865 million, up 3.7% compared to CHF 834.2 million in 2011, in spite of persistent low interest rates, the strong Swiss franc and the ongoing cautious stance of clients in the fi-nancial markets. Net interest income totalled CHF 228.8 million, a rise of 5.0% compared to 2011 (CHF 217.9 million), due chiefly to the ongoing high levels of liquidity, particularly in the first half of the year. Commission and service fee income rose by 6.6% to CHF 458.7 million (CHF 430.4 million in 2011), whilst trading income in-creased to CHF 156.5 million (+11.8% compared with the CHF 140 million recorded in 2011). Other ordinary income was CHF 21 million.

Rigorous cost controls contributed to a slight reduction (0.1%) in operating expenses, which came to CHF 668 million (2011: CHF 668.6 million), although major invest-ment to support international development continued in 2012, and additional expenses relating to the Bank’s fu-ture commitments arose following a change in account-ing principles.

Consolidated gross profit rose 19% to CHF 197 million (CHF 165.6 million in 2011), whilst net profit increased by 22.2% to CHF 71 million (versus CHF 58.1 million the previous financial year).

As at 31 December 2012, the BSI Group’s total assets stood at CHF 24.3 billion. Due from customers rose to CHF 10.5 billion compared with CHF 9.4 billion in 2011, of which CHF 3.5 billion relates to residential mortgage loans (2011: CHF 3.3 billion). Again in 2012, BSI confirmed that it is a solid bank, with shareholders’ equity of CHF 2.5 billion and a total capital ratio of 17.0% (2011: 14.6%), testifying to the further strengthening of the Group’s capital base.

Diébédo Francis Kéré was born in Burkina Faso in 1965, the first born son of the chief of the village of Gando. After completing his apprenticeship as a joiner, Kéré began to work in the capital city of Ouagadou-gou as a teacher in the professional training courses organised with the sponsorship of the German Federal Ministry for Economic Cooperation and Development. Kéré was awarded a scholarship in 1990 and moved to Berlin. He completed his secondary education there and enrolled at the Technische Universität of Berlin in 1995, where he earned his degree in Architecture in 2004. Kéré began his career in architecture while still at university. In 1998, he founded the association Schulbausteine für Gando, through which he raised the funds to build a new primary school in his home vil-lage. The complex immediately attracted international attention and recognition for its high quality, and Kéré was honoured in 2004 with the Aga Khan Award for Architecture, followed in 2007 by the Zumtobel Award for Sustainable Architecture and in 2009 by the Global Award for Sustainable Architecture. Diébédo Francis Kéré has been a lecturer at the Technische Universität of Berlin since October 2004, and opened his own architecture practice in Berlin in September 2005. In September 2005 he opened a practice in Berlin. His major projects and works include: in Burkina Faso, the primary school at Gando (2001) with a subsequent extension (2008) and the teachers’ homes (2003), the secondary school at Dano (2007) and the Opera vil-lage Remdoogo Laongo (under construction); in Mali, the Mopti Community and Exhibition Centre (under construction) and the Mali National Park at Bamako (2009-2010); in Togo, the Dapaong Training Center (groundbreaking in autumn 2010); in Yemen, a pro-totype school building based on bioclimatic criteria (2006). For the first Biennial of Architecture, Art and Landscape of the Canary Islands he designed a Mee-ting Point in Fuerteventura, and was one of the three

SECOND EDITION2009–2010

architects chosen in the competition for the permanent exhibition of the Red Cross and Red Crescent Mu-seum in Geneva (under construction). He was invited by the architect Wang Shu and the Locus Foundation to participate in the conversion of a fishing port in the city of Zhou Shan into artists’ studios (2010). His work has been presented in the Expo Zaragoza at “Zara-gozaKyoto – Architectures for a Sustainable Planet”, at the DAM-Deutsches Architekturmuseum, Frankfurt, and recently at the MoMA in New York.

JURY’S MOTIvATION“Faced with cutting-edge technical and structural in-novations, after the extensive technological output of past decades, the Jury opted for a more concrete or, we might say less sophisticated approach compared to that characteristic of Western technological cultu-re. It chose to honour Francis Kéré for his intelligent, quintessential architecture, which avoids all conces-sions to superstructural elements. In his work, the in-volvement of local communities has created an active project for improving living conditions in a context as poor as that of Burkina Faso in “nearby” Africa. With Francis Kéré architecture returns to its most profound significance, and is capable of addressing important issues in places where there still persist pockets of poverty and underdevelopment which architecture cannot ignore. His vocabulary presents us with ima-ges of the fundamental elements of compositional grammar: the load-bearing walls built of brick mason-ry which work by gravity and the lightweight roofs that become true umbrellas sheltering spaces for living. Francis Kéré’s architecture embodies great humility, providing a forceful demonstration of how the ethics of building can sometimes guide us to the marvellous silences of a poetic language”.Mario BottaPresident of the BSI Swiss Architectural Award Jury

The winner: Diébédo Francis Kéré (Burkina Faso/Germany)

Dié

bédo

Fra

ncis

Kér

é

TEACHERS’ HOUSINGGANDO (BURKINA FASO)2003The construction of teachers’ accommodation, with standards to match the school building, followed the school. The teachers’ housing was designed to give an incentive to migrate to the countryside while living with the same level of comfort as expected in the city. In order to be able to respond to the staff’s require-ments and at the same time ensure sustainable inte-gration into village life, the houses were constructed as modules. Certainly, the project aims at being at-tractive and comfortable for the local people as well. In size, the basic module is comparable to the traditio-nal living space in the region. Single modules can be combined variously into larger composite units. Each module variation consists of the requisite living space for staff and family, a courtyard surrounding the house and a unit with shower and pit latrines within the cour-tyard. With its arrangements in rows and coordinatedseries of half open and open spaces, the housing de-sign is an enhancement of the farmstead structure used in urban planning. Furthermore, these houses offer a revised architecture of the villagers’ homes. The design avoids using wood in order to increase fire protection and because there hardly is any wood for building. Metal roofing would be preferable, not only because of its availability but also for its resistance against termites. Yet high costs keep many from affor-ding this material. Therefore, this project strives to of-fer concepts including local materials. For protection against rising humidity, the 40 cm thick solid ado-be walls are based on a foundation of cast-in-place cement and granite boulders. The solid barrel vault which is also made of clay rests on these walls. Tin roofed constructions have become very popular and slowly are displacing the traditional thatched houses. Due to lack of knowledge and working skills with this material, these houses have extremely poor clima-tic conditions inside. In comparison, the new adobe structure of the outer shell helps reduce the tempe-rature inside. As a consequence the rooms are ple-asantly cool during the day. There are two different types of roof sizes. At the point of convergence of two roofs a sickle-like gap is created which allows cool air and light into the room. The project is not seen as completed fully yet; additional improvements anddevelopments are being implemented, e.g. for we-ather protection. Nevertheless, it has already found emulators who accept the ideas and follow the mo-del for new homes to be built. Both the school and teachers’ houses are notable for one very importantfeature: the strong, active and enthusiastic engage-ment of the Gando people. The projects were con-ducted by women, men and children of the village alike and evoked awareness and a sense of respon-sibility.

SCHOOL ExTENSION GANDO (BURKINA FASO)2008The school extension building in Gando is the result of the success of the first school building which was fi-nished in 2001 and provided space for 120 students. Because of the high quality and the strong identifica-tion of the entire village community with the building, two years after the opening more than 260 children wanted to attend education in that school. This made an extension inevitable. The design principle follows the same climatic considerations as in the first school, but in a different physical expression. Instead of the massive ceiling used by the first school, the ceiling of the extension building is a vault with slits for light and outlet vents for the overheated air. For climatic reasons, cavities have been integrated into the vault.The enclosed air in the cavities works as a buffer and so can help reduce overheating inside the classro-oms. The protection against rain and sun is provided, like in the first school, by a widely overhung metal roof. This roof, which absorbs direct sunlight, lets the air circulate between the two layers and guides the hot air out of the building. It can be considered as the motor of this natural ventilation system. Regarding the participation of the people in the building process there was a big difference to the first one. During the work process all the surrounding village communitiesof Gando, came to help erect the extension building. This was very new in the region and initiated a turning point in the perception of the community. Never befo-re has a school project raised expectations like this inthe region. Even the government was surprised by the overwhelming interest of the people in their project and is about to find ways to support similar projects in the long run.

SECONDARY SCHOOLDANO (BURKINA FASO)2007Situated at the edge of a small town in Burkina Fa-so, the project comprises an L-shaped addition to an existing school complex. The design incorporates lo-cally available materials and sustainable features that respond to the specific constraints of climate. This new building closes the southern angle of the com-pound and is oriented to reduce direct sunlight onto the walls, which are themselves protected from the sun by a wave-like canopy. The extension comprises three individual blocks housing the classroom, offices and a computer room. An oval “amphitheatre”, open to the exterior, serves as a sitting area during breaks. The ensemble is covered by a tilted, cantilevering ro-of structure whose undulating bays create a rhythm against the orthogonal enclosure below. Walls of lo-cally available laterite (laminated with thin layers of ce-ment to form 30-cm thick load-bearing partitions) sit on a granite stone bed. Regularly spaced, tall window shutters are painted in bright colours that vary with the activity inside. The roof consists of 3 m wide, modular elements assembled from 14 mm and 16 mm thick iron bars welded together on site. Corrugated roofing fixed to the assemblage protects the interior from the elements. Within the classrooms, a wave-like suspen-ded ceiling defined into 3 m bays recalls the outer structure. Slits in the ceiling allow hot air to flow out through the roof, keeping the building naturally ven-tilated. Composed of cement stones hanging on the construction of thin, flat-rolled steel, the underside of the ceiling is painted in reflective white so as to di-stribute light within the classrooms. Throughout the construction process, local artisans were trained in new techniques, ensuring that building methods would stay within the community.

School Extension Gando (Burkina Faso)2008

Collaborators: village Community of Gando

Craftsmen: Binjamain Kaboré, Sanfo Saidou (master builders); Amédé Kéré, Justin Tamagda (welders)

Site coordination: Schulbausteine für Gando e.v./Kéré Architecture

Client: Schulbausteine für Gando e.v., Community of Gando

Photo: Enrico Cano

Teachers’ HousingGando (Burkina Faso)2003

Collaborators: village Community of Gando


Site coordination: Schulbausteine für Gando e.v./Kéré Architecture

Client: Schulbausteine für Gando e.v., Community of Gando

Photo: Enrico Cano

Secondary SchoolDano (Burkina Faso) 2007


Building contractor:EGC (Entreprise Générale de Construction), Ouagadougou

Site coordination: Kéré Architecture

Client: Dreyer Stiftung

Photo: Enrico Cano

In a globalised world of ever increasing connectivity, complexity and uniformity, sustainability, identity and local context become important values of human behaviour and action. Francis Kéré, with his poetic and sensible architecture, gives a face to these values.

«

Felix R. Ehrat, President of BSI Architectural Foundation

»

__ 37

38 __ CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2012

39 __ CONSOLIDATED PROFIT AND LOSS STATEMENT 2012

40 __ CONSOLIDATED CASH FLOW STATEMENT 2012

41 __ NOTES TO THE 2012 GROUP ACCOUNTS

72 __ REPORT OF THE STATUTORY AUDITOR ON THE CONSOLIDATED FINANCIAL STATEMENTS

groUp aCCoUnts

38 __ BSI Group accounts

AssetsCash and other liquid assets

Money market paper

Due from banks

of which due from reverse repo transactions

Due from customers

Mortgage loans

Securities and precious metals held for trading

Financial investments

Non-consolidated participations

Fixed assets

Intangible assets

Accrued income and prepaid expenses

Other assets

Total assets Total subordinated assets

Total amounts receivable from non-consolidatedparticipations and qualified shareholders

LiabilitiesMoney market paper liabilities

Due to banks

of which due from repo transactions

Due to customers in savings and investment accounts

Due to customers, other

of which due from the trading portfolio

Medium-term notes

Loans with issuers of property bonds and other

Accrued expenses and deferred income

Other liabilities

Value adjustments and provisions

Reserves for general banking risks

Share capital

Capital reserve

Reserve and retained earnings

of which minority interests

Net Group profit


Total liabilities Total subordinated liabilities

Total liabilities to non-consolidatedparticipations and qualified shareholders

Off-balance sheet businessContingent liabilities

Irrevocable commitments

Contingent liabilities for calls and margin liabilities

Loan commitments

Derivative financial instruments Positive replacement value

Negative replacement value

Contract volumes

Fiduciary transactions1 The data for 2011 have been adjusted.

31.12.2011

CHF 1’000

11’636’786

1’983’001

3’677’245

1’397

6’162’413

3’260’382

1’293’297

1’347’385

56’958

396’680

822’907

92’020

1’435’600

32’164’674

31’472

20’789

2’541

739’948

139’468

413’514

26’811’278

1’174’200

1’550

93’490

135’749

1’447’883

55’136

168’550

1’840’000

145’200

251’723

1’108

58’112

1’266

32’164’674

104’436

782’778

1’603’731

144’651

1’021

3’6361

1’335’060

1’313’581

49’458’510

2’932’728

31.12.2012

CHF 1’000

3’890’088

1’590’600

3’678’720

91’575

7’057’084

3’490’324

1’731’912

1’140’559

54’753

387’521

762’488

68’454

434’428

24’286’931

45’895

20’746

2’408

1’094’599

166’529

493’340

19’409’843

867’663

1’029

91’575

188’494

484’861

44’667

142’508

1’840’000

145’200

277’396

71’011

24’286’931

105’148

28’673

1’934’921

108’422

983

6’409

315’754

373’641

41’557’241

2’133’313

Notes

3.1

3.1

3.2

3.3, 3.8

3.4, 3.6, 3.7

3.7

3.7

3.18

3.17

3.17

3.17

3.18

3.10

3.10, 3.11

3.11

3.11

3.11

3.1, 4.1

3.1, 4.5

3.1

3.1, 4.6

3.18, 4.2

3.18, 4.2

4.2

4.3

Change

in %

-66.6

-19.8

6’455.1

14.5

7.1

33.9

-15.4

-3.9

-2.3

-7.3

-25.6

-69.7

-24.5

45.8

-0.2

-5.2

47.9

19.4

19.3

-27.6

-26.1

-33.6

-2.0

38.9

-66.5

-19.0

-15.5

10.2

-100.0

22.2

-100.0

-24.5

0.7

-96.3

20.7

-25.0

-3.7

76.3

-76.3

-71.6

-16.0

-27.3

CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2012

__ 39

Income and expenses from ordinary banking operationsInterest and discount income

Interest and dividend income from financial investments

Interest expenses

Result from interest activities

Commission income from lending activities

Commission income from securities and investment transactions

Commission income from other services

Commission expenses

Result from commission and service fee activities

Result from trading operations

Result from the sales of financial investments

Income from participations

of which from participations consolidated using the equity method

of which from non-consolidated participations

Net income from real estate

Other ordinary income

Other ordinary expenses

Other ordinary result

Net operating result

Personnel expenses

Other operating expenses

Operating expenses

Gross profit

ProfitGross profit


Value adjustments, provisions and losses

Result before extraordinary items and taxes

Extraordinary income

Extraordinary expenses

Taxes

Net Group profit of which minority interests

2011

CHF 1’000

245’392

19’078

-46’598

217’872

5’356

462’035

38’522

-75’462

430’451

139’950

1’642

7’970

5’384

2’586

1’653

40’645

-6’032

45’878

834’151

-438’730

-229’852

-668’582

165’569

165’569

-105’939

-21’259

38’371

66’929

-23’618

-23’570

58’112

1’266

2012

CHF 1’000

252’666

15’345

-39’263

228’748

9’550

485’692

51’034

-87’567

458’709

156’533

748

17’387

14’111

3’276

2’912

4’233

-4’232

21’048

865’038

-437’713

-230’284

-667’997

197’041

197’041

-105’231

-41’104

50’706

41’030

-6’740

-13’985

71’011

Notes

5.1

5.2

5.3

5.4

5.5

3.7

3.10

5.6

5.6

5.7

Change

in %

3.0

-19.6

-15.7

5.0

78.3

5.1

32.5

16.0

6.6

11.8

-54.4

118.2

162.1

26.7

76.2

-89.6

-29.8

-54.1

3.7

-0.2

0.2

-0.1

19.0

19.0

-0.7

93.3

32.1

-38.7

-71.5

-40.7

22.2

-100.0

CONSOLIDATED PROFIT AND LOSS STATEMENT 2012


Cash flow provided by operating activities (internal financing) Net Group profitDepreciation of fixed assetsValue adjustments and provisionsAccrued income and prepaid expensesAccrued expenses and deferred incomeOther itemsDividend Subtotal

Cash flow provided by equity transactionsReserves for general banking risksReserve and retained earningsTranslation differences arising from profit consolidation Subtotal

Cash flow provided by changes in fixed assets and in participationsParticipationsReal estateOther fixed assetsIntangible assetsSubtotal Total

Cash flow provided by banking activitiesMedium- and long-term activities ( > 1 year)Due to customersMedium-term notesLoans with issuers of property bonds and other Due from banksDue from customersMortgage loansFinancial investments

Short-term activities Money market paper liabilitiesDue to banksSavings and investment accountsDue to customersMedium-term notesMoney market papersDue from banksDue from customersMortgage loansSecurities and precious metals held for tradingFinancial investmentsCash and other liquid assets Total1 The data for 2011 have been adjusted.

Uses of cash

CHF 1’000

12’75514’60713’84175’372 92’500

2’762 3’171

5’234831

35’419

25’2691

521

447’955241’128

290’087

85423’933

1’102’97324’353

273’968278’175

11’124’74382’360

Uses of cash

CHF 1’000

10’469

31’151

249’083

26’008

1’750

55429’711

5’288

188’305

2291’915

31’27061’81723’487

261’845

133

7’407’120292

832’854206’455

438’615

Sources of cash

CHF 1’000

58’112105’939

45’024

1’838

4’095

8’24333’241 82’360

93’4904’794

427’887

2’541

19’77912’500’3371

867’491

Sources of cash

CHF 1’000

71’011105’231

23’56652’74538’150

428

27’330

2’105

33’448

5’685

354’65179’826

392’40129’795

468’671

7’746’698188’305

20112012

CONSOLIDATED CASH FLOW STATEMENT 2012

__ 41

1 CoMMentArIeS reGArDInG tHe Group’S BuSIneSS ACtIvItIeS

The following notes refer to the position at 31 December 2012.

GenerAl InForMAtIon

The Group’s parent bank, BSI AG, is based in Lugano and operates in Switzerland and internationally through a network of ten branches (Bellinzona, Chiasso, Geneva, Locarno, Lausanne, St. Moritz, Zurich, Bahrain, Hong Kong and Nassau), one agency (Crans-Montana) two representative offices (Montevideo and Panama) and four banks (Luxembourg, Monte Carlo, Nassau and Singapore) and affiliated companies. For the scope of consolidation and the major non-consolidated holdings, please see tables 3.5 and 3.6. BSI AG is wholly owned by Assicurazioni Gene- rali SpA, Trieste, through its direct participation Participa-tie Maatschappij Graafschap Holland N.V., Diemen (NL).

tHe prInCIpAl ACtIvItY oF tHe BSI Group

The BSI Group is active primarily in asset management for private and institutional clients and the activities closely related to it such as investment funds, the placing of fi-duciary deposits and trading in securities, precious metals and foreign exchange. The Group also offers its clients credit services.BSI AG carries out trading in currencies and securities (shares, bonds and derivatives), including own account trading and third-party trading with pre-defined limits. BSI AG also performs issuing activities and acts as a market maker.

BAlAnCe SHeet trAnSACtIonS

Balance sheet transactions have a complementary role. They account for about 26.4% of the Group’s net operat-ing result (2011: 26.1%). Lending activities mainly involve the granting of Lombard loans, loans largely covered by guarantees and mortgages, and unsecured loans. Overall, secured loans account for 93.1% of total loans (2011: 93.1%). Bank deposits are made only at leading Swiss or OECD country institutions. BSI AG holds a bond portfolio, booked as “Financial investments”, as a medium- to long-term investment.

HeADCount

At the end of 2012 the Group had 1,962.55 full-time equivalent (FTE) employees (2011: 1964.40), of whom 645.40 were employed abroad (2011: 618,45). The parent company had 1,355.45 full-time equivalent employees (2011: 1,352.95), of whom 110 were employed abroad. Following the founding of Patrimony 1873 SA, a new affiliated company of the Group, there was a reduction in the headcount of the Parent Bank, with 47 employees leaving the Bank.

Control AnD rISk MAnAGeMent

prInCIpleS

Risk management forms an integral part of the corporate policy of the BSI Group. In compliance with Swiss and international laws and regulations, the Bank has estab-lished a structure for monitoring and managing risks for the BSI Group.

StruCture AnD reSponSIBIlItIeS

The Bank’s internal control and risk management struc-ture adequately reflects the size and complexity of the business the Bank conducts. This structure includes pro-cesses and controls that ensure the delegation of authori-ties and the segregation of critical functions.

The Board of Directors monitors whether the Bank has a clear global risk management process. It approves risk policies and limits and is informed quarterly in writing of the situation with respect to risks for the BSI Group.

The Group Executive Board is responsible for implement-ing the risk management process for the entire bank-ing organisation. It defines the principles, risk strategies and policies, global limits and authorities approved by the Board of Directors.

To ensure that risk is managed effectively, the Group Ex-ecutive Board has set up various committees with specific responsibilities relating to the management of credit risks, counterparty risks, market risks, liquidity risks, operational risks and compliance risks. The members of the Group Executive Board are generally represented on the vari-ous committees, which are made up of risk management experts for the Bank’s various areas of business.

Risk Management, in cooperation with the control units of the Bank’s various business areas, conducts various controls independent of the line. The control units inter-vene directly in cases of non-compliance with limits, and they periodically inform Risk Management of the current status of risks over which they have authority.

NOTES TO THE 2012 GROUP ACCOUNTS


Risk Management analyses and consolidates the risk data and information at Group level and produces a quar-terly Audit Report on Risks for the attention of the Group Executive Board and the Board of Directors.

The Legal & Compliance unit is responsible for managing legal and reputational risks and for ensuring that the BSI Group complies with regulatory and legal requirements.

BAlAnCe SHeet GuIDelIneS

The Bank has a reference model for managing the con-solidated balance sheet, approved by the Board of Direc-tors and Group Executive Board. The reference model explicitly sets the risk appetite and the guidelines for the trend in the principal asset and liability items on the basis of solvency, liquidity, risk and profitability. In particular, within these balance sheet guidelines the Bank has de-fined some measures which have allowed it to improve the level of solvency and to mitigate and optimise the exposure.

Credit RisksCredit risk is the risk that a counterparty’s creditworthi-ness deteriorates and the counterparty becomes insol-vent or does not pay back its liabilities. Credit risk also includes other risk categories such as counterparty risk, delivery risk, concentration risk and country risk. Credit risks are present in interbank portfolios and in the Bank’s own portfolios as well as in client loan portfolios.

The Bank has set out various internal policies that define the principles for managing risk, the means of calculating and limiting risk, the responsibilities for authorising credit lines and overdrafts, and the reports to be submitted to the managing bodies and the Board of Directors. More specifically, the Credit Office ensures centralised administration at Group level, coordinating all consolidat-ed positions and managing control processes. There are two high-level decision-making committees: the Credit Committee, which is responsible for loans to private and institutional clients, and the Banks and Brokers Commit-tee, which is responsible for counterparty risk (for states, banks, brokers, custodian banks and correspondent banks). The analysis, control and management of portfolio credit risks are the responsibility of the Financial Risks & Capital Allocation Committee.

The Bank measures and checks credit risk every day. Us-ing a limits system, it defines the maximum levels of risk acceptable with respect to groups of counterparties and checks that the regulatory requirements on high risks are observed. The independent control is carried out by the Credit Office unit, both at the consolidated level and at the Bank and the main affiliates.

In its lending to clients, the Bank aims to diversify risks and maximise the risk-return ratio. To this end, the Bank uses internal models to assess credit risk.The client loans portfolio is primarily made up of loans guaranteed by pledges on assets and securities as well as mortgages, especially for residential property in Swit-zerland and Singapore. The Bank applies internal policies that govern the lending values of guarantees to these loan categories, in accordance with the principles of prudence. Exceptions to the policies are submitted and approved by the Board of Directors.Commercial loans, loans linked to trade finance transac-tions and loans to finance Ticino-based public entities al-so constitute a significant component of the loan portfolio.

The Bank has maintained a cautious approach to the credit risk in the interbank portfolio, placing particular at-tention on the selection and diversification of bank coun-terparties and issuers, including government issuers, and reducing the duration of exposures.

The Bank has a country risk policy (concerning risk for balance sheet assets) and the country exposure is based on the final risk approach, which means that for collateral (pledges, mortgages, guarantees), the domicile of the col-lateral is considered and not the domicile of the borrower. The Bank maintained a close watch on country risk in 2012 and adopted various measures for limiting its expo-sure to high-risk countries. In particular, the Bank had no risk exposure to Greece or Portugal, and extremely lim-ited exposure to Ireland and Spain. Exposure to Italy was reduced both in terms of amount and residual duration.

__ 43

Market riskMarket risk is the risk of losses arising from unexpected changes in interest rates, exchange rates, share prices or the prices of precious metals and commodities, as well as the corresponding expected volatility. Market risk can have an impact on the Bank’s profit and loss statement and the value of its assets.

Risks related to the balance sheet structure (interest rate and exchange rate) are managed by the Financial Risks & Capital Allocation Committee (FINRISK) and monitored by Risk Management, in accordance with the principles and maximum limits stipulated in the “Market risk policy – balance sheet/ALM”. In the case of Asset & Liability Management (ALM), derivative products are also used. Positions without fixed maturities are replicated on the basis of historical analyses. The FINRISK Committee is also responsible for managing credit risks and allocating capital for the Bank’s various balance sheet activities.

The Bank carries out trading operations both for its cli-ents and on its own account using all financial products and their derivatives. The trading portfolio is governed by a “Market Risk Policy – Trading”, which defines the or-ganisational structure, responsibilities, limit systems and maximum acceptable risk. The Proprietary Trading Com-mittee is responsible for managing and monitoring market risk related to trading activities, based on the restrictions set by the FINRISK Committee.

In addition to its trading portfolio, the Bank has an in-vestment portfolio, which allows it to diversify balance sheet assets and to optimise any excess liquidity. The investment portfolio is subdivided into various portfolios based on product type and strategy. The risks related to the investment portfolio are managed by the Proprietary Investment Committee, which operates on the basis of re-strictions set by the FINRISK Committee and the “Market Risk Policy-Investments”.

Liquidity risksLiquidity risks arise when financing becomes difficult or costly due to market pressure or reputational problems. Liquidity risks also arise when it is difficult to meet the Bank liabilities in a timely fashion due to the lack of highly liquid assets.

Liquidity risks are managed by the FINRISK Committee, which assigns the operational management to Treasury and the control to Risk Management.

In its balance sheet management guidelines, the Bank has included the defined indicators of the new Basel III in-ternational framework for liquidity risk management. The indicators cover two separate but complementary objec-tives. The aim of the first indicator, the Liquidity Coverage Ratio (LCR), is to increase the short-term resilience of the liquidity risk profile, thereby ensuring that there are suf-ficient high-quality liquid assets to cover an acute stress situation over one month. The second indicator, the Net Stable Funding Ratio, has a one-year time horizon and aims to guarantee that assets and liabilities are composed sustainably in terms of maturities.

Operational riskOperational risk is the risk of losses resulting from inad-equate or failed internal processes, people and systems or from external events. Operational risks also include compliance, legal and image risks.

The management of operational risks at BSI is the task of Risk Management. It is based primarily on the collection and central analysis of operational losses, the identifica-tion and analysis of risks inherent in processes through Risk & Control Self-Assessment (RCSA), and the man-agement of corrective measures. The Bank creates provi-sions for events that could generate a financial loss. The heads of the different areas of the Bank have selected risk indicators, which are used and monitored in order to identify any increase in the level of risk within the Bank with a certain amount of advance.

The Operational Risk and Compliance Committee (ORCC) governs the management of operational risks and coordi-nates the implementation of strategies for managing and mitigating operational and compliance risk.


The Bank’s risk mitigation controls have a three-level structure.

• First-level controls are conducted by the line and are fundamental for carrying out operational activities. The purpose is to ensure correct execution.

• Second-level controls monitor and ensure that activities are carried out correctly by the operating units. These controls are conducted by Risk Management and by Legal & Compliance and by other units that are independent from the unit being monitored.

• Third-level controls are conducted to verify the correct implementation and the effectiveness of the first- and second-level controls. These controls are carried out by Internal Control, which reports to the Group Chief Executive Officer (CEO).

CApItAl plAnnInG

As at the end of 2012, the BSI Group and the Bank re-spected the limits specified by the Ordinance on Capital Adequacy (CAO) with respect to minimum capital and risk concentration. Quantitative data on capital and credit risk are provided in the attached tables. In accordance with FINMA guidelines on a capital buffer and capital planning, and in consideration of the size of the risks to which the Bank and the Group are exposed (category 3), it was de-cided that the new free surplus buffer beyond the basic capital adequacy requirements during favourable periods should be increased to a minimum of 50%.Additional information about the calculation method used by the Bank is provided below.

Credit riskThe Bank has adopted the credit risk approach defined as AS-CH (Swiss Standard Approach). This approach is based on ratings provided by external agencies recognised by FINMA. In particular, the Bank uses the ratings provided by Standard & Poor’s, Moody’s and Fitch to as-sess the quality of counterparties and the ratings provided by Standard & Poor’s and Moody’s for debt securities.Off-balance sheet positions in derivatives are calculated as credit equivalent using the market value method (art. 43 CAO). The Bank also applies the complete approach to transactions with financial collateral (art. 48 CAO).

Market riskThe Bank applies the standard method to the calculation of capital requirements for market risk. These require-ments amount to around 7.7% of the available eligible capital.

Operating riskTo calculate the regulatory requirements for operating risks, the Bank uses the base method, weighting gross revenues with factors varying from 12% to 18%, depend-ing on the business lines in question, as defined in the FINMA Circular 2008/21.As at 31 December 2012, the regulatory capital for the BSI Group’s operating risks amounted to around CHF 108 million, which is about 6.2% of the available eligible capital.

outSourCInG

BSI outsources the management, development and main-tenance of its information technology environment and back-office activities to B-Source SA, a service provider in which BSI holds a 49% stake. BSI AG outsources the management of hedge fund products to Thalìa SA, in which BSI has a 100% stake. BSI AG has also outsourced to Finaclear AG a part of the administrative and IT services tasks for some specific products (Genera products). The Bank complies with the legal provisions on outsourc-ing contained in FINMA Circular 08/7.

vAlue ADDeD tAx (vAt)

The Bank belongs to the VAT group of Generali Personen- versicherungen AG and is thus jointly and severally liable for commitments arising from this tax.

__ 45

exCHAnGe rAteS uSeD For tHe MAIn CurrenCIeS

Denomination

1

1

100

1

2011

0.879

1.230

1.107

1.415

31.12.2011

0.935

1.214

1.215

1.455

2012

0.933

1.204

1.167

1.485

31.12.2012

0.916

1.207

1.059

1.488

Currency

USD

EUR

JPY

GBP

Closing rate Annual average rate

2 ACCountInG AnD vAluAtIon prInCIpleS

GenerAl prInCIpleS

The accounting, balance sheet entry and valuation criteria conform to the provisions of the Swiss Code of Obliga-tions, the Swiss Banking Law and the directives of the Swiss Financial Market Supervisory Authority FINMA. The Group accounts show a true and fair view of the Bank’s asset, financial and economic situation.

reCorDInG oF trAnSACtIonS

Unlike in the past years, all transactions are recorded in the books of Group companies on the execution date. Transactions with future execution date are recorded in the balance sheet, except for BSI Monaco SAM, for which they are booked in accordance with the value date prin-ciple.

SCope oF ConSolIDAtIon

The Bank fully consolidates all the companies operating in the banking and finance sector in which it directly or indirectly holds most of the votes or the capital (50%).Special purpose entities (SPE) in which the Bank does not hold the majority of votes or capital are fully consoli-dated if circumstances indicate a business relationship in which the Bank controls the majority of the profit of the entity or the risks connected to the entity’s activities.A list of fully consolidated participations, participations entered in the balance sheet in accordance with the equity principle, relevant participations entered in the balance sheet at the purchase value minus the necessary amorti-sation and depreciation, and changes to the perimeter of consolidation are shown in tables 3.5 and 3.6.

ConSolIDAtIon MetHoD

The capital of the companies involved in banking and finance in which BSI AG has a direct or indirect major-ity of the voting rights or capital is fully consolidated in accordance with the purchase method.The purchase price is offset against the market value of the assets at the time of acquisition. The resulting difference from the first consolidation is entered in the bal-ance sheet under “Intangible assets” and generally amor-tised over a maximum of ten years. Participations between 20% and 50% are consolidated at equity and are shown in the balance sheet with the net asset value for the Bank’s share.Minor companies and companies held with a view to a subsequent sale are entered in the balance sheet at their purchase price after deduction of the necessary depreciation. Group-internal transactions and related internal profits are eliminated.

ConverSIon oF CurrenCY

Foreign currency transactions are recorded at the ex-change rate of the trade date. Profits or losses arising from revaluations are recorded into the profit and loss account. Foreign currency denominated balance sheet items are converted into Swiss francs at the rate of the balance sheet closing date.Foreign currency denominated profit and loss items of Group companies are converted into Swiss francs at the average exchange rate for the year. Conversion differ-ences are booked directly within the consolidated share-holders’ equity.


CASH AnD otHer lIquID ASSetS, MoneY MArket

pAperS, Due FroM BAnkS AnD lIABIlItIeS

These items are recorded in the balance sheet at the nominal value or purchase cost less any adjustments for doubtful debts. Any discounts are recorded in the appro-priate liabilities items.

Due FroM CuStoMerS AnD MortGAGe loAnS

Loans to clients are recorded in the balance sheet at their nominal value.Loans for which the debtors or guarantors are unlikely to meet their future obligations are considered by the Bank to be non-performing loans. A loan is therefore deemed to be non-performing if certain indicators show that the capital and/or interest due in accordance with the con-tract will probably not be paid. Non-performing loans are valued individually, and specific value adjustments are booked to cover the identified value losses. The Bank creates provisions for the interest on the credit positions for which clients have not respected the contractual terms for more than 90 days.Off-balance sheet liabilities such as guarantees and de-rivatives are also considered in this valuation.The Bank determines the provisions’ amounts based on the liquidation value of the collaterals.Provisions are created for non-performing interest in accordance with the rule described above and directly deducted from the corresponding items under “Assets”.Loans are no longer considered non-performing if the amount due (interest and principal) is fully settled, the contractual obligations are re-established and the solvency criteria are fulfilled.Loans are amortised by debiting the corresponding in-dividual provisions if the loans are considered entirely or partially impaired or if the decision is taken not to recover them.

SeCurItIeS lenDInG AnD BorrowInG

Securities lending operations for which the Bank acts as principal are shown in the notes to the annual accounts. The commissions collected and paid for these transac-tions are booked in the corresponding items of the profit and loss statement.

repo AnD reverSe repo trAnSACtIonS

These transactions are booked as loans collateralised with securities or secured with pledged securities ac-counts. They are entered under “Due from / to banks” and valued at their nominal value. Interest amounts collected or paid are recorded in the corresponding items of the profit and loss account.

SeCurItIeS AnD preCIouS MetAlS HelD

For trADInG

Securities and metals held by the Bank for trading are revalued at market price on the balance sheet date. The result of the revaluation is entered in the profit and loss account under “Results from trading operations”. Any relevant accrued interest and dividends are reported as “Results from trading operations”, minus any financing costs, which are recorded as “Result from interest ac-tivities”.

FInAnCIAl InveStMentS

The balance sheet value of securities purchased as long-term investments is calculated according to the following principles:

• Debt securities intended to be held to maturity are valued at the purchase price. If the purchase was made at a price other than at par, the premium or discount is spread over the residual term to maturity and deb- ited or credited to “Interests and dividend income from financial investments”.

• Debt securities which are not intended to be held until maturity and shares are booked at the lower of purchase price and market value. Any value adjustments are recorded as “Sundry ordinary expenses”. In the event of a recovery in market value, shares are revalued to the extent that their revalued amount does not exceed the purchase price. Such revalued amounts are posted to “Sundry ordinary income”.

__ 47

ASSet

Bank premises

Structural renovation of premises

Internal restructuring or improvements (own property)

Internal restructuring or improvements (third-party property)

Furnishings

Miscellaneous non-IT installations and vehicles

Hardware and software

Special projects1 Duration of the rental contract.

Duration of use

50 years

10 years

5 years

5 years1

10 years

5 years

In accordance with expected useful life

In accordance with expected useful life

Properties that have been acquired as a result of lend-ing transactions and are intended to be sold are booked under this item and valued at the lower of purchase price and sale price.The result deriving from the securities related to this asset item are entered under “Interest and dividend in-come from financial investments”.

non-ConSolIDAteD pArtICIpAtIonS

Minority participations between 20% and 50% in the banking and finance sector are entered in the balance sheet in accordance with the equity method.Companies in which the Bank has a participation of less than 20% or whose size or activities do not have a signifi-cant influence on the Bank are valued at purchase price, minus the required depreciation.

ACCruAlS AnD DeFerrAlS

Interest income, interest expenses and all other income and expenses not settled during the accounting period are accrued or prepaid in order to match the correct profit and loss period.

FIxeD ASSetS

Fixed asset acquisitions are capitalised and valued at their purchase price, if their intended use is for more than one accounting period and their purchase price exceeds a minimum of CHF 5,000. Any new investment in already existing fixed assets is capitalised if it leads to permanent increases in the market value or significant lengthening in the useful life of such assets.

Thereafter, fixed assets are recorded at their purchase cost less accumulated depreciation. Depreciation is calculated on the basis of assets’ expected useful lives. Fixed assets are reviewed annually for any impairments in value: if such analysis shows the need to shorten the depreciation period or to decrease the value, the rates of depreciation are adjusted or an extraordinary depreciation charge is booked in the profit and loss statement.Profits realised on the sale of fixed assets are booked as “Extraordinary income” and losses as “Extraordinaryexpenses”.

IntAnGIBle ASSetS

Goodwill is amortised linearly in accordance with its ex-pected useful life over a maximum of ten years. An am-ortisation period of 20 years has been applied for the integration of the ex Banca del Gottardo Group.Other intangible assets are booked at the purchase price and amortised linearly over five years.The current value is revised every year. If this valuation identifies a change in useful life or a fall in value, the re-sidual accounting value is amortised in accordance with a plan corresponding to the new useful life or an impairment charge is recorded.


penSIon plAnS

The accounting treatment complies with Swiss GAAP ARR 16 relating to the presentation of accounts.Further details are provided in point 3.9 in the notes to the Group accounts.

tAxeS

Taxes relating to the current accounting period are es-timated in accordance with local tax legislation and re-corded as costs for the period to which they relate. Direct taxes on current year profits payable, but not yet paid, are recorded as “Accrued expenses”.Provisions for deferred taxation relating to any future re-lease of amounts from the reserve for general banking risks are reported as “Value adjustments and provisions”.Tax credits on tax losses carried forward are entered in the balance sheet in the item “Other assets” up to an amount calculated based on the profits forecast for a maximum period of three years. The accounting treatment is in compliance with ARR 11 relating to the presentation of accounts.

vAlue ADJuStMentS AnD provISIonS

Specific provisions and value adjustments are made with respect to all identified risks in accordance with the prin-ciple of prudence. The value of such items is deducted from the balance sheet assets to which they relate. Value adjustments and provisions proving to be financially un-necessary during the financial year are released and cred-ited to the profit and loss statement. Provisions for latent risk or other risks are booked as liabilities in the balance sheet under “Value adjustments and provisions”.

reServeS For GenerAl BAnkInG rISkS

This item was created in accordance with FINMA direc-tives on the presentation of accounts. Movements in the reserves for general banking risks are posted to “Extraor-dinary income” or “Extraordinary expenses”.

ContInGent lIABIlItIeS, IrrevoCABle CoMMItMentS,

ContInGent lIABIlItIeS For CAllS AnD MArGIn

lIABIlItIeS

Off-balance sheet items are stated at nominal value. Any provisions for identified risks are included under “Value adjustments and provisions”. A guarantee is in place to the government of Singapore for the business operations conducted by the subsidiary BSI Bank Ltd., Singapore. Following the application of the banking agreement on deposit guarantees, the Bank has an irrevocable commit-ment in respect of privileged deposits.

DerIvAtIve FInAnCIAl InStruMentS

Derivative financial instruments are normally treated as trading operations with the exception of the transactions described in the following paragraph.

trADInG trAnSACtIonS

They are periodically valued with reference to market or trading prices or, alternatively, are based on calculations entailing the discounted future cash flows or option pric-ing models.

HeDGInG trAnSACtIonS

The Bank uses derivative financial products for asset and liability management (ALM) purposes. Hedges and their underlying positions are valued in the same way. Any net income earned on these transactions is credited to the same item as income arising from the hedged transac-tions. The Bank enters into global hedge transactions with respect to interest rate risk. Profits on these transactions are accrued as interest income. Accrued interest payable and receivable is recorded in the balance sheet under “Other liabilities” and “Other assets”. Positive and nega-tive replacement values in connection with hedges are also recorded under “Other assets” and “Other liabilities”. The use of derivatives for ALM purposes is documented together with the objectives and strategies employed and kept on file until such time as the transactions expire. The effectiveness of the hedge is periodically controlled. Whenever the value of a hedge exceeds the value of the hedged item, the excess is treated as a normal trading position.

__ 49

replACeMent vAlueS

For over the counter transactions (OTC), replacement val-ues are recorded in the balance sheet as “Other assets” if positive and as “Other liabilities” if negative. In either case, gains or losses are recorded in the Bank’s profit and loss statement as “Results from trading operations”.

ClIent ASSetS

The value of client assets under management is calcu-lated with reference to the total value of all client positions at year end. Fund units held by the Bank’s clients are double counted: once as units held by clients and again as funds under management. Any funds held by correspond-ent banks and brokers are excluded as are securities be-longing to the Group. Funds managed by the Group but deposited at third party banks are also included.

DAtA ADJuStMentS For tHe prevIouS

FInAnCIAl YeAr

A migration of the accounting data took place in 2011, allowing the Bank to further improve the level of data detail. Therefore, some of the presented data have been reviewed in order to be in line with the 2012 presentation of accounts. These reclassifications are highlighted in the present annual report with the note “The data for 2011 have been adjusted”.

eventS FollowInG tHe BAlAnCe SHeet DAte

After the balance sheet date, no event took place that would lead to a correction of the financial statements.


3 InForMAtIon on tHe BAlAnCe SHeet

3.1 BreAkDown oF loAn CollAterAl AnD oFF-BAlAnCe-SHeet BuSIneSS

LoansDue from customers

Mortgage loans

Residential properties

Commercial and industrial properties

Other

Total at 31.12.2012 31.12.2011

Off-balance sheet business Contingent liabilities



Loan commitments

Total at 31.12.2012 31.12.2011

Impaired loansTotal at 31.12.2012 31.12.20111 The data concerning the item “Loan commitments” for 2011 have been adjusted.

Total

CHF 1’000

7’057’084

3’490’324

10’547’408

9’422’795

1’934’921

108’422

983

6’409

2’050’735

1’753’0391

Individualspecific

provisions

122’452

129’756

Othercollateral

CHF 1’000

6’000’111

6’000’111

5’225’435

333’762

75’409

144

409’315

428’7481

Estimatedrealisable value

of guarantees received

89’556

67’324

Unsecured

CHF 1’000

729’849

729’849

648’672

1’596’402

32’762

983

6’265

1’636’412

1’314’4321

Netamount

122’452

129’756

Secured bymortgage

CHF 1’000

327’124

3’490’324

2’663’398

568’705

258’221

3’817’448

3’548’688

4’757

251

5’008

9’8591

Grossamount

212’008

197’080

Type of collateral

3.2 SeCurItIeS AnD preCIouS MetAlS HelD For trADInG

Securities and precious metals held for tradingDebt securities

listed

unlisted

Equities

Precious metals

Total of which eligible as repurchase transactions in compliance with the liquidity regulations

31.12.2011

CHF 1’000

914’563

907’148

7’415

200’368

178’366

1’293’297

89’218

31.12.2012

CHF 1’000

837’695

828’905

8’790

228’753

665’464

1’731’912

47’947

__ 51

3.4 non-ConSolIDAteD pArtICIpAtIonS

With market value

Without market value

Total

31.12.2011

CHF 1’000

5’463

51’495

56’958

31.12.2012

CHF 1’000

54’753

54’753

3.3 FInAnCIAl InveStMentS

Financial investments of which valued on an accrual basis

of which valued according to the lower value principle

Equities of which qualified participations1

Real estateTotal of which eligible as repurchase transactions in compliance with the liquidity regulations 1 At least 10% of capital or votes.

31.12.2011

CHF 1’000

1’346’818

1’344’647

2’171

23’650

8’193

6’600

1’377’068

–

31.12.2011

CHF 1’000

1’320’478

1’318’307

2’171

21’510

8’193

5’397

1’347’385

944’705

31.12.2012

CHF 1’000

1’149’835

1’148’654

1’181

22’748

8’117

16’520

1’189’103

–

31.12.2012

CHF 1’000

1’103’469

1’102’289

1’181

22’321

8’117

14’769

1’140’559

737’564

Market valueBook value


3.5 InForMAtIon on relevAnt pArtICIpAtIonS

3.5.1 Scope of consolidation

A. Fully consolidated participationsAnderfin SA, Lugano

BSI Bank Ltd., Singapore

BSI Investment Advisors (Hong Kong) Ltd., Hong Kong

BSI Investment Advisors (Panama) Inc., Panama

BSI Luxembourg SA, Luxembourg

BSI Monaco SAM, Monte Carlo

BSI Asset Managers SAM, Monte Carlo

BSI Overseas (Bahamas) Ltd., Nassau

BSI Trust Corporation (Bahamas) Ltd., Nassau

Alpine Services Ltd., Nassau

BSI Trust Corporation (Malta) Ltd., La Valletta

BSI Trust Corporation (Singapore) Ltd., Singapore

BSI Wealth & Family Società d’Intermediazione Mobiliare SpA, Milan

EOS Servizi Fiduciari SpA, Milan

Gotam SGR SpA, Milan

Oudart SA, Paris

Oudart Gestion SA, Paris

Oudart Patrimoine SARL, Paris

Solidia Finance et Patrimoine SA, Paris

Patrimony 1873 SA, Lugano

Thalìa SA, Lugano

Thalìa Fund Management Company (Lux) SA, Luxembourg

B. Participations valued at equity

Atacama Investments Ltd., British Virgin Islands

B-Source SA, Bioggio

Cross Factor SpA, Milan

Livolsi e Associati Private SA, Lugano

Second Pillar SA, Athens1 Share capital at the time the sale or the liquidation took place.

Change

participationin %

100.00

-100.00

-100.00

100.00

49.00

-100.00

-10.08

-40.00

31.12.2011

participationin %

100.00

100.00

100.00

100.00

100.00

99.98

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

51.00

100.00

49.79

49.00

20.00

40.00

25.00

31.12.2012

participationin %

100.00

100.00

100.00

100.00

100.00

100.00

99.98

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

39.71

49.00

20.00

25.00

Share capital

million

CHF 0.10

USD 214.00

USD 43.00

USD 0.41

EUR 27.47

EUR 15.00

EUR 2.00

USD 10.00

USD 1.00

USD 0.01

EUR 0.05

SGD 2.101

EUR 5.00

EUR 0.75

EUR 2.051

EUR 5.50

EUR 1.00

EUR 0.04

EUR 0.31

CHF 5.00

CHF 4.80

EUR 0.131

USD 16.85

CHF 2.40

EUR 1.03

CHF 1.001

EUR 0.06

Business

Asset management company

Bank

Investment company

Investment company

Bank

Bank


Bank

Trust company

Investment company

Trust company

Trust company

Brokerage firm

Fiduciary company







Investment company

Fund management company

Investment company

Systems development and business operations

Investment company



__ 53

3.5.2 Changes to the scope of consolidation

Participations new to the scope of consolidationAnderfin SA, Lugano

Patrimony 1873 SA, Lugano

Participations no longer in the scope of consolidation

BSI Trust Corporation (Singapore) Ltd., Singapore: sold

Livolsi e Associati Private SA, Lugano: sold

Gotam SGR SpA, Milan: liquidated

Thalìa Fund Management Company (Lux) SA, Luxembourg: liquidated

Changes to participations percentageAtacama Investments Ltd., British Virgin Islands: reduction of participation from 49.79% to 39.71%

Thalìa SA, Lugano: participation increase from 51% to 100%

Capital increaseBSI Bank Ltd., Singapore: capital increase from USD 184’000’000 to USD 214’000’000

BSI Luxembourg SA, Luxembourg: capital increase from EUR 23’465’711 to EUR 27’465’676

Thalìa SA, Lugano: capital increase from CHF 1’000’000 to CHF 4’800’000

Reduction of capitalAtacama Investments Ltd., British Virgin Islands: reduction of capital from USD 24’450’000 to USD 16’850’000

3.6 SIGnIFICAnt non-ConSolIDAteD pArtICIpAtIonS

3.6.1 Significant non-consolidated participations and entered under “Non-consolidated participations”

Banca Patrimoni Sella & C. SpA, Turin

BSI Laran SA, Lugano

Dynamic Securities SA, Athens

Generali Thalìa Investments Italy SpA, Milan

Tamburi Investment Partners SpA, Milan

Change

participationin %

4.21

-20.00

-2.70

31.12.2011

participationin %

5.68

100.00

15.74

20.00

2.70

31.12.2012

participationin %

5.68

100.0

19.95

Share capital

million

EUR 28.00

CHF 0.10

EUR 6.09

EUR 0.501

EUR 57.681

Business

Bank

Investment company

Securities broker

Investment company

Mergers and acquisitions company

3.6.2 Significant non-consolidated participations and entered under “Financial investments” (at purchase price, minus the required depreciation)

BSI-Ifabanque SA, Paris 2 1 Share capital at the time of sale.2 In liquidation.

Change

participationin %

31.12.2011

participationin %

51.00

31.12.2012

participationin %

51.00

Share capital

million

EUR 15.79

Business

Bank


3.7 AnAlYSIS oF InveStMentS

in CHF 1’000

Participations valued at equity

Other non-consolidatedparticipations

Total non-consolidated participations

Bank premises

Other real estate

Total real estate

Other tangible fixed assets

Total tangible assets

Goodwill

Total costs

Other intangible assets

Total intangible assets

Fire insurance value of the real estate

Fire insurance value ofother tangible fixed assets 1 Including value increases.2 The data for 2011 have been adjusted.

Bookvalue

31.12.2011

37’359

19’599

56’958

191’943

30’627

222’570

174’110

396’680

809’185

8’949

4’773

822’907

293’9672

130’043

Deprecia-tion

to date

-1’676

-1’676

-104’797

-26’924

-131’721

-240’092

-371’812

-241’923

-13’310

-5’398

-260’631

Acquisitionprice

37’359

21’275

58’634

296’740

57’551

354’291

414’202

768’492

1’051’108

22’259

10’171

1’083’538

Invest-ments

13’2861

842

14’128

440

114

554

29’895

30’449

104

104

Changes to the scope of

consolidation

-90

-90

5’192

5’192

Depre-ciation

-100

-100

-5’890

-1’151

-7’041

-32’383

-39’424

-58’873

-4’452

-2’382

-65’707

Disposal

-9’228

-7’005

-16’233

-94

-94

-8

-8

2012

Bookvalue

31.12.2012

41’417

13’336

54’753

186’493

29’590

216’083

171’438

387’521

755’496

4’497

2’495

762’488

293’980

131’953

__ 55

3.8 ASSetS pleDGeD AnD SeCurItIeS repurCHASe AnD reverSe repurCHASe AGreeMentS

A. Assets pledged as security for own liabilities

Including assets subject to retention of title and excluding securities repurchaseand reverse repurchase agreements

B. Securities repurchase and reverse repurchase agreements1

Book value of own account securities lent or transferred as collateral for securities lending operations or for repurchase and reverse repurchase transactions

of which securities with no restrictions on rights of sale or subsequent pledging

Book value of securities received as collateral in accordance with securities lending agreements and securities received in accordance with securities borrowing agreements and withreverse repurchase agreements with no restrictions on rights ofsale or subsequent pledging

of which securities sold or pledged as collateral1 Amounts paid or received in cash are booked under the balance sheet subheading in the item “Due from banks” or “Due to banks”.

Change

in %

Pledgedamount

22.8

Change

in %

-16.4

-16.4

-16.1

-11.6

Bookvalue

3.7

31.12.2011

CHF 1’000

2’231’463

2’231’463

4’573’936

2’271’075

31.12.2011

CHF 1’000

Pledgedamount

47’171

31.12.2012

CHF 1’000

1’866’379

1’866’379

3’837’791

2’007’787

Bookvalue

250’356

31.12.2012

CHF 1’000

Pledgedamount

57’940

Bookvalue

259’729

3.9 CoMMItMentS to penSIon InStItutIonS AnD noteS on penSIon plAnS

Commitments to Group pension institutions

31.12.2011

CHF 1’000

47’899

31.12.2012

CHF 1’000

57’229

A. Staff at the Bank and the Swiss subsidiariesPension insurance is provided to employees of BSI AG and its Swiss subsidiaries by the Pension Foundation of BSI AG, which guarantees occupational pension contribu-tions in compliance with the Swiss Federal Law on Oc-cupational Retirement, Survivors and Disability Pension Plans (LPP) and its ordinances. The Foundation applies a defined-benefit plan. Retirement benefits in the event of incapacity or death are thus based on the employee’s last salary prior to the occurrence of the insured event. Retirement age is set at 64 (2011: age 63).

BSI AG’s Social Insurance Fund offers a complementary plan with defined contributions. This Fund insures em-ployees who are already covered by BSI AG’s Pension Foundation and whose contributory salary calculated in accordance with the LPP is positive, or whose vested ben-efits on joining BSI AG’s Pension Foundation generated a surplus.

The contributory salary based on the applicable regula-tions applies for the determination of pension contributions and benefits. Where appropriate, the variable component of the salary is also taken into consideration.

Employees of BSI AG and its Swiss subsidiaries who have a fixed-term employment contract of more than three months or an advisory mandate are covered for their oc-cupational pension by a primary pension institution.

As at 31 December 2012 the cover level of the Pension Foundation of BSI AG was 98.2% (2011: 91%) and 101.8% (2011: 98%) for BSI AG’s Social Insurance Fund. In 2012, the boards of the two foundations approved some restructuring measures charged to the employer and the employees aimed at raising the cover level, the positive effects of which were already apparent on 31 December 2012.


Employer’s contribution reserve

in CHF 1’000

Pension fund / Pension institution

BSI AG Pension Foundation (booked in “Other assets”)

BSI AG’s Social Insurance Fund (booked in “Other assets”)

Total

Nominal value

31.12.2012

11’000

2’000

13’000

Waiver of use

31.12.2012

Othervalue

adjustments

31.12.2012 31.12.2012

11’000

2’000

13’000

Lendingvalue

31.12.2012

31.12.2011

11’000

2’000

13’000

Balance sheet

Financial assets / liabilities and pension insurance costs

Pension funds / Pension institutionsBSI AG Pension Foundation

with cover deficit

BSI AG’s Social Insurance Fund

without cover surplus / deficit

Total1 The data for 2011 have been adjusted.

Pensioninsurance

costs includ-ed in the

costsof staff

2011

CHF 1’000

21’6471

7’537

29’184

Pensioninsurance

costs includ-ed in the

costsof staff

2012

CHF 1’000

30’629

12’411

43’040

Contributionsadjusted for

the period

CHF 1’000

30’629

12’411

43’040

Changefrom pre-

vious finan-cial year/

with impacton financial

result

CHF 1’000

Financialshare paid

by the orga-

nisation

31.12.2011

CHF 1’000

Financialshare paid

by the orga-

nisation

31.12.2012

CHF 1’000

Coversurplus/

deficit

31.12.2012

CHF 1’000

-15’200

-15’200

B. Employees of foreign branches and affiliates Employees of foreign branches and affiliates have occupa-tional pension insurance in their respective countries ac-

cording to local laws. The relevant costs are entered under “Personnel expenses”.

Pension insurance costs included in the costs of staff1 The data for 2011 have been adjusted.

31.12.2011

CHF 1’000

2’3371

31.12.2012

CHF 1’000

2’772

__ 57

3.10 vAlue ADJuStMentS AnD provISIonS / reServeS For GenerAl BAnkInG rISkS

in CHF 1’000

Provisions for deferred taxes Value adjustments and provisions for default risks and other business risks Value adjustments and provisions for default risks (credit and country risks)

Value adjustments and provisions for other business risks

Value adjustments for financial investments

Other provisions

Total value adjustments and provisions Value adjustments set off directly against assets

Total value adjustments and provisions as per balance sheet


Useaccording

to purpose

-28’138

-24’800

-126

-3’212

-28’138

–

–

Situation31.12.2011

25’620

174’676

148’545

897

3’961

21’273

200’296

-145’160

55’136

168’550

Recoveries,doubtfulinterest,

currencydifferences

-11

1’172

1’132

-77

117

1’161

–

–

-34

Newprovisions

chargedto P/L

2’318

33’457

22’750

167

10’540

35’775

–

–

679

Releasecredited

to P/L

-18’186

-6’512

-4’540

-1’972

-24’698

–

–

-26’687

2012

Situation31.12.2012

9’741

174’655

143’087

938

3’884

26’746

184’396

-139’729

44’667

142’508


3.11.2 Statement of shareholders’ equity

Shareholders’ equity at 1 January 2012 Share capital

Capital reserve



Net Group profit

Total shareholders’ equity

Net release of reserves for general banking risks credited to P/L

Change in the scope of the consolidation

Distribution of the dividend of the previous year’s profits

Net Group profit for the reporting year

Translation differences arising on profit consolidation

Total shareholders’ equity at 31 December 2012

of which: Share capital

Capital reserve



Net Group profit

CHF 1’000

1’840’000

145’200

251’723

168’550

58’112

2’463’585

-26’008

428

-31’151

71’011

-1’750

2’476’115

1’840’000

145’200

277’396

142’508

71’011

3.11.1 Presentation of share capital and shareholders with voting rights above 5%

A. Share capitalShare capital

B. Shareholders

Shareholders with voting rights Participatie Maatschappij Graafschap Holland N.V., Diemen (NL)1 1 Company directly and wholly owned by the Assicurazioni Generali Group, Trieste.

Numberof shares

18’400’000

NominalCHF 1’000

1’840’000

Totalnominal

value

CHF 1’000

1’840’000

Capitalwith

dividendrights

CHF 1’000

1’840’000

31.12.2012

Participationpercentage

100.00

Totalnominal

value

CHF 1’000

1’840’000

Numberof shares

18’400’000

NominalCHF 1’000

1’840’000

31.12.201131.12.2012

Capitalwith

dividendrights

CHF 1’000

1’840’000

31.12.2011


100.00

3.11 preSentAtIon oF SHAre CApItAl AnD StAteMent oF SHAreHolDerS’ equItY

__ 59

3.12 MAturItY StruCture oF Current ASSetS AnD tHIrD-pArtY lIABIlItIeS

in CHF 1’000

Current assets Cash and other liquid assets

Money market papers

Due from banks

Due from customers

Mortgage loans

Securities and preciousmetals held for trading


Total 31.12.2012 31.12.2011

Third-party liabilitiesMoney market paper liabilities

Due to banks

Due to customers in savingsand investment accounts


Medium-term notes


Total 31.12.2012 31.12.2011 1 The data concerning the item “Due to customers, other” for 2011 have been adjusted.

due within3 months

–

653’053

1’278’473

2’724’459

659’089

42’845

5’357’919

6’102’683

2’408

196’046

–

1’045’818

79

1’244’351

2’234’1921

subjectto notice

–

–

2’490’569

628’393

–

–

3’118’962

2’933’676

–

493’340

996’707

–

–

1’490’047

2’466’916

on demand

3’890’088

–

1’497’842

–

1’731’912

21’020

7’140’862

13’912’951

–

889’396

–

16’943’760

–

–

17’833’156

22’946’4181

fixed

–

–

–

–

–

–

14’769

14’769

5’397

–

–

–

–

–

–

–

–

due within 3-12 months

–

937’547

870’771

999’160

515’646

75’050

3’398’174

3’226’248

9’157

–

410’252

150

419’559

312’6551

due within1 to 5 years

–

31’634

799’101

1’016’395

950’990

2’798’120

2’372’731

–

13’306

800

14’106

8’6501

due after5 years

–

43’795

670’801

35’885

750’481

806’823

–

91’575

91’575

93’490

Residual maturity

Total

3’890’088

1’590’600

3’678’720

7’057’084

3’490’324

1’731’912

1’140’559

22’579’287

29’360’509

2’408

1’094’599

493’340

19’409’843

1’029

91’575

21’092’794

28’062’321

3.13 Due FroM AnD to tHe Group’S BoDIeS, Due FroM AnD to AFFIlIAteD CoMpAnIeS

Due from the bank’s bodies

Due from affiliated companies

Due to affiliated companies

Change

in %

-55.3

100.2

-93.9

31.12.2011

CHF 1’000

34’204

66’349

7’960’078

31.12.2012

CHF 1’000

15’305

132’845

485’444

• The conditions applied to loans to the Bank’s senior management are the same as those applied to staff loans. Due to their lower credit risk, employees generally receive a 1% or 1.5% interest rate reduction depending on the type of loan.

• All transactions with affiliated companies were effect- ed at market rates. Costs of about CHF 5.0 million (2011: about CHF 8.0 million) are included under the item “Result from interest activities”, while revenues of CHF 4.1 million (2011: CHF 6.9 million received by companies linked to the Generali Group are included under the item “Result from commission and service fee activities”.


3.14 AnAlYSIS oF SwISS AnD ForeIGn ASSetS AnD lIABIlItIeS

Assets Cash and other liquid assets

Money market papers

Due from banks

Due from customers

Mortgage loans




Fixed assets

Intangible assets


Other assets

Total assets


Due to banks



Medium-term notes



Other liabilities



Share capital

Capital reserve



Net Group profit

Total liabilities

Abroad

CHF 1’000

8’704’027

1’981’550

3’266’575

4’870’854

573’231

1’102’678

1’337’018

41’642

9’325

6’045

57’300

933’762

22’884’007

421’185

80’929

20’942’469

93’490

89’922

920’866

7’232

22’556’093

Abroad

CHF 1’000

214’993

1’589’317

3’408’409

5’673’211

679’254

1’122’337

1’120’784

37’912

7’759

3’617

50’149

290’517

14’198’259

806’364

79’323

14’817’249

91’575

98’813

294’934

8’154

16’196’412

Switzerland

CHF 1’000

2’932’759

1’451

410’670

1’291’559

2’687’151

190’619

10’367

15’316

387’355

816’862

34’720

501’838

9’280’667

2’541

318’763

332’585

5’868’809

1’550

45’827

527’017

47’904

168’550

1’840’000

145’200

251’723

1’108

58’112

9’608’581

Switzerland

CHF 1’000

3’675’095

1’283

270’311

1’383’873

2’811’070

609’575

19’775

16’841

379’762

758’871

18’305

143’911

10’088’672

2’408

288’235

414’017

4’592’594

1’029

89’681

189’927

36’513

142’508

1’840’000

145’200

277’396

71’011

8’090’519

31.12.201131.12.2012

3.15 ASSetS BY CountrY / GroupS oF CountrIeS

Switzerland

Other OECD countries

Other European countries

Caribbean and Latin America

Other

Total

Participation in %

28.9

57.0

1.6

7.6

4.9

100.0

CHF 1’000

9’280’667

18’353’433

525’928

2’436’305

1’568’341

32’164’674

Participation in %

41.6

35.9

2.6

10.4

9.5

100.0

CHF 1’000

10’088’672

8’715’892

638’997

2’527’886

2’315’484

24’286’931

31.12.201131.12.2012

__ 61

3.16 ASSetS AnD lIABIlItIeS BY CurrenCY

Equivalent in CHF 1’000


Money market papers

Due from banks

Due from customers

Mortgage loans

Securities and preciousmetals held for trading



Fixed assets

Intangible assets


Other assets

Total balance sheet assets 31.12.2012

31.12.2011

Spot, forward and optioncontracts not yet delivered

Total assets

Liabilities Money market paper liabilities

Due to banks



Medium-term notes

Loans with issuers ofproperty bonds and other


Other liabilities



Share capital

Capital reserve


Net Group profit

Total balance sheet liabilities 31.12.2012

31.12.2011

Spot, forward and optioncontracts not yet delivered

Total liabilities Net position per currency

Total

3’890’088

1’590’600

3’678’720

7’057’084

3’490’324

1’731’912

1’140’559

54’753

387’521

762’488

68’454

434’428

24’286’931

32’164’674

27’860’357

52’147’288

2’408

1’094’599

493’340

19’409’843

1’029

91’575

188’494

484’861

44’667

142’508

1’840’000

145’200

277’396

71’011

24’286’931

32’164’674

27’903’180

52’190’111

-42’823

Other

5’169

129’218

609’597

812’212

403’447

700’764

820

127

2’694

12’122

2’676’170

1’913’565

2’196’541

4’872’711

75

382’315

1’995’892

8’355

13’269

2’399’906

2’186’877

2’326’141

4’726’047

146’664

JPY

827

26’641

176’088

4’315

35

126

451

208’483

233’272

889’237

1’097’720

4

8’119

65’634

86

542

74’385

37’380

928’203

1’002’588

95’132

EUR

268’712

967’900

848’927

1’274’809

92’606

526’988

696’084

8’659

4’087

1’270

29’661

65’075

4’784’778

14’558’639

5’470’038

10’254’816

1’409

207’602

21’386

6’224’996

18’781

85’734

6’855

6’566’763

15’420’471

3’740’525

10’307’288

-52’472

USD

4’670

493’426

1’999’323

3’621’577

171’952

443’659

424’492

28’177

2’232

2’347

23’078

66’962

7’281’895

6’277’326

10’990’217

18’272’112

749

126’812

7’534’638

91’575

68’896

57’582

4’420

7’884’672

7’561’362

10’371’304

18’255’976

16’136

CHF

3’610’710

56

194’232

1’172’398

2’818’004

60’501

19’128

17’790

381’202

758’871

12’895

289’818

9’335’605

9’181’872

8’314’324

17’649’929

171

369’751

471’954

3’588’683

1’029

92’376

327’734

33’392

142’508

1’840’000

145’200

277’396

71’011

7’361’205

6’958’584

10’537’007

17’898’212

-248’283


3.17 unreDeeMeD BonDS, MeDIuM-terM noteS AnD StruCtureD proDuCtS

C. Structured products

Issuer BSI SA, Lugano (CHF)

BSI SA, Lugano (EUR)

BSI SA, Lugano (SGD)

BSI SA, Lugano (USD)

BSI Overseas (Bahamas) Ltd., Nassau (CHF)

BSI Overseas (Bahamas) Ltd., Nassau (CHF)

BSI Overseas (Bahamas) Ltd., Nassau (CZK)

BSI Overseas (Bahamas) Ltd., Nassau (EUR)

BSI Overseas (Bahamas) Ltd., Nassau (EUR)

BSI Overseas (Bahamas) Ltd., Nassau (USD)

BSI Overseas (Bahamas) Ltd., Nassau (USD)

Total

Averageweighted

yield

5.24%

5.51%

3.74%

7.97%

Maturity

2016

2013

2013

2013 - 2014

2013 - 2014

2013

2013

2013 - 2017

2013 - 2015

2013

2013 - 2016

Amounts inCHF 1’000

31’131

9’047

2’546

44’387

52’110

186

8’553

161’378

253’229

72’447

77’584

712’598

Unsubordinated,structured products











B. Medium-term notes

Maturity

2013

2014

CHF 1’000

229

800

1’029

Average residualmaturity (months)

5.5

Yield %

2.000 - 2.875

CHF 1’000

1’029

CHF 1’000

1’029

AverageYield %

2.3

A. Unredeemed bonds

Issuer BSI AG, Lugano

Total

Averageweighted

yield

5.25%

Maturity

23.12.2021

Amounts inCHF 1’000

91’575

91’575

Subordinated loan

Maturity schedule of unredeemed bonds

Issuer

BSI AG, Lugano

from 1 to 2 years

CHF 1’000

from2 to 3 years

CHF 1’000

from3 to 4 years

CHF 1’000

from4 to 5 years

CHF 1’000

after5 years

CHF 1’000

91’575

Maturity Total

CHF 1’000

91’575

due within1 year

CHF 1’000

__ 63

3.18 otHer ASSetS AnD otHer lIABIlItIeS

Other assetsContribution reserve with BSI AG Pension Foundation andBSI AG’s Social Insurance Fund

Replacement values for derivatives from trading activities

Replacement values for derivatives from hedging activities

Netting account

Other assets

Total other assets

Other liabilitiesReplacement values for financial instruments deriving from trading activities

Replacement values for financial instruments deriving from hedging activities

Other liabilities

Total other liabilities

Change

in %

-77.1

-58.9

62.3

10.4

-69.7

-78.1

42.1

-17.2

-66.5

31.12.2011

CHF 1’000

13’000

1’278’177

56’883

17’385

70’155

1’435’600

1’242’334

71’247

134’302

1’447’883

31.12.2012

CHF 1’000

13’000

292’368

23’386

28’210

77’464

434’428

272’432

101’209

111’220

484’861

Maturity schedule of structured products

Issuer

BSI SA, Lugano

BSI Overseas (Bahamas) Ltd., Nassau

Total

from 1 to 2 years

CHF 1’000

40’468

146’795

187’263

from2 to 3 years

CHF 1’000

79’954

79’954

from3 to 4 years

CHF 1’000

31’131

8’059

39’190

from4 to 5 years

CHF 1’000

30’185

30’185

Maturity Total

CHF 1’000

87’111

625’487

712’598

due within1 year

CHF 1’000

15’512

360’494

376’006

These amounts are included in “Due to customers, other”.


4.1 BreAkDown oF ContInGent lIABIlItIeS


Performance guarantees

Other contingent liabilities

Total

4 InForMAtIon on oFF-BAlAnCe SHeet BuSIneSS

Change

in %

318.4

19.7

-15.2

20.7

31.12.2011

CHF 1’000

34’087

1’323’276

246’368

1’603’731

31.12.2012

CHF 1’000

142’633

1’583’418

208’870

1’934’921

4.2 DerIvAtIve FInAnCIAl InStruMentS outStAnDInG

Interest rate instruments Swaps

Futures

Currencies and precious metals Forward contracts

Options (OTC)

Equities / indices Futures

Options (OTC)

Credit derivativesCredit default swaps

Total at 31.12.2012

31.12.2011 1 No value is entered for products traded for the client’s account in a recognised stock market with daily margining.2 Credit component of the underlyings or the nominal values of own transactions and transactions with clients.

volumes2

CHF 1’000

2’381’518

3’007’638

27’269

5’416’425

5’059’729

volumes2

CHF 1’000

118’979

46’322

28’014’397

5’374’084

10’600

2’423’090

153’344

36’140’816

44’398’781

negative1

CHF 1’000

62’320

38’804

85

101’209

71’247

negative1

CHF 1’000

2’091

230’936

28’330

10’667

408

272’432

1’242’334

positive1

CHF 1’000

16’622

6’763

1

23’386

56’883

positive1

CHF 1’000

2’736

26

245’102

32’711

10’720

1’073

292’368

1’278’177

ContractContract Replacement valueReplacement value

Hedging instrumentsTrading instruments

__ 65

4.3 FIDuCIArY trAnSACtIonS

Fiduciary deposits with other banks

Fiduciary credits and other fiduciary transactions

Total

Change

in %

-27.2

-34.7

-27.3

31.12.2011

CHF 1’000

2’910’429

22’299

2’932’728

31.12.2012

CHF 1’000

2’118’762

14’551

2’133’313

4.5 IrrevoCABle CoMMItMentS

Deposit guarantees

Other irrevocable commitments

Total

Change

in %

-22.5

-26.0

-25.0

31.12.2011

CHF 1’000

39’810

104’841

144’651

31.12.2012

CHF 1’000

30’836

77’586

108’422

4.4 ClIent ASSetS

Held by funds

Assets under management

of which deposited with third parties

Other assets

Total client assets

of which double counting

Net inflow / outflow1

Impact on assets from changein the scope of consolidation 2 1 Net new money 2012 was calculated by deducting the outflow from the new capital (cash or securities from outside the BSI Group). Internal movements within the Group were excluded. Net new money thus does not include interest or dividends received by clients as part of assets under management. Moreover, it does not include the performance effect or other changes during the year with respect to portfolios.2 This refers to the structural inflow of assets relating to new entities that report to the BSI Group (for 2012 specifically no company), and outflow of assets relating to entities that no longer report to the BSI Group (for 2012 specifically no company).

Change

in %

-0.8

16.8

-16.5

10.7

11.0

-0.6

31.12.2011

CHF million

5’849

14’583

540

57’314

77’746

4’627

6’690

63

31.12.2011

CHF million

5’802

17’035

451

63’425

86’262

4’597

7’519

As at 31 December 2012 the BSI Group had assets under management deposited at other banks for a total of 451 million francs (2011: CHF 540 million) for which other banks act solely as custodians.BSI AG, BSI Overseas (Bahamas) Ltd. and BSI Bank Ltd. Singapore hold CHF 2,935 million (2011: CHF 3,227 million), CHF 732 million (2011: CHF 881 million) and

CHF 2,123 million (2011: CHF 680 million) of these assets respectively, included in “Other assets”, for clients for whom BSI acts as a custodian. The term Custody Only is used to describe clients for whom the Bank acts solely as a cus-todian or financial intermediary without any influence on the management of the assets.

4.6 loAn CoMMItMentS

Deferred payment liabilities

Total 1 The data for 2011 have been adjusted.

Change

in %

76.3

76.3

31.12.2011

CHF 1’000

3’6361

3’636

31.12.2012

CHF 1’000

6’409

6’409


5.4 otHer operAtInG expenSeS

Premises, machinery and furnishing

IT expenses

Other office expenses

Total

2011

CHF 1’000

39’849

71’240

118’763

229’852

2012

CHF 1’000

33’835

96’765

99’684

230’284

Change

in %

-15.1

35.8

-16.1

0.2

5.2 reSultS FroM trADInG operAtIonS

Foreign exchange and banknote transactions

Precious metal transactions

Securities transactions

Other trading income

Total

Change

in %

8.9

-67.8

108.3

-62.2

11.8

2011

CHF 1’000

79’636

26’221

28’446

5’647

139’950

2012

CHF 1’000

86’723

8’433

59’243

2’134

156’533

5.3 perSonnel expenSeS

Salaries

Social security contributions

Contributions to pension funds in favour of the staff

Other personnel expenses

Total 1 The data for 2011 have been adjusted.

2011

CHF 1’000

360’3391

28’314

24’5951

25’4821

438’730

2012

CHF 1’000

337’392

28’307

46’122

25’892

437’713

Change

in %

-6.4

87.5

1.6

-0.2

5 InForMAtIon on tHe proFIt AnD loSS StAteMent

5.1 InCoMe FroM reFInAnCInG InCluDeD In IntereSt AnD DISCount InCoMe

Total

Change

in %

-50.0

2011

CHF 1’000

2’562

2012

CHF 1’000

1’281

__ 67

5.6 extrAorDInArY InCoMe AnD expenSeS

Extraordinary income Release of value adjustments and provisions

Release of reserves for general banking risks

Gains on the sale of participations

Recovered losses

Profit from sale of fixed assets

Other extraordinary income Extraordinary expenses Creation of reserves for general banking risks

Losses on sale of participations

Other extraordinary expenses

Total

2011

CHF 1’000

66’929

15’494

14’143

24’708

5’123

7’461

-23’618

-15’981

-1’822

-5’815

43’311

2012

CHF 1’000

41’030

6’512

26’687

522

559

212

6’538

-6’740

-679

-4’437

-1’624

34’290

5.7 tAxeS

Creation of deferred tax assets

Release of deferred tax assets

New provisions for deferred taxes

Release of provisions for deferred taxes

Current year tax liability

Tax credits on tax losses carried forward in the balance sheet

Total Tax credits on tax losses not on balance sheet 1 Including CHF 17.2 million of provisions for current year tax liability, which have been reclassified. They were considered as deferred taxes in the previous years.

2011

CHF 1’000

-5’229

1’633

5’750

-9’038

32’577

-2’123

23’570

2’991

2012

CHF 1’000

-25

946

2’318

-18’1861

30’0671

-1’135

13’985

3’667

5.5 DoMeStIC AnD ForeIGn ConSolIDAteD GroSS proFIt oF tHe Group






Personnel expenses


Operating expenses

Gross profit

Switzerland

CHF 1’000

185’906

334’499

109’131

45’109

674’645

-317’403

-185’735

-503’138

171’507

Switzerland

CHF 1’000

189’399

333’128

131’876

20’006

674’409

-302’613

-185’164

-487’777

186’632

Abroad

CHF 1’000

31’966

95’952

30’819

769

159’506

-121’327

-44’117

-165’444

-5’938

Abroad

CHF 1’000

39’349

125’581

24’657

1’042

190’629

-135’100

-45’120

-180’220

10’409

20112012


6 InForMAtIon requIreD In ACCorDAnCe wItH tHe FInMA CIrCulAr 08/22 on CApItAl ADequACY DISCloSure

6.1 preSentAtIon oF AvAIlABle SHAreHolDerS’ equItY

Basic shareholders’ equity of which minority shareholdings

of which innovative instruments

– Regulatory reductions

– Other items deducted from basic shareholders’ equity

– Intangible assets

Total basic shareholders’ equity available

+ Additional shareholders’ equity

– Other amounts arising from additional shareholders’ equity and from all shareholders’ equity

Total available shareholders’ equity

31.12.2011

CHF 1’000

2’433’585

2’374

822’908

1’610’677

93’490

29’083

1’675’084

6.2 preSentAtIon oF requIreD SHAreHolDerS’ equItY

Credit risks (in accordance with SA-CH approach) of which equities and shares in collective investment schemes

Risks not linked to counterpartiesMarket risk (in accordance with the standard approach) of which relating to bonds (general and specific market risk)

of which relating to equities

of which relating to currencies and precious metals

of which relating to commodities

Operating risks (in accordance with the standard approach) Total required shareholders’ equity

Ratio of available shareholders’ equity to required shareholders’ equity

31.12.2011

CHF 1’000

536’762

36’851

136’039

135’738

49’231

19’832

46’251

15’811

109’878

918’417

182.39%

31.12.2012

CHF 1’000

2’446’114

0.3

762’488

1’683’626

91’575

31’969

1’743’232

31.12.2012

CHF 1’000

444’644

37’093

136’219

133’673

34’773

29’814

40’709

17’127

107’784

822’320

211.99%

__ 69

6.3 CreDIt rISk BY tYpe oF CounterpArtY

in CHF 1’000

Loan commitmentsBalance sheet / loans Liquidity

Due from banks

Due from customers

Mortgage loans

Financial investments1

Other assets / positive replacement values

Total at 31.12.2012

31.12.2011

Off-balance sheet Contingent liabilities



Loan commitments

Total at 31.12.2012

31.12.2011 1 Including money market paper and reclassification of hedge fund portfolios.

Corpora-tions

underpublic law

237’110

14’021

560’679

30

811’840

1’126’979

1’552

37’176

38’728

40’619

Banks and

securitiestraders

3’659’850

971’102

29’944

1’156’431

360’634

6’177’960

7’020’586

109’852

270

983

144

111’249

104’849

Govern-ments

and centralbanks

13’978

412’452

45’500

967’069

7’849

1’446’848

1’144’602

5’601

5’601

7’296

Corpora-tion

4’718

2’808’557

664’072

8’465

42’007

3’527’820

3’356’163

323’220

6’265

329’485

256’270

Individuals,small andmedium-

sizedcompanies

(retail)

173

2’627’863

2’736’787

23’365

5’388’189

5’184’857

119’194

70’976

190’171

215’114

Other

3’890’088

15’953

542

3’906’583

11’647’900

446

446

Equitiesand

shares incollective

investmentschemes

153’235

153’235

150’347

Total

3’890’088

3’678’720

7’057’084

3’490’324

2’861’831

434’428

21’412’475

29’631’434

559’865

108’422

983

6’409

675’680

624’148

6.4 CreDIt rISk MItIGAtIon

in CHF 1’000

Loan commitments/Counterparty riskon balance sheet closing Balance sheet / loans Due from banks

Due from customersMortgage loans


Other assets / positive replacement values

Total at 31.12.2012

31.12.2011




Loan commitments

Total at 31.12.2012

31.12.2011 1 Including money market paper.

Covered by recognisedfinancial guarantees

91’575

4’745’096

409’893

625

5’247’190

4’247’457

342’125

270

246

342’641

105’949

Covered byother guarantees

939’783

3’031’104

1

3’970’888

3’522’821

3’395

7’327

10’721

1’713

Covered by guaranteesand derivatives

508’593

44’440

604’390

1’157’422

194’561

19’231

19’231

1’356

Total

91’575

6’193’472

3’485’437

604’390

626

10’375’499

7’964’839

364’750

7’597

246

372’593

109’018


6.6 GeoGrApHICAl CreDIt rISk

in CHF 1’000

Loan commitmentsBalance sheet / loans Due from banks



Other assets/positive replacement values

Total at 31.12.2012

31.12.2011




Loan commitments

Total at 31.12.2012


LatinAmerica

220

210’525

4’774

215’520

277’067

19’790

19’790

15’800

NorthAmerica

657’720

569’995

114’375

64’863

12’083

1’419’036

777’230

4’981

4’981

3’654

Oceania

7’753

166’789

819

175’361

257’549

2’443

2’443

2’533

Switzerland

270’478

1’678’284

2’810’246

21’163

145’922

4’926’093

5’252’913

127’071

108’152

983

1’023

237’228

326’395

Europe

2’609’084

1’722’110

307’927

2’583’819

215’852

7’438’793

8’675’453

155’072

5’243

160’315

115’072

Carib-bean

1’210

1’305’082

4

1’426

31’151

1’338’872

1’401’686

157’427

270

157’697

124’446

OtherAsia

131’046

1’338’142

257’772

190’561

22’806

1’940’327

1’314’710

81’766

144

81’910

31’532

Africa

1’209

66’156

1’020

68’385

38’040

11’315

11’315

4’716

Total

3’678’720

7’057’084

3’490’324

2’861’831

434’428

17’522’387

17’994’648

559’865

108’422

983

6’409

675’680

624’148

6.5 BreAkDown oF CreDIt rISk

in CHF 1’000

Loan commitments / Counterpartyrisk on balance sheet closing Balance sheet / loans Liquidity

Due from banks



Other assets/positive replacement values

Total at 31.12.2012

31.12.2011




Loan commitments

Total at 31.12.2012


125%

5’301

5’301

5’130

100%

4’890

681’852

61’117

94’996

62’888

905’743

1’911’450

98’324

69’735

983

6’019

175’061

208’849

75%

111’646

511’895

2’201

625’742

288’030

12’520

254

12’774

17’054

50%

832’497

165’672

4’471

803’936

74’960

1’881’535

1’647’795

61’084

61’084

696

35%

354’366

2’284’324

1

2’638’690

2’290’406

944

7’3271

8’271

4’405

20 -25%

2’735’777

90’568

408

827’827

256’207

3’910’785

5’732’124

39’369

30’836

144

70’349

117’863

0%

3’890’088

105’553

5’645’076

608’613

967’069

37’781

11’254’181

17’566’198

347’623

270

246

348’140

275’078

150%

3

7’904

19’498

27’406

25’886

202

Deduc-tions

> = 250%

162’703

389

163’092

164’414

Total

3’890’088

3’678’720

7’057’084

3’490’324

2’861’831

434’428

21’412’475

29’631’433

559’865

108’422

983

6’409

675’680

624’148

Weighting of regulated risk

__ 71

6.7 IMpAIreD ClIent loAnS BY GeoGrApHICAl reGIon

in CHF 1’000

Impaired loans (gross amount) Total at 31.12.2012 31.12.2011

Individual value adjustments Total at 31.12.2012 31.12.2011

LatinAmerica

679

679

2’691

692

692

3’419

NorthAmerica

8’298

8’298

22’380

1’156

1’156

7’817

OceaniaSwitzerland

106’321

106’321

87’011

46’358

46’358

49’352

Europe

75’496

75’496

75’369

55’362

55’362

62’338

Carib-bean

21’214

21’214

8’486

19’000

19’000

6’231

OtherAsia

1’144

599

Africa Total

212’008

212’008

197’080

122’568

122’568

129’756

6.8 ContrACt voluMeS For CreDIt DerIvAtIveS In tHe BAnk portFolIo

Derivatives Credit default swaps of which from the trading portfolio

of which from the investment portfolio

Seller

CHF 1’000

311’162

311’162

Seller

CHF 1’000

55’861

55’861

Buyer

CHF 1’000

284’663

257’097

27’566

Buyer

CHF 1’000

124’752

97’483

27’269

2011 2012


REPORT OF THE STATUTORY AUDITOR ON THE CONSOLIDATED FINANCIAL STATEMENTS

Founded by Bijoy Jain, Studio Mumbai is a human infrastructure of skilled craftsmen and architects who design and build the work directly. Gathered through time, this group shares an environment created from an iterative process, where ideas are explored through the production of large-scale mock-ups, models, ma-terial studies, sketches and drawings. Projects are developed through careful consideration of place and practice that draws from traditional skills, local building techniques, materials, and an ingenuity aris-ing from limited resources. The essence of the work lies in the relationship between land and architecture. The endeavor is to show the genuine possibility in creating buildings that emerge through a process of collective dialogue and face-to-face sharing of knowl-edge. Bijoy Jain was born in Mumbai, India in 1965 and received his M. Arch from Washington University in St Louis, USA in 1990. He worked in Los Angeles and London between 1998 and 2005 and returned to India to found his practice. The work of Studio Mumbai has been presented at the XII Venice Bien-nale and the Victoria & Albert Museum, and received several prizes, among which the Global Award in Sus-tainable Architecture (2009).

THIRD EDITION2011–2012

JURy’S MOTIVATION“The Jury presented the award to Studio Mumbai for their ability to communicate the memory and tradi-tions of the place in which they work, thanks to the combination, in a collective process, of the creative work of designers and the manual work of builders. A cultural dimension of the very highest level which has the merit of offering an overview of contemporary ar-chitecture which takes responsibility for the environ-mental, social and aesthetic aspects of their work”.

A dimension that took in 2012 the BSI Swiss Archi-tectural Award to the 13th International Architecture Exhibition of the Venice Biennale, with an event de-voted to celebrating the winners of the three editions.Stefano CoduriGroup CEO BSI

The winner: Studio Mumbai (India)

Bijo

y Ja

in

cased with a lid of weathered copper. The last move is the inclusion of the element of water, whether in the form of the monsoon rain which is relentless in its action on material and mood, or in the form of the well, the stream and the pool beyond the house. The seasonal “anxiety” of the ground is addressed in the manner in which the paving is worked out within the courtyard in a continuous linear fashion and in a loose ring around the house, with undulations registering the flow of rainwater as it reaches for the nearest point of exit. The final gesture was housing the massive rock which came as a gift from the owner’s mother, leaving it for time to take over, as time inevitably will.

PALMyRA HOUSENANDGAON, MAHARASHTRA (INDIA)2007Accessed on foot along a moss-covered stone aque-duct, the house sits at the heart of a dense coconut plantation. The two timber-framed volumes are carefully positioned to preserve as many trees as possible and are anchored to stone platforms which overlook wells, water channels and a field of palms, weaving and absorbing this complex landscape into an inhabit-able whole. Light and air filter through the handcrafted wood structures, gently inundating the spaces.Alternating reflections, shadows, brightness, and semi- darkness enliven the way in which the house is re-vealed. The house disperses living and reading in the north volume, while the south contains cooking and dining; sleeping and bathing functions are shared in both structures. Events oscillate between these two volumes, involving the space in-between, and the in-finite itself in this performance. Set within this space is the pool, a channel for swimming towards endless

COPPER HOUSE IICHONDI, MAHARASHTRA (INDIA)2011The language and logic of the building are located in three primary architectural moves. The first is the creation of two distinct blocks, varying in width by a foot, separated by the stone-paved courtyard on the ground, and united by the copper roof plane on the upper level. The two blocks function as discrete personal spaces on the upper level, one is a singular space of bedroom and bath, the other has an addi-tional study. At the ground level, an indoor family room becomes an adjunct to the main living space that func-tions literally as the deck of the house, overlooking the landscape and the courtyard, creating a simultaneity of vistas, each of a different scale and access. The copper-covered private spaces at the upper level are positioned in mutual tension, with the guarantee of simultaneous intimacy and isolation. In Kerala, further south from Mumbai along the west coast of the Indian peninsula (as in many other regions), the courtyard was the centre of the traditional house. The central room formed by the courtyard flanked by pillars was called the naalukettu. But the entire structure, com-prising the central hall and the four wings around was also commonly referred to as the naalukettu. This ref-erence to the courtyard as the house itself, holds a clue to the development of the design for this house, as it evolved from being an embracing structure to one which opened out. The second move is the layering of light through a series of material gestures, each one tuned to the direction that light takes and the need for changing degrees of privacy. This is articulated with screening devices made of fine netting framed in traditionally crafted wood, fluted glass which diffuses the light and greenery and hints at the absent city, and sliding and folding wooden windows. The walls are finished in a celadon coloured traditional plaster, smooth like human skin, and crackled like the ancient Chinese glaze, giving the transitory appearance of a fragmented ceramic container, rectilinear and en-

vistas of palm trees to the east and the sea to the west. The density of the trees prevented the use of heavy equipment and all phases of work were exe-cuted manually by artisans from the studio. Structural framing for the house was fabricated of ain, a local hardwood, and prepared in the workshop. It was lat-er assembled at site using interlocking joinery. The external louvres were made from the outer part of the palmyra trunk, a local palm species, and were care-fully calibrated to provide protection from the sun, wind, and rain and privacy to the interiors. Exteriors were detailed with hand-worked copper flashing and ship lapped wood siding while interior surfaces were finished with teakwood and grey-green coloured ce-ment plaster screed, mimicking lichen that pattern the bark of coconut trees. Four wells on the site supply the house with water and irrigate the plantation using aqueducts typical of the area, involving the landscape in an ongoing and reciprocal relationship with inhab-itation: the continuation of tradition, the beginning of a ritual.

LETI 360 RESORTLETI, UTTARANCHAL (INDIA)2007Situated 2300 meters above sea level and nine kilo-metres from the nearest road for motor traffic, the pro-ject is perched on a promontory at the foothills of the Indian Himalayas. The site is accessed along a narrow footpath carved into the mountainside, part of a net-work of trails used by local villagers for daily travel and transport. The trail culminates at the central living and dining structure built on a plateau, around which four guest dwellings are discreetly set into existing agricultural terraces. The design was influenced by the inherent constraints of building in the region, con-cerns of environmental impact and cultural sensitivity, and careful observation of indigenous materials, cli-mate, landscape and access to the site. The project was constructed over a period of seven months with

the help of more than 70 village masons, carpenters,and craftsmen. They leased out the land and provided the labour, but they did impose one important condi-tion: the work schedule had to respect the cycle of the seasons and the customs that this has always dictated. The farmers/builders halted the works for the two months preceding the arrival of the monsoons (in June) and winter (in December) to shelter their an-imals and prepare their homes for the incessant rain and snow. The project is a passive reworking of the landscape through gathering, moving and condens-ing native materials into cohesive but temporary struc-tures that do not attempt to challenge the transform-ative effects of time. Thick dry-stacked stone walls provide weight and texture to each structure while glazed surfaces visually connect occupants with the surrounding landscape. Locally quarried stone and other building materials were proportioned and uni-tised and transported to the site by porters and mules. Due to its remote location the project is independent and relies on its own infrastructure. Solar panels are provided to heat water and charge portable lanterns for the dwellings. The project is envisioned as a tem-porary settlement designed to be dismantled, permit-ting the land to reclaim itself. Local farming continues on the terraces between the dwellings, passing herds of sheep, goats and cattle graze on the grassy land-scape, merging the project with indigenous life in the mountains.

Copper House IIChondi, Maharashtra (India) 2011

Project team: Jeevaram Suthar, Punamchand Suthar, Pandurang Malekar

Structural engineer: Dwijen Bhatt

Photo: Enrico Cano

Palmyra HouseNandgaon, Maharashtra (India), 2007

Project team: Jeevaram Suthar, Roy Katz,Mangesh Mhatre, Samuel Barclay, Punamchand Suthar, Pandurang Malekar

Photo: Enrico Cano

Leti 360 ResortLeti, Uttaranchal (India)2007

Project team: Geoffrey Johnston, Roy Katz, Bhimaram, Deeparam Suthar, Dharmaram Suthar, Tabez Ahmed, Prem Singh

Photo: Hélène Binet

Studio Mumbai is notable not only for the outstanding quality of its projects, but also for the distinctive character of its creative process and the quest for a relationship with history and the memory of the place, which, being based on a constructive know-ledge accumulated over time, is embodied in a contemporary language alien to nostalgic indulgences and yet firmly rooted in both time and space.

«

Mario Botta, President of the BSI Swiss Architectural Award Jury

»

76 __ PARENT BANK BALANCE SHEET AS OF 31 DECEMBER 2012

77 __ PARENT BANK PROFIT AND LOSS STATEMENT 2012

78 __ NOTES TO THE 2012 PARENT BANK ACCOUNTS

82 __ REPORT OF THE STATUTORY AUDITOR ON THE FINANCIAL STATEMENTS

BsI ag aCCoUnts

__ 75

76 __ BSI Parent Bank accounts


Money market paper

Due from banks

of which due from reverse repo transactions

Due from customers

Mortgage loans



Shareholdings

Fixed assets


Other assets

Total assets Total subordinated assets

Total amounts receivable from Group companiesand qualified shareholders


Due to banks

of which due from repo transactions



of which due from the trading portfolio

Medium-term notes



Other liabilities



Share capital

General legal reserve

Balance brought forward

Net profit

Total liabilities Total subordinated liabilities

Total liabilities to Group companies and qualified shareholders

Off-balance sheet businessContingent liabilities



Loan commitments

Derivative financial instruments Positive replacement value

Negative replacement value

Contract volumes

Fiduciary transactions 1 The data for 2011 have been adjusted.

31.12.2011

CHF 1’000

2’932’753

948’790

2’228’514

1’397

4’395’766

2’960’257

895’123

1’312’021

351’852

1’162’009

66’070

1’406’614

18’659’769

31’472

758’8511

2’541

4’350’511

139’468

387’490

9’995’974

404’318

1’550

93’490

53’386

1’433’273

41’445

92’829

1’840’000

267’006

10’161

90’113

18’659’769

104’436

3’732’991

1’540’287

45’682

1’021

3’6361

1’339’327

1’314’018

50’750’475

5’242’893

31.12.2012

CHF 1’000

3’678’830

1’108’571

2’695’849

91’575

4’891’758

3’136’940

1’462’770

1’124’593

372’819

1’100’273

49’751

400’913

20’023’067

45’895

890’342

2’408

4’119’655

166’529

471’953

12’454’925

305’888

1’029

91’575

108’773

454’261

28’408

81’933

1’840’000

271’511

65’769

30’867

20’023’067

105’148

3’137’579

1’865’235

38’687

983

6’409

319’895

382’299

38’727’813

2’766’490

Notes

7

7

2

2, 4

3, 4

4

4

1

Change

in %

25.4

16.8

21.0

6’455.1

11.3

6.0

63.4

-14.3

6.0

-5.3

-24.7

-71.5

7.3

45.8

17.3

-5.2

-5.3

19.4

21.8

24.6

-24.3

-33.6

-2.0

103.7

-68.3

-31.5

-11.7

1.7

547.3

-65.7

7.3

0.7

-15.9

21.1

-15.3

-3.7

76.3

-76.1

-70.9

-23.7

-47.2

PARENT BANK BALANCE SHEET AS OF 31 DECEMBER 2012(before approval by the General Shareholders Meeting)

__ 77

Income and expenses from ordinary banking operationsInterest and discount income

Interest and dividend income from financial investments

Interest expenses


Commission income from lending activities

Commission income from securities and investment transactions

Commission income from other services

Commission expenses



Result from the sale of financial investments

Income from participations

Net income from real estate

Other ordinary income

Other ordinary expenses



Personnel expenses


Operating expensesGross profit

Profit Gross profit


Value adjustments, provisions and losses

Result before extraordinary items and taxes Extraordinary income

Extraordinary expenses

Taxes

of which release of provisions not required for year tax liabilities

Net profit

Appropriation of profit

Net profit


Balance sheet profit

Proposal of the Board of DirectorsOrdinary dividend on share capital

Allocation to the general legal reserve

Balance to be carried forward

Total

2011

CHF 1’000

186’587

16’421

-31’443

171’565

5’147

361’708

13’406

-56’723

323’538

110’097

1’633

31’059

2’520

9’265

-5’912

38’565

643’765

-262’948

-200’880

-463’828

179’937

179’937

-87’328

-18’620

73’989

64’784

-22’800

-25’860

5’899

90’113

31.12.2011

CHF 1’000

90’113

10’161

100’274

30’000

4’505

65’769

100’274

2012

CHF 1’000

193’222

12’081

-32’057

173’246

9’281

374’666

16’304

-89’670

310’581

132’443

151

27’681

3’000

13’547

-3’972

40’407

656’677

-303’687

-191’113

-494’800

161’877

161’877

-103’713

-37’855

20’309

22’504

-3’259

-8’687

30’867

31.12.2012

CHF 1’000

30’867

65’769

96’636

30’000

1’543

65’093

96’636

Notes

8

9

9

Change

in %

3.6

-26.4

2.0

1.0

80.3

3.6

21.6

58.1

-4.0

20.3

90.8

-10.9

19.0

46.2

-32.8

4.8

2.0

15.5

-4.9

6.7

-10.0

-10.0

18.8

103.3

-72.6

-65.3

-85.7

-66.4

-100.0

-65.7

Change

in %

-65.7

547.3

-3.6

-65.7

-1.0

-3.6

PARENT BANK PROFIT AND LOSS STATEMENT 2012


ACCountInG AnD vAluAtIon CrIterIA

The accounting, balance sheet entry and valuation criteria conform to the provisions of the Swiss Code of Obligations, the Swiss Banking Law and Ordinance and the directives of the Swiss Financial Market Supervisory Authority FINMA.

Please refer to the “Accounting and valuation principles” attached to the Group’s accounts, which are also valid for the accounts of the Parent Bank. The only exception is made for the amortisation of goodwill following the acquisi-tion of the former Banca Unione di Credito. For the Parent Bank, this was completely amortised in 2007.

1 FIDuCIArY trAnSACtIonS

Fiduciary deposits with other banks

Fiduciary deposits with Group banks and associated banks

Fiduciary credits and other fiduciary transactions

Total

31.12.2011

CHF 1’000

2’649’393

2’592’986

514

5’242’893

31.12.2012

CHF 1’000

1’715’932

1’050’558

2’766’490

Change

in %

-35.2

-59.5

-100.0

-47.2

2 vAlue ADJuStMentS AnD provISIonS / reServeS For GenerAl BAnkInG rISkS

in CHF 1’000

Provisions for deferred taxes Value adjustments and provisions for default risks and other business risks Value adjustments and provisions for default risks (credit and country risks)

Value adjustments and provisions for other business risks

Value adjustments for financial investments

Other provisions

Total value adjustments and provisions Value adjustments set off directly against assets

Total value adjustments and provisions as per balance sheet


Useaccording

to purpose

-26’582

-24’060

-126

-2’396

-26’582

–

–

Situation31.12.2011

17’229

168’000

143’871

896

3’961

19’272

185’229

-143’784

41’445

92’829

Recoveries,doubtfulinterest,

currencydifferences

1’358

1’196

-77

239

1’358

–

–

Newprovisions

chargedto P/L

30’470

21’331

139

9’000

30’470

–

–

Releasecredited to

P/L

-17’299

-5’924

-4’536

-1’388

-23’153

–

–

-10’896

2012

Situation31.12.2012

167’322

137’802

909

3’884

24’727

167’322

-138’914

28’408

81’933

NOTES TO THE 2012 PARENT BANK ACCOUNTS

__ 79

4 StAteMent oF SHAreHolDerS’ equItY

Shareholders’ equity at 1 January 2012Share capital




Previous year’s net profit

Total shareholders’ equity (before appropriation of profit) Release of reserves for general banking risks credited to P/L

Distribution of previous year’s dividend

Net profit for the current year

Shareholders’ equity at 31 December 2012 (before appropriation of profit) of which: Share capital




Net profit

CHF 1’000

1’840’000

267’006

92’829

10’161

90’113

2’300’109

-10’896

-30’000

30’867

2’290’080

1’840’000

271’511

81’933

65’769

30’867

3 preSentAtIon oF SHAre CApItAl AnD SHAreHolDerS wItH votInG rIGHtS ABove 5%

A. Share capitalShare capital

B. Shareholders

Shareholders with voting rights Participatie Maatschappij Graafschap Holland N.V., Diemen (NL)1 1 Company directly and wholly owned by the Assicurazioni Generali Group, Trieste.

Numberof shares

18’400’000

NominalCHF 1’000

1’840’000

Totalnominal

value

CHF 1’000

1’840’000

Capitalwith

dividendrights

CHF 1’000

1’840’000

31.12.2012


100.00

Totalnominal

value

CHF 1’000

1’840’000

Numberof shares

18’400’000

NominalCHF 1’000

1’840’000

31.12.201131.12.2012

Capitalwith

dividendrights

CHF 1’000

1’840’000

31.12.2011


100.00


5 penSIon lIABIlItIeS

Commitments to Group pension institutions

31.12.2011

CHF 1’000

47’899

31.12.2012

CHF 1’000

57’229

6 otHer BAlAnCe SHeet InForMAtIon

Assets pledged as security for own liabilities

Due from the Bank’s bodies

Due from affiliated companies

Due to affiliated companies

31.12.2011

CHF 1’000

250’356

34’204

60’772

27’113

31.12.2012

CHF 1’000

259’729

15’305

130’693

29’103

Change

in %

3.7

-55.3

115.1

7.3

• The conditions applied to loans to the bank’s senior management are the same as those applied to staff loans. Due to their lower credit risk, employees receive a maximum interest rate reduction that varies between 1% and 1.5% depending on the type of loan.• All transactions with affiliated companies were effect- ed at market rates. Revenues of CHF 2.2 million (2011: CHF 2.5 million) received by companies linked to the Generali Group are included under the item “Result from commission and service fee activities”.

• BSI has outsourced systems operations, development and maintenance as well as back-office activities to B-Source SA, a service provider in which BSI holds a 49% stake. These services are remunerated at market rates and are performed in compliance with FINMA-Circular 08/7.

All employees of the Parent Bank are covered by the pension plan except for apprentices, trainees and unpaid staff. As at 31 December 2012 there were 1,293 emplo-yees covered by the pension scheme and 920 drawing pension benefits (as at 31 December 2011 there were 1,3791 employees covered and 8991 drawing benefits).Costs incurred by the Bank for pension plans are inclu-ded in “Personnel expenses”.

As at 31 December 2012 the cover level of the Pension Foundation of BSI AG was 98.2% (2011: 91.0%) and 101.8% (2011: 98.0%) for BSI AG’s Social Insurance Fund. In 2012, the boards of the two foundations approved some restructuring measures charged to the employer and the employees aimed at raising the cover level, the positive effects of which will be visibile from 31 Decem- ber 2012.

1 The data for 2011 have been adjusted.

__ 81

8 reSultS FroM trADInG operAtIonS

Foreign exchange and banknote transactions

Precious metal transactions

Securities transactions

Other trading operations

Total

2011

CHF 1’000

61’996

26’322

16’132

5’647

110’097

2012

CHF 1’000

72’139

8’431

49’739

2’134

132’443

Change

in %

16.4

-68.0

208.3

-62.2

20.3

9 extrAorDInArY InCoMe AnD expenSeS

Extraordinary income Release of value adjustments and provisions

Net release of reserves for credit risks

Gains on the sale of participations

Release of reserves for general banking risks

Recovered losses

Profit from sale of fixed assets

Other extraordinary income

Extraordinary expenses Creation of reserves for general banking risks

Losses on sale of participations

Other extraordinary expenses

Total

2012

CHF 1’000

22’504

1’388

4’536

651

10’896

559

194

4’280

-3’259

-2’419

-840

19’245

2011

CHF 1’000

64’784

7’110

9’212

34’489

5’123

8’850

-22’800

-15’981

-2’119

-4’700

41’984

7 otHer ASSetS AnD otHer lIABIlItIeS

Other assets Replacement values for derivatives from trading activities


Netting account

Other assets

Total other assets

Other liabilities Replacement values for derivatives from trading activities


Other liabilities

Total other liabilities

31.12.2011

CHF 1’000

1’282’444

56’883

17’385

49’902

1’406’614

1’242’771

71’247

119’255

1’433’273

31.12.2012

CHF 1’000

296’509

23’386

29’307

51’711

400’913

281’090

101’209

71’962

454’261

Change

in %

-76.9

-58.9

68.6

3.6

-71.5

-77.4

42.1

-39.7

-68.3


REPORT OF THE STATUTORY AUDITOR ON THE FINANCIAL STATEMENTS

84 __ BSI Glossary

Accrued expenses and deferred incomeExpenses and income that are recognised in the current year even though the transaction will take place in the successive accounting year. An example of this would be a rent payment for December that is not paid until January but which is included in the revenue for the current year.

ALMAsset and liability management. Optimisation of assets and liabilities in order to guarantee security, an appropri-ate risk level and liquidity.

AMLA (LRD)Federal Act on combating money laundering and terrorist financing in the financial sector (Anti-Money Laundering Act, SR 955.0) of 10 October 1997.

AMLCAAnti-Money Laundering Control Authority.

AMLO-FINMA 1 Ordinance of the Federal Market Supervisory Authority of 18 December 2002 on combating money laundering and terrorist financing in the financial sector (Anti-Money Laundering Ordinance – FINMA 1; SR 955.022).

Balance sheetA document that shows the assets and liabilities of a company at a specific point in time.

BAFederal Act on banks and savings banks of 8 November 1934.

BCBSBasel Committee on Banking Supervision.

Bearish Negative expectation regarding the performance of fi-nancial products on a financial market (expectation of falling prices).

BenchmarkingBenchmarking means the comparison of a company’s performance with that of competitors. The performance indicator of competitors is called benchmark. The aim of this kind of comparison is to identify scope for improve-ment and competitive disadvantages, as well as to in-crease the competitiveness of the company.

Breakeven point The point at which income equals expenses and thus nei-ther a profit nor a loss is made. The profit zone (where income exceeds expenses) is above the breakeven point and the loss zone (where expenses exceed income) is below it.

BullishPositive expectation regarding the performance of finan-cial products on a financial market (expectation of rising prices).

Buy-out Purchase of a company or part of a company, where at least a majority of the share capital is purchased.

Cash flow statementStatement of all cash inflows and outflows during a busi-ness period. These are usually subdivided into cash flow from (for) operating activities, from (for) investing activi-ties, and from (for) financing activities. The balance of the cash flow statement shows the change in liquidity during the period under consideration.

CDB 08Agreement on the Swiss banks’ code of conduct.

Clearing systemSettlement system for payment transactions. The central-ised system simplifies the settlement of accounts between counterparties, allowing them to exchange and offset debit and credit claims against each other. In the securities sec-tor, clearing systems help to streamline and speed up the processing of stock market transactions.

Commodities Commodities are goods that can be readily exchanged for units of other goods, e.g. metals, raw materials, plant products, animal products and energy related products. Commodities and future contracts on commodities (es-pecially futures) are traded on commodities exchanges (e.g. Chicago Board of Trade www.cbot.com).

Consolidation The adjustment and combination of the financial state-ments of different (subsidiary) companies in the form of consolidated group financial statements.

Corporate bondsCorporate bonds are bonds issued by companies. They are different from bonds issued by governments and sov-ereign entities.

gLossary oF seLeCted terms and aBBrevIatIons

__ 85

Credit rating A measurement of the ability and willingness of a debtor (e.g. bond issuer) to repay its debt. Specialised rating agencies (e.g. Standard & Poor’s, Moody’s, etc.) assess the creditworthiness of companies and publish their as-sessments in the form of ratings. Banks also have a rating system for borrowers.

Credit risk The credit risk is the probability of a debtor being unable to meet its financial obligations, i.e. to pay interest and principal at face value on time. If the debtor’s credit rat-ing falls, the risk of default rises and this is reflected in a falling bond price and a rising yield to maturity.

CustodyCustody refers to both the safekeeping and administra-tion of securities on behalf of clients. Custody includes the actual custody account management, while adminis-tration focuses on tasks related to dividend and interest payments, equity-related transactions and share voting rights.

Depreciation/amortisation Reduction in value of assets which is charged to the profit and loss statement as an expense. A classic example is the depreciation in the value of an industrial machine. The value of a machine is depreciated on the basis of its estimated useful life.

Derivative financial instrumentsFinancial instruments whose price does not directly de-pend on the economic value, as is the case for stocks and bonds, but is instead derived from the price of another instrument, generally a financial instrument. Derivatives exist on almost every type of financial instrument. There are even derivatives on derivatives. Derivatives are (lev-eraged) marginal instruments and can thus be used for speculative purposes. They are very efficient for control-ling a portfolio’s risk.

Duration Measurement of sensitivity for the risk of a bond yield fluctuation. A negative correlation exists between interest rates and bond prices. Investors should choose a dura-tion for their bonds in view of changes in interest rates. Duration changes are a function of the amount of interest, maturity and yield of the bond.

EBAEuropean Banking Authority.

ECB European Central Bank.

FEDFederal Reserve System, the central banking system of the United States.

FINMASwiss Financial Market Supervisory Authority.

FixingProcedure to determine a specific (fixed) price, which will then be used as a daily reference price for all transac-tions. The procedure is used for financial instruments that are not traded on a stock market (for which there is an official closing price).

FutureStandardised contract that guarantees the delivery of an underlying at a fixed price on a given date in the future. Unlike forward transactions, which are entered into by two specific parties, futures can be traded on stock ex-changes.

GoodwillDifference between the price paid for a company and the fair value of the acquired company. Goodwill thus repre-sents the intangible value of a company, which is not re-ported in the balance sheet as long as the company is not acquired, such as client loyalty and employees’ expertise. The term is also used to refer to the difference between the earning power of a company and its current value.

Hedge A transaction that is performed to protect against losses as a result of price changes in commodities, currencies and securities. It is an offsetting transaction to the original transaction. Derivatives (options, futures, etc.) are often used for this purpose, as they allow a hedge to be made with less capital due to the leverage effect.

Hedge funds Hedge funds are investment funds that can use invest-ment strategies generally not permitted for investment funds that comply with investment fund regulations (such as UCITS). The strategies commonly used are arbitrage, long/short positions, hedging and others. UCITS regula-tions are gradually expanding so that investment funds can use most of the strategies deployed by hedge funds.

86 __ BSI Glossary

Initial public offering (Going public)Transformation of a privately held company into a public company. When an IPO is launched, shares are offered publicly for the first time, usually via a stock exchange. As a result, both old and newly issued shares are made available for public trading.

Issue Issue of new securities (e.g. bonds, shares) to investors. An issue can take the form of a fixed-price placement or can be sold at auction. Securities are often issued with the help of an investment bank.

Joint Venture A form of cooperation by several companies to achieve a common aim. This can take the form of contractual col-laboration or the creation of a company. Unlike mergers, joint ventures do not require the participating companies to give up their independence. Joint ventures are often set up for a defined period of time only.

London Interbank Offered Rate (LIBOR)Money market interest rate resulting from the average interest rate quoted by different banks in London. Due to the considerable importance of London as a financial centre, the LIBOR is the most important money market rate and the reference interest rate for the euro money market, or for loans in euros and for many other financial products.

Long Position Purchase of a position. This can involve securities of all kinds, derivatives, commodities, etc.

Mergers and acquisitions A general term created by investment banks to describe all forms of business combinations between companies. A merger involves the actual merging of two companies to form a new entity, for example by means of merger of equals or consolidation. On the other hand, an acquisition refers to the purchase and sale of companies, business units or equity interests and their integration in the acquir-ing company.

Money marketFinancial market for short-term liquidity and securities. Maturities of less than a year are considered to be short-term.

Mortgage A mortgage is a specific kind of loan that is secured by property.

Outsourcing Operation to move a service hitherto carried out by a company in-house to a new or existing external com-pany. This operation generally enables a company to convert fixed costs to variable costs and to improve ef-ficiency.

Over-the-counter (OTC)A transaction carried out directly between two parties without the involvement of a stock exchange or other financial intermediary. OTC transactions are thus more individualised than exchange-traded products.

Pricing The calculation and setting of an appropriate price. In the financial sector, pricing can refer to the setting of prices or interest rates. In general, pricing is based on models (capital asset pricing model, option price model, arbitrage pricing theory).

Provisions Liabilities created in the balance sheet through charges to the profit and loss statement to cover future commit-ments, the amount and timing of which are currently not absolutely certain. Unlike reserves, provisions are always related to a specific transaction or event.

SBASwiss Bankers Association.

SecuritiesIn general, a financial instrument that uses capital for financing debt (bonds) or equity (shares). This term is sometimes applied more broadly to any type of financial instrument, from structured products to investment funds.

Short Position Sale of a position. This can involve securities of all kinds, derivatives, commodities, etc.

SNBSwiss National Bank.

Spread Difference between the price or yield of one or more fi-nancial instruments. For instance, it may reflect the differ-ence between the purchase and sale prices of two bonds or the short-term (2 years) and long-term (10 years) yields of two bonds.

Structured products Structured products are financial instruments composed of derivative and non-derivative financial instruments. This special composition makes it possible to follow a specific investment strategy.

SwapFinancial contract governing an exchange of payments. As comparable obligations can be bought and sold, a swap is similar to an exchange of obligations. In an inter-est rate swap, fixed and variable interest-rate obligations are exchanged, while in a currency swap, obligations in one currency can be exchanged for obligations in another currency.

Underlying It indicates the financial instrument that will be exchanged on the basis of a derivative instrument (options, futures, forwards, etc.).

Volatility A measure of risk. It may be calculated on historical prices (historical volatility) or on the basis of expecta-tions through the price of derivative instruments (implied volatility). As a rule, high volatility reflects significant price fluctuations. Warrant Put and call options issued by financial institutions. Con-trary to options traded on Eurex or other organised stock exchanges, warrants come in many maturities, sizes and strike prices set by the issuer. Often, it takes many warrants to exercise a right, which is why their price is very low.

In cooperation with IBF (Institute of Banking & Finance) Wikifinance, University of Zurich.

__ 87

printed with eco-friendly ink.

HeAD oFFICe AnD exeCutIve BoArD pHone FAx

Lugano Via Magatti 2, CH-6900 Lugano, www.bsibank.com +41(0)58 809 31 11 +41(0)58 809 36 78

BrAnCHeS In SwItzerlAnD

Bellinzona Viale Stazione 9, CH-6500 Bellinzona +41(0)58 809 65 11 +41(0)58 809 65 85

Chiasso Corso S. Gottardo 20, CH-6830 Chiasso +41(0)58 809 61 11 +41(0)58 809 62 39

Geneva 8, Boulevard du Théâtre, CH-1204 Geneva +41(0)58 809 12 12 +41(0)58 809 12 45

Lausanne 3, Avenue de Rumine, CH-1005 Lausanne +41(0)58 809 41 41 +41(0)58 809 41 43

Locarno Piazza Grande 7, CH-6600 Locarno +41(0)58 809 63 54 +41(0)58 809 63 08

St. Moritz Via Somplaz 10, CH-7500 St. Moritz +41(0)58 809 88 11 +41(0)81 830 88 11

Zurich Schützengasse 31, CH-8001 Zurich +41(0)58 809 81 11 +41(0)58 809 83 68

ForeIGn BrAnCHeS

Bahrain BSI SA, Bahrain Financial Harbour, West Tower, 14th Floor +973 17 155 155 +973 17 107 777 P.O. Box 11321, Manama, Kingdom of Bahrain

Hong Kong BSI Ltd., Hong Kong Branch +852 3126 0088 +852 3126 0288 20th Floor, Two Exchange Square, Central, Hong Kong

Nassau BSI AG, Nassau Branch +1 242 502 22 17 +1 242 502 23 17 Goodman’s Bay Corporate Centre,West Bay Street and Sea View Drive P.O. Box CB-10956, Nassau, Bahamas

AGenCIeS

Crans-Montana Immeuble Le Scandia,7, Rue Centrale, CH-3963 Crans-Montana +41(0)58 809 19 00 +41(0)58 809 02 82

repreSentAtIve oFFICeS

Montevideo BSI Servicios SA, Antonio D. Costa 3571, Piso 2 +598 2 628 93 22 +598 2 628 93 30 11300 Montevideo, Uruguay

Panama BSI (Panama) SA, Torre Generali, Piso 14 +507 265 70 00 +507 264 35 88 Ave. Samuel Lewis y Calle 54, Obarrio, Apartado 832-1637, WTC, Panama

BAnkS

Luxembourg BSI Luxembourg SA, 6, avenue Marie-Thérèse +352 46 1566 1 +352 46 1566 227 L-2132 Luxembourg, www.lux.bsibank.com

Monte Carlo BSI Monaco SAM, Le St. Michel, 1, Av. St. Michel +377 92 16 89 89 +377 97 97 11 30 MC-98000 Monaco (Monte Carlo), www.mc.bsibank.com

Nassau BSI Overseas (Bahamas) Ltd., Goodman’s Bay Corporate Centre +1 242 502 22 00 +1 242 502 23 00 West Bay Street and Sea View Drive, P.O. Box N-7130, Nassau, Bahamas www.bs.bsibank.com

Singapore BSI Bank Ltd., 7 Temasek Boulevard, #32-01 Suntec Tower One +65 6521 1888 +65 6521 1605 038987 Singapore-SG, www.bsibank.sg

truSt CoMpAnIeS

La Valletta BSI Trust Corporation (Malta) Ltd., 35 St. Zachary Street Valletta VLT +356 212 25 817 +356 212 25 865 1132 Malta-M, www.bsitrustma.bsibank.com

Milan AEON Trust Società Italiana Trust Srl, Via Montebello 39, I-20121 Milan +39 02 63696 201 +39 02 29063 045

Nassau BSI Trust Corporation (Bahamas) Ltd., Goodman’s Bay Corporate Centre +1 242 502 22 70 +1 242 502 23 10 West Bay Street & Sea View Drive, P.O. Box CB-10976 Nassau, Bahamas www.bsitrustbs.bsibank.com

AFFIlIAteD CoMpAnIeS AnD otHer CoMpAnIeS

Lugano Patrimony 1873 SA , Via Peri 21b, CH-6901 Lugano, www.patrimony1873.com +41(0)91 912 72 72 +41(0)91 912 72 70

Lugano Thalìa SA, Via Trevano 2a, CH-6900 Lugano, www.thaliainvest.com +41(0)91 912 97 00 +41(0)91 912 97 01

Milan BSI Wealth & Family SIM SpA, Via Montebello 39, I-20121 Milan, www.bsisim.it +39 02 7222 271 +39 02 8692 941

Milan EOS Servizi Fiduciari SpA, Via Montebello 39, I-20121 Milan +39 02 63696 220 +39 02 29063 197

Monte Carlo BSI Asset Managers SAM, Europa Résidence, Place des Moulins +377 97 97 39 79 +377 97 97 39 80 MC-98000 Monaco (Monte Carlo)

Montevideo BSI Consultores SA, Antonio D. Costa 3571, Piso 1 +598 2 628 53 00 +598 2 628 76 90 11300 Montevideo, Uruguay

Panama BSI Investment Advisors (Panama) Inc., Torre Generali, Piso 14 +507 265 70 00 +507 264 35 88 Ave. Samuel Lewis y Calle 54, Obarrio, Apartado 832-1637, WTC, Panama

Paris Oudart SA, 10A, rue de la Paix, F-75002 Paris, www.oudart.com +33 1 4286 2500 +33 1 4286 2525

88 __ BSI Contacts

ContaCts

annual report 2012

Documents