Client Business International

in CHF 1,000	2017	2016	Variance absolute	Variance in %
Segment results
Total net interest income	29,978	24,936	5,042	20.2
Total net income from commission business and services	37,131	33,878	3,253	9.6
Income from trading activities	8,361	6,565	1,796	27.4
Income from financial instruments	78	396	–318	–80.3
Other income	2,527	1,078	1,449	134.4
Total operating income	78,075	66,853	11,222	16.8
Personnel expenses	41,361	39,000	2,361	6.1
General and administrative expenses	22,329	21,544	785	3.6
Depreciation of property, equipment and intangible assets	3,163	3,336	–173	–5.2
Valuation allowances, provisions and losses	4,074	716	3,358	469.0
Services to/from other segments	0	0	0	0.0
Operating expenses	70,927	64,596	6,331	9.8
Segment income before income tax	7,148	2,257	4,891	216.7

Additional information
Operating expenses excluding depreciation and amortisation, valuation allowances, provisions and losses / total operating income (in %)	81.6	90.6
Operating expenses excluding valuation allowances, provisions and losses / total operating income (in %)	85.6	95.6
Client assets under management (in CHF billion)	13.7	11.2
Change in client assets under management compared to 31.12. prior year (in %)	22.3	6.6
Net new money (in CHF billion)	1.5	0.2
Total operating income / average client assets under management (bp)1	62.9	61.7
Segment result / average client assets under management (bp)1	5.8	2.1
Cost/income ratio operating income (in %)2	84.4	92.6	–8.2	–8.9
Headcount (number of employees)	279	248	31.0	12.5
Headcount (expressed as full-time equivalents)	262.2	233.2	29.0	12.4

Annualised, average values.
Operating expenses excluding depreciation and amortisation, valuation allowances, provisions and losses / gross income less other income and income from financial instruments.

Structure

The business segment “Client Business International” encompasses the business conducted in international locations. VP Bank (Switzerland) Ltd, VP Bank (Luxembourg) SA, VP Bank (BVI) Ltd, VP Bank (Singapore) Ltd, VP Wealth Management (Hong Kong) Ltd and VP Fund Solutions (Luxembourg) SA are allocated to this business segment.

Segment result

In 2017, the pre-tax segment result could be improved, year-on-year, by CHF 4.9 million. Operating income could be increased, year-on-year, CHF 11.2 million (16.8 per cent). This increase is attributable principally to higher interest income from clients (20.2 per cent) but also commission and service income (9.6 per cent), trading income (27.4 per cent) and other income (including the income from the sale of an associated company) contributed to this positive result.

Operating expenses rose by CHF 6.3 million, or 9.8 per cent, to CHF 70.9 million. This increase results, on the one hand, from personnel and general and administrative expense reflecting principally the recruitment offensive for new senior client advisors. On the other hand, charges for valuation allowances, provisions and losses increased. In the business segment “Client Business International”, the recharging of services is based on actual invoices and recorded under general and administrative expenses.

The gross margin could be increased to 62.9 basis points (prior year: 61.7 basis points). The cost/income ratio improved from 92.6 per cent to 84.4 per cent.

Net new money developed positively in 2017 with CHF 1.5 billion. All locations reported net new client money inflows during the reporting period. The recruitment offensive at these locations give rise to the first new client money inflows already in 2017. Net new money inflows could again be achieved in the investment-fund business and in Asian markets thanks to reinforced market-development activities. Assets under management at 31 December 2017 totalled CHF 13.7 billion (31 December 2016: CHF 11.2 billion). The employee headcount rose from 233 individuals (31 December 2016) to 262 primarily because of the recruitment offensive for new senior client advisors.