Corporate Center
Segment results |
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in CHF 1,000 | 2018 | 2017 | Variance | Variance |
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Total net interest income | –7,239 | 230 | –7,469 | n.a. |
Total net income from commission | –6,004 | –3,867 | –2,137 | –55.3 |
Income from trading activities | 27,282 | 21,824 | 5,458 | 25.0 |
Income from financial instruments | –1,732 | 19,132 | –20,864 | –109.1 |
Other income | –339 | –198 | –141 | –71.2 |
Total operating income | 11,968 | 37,121 | –25,153 | –67.8 |
Personnel expenses | 68,988 | 58,213 | 10,775 | 18.5 |
General and administrative expenses | 27,776 | 31,725 | –3,949 | –12.4 |
Depreciation of property, equipment and intangible assets | 16,968 | 16,971 | –3 | –0.0 |
Valuation allowances, provisions and losses | 557 | 10,534 | –9,977 | –94.7 |
Services to/from other segments | –41,888 | –39,689 | –2,199 | –5.5 |
Operating expenses | 72,401 | 77,754 | –5,353 | –6.9 |
Segment income before income tax | –60,433 | –40,633 | –19,800 | –48.7 |
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Additional information |
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Headcount (number of employees) | 407 | 387 | 20.0 | 5.2 |
Headcount (expressed as full-time equivalents) | 371.9 | 353.9 | 18.0 | 5.1 |
Structure
The business segment “Corporate Center” is of great importance for banking operations and the processing of business transactions. It encompasses the areas Group Operations, Group Information Technology, Group Projects & Processes, Group Credit, Group Treasury & Execution, Group Finance, Group Risk, Group Legal Services, Group Compliance, Group Tax Center, Group Human Resources Management, Group Communications & Marketing, Group Business Development and Group Strategy. In addition, those revenues and expenses of VP Bank Ltd having no direct relationship to client-oriented business segments, as well as consolidation adjustments are reported under the Corporate Center. Revenue-generating business activities of the segment Corporate Center arise in connection with the Group Treasury function. The results of the Group’s own financial investments, the structural contribution and the changes in the value of hedges are reported in this segment.
Segment result
The pre-tax segment result in 2018 amounted to minus CHF 60.4 million as opposed to minus CHF 40.6 million in the prior year.
Year-on-year, operating income fell by CHF 25.2 million. Responsible for this decline is the reduction in the income from financial investments.
Interest income fell, year-on-year, by CHF 7.5 million. This is attributable, in part, to the on-going negative interest level and, consequently, to the decline in interest revenues from maturity transformation (SNB negative interest).
Commission and service income reports a reduction in income. This caption comprises third-party bank commissions which were invoiced to front business units by the service units through internal recharging.
Income received by Group Treasury & Execution is reported under trading income. This relates to income generated from the execution of foreign-exchange trades. The caption also includes the results of derivatives employed to minimise risks as well as gains/losses from balance-sheet management activities.
In 2018, income from financial investments developed negatively with CHF minus 1.7 million as a result of market developments. In the previous year, this position had reported an income of CHF 19.1 million primarily from unrealised revaluation gains on financial instruments.
Operating expenses in the financial year declined by CHF 5.4 million from CHF 77.8 million to CHF 72.4 million. The reason for this, on the one hand, is the non-recurring credit to personnel expenses in 2017 of CHF 10.1 million resulting from the adjustment to the rate of conversion in the retirement-fund plan (IAS 19). Consequently, personnel expense increased in 2018 by CHF 10.8 million. On the other hand, the charges for valuation allowances, provisions and losses in the financial year fell by CHF 10.0 million as a result of a provision raised in the prior year for a payment made in connection with a settlement with the German authorities. General and administrative expense could be reduced by CHF 3.9 million. At CHF 17.0 million, depreciation and amortisation remained at the prior-year’s level.
The employee headcount rose from 354 (31 December 2017) to 372 positions.