Corporate Center
Segment results |
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in CHF 1,000 | 2019 | 2018 | Variance | Variance |
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Total net interest income1 | –3,938 | –7,239 | 3,301 | 45.6 |
Total net income from commission | –7,028 | –6,004 | –1,024 | –17.1 |
Income from trading activities | 30,198 | 27,282 | 2,916 | 10.7 |
Income from financial instruments | 14,100 | –1,732 | 15,832 | n.a. |
Other income | –3,300 | –339 | –2,961 | n.a. |
Total operating income | 30,032 | 11,968 | 18,064 | 150.9 |
Personnel expenses | 69,178 | 68,988 | 190 | 0.3 |
General and administrative expenses | 27,708 | 27,776 | –68 | –0.2 |
Depreciation of property, equipment and intangible assets | 16,480 | 16,968 | –488 | –2.9 |
Credit loss expenses | 0 | 1,647 | –1,647 | –100.0 |
Provisions and losses | 0 | –1,090 | 1,090 | 100.0 |
Services to/from other segments | –43,258 | –41,888 | –1,370 | –3.3 |
Operating expenses | 70,108 | 72,401 | –2,293 | –3.2 |
Segment income before income tax | –40,076 | –60,433 | 20,357 | 33.7 |
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Additional information |
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Headcount (number of employees) | 403 | 407 | –4.0 | –1.0 |
Headcount (expressed as full-time equivalents) | 368.0 | 371.9 | –3.9 | –1.0 |
- As of 1 January 2019, the new funds transfer pricing was introduced within the Group. The impact of this change for the segment Corporate Center amounted to CHF 10.2 million. The prior-year comparatives were not restated as the change for prior periods was impracticable because of the passage of time as well as the lack of an appropriate data base and the cost of assembling this data retrospectively on an individual-transaction basis would be so high that it would bear no relationship to the benefit to be derived therefrom.
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 Services, Corporate Excellence & Transformation, Corporate Services, Group Credit, Group Treasury & Execution, Group Finance, Group Financial Management & Reporting, Group Risk, Group Legal Services, Group Compliance, Group Human Resources, Group Communications & Marketing, Group Strategy and CEO Office. In addition, those revenues and expenses of VP Bank Ltd having no direct relationship to client-focussed 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 of 2019 was minus CHF 40.1 million compared to minus CHF 60.4 million in the comparable prior-year period.
In 2019, operating income rose by CHF 18.1 million year- on-year; income from financial investments is principally responsible for this increase.
Year-on-year, interest income fell by CHF 3.3 million. This is partly attributable to the continuing negative interest rate level and, as a result, to the decline in interest income from maturity transformation (SNB negative interest). In addition, the earnings from SNB swaps were on the decline compared with the same period last year (CHF -12.0 million). The introduction of fund-transfer pricing as of 1 January 2019 and the development of financial instruments made a positive contribution to the interest result.
Commission and service income reported a decline 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 reflects the results of derivatives employed to minimize risks as well as gains/losses from balance-sheet management activities.
In 2019, income from financial investments aggregated CHF 14.1 million. In the prior year, this position had reported a negative result of CHF 1.7 million resulting primarily from the market developments. The increase derives mainly from revaluation gains on financial investments.
Operating expenses fell by CHF 2.3 million from CHF 72.4 million to CHF 70.1 million in the reporting period. Charges for valuation allowances, provisions and losses fell by CHF 0.6 million in the reporting period.
Personnel expenses and general and administrative expenses remained on par with those of the previous year. Depreciation and amortisation declined marginally from CHF 17.0 million to CHF 16.5 million.
The employee headcount could be reduced from 372 (31 December 2018) to 368.