Principles underlying financial statement reporting and comments

The interim financial reporting was prepared in accordance with International Financial Reporting Standards (IAS 34). The half-year financial statements were prepared using the accounting polices applied to the 2015 financial statements, with the exception of forward elements of certain currency forward contracts, which are now shown under net interest income (previously income from trading activities). Also, given the growing importance of negative interest rates, they are now presented separately under interest income as “interest income from financial liabilities” and under interest expense as “interest expense on financial assets”. The comparison data from previous reporting periods was adjusted accordingly. Following the reclassification of the above-mentioned currency forward contracts, net interest income increased by CHF 0.8 million during the previous 2015 period, while income from trading operations decreased commensurately during the same period. The corresponding accounting prin­ciples may be found in the 2015 annual report on pages 98 et seq.

This 2016 half-year financial report was not audited. The 2015 half-year financial report was audited by Ernst & Young AG, with the audited information and tables in the report marked as “audited”. 

Since 1 January 2016, the following new and revised standards and interpretations have been in effect: 

In September 2014, the IASB published several changes to existing IFRS through its Annual Improvements cycle. These amendments include changes to various IFRS affecting both estimates, valuations and recognition of business transactions as well as terminology and drafting corrections. The changes have no material impact on the consolidated financial statements. 

Accounting for acquisitions of interests in joint operations (Amendment to IFRS 11) modifies IFRS 11 such that the ­acquirer of interests in a joint operation that constitutes a business as defined by IFRS 3 are to apply the relevant prin­ciples on business combination accounting in IFRS 3 and other IFRS as long as they do not conflict with the guiding principles of IFRS 11. The amendments have no material impact on the consolidated financial statements. 

In December 2014, as part of an initiative to improve financial statements presentation and disclosures, the IASB issued amendments to IAS 1 “Presentation of Financial Statements” (“IAS 1”). These amendments make clear that the principle of materiality should be applied to the financial statements as a whole, that professional judgment be used in determining which information to disclose and that the use of immaterial information can lead to reduced effectiveness of disclosures. The amendments affect only the notes to the consolidated financial statements. 

At VP Bank’s 53rd annual general meeting in Vaduz on 29 April 2016, all of management’s proposed resolutions were approved. The annual general meeting approved the Board of Director’s proposal to convert bearer shares into registered shares. The trend in corporate governance at the international level now calls for greater transparency as regards ownership relationships among legal persons. For that reason, the Board of Directors proposed conver­- ting VP Bank bearer shares with a par value of CHF 10.00 into registered shares A with an identical par value. The existing unlisted registered shares with a par value of CHF 1.00 will remain unchanged as registered shares B and continue to be unlisted. The first trading day for the registered shares A was 6 May 2016. 

Pursuant to the authorisation given by the annual general meeting of 24 April 2015, VP Bank AG decided to increase the number of its own shares through another share buyback of up to 10 per cent of the share capital. VP Bank AG thereby builds on the two successful share buyback programmes of 2015. The repurchase of registered shares A, which lasts from 7 June 2016 through 31 May 2017, will occur through the regular trading line on the SIX Swiss Exchange.

VP Bank AG is prepared to repurchase up to 120,000 registered shares A under the public share buyback programme. At no time, however, will it hold more registered shares A own shares than is allowed under the aforementioned authorisation from the annual general meeting (up to 601,500 shares, which corresponds to 10 per cent of all registered shares A). 

The repurchased registered shares A are to be used for future acquisitions or treasury management purposes. VP Bank AG retained Zürcher Kantonalbank to implement the buyback of registered shares A.

By 30 June 2016, VP Bank AG had repurchased 12,132 registered shares A through the buyback programme. At 30 June 2016, VP Bank Group owned a total of 528,090 registered shares A and 127,312 registered shares B, representing 8.18 per cent of the total share capital outstanding and 5.45 per cent of the voting rights. 

At its 18 August 2016 meeting, the Board of Directors discussed and approved the interim financial report and released it for publication. 

The following exchange rates apply in respect of the most important Group currencies: