2014 Valartis Group Consolidated Financial Statements - Seite 3

2014 - A year of continued adjustment

In financial year 2014, Valartis Group concentrated on implementation of the strategic decisions taken in 2013 and 2014. The main focus was on the sale of Valartis Bank AG, Switzerland to Banque Cramer & Cie S.A. at end-August 2014 and the reorganisation of Valartis Group AG with the incorporation of Valartis Finance Holding AG in Liechtenstein in summer 2014.

A look back

In 2007, Valartis Group was realigned in order to focus strategically on the wealth management business with wealthy private clients and institutional investors. Despite the financial crisis which started in 2008, Valartis Group was able to further develop its private banking activities over the following three years through targeted acquisitions in that segment. Valartis Group intensified concentration on private banking by means of tactical divestments of non-private banking activities in 2011 and 2012 and, at the same time, by tightening its organisation in 2012 and 2013 by means of cost reduction measures.

After it had become apparent that the acquisition capacity of Valartis Bank AG, Switzerland could not be enhanced at the planned rate despite the 2012 newly aligned front-office organisation, and that the bank would not attain the appropriate critical mass within the foreseen timeframe, in 2013, Valartis Group decided to divest the Swiss 100-percent subsidiary. By retaining a 25-percent holding in Norinvest Holding S.A., the listed parent company of Banque Cramer & Cie S.A., the purchaser of the Swiss bank, Valartis Group maintains in 2014 its presence in the private banking market in Switzerland to a lesser extent.

A look to the future

Since the financial crisis, wealth management banks have found themselves in a difficult macroeconomic environment with record low interest rates and a challenging investment situation. In addition, implementation of a range of complex, national and international regulatory requirements is affecting banks' cost structures and margins. And these trends did not by-pass Valartis Group. This environment makes it increasingly difficult for the Group to generate sustainable operating profits. The critical mass for Valartis Group's private banking activities as a whole has not been enhanced in spite of the sale of the Swiss unit. The Group's results in the last few years were also influenced by the very volatile results from non-private banking activities.