EANS-Adhoc: Valartis Group AG / Group profit of CHF 3.3 million for Valartis shareholders

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annual report

08.04.2009

The Valartis Group achieved a consolidated net profit of CHF 3.3
million in 2008 (prior year: CHF 49.9 million). With shareholders´
equity of CHF 285.9 million (including minority interests of CHF 47
million) the Group has retained its strong capital and financing base
(prior year: CHF 244.4 million). Client assets under management as at
year-end were CHF 4.015 billion (prior year: CHF 4.239 billion). The
Board of Directors will propose to the General Assembly of 5 May 2009
to pay out a dividend of CHF 0.50 per bearer share (prior year: CHF
2.75). It also will propose the reelection of Erwin W. Heri and
Stefan Holzer to the Board of Directors of Valartis Group AG.

A challenging financial year The Valartis Group´s earnings in 2008
were heavily impacted by the turmoil on the financial markets. The
year can only be deemed an "annus horribilis" for Investment Banking,
which recorded net trading income of CHF -56.4 million (CHF 23.0
million). This was mainly due to the larger trading positions of this
segment in Swiss small and mid caps, which sharply declined in value
due to extremely poor performance on the global equity markets in the
second half of 2008.

Earnings also weakened in commission business with securities and
investments, which dropped from CHF 86.4 million (prior year) to CHF
48.6 million. First, lower transaction volumes resulted in reduced
earnings from client-related stock and derivatives trading
(brokerage). Second, the drop in assets under management, and in
particular the loss of performance-related income - primarily from
equity funds focussed on Russia and Eastern Europe - negatively
affected commission earnings. The real estate activities of the Asset
Management segment saw much more positive developments. For
instance, construction of a shopping, entertainment and office
complex progressed according to schedule in Algeria; the centre is
expected to open in the second half of 2009. In the international
real estate funds segment, Valartis received two advisory mandates,
for which initial investments were made in Europe, Asia and Latin
America.

The turmoil on the international financial markets, however, has also
given rise to new opportunities. For instance, the Valartis Group was
able to purchase a 50% stake in the investment company ENR Russia
Invest (ENR) for well under book value and a 20% investment in
Eastern Property Holdings (EPH). These companies were fully and
partly consolidated, respectively, which resulted in income from
business combination of CHF 14.0 million and income from associates
of CHF 41.5 million.

On the cost front, personnel and operating costs were CHF 58.2
million (CHF 50 million). The increase compared with the prior year
is primarily due to the expansion of corporate finance and M&A
activities in Europe, the Asset Management segment´s expansion of its
real estate activities and investments in Private Banking. In
response to poor market conditions in the second half of 2008, the
Group initiated its first cost-saving measures. Apart from changes to
remuneration policy, the measures mainly target the service range
offered by Investment Banking; the effects of these measures,
however, will not be felt until sometime later this year.

After taking deferred tax assets of CHF 5.1 million (CHF -10.1
million) into account and factoring in the share of losses of
minority interests of CHF 7.3 million (CHF 0.7 million), the net
profit for the shareholders of the Valartis Group AG is CHF 3.3
million (CHF 49.9 million).

Setting the course in private banking By acquiring a private bank in
Vienna at the end of 2008, which started 2009 under the new name
Valartis Bank (Austria) AG, the Group has significantly expanded its
Wealth Management activities while also expanding its fund business
in the Asset Management sector. The Group´s earning power is now not
only more broadly based but also strengthened by seizing new growth
opportunities. In Switzerland, the company´s Private Banking presence
has been selectively expanded in Geneva and Zurich. As at the end of
2008, the Wealth Management segment had some CHF 2 billion in assets
under management and advised some 4,000 clients worldwide.

As a result of this new focus, the Investment Banking segment has
massively reduced its limits for proprietary trading in Swiss
equities and derivatives. This reorientation was prompted by the
conviction that, in the long run, the conservative investment
philosophy in Private Banking, with its focus on capital protection
and long-term capital growth, is not compatible with large volatile
trading positions in Investment Banking.

Capital base remains strong The consolidation of the bank in Vienna
as at 31 December 2008 also had a profound impact on the Group´s
balance sheet. Total assets increased compared with the prior year by
a good CHF 1 billion to CHF 1.501 billion. About two-thirds of the
total assets represent client assets that are temporarily invested in
high-quality domestic and international banking institutions. This
indicates that going forward, interest operations will be of much
greater significance to Valartis. With equity of CHF 285.9 million,
the Group continues to have a strong capital and financial base;
excluding minority shares, the book value per bearer share is CHF
48.60 (CHF 49.80).

On a consolidated basis, the Group managed assets of CHF 4.015
billion (CHF 4.239 billion) as at the end of 2008.

Changes to the Group Executive Board Reto Peczinka, a member of the
Group Executive Board and member of Valartis Bank's Executive Board,
will leave the Group at the end of April 2009 to pursue other
opportunities. He has held various positions for Valartis since 1995
in trading and brokerage. The Board of Directors thanks Reto Peczinka
for his many years of dedication and wishes him much success for his
future professional life. Gustav Stenbolt, Group CEO, will take over
management of Investment Banking for the transitional period.

Proposals of the Board of Directors - reduced dividends In light of
the lower earnings, Valartis Group AG´s Board of Directors will
propose to the General Assembly of 5 May 2009 to pay out a lower
dividend this year of CHF 2.5 million (prior year: CHF 13.75
million), i.e., CHF 0.50 (prior year: CHF 2.75) per bearer share. It
also proposes the re-election of Erwin W. Heri and Stefan Holzer to
the Board of Directors of Valartis Group AG.

Dates and information Financial results press conference 8 April
2009, 10:30 a.m. Widder Hotel, Zurich General Assembly
5 May 2009, 5:00 p.m. World Trade Center, Zurich

The 2008 Annual Report can be downloaded as a PDF from our Web site:
www.valartis.ch

end of announcement euro adhoc
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ots Originaltext: Valartis Group AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Gustav Stenbolt, CEO Valartis Group

Tel. +41 43 336 81 11

Branche: Financial & Business Services
ISIN: CH0001840450
WKN: 184045
Index: SPI, SPIEX, SSCI
Börsen: SWX Swiss Exchange / official market