EANS-Adhoc: Valartis Group Consolidated Financial Statements 2009: Successful expansion in private banking - significant profit increase

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annual report

13.04.2010

Valartis Group improved its earnings base in the year 2009 due to
the further implementation of its private banking strategy. The total
income rose to CHF 162.7 Million (previous year: CHF 52.0 Million),
while net profit increased to CHF 62.8 Million (CHF 3.3 Million).
Assets under management rose from CHF 4.32 Billion to CHF 6.38
Billion, with net new assets of CHF 1.76 Billion. The Valartis
Group´s total shareholders´ equity (including minority interests) was
CHF 356.8 Million (CHF 285.9 Million), giving the Valartis Group a
solid capital base. The equity per bearer share was CHF 62.9 (CHF
48.5). The Board of Directors will propose to the Shareholders´
Meeting of 4 May 2010 an unchanged dividend of CHF 0.50 per bearer
share.

The growth strategy in Private banking shows results In continuing to
expand its private banking activities, the Valartis Group took an
important step in 2009 towards achieving its goals of diversifying
and stabilizing its earnings base, unlocking synergies and creating
growth opportunities. The bank in Geneva and Zurich was considerably
strengthened with the addition of experienced private bankers. At the
same time, Valartis Bank (Austria) AG, Vienna, which was acquired at
the end of 2008, was successfully integrated into the group. In
December 2009, the Valartis Group acquired Hypo Investment Bank
(Liechtenstein) AG, now renamed Valartis Bank (Liechtenstein) AG.

Sources of income broadened - interest income gains in significance
With the acquisition of Valartis Bank (Austria) and Valartis Bank
(Liechtenstein), the group significantly increased its balance-sheet
over the last 18 months. Starting out in 2009, the liquidity of the
Valartis Group was mainly invested with large international banks. To
counter the risks inherent to the international banking system, the
group substantially reduced its positions due from banks and invested
the liquid assets with first class borrowers in the corporate sector,
utilities sector, and in selected regional and government borrowers.
The significant increase in interest and dividend income to CHF 27.7
Million (CHF 3.1 Million) is evidence of the balance-sheet management
and largely reflects the interest income from this broadly
diversified portfolio of money market and fixed-income positions.

The fixed income portfolio was mainly built up during the first half
of 2009, at a time when risk premiums over government bonds (credit
spreads) were at historical highs as a result of the financial
crisis. As the economic and financial situation improved, the credit
spreads narrowed. The resulting gains -interest rate risks being
fully hedged - led to trading income of CHF 41.2 Million, which made
up a significant amount of the group´s net trading income of CHF 77.4
Million (CHF -56.4 Million). The net trading income also includes
income from currencies and precious metals of CHF 3.6 Million (CHF
1.8 Million) and income from securities of CHF 32.7 Million (CHF
-58.3 Million). The income from securities consists of CHF 10.8
Million gains from Eastern Property Holdings (EPH), a company
operating in the Russian real estate sector, and another CHF 21.9
Million from the increase in value of the Valartis Group´s investment
portfolio, which benefited from the very strong recovery on the
global equity markets.

The Valartis Group increased its stake in EPH during 2009 to 38%
(20%). The equity consolidation of this stake resulted in a CHF 13.4
Million increase in value of investments in associates. Including the
trading profit from EPH of CHF 10.8 Million, the total income
generated by the investment in EPH for 2009 amounted to CHF 24.3
Million or CHF 18.7 Million after tax.

Net commission income of CHF 42.0 Million (CHF 48.6 Million) was
somewhat lower than last year and could not keep up with the overall
excellent earnings performance of the group. This decrease is due to
significantly lower client activity and a drop in assets under
management in the funds and investment companies, declining as a
result of the financial crisis. However, as the economy continues to
recover and the group continues to attract new assets, the commission
business is set to quickly regain momentum. This is not the least
underlined by the excellent performance of our equity funds focused
on Russia (MC Russian Market Fund) and Switzerland (Swiss Small & Mid
Cap Selection Fund); both significantly outperforming their
respective benchmarks and were among the best in their class for
2009.

Cost/income ratio falls to 44% The significant increase in total
income to CHF 162.7 Million (CHF 52.0 Million) contrasts with a
lesser increase in personnel and administrative expenses to CHF 71.5
Million (CHF 58.2 Million). Compared to the previous year, this
increase is due mainly to the first-time full consolidation at income
statement level of Valartis Bank (Austria) AG (Valartis Bank
(Liechtenstein) AG was not consolidated in the 2009 on the level of
income statement). The very low cost/income ratio of 43.9% (111.9%)
compares favourably with its peers. The operating profit for 2009
amounted to CHF 91.2 Million (CHF -6.2 Million).

After deducting deprecation/amortisation and value adjustments of CHF
13.5 Million (CHF 2.9 Million) and tax expenses of CHF 11.1 Million
(CHF -5.1 Million), the Valartis Group posted a net profit excluding
minority interests of CHF 66.6 Million (CHF -4.0 Million). The net
profit attributable to shareholders of Valartis Group AG amounted to
CHF 62.8 Million (CHF 3.3 Million), or CHF 13.39 (CHF 0.67) per
outstanding bearer share.

Solid balance sheet structure After consolidating Valartis Bank
(Liechtenstein) AG on the balance sheet level, the Valartis Group
shows total balance sheet assets of CHF 2.92 Billion at end of 2009
(CHF 1.50 Billion). The Valartis Group´s equity rose to CHF 356.8
Million at the end of 2009 (CHF 285.9 Million). Excluding minority
interests of CHF 70.4 Million (CHF 47.0 Million), the shareholders´
equity of Valartis Group AG amounted to CHF 286.3 Million (CHF 238.9
Million), or CHF 62.9 (CHF 48.5) per outstanding bearer share.

Unchanged dividend proposed The Board of Directors of Valartis Group
AG will propose to the Shareholders´ Meeting of 4 May 2010 an
unchanged dividend of CHF 2.5 Million, or CHF 0.50 per bearer share.
This will support the continued dynamic development of the group in
an environment that continues to offer many growth opportunities.

Dates and information Press conference 13 April 2010,
8.30 a.m. Widder Hotel, Zurich Shareholders´ Meeting 4 May
2010, 5.00 p.m. World Trade Center,Zurich

end of ad-hoc-announcement ==========================================
====================================== The 2009 Annual Report can be
downloaded as a PDF from our Website: 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
Börsen: SIX Swiss Exchange / official market