EANS-Adhoc: Bank Sarasin + Cie AG / Sarasin Group comes to a temporary halt on its growth path

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23.02.2012

Assets under management decline to CHF 96.4 billion owing to negative
market performance - CHF 1.5 billion of net new money received -
Solid earnings from core business - Adjusted Group profit comes to
CHF 111.7 million - Shareholder realignment progresses as planned

Growth slows: negative market performance reduces client assets The
Sarasin Group saw the growth of net new money slow significantly in
2011, which meant this growth did not compensate for the negative
effect of the market environment, which totalled CHF 8.5 billion.
While CHF 3.9 billion flowed into the Group in the first half of
2011, the second half brought a decline (CHF -2.4 billion) that can
be attributed to several factors. As predicted, the Sarasin Group
experienced outflows in response to its rigorously implemented
strategy focusing on tax-compliant assets. Furthermore, the popular
initiative for a national inheritance tax has already started to have
an effect due to a retroactive clause - even before it has come into
force. In addition, a number of large institutional investors decided
not to renew their fixed-term deposits due to the adverse market
situation, and withdrew their money towards the end of the year as
part of their cash flow planning. Conversely, new clients showed a
great reluctance to commit funds in the second half of 2011 because
of media speculation about the change in Bank Sarasin's shareholder
structure. Total net new money growth for the full year under review
amounted to CHF 1.5 billion, equivalent to a growth rate of 1.4%.
Assets under management at the Sarasin Group at the end of 2011 stood
at CHF 96.4 billion.

40 percent of clients domiciled in Switzerland Around 40% of the
Sarasin Group's clients come from its home market of Switzerland. The
percentage of clients domiciled in Europe (excluding Switzerland) is
only slightly lower, at 37%. There has been a slight increase in the
proportion of clients based in the high-growth regions of the Middle
East and Asia. They now account for 18% of the total. As a result of
the Group´s focus on the regions of Europe, the Middle East and Asia,
the percentage of clients from other parts of the world has continued
to shrink and now lies at 5%.

Christoph Ammann, Chairman of the Board of Directors of Bank Sarasin
& Co. Ltd "The transaction between Rabobank and the new majority
shareholder Safra is an important milestone for our bank. As a
majority shareholder with a long-term view and ample capital funding,
Safra creates stability and confidence for our clients as well. The
wave of consolidation that has gripped Swiss Private Banking is
expected to continue apace. As far as we are concerned, however,
Safra's decision already gives us the security we need."

Joachim H. Straehle, CEO of Bank Sarasin & Co. Ltd "Despite an
environment characterized by ongoing uncertainty, we do not plan any
fundamental change of direction. We are convinced that our focus on
sustainability and tax-compliant assets will pay off in the long run
and that with the backing of Safra as a well-capitalised majority
shareholder we can look forward to exciting prospects. We are
systematically pursuing our existing strategy. Our mid-term targets
remain unchanged."

Solid earnings quality in the core business Considering the smaller
business base and the reluctance of clients to engage in any activity
due to market turbulence in the second half of the year, the
operating result is satisfactory. Net interest income was 1% higher
at CHF 148.9 million. Income from commission and service fee
activities shrank by 4% to CHF 440.7 million. Income from trading
operations rose sharply by 57% to CHF 93.8 million. This was because
there was no longer any negative impact in treasury business or
proprietary trading created by hedging transactions against rising
interest rates. Nor was there a negative currency translation effect.
Income generated by subsidiaries from trading in foreign currency and
currency options was higher as well. The Sarasin Group´s operating
income during the year under review was practically unchanged at CHF
686.2 million (2010: CHF 690.6 million).

Comparability of operating performance requires adjustment for
one-off effects Internal and external expenses incurred in connection
with the intended sale of Rabobank's majority stake came to around
CHF 10 million. A restructuring in Private Banking created one-off
costs of CHF 2.5 million. In addition, Bank Sarasin decided, in
accordance with the principle of prudence, to completely write off
the remaining intangible assets (originally to be amortised over
time) for the stake in bank zweiplus ltd. This corresponds to an
extraordinary impairment charge of CHF 11.5 million, which will allow
ordinary write-downs to be reduced by CHF 1.3 million per year in
future. There was no change to the bank zweiplus goodwill carried on
the balance sheet.

Results-neutral sale of financial stake in Neue Zürcher Bank Bank
Sarasin sold its stake in Neue Zürcher Bank (NZB) back to NZB in
December 2011. At the end of 2009 Bank Sarasin had already revalued
its 40% financial stake in NZB Holding in accordance with the
principle of prudence, and impaired the value of the stake by CHF
70.2 million. The sale had no influence on the Bank´s 2011 business
results.

Performance-oriented HR policy There was a further expansion in the
workforce during the year under review. While in Switzerland
mid-office and back-office operations were strengthened, the CRM team
outside Switzerland was significantly expanded with the recruitment
of 20 new advisors. The planned recruitment of around 50 new CRMs
(gross figure) and the consistently applied performance-oriented HR
policy led to the desired further improvement in the quality of the
CRM team. Professionalism, quality and an awareness of the needs of
an expanding international clientele are the hallmarks of the bank´s
client advisors. These characteristics should facilitate the
acquisition of new business over the next few years. The total number
of CRMs across all of the Sarasin Group's locations showed a net
increase of 3% during the reporting period, from 434 to 446.

Moderate cost increase despite continuing investment in growth
Personnel expenses increased by 4%, mirroring the increase in
headcount, to reach CHF 382.2 million (adjusted) in the period under
review. Despite the constant level of international marketing
activities, combined with investment in new locations and the further
development of systems and processes, general administrative expenses
fell by 2% to CHF 133.6 million (adjusted). Depreciation and
write-offs increased by 9% to CHF 33.5 million, mainly because of the
investments made during the past year in various Group IT systems, as
well as the rollout of Avaloq in Asia. Valuation adjustments,
provisions and losses remained more or less at the previous year´s
level. Overall, the Sarasin Group´s adjusted operating expenses
during the reporting period showed a moderate rise of 2% to CHF 515.8
million (2010: CHF 505.2 million).

The cost-income ratio increased to 80.0%. The adjusted Group result
fell 10% to CHF 111.7 million. The adjusted return on equity came to
8.7%. The equity ratio was virtually unchanged at 7.2% as at
31.12.2011. The BIS Tier 1 ratio, defined as core capital as a
percentage of risk-weighted assets, came to a solid 15.6% at year-end
2011, meaning that the Group already fulfils the new standards. The
Sarasin Group has no Greek, Irish or Portuguese government bonds on
its books, and only very little Italian or Spanish sovereign debt.
Neither does it have any outstanding loans to Greek, Italian,
Portuguese or Spanish banks. It has just one outstanding loan, a very
small one, to an Irish bank.

Realignment of shareholders proceeds according to plan Work on the
project to complete the sale of Rabobank´s majority shareholding in
Bank Sarasin to Safra is progressing as planned. The first approvals
of the transaction from regulatory bodies have been received. The
transaction should be completed by mid 2012.

Annual General Meeting: Motions proposed by the Board of Directors
The Board of Directors will submit a proposal to shareholders at the
Annual General Meeting of 26 March 2012 to allocate the entire profit
to the general statutory reserve. The Board also intends to submit a
proposal for an exceptional payment to be made to shareholders. This
proposal will be made at an extraordinary general meeting to be held
once the sale of Rabobank´s shareholding to Safra has been completed
and Safra has made its mandatory tender offer to public shareholders.

Pim W. Mol's term of office as a Board member is scheduled to end at
the Annual General Meeting on 26 March 2012. In view of Safra's
planned acquisition of Rabobank's majority shareholding, the Board of
Directors proposes Pim W. Mol for re-election for a term of office
lasting only until the closing of the transaction. Elections of the
representatives of the new majority shareholder Safra will be held as
part of a general re-election of the Board of Directors at an
Extraordinary General Meeting to be convened after the closing of the
transaction.

Outlook: return to faster growth - appointment of 75 additional
relationship managers Despite the still subdued market environment,
the Group will stick firmly to its growth strategy. This focuses on
selected markets in Europe, the Middle East and Asia, with potential
assets under management of CHF 3 and 5 billion per country in the
mid-term. This volume allows the Bank to comprehensively service the
markets while at the same time maintaining cost efficiency.

The Sarasin Group plans to recruit a total of 75 extra CRMs (net)
over the financial year 2012 in order to further improve both the
quality and quantity of client advisors in our bank. Accordingly the
bank expects to return to its planned growth trajectory. It does
expect to see some more outflows of money in 2012 owing to the
implementation of its strategy focusing on tax-compliant assets. But
at the same time Bank Sarasin believes that the acquisition of the
majority shareholding by Safra will allow the further development of
its already strong position as an independent Swiss private bank, the
further strengthening of its CRM team and, therefore, the successful
acquisition of new client assets.

Mid-term targets remain unchanged By 2015 Sarasin Group aims to
manage clients assets totalling CHF 150 billion
(performance-adjusted). At the same time, operating results should be
increased thanks to a significant improvement in the gross margin.
Further efficiency gains should lead to a substantial reduction in
the cost-income ratio. Overall, the Sarasin Group continues to strive
for solid growth while maintaining a strong capital base.

Bank Sarasin & Co. Ltd´s 2011 Annual Report is available from today,
23 February 2012, 7.00 a.m., at www.sarasin.com.

Further inquiry note:
Dr. Benedikt Gratzl
Head Corporate Communications
T.: +41(61) 277 70 88
Benedikt.Gratzl@sarasin.ch

end of announcement euro adhoc
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issuer: Bank Sarasin + Cie AG
Elisabethenstr. 62
CH-4002 Basel
phone: +41(61)277 77 77
FAX: +41(61) 272 02 05
mail: info@sarasin.ch
WWW: http://www.sarasin.ch
sector: Banking
ISIN: CH0038389307
indexes: SPIEX, SPI ex SLI
stockmarkets: official dealing/general standard: SIX Swiss Exchange
language: English