EANS-Adhoc: Bank Sarasin + Cie AG / Half Year Results 2012 of Bank Sarasin & Co. Ltd: Structural pressure on earnings calls for a cautious approach

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6-month report

30.07.2012

Positive net new money inflow of CHF 0.5 billion - assets under
management rise to CHF 99.1 billion - lower asset base and cautious
client investment activity reduce operating income by 9% to CHF 330.3
million - decline of 29% in group result to CHF 48.2 million -
medium-term goals under review

Eurozone debt crisis escalation in the second quarter of 2012 did not
entirely eclipse the first quarter's positive momentum in financial
markets: equity markets finished the first half of the year in
positive territory overall, with interest rates remaining at record
lows. As a result, market performance made a positive contribution of
CHF 1.9 billion to the Sarasin Group's asset base. A slight weakening
of the Swiss franc, especially against the US dollar, added positive
currency translation effects of CHF 0.3 billion. The Sarasin Group
achieved positive net new money growth of CHF 0.5 billion. At the end
of June 2012, client assets managed by the Sarasin Group amounted to
CHF 99.1 billion.

Income down in response to reduced asset base and cautious client
investment activity The Sarasin Group's operating income was 9% lower
than the prior-year figure, at CHF 330.3 million. On the one hand,
the revenue trend reflects cautious client investment activity, due
largely to growing uncertainty created by the escalation of the
eurozone debt crisis. On the other hand, the average client assets on
which Sarasin's business performance and revenues are based were
significantly below the prior-year level. Income from commission and
service fee activities declined by 13% to CHF 202.3 million. Net
interest income was more robust, but still fell by 6% to CHF 70.3
million. Income from trading operations amounted to CHF 46.1 million
(-10%). Ordinary trading activities on behalf of clients along with
income from trading in structured products were lower. Other ordinary
results rose to CHF 11.6 million from the sales proceeds of financial
investments.

Joachim H. Straehle, CEO of Bank Sarasin & Co. Ltd "The Sarasin
Group's financial performance for the first half of 2012 reflects the
macroeconomic environment. In addition, the implementation of our
strategy focusing on tax-compliant assets was of particular
importance for us in the reporting period. After completion of its
implementation the Sarasin Group will be in an even stronger position
for the future. With Safra as a new, well-capitalised majority
shareholder, Bank Sarasin is assured financial and operational
stability."

Lower expenses despite expansion of workforce and locations The
Sarasin Group's operating expenses were 1% lower than in the first
half of 2011, finishing at CHF 259.1 million. Personnel expenses were
unchanged at CHF 194.3 million during the reporting period. The
headcount increased by 16 since beginning of the year. General
administrative expenses were 4% lower, at CHF 64.7 million. The
expansion of new locations - along with the extension of various
activities at existing locations - was more than offset by cost
savings in other areas. Depreciation and write-offs decreased by 5%
to CHF 15.9 million as a number of charges on various IT investments
ended. The figure for value adjustments, provisions and losses was
CHF 1.0 million.

Capital strength unchanged - decline in group result Due to declining
revenues, the cost income ratio increased to 83.3% (1H 2011: 76.4%).
The group result was 29% lower, at CHF 48.2 million, but was still
higher than the adjusted figure for the second half of 2011. At CHF
19.3 billion, the total assets carried on the balance sheet of the
Sarasin Group were 10% higher than at the end of 2011. The Bank's
liquidity was further improved. Cash and cash equivalents increased
from CHF 192 million to CHF 1.4 billion. There was only a modest
increase of CHF 29 million in loans to clients. The net profit for
2011 has been allocated to the profit brought forward, which resulted
in a rise in shareholders' equity to CHF 1.4 billion. The equity
ratio was virtually unchanged at 7.0% on 30 June 2012 (31.12.2011:
7.2%). The BIS Tier 1 ratio, defined as core capital as a percentage
of risk-weighted assets, comes to 15.5% on 30 June 2012.

Consistent implementation of the strategy for avoiding non
tax-compliant assets Bank Sarasin is working hard to implement its
strategy for avoiding non tax-compliant assets and intends to
terminate dealings with any client for whom the Tax Due Diligence
Process cannot be completed before the end of 2012 or who refuses to
handle their assets in accordance with the tax rules applicable in
their country of domicile. For existing international clients of Bank
Sarasin in Switzerland, a comprehensive process is being introduced
whereby the Bank analyses the tax situation of the assets deposited
by the client. The Process was first developed and defined for
Booking Center Switzerland in 2011 and has been in place ever since.

Various clearly defined groups of clients are suspended from the Tax
Due Diligence Process: the Process does not affect private clients
domiciled in Switzerland, because of the duty of self-declaration for
all Swiss taxpayers, and a withholding tax. In addition, Bank Sarasin
has decided - in light of various amendments initiated at political
level - to exclude from the Process any client domiciled in a country
with which Switzerland has negotiated a double taxation agreement
that provides for a final withholding tax, or which has recently
initiated tax negotiations in this area. If the agreements do not
come into force, these clients will be subject to the Tax Due
Diligence Process in accordance with Bank Sarasin's strategy for
avoiding non tax-compliant assets.

Outlook for 2H 2012: cost-cutting measures introduced, medium-term
goals under review After the difficult business performance in the
first quarter of 2012, the Management has already introduced an
initial package of immediate cost-cutting measures. On the general
administrative expenses front, budgets were cut. New CRMs will still
be recruited in order to acquire new clients, while at the same time
improving efficiency in all areas of the Group. Given this backdrop,
the Board of Directors and the Management will be reviewing the
existing medium-term goals. With investors still standing on the
sidelines, the Sarasin Group expects new money growth to remain
positive, but at a slightly slower pace than in previous years.

The Half Year Report 2012 of Bank Sarasin & Co. Ltd can be downloaded
from www.sarasin.com from 7 a.m. onwards on 30 July 2012.

Further inquiry note:
Dr. Benedikt Gratzl
Head of 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
Elisabethenstrasse 62
CH-4002 Basel
phone: +41 (61) 277 77 77
FAX: +41 (61) 272 02 05
mail: info@sarasin.ch
WWW: www.sarasin.ch
sector: Banking
ISIN: CH0038389307
indexes: SPIEX, SPI ex SLI
stockmarkets: official dealing/general standard: SIX Swiss Exchange
language: English