Bellevue | Küsnacht, 23.02.2015.
Group net profit up 71% to CHF 11.1 mn. Assets under management at Bellevue Asset Management up more than 75% to CHF 4.7 bn thanks to strong performance-driven gains and Adamant acquisition. Operating profit at Asset Management triples to CHF 14.2 mn. Bank am Bellevue’s operating profit CHF 2.3 mn. Entire profit for the year to be paid out with the proposed dividend of CHF 1.00 per share. Dr. Mirjam Staub-Bisang nominated for election as a new director; Chairman Walter Knabenhans is not standing for re-election.
Global stock markets extended their upward trends in 2014. Even the bouts of turbulence experienced during the final quarter of the year were unable to change the general direction. Developments in the market environment and the global economy were generally positive, despite considerable divergence at the regional and sectoral level.
As the financial and currency crises gradually receded from the spotlight, geopolitical hot spots flared up, for example in Ukraine and Syria. Plunging oil prices, the ruble’s woes and persisting ultra low interest rates also stoked investor uncertainty and skepticism and kept trading volumes in Swiss stocks at low levels. Stubbornly low yields on fixed income and money market investments did little to boost demand for higher risk equity investments.
Sharp increase in profits thanks to sustained income growth at Asset Management
Despite this environment of ambivalence, Bellevue Group, a financial services boutique with a focus on stock investing, increased its consolidated net profit significantly. Net fee and commission income – the Group’s main source of income – was increased by 33% to CHF 50.0 mn during the year under review. Total operating income rose to CHF 52.8 mn (previous year: CHF 43.5 mn). Bellevue Asset Management was instrumental in achieving this improvement thanks to the renewed outperformance of its investment vehicles in the biotechnology and healthcare sectors and the acquisition of Adamant Biomedical Investments AG. Its overall operating income climbed 65% y-o-y. Bank am Bellevue, on the other hand, experienced a 17% decline in operating income. This was partly attributable to the CHF 2.3 mn reduction in dividend income from the bank’s interest in SIX Group compared to 2013. Total Group operating expenses increased by 10% to CHF 39.5 mn (previous year: CHF 35.9 mn). Consolidated operating profit for Bellevue Group amounted to CHF 13.3 mn, an increase of 74% compared to the previous year (CHF 7.7 mn). After consideration of seed capital, depreciation and amortization, impairments and taxes, Group net profit showed a y-o-y gain of 71% to CHF 11.1 mn (previous year: CHF 6.5 mn). Bellevue Group’s employees numbered 78 in 2014, measured on an average FTE basis (previous year: 80).
“The clearly positive trend in our operating performance is proof that our strategy of growing the Group’s recurring income streams is steadily paying off. Higher assets under management and the outstanding product quality offered by Asset Management provide a sound basis for future earnings growth. At Bank am Bellevue, the key objectives are to increase its brokerage earnings and to make better use of its existing capital and reserves,” comments Urs Baumann, CEO of Bellevue Group, with regard to the 2014 results.
Asset Management: Income and assets under management at new record high
The acquisition of Adamant Biomedical Investments AG further strengthened Bellevue Asset Management’s international leadership and competency profile as a specialist for biotech and healthcare investment strategies. Thanks to the additional Adamant-managed assets of CHF 870 mn and the strong performance-driven gain of CHF 1.1 bn at BB Biotech, total assets under management rose to a record high of CHF 4.7 bn. BB Biotech was also one of the market’s top performing stocks again as its share price advanced +75.1% (in CHF) over the year, handily beating its benchmark with an excess performance of 23 percentage points. The BB African Opportunities Fund also performed well and passed the CHF 100 mn threshold during the past year. The various investment fund products offered by the Asset Management unit attracted some CHF 360 mn in new money. That inflow was largely offset, however, by the drawdown of seed capital and redemption activity. A strong investment performance and the acquisition of Adamant were the drivers behind the three-fold increase in the Asset Management unit’s operating profit to CHF 14.2 mn (previous year: CHF 4.3 mn).
Bank am Bellevue: Good results in Corporate Finance – low volumes in Brokerage
Corporate Finance generated much higher income thanks to its participation in the initial public offerings of the Swiss manufacturing company SFS Group and the biotech firm Molecular Partners, and to its lead role in several M&A transactions. Its earnings growth was overshadowed by a slowdown in the Brokerage business, however. Organizational adjustments and personnel constraints in the Research and Sales departments posed special challenges during the year under review. Despite an approximately 6% drop in operating expenses due to a reduction in staff, Bank am Bellevue’s operating profit slumped by about 50% to CHF 2.3 mn (previous year: CHF 5.0 mn). Factoring out the special dividend received from SIX in 2013, however, ordinary operating profit is only about 11% less than in the previous year. During the course of routine testing of intangible assets as required by IFRS, additional amortization in the amount of CHF 3.1 mn was recognized. This resulted in an after-tax loss of CHF 1.5 mn for the bank. This revaluation is merely an accounting adjustment and has no impact on operating activities. Bank am Bellevue continues to operate with a high level of regulatory capital and a large cash position. Its CET 1 ratio of 32.2% (previous year: 41.5%) remains very high.
Exceptionally strong capital base allows entire profit for the year to be paid out as dividends
The impressive net profit figure combined with the Group’s very strong equity base of CHF 150 mn allows the company to maintain its generous dividend policy. The Board of Directors will propose a dividend of CHF 1.00 per registered share at the Annual General Meeting, which means the entire consolidated net profit for the year is to be paid out to shareholders in the form of dividends. Given its CET 1 ratio of 21.6% (previous year: 32.5%), the Group’s eligible capital and reserves will remain well above the minimum regulatory capital requirements even after the proposed dividend payout.
Changes in the Board of Directors
Walter Knabenhans, Chairman of the Board of Directors since 2006, is not standing for re-election at the next General Meeting. During his time of service Bellevue Group successfully navigated the turmoil in the wake of the global financial crisis with proactive strategic risk policies and the business activities of the Asset Management unit were sustainably repositioned. The Board of Directors thanks Walter Knabenhans for his sagacious guidance and his valuable contribution to the Group’s consistently profitable growth over the years. The current director Dr. Thomas von Planta will be proposed as new chairman of the board.
Dr. Mirjam Staub-Bisang, founder and Chief Executive Officer of Independent Capital Group AG, will be nominated for election as a new member of the Board of Directors. Mirjam Staub-Bisang has many years of experience in the financial industry, especially in asset management.
Contact:
Media / Investor Relations: Daniel Koller, CFO
Telephone +41 44 267 67 00, Fax +41 44 267 67 01, ir@bellevue.ch
