Schroder & Co Bank AG | Annual Report 2014
4 2014 2014 2014 2014 20
2014 2014 2014 2014 2014
4 2014 2014 2014 2014 20
2014 2014 2014 2014 2014
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Content
Chairman’s Statement
5
Balance Sheet
6
Off-Balance Sheet Transactions
7
Profit and Loss Account
8
1. Comments on Business Activities
10
2. Principal Accounting Policies and Valuation Principles
12
3. Information on the Balance Sheet
15
4. Information on Off-Balance Sheet Transactions
25
5. Information on the Profit and Loss Account
28
Report of the Statutory Auditor
29
Board and Senior Staff
30
Adresses32
3
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Chairman’s Statement
In 2014, Schroder & Co Bank AG achieved a good result, in
The Board of Directors proposes to the General Meeting the
part thanks to some non-recurring items.
distribution of an ordinary dividend of CHF 7 million. It is also
proposing that CHF 0.4 million be allocated to the general
During the year, considerable progress was made by the
legal reserve, CHF 10.5 million to other reserves and that
new CEO in forming a new management team and adapting
the profit remaining of CHF 10 290 be carried forward. As a
our business model and services.
result, the Bank’s reported equity capital after payment of
the dividend will rise to CHF 127.7 million.
The assets administered by the Bank increased significantly
from CHF 36.2 billion to CHF 49 billion following the
On behalf of the Board of Directors, I would again like to
successful integration of Cazenove Capital Management’s
express my thanks to all employees for their hard work and
clients in the UK on 1 August 2014.
commitment through the past year.
Philip Mallinckrodt
Chairman of the Board of Directors
5
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Balance Sheet
as of 31 December 2014
CHF
Notes31.12.1431.12.13
Assets
Liquid assets
909 585 517 551 592 831
Due from banks
866 348 711 992 898 001
Due from clients
3.1
169 578 525 204 787 440
Financial investments
3.2, 3.6
69 095 808 117 081 617
Participations
3.3
1 100 000 1 100 000
Fixed assets
3.4
62 040 162 036
Accrued income and prepaid expenses
13 349 441 15 850 055
Other assets
26 884 031 5 791 514
3.5
Total assets
2 056 004 073 1 889 263 494
Total due from Group entities and
significant shareholders
12 803 391
140 647
Due to banks
27 913 349 19 021 512
Due to clients
1 828 997 744
1 675 881 749
Accrued expenses and deferred income
20 936 877
15 752 125
Liabilities and shareholders’ equity
Other liabilities
3.5
12 266 217
8 908 699
Valuation adjustments and provisions
3.8
31 179 596
49 727 182
Share capital
3.9, 3.10
60 000 000
60 000 000
General legal reserve
3.10
28 700 000
28 700 000
Other reserves
3.10
28 100 000
28 100 000
Retained earnings brought forward
3 172 226
18 018
Net income
14 738 064
3 154 209
Total liabilities and shareholders’ equity
2 056 004 073
1 889 263 494
13 756 411
15 539 193
Total due to Group entities and
significant shareholders
6
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Off-Balance Sheet Transactions
as of 31 December 2014
CHF
Notes31.12.1431.12.13
Contingent liabilities
3.1, 4.1
15 381 519 21 251 052
Irrevocable commitments
3.1
2 848 000 2 984 000
Derivative instruments
4.2
– positive replacement values
25 680 036 5 200 325
– negative replacement values
9 314 718 5 533 473
– notional amounts
1 516 860 348 931 217 457
530 848 459
566 887 848
—
5 404 244
Fiduciary transactions
4.3
– Fiduciary placements with third parties
– Fiduciary placements with Group entities
– Fiduciary credits
7
2 881 295 2 578 622
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Profit and Loss Account
for the period from 1 Januar y to 31 December 2014
CHFNotes 2014 2013
a ) Revenues and expenses from ordinar y banking activities
Results from interest activities
– Interest and discount income
5 496 406 5 444 937
– Interest and discount income from financial investments
1 428 841 2 225 187
– Interest expenses
(1 644 928)
(1 187 259)
Total
5 280 319 6 482 865
– Commission income on lending activities
464 036 401 634
– Commission income on securities and investment transactions
47 229 677 43 940 091
– Commission income on other services
1 021 069 1 166 521
– Commission expenses
(10 648 455) (11 354 682)
Total
38 066 327 34 153 564
5.1
7 414 273 4 835 628
– Income from administrative services provided by the Service Centre
30 079 402 19 161 576
– Other ordinary expenses
(13 760)
(1 353 800)
Total
30 065 642 17 807 776
(50 699 949)
(40 267 949)
Results from commission and service fee activities
Results from trading operations
Other ordinary results
Operating expenses
– Personnel expenses
5.2 – Other operating expenses
5.3
(17 439 697) (19 509 938)
Total
(68 139 646) (59 777 887)
Gross profit
12 686 915 3 501 946
8
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
CHFNotes 2014 2013
b ) Net income
Gross profit
12 686 915 3 501 946
3.4
(99 996) (190 057)
Valuation adjustments, provisions and losses
(4 586 241) (17 915 935)
Results before extraordinary items and taxes
8 000 678 (14 604 046)
11 525 244 18 343 295
Depreciation and write-offs of non-current assets
Extraordinary income
5.4
Taxes
(4 787 858) (585 040)
Net income
14 738 064 3 154 209
14 738 064 3 154 209
c ) Allocation of retained earnings
Net income
Retained earnings brought forward
3 172 226 18 018
Total
17 910 290 3 172 227
Retained earnings at the end of the period
17 910 290 3 172 227
(7 000 000)
—
Allocation of retained earnings
– Ordinary dividend
– Allocation to general legal reserve
(400 000)­­—
– Allocation to other reserves
(10 500 000)
—
Retained earnings carried forward
10 290 3 172 227
9
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
1. Comments on Business Activities
General
Risk management
Schroder & Co Bank AG is a wholly-owned subsidiary of
Risk Assessment
Schroders plc, London. In addition to the head office in
The Board of Directors re-assesses the Bank’s risks each
Zurich the Bank has a branch office in Geneva.
year (in particular with respect to credit, market, liquidity
and operational risks). The effectiveness of the limit system
The business activities of the Bank are described below.
and the controls are also evaluated. The Organisation and
There are no further business activities that would signifi-
Management Regulations ensure that the Board of Directors
cantly impact the Bank’s risk and income situation.
is always adequately informed of the risk situation and that
the authority for decisions in this area remains in the Board
Fee and commission business
of Directors’ responsibility.
The Bank’s principal line of business is investment management for both domestic and foreign clients.
Details on Risk Management
The risk management procedures and the ongoing mo-
Asset management, trustee, custodian and credit operations
nitoring is delegated to committees. The Asset & Liability
are the main contributors to commission and service fee
Management Committee is responsible for monitoring
revenues.
market risk, interest rate risk and liquidity. This includes the
selection and monitoring of banks, brokers and custodians.
Banking activities
In addition it monitors the adherence to the capital and large
The Bank’s main balance sheet activities are the client-len-
exposure regulations.
ding business and interbank operations.
The interest rate risks arising out of the balance sheet and
Loans to clients are mainly granted on the basis of Lombard
off-balance sheet positions are monitored and managed
coverage.
centrally. They are managed using calculations of the net
present value effect on shareholders equity and the net
Trading activities
income effect under various interest rate assumptions. The
Trading comprises mainly trading for the accounts of clients
ability to meet obligations is monitored and ensured within
in interest rate products, securities and foreign exchange,
the framework defined in the bank law and by the Group.
and to a limited extent proprietary trading.
Operational risks are managed through internal organisation
and control procedures. Internal audit regularly audits the in-
Service Centre Zurich – Insourcing business
ternal controls and issues reports to the Board of Directors.
The Service Centre Zurich renders securities administration,
funds transfer, accounting and IT services centrally. These
The credit risks are subject to specific monitoring by the
services are being offered to other Schroder Group
Credit Committee and the Credit Department. Loan collate-
companies (currently Schroder & Co. Limited, London,
ral is valued at market value. The collateral rates are set forth
Schroders (C.I.) Limited, Guernsey, Schroder & Co. (Asia)
in predefined procedures.
Limited, Singapore and Schroder Investment Management
(Switzerland) AG), Zurich. These services are charged at
market rates.
10
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Outsourcing
Staff
The Bank has an outsourcing agreement with the company
At the end of the business year the Bank had 179 full- and
Biveroni Batschelet Partners AG (BBP) for running the inter-
28 part-time employees, for a total of 207 (or 199 full-time
bank applications SIC, EuroSIC, Swift and Secom. BBP’s
equivalent positions; previous year: 164).
role is limited to providing electronic access to the abovementioned interbank services.
Capital Adequacy
Basel III
Basel III
CHF 1000
2014
2013
Adjusted eligible capital
118 872
– thereof for large exposure­­­—
Remaining eligible capital
115 718
2 307
118 872
113 411
Total minimum capital requirement
44 735
48 088
– thereof for credit risk
30 555
36 623
– thereof for valuation adjustments
237
96
– thereof for non-counterparty related risks
5
13
– thereof for market risk
3 584
446
– thereof for operational risk
10 354
10 910
Capital requirement coverage ratio I
266 % 241%
Capital requirement coverage ratio II
266 % 236 %
11
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Basis of preparation
Interest accrual is suspended if recovering interest is so unli-
The accounts are prepared in accordance with the Swiss
kely that an accrual no longer makes sense.
Code of Obligations, the Swiss Federal Law Governing
Banks and Savings Banks, including the implementing ordi-
If an outstanding loan is classified as entirely or partially irre-
nances, directives, and the Swiss Financial Market Supervi-
coverable or if a renunciation of outstandings is granted, the
sory Authority’s (FINMA) regulations and directives.
outstanding loan is written off by debiting the respective loss
provision.
All transactions are recorded in the Bank’s books at the
trade date and valued from that date for the profit and loss
Troubled loans are reclassified as being of full value when
account. Money market and foreign exchange transactions
outstanding amounts of capital and interest are again paid
are reported off-balance sheet until the settlement date.
on time according to the conditions fixed by contract.
From the settlement date, these transactions are included in
the balance sheet.
Securities and precious metals trading portfolio
Actively traded positions which are either traded on a recog-
Business risks are covered by adequate value adjustments
nised stock exchange or for which a representative market
and provisions.
exists are valued at market value. Refinancing costs are
charged against trading income. All other trading positions
As allowed by Article 23a, paragraph 5 of the Swiss Banking
are valued at the lower of cost or net realisable value.
Ordinance, consolidated financial statements have not been
prepared.
Financial investments
Securities held to generate income in the medium term are
Detailed principles
valued at the lower of cost or net realisable value. Realised
The most important accounting policies and valuation prin-
profits or losses from sales of these securities are included
ciples are shown below.
within “Results from the sale of financial investments”. Unrealised profits or losses are included within “Other ordinary
Liquid assets, receivables from banks and liabilities
income” or “Other ordinary expenses”. Debt securities to
These items are stated in the balance sheet respectively at
be held until maturity are valued at cost. Any premium or
their nominal value or at cost less any individual valuation
discount is amortized over the life of the security. Precious
adjustments required for impaired assets.
metals are valued at market value.
Loans
Participations
Impaired loans, i. e. loans that are unlikely to be repaid by the
Participations are stated at cost, less any impairment.
debtor, are valued individually. A specific provision is made
for the estimated shortfall against nominal value in capital
Tangible fixed assets
and interest. Off-balance sheet exposure, such as commit-
Tangible fixed assets are valued at cost, less accumulated
ments, guarantees or derivative instruments, are also taken
depreciation. Depreciation is calculated using the straight-
into consideration for this valuation. Loans are considered
line method based on useful life.
as impaired at the latest when the contractual payments for
capital and/or interest are overdue for more than 90 days.
12
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
The recoverability is reconsidered each year. Should the
Taxes
useful life change or the value decrease upon reconsidering
Current tax is generally tax on profit and recurs on an annual
the recoverability, the remaining book value will be depre-
basis. One-off or transaction taxes are not considered as
ciated according to the revised plan, or an extraordinary de-
current tax and are charged elsewhere in the profit and loss
preciation can be made. In accordance with tax regulations,
account.
smaller items may be charged directly to the profit and loss
account.
Current tax on earnings is included as expense of the period in which the earnings are recognized. Tax liabilities are
Useful life of the various fixed assets:
shown under “Accrued expenses and deferred income”.
Information technology (hardware and software): 3 years
Cars: 4 years
Derivative financial instruments
Derivative financial instruments are used by the Bank for
Foreign currencies
asset and liability management and for securities and foreign
Transactions in foreign currencies are translated at the
exchange dealing. They are used both for proprietary trading
mid exchange rates ruling at the daily balance sheet date.
and for trading for the accounts of clients. Valuation is in
Foreign exchange positions in the balance sheet are trans-
accordance with the purposes for which they were originally
lated at the closing exchange rates at the balance sheet date
acquired.
and taken to the profit and loss account. Forward foreign
1. Derivative trading positions
exchange transactions are valued at the forward market
rates ruling at the balance sheet date. The result of the
These derivatives are marked to market. Positive and
negative replacement values are included within “Other
revaluation is taken to the profit and loss account.
assets” or “Other liabilities”. Profits and losses are included within “Result from trading operations”.
The main conversion rates applied are listed below:
2014
2. Derivative financial investments
2013
EUR
1.20241.2254
These derivatives are acquired by the Bank instead of
GBP
1.54781.4724
direct investments. In accordance with the accounting
USD
0.99360.8892
policy for financial investments, these positions are
JPY
0.82890.8460
valued at the lower of cost or net realisable value. Any
interest income components are included within “Interest
and dividend income from financial investments”.
Valuation adjustments and provisions
Based on the principle of prudence, the Bank establishes
Realised profits or losses are included within “Result
from the sale of financial investments”.
valuation adjustments and provisions within liabilities for
contingent risks. The valuation adjustments and provisions
3. Derivatives for hedging purposes
may contain undisclosed reserves.
Derivative transactions concluded for hedging purposes
are valued and booked on a basis consistent with the
underlying transactions.
13
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Liabilities to own pension plans
The employees of Schroder & Co Bank AG benefit from
two defined contribution pension plans. The “BVG Stiftung”
grants a minimum of the benefits mandatory by law. The
“Vorsorgestiftung” of Schroder & Co Bank AG grants
benefits for that part of the salary above the limit of the BVG
law. The employer’s contributions according to the defined
contribution pension plans are included within “Personnel
expenses”.
14
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3. Information on the Balance Sheet
3.1 Schedule of collateral for loans and off-balance sheet transactions
CHF 1000
Type of collateral
Mortgage
Other
Without
Total
collateralcollateralcollateral
Loans
Due from clients
—
164 814 4 765 169 579
Total
31.12.14
—
164 814 4 765 169 579
31.12.13
—
185 269 19 518 204 787
Contingent liabilities
—
15 378 4
15 382
Irrevocable commitments
—
—
—
—
Off-balance sheet transactions
Irrevocable commitment to the Swiss
Bankers’ and Securities Dealers’
Deposit Guarantee Association, Basel
—
—
2 848 2 848
Total
31.12.14
—
15 378 2 852 18 230
31.12.13
—
21 231 3004 24 235
Gross
Estimated
Net
Specific
amount
collateralamount
provision
proceeds
Impaired loans
31.12.14
211 3
208 208
31.12.13
36 273 17 162 19 111 19 111
3.2 Financial investments
CHF 1000
Book Value
Book Value
Fair Value
Fair Value
31.12.1431.12.1331.12.1431.12.13
Debt securities and rights
– with the intention to hold to maturity
45 389 65 445 45 437 65 462
– at lower of costs or market —
30 012 —
30 012
Precious metals
23 707 21 625 23 707 21 625
Total
69 096 117 082
69 144 117 099
of which qualify as repos as defined in the liquidity rules
45 437 95 474
15
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.3 Participations
CHF 1000
31.12.14
31.12.13
Without market value
1 100
1 100
Total
1 100
1 100
Additional information on significant participations
Share
Ownership
Ownership
Company Name
Business activities
capital
propor tion
propor tion
Schroder Trust AG, Geneva
Trust and offshore
company administrationCHF 100 000
100%
100%
100%
100%
Schroder Cayman BankBanking services and
and Trust Company Ltd.,
trust and offshore
Cayman Islands
company administrationUSD 633 714
3.4 Assets and participations
CHF 1000
31.12.13
31.12.14
Historical
Accumulated
Book value
Additions
Disposals
Depreciation
cost
depreciation
Book value
Total majority participations
1 100
—
1 100
—
—
—
1 100
Other fixed assets
4 120 (3 814)
162 —
—
(100)
62
Total
5 220 (3 814)
1 262 —
—
(100)
1 162
Fire insurance value of other fixed assets
22 300
Liabilities: future operational lease commitments
17 619
16
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.5 Other assets and other liabilities
CHF 1000
31.12.14
31.12.13
Other assets
Other liabilities
Other assets
Other liabilities
Replacement costs of derivative instruments
25 680 9 315 5 200 5 533
Indirect taxes and stock exchange fees
504 2 566 430 2 561
Other assets and liabilities
700 385 161 815
Total
26 884 12 266 5 791 8 909
3.6 Assets pledged or ceded to secure own liabilities and assets subject
to ownership reservation
CHF 1000
31.12.14
31.12.13
Assets pledged
Effective liability
(Book value)
Own securities
37 259 There are no loans or pension transactions with securities.
17
­16 230
Assets pledged
(Book value)
49 034 Effective liability
—
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.7 Pension plans
CHF 1000
31.12.14
31.12.13
The liabilities due to own pension plans
at the balance sheet date amounted to:
10 961 12 430
According to the pension fund regulations, the employer pays total contributions and benefits equivalent to 15% of the relevant salary whereas the employees contribute
5% of that salary.
Pension plan free funds at the balance sheet date
CHF 1000
31.12.13
31.12.12
Schroder & Co Bank AG BVG Stiftung (mandatory pension plan)
55
53
Schroder & Co Bank AG Vorsorgestiftung (non-mandatory pension plan)
4
3
In 2013 the level of the accounts of the individual plan members was TCHF 29 438.
Contributions to pension funds / pension and related benefits expense
CHF 1000
2014
2013
The Bank’s total contributions to both pension plans for the year amounted to:
4 695 3 932
6 697 5 647
The Bank’s total pension and related benefit expenses (including old age and
survivors’ insurance, disability insurance, unemployment insurance and other
mandatory contributions) for the year amounted to:
18
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.8 Valuation adjustments, provisions and reserves for general banking risks
CHF 1000
Balance
31.12.13
Specific
usage and
reversals
Change in
Recoveries, New provisions
Reversals
Balance
definition of overdue interest,
charged to
credited to31.12.14
purpose (re-
exchange rate
Profit & Loss
Profit & Loss
differencesstatementstatement
classifications)
Loan losses (credit
and country risk)
19 111 (8 146)
—
680 67
(11 504)
208
Other provisions 30 616 (2 849)
—
23
3 182 —
30 972
and provisions
49 727 (10 995)
—
703 3 249 (11 504)
31 180
31.12.13
31 513 (520)
—
1 071
19 174
(1 511) 49 727
Valuation adjustments
A provision is created when the Bank has a present obligation at the time of the establishment of the accounts as a result of a past event which is likely to result in an expected
outflow of resources that can be reliably estimated. On 29 August 2013 the U.S. Department of Justice published its programme for the Swiss bank industry for which the Bank
created provisions within Other Liabilities for a potential penalty and legal costs. The management of the Bank established this provision based on the principles contained in
the DoJ programme and based on the on-going review of relevant accounts as at 31.12.2014 and increased the provision for legal costs. The change in loan losses is mainly due
to provisions which are no longer necessary.
3.9 Capital structure and shareholders
The share capital amounts to CHF 60 million and is split into 60 000 shares of CHF 1000 nominal value each.
At 31 December 2014 all shares are held directly by Schroder Nederland Finance BV, Amsterdam. That company is
ultimately wholly-owned by Schroders plc, London.
On 5 March 2014, respectively on 6 March 2013 Schroders plc was notified pursuant to “FSA’s Disclosure and
Transparency Rule 5.1.2 R” of the following interests of 3 % or more in the ordinary shares:
05.03.2014
06.03.2013
Shares Schroders plc
Stake
Vincitas Limited
60 724 609
26.87%
Veritas Limited
36 795 041
Flavida Limited
60 951 886
Fervida Limited
40 188 706
Harris Associates L.P.
15 969 200
Shares Schroders plc
Stake
60 724 609 26.87%
16.28 %
36 795 041 16.28 %
26.97%
60 951 886 26.97%
17.78 %
40 188 706 17.78 %
7.07%
15 969 200
7.07%
Vincitas Limited and Veritas Limited held their interests as trustees of certain settlements made by members of the Schroder family. The interests of Flavida Limited and Fervida
Limited include interests in voting rights in respect of all the shares in which Vincitas Limited and Veritas Limited are interested as trustees.
19
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.10 Statement of changes in shareholders’ equity (before profit distribution)
CHF 1000
Total shareholders’ equity at the beginning of 2014
Paid-in share capital
60 000
General legal reserve
28 700
Other reserves
28 100
Reserves for general banking risks­—
Retained earnings brought forward
3 172
Total shareholders’ equity at the beginning of 2014
119 972
Movements
Net income 2014
14 738
Total shareholders’ equity at the end of 2014
134 710
Paid-in share capital
60 000
General legal reserve
28 700
Other reserves
28 100
Retained earnings carried forward
20
17 910
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.11 Maturity structure of working capital and liabilities
CHF 1000
At sight
Redeemable
Maturities
Total
upon notice
Up toFromFrom
Beyond
3 months
3 to 12
12 months
5 years
months
to 5 years
Assets
Cash
909 586 Due from banks Due from clients
Financial investments Total 31.12.14
31.12.13
—
—
—
133 904 —
535 581 196 864 14 66 559 63 057 38 948 —
—
909 586
—
—
866 349
1 000 —
169 578
69 096
23 707 —
—
29 923 15 466 —
1 067 211 66 559 598 638 265 735 16 466 — 2 014 609
709 809 102 252 899 470 107 735 47 094 — 1 866 360
24 635 —
3 279 —
—
Liabilities
Due to banks
—
27 914
1 828 997
Due to clients
1 814 127 357 14 513 —
—
—
Total 31.12.14
1 838 762 357 17 792 —
—
— 1 856 911
1 674 771 408 18 836 889 —
— 1 694 904
31.12.13
3.12 Amounts due from and due to affiliated companies as well as loans and exposures
to members of the Bank’s governing bodies
CHF 1000
31.12.14
31.12.13
Due from affiliated companies
2 590
141
Due to affiliated companies
4 667
5 039 Loans and exposures to members of the Bank’s governing bodies
4
216
With related parties the Bank engages in securities and money market transactions and applies interest rates at conditions applicable to third parties. Members of the Board
of Management and of the Board of Directors are granted the conditions and tariffs applicable to staff members of the Bank.
21
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.13 Assets and liabilities by domestic and foreign origin
CHF 1000
31.12.14
31.12.13
Domestic ForeignDomestic Foreign
Assets
Cash
909 586 —
551 593 —
Due from banks
405 917 460 432 314 940 677 958
Due from clients
24 911 144 668 39 540 165 247
Financial investments
54 436 14 660 83 351 33 730
Participations
100 1 000 100 1 000
Fixed assets
62 —
162 —
Accrued income and prepaid expenses
12 830 519 15 314 536
Other assets
9 313 17 570 1 840 3 952
Total
1 417 155 638 849 1 006 840 882 423
Due to banks
717 27 197 9
19 012
Due to clients
313 766 1 515 231 279 475 1 396 407
Accrued expenses and deferred income
20 936 1
15 751 1
Other liabilities
6 870 5 396 6 409 2 500
Valuation adjustments and provisions
31 180 —
49 727 —
Share capital
60 000 —
60 000 —
General legal reserve
28 700 —
28 700 —
Other reserves
28 100 —
28 100 —
Retained earnings brought forward
3 172 —
18 —
Liabilities and shareholders’ equity
Net income
14 738 —
3 154 —
Total
508 179 1 547 825 471 343 1 417 920
22
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.14 Assets by countries / country groups
CHF 1000
31.12.14
31.12.13
Total
in %
Total
in %
Assets
Europe
– Germany
34 123 1.7%
38 516 2.0 %
– United Kingdom
159 276 7.7%
209 650 11.1%
– Switzerland
1 417 155 68.9 %
1 006 840 53.3 %
– Rest of Europe
299 718 14.6 %
483 467 25.6 %
Total Europe
1 910 272 92.9 %
1 738 473 92.0 %
North America
6 060 0.3 %
15 265 0.8 %
Asia
18 438 0.9 %
12 170 0.6 %
Other countries
121 234 5.9 %
123 355 6.6 %
Total
2 056 004 100.0 %
1 889 263 100.0 %
23
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
3.15 Assets by currencies
CHF 1000
31.12.14
Currencies
CHF
EUR
USDPrecious
metals
Other
Total
Assets
Cash
908 606 758 105 —
117 909 586
Due from banks
50 865 152 708 530 813 21 555 110 407 866 348
Due from clients
64 005 54 512 35 281 —
15 782 169 580
Financial investments
30 729 14 660 —
23 707 —
69 096
Participations
1 100 —
—
—
—
1 100
Fixed assets
62 —
—
—
—
62
Accrued income and prepaid expenses
12 496 299 214 —
340 13 349
Other assets
26 568 11 304 —
—
26 883
Total balance sheet assets
1 094 431 222 948 566 717 45 262 FX forward and FX option transactions
189 913 411 673 724 444 —
Total assets
1 284 344 634 621 1 291 161 45 262 126 646 2 056 004
Assets deriving from FX spot,
190 831 1 516 861
317 477 3 572 865
Liabilities and shareholders’ equity
Due to banks
1 285 213 12 198 —
Due to clients
213 620 469 711 945 196 45 262 Accrued expenses and deferred income
20 932 —
4
—
Other liabilities
11 976 —
290 Valuation adjustments and provisions
30 738 —
—
14 218 27 914
155 208 1 828 997
2
20 938
—
—
12 266
—
441 31 179
Share capital
60 000 —
—
—
—
60 000
General legal reserve
28 700 —
—
—
—
28 700
Other reserves
28 100 —
—
—
—
28 100
Retained earnings brought forward
3 172 —
—
—
—
3 172
—
14 738
Net income
14 738 —
—
—
Total balance sheet liabilities
413 261 469 924 957 688 45 262 164 681 333 416 —
147 488 1 499 688
634 605 1 291 104 45 262 317 357 3 555 692
169 869 2 056 004
Liabilities deriving from FX spot,
FX forward and FX option transactions
854 103 Total liabilities
1 267 364 Net position by currency
16 980 16 24
57 —
120 17 173
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
4. Information on Off-Balance Sheet Transactions
4.1 Contingent liabilities
CHF 1000
31.12.14
31.12.13
Credit guarantees
15 382 Irrevocable commitments
—
14 849 6 402
Total
15 382 21 251
4.2 Outstanding derivative instruments
CHF 1000
Positive
replacement
values
Negative
replacement
values
Contract
volume
Foreign exchange / metal instruments
Forward contracts
25 389 9 024 1 508 912
Options (OTC)
291 291 7 948
Total 31.12.14
25 680 31.12.13
5 200 9 315 1 516 860
5 533 931 217
The above outstanding derivative instruments are held for trading purposes. There are no netting agreements in place.
Outstanding derivative instruments by counterparties
CHF 1000
31.12.14
31.12.13
Banks
Positive
replacement
values
Negative
Contract
Positive
replacement
volume
replacement
values
values
18 730 Non banks
6 950 Total
25 680 6 111 1 085 800 3 204 25
2 246 Negative
replacement
values
Contract
volume
2 722 623 890
431 060 2 954 2 811 307 327
9 315 1 516 860 5 200 5 533 931 217
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
4.3 Fiduciary transactions
CHF 1000
31.12.14
31.12.13
Fiduciar y deposits
Fiduciary deposits in CHF
—
4 900
Fiduciary deposits in European currencies
357 041 306 311
Fiduciary deposits in USD
122 246 256 091
Fiduciary deposits in other currencies
51 561 4 990
Total
530 848 572 292
Fiduciar y credits
Fiduciary credits in USD
2 881 2 579
Total
2 881 2 579
Effected fiduciary deposits placed with banks within the Schroder Group at the end of the year amounted to TCHF 0.
26
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
4.4 Funds under management
CHF 1000
31.12.14
31.12.13
Private Banking
Assets in own managed investment funds
10 288 9 959
Assets under discretionary management
1 535 333 1 555 393
Assets subject to other management
5 219 466 4 884 933
Total funds under management Private Banking (incl. double counting)
6 765 087 6 450 285
of which double counting
10 288 9 959
Total funds under management Private Banking (excl. double counting)
6 754 799 6 440 326
Total net inflow / outflow of assets
(125 886)
(110 302)
The Bank does not hold any custody-only assets. Debit interest on current account overdrafts is treated as negative performance, while interest charged on Lombard loans
is a cash outflow. The Bank calculates performance according to the direct method.
4.5 Funds administered by the Service Centre Zurich
CHF 1000
31.12.14
31.12.13
Assets administered banking activities (cf 4.4.)
6 754 799 6 440 326
insourcing for Schroder Group companies
42 281 074 29 776 181
Total assets administered by the Service Centre Zurich
49 035 873 36 216 507
Assets administered in connection with the
The Bank’s Service Centre Zurich renders administrative services to other Schroder Group companies in the areas of custody, operations and finance.
For this insourcing business the Service Centre charges fees which are reflected in the profit and loss account under the position other ordinary income (see explanation
about the Service Centre – insourcing business). Following the integration of the Cazenove Capital Holdings Ltd. clients on 1 August 2014, the administered assets increased
significantly.
27
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
5. Information on the Profit and Loss Account
5.1 Results from trading operations
CHF 1000
2014
2013
Foreign exchange
7 414 4 836 Total
7 414 4 836
5.2 Personnel expenses
CHF 1000
2014
2013
Authorities, meeting compensations and fixed compensations
204 186
Salaries and extras
41 546
32 663
Social security contributions
2 002 1 715
Pension plan contributions
4 695 3 932
Other personnel expenses
2 253 1 772
Total
50 700 40 268
5.3 Operating expenses
CHF 1000
2014
2013
Occupancy expenses
4 871 3 605
5 000 6 548
publication and advertising, audit, other costs
7 569 9 357
Total
17 440 19 510
Expenses for EDP, machinery, fixtures and fittings,
vehicles and other equipment
Other operating expenses including:
Telephone, telex, postage, electronic information systems,
legal and other consulting fees, stationery and printing,
courier services, property insurance, travel and entertainment,
5.4 Extraordinary income
The CHF 11.5 million of extraordinary income is due to the reversal of loan loss provisions which are no longer necessary.
28
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Report of the Statutory Auditor
As statutory auditor, we have audited the financial
presentation of the financial statements. We believe that the
statements of Schroder & Co Bank AG, which
audit evidence we have obtained is sufficient and appropria-
comprise the balance sheet, income statement and
te to provide a basis for our audit opinion.
notes, for the year ended 31 December 2014.
Opinion
Board of Directors’ responsibility
In our opinion, the financial statements for the year ended
The Board of Directors is responsible for the preparation of
31 December 2014 comply with Swiss law and the
the financial statements in accordance with the requirements
company’s articles of incorporation.
of Swiss law and the company’s articles of incorporation.
This responsibility includes designing, implementing and
Report on other legal requirements
maintaining an internal control system relevant to the pre-
We confirm that we meet the legal requirements on licensing
paration of financial statements that are free from material
according to the Auditor Oversight Act (AOA) and indepen-
misstatement, whether due to fraud or error. The Board of
dence (article 728 CO and art. 11 AOA) and that there are no
Directors is further responsible for selecting and applying
circumstances incompatible with our independence.
appropriate accounting policies and making accounting
estimates that are reasonable in the circumstances.
In accordance with article 728a paragraph 1 item 3 CO and
Swiss Auditing Standard 890, we confirm that an internal
Auditor’s responsibility
control system exists which has been designed for the
Our responsibility is to express an opinion on these financial
preparation of financial statements according to the instruc-
statements based on our audit. We conducted our audit in
tions of the Board of Directors.
accordance with Swiss law and Swiss Auditing Standards.
Those standards require that we plan and perform the audit
We further confirm that the proposed appropriation of availa-
to obtain reasonable assurance whether the financial state-
ble earnings complies with Swiss law and the company’s
ments are free from material misstatement.
articles of incorporation. We recommend that the financial
statements submitted to you be approved.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the finan-
PricewaterhouseCoopers AG
cial statements. The procedures selected depend on the
Thomas Romer,
auditor’s judgement, including the assessment of the risks of
Markus Meier,
Audit expert, Auditor In Charge
Audit expert
material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the
Zurich, 20 March 2014
auditor considers the internal control system relevant to the
entity’s preparation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control system.
An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of
accounting estimates made, as well as evaluating the overall
29
S c h r o d e r & C o B a n k AG — A n n u a l R e p o r t 2 014
Board and Senior Staff
(as of 1 April 2015)
Board of Directors
Executive Board
Externe Revisionsstelle
Philip Mallinckrodt
Adrian Nösberger
PricewaterhouseCoopers AG Zürich
Chairman
Chairman,
Dr. François Bochud
Marc Brodard
Deputy Chairman
Dr. Martin Eckert
Jean-Claude Marchand
Jean-Charles Roguet
Markus Rütimann
Chief Executive Officer
Member, Head Private Clients Geneva
David Dowse
Member, Chief Financial Officer
Oliver Oexl
Member, Head Legal, Compliance and Risk
Peter Thüring
Member, Chief Operating Officer
30
Head Office
Branch Office
Subsidiary Companies
Schroder & Co Bank AG
Schroder & Co Banque SA
Schroder Trust SA
Central 2, 8001 Zürich
8, rue d’Italie, 1204 Genève
8, rue d’Italie, 1204 Genève
Postfach, 8021 Zürich
Case postale 3655, 1211 Genève 3
Case postale 3655, 1211 Genève 3
Tel +41 (0)22 818 41 11
Tel +41 (0)22 818 41 22
Fax +41 (0)22 818 41 12
Fax +41 (0)22 818 41 28
Service Centre Zürich
Pfingstweidstrasse 60, 8005 Zürich
Postfach 2222, 8031 Zürich
Schroder Cayman Bank and
Trust Company Limited
Tel +41 (0)44 250 11 11
P. O. Box 1040, Harbour Centre
Fax +41 (0)44 250 13 12
Grand Cayman KY1-1102, B.W.I.
www.schroders.ch
Tel +1 345 949 28 49
contact@schroders.ch
Fax +1 345 949 54 09