Annual Report 2014 - Z£¼rcher Kantonalbank Z£¼rcher Kantonalbank Annual...

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Transcript of Annual Report 2014 - Z£¼rcher Kantonalbank Z£¼rcher Kantonalbank Annual...

  • for the 2014 financial year

    Annual Report

  • In Brief 4

    Business Performance 8

    Strategy 11

    Public Service Mandate 17

    Customers 21

    Employees 27

    Corporate Governance 31

    Compensation 51

    Financial Report 61

    Glossary 148

    Locations 152

    Contact 154


    The theme of this year’s annual report is

    “On the move”.

    We invite you to join us on a journey through the canton of Zurich. Our annual report and sustainability report highlight interesting links between different places within our canton. It’s a journey that takes us through unspoilt nature, via the wider conurbation and into the city itself. We hope our tour uncovers one or two thought-provoking facts about our home canton.

  • 3Zürcher Kantonalbank Annual Report 2014

    Key figures (group)

    Income statement in CHF million 2014 2013 2012 Change

    2014 / 2013 in %

    Net interest income 1,070 1,117 1,154 – 4.2

    Net commission and fee income 531 551 536 –3.5

    Income from trading operations 287 340 379 –15.7

    Other ordinary income 47 109 54 –57.1

    Operating income 1,935 2,118 2,122 – 8.6

    Operating expenses 1,200 1,241 1,266 1 –3.3

    Gross profit 735 877 856 1 –16.2

    Depreciation and amortisation of fixed assets 93 87 100 6.4

    Allowances, provisions and losses 60 210 46 –71.6

    Extraordinary income 65 218 33 –70.0

    Tax expenses 0 0 – 0 –

    Group net income 647 797 744 1 –18.8

    Balance sheet (before distribution of net profit) in CHF million

    Total assets 158,392 149,707 150,694 5.8

    Loans to customers 86,408 80,421 78,552 7.4

    – of which mortgages 71,389 69,658 67,371 2.5

    Funds due to customers 97,808 95,869 94,187 2.0

    – of which savings and investment accounts 45,624 43,992 44,455 3.7

    Allowances and provisions 721 688 617 4.8

    Net equity 9,487 9,208 8,784 3.0

    Key figures in %

    Return on equity (ROE) 7.2 9.2 9.0 1

    Cost/income ratio (CIR) 66.8 62.7 64.4 1

    Common equity Tier 1 ratio (CET1) 14.6 15.2 –

    Core capital ratio (Tier 1) 2 15.6 16.2 15.2

    Total capital ratio 16.6 16.2 –

    Assets under management in CHF million

    Total assets under management 3 199,095 192,070 191,821 3.7

    Net new money (NNM) 3 –2,258 –178 8,320

    Personnel / banking outlets Number

    Headcount after adjustment for part-time employees, as at 31 December 4,844 4,818 5,068 0.5

    Banking outlets 4 97 97 99

    Rating agencies Rating

    Fitch AAA AAA AAA

    Moody’s Aaa Aaa Aaa

    Standard & Poor’s AAA AAA AAA

    Scope of consolidation Share in %

    Zürcher Kantonalbank Finance (Guernsey) Ltd. 100 100 100

    Balfidor Holding AG 100 100 100

    Zürcher Kantonalbank Österreich AG 100 100 100

    1 Excludes CHF 150 million non-recurring expense for Zürcher Kantonalbank's pension in connection with the reduction in the technical interest rate. 2 2014 and 2013 in accordance with Basel III; 2012 in accordance with Basel 2.5. 3 Restated following a change in segmentation of business partners (see Note 4.5, p. 98). 4 Including branches of Zürcher Kantonalbank Österreich AG in Salzburg and Vienna as well as five automated banks.

  • 4 Zürcher Kantonalbank Annual Report 2014

    In Brief The bank that’s “close to you”

    Zürcher Kantonalbank is successfully positioning itself as a full-service bank with a regional base as well as national and international links. We are the largest cantonal bank in Switzerland and one of the largest Swiss banks. With a market penetration of around 50 percent, we rank as the leader in retail as well as corporate banking in the canton of Zurich. Zürcher Kantonalbank is wholly owned by the canton of Zurich

    and benefits from a state guarantee. Our public service mandate entails providing financial services for the public and businesses, assisting the canton in the performance of its tasks in the economic, social and environmental arenas, and ensuring that our actions comply with the demands of environmental and social responsibility. Our values are: personal, competent and responsible. We are part of life in the canton of Zurich.

    New organisational structure

    Zürcher Kantonalbank realigned its organisational structure on 1 October 2014. Comprehensive respon- sibility for the provision of personal service and support to all our private customers now lies with the Private Banking business unit.

    Corporate Banking Private Banking

    LogisticsFinance Risk

    Institutionals & Multinationals


    Products, Services & Direct Banking

    Committee of the board

    Executive board

    Board of directors


  • 5Zürcher Kantonalbank Annual Report 2014

    In Brief

    Switzerland‘s only AAA bank

    We are the only Swiss bank and the only full-service bank in the world to be given an AAA rating by Standard & Poor’s. Fitch and Moody’s also awarded us their top marks.

    Personnel changes

    Roger Müller became chief risk officer on 1 January, Stephanino Isele head of Institutionals & Multinationals on 1 April and Daniel Previdoli head of Products, Services & Direct Banking on 1 October. René Huber was elected to the board of directors on 1 November. Walter Seif becomes head of Audit on 1 January 2015.

    Roots in the canton

    With 90 branches, we have strong roots in the canton of Zurich. Our customers are also able to conduct their banking transactions via our call centres, via eBanking and via eBanking Mobile.

    Net result

    With a group net income of CHF 647 million, Zürcher Kantonalbank achieved a satisfactory result in the 2014 financial year. After payment of capital costs on the endowment capital and allocations to reserves, CHF 246 million was distributed to the canton of Zurich and its municipalities.

    Significant employer

    Around 5,500 people work at Zürcher Kantonalbank in 4,844 full-time positions. With 406 apprentices, interns and trainees, we are one of the largest training centres for banking professions and offer around 100 apprentice- ships in banking, IT and logistics every year.


    At the end of 2014, Zürcher Kantonalbank had net equity of CHF 9,487 million. The total capital ratio amounted to 16.6 percent. We are therefore one of the best capitalised banks in the world.

    Legal amendment

    At the beginning of 2013, we submitted an application for a partial amendment of the Law on Zürcher Kantonalbank to the cantonal parliament of Zurich. The cantonal parliament partially approved the requested legal amendment in April 2014.


    In December 2014, we announced the acquisition of the Swisscanto group. By integrating this joint venture between the cantonal banks, we will become Switzer- land’s third-largest fund provider. At the same time, we are increas- ing our diversification by strength- ening the share of income we generate from commission and fee business.

  • Dr. Jörg Müller-Ganz, Martin Scholl

  • 7Zürcher Kantonalbank Geschäftsbericht 2014


    The banking industry is in the midst of deep and far-reaching structural change. The effects of the 2008 crisis on the financial markets can be seen to this day. If we look at Switzerland, however, we see a financial industry that is in a very solid position despite ongoing consolidation pressures and a difficult international market backdrop. Prudently managed, well-capitalised banks are a vital asset for this country’s economy.

    Zürcher Kantonalbank benefited from the robust state of the domestic economy in 2014. Low interest rates and more intensive competition left their mark, however. Our group net income of CHF 647 million failed to match the previous year’s figure, which had been buoyed by extraordinary income. Given such a challenging environment, the result nevertheless met our expectations.

    The cantonal parliament last year approved the amended Law on Zürcher Kantonal- bank. The bank’s constitutional state guarantee is to be compensated financially from 2015. The cantonal parliament also voted to raise the ceiling for any increase in the endowment capital from CHF 575 million to CHF 1,075 million.

    We are continuing to pursue our proven strategy. For customers in Zurich as well as Switzerland as a whole, we are positioning ourselves as a full-service bank with a regional base as well as national and international links. Accordingly, we were particu- larly pleased when in December Standard & Poor’s once again awarded us its top AAA rating – making us the world’s only full-service bank to be given such an accolade. The S&P analysts praised the broad diversification of our income streams as well as the services we provide to other cantonal banks. We are now the only Swiss bank with a triple-A rating.

    We regard the structural change in our industry as a major opportunity rather than a threat. At the end of the year, a tremendous opportunity arose for us to acquire the Swisscanto group – a joint venture between the cantonal banks that was established in 1993. Once officially approved, the transact