Establecimiento del layout propuesto

Nyon

The construction sector suffered from weaker sales of condominiums, but was still supported by large real-

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Year in Review – Economic Environment

Economic structure by BCV region

Broye Chablais Gros-de-Vaud Lausanne Lavaux Morges VaudoisNord Nyon Riviera

Population at end-2015 31,429 48,854 61,507 224,968 59,324 74,802 89,930 94,763 81,920 Population growth in 2015 +1.7% +2.2% +2.1% +1.3% +1.4% +2.1% +1.6% +1.7% +1.2% Proportion of Canton’s population 4.1% 6.4% 8.0% 29.3% 7.7% 9.7% 11.7% 12.3% 10.7% Jobs (2013) 14,074 21,718 22,536 180,744 20,601 36,756 45,272 42,380 37,909 Proportion of Canton’s jobs 3.3% 5.1% 5.3% 42.8% 4.9% 8.7% 10.7% 10.0% 9.0%

Jobs in the primary sector

10.5% 7.6% 7.0% 0.1% 6.2% 6.0% 5.7% 3.8% 1.5%

Jobs in the secondary sector

27.7% 22.6% 30.9% 11.5% 16.7% 21.3% 32.1% 15.1% 12.0%

Jobs in the tertiary sector 61.8% 69.8% 62.1% 88.4% 77.0% 72.7% 62.2% 81.1% 86.5% Average unemployment in 2015 5.4% 5.1% 3.6% 6.4% 3.4% 4.0% 4.8% 3.9% 5.2% Change in unemployment in 2015 +0.5% -0.2% +0.2% +0.0% -0.2% +0.2% +0.2% +0.0% +0.1%

Sources: Statistique Vaud, FSO, SECO

estate projects in Nyon, Gland and Rolle. Municipalities in the region initiated a number of construction projects, aimed particularly at improving educational facilities. The region’s hotels were hit by lower guest numbers, caused by the strong franc and restrictions on companies’ business travel budgets.

Riviera

Tourist activity was adversely affected by the removal of the exchange-rate floor, although lower guest numbers from Europe were partly offset by an increase in tourists from Asia and particularly China. Hotel capacity increased further with the construction of the Modern Times Hotel, which is partly designed to cater for people visiting the new Charlie Chaplin museum slated to open in spring 2016. The

region also started preparing for the 2016 Federal Music Festival in Montreux and the 2019 Fête des Vignerons in Vevey. Finally, private schools and clinics did well despite the lackluster economic climate.

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In the offshore private banking business, the automatic exchange of tax information became an international standard and implementation work began. As part of this process, Switzerland signed agreements with the European Union and Australia. However, as BCV is primarily focused on the onshore market, we are less affected by this issue than other banks.

There were further signs of cooling in the Vaud real-estate market. Prices for condominium apartments and single-family homes fell in 2015. While Vaud real-estate prices rose faster than the Swiss average from 2008 to 2012, the growth rate was below the national average in 2015 for the third year in a row.

Continued growth in customer-driven business volumes

Mortgage lending rose 2% (+CHF 477m) to CHF 24.5bn. Other loans were down 13% to CHF 4.9bn. On the liabilities side, the expansion in customer deposits continued, with a rise of 1% (+CHF 345m) to CHF 28.9bn. Total assets were up 4% to CHF 43.4bn.

Group assets under management grew 2% (+CHF 1.6bn) to CHF 88.0bn. Net new money for the period amounted to CHF 2.5bn. This figure reflects onshore fund inflows of CHF 3.6bn and the expected outflows of offshore funds (–CHF 1.1bn).

Financial results

Total revenues were up 2% year on year to CHF 1.03bn. In an environment marked by negative interest rates, net interest income before loan impairment charges/reversals fell 3% to CHF 489m. As loan impairment reversals were lower than in 2014, net interest income fell 6% to CHF 490m. Fee and commission income edged down 3% to CHF 332m. Net trading income, however, jumped 41% to CHF 151m. This rise was spurred by an increase in customer-driven forex trading caused by the renewed volatility in the Swiss franc after the EUR/CHF floor was dropped. Other ordinary BCV Group delivered very solid 2015 results in an

environment that remained mixed. The Vaud economy lost steam after the Swiss National Bank dropped the EUR/CHF floor rate and introduced negative interest rates at the beginning of the year. But our business volumes nonetheless rose. Trading volumes grew, spurred by the increase in customer-driven forex transactions. This more than offset the drop in interest income and fee and commission income. Operating expenses once again fell. Operating profit rose 5% to CHF 399m despite the costs relating to the settlement reached with the U.S. Department of Justice as part of the USA/Switzerland tax program; the settlement marked the end of a long process. Extraordinary income came in at CHF 29m, mainly due to the sale of our stake in Swisscanto. This helped drive net profit up 14% to CHF 336m.

In 2015, we also pressed ahead with our new strategic phase, stratégie2018, which builds on our previous strategy while also taking account of changes in the market and regulatory environment. In this phase, we aim to improve our internal processes, make impeccable service quality our differentiating factor and enhance our various customer touch points, particularly by further developing our online services.

A mixed economic environment

Global economic growth slowed to 3.1% in 2015 owing to weakness in emerging markets. In addition, the Vaud economy and that of Switzerland as a whole were hampered by the rise in the Swiss franc after the Swiss National Bank dropped the EUR/CHF currency floor on 15 January 2015. Export sectors, tourism and trade, together with sectors that face competition from imported products all experienced downward pressure on prices and earnings. The Vaud and Swiss economies nevertheless proved resilient and avoided a recession.

Year in Review

BCV in 2015

income increased 33% to CHF 53m, owing to a financial- asset disposal and a one-off dividend paid by SIX Group Ltd. Operating expenses once again edged down, declining 1% to CHF 514m. Personnel costs fell 1% to CHF 337m and other operating expenses were also down 1% to CHF 177m. Depreciation and amortization decreased 5% to CHF 76m. Despite the costs relating to the settlement reached with the U.S. Department of Justice as part of the USA/Switzerland tax program, operating profit rose 5% to CHF 399m.

Extraordinary income came in at CHF 29m, mainly due to the sale of our stake in Swisscanto, which helped drive net profit up 14% to CHF 336m.

Our cost/income ratio improved, declining from 60% to 57%. In an environment marked by negative interest rates, our net interest margin fell to 1.14%, down from 1.22% in 2014. Shareholders’ equity rose 2% to CHF 3.4bn. The Group’s Core Equity Tier 1 (CET1) ratio at 31 December 2015 was 17.6%. Return on equity increased to 10.1% thanks to the rise in net profit.

Business sector overview

Retail Banking

Our Retail Banking business continued to grow in 2015, even though the real-estate market slowed and interest rates fell to historically low levels in early 2015 and remained there for the rest of the year. The mortgage book expanded by 2.4% to CHF 7.6bn, and customer deposits were up 1.6% to CHF 8.4bn. Sector revenues rose 6.9% to CHF 187m, driven in particular by a high level of forex business. Operating profit was up 74% to CHF 35m. Retail Banking also carried out several projects to enhance customer service as part of our

stratégie2018 strategic phase.

Corporate Banking

Corporate Banking’s business development showed mixed trends in 2015. Vaud SMEs held up very well against the difficulties caused by the Swiss franc’s rise against the euro. However, our Trade Finance business continued to suffer from low volumes and falling commodity prices. Lending and commitments fell by 4.7% to CHF 14.7bn, while deposits grew by 6.7% to CHF 8.1bn. The Sector’s revenues rose 6.0% to CHF 232m, and operating profit was up 10% to CHF 127m.

Net new provisioning needs were low, attesting to the quality of our corporate loan book.

Wealth Management

Our Wealth Management Sector experienced different business trends across its various segments in 2015. Offshore private banking, where the regulatory environment is undergoing major change, continued to decline, while onshore private and institutional wealth management saw firm business growth, including in German-speaking Switzerland. Assets under management were up 1% to CHF 68.3bn, and mortgage lending increased 4.2% to CHF 7.2bn. The Sector’s revenues rose 1.1% to CHF 335m, and operating profit was up 15% to CHF 106m.

Trading

Currency trading had a record year after the SNB’s surprise announcement on 15 January that it was scrapping the EUR/CHF floor rate. In response to renewed volatility, many customers contacted the trading room to buy foreign currencies on a spot basis, or to arrange hedging. The structured products business also performed well, with a high level of customer-driven issuance activities. Trading revenues jumped 35% to CHF 67m, and operating profit rose 72% to CHF 39m. Risk levels stayed very low, as our trading activities are focused primarily on customer-driven transactions.

Highlights of the year

Dividend payment and special distribution

We intend to pay an ordinary dividend of CHF 22-27 per share as well as a special distribution of CHF 10 per share out of paid-in reserves. Barring significant changes in the economic and regulatory environment or in the Bank’s situation, we plan to maintain this distribution level until 2018.

In 2015, we maintained our dividend and capital- management policy for the eighth consecutive year. In April, we distributed CHF 189m to shareholders in the form of an ordinary dividend and made a special distribution of CHF 86m out of paid-in reserves. The Canton of Vaud received CHF 185m of the CHF 275m paid out to shareholders in 2015. For the 2007 to 2014 financial years, BCV returned a total of over CHF 2.3bn to its shareholders.

Year in Review – BCV in 2015

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