Newsletter 2013-01 (PDF) - PostFinance

Dear Reader
1 March 2013
2013 is an eventful year. On 26 June,
PostFinance will be demerged into
a public limited company. As of the
same date, it will be regulated by
the Swiss Financial Market Supervisory
Authority and granted a banking
licence. This means that you
can continue to rely on PostFinance
as a solid partner.
Over the past few years, PostFinance
has grown into a leading Swiss retail
financial institution. PostFinance has
achieved solid profits in a difficult
market environment with historically
low interest rates. It has established
itself as a reliable financial institution
for both, private and business customers
in the retail market and for
major corporate customers.
Its success is mainly due to its leading
market position in Swiss payment
transactions. PostFinance is constantly
striving to develop and modernise
payment transactions together
with Switzerland’s major financial
institutions. The introduction of new
standards for European payment
transactions is just one example.
The aim is to achieve harmonisation
in the light of increasing national
and international regulatory requirements.
A further step in this process
is described in this newsletter.
Best wishes and happy reading!
Hansruedi Köng
Head of PostFinance
Page 3Annual results
2012: PostFinance well
capitalized
Page 4Payments in
transition: The QR code
is gaining acceptance
News from PostFinance
for financial institutions
Page 5Outsourcing:
Banks relying on Swiss
Post specialists
On the road to PostFinance Ltd
On 26 June 2013, PostFinance will be
demerged into a public limited company
owned by Swiss Post Ltd. As such, it will
be fully regulated by the Swiss F inancial
Market Supervisory Authority (FINMA)
and will be granted a banking licence in
accordance with the Banking Act.
New legal provisions
The Swiss Parliament adopted the new
postal legislation at the end of 2010.
The Federal Council has passed several
resolutions bringing the new legislation
into force and has made decisions
regarding its implementation. Swiss
Post should become more competitive
in the liberalised environment provided
by the new legal framework, ensuring
that it can succeed in its different tasks
covering the postal service, logistics,
public passenger transport and the
financial market. According to the new
legislation, Swiss Post will be converted
into a public limited company under
special law and P ostFinance will be
demerged into a public limited company
under private law.
The Swiss Post group will consist of the
subsidiaries PostBus Ltd and Post CH Ltd
alongside PostFinance Ltd. PostFinance
Ltd will be owned by Swiss Post Ltd, and
the Swiss Confederation will remain the
owner of Swiss Post.
The most important points at a glance
The new legal framework will result in
several changes for PostFinance:
− PostFinance will be regulated by FINMA.
In addition, PostFinance Ltd will be
granted a licence by FINMA in accordance
with the Swiss Banking Act on
the demerger date.
− To determine equity requirements,
FINMA will allocate PostFinance to bank
category 2 with other institutions
such as the Raiffeisen Group and Zürcher
Kantonalbank.
− Once PostFinance has been demerged
into a public limited company, a limited
state guarantee of CHF 100,000
per customer will apply for five years.
This guarantee will be replaced by
Swiss bank depositor protection of
CHF 100,000 per customer.
1

1 March 2013
− Protection for products offered by PostFinance together
with partners (vested benefits account and retirement savings
account 3a) will not change as a result of the demerger.
− Future reporting will comply with Swiss accounting standards
for banks (BAG standard) and supplementary FINMA
guidelines.
− Even as a public limited company, PostFinance will pursue a
conservative investment policy and guarantee risk tolerance in
accordance with financial market requirements.
− New provisions regarding investments made by major or
institutional investors will apply to PostFinance Ltd from the
demerger date.
Basic service for payment transactions
PostFinance’s business activities are defined in the «Purpose»
article of the Postal Organisation Act, according to which
Swiss Post remains responsible for providing a basic service with
regard to payment transactions. Swiss Post will delegate the
provision of services to the future PostFinance Ltd. The Postal
The future group structure of Swiss Post
PostCom supervision
FINMA supervision
Prof. Dr Rolf Watter
PostMail
Swiss Post Ltd
PostLogistics
Management and
service units
Swiss Post
Solutions
Post Offices
& Sales
PostBus Ltd Post CH Ltd PostFinance Ltd
Immobilien AG
News from PostFinance
Organisation Act defines the provision of the following
financial services:
− Payment services
− Accepting customer deposits
− Account services and other related services
− Investments for own account
− Other financial services on behalf of third parties
− Under the new legislation, PostFinance will still not be
able to issue its own loans and provide mortgages.
It will continue to offer these products in cooperation
with partners.
PostFinance has made organisational changes in order to
meet the new legal requirements. It modified its structure at
the beginning of 2012 in order to comply with the stricter
requirements applicable in terms of corporate governance and
regulation.
FAQ about PostFinance Ltd can be found at postfinance.ch/ltd.
PostFinance Ltd obtains rating
from Standard & Poor’s
The future PostFinance Ltd
has obtained an AA from rating
agency Standard & Poor’s
(S&P). Meanwhile, Swiss Post
Ltd has also been assigned
a rating (AA+). When awarding
its ratings, S&P takes into
account different factors
such as the general business
position, capital resources and
earnings as well as the risk,
financing and liquidity situation.
Issues such as the
ownership structure and basic
service mandate were also
relevant. The rating shows
that Post Finance will remain a
solid, reliable financial institution
after the demerger into a
public limited company.
The Board of Directors of PostFinance Ltd
The Board of Directors of PostFinance Ltd was
e lected in October 2012. The seven-member Board
of Directors will be chaired by business lawyer
Prof. Dr Rolf Watter. He brings to the role extensive
knowledge of corporate and securities law. His deputy
is Dr Marco Durrer (Board of Directors of Swiss
Post). Legal and compliance specialist Dr Michaela
Troyanov, and Dr Patrick Frost, also with many years
of management experience in the financial services
industry, join the PostFinance Board of Directors. On
the Swiss Post side, Adriano P. Vassalli was elected,
together with CEO Susanne Ruoff and Head of
Finance Pascal Koradi. The newly acquired expertise
of the PostFinance Ltd Supervisory Board is already
being put to use during the transition period.
2

1 March 2013
PostFinance annual results 2012
Customer assets of over 100 billion francs
111,000 new customers put their trust
in the financial institution and opened
213,000 new accounts last year. The
total number of accounts at the end of
December was therefore 4.55 million
(+ 4.9 percent). The associated inflow of
new money of about 12 billion francs
increased customer assets to 104 billion
francs (+ 12.6 percent).
Last year, PostFinance’s earnings
before taxes compared to the previous
year increased by 40 million francs to
631 million francs (+ 6.8 percent).
The main reasons for the good results
were interest income and reversals
of previous years’ flat-rate writedowns
amounting to 25 million francs. Onetime
profit of 17 million francs from
PostFinance key figures 2012 2011 Delta
Annual earnings before taxes (CHF m)
incl. associated companies (SIC, SECB)
631 591 40
Operating income (CHF m)
1,534 1,474 60
– Net interest income after writedowns
1,062 1,024 38
– Service and commission income 303 301 2
– Trading income 148 146 2
Operating expenses (CHF m)
– Staff costs
– Material expenditure
– depreciation
Number of customers (reference date, thousands) 2,922 2,811 111
Number of customer accounts (reference date, thousands) 4,549 4,336 213
Customer assets (annual average, CHF m) 103,850 92,225 11,625
Funds and securities (reference date, CHF m) 4,524 3,988 536
Mortgages (reference date, CHF m) * 4,167 3,684 483
Loans to business customers (reference date, CHF m) 6,514 6,842 –328
E-finance users (reference date, thousands) 1,463 1,350 113
Headcount (full-time equivalent, annual average) 3,473 3,422 51
Millions of transactions processed (reference date, accumulated) 932 907 25
* PostFinance offers mortgages through its partner banks.
905
471
426
8
882
446
426
10
New PostFinance head office to
open its doors in May 2013
PostFinance has been one of Switzerland’s
biggest job creators for many
years. Since 1998, the number of fulltime
positions has risen from 1,602
to over 3,400. The growth of the company’s
workforce has also impacted
on its space requirements. The majority
of the 1,800 employees currently
based in five different locations across
Berne will be brought together in the
new, modern head office building.
The first employees will be relocating
to the new 13-storey head office on
Mingerstrasse in the north of Berne as
of May 2013.
The 55-metre-high new head office,
which will have capacity for 1,200
employees and 15,000 m 2 of gross floor
space, is one of the largest buildings
in Berne, reflecting the company’s successful
business development story.
The building has been constructed in
line with MINERGIE-ECO standards
(minergie.ch).
23
25
0
–2
News from PostFinance
the cancellation of a financial investment
also contributed to the results.
Net interest income after writedowns
increased by 38 to 1,062 million
francs (+ 3.8 percent) in spite of the
difficult financial market situation.
At the same time, PostFinance benefited
from current long-term investment
income last year. Constantly falling
interest margins will adversely affect
PostFinance’s results next year.
PostFinance well capitalized
As a public limited company,
PostFinance needs to be funded with
equity, the amount of which will be
determined by the Capital Adequacy
Ordinance (CAO). The same legal
framework will apply as for banks.
PostFinance’s compliance will be monitored
by FINMA. PostFinance Ltd
will have equity of around 4.6 billion
francs. Risk-weighted assets amount
to around 24 billion francs. This gives
a tier 1 equity share (hard equity)
of over 19 %. For a category 2 bank,
which is the category PostFinance Ltd
will be allocated to, FINMA requires
a tier 1 equity share of between
13.6 % and 14.4 %. PostFinance Ltd
will therefore be well capitalized.
Right from the start, it will meet
the strict equity require-ments set
by Basel III and the new Capital
Adequacy Ordinance – in terms of
equity quantity and quality alike.
Watch the new PostFinance head office
being built on Minger strasse in Berne
via webcam 1 and webcam 2.
– http://w w w.bildersammlung.ch/
bern-webcam-wetter-bern-5/ webcam.php
– http://w w w.bildersammlung.ch/
bern-webcam-wetter-bern-6/ webcam.php
3

1 March 2013
Payment transactions in transition
The Swiss financial centre is
harmonising payment transactions.
PostFinance is working alongside banks on
the future of Swiss payment transactions. Switzerland
currently has two independent payment
systems that are closely linked and allow
smooth payment transactions: the PostFinance
system and the Swiss Interbank Clearing (SIC)
system. Until now, Switzerland’s high-quality
dual system consisted of over ten standards
and formats and seven different types of slip.
As a result of increasing national and international
regulatory requirements, these different
standards and formats will no longer be
developed in the long term. Instead, the aim
is to achieve harmonisation.
Harmonisation for transfers, debits and
inpayment slips
The areas of credit transfers, payment slips
and direct debits were analysed in a study to
explore the possibilities for harmonisation
and alignment with European standards. The
Swiss financial centre came to the conclusion
that the Swiss transfer schemes should be
The migration of payment transactions in Switzerland will form the basis for streamlined,
uniform and cost-effective payment transaction processes.
Imprint
harmonised and substantially aligned to meet
European standards. The area of direct debits,
which currently consists of five schemes,
will also be consolidated and aligned to SEPA
standards.
As far as inpayment slips are concerned, the
existing documents will be combined and
optimised. A new uniform slip will incorporate
all the current advantages alongside additional
functions such as the use of QR codes.
Fewer errors thanks to the QR code
Use of the QR code leads to a higher degree
of automation during processing and an
increase in the Straight Through Processing
Rate (STP). There are many advantages to
the QR code, not only for financial institutions
but also for invoice issuers and payers.
Harmonisation of Swiss payment transactions
will form the basis for streamlined, uniform
and cost-effective processes.
“News from PostFinance for financial institutions”, Edition 1 / 2013
Publisher: Swiss Post, PostFinance
International Payments
Nordring 8, CH-3030 Berne
postfinance.ch / banks
News from PostFinance
The QR code is gaining
acceptance
The square matrix made up
of black and white dots was
developed in 1994 by the
Japanese software company
Denso Wave and was initially
used in logistics by automobile
manufacturers.
Now the QR code is gaining
acceptance – mostly thanks to
applications on smart-phones.
Its uses range from downloading
software to accessing
websites and identifying
products.
QR stands for Quick Response.
Special markings in three of
the four corners show which
way up it goes. The number
of points contained in the
matrix is between 11 times
11 and 177 times 177.
When scanned, this QR code
takes you to migration-pt.ch
to find out more about
slip migration in Switzerland.
Edited by: Dominik Hölz, Relationship Manager
Layout: PostFinance, Communications, Public Relations
4

1 March 2013
News from PostFinance
Outsourcing: Positive experience for banks
The Glarner and Freiburger Kantonalbank
have outsourced logistics and payment transactions
to specialised units within Swiss Post.
What has long been standard practice in
industry is increasingly becoming applicable
in the financial sector too. Parts of
the value added chain that are not within
banks’ own core competency are outsourced
to specialists. This generates
new cooperation and business models.
According to many analyses and surveys,
payment transaction processing is
highly suited to outsourcing. Payment
transactions in Switzerland are extremely
standardised and the high transaction
volumes allow considerable economies
of scale.
In addition to UBS and the Freiburger
Kantonalbank, which have outsourced
slip-related payment transactions to
PostFinance, Banque CIC,the Glarner
and Tessiner Kantonalbank now entrust
PostFinance with all their payment
transaction processes.
Investments quickly amortised
“By outsourcing payment transactions
we have been able to save approxi-
mately 30 percent of our costs on a
long-term basis,” declared Martin
Dürst, Head of Finance and Logistics at
the Glarner Kantonalbank (GLKB). Jean-
Pierre Bruegger, Head of Payment
Transactions at the Freiburger Kantonalbank
(FKB) explained, “We chose to
work with Swiss Post because it has
intersectoral experience – and can take
on overall logistics.”
PostFinance has been carrying out payment
transactions for the Glarner
Kantonalbank since 2007. The manage-
ment was surprised by the high cost
savings and rapid investment payback
of less than two years. The bank managed
to keep within its budget for the
project.
Maintaining customer contact
Glarner bankers did not have to give up
their closeness to local customers on
account of outsourcing. There is no
direct customer contact involved in processing
payment transaction documents.
“Our customers do not even
Your relationship managers at PostFinance
realise that their documents are sent
directly to PostFinance”, commented
Martin Dürst.
“As much automation as possible”
For the Freiburger Kantonalbank, the
aim of working with Swiss Post specialists
was not merely to replace its existing
IT system. The bank was much more
interested in achieving “as much automation
as possible and gradually outsourcing
optimised processes”, as
described by Jean-Pierre Bruegger. Swiss
Post Solutions has been responsible for
printing and dispatch for the FKB for
ten years already. It also took over scanning
in 2010. PostFinance now takes
care of document-based payment transactions
for the Freiburger Kantonalbank.
The FKB’s initial doubts about
data security and banking confidentiality
were dispelled to the bank’s entire
satisfaction.
As usual, you can reach your personal contact via the contact details shown below. We look forward to hearing from you!
Thomas Hadorn
Head of Relations and Networks
thomas.hadorn@postfinance.ch
Phone +41 58 338 53 80
Marianne Zentriegen
Germany, Austria
marianne.zentriegen@
postfinance.ch
Phone +41 58 338 25 23
Hye-Sook Jeon
Great Britain, Asia Pacific,
North America
hye-sook.jeon@postfinance.ch
Phone +41 58 338 28 59
Nuno Domingos
France, Portugal, Spain, Central
and South America
nuno.domingos@postfinance.ch
Phone +41 58 338 07 02
Corinne Heiniger
Italy
corinne.heiniger@postfinance.ch
Phone +41 58 338 85 92
Dominik Hölz
Scandinavia, Benelux, Baltic
Countries, Russian Federation
dominik.hoelz@postfinance.ch
Phone +41 58 338 02 87
Bang Fernandez Nguyen
Africa, Eastern Europe
bang.fernandez@postfinance.ch
Phone +41 58 338 59 68
5