banca del sempione sa - bancasempione.ch

Report on the forty-ninth year of operations,presented to the General Meeting of Shareholders on 27 April 2010

Banca del Sempione SA

Annual Report

Contents

6 Bank’s governing bodies

9 Chairman’s report

1. Consolidated annual financial statements of Banca del Sempione’s Group

18 Consolidated balance sheet

19 Consolidated income statement

20 Consolidated statement of Cash Flows

21 Notes to the annual consolidated financial statements

38 Auditor’s Report

2. Other activities of the Group

46 Accademia SGR SpA

48 Base Investments SICAV

50 LMF & Partners SIM SpA

51 Banca del Sempione (Overseas) Ltd., Nassau

3. Annual financial statements of Banca del Sempione SA

58 Balance sheet

59 Income statement

63 Notes to the annual financial statements


Board of Directors of Banca del Sempione SA

Fiorenzo Perucchi 1) 2) chairman

Günter Jehring 1) vice chairman

Bruno ArmaoFrancesco Arcucci 2)

Sergio Barutta 1) 2)

Giampio BracchiGiuseppe Franchi 1) 2)

Sandro Medici 1)

Silvio Tarchini 2)

AuditorPricewaterhouseCoopers SA, Lugano

1 members of executive board2 independent members

Management of the Banca del Sempione SA

Stefano Rogna general manager

Roberto Franchi deputy general manager� ( 25.03.2010)

Giordano Bellotti manager

Massimo Gallacchi manager

Pietro Scibona manager

Athos Walter manager

Submanagement of the Banca del Sempione SA

Michele Donelli assistant manager

Angelo Gilardoni assistant manager

Sascha Kever assistant manager

Dario Piffaretti assistant manager

Maria Quagliozzi assistant manager

Gianluigi Righini assistant manager

Massimo Valsangiacomo assistant manager

Peter Wüst assistant manager

Guido Zanon assistant manager

Banca del Sempione SA

Bank’s governing bodies

Internal auditors

Frank Leisinger chief inspector

Gabriele Domenighetti inspector

Management of the branches

ChiassoRoberto Piccioli manager–branch manager

BellinzonaErmes Bizzozero assistant manager–branch manager

Locarno–MuraltoClaudio Lanini assistant manager–branch manager

Banca del Sempione SA 6 7 Annual Report 2009

The year’s report on 2009 Financial Statements unfortunately begins with an event which occurred in early2010 and which left all the staff at the Banca del Sempione SA and its subsidiaries shaken and in a state ofdisbelief. On 25th March 2010, at the age of just 51, Dr. Roberto Franchi, the Banca del Sempione’s DeputyGeneral Manager, suddenly left us. A highly intelligent, professional and skillful man, he was involved in theBank for over 20 years, supporting it with his innovative attitude, and he never stopped believing in our Bank’spotential, laying the foundations for what the Banca del Sempione Group is today. We will always remember him with affection and gratitude.It was also because of his contribution that the Bank achieved excellent results in 2009 despite the very dif-ficult macro-economic context. We remember the steep declines on the stock markets in the early part of the year, causing great anxietyamong participants and downbeat forecasts for all of 2009 until early March. But then better-than-forecastmacroeconomic data provided stimulus to the financial markets, leaving room for some optimism, triggeringseveral months of euphoria on the stock markets, rebounding sharply from their lows. The central banks alsoflooded the system with massive liquidity, ensuring that the tone would remain upbeat. In reality we do notknow whether the objectives of this expansionary monetary policy, aiming at ensuring bank credit to businesses, have been achieved. The concern is that certain banks have often used it to invest in speculativefinancial instruments rather than to sustaining the real economy as the central banks have desired. To the ex-tent possible, we have designed and implemented several lending policies, especially in the mortgage sector,in support of a total customer relationships. Our precise aim is to better serve our private clients more effi-ciently and effectively. That is why, in addition to traditional asset management services, we have highlight-ed the bank’s ability to provide universal bank services to its clients.

But the reality is we cannot say with certainty that the recession is behind us. There are still major politicaland economic tensions and very aggressive monetary policy and financial industry interventions are certainlynot enough to reverse the trend. What is needed are greater vigour and conviction on rules of conduct and assessments of structural measures that limit government budget deficits, allowing for a reversal of the na-tional debt generation trend that is by now unsustainable. Naturally these difficult conditions have had a neg-ative impact on Switzerland’s and Ticino’s economy. Unemployment in particular has shown worrying signs ofticking up again and economic growth has certainly slowed down. As everyone knows, the banking industry isa lead player in this situation and a cause of general concern especially in Ticino, due to the impact of cap-ital repatriation measures adopted in Italy. But the impact on our Bank has been muted and our clients, in appreciation of the quality of our services, have remained loyal.

The balance sheet and income statement items also show it and deserve some reflection.

Lending Operations And Interest IncomeAs we have observed, the Bank increased lending volume, but based on the timeless principle of creditwor-thiness. Unfortunately, this growth did not offset the decline in margins due to the zero interest rate policyimplemented in the main developed countries. In the attempt to generate at least sufficient returns, then,we gainfully focused on the securities portfolio, thus limiting the percentage decrease in net earnings.

Commission IncomeCommission income increased noticeably on the back of the financial market rally starting in the spring of2009. Clients returned to a favourable view of stock market investments, allowing for a better-than-expectedrebound from the previous year’s decline. In addition, our asset management division traded skilfully in ourclients’ interest, outperforming the benchmarks by two percentage numbers.

Chairman’s Report on the 2009 Financial Statements


Trading OperationsThe investments made in recent years have definitely had a positive impact. The trading activities are grownsubstantially, due to an evaluation of the market’s developed and the ability to understand them. Likewise,great care was taken to check the inherent risks in this activity.

Client Assets At the consolidated level, we are satisfied with the nearly CHF 400 million increase in this area on the year. Itis worth highlighting that this growth was attributable to the contribution of our subsidiaries whose net in-flow offset the net outflow at the parent company, due to the third wave of Italian repatriations, though stillcontained.

Operating CostsCosts were for the most part within budget. Some new quality staff members proved to be particularly effec-tive in improving our client services and going forward we will not hesitate to invest in professional and skill-ful staff: our aim is to ensure excellent service which makes a difference. Hence we also focus on control, compliance, and due diligence operations which are fundamental for best expressing our potential.

Consolidated Operating ResultIn a complex environment, we are greatly satisfied with the consolidated results. Gross profit increased by35%, while net earnings reached to 18%, net of provisions.

In view of this result, the Board proposes the following allocation of the CHF 11’654’000 in net earn-ings at the parent company’s shareholders’ meeting:

CHF 500’000 to the legal reserveCHF 2’500’000 to other reservesCHF 6’000’000 dividendCHF 2’654’000 carried forward

2009 has concluded, opening the way to a major anniversary for our Bank. In 2010 Banca del Sempione SAcelebrates its 50th year with pride and joy for us, for our dear clients, and for our institutional and non-insti-tutional counterparties. There will be a series of coordinated events in cooperation with a great internationalname, Alfa Romeo, which in turn is celebrating 100 years of history. Through our site and the mass media, you will be constantly informed on the unfolding of these events so that you may maintain an ever closer relationship with our Bank. The Board of Directors thanks the Bank’s entire staff and Management Team for the constant commitment anddedication that they have demonstrated in the pursuit of their tasks. We also thank the Swiss Financial MarketSupervisory Authority for the Financial Sector for its cooperation and the independent auditors for their vitalrole.

Mr. Fiorenzo PerucchiChairman of the Board of Directors

STRENGTH AND FOCUS ON THE FUTURE

Take advantage of recovery and opportu-

nities arising from the crisis. Focus on

strengths. Invest in farsightedness. In the

1950s and 1960s, the Swiss economy laid

down the basis for long-term stability. The

tragedies of the war behind them, Europe

and the world were on paths marked by

new divisions and threats. Now, like then,

we are living through a period of great

uncertainty and the road to follow is far-

sightedness and stability. Banca del

Sempione SA offers as a reliable partner

with whom to build solid bases day by day

to face the challenges of the coming years

without fear.

Swiss prosperity

Safety and reliability

Potsdam, winter 1957: the view runs beyond the Glienicker bridge, symbolic and almost impenetrablepassageway between the two Germanies, towards the sparkling lights of west Berlin, towards the westin full post-war economic bloom in the wake of the Marshall Plan, whilst, after the occupation ofHungary in the previous year, a burden limiting individual freedom again laid upon the eastern bloc.But Europe and the entire first world accelerated their run into the future, preparing for the WorldExpo in Brussels in 1958 with its paean to atom. A year before the Treaty of Rome was signed to pre-vent future conflicts between Germany and France, laying down the basis for the European Union asthe guarantor of peace, development and well being on the continent.

In the west, rarely had things changed so quicklyand radically in such a relatively brief period oftime as in the 1950s.The post-war history is basi-cally one of success without precedent in the cap-italist economy led by the United States.International economic interdependence createdthe need for trade regulations (GATT/WTO)and political and military cooperation (NATO).The American way of life came to Switzerlandtoo and the transformation affected all sectors:the economy, technology, housing , the landscape,demography, social structures, attitudes, andmodes of expression. At the same time, the coun-try developed ever closer relations with theworld, becoming more international. Switzerlandcame out of the war with its economy, capital re-serves, infrastructure, and industries intact: its su-periority over Europe and the Third Worldplaced it in a particular competitive position. The“hedgehog” mentality that had developed in the1930s during a time of war against the world wasabandoned: the external threat and isolation ofthe time had reinforced nationalism. But afterthe war, there was a return to liberal democracyand market economy which are at the origin offast economic growth without major governmentintervention. Swiss society was profoundlychanged by this development and the feverishpursuit of success: for its part, the government in-troduced major social reforms such as AVS andAI, and a very favourable tax system, keeping thecountry safe, reliable, and very stable politically.Within a few years, Switzerland became thetwentieth most industrialised country, number 12in world trade, and the third biggest financialmarket after London and New York. The Swiss

SAFETY AND RELIABILITY: SWISS PROSPERITY

economy is largely export-oriented but it de-pends on other countries for raw materials, ener-gy, and labour. The sudden high use of motorisa-tion made it increasingly dependent on Arab andPersian oil wells which were in the meantime na-tionalised. So it sought solutions, developing newtypes of urban transport and starting the con-struction of highways, though somewhat behindItaly, France and Germany with the first segmentinaugurated only in 1964 between Geneva andLausanne, in time for the Expo. The Swiss alsodesigned road tunnels, Alpine rail crossings, newairports and atomic plants, they also built powerplants and giant dams to contain artificial Alpinebasins such as the Grimsel and Grande Dixance,they extended the port of Basel and the mer-chant marine, and, as a result of the bathyscaphe“Trieste” by Jacques Piccard, on 26 January 1960Switzerland dug 11,000 metres below the sea,

reaching the deepest point in the Earth in onlyfive hours, the Mariana Trench in the PacificOcean. The economic miracle, demographic de-velopment, and the arrival of many workers fromItaly, Spain, and Portugal, directly contributing toSwitzerland’s increasing well being, went lock-step with the construction of new schools, hospi-tals, offices, apartments, and villas that radicallychanged the landscape, especially in the uplands.Half the Swiss population by then lived inZurich, Basel, Bern, Biel, Lausanne and Geneva.Though Switzerland had begun to develop andaffirm itself as an international financial marketat the start of the century, by the 1950s, the coun-try’s geographic position, firmly in the heart ofthe European telecommunications network andnear the German and Italian industrial basins,the guarantee of economic stability and socialpeace that it offers, the particular political situa-tions of nearby countries and their economicgrowth, all made it possible to consolidate its po-sition as a major financial centre as a result ofenormous capital inflow, especially to Genevaand Zurich, So Banca del Sempione SA began itsSwiss adventure in a very promising, safe and se-cure environment.

1. Consolidated annual financial statements of Banca del Sempione’s Group

18 Consolidated balance sheet

19 Consolidated income statement

20 Consolidated statement of Cash Flows

21 Notes to the annual consolidated financial statements


Year under Previous(Amount expressed in CHF 1’000) rewiew year Change

AssetsCash 47’992 73’825 –25’833Due from banks 289’471 230’455 59’016Due from customers 69’106 54’407 14’699Mortgages 74’122 62’092 12’030Securities and precious metal trading portfolios 3’384 732 2’652Financial investments 84’726 49’964 34’762Non consolidated participations 23 20 3Fixed assets 35’352 35’810 –458Intangible assets 1’120 1’120Accrued income and prepaid expenses 2’971 2’968 3Other assets 4’296 11’219 –6’923Total assets 612’563 521’492 91’071

Total due from unconsolidated Group entitiesand significant shareholders 1’485 200 1’285

LiabilitiesDue to banks 13’577 10’945 2’632Due to customers in savings and investment accounts 46’517 43’013 3’504Due to customers, others 410’345 324’953 85’392Accrued expenses and deferred income 4’240 4’453 –213Other liabilities 8’368 17’012 –8’644Valuation adjustments and provisions 14’832 14’302 530Reserves for general banking risks 15’510 14’950 560Share capital 20’000 20’000Reserves and retained earnings 66’492 62’608 3’884Minority interests in shareholders’equity 1’976 194 1’782Net income 10’706 9’062 1’644of which minority interests 95 –42 137Total liabilities and shareholders’equity 612’563 521’492 91’071

Total due to unconsolidated Group entitiesand significant shareholders 7’842 6’396 1’446

Off-balance sheet transactionsContingent liabilities 18’390 17’748 642Irrevocable commitments 2’744 2’194 550Liabilities for calls on share and other equities 50 50Derivative financial instruments– Contract volumes 427’900 369’906 57’994– Positive replacement values 3’311 10’691 –7’380– Negative replacement values 3’186 10’424 –7’238Fiduciary transactions 102’813 336’320 –233’507

CONSOLIDATED BALANCE SHEET AT 31.12.2009

Year under Previous(Amount expressed in CHF 1’000) rewiew year Change

REVENUES AND EXPENSES FROM ORDINARY BANKING ACTIVITIES

Result from interest activitiesInterest and discount income 5’243 9’593 –4’350Interest and dividend income on trading portfolios 37 4 33Interest and dividend income on financial investments 1’836 891 945Interest expense –625 – 1’652 1’027Net interest income (subtotal) 6’491 8’836 –2’345

Result from commission and service fee activitiesCommission income on lending activities 149 204 –55Commission income on securities and investment activities 28’376 22’632 5’744Commission income on other services 3’822 3’224 598Commission expenses –2505 – 2’123 –382Result from commission and service fee activities (subtotal) 29’842 23’937 5’905

Result from trading operations 4’492 2’051 2’441

Other ordinary resultsResults from the sale of financial investments 53 53Income from non-consolidated participations 4 3 1Real estate income 628 642 –14Other ordinary income 28 163 –135Other ordinary expenses –62 – 576 514Other ordinary results (subtotal) 651 232 419

Total income 41’476 35’056 6’420

Operating expensesPersonnel expenses –17’738 – 16’311 –1’427Other operating expenses –7’219 – 6’481 –738Total operating expenses (subtotal) –24’957 – 22’792 –2’165

Gross Profit 16’519 12’264 4’255

GROUP PROFIT

Gross profit 16’519 12’264 4’255Depreciation of fixed assets –2’321 – 2’536 215Valuation adjustments, provisions and losses –562 – 530 –32Intermediate result 13’636 9’198 4’438

Extraordinary income 3’053 –3’053Extraordinary expenses –587 – 1’250 663Taxes –2’343 – 1’939 –404Net income 10’706 9’062 1’644of which minority interests 95 – 42 137

CONSOLIDATED INCOME STATEMENT 2009


Year under review Previous yearSource Application Source Application

(Amount expressed in CHF 1’000) of funds of funds of funds of funds

Cash flow from operating activities (internal source)Net income 10’706 9’062Depreciation of fixed assets 2’321 2’536Valuation adjustments and provisions 640 110 235 1’662Change of reserves for general banking risks 560 1’250Accrued income and prepaid expenses 3 293Accrued expenses and deferred income 213 1’451Other expenses 6’923 8’759Other income 8’644 11’358Dividend 5’000 4’000Balance 7’180 8’276

Cash Flow from shareholders’equity transactionsVariation in minority shareholdings in the equity capital 1’782 147Foreign currency transactions and consolidation differences 178Balance 1’604 147

Cash flow from investment activitiesParticipations 3Fixed assets 1’774 1’462Intangible assets 1’209Balance 2’986 1’462

Cash flow from investment activitiesMedium and long term operations (>1 year)Saving and investments accounts 3’504 4’417Mortgages 12’030 804Financial investments 34’762 12’623

Short-term operationsDue to banks 2’632 13’428Due to customers 85’392 152’500Due from banks 59’016 99’113Due from customers 14’699 28’207Securities and precious metal portfolios 2’652 71

LiquidityCash 25’833 67’502

Balance 5’798 6’667

CONSOLIDATED STATEMENT OF CASH FLOWS 2009

The Banca del Sempione Group profileBanca del Sempione SA, founded in 1960, is the Group’s parent company with its head office in Lugano andbranches in Bellinzona, Chiasso and Locarno.The Group operates abroad through an affiliate incorporated in the Bahamas, Banca del Sempione (Overseas)Ltd., and an asset-management company named Accademia SGR SpA, specializing in the promotion and man-agement of Italian-law real estate investment funds.

Since September 2009, Banca del Sempione SA has also held 52% of the share capital of LMF & Partners SIM SpA,a stock brokerage company with its head office in Milan.

A complete list of the Group’s equity investments is provided in paragraph 3.3.

The Banca del Sempione Group businessThe Group provides its private and corporate clients with all the typical services of a universal bank, themain focus being on the provision of financial advice, asset administration services as well as securities, de-rivatives and currencies trading on behalf of its clients.The volume of transactions for the Group’s own account is limited.

The Group also promotes and manages a SICAV operating under the laws of Luxembourg (Base InvestmentsSICAV, licensed to distribute products in Switzerland).On the other hand, on-balance sheet transactions have secondary meaning. The lending policy has been kept very tight for a while; new loans are issued only if backed by collateral.Customer loans backed by guarantees shown in the financial statements account for 92% of the customerloans.Excess cash is invested short term at primary banks, medium term in a diversified high quality bond port-folio booked under “financial investments”.

PersonnelAs at 31 December 2009, the Group had 133 employees on its books, equating to 126.4 full-time positions(previous year: 118 employees, equating respectively to 115.5 positions).

Risk control and managementDuring the year, the Board of Directors regularly analyses the main risks linked to the Group’s activities. Thisanalysis is largely based on the information generated by the risk management system that the Group has setup, as illustrated below, and the reports issued by Internal Audit, Operations Management, Risk Control andCompliance.On the basis of this assessments, the Board of Directors determines the standards that regulate the Grouprisk policy.

NOTES TO THE 2009 CONSOLIDATED FINANCIAL STATEMENTS

1. Illustration of the Bank's business operations and organization


The Group has a set of regulations defining risk control and risk management in all areas of activities. Clearand conservative limits have been defined for each type of risk. These limits are regularly updated andadapted to the risk profile of each operation wich is carried out. The Risk Control unit is endowed with the necessary independence and professionalism. Its operating re-sponsibility is to identify and measure risks as well as to ensure that the Group's policies are implementedand limits respected: controls take place at regular intervals with the aid of the appropriate surveillancetools. Market valuations are updated on a daily basis.Operations Management is constantly informed on the Group’s risks.The Risk Control unit also draws up a quarterly report addressed to Operations Management and to the Boardof Directors.

Counterparty (credit) risks are minimized through a rigorous selection of financial counterparties and bysystematic demands on customers for collateral and margin coverage. The Group’s companies also haveprocedures regulating concession powers and ensuring a separation of functions between units that takeon risk and those that manage it.Lombard credits, which represent the preponderant part of the customer loan portfolio, are granted on thebasis of collateral, prudentially calculated and constantly monitored. The mortgage portfolio mainly refers to residences occupied by the owners themselves. The average mort-gage amount issued is CHF 367,000 (previous year: CHF 320,000). The collateral value of commercial prop-erties, incoming-producing buildings and private houses of high standing is determined with the help ofexternal appraisers.

Interest rate risk management with respect to the balance sheet structure is managed by the Group’s ALMcommittee.Other market risks, mainly on currency and securities positions, are contained by virtue of very strict lim-its imposed by the operating units. The positions are monitored daily.

Operating risks are limited through a series of internal regulations and provisions. Control operations arean integral part of daily operations. Internal Audit constantly monitors the adequacy of the procedures. The Compliance service ensures that regulations and diligence requirements affecting the Group’s variousareas of operations are respected. The Group has a business continuity plan to ensure operating continuity even in case of extraordinaryevents that limit the availability of personnel, infrastructure, and information systems.

OutsourcingBanca del Sempione SA has appointed an external company to carry out the necessary maintenance work onprograms belonging to the IT platform BOSS. A detailed services contract formally regulates the terms ofthis service. All personnel connected with the service company are subject to bank secrecy obligations.However, the services are not subject to the provision of circular FINMA 08/07.

General principlesThe accounting principles and valuation criteria adopted are in compliance with the provisions of the Codeof Obligations, Swiss banking law, and the guidances issued by the FINMA.The consolidated financial statements have been drawn up in accordance with Swiss law governing thepreparation of bank accounting statements. They present a true and fair view of the Group's capital struc-ture, financial standing, and operating performance.All transactions are shown in the financial statements according to the transaction date entry principle.

Scope and method of consolidationThose companies in which the Bank owns more than 50% of capital and shares with voting rights are fullyconsolidated.In accordance with the fully consolidation method, debits and credits, as well as revenues and expensesgenerated by transactions between consolidated companies, are netted. Consolidation of capital takes place according to the "purchase method". According to this method, bookvalue is offset against net equity existing at the time of formation or acquisition.Any equity investments held by 20%-50% are recognized in the consolidated financial statements accord-ing to the equity method.The non-consolidated equity investments are shown in the balance sheet at acquisition cost less any amor-tization, which may be necessary.The list of significant equity investments, as well as the change in the scope of consolidation, are shown inparagraph 3.3 of the Schedule.

Conversion of foreign currenciesForeign currency transactions are booked at the exchange of the transaction date. Profits and losses generated by the winding up of these transactions or by the conversion of foreign-curren-cy denominated assets and liabilities at exchange rates prevailing as at the end of the financial year arebooked to the income statement. The assets and liabilities of the consolidated companies are convertedat the year-end exchange rate, whereas revenues and expenses are converted at the average exchange rate.The resulting differences are directly allocated to the Group equity.

The following table sets out the exchange rates against the major foreign currencies applied for conver-sion purposes:

Main valuation principlesAssets, liabilities, and off-balance sheet entries shown under the same item are always subject to an indi-vidual valuation.

Cash, money market securities, loans to banks, liability reservesThese items are shown in the financial statements on the basis of their nominal value or acquisition value,less write-downs to individual items for credit risk. The discount on money market securities is divided intoinstallments.

2009 2008

Year End Average Year End Average

USD 1.0310 1.0827 1.0605 1.0803EUR 1.4857 1.5139 1.4912 1.5854GBP 1.6613 1.5392YEN 1.1162 1.1757

2. Accounting principles and valuation criteria


Loans (accounts receivable from customers and mortgage lending)Loans are generally booked at nominal value. Non-performing loans – defined as loans for which the debtor is considered unlikely to meet its commit-ments based on an examination of solvency criteria – are valued on a case-by-case basis. Presumed risks ofloss are covered by individual prudent write-downs. Any commitments deriving from off-balance sheet trans-actions are duly considered in this valuation. A loan is considered non-performing when interest and repayment are expired by more than 90 days at thelatest. In this case, interest not received is directly attributed to write-downs; an entry to revenues is madeonly when the interest is effectively received. The amount of the write-down corresponds to the difference between the book value of the loan and theamount the Bank believes it can collect based on counterparty risk and net revenues obtainable from theimplementation of any guarantees. Non-performing loans are recognised in the balance sheet net of corre-sponding write-downs. A lump-sum adjustment may be applied to loans that, while not substandard, present a potential risk ofloss, and to the portion of the portfolio consisting of numerous small loans. This adjustment is determinedby applying a calculation method that is systematic and constant over time (20% of the nominal value ofrisked loans and 5% for the minor loans).Changes in the amount of the write-down, both case-by-case and lump-sum, as well as collections of loanspreviously amortised are entered under the income statement item “value adjustments, provisions, and loss-es”. Reserves released because they are no longer necessary are either allocated to form new provisions orbooked to the income statement under the item “extraordinary gains”.

Trading securities and precious metals Trading securities and precious metals are shown at the market price on the closing date of the financialstatements and the results generated are shown in the income statement. If no reliable market price is avail-able, the lesser value principle is applied.

Financial investmentsFixed-income securities are valued according to the accrual method since the intention is to hold them tomaturity. Any transaction premiums and discounts at the time of the acquisition of the fixed-income securities aretherefore shown in the income statement on an accrual basis according to time-to-maturity.The result realized on a sale or early repayment is spread over the residual duration of the transaction deter-mined on the basis of the original maturity date. Any depreciation in value caused by a deterioration in the issuer’s solvency is shown under the item “otherordinary expenses”. In a similar way, any later write-backs to the previous value are booked to the item “oth-er ordinary revenues”. Equity investments and precious metals are shown at the lesser of acquisition cost and market value. Real assets received in guarantee of loans issued, and then received from auctions, are shown among finan-cial investments if the intention is to sell them off; they are shown at the lesser of acquisition cost and liq-uidation value. Physical assets in precious metals intended for conversion into cash are valued according to the lesser valueprinciple, while those used to cover commitments in the metals account are valued according to marketprices.

Non-consolidated equity investmentsAny minority stakes held by 20%-50% are shown in the financial statements according to the equity method.The companies in which the Bank holds an equity investment of less than 20% of the voting shares or whosesizes and operations do not have a significant impact on the Group, are shown in the financial statements atacquisitions price less depreciation and amortization as appropriate.

Fixed assetsAssets used for more than one reporting period and which are higher than the minimum activation limit areshown in the balance sheet at acquisition cost less depreciation and amortization. Depreciation and amor-tization are applied according to the straight-line method and are estimated on the basis of the presumeduseful life of the assets according to conservative criteria.Purchase of software and other intangible assets are carried in the balance sheet only if their useful life ismulti-year. Intangible assets developed in-house are not recognized on the balance sheet.Every year the bank examines the consistency of the criteria adopted and, if necessary, deducts supple-mentary depreciation and amortization. Ordinary and supplementary depreciation and amortization arebooked under the income statement item “depreciation and amortization of fixed assets.”

The presumed useful life expected for the different categories of assets is set out below:

Any gains realized on sales of fixed assets are shown under the item “extraordinary gains” and any lossesunder the item “extraordinary losses”.

Intangible AssetsGoodwillIf an equity investment is acquired at a price higher than the net value of the assets taken over, the dif-ference is recognised as goodwill.Amortisation, calculated in accordance with the useful life of the asset (usually 5 years), is recognised inthe income statement. At the end of each period, the real value of goodwill is in any case subject to an impairment test. If itproves to be overvalued, supplemental amortisation is recognised.

Employee pension funds All employees at the Swiss parent company are members of two legally autonomous pension funds. Foreign employees are subject to a professional pension required from local laws. In the absence of suchlaws, voluntary pensions may be set up.

Premiums paid by the employer are recognised as staff expenses.

Real estate, including land Up to 67 yearsOther fixed assets Up to 10 yearsInformation technology and other equipment Up to 5 years


TaxesCurrent taxes are determined in accordance with legal provisions in force. They are booked in the incomestatement of the period in which taxable earnings are generated. Tax provisions set aside at year-end are booked under the liability item “accrued liabilities and deferred in-come”. The tax effect of the time difference between the tax amount and the financial statement value ofthe assets and contingent liabilities is booked as deferred taxes on the liability side of the balance sheetunder the item “value adjustments and provisions”.Deferred taxes are calculated separately for each accounting period and for each tax entity based on taxrates in effect at the time the annual financial statements are drawn up. Deferred tax credits on time dif-ferences or on losses carried forward are booked under the asset item “pre-paid expenses and accrued in-terest” only if it is likely that they will be realized as a result of the future generation of sufficient taxableearnings.Deferred tax credits and liabilities are offset only to the extent that they are attributable to the same taxcollection agency and only if this offsetting is permitted by law.

Contingent liabilitiesThese off-balance sheet transactions are booked at nominal value. Value adjustments and provisions aremade for all recognizable risks on a case-by-case basis as at the financial statement ending-date accord-ing to the conservative principle.

Value adjustments and provisionsA single value adjustment and provision is made for all recognizable risks as at the financial statement end-ing-date according to the conservative principle.Provisions no longer necessary for operating purposes and which are not used to constitute new provisionsof the same type are liquidated in favor of the income statement. Individual provisions and value adjustments are used to directly decrease the value of the asset in question. The tax provision includes only deferred taxes deriving from the difference between the financial statementcriteria adopted for drawing up the annual consolidated accounts and the individual financial statements.

Derivative financial instrumentsAll derivative financial instruments are shown at market value since they are strictly for trading purposes. Positive and negative replacement values are booked under the balance sheet items “other assets” or “oth-er liabilities” as appropriate.Market value is determined by market prices on an efficient and sufficiently liquid regulated stock exchange,by sell prices offered by a market-maker or by prices calculated with the aid of a pricing model. Offsetting in the balance sheet between positive and negative replacement values with the same counter-party is allowed only within the limits of legally valid offsetting agreements. The realized or unrealized results from transactions with derivative instruments are shown under the item“results from trading operations”.

Changes to the accounting, valuation, and presentation principlesThe accounting and valuation principles applied to the annual report for the year-ending 31 December 2009are the same as those applied in the previous year.

Type of collateralMortgage Other Without

(Amount expressed in CHF 1’000) collateral collateral collateral Total

LoansDue from customers 5’362 52’761 10’983 69’106Mortgages 74’122– Residential real estate 62’406– Trade and industrial property 11’716Total loans 79’484 52’761 10’983 143’228Previous year 68’826 41’173 6’500 116’499

Off-balance sheet transactionsContingent liabilities 17’934 456 18’390Irrevocable commitments 2’744 2’744Liabilities for calls on shares and other equities 50 50Total off-balance sheet transactions 17’934 3’250 21’184Previous year 17’304 2’688 19’992

Estimated SpecificGross realisation Net provisio –

(Amount expressed in CHF 1’000) amount value amount ning

Non-performing loansYear under review 3’787 310 3’477 3’477Previous year 4’648 310 4’338 3’588

3.2 Securities and precious metal trading portfolios, financial investments and participations

Year under Previous(Amount expressed in CHF 1’000) review year

Securities and precious metal trading portfoliosInterest bearing securities 802 349Listed equities 2’546 141Precious metals 36 242Total securities and precious metal trading portfolios 3’384 732

Book MarketValue Value

Year under Previous Year under Previous(Amount expressed in CHF 1’000) review year review year

Financial investmentsInterest bearing securities to keep until maturity 79’221 44’732 80’622 45’154Listed equities 3’490 3’217 3’711 3’219Real estate 2’015 2’015 2’015 2’015Total financial investments 84’726 49’964 86’348 50’388of which securities used in repurchase agreements, according to liquidity provisions 56’016 26’732


ParticipationsNot listed 23 20Total participations 23 20

3. Information on the balance sheet

3.1 Breakdown of collateral loans and off-balance sheet transactions


Year under PreviuosName and address Business activities review year

Share capital Interest in % Interest in %

Fully consolidated companiesBanca del Sempione (Overseas) Ltd., Nassau Bank and Trus CHF 5’000’000 100.0 100.0BDS Corporate Services Ltd., Nassau Financial USD 100’000 100.0 100.0Imocentro SA, Lugano Real Estate CHF 700’000 100.0 100.0Finrate SA, Lugano Financial CHF 200’000 100.0 100.0Accademia SGR SpA, Milano Asset Management EUR 1’942’800 93.7 91.0LMF & Partners SIM SpA, Milano Asset Management EUR 2’300’000 52.1 0.0

During the year under review, Accademia SGR SpA increased its share capital by an amount of EUR 578,000. This capital increased wasonly reserved to Banca del Sempione SA.

The participation in LMF & Partners SIM SpA (52.1%) was purchased in September 2009.

3.4 Fixed assets and participations

Book BookWrite-offs/ value value year

Historical Accumulated previous Write-offs/ Reclas- under(Amount expressed in CHF 1’000) cost depreciation year Additions Disposals Depreciations sifications review

Non-consolidated ParticipationsOther participations 70 50 20 3 23Total non-consolidated participation 70 50 20 3 23

Fixed assetsBank buildings 49’289 16’436 32’853 244 –1’015 32’082Others fixed assets 21’712 18’755 2’957 1’336 –1’217 194 3’270Total fixed assets 71’001 35’191 35’810 1’580 –2’232 194 35’352

Intangible assestsGoodwill 583 583 1’209 –89 1’120Total intangible assests 583 583 1’209 –89 1’120

Fire insurance value of real estate 43’511Fire insurance value of other fixed assets 6’747

Commitments on outstanding leasing contracts 94

3.3 Information on significant participations

Year under review Previous yearOther Other Other Other

(Amount expressed in CHF 1’000) assets liabilities assets liabilities

Replacement value of derivative financial instrumentsrelated to contracts negotiated for own account 3’311 3’186 10’691 10’424Indirect taxes 251 3’052 219 3’022Settlement accounts 734 2’130 309 3’566Total 4’296 8’368 11’219 17’012

3.6 Assets pledged or ceded to secure own liabilities and assets subject to ownership reservation

Year under Previous (Amount expressed in CHF 1’000) review year

Type of securities and purpose of the depositFinancial investment reserved for REPO transactions with the SNB (unused) 6’174 5’955

Receivables from banks and financial investment to cover mandatory marginson derivative products (fully used) 10’283 7’077Total 16’457 13’032

3.7 Liabilities to the pension fund of own staff

Year under Previous (Amount expressed in CHF 1’000) review year

Balances in sight and time accounts of the Group foundation 1’989 3’182

Banca del Sempione SA has two pension plans for its staff members in Switzerland. For the mandatory part, LPP, the Bank has opted for affiliation with the legally independent, Basel-based, Collective Pension Foundation.In addition, employees are affiliated with the Banca del Sempione Pension Fund, managing only the optional (supplemental) part of theprofessional pension plan. Both Funds reinsure risks with a life insurance company, fully for the mandatory part, and only for the risk of decease and disability forthe supplemental part. The pension age is the same as that established by the AVS. In case of early retirement, the affiliate receives thecapital accumulated at that time (supplemental part). At the end of the accounting period, as in the previous year, the Bank did not record any obligations with the two pension funds sinceall the risks are reinsured and there are no financial risks in the supplemental part. So the Bank receives neither a monetary advantage nor does it have coverage obligations. All the Bank’s financial obligations to thepension Funds are fulfilled with the payment of the contributions. Neither of the two Funds contain reserve contributions from the employer. The Banca del Sempione SA Pension Fund’s last audited annu-al report (31 December 2008) showed a coverage rate of 137%. Banca del Sempione (Overseas) Ltd. employees benefit from voluntary pension coverage. In this case as well, the Bank’s commitmentis limited to the payment of contributions

3.5 Other assets and other liabilities


Recoveries, Newdoubtful allocation Reversal

change in the interest, charged credited YearPrevious Specific scope of exchange to income to income under

(Amount expressed in CHF 1’000) year usage consolidation differences statement statement review

Provisions for current and deferred taxes 1’657 140 –12 1’785

Valuation adjustments and provisions reserve forloan losses (credit and country risks) 3’683 –73 64 –63 3’611Other provisions 12’550 –265 172 –44 500 12’913Subtotal 16’233 –338 172 20 500 –63 16’524

Total valuation adjustments and provisions 17’890 –338 172 20 640 –75 18’309

less: valuation adjustments directly netted with assets –3’588 –3’477

Total valuation adjustments andprovisions as per balance sheet 14’302 14’832Reserves for general banking risks 14’950 560 15’510

3.9 Statement of changes in shareholders’equity

Shareholders’equity, at beginning of year under review (Amount expressed in CHF 1’000)

Share capital 20’000General legal reserve 62’608Minority interests in shareholders’equity 194Other reserves 14’950Retained earnings 9’062Total shareholders’equity, at the beginning of year under review (before profit distribution) 106’814– Dividend –5’000+ Allocation to the reserve for general banking risks 560+ Variation in minority shareholdings in the equity capital 1’782+ Foreign currency transactions and consolidation differences –178+ Net income 10’706Total shareholders’equity, at the end of year under review (before profit distribution) 114’684

Of which:Share capital 20’000General legal reserve 66’492Minority interests in shareholders’equity 1’976Other reserves 15’510Retained earnings 10’706

3.8 Valuation adjustements and provision

MaturityWithin

Redeemable Within Within 12 months– After Real estate(Amount expressed in CHF 1’000) At sight by notice 3 months 3–12 months 5 years 5 years to be sold Total

Current assetsCash 47’992 47’992Due from banks 73’908 215’563 289’471Due from customers 619 54’486 4’675 7’976 850 500 69’106Mortgages 30’926 2’978 6’311 33’607 300 74’122

Securities and precious metaltrading portfolios 3’384 3’384Financial investments 3’490 9’785 15’145 51’120 3’171 2’015 84’726Total current assets 129’393 85’412 233’001 29’432 85’577 3’971 2’015 568’801Previous year 169’720 68’978 167’346 31’360 32’056 2’015 471’475

Borrowed fundsDue to banks 13’577 13’577

Due to customers in savingand investment accounts 46’517 46’517

Due to customers,other 405’821 1’500 2’875 149 410’345Total borrowed funds 419’398 48’017 2’875 149 470’439Previous year 308’875 45’313 22’044 2’679 378’911

3.11 Related party transactions, loans to members of the Bank’s governing bodies


Due from related companies 20’526 6’394Due to related companies 9’701 10’138Loans and exposure to members of the bank’s governing bodies 6’650 5’385

Transactions with related partiesNo significant transactions with affiliated entities were executed during the financial year. The conditions applied for banking servicesare equivalent to those applied to primary customers. Members of the Bank’s governing bodies enjoy the same benefits made availableto all employees.

.

3.10 Maturity structure of current assets and borrowed funds


Year under review Previous year

(Amount expressed in CHF 1’000) Domestic Foreign Domestic Foreign

AssetsCash 47’991 1 73’824 1Due from banks 44’859 244’612 25’774 204’681Due from customers 26’381 42’725 19’476 34’931Mortgages 74’122 62’092Securities and precious metal trading portfolios 39 3’345 248 484Financial investments 9’393 75’333 10’843 39’121Non-consolidated participations 20 3 20Fixed assets 34’784 568 35’394 416Intangible assets 1’120Accrued income and prepaid expenses 1’847 1’124 2’183 785Other assets 3’459 837 10’965 254Total assets 242’895 369’668 240’819 280’673

LiabilitiesDue to banks 1’400 12’177 8’471 2’474

Due to customers in savingand investment accounts 42’539 3’978 38’912 4’101Due to customers, other 135’562 274’783 111’762 213’191Accrued expenses and deferred income 3’438 802 3’592 861Other liabilities 7’324 1’044 16’182 830Valuation adjustments and provisions 14’660 172 14’302Reserves for general banking risks 15’510 14’950Share capital 20’000 20’000Reserves and retained earnings 63’093 3’399 58’944 3’664Minority interests in shareholders’equity 1’976 194Net income 7’538 3’168 7’055 2’007Of which minority interests 95 –42Total liabilities and shareholders’equity 311’064 301’499 294’170 227’322

3.13 Assets by countries/country group

Year under review Previous year

(Amount expressed in CHF 1’000) Amount CHF Percentage % Amount CHF Percentage %

Switzerland 242’895 40 240’819 46Other OECD countries 353’135 57 268’598 52Other countries 16’533 3 12’075 2Total assets with foreign countries 369’668 60 280’673 54Total assets 612’563 100 521’492 100

3.12 Assets and liabilities by domestic and foreign origin

(Amount expressed in CHF 1’000) Currency

CHF USD EUR Other Total

AssetsCash 44’969 74 2’903 46 47’992Due from banks 17’748 63’600 187’657 20’466 289’471Due from Customers 20’931 8’915 37’430 1’830 69’106Mortgages 74’122 74’122Securities and precious metal trading portfolios 12 2’038 1’268 66 3’384Financial Investments 50’818 7’858 26’050 84’726Non-consolidated participations 23 23Fixed assets 35’044 308 35’352Intangible assets 1’120 1’120Accrued income and prepaid expenses 1’120 320 1’523 8 2’971Other assets 3’120 363 593 220 4’296Total assets 249’027 83’168 257’732 22’636 612’563Forward transactions and currency options 81’397 113’202 153’448 79’853 427’900Total assets 330’424 196’370 411’180 102’489 1’040’463

Liabilities and shareholders’equityDue to banks 745 387 11’692 753 13’577

Due to customers in savingand investment accounts 46’517 46’517 Due to customers, other 116’395 63’763 212’641 17’546 410’345Accrued expenses and deferred income 3’803 118 317 2 4’240Other liabilities 5’987 346 1’733 302 8’368Valuation adjustments and provisions 2’717 12’115 14’832Reserves for general banking risks 15’510 15’510Share capital 20’000 20’000Reserves and retained earnings 66’492 66’492Minority interests in shareholders’equity 1’976 1’976Net income 10’701 42 –37 10’706Of which minority interests 95 95Total liabilities and shareholders’equity 288’867 64’656 240’437 18’603 612’563Forward transactions and currency options 48’403 132’985 163’326 83’186 427’900Total liabilities and shareholders’equity 337’270 197’641 403’763 101’789 1’040’463Net positions per currency –6’846 –1’271 7’417 700

3.14 Balance sheet by currencies



Contingent liabilitiesGuarantees and similar instruments issued 17’697 17’748Irrevocable commitments arising from documentary credits 693Totale impegni eventuali 18’390 17’748

4.2 Outstanding derivative instruments

Positive Negativereplacement replacement Contract

(Amount expressed in CHF 1’000) value value volumes

Foreign exchangeForward contracts 2’894 2’747 316’414Options (OTC) 417 439 111’486Total 3’311 3’186 427’900Previous year 10’691 10’424 369’906

4.3 Fiduciary transactions


Fiduciary transactionsFiduciary deposits with third banks 64’729 297’663Fiduciary loans 38’084 38’657Total fiduciary transactions 102’813 336’320

4.4 Assets under control


Type of Assets under controlAssets in funds managed by the Group 712’804 415’734Assets under management 842’982 478’452Other Assets under control 1’654’454 1’913’234Total Assets under control (including assets consolidated two times) 3’210’240 2’807’420of which double counting 312’529 413’863Net new money 214’583 129’422

The managed assets include all the equity for which the Bank receives commission and/or fees in addition to the safe custody and ac-count charges. The Bank does not hold assets which could be considered as "custody only".

The net inflow includes all the incoming and outgoing liquidity and stock transfers during the year, according to the valuation on theday of the transfer and excluding interest, charges and commission. The assets controlled by LMF & Partners SIM SpA, when it was pur-chased by Banca del Sempione SA (September 2009), have been included in the net new money.

4. Information on off –balance sheet transactions

4.1 Contingent liabilities


Foreign exchange and banknotes 4’221 2’147Precious metals 55 4Securities 216 –100Total result from trading operations 4’492 2’051

5.2 Personnel expenses


Bank organs 965 744Salaries and wages 13’465 12’373AVS, AI, IPG and other contributions required by law 1’455 1’301Pension foundation contributions 1’348 1’321Other personnel expenses 505 572Total personnel expenses 17’738 16’311

5.3 Other operating expenses


Premises expenses 1’179 1’130Information technology, machinery, fixtures and fittings, vehicles and other equipment 1’555 1’388Other operating expenses 4’485 3’963Total operating expenses 7’219 6’481

5.4 Extraordinary income and costs

Under the extraordinary costs a provision of CHF 560’000 has been registered in favour of the reserves for general banking risks.

5.5 Revaluation of fixed assets to a level exceeding acquisition value (art. 665 and 665a CO)

No company included within the scope of consolidation has carried out revaluations.

5. Information on the income statement

5.1 Result from trading operations


Year under rewiew Previous year

(Amount expressed in CHF 1’000) Switzerland Abroad Switzerland Abroad

Result from interest activitiesInterest and discount income 4’727 516 8’400 1’193Interest and dividend income on trading portfolios 37 4Interest and dividend income on financial investments 1’769 67 841 50Interest expense –476 –149 – 991 – 661Net interest income (subtotal) 6’057 434 8’254 582

Result from commission and service fee activitiesCommission income on lending activities 124 25 192 12Commission income on securities and investment activities 22’834 5’542 19’040 3’592Commission income on other services 2’242 1’580 2’376 848Commission expenses –2’301 –204 –1’933 –190Result from commission and service fee activities (subtotal) 22’899 6’943 19’675 4’262

Result from trading operations 4’290 202 1’945 106

Other ordinary resultsResults from the sale of financial investments 44 9 –7 7Income from non-consolidated participations 4 3Real estate income 628 642Other ordinary income 1 27 31 132Other ordinary expenses –22 –40 –550 –26Total operating expenses (subtotal) 655 –4 119 113

Total income 33’901 7’575 29’993 5’063

Operating expensesPersonnel expenses –15’775 –1’963 –14’953 –1’358Other operating expenses –5’572 –1’647 –5’381 –1’100Total operating expenses (subtotal) –21’347 –3’610 –20’334 –2’458

Gross Profit 12’554 3’965 9’659 2’605

5.7 Taxes


New provisions for deferred taxes 140Release of provisions for deferred taxes –12 –13Taxes on current income 2’215 1’952Total taxes 2’343 1’939

5.6 Revenues and expenses from ordinary banking operations broken down according to the domicile of operations (Switzerland or abroad)

6. Eligible capital and necessary capital

Year under Previous(Amount expressed in CHF 1’000) review Year

Eligible capital 102’736 97’752

Credit risk 19’299 13’475Risk without counterparty 8’656 8’661Market risk 2’514 3’465Operational risk 5’678 5’202Write-downs and provisions –772 – 763Necessary capital 35’375 30’040

The data reported in the table is based in the Basel II provisions on capital. At 31 December 2009, CHF 35.4 million in eligiblecapital is in place covering a legal need valued at CHF 102.7 million. The ratio of eligible capital to necessary capital is 290% (previ-ous year: 325%), reflecting Banca del Sempione’s solid capital structure.


DEVELOPMENT IS BASED ON TRUST

Progress is a compromise between our past

and a future that is not yet unveiled. We

make progress day by day, but there are

times when the pace of events accelerates

and the change is more difficult to handle.

Ticino went through such times in the

1950s, when the sprint to modernise trig-

gered urban and infrastructure expansion,

transforming its society and landscape for-

ever.

In 1960, Banca del Sempione SA set up its

head office where there was most need for

stable reference points, capable of support-

ing business initiatives and life projects that

would shape the new Ticino. And today its

mission has not changed.

Modern ticino

Great potential

After World War II, a flow of foreign workers became necessary for the Swiss economy which did not havea sufficient domestic labour force. In the early 1950s, while Switzerland and Europe took off economical-ly and moved confidently into the future, the Canton of Ticino again opened up and increasingly towardsthe south. Shortly before that period, Ticino had been a land of emigrants, now it became a land of immi-grants: the first wave of workers came from Italy, attracted by the big construction sites and sharing language and culture with the Ticinese; the second wave came from German Switzerland and Germany,seeking that legendary mild and warm south that the first tourists pursued in the late 1800s after the open-ing of the San Gottardo line, and the northern European nobility and intellectuals of the 1920s.

The combination of these two migratory currentsbrought well being and consequences in the re-gion’s transformation from rural to urban andresidential. So the transition began: the tradition-al peasant society disappeared and a period ofrapid development and economic and demo-graphic changes remade Ticino’s identity. Thisrapid development left in its wake big differencesbetween cities, valleys in expansion, and moun-tain regions. The fast arrival of modernity and itsimpact also raised fears. But most economic par-ticipants thought that Ticino could focus on de-velopment, taking advantage of its natural re-sources, such as the landscape and waterpower.Participants also focused enthusiastic effort onlinks with Italy through the Locarno-Venice wa-terway and the Genoa-Chiasso motorway, andthey began to turn the waters of the Valle Maggiaand Val di Bienio into hydroelectric power. In the early 1960s, people in the industrializedeconomies thought that the boom would last atleast another 20 years. First the American dream,then the sweet life and economic boom, acted as astimulus also for the Ticinese to develop their re-gion: with euphoria and enthusiasm, they includ-ed the Canton in the dynamic and irreversible de-velopment of the European economy. The societywas radically transformed, quickly transitioningfrom the plough to the computer. The belief inprogress and the hope for well being made every-

one dream for Ticino too “a blue sky paintedblue”, a “Carosello” future made of prosperity,technological development, cars, cement, andeverywhere motorways, tunnels, airports, roadbridges, skyscrapers, and oil pipelines. A transi-tion worthy of “The Jetsons”, a cartoon widelybroadcast by TSI which began programming in1961. Construction went on at breakneck speedand the development of tourism, which became amajor sector of the Ticinese economy, increasedthe value of the towns’ old centres, with their cot-tages and monuments to faith. The InternationalFilm Festival brought worldliness and eleganceto Locarno, a city that, with Ascona, developedits hotel industry in particular. MeanwhileLugano, with its world-famous architects, devel-oped new urban spaces suitable to foster growthin banking and financial services, education, andtourism, and it also developed its luxury industry.

GREAT POTENTIAL: MODERN TICINO

The Ticinese banking industry had been develop-ing since the start of the century, but it did nottake off until the 1960s. This financial centre is lo-cated between Lombardia and Zurich, two verydynamic European regions, gaining a consider-able position in a short time. Foreign banksopened offices alongside the branches of the bigSwiss banks. Linking the northern Italian econo-my with the Swiss economy, Lugano and itsbanking centre has held a strategic economic,cultural and geographical position. Because ofSwitzerland’s economic, monetary, political andinstitutional stability, its business freedom, secu-rity, and client confidentiality, the Ticinese bank-ing industry enjoyed major structural growth,with a sharp increase in the number of banks,branches, and employees. There was also a sharpincrease in international financial flows seekingasset management skills which became Ticino’sspecialty. Rising up in response to traditional lo-cal demand, growing on the stimulus of thesearch for stability in international capital, theTicino financial centre then focused on offeringquality services. Ticino’s manufacturing and serv-ice sectors grew fast and decisively then, seizingthe opportunity of its proximity to Italy. In 1960,Banca del Sempione SA chose Lugano to openits first head office, demonstrating its belief in thegreat potential of a region that in a few yearswould become Switzerland’s third biggest finan-cial centre after Zurich and Geneva.

2. Other activities of the Group

46 Accademia SGR SpA

48 Base Investments SICAV

50 LMF & Partners SIM SpA

51 Banca del Sempione (Overseas) Ltd., Nassau

ACCADEMIA SGR SpA

The CompanyAccademia SGR SpA is an asset-management company specialized in real estate funds, combining the interna-tional experience accumulated in real estate and the asset management business generated by Banca delSempione SA in over forty years. Providing asset management services through a real estate fund allowsthe Banca del Sempione SA Group to enhance its range of products and services.

The MissionAccademia SGR SpA has inherited the Group’s attention to the needs of the individual. In fund management,this means forging tools designed for use by a restricted number of qualified investors. The Accademia SGR SpAmission is to give investors maximum transparency in the management of their funds. As a result, investorshave the opportunity to participate in highly attractive real estate initiatives. Said tools are directly man-aged by the company, with the advice of real estate industry experts, and give investors the comfort of theguarantees afforded by the control structure, under Italian law.

Real Estate FundsIn 2009, Accademia SGR SpA acquired an investment fund already managed by another company, bringingthe number of funds managed to four and increasing assets under management to Eur 266 millions. Duringthe year the Bank further strengthened its organisation, adapting it to its growing operating needs, and inearly 2010 it moved its headquarters to offices more suitable for hosting its staff.

Accademia SGR SpA mainly deals in the following types of funds:

Real Estate:

real estate assets, real estate rights, and/or equity investments in real estate companies;

Closed-End:the fund regulations set the timetable and procedures for investing in shares and their duration; the in-vestor has the option of early redemption of the shares only through a specific resolution by the SGR’s boardof directors;

Reserved:investment is restricted to certain “qualified investors”, defined in the fund’s regulations in the frameworkof Italian law. This type of fund allows for the initial identification of the investors and exemptions frominvestment diversification standards prescribed by the Bank of Italy for most mutual funds.

Investing In Our FundsThe real estate funds are an ideal tool for transforming savings into a real fruitful and safe investment, farfrom securities market fluctuations because of value growth over time and sizable returns. Since these fundsare reserved for “qualified investors”, they are allowed to maintain a higher investment concentration,a feature that makes them similar to a personal inheritance and not an anonymous mutual investment fund.

Accademia SGR SpAVia S. Maurilio 1320123 MilanoTel. +39 02 36 567 003Fax +39 02 36 567 183www.accademiasgr.it

Board of Directors

Sandro Medici Chairman

Michele Bonaduce Deputy Chairman

Roberto Franchi Managing Director� ( 25.03.2010)

Mario Galetti Director

Uberto Selvatico Estense Director

Stefano Rogna Director

Auditor PricewaterhouseCoopers SpA, Milan

ACCADEMIASGR

Investor ProfileAccademia SGR SpA targets a small circle of “qualified investors” with experience in real estate investment andwho are willing to delegate management of their capital to participate in real estate transactions in associa-tion with other investors with the same qualifications. Ministerial Decree no. 228 of 24 May 1999 defines a“qualified investor”. The definition includes institutional investors, both natural and legal persons who havespecific skills and experience in the fund’s target investment.

With Accademia SGR SpA, Banca del Sempione Group provides another option in its array of assetmanagement services.


Base Investments SICAV

In the Grand-Duchy of Luxembourg, Banca del Sempione SA is the sponsor of BASE Investments SICAV, an open-end investment company established on 29 May 2001 and registered in the official list of Undertakings forCollective Investment pursuant to the Law of 20 December 2002, Section I.

The company is organised according to the multi sub-funds, multi-manager principle. The sub-funds havevarying, specific investment objectives and different types of risk. Each sub-fund is represented by distinctshares, offering investors the advantage of being able to choose among different investment categories.

BASE Investments SICAV aims to preserve capital, increase assets, and provide investors with a diversifiedinvestment portfolio. The ideal minimum investment period is 2-3 years, depending on the features of theindividual sub-funds.

BASE Investments SICAV uses the most modern fund management techniques, attaching marked importance toasset picking and the careful selection of outside managers with proven efficiency and professionalism. Thisapproach offers not only different investment methods, it also reduces overall investment risk. Banca delSempione SA Group takes care of the research and the selection of managers for each sub-fund with a view toachieving the best results for investors.

Starting from the principle that the SICAV’s various sub-funds are invested in securities, where cash is usedas a support, the company carefully picks the markets it wants to operate in, focusing mainly on three assetclasses (equity, bond, and monetary), following the specific approaches of the sub-funds, listed below:

BASE Investments SICAV - Equities USAThe objective of this Sub-Fund is to outperform the Standard & Poor’s 500 Index, investing mainly in sharesof companies domiciled in the United States or which generate the bulk of their turnover in the UnitedStates.

BASE Investments SICAV - Equities SwitzerlandThe objective of this Sub-Fund is to outperform the SLI Index, investing mainly in shares of companiesdomiciled in Switzerland or which generate the bulk of their turnover in Switzerland.

BASE Investments SICAV - Equities EuropeThe objective of this Sub-Fund is to outperform the EUROSTOXX 50 Index, investing mainly in shares ofcompanies domiciled in Continental Europe and the United Kingdom (including all EU and Scandinavian coun-tries, as well as Switzerland) or which generate the bulk of their turnover in Continental Europe and theUnited Kingdom.

BASE Investments SICAV - Equities ItalyThe objective of this Sub-Fund is to outperform an Index composed of JPM CASH EUR 03 MONTHS (15%) andCOMIT GLOBALE (85%), investing mainly in shares of companies domiciled in Italy or which generate thebulk of their turnover in Italy.

BASE Investments SICAV - Equities AsiaThe objective of this Sub-Fund is to seek capital preservation and appreciation over time, investing mainlyin shares of companies domiciled in Asia or which generate the bulk of their turnover in Asia.

BASE Investments SICAV - Bond EURThe objective of this Sub-Fund is to outperform an index composed of SSB EUROBIG (80%) and JPM CASH EURO03 MONTHS (20%), with a time horizon of three years, investing mainly in euro-denominated fixed-incomesecurities, having a rating of at least A- according to the Standard & Poor’s rating system (or an equivalentrating assigned by another rating agency).

Board of Directors

Roberto Franchi Chairman� ( 25.03.2010)

Massimo Paolo Gentili Independent Director


Beat Viktor Meier Director

Auditor PricewaterhouseCoopers, Luxembourg

BASE Investments SICAV - Bond USDThe objective of this Sub-Fund is to outperform the SSB EuroDollar Index, with a time horizon of three years,investing mainly in USD-denominated fixed-income securities, having a rating of at least A- according to theStandard & Poor’s rating system (or an equivalent rating assigned by another rating agency).

BASE Investments SICAV - Bond CHFThe investment objective of this Sub-Fund is to outperform an index composed of SBI FOREIGN RATING AAATOTAL RETURN (80%) and JPMORGAN CASH INDEX CHF 3 MONTHS (20%), with a time horizon of three years,having a rating of at least A- according to the Standard & Poor’s rating system (or an equivalent ratingassigned by another rating agency).

BASE Investments SICAV - Bond EUR IIThe objective of this Sub-Fund is to outperform an index composed of EBREXX Gov. Bond 2.5-5.5 years (85%)and JPM EMU CASH 03 Months (15%), with a time horizon of three years, investing mainly in euro-denomi-nated fixed-income securities issued by entities having a rating of BBB or better according to the Standard& Poor’s rating system (or an equivalent rating assigned by another rating agency).

BASE Investments SICAV - Short Term CHFThe objective of this Sub-Fund is to outperform the JPM CASH CHF 03 MONTHS Index, mainly investing infixed-rate or floating-rate securities, such that the average time to maturity of the securities included inthe portfolio does not exceed twelve months.

BASE Investments SICAV - Short Term EURThe objective of this Sub-Fund is to outperform the JPM CASH EUR 03 MONTHS Index, mainly investing infixed-rate or floating-rate securities, such that the average time to maturity of the securities included inthe portfolio does not exceed twelve months.

BASE Investments SICAV - Short Term USDThe objective of this Sub-Fund is to outperform the JPM CASH USD 03 MONTHS Index, mainly investing infixed-rate or floating-rate securities, such that the average time to maturity of the securities included inthe portfolio does not exceed twelve months.

In 2009, the EUR bond Sub-Fund directly managed by Banca del Sempione SA was awarded best fund for itscategory among those distributed in Switzerland. The SICAV increased its assets in 2009, driven by the ex-cellent performance of several sub-funds. During the year, the SICAV obtained authorisation for distributionin Italy for most of its sub-funds. In the early months of 2010, two new sub-funds were successfully intro-duced: Flexible Low Risk, which combines a small allocation of equity investment with bond investment,and Bond Multicurrency, bond investment with exposure to currencies other than the euro. In view of theirstrategies, both products should be considered innovative, with a total return objective and careful riskmanagement.


Board of Directors

Benedetto Lorito Chairman

Günter Jehring Deputy Chairman

Massimo Gionso Managing Director

Giampio Bracchi Director


Angelo Carbone Director

Andrea Bonetti Director

Auditor PricewaterhouseCoopers SpA, Milan

LMF & Partners SIM SpA, based in Milan, became part of the Banca del Sempione Group in 2009.

A subsidiary of Banca del Sempione SA, the company is active in asset management, investment advisory, andsecurities brokerage in general. It is geared towards clients who demand proven asset management skill basedon the principles of reliability and common sense, typical of all Banca del Sempione Group companies.

Mission LMF & Partners SIM SpA provides management of assets entrusted to it customised to each clients’ changingneeds and preferences, together with their expectations and appropriate margin of risk agreed to beforehand.

Features

Customisation Customisation means continuously interacting with the client, through direct contact, pursuing the devel-opment of investment decisions so that that they are consistent with expectations.

Professionalism LMF & Partners SIM SpA offers its clients a staff of managers with many years of experience who, through aseries of national and international contacts, are capable of taking advantage of the best opportunities inthe various regulated markets.

Research Management, advisory and order taking are appropriately aided by sources of recognised skill at the nationaland international level and by coordinated in-house analysis that independently evaluates management de-cisions, favouring dynamic, innovative, and transparent trading.

Safety Through a series of agreements with top banks, LMF & Partners SIM SpA guarantees its clients clear separa-tion between client assets deposited in trading accounts and assets under management by the SIM by virtueof mandates received.

Asset management, asset administration, and financial advisory are the services that LMF & Partners SIM SpAoffers to those who seek an independent, professional and flexible company for their savings.

LMF & Partners SIM SpA Società di Intermediazione Mobiliare SpALegal, operating, and administrative officesVia M. Gonzaga, 2 I - 20123 MilanTel. +39 02 303 03 51Fax +39 02 303 035 122/124

Lecco Branch Piazza Lega Lombarda, 3 | 4th floor, staircase A I - 23900 Lecco Tel. +39 0341 36 97 06Fax. +39 0341 37 06 30

LMF & Partners SIM SpA

Banca del Sempione (Overseas) Ltd., Nassau

Banca del Sempione’s mission to serve its clients and explore new opportunities and trading possibilities forthem was furthered in early 2000 with the opening of Banca del Sempione (Overseas) Ltd., domiciled inNassau, Bahamas and wholly-owned by the Swiss parent.

This Caribbean country and especially Nassau are today one of the world’s major financial centres with around400 banks. Because of its constantly updated infrastructure and highly restrictive anti-money laundering reg-ulations, over time it has earned the reputation of being the Switzerland of the Caribbean. Evidence of theeffort made is that fact that the country and the banking industry in particular are no longer on the OECDgrey list.

Banca del Sempione (Overseas) Ltd., has been able to participate in this context and today it is an inde-pendent operation within the Group, with a deep commitment to asset management and the offer of finan-cial and estate planning services. Over the years, the Nassau branch has acquired the skills that have enabled it to play the precious role of advisor in the selection of outside managers for the group’s SICAV,BASE INVESTMENTS, for years present in Luxembourg.

Thanks to the recruitment of additional staff with specialist skills and training, the bank is now equippedwith the tools needed to protect its customers in an extremely complex environment while ensuring that theproducts it manages remain of the utmost quality.

Considerable attention has continued to be paid to significantly developing emerging areas within businessactivities.

NassauBanca del Sempione (Overseas) Ltd.George House, George StreetNassau, The BahamasTel. +1 242 322 80 15Fax +1 242 356 20 30

Board of Directors

Günter Jehring Chairman

Beat Viktor Meier Managing Director

Roberto Franchi Director� ( 25.03.2010)

Arthur Seligman Independent Director

Auditor PricewaterhouseCoopers, Nassau


UNCHAIN THE ENERGY OF GROWTH

Passion, hard work, commitment and, final-

ly, the reward of achieving well being, of

confidence in one’s own life and in one’s

own future. This is how we unchain new

and uncontainable energies. .One of the

distinctive signs of the transformation from

the aftermath of the war to modernity has

been the cultural revolution that has

changed customs and consumption, that

has generated new needs and new

lifestyles, that has changed the world and

the way of looking at the world.

For Banca del Sempione SA too, the 1960s

and 1970s were important years, years in

which it was close to people and businesses

that shaped the change. Growing together

with them.

A new world

Changes and stability

In the early 1950s Europe rose from the ashes like a Phoenix. Germany and Italy achieved unprece-dented economic and demographic growth. It took only ten years for all of Europe to become a para-dise of creativity and good living. Films and illustrated magazines broadcast to the world Europe’s spir-it of the sweet life even before Anita Ekberg came off the plane on the footbridge to embrace the Romeof Federico Fellini and dive into the Trevi fountain. From America, GIs returned to Europe as tourists:in Capri, Clark Gable met Sophia Loren and Italian mambo; in Saint Germain-des-Près, Count Basieand Sidney Bechet introduced swing; in Naples, Frank Sinatra became known as “The Voice”; inLocarno Paulette Goddard opened the sequins; and in Monaco, Grace Kelly became a princess.

Meanwhile Marilyn Monroe, Cyd Charisse, AvaGarner and Brigitte Bardot stirred the celluloiddreams of all generations, and James said Yes toUrsula and No to Goldfinger. In Italy, an airplanemotor was adapted to the Vespa and the scooterinvaded Europe, bringing a gust of freedom. Withit, young people everywhere became mobile. Theblack and white neorealism triumphed, while FI-AT 500 and 600 put half of Italy on the road. InFrance, it was the Citroën DS19 and the 2CV thatbrought the “New Vogue” to the Riviera and thefirst mass tourism in search of an unlikely suntan. In Germany, it was the powerful Mercedes300SL and the modest DKWs with the first post-war tourists on board, ready to discover Asconaand Rimini. From Berlin to Lugano, from Rometo London, both furnishings and lifestyleschanged in people’s houses: formica countertops,linoleum, plastic, gaudy curtains, freeze-dried cof-fee, tights, and psychedelic lights all appeared.Thousands of neon lights lit up European nights:from Kurfürsterdamm to Via Veneto, fromPiccadilly to Place de l’Opéra, from Rue du MontBlanc to Slussen, advertising lit up the asphaltlike it was day and the Earth in the universe.Progress and economic prosperity made evensweeter the summer nights of Viareggio, Cannesand Santa Barbara, to then have breakfast atTiffany’s. Youth became the lead player becauseit takes destiny firmly in its own hands, generat-ing major and fast changes in music, art, culture,attitudes, rights, costumes, and lifestyle that

would lead to the epochal changes of the1970s.Considered a scandalous orgy of terror bythe less young, the coming of rock n’ roll dividedgenerations. With Elvis, James Dean and MarlonBrandon, the imagine of rebellious youth was im-pressed. The Twist, a bit more restrained, calmedthe spirits, but then Bob Dylan, the Beatles andthe Rolling Stones took over with the meaningand the values of life and non-violence. JeanTinguely, Picasso, and Yves Klein sculpted theworld with iconoclastic eyes. Arthur Miller,Camus, and Ionesco described it with criticaleyes. Andy Warhol, Lichtenstein, and Joan Miròmade it immortal with conceptual eyes. Mean-while, the architecture of Oscar Niemeyer inBrasilia, Le Corbusier in Chandighar, and PierLuigi Nervi in Milan symbolised the triumph ofmodernity and faith in an atomic and space future. On Earth, the present also featured the

CHANGES AND STABILITY: A NEW WORLD

affirmation of the principle of equal rights for all.While hair got longer and shirts shorter, youngpeople came out into the open from Berkeley toWoodstock, from Alabama and the Latin Quarterto Carnaby Street and Václavské Náměstí.Students, workers, people of colour, housewives,gays and feminists, each one demanding greaterfreedom, equality, respect, and tolerance. Theyhave a dream: Peace and Love! The late 1960swere spring in full bloom in the industrialisedcountries, while the colonial empires made wayfor the possible development of democracy. Inthe Middle East and the Third World as well, newways of life and thousands of hopes emerged:Beirut became a capital of business, elegance andplay, Teheran arranged fairy-tale marriages forthe emperors of oil, Dakar, Nairobi and Caracasbegan to look like Manhattan, and Acapulco re-placed the hot nights of Havana. But the world ofthe baby boomers and economic and socialprogress was dancing on a volcano, shiveringwhen violence struck down John and RobertKennedy, Martin Luther King and Che Guevara,becoming enthusiastic over the formation of theEuropean Community and the affirmation of theprinciples and desires of Pope John XXIII, har-monising with the music of Edith Piaf, Nilla Pizzi,and Callas, and admiring the successes of Coppi,Fangio, and Cassius Clay. Despite the lightening-fast changes of history, over the years Banca delSempione SA has demonstrated not only stabili-ty, but also skill in adapting to changes and theneeds of new a type of client.

3. Annual financial statements of Banca del Sempione SA

58 Balance sheet

59 Income statement

63 Notes to the annual financial statements


Year under Previous(Amount expressed in CHF 1’000) review year Change

AssetsCash 47’991 73’824 –25’833Due from banks 250’475 200’025 50’450Due from customers 66’843 53’067 13’776Mortgages 87’322 74’892 12’430Securities and precious metal trading portfolios 3’384 732 2’652Financial investments 81’328 47’356 33’972Participations 19’138 15’613 3’525Fixed assets 13’902 14’124 –222Accrued income and prepaid expenses 2’165 2’080 85Other assets 3’573 10’962 –7’389Total assets 576’121 492’675 83’446

Total due from unconsolidated Group entitiesand significant shareholders 18’603 17’385 1’218

LiabilitiesDue to banks 37’397 22’930 14’467Due to customers in saving and investment accounts 46’517 43’013 3’504Due to customers, others 360’280 290’640 69’640Accrued expenses and deferred income 3’707 3’808 –101Other liabilities 7’441 16’587 –9’146Valuation adjustments and provisions 30’125 29’195 930Share capital 20’000 20’000General legal reserve 32’500 32’000 500Other reserves 26’500 24’000 2’500Retained earnings 2’502 1’807 695Net income 9’152 8’695 457Total liabilities and shareholders’equity 576’121 492’675 83’446

Total due to unconsolidated Group entitiesand significant shareholders 32’543 19’473 13’070

Off-balance sheet transactionsContingent liabilities 18’390 17’748 642Irrevocable commitments 2’744 2’194 550Liabilities for capital payment in share and other equities 50 50Derivative financial instruments– Contracts volumes 425’039 369’322 55’717– Positive replacement values 3’178 10’713 –7’535– Negative replacement values 3’051 10’451 –7’400Fiduciary transactions 99’636 309’227 –209’591

BALANCE SHEET AT 31.12.2009


REVENUES AND EXPENSES FROM ORDINARY BANKING ACTIVITIES

Result from interest activitiesInterest and discount income 5’057 8’736 –3’679Interest and dividend income on trading portfolios 37 4 33Interest and dividend income on financial investments 1’769 841 928Interest expense –408 –975 567Net interest income (subtotal) 6’455 8’606 –2’151

Result from commission and service fee activitiesCommission income on lending activities 124 192 –68Commission income on securities and investment transactions 22’888 19’022 3’866Commission income on other services 2’797 2’933 –136Commission expenses –2’316 –1’948 –368Result from commission and service fee activities (subtotal) 23’493 20’199 3’294

Result from trading operations 4’290 1’945 2’345

Other ordinary resultsResults from the sale of financial investments 44 –7 51Participation income 1’849 1’613 236Real estate income 86 79 7Other ordinary income 1 31 –30Other ordinary expenses –22 –550 528Result from commission and service fee activities (subtotal) 1’958 1’166 792

Net revenues 36’196 31’916 4’280

Operating expensesPersonnel expenses –15’775 –14’953 –822Other operating expenses –6’408 –6’203 –205Total operating expenses (subtotal) –22’183 –21’156 –1’027

Gross Profit 14’013 10’760 3’253

NET INCOME

Gross Profit 14’013 10’760 3’253Depreciation of fixed assets –1’512 –1’541 29Valuation adjustments, provisions and losses –562 –530 –32Intermediate result 11’939 8’689 3’250

Extraordinary income 63 3’116 –3’053Extraordinary costs –700 –1’250 550Taxes –2’150 –1’860 –290Net income 9’152 8’695 457

INCOME STATEMENT 2009



Net income 9’152 8’695 457Retained earnings 2’502 1’807 695Total 11’654 10’502 1’152

Proposal for appropriation on retained earningsAllocation to general legal reserve 500 500Allocation to other reserves 2’500 2’500Dividend 6’000 5’000 1’000To be brought forward 2’654 2’502 152

Appropriation of retained earnings


NOTES TO THE 2009 FINANCIAL STATEMENTS

1. Illustration of the Bank’s business operations and organization

Banca del Sempione’s business areas and risk management are not distinguished from those of the Group.As at 31 December 2009, Banca del Sempione had 108 employees on its books, equating to 105.4 full-time positions (previous year: 106 employees, equating respectively to 104.5 positions).

2. Accounting principles and valuation criteria

The accounting principles and valuation criteria adopted in drawing up the Parent company financialstatements are in compliance with the provisions of the Code of Obligations, Swiss banking law, and therulings issued by FINMA.These principles coincide for the most part with those applied in drawing up the consolidated financialstatements, except for the different valuation criteria for the items illustrated:

ParticipationsEquity investments are shown in the balance sheet at acquisition price less depreciation and amortizationas appropriate.

Fixed assetsFixed assets are shown at acquisition costs less depreciation and amortization as appropriate. Depreciationand amortization are applied at constant rates based on a conservative estimate of the assets’presumeduseful life. Accelerated depreciation and amortization may be charged within the limits allowed by law.

Valuation adjustments and provisionsCase-by-case value adjustments and provisions are made according to the conservative principle for allperceivable risks as at the closing date of the financial statements. Contingent risks are covered with lump-sum value adjustments and provisions determined by a calculation method that is systematic and constantover time. Valuation adjustments and provisions may also contain contingent reserves.

Changes in comparison to the previous financial yearThe accounting and valuation principles applied to the annual report for the year-ending 31 December 2009are the same as those applied in the previous year.

Year under review Previous yearOther Other Other Other

(Amount expressed in CHF 1’000) assets liabilities assets liabilities

Replacement value of derivative financial instrumentsrelated to contracts negotiated for own account 3’178 3’051 10’713 10’451Indirect taxes 251 3’052 219 3’022Settlement accounts 144 1’338 30 3’114Total 3’573 7’441 10’962 16’587

2.2 Pledged or assigned assets and securities lending and repurchase transactions


Type of securities and purpose of the depositFinancial investment reserved for REPO transactions with the SNB (unused) 6’174 5’955

Receivables from banks and financial investment to cover mandatory margins on derivative products (fully used) 10’283 7’077Total 16’457 13’032

2.3 Valuation adjustments and provisions

Recoveries, New doubtful allocations Reversal

Change interest, charged creditedPrevious Specific in definition exchange to income to income Year under

(Amount expressed in CHF 1’000) year usage of purpose differences statement statement review

Valuation adjustments and provisions reserve for loan losses (credit and country risks) 3’683 –73 64 –63 3’611Other provisions 29’100 –265 –44 1’200 29’991Total valuation adjustments and provisions 32’783 –338 20 1’200 –63 33’602

less: valuation adjustments directly nettedwith assets –3’588 –3’477

Total valuation adjustments and provisionsas per balance sheet 29’195 30’125

2. Information on the balance sheet

2.1 Other assets and other liabilities

Year under review Previous yearTotal Dividend Total Dividend

nominal Number right nominal Number right(Amount expressed in CHF 1’000) value of shares capital value of shares capital

Capital structureShare capital 20’000 200’000 20’000 20’000 200’000 20’000Total share capital issued and fully paid 20’000 200’000 20’000 20’000 200’000 20’000

Nominal value Participation Nominal value ParticipationCHF in % CHF in %

Major shareholders at 31 DecemberEburnea Holding SA, Sion (Donelli Group) 10’400 52.00 10’400 52.00Molu Holding SA, Lugano (Gattei Group) 7’000 35.00 7’000 35.00Golden Horn Finanz AG, Lugano (Filofibra Group) 2’600 13.00 2’350 11.75

There is neither conditional capital nor shareholders without rights to vote.

2.5 Statement of changes in shareholders’equity

Shareholder’s equity, at beginning of year under review (Amount expressed in CHF 1’000)

Share capital 20’000General legal reserve 32’000Other reserves 24’000Retained earnings 10’502Total shareholders’equity, at the beginning of year under review (before profit distribution) 86’502– Dividend provisions to reserve –5’000+ Net income 9’152Total shareholders’equity, at end of year under review (before profit distribution) 90’654

Of which:Share capital 20’000General legal reserve 32’500Other reserves 26’500Retained earnings 11’654

2.4 Share capital and major shareholders with more than 5% of voting rights



Due from related companies 19’610 6’369Due to related companies 2’285 5’158Loans and exposure to members of the bank’s governing bodies 6’641 5’372

Transactions with related partiesNo significant transactions with shareholders and Group companies were executed during the financial year.The conditions applied for banking services are equivalent to those applied to primary customers. Members of the Bank’s governing bodies enjoy the same benefits made available to all employees.

2.6 Related parties transactions, loans to member of the Bank’s governing bodies


Fiduciary placements with third party banks 61’655 270’676Fiduciary credits 37’981 38’551Total fiduciary transactions 99’636 309’227

4. Information on the income statement

4.1 Result from trading operations


Foreign exchange and banknotes 4’019 2’041Precious metals 55 4Securities 216 –100Total result from trading operations 4’290 1’945

4.2 Extraordinary income and costs

The extraordinary income of CHF 63'000 has been generated by partially dissolution of hidden reserves regarding fixed assetscreated during previous years through anticipated depreciations.

The costs concern the creations of provisions economically not necessary.

4.3 Revaluation of fixed assets to a level exceeding acquisition value (art. 665 e 665a CO)

No revaluations of fixed assets were carried out.

3. Information on off-balance sheet transactions

3.1 Fiduciary transactions


MISSIONS IMPOSSIBLE THAT NURTURE WELL BEING

Competition is extraordinary nutrition for

growth. We experience it everyday, at work,

on the markets, or when we choose a com-

puter or a car. In the 1960s and 1970s, tech-

nological competition helped mankind

make an unprecedented leap forward:

space missions, conquest of unexplored ter-

ritories, innovative materials that paved

the way to modern scientific progress.

For Banca del Sempione SA, being near

the heart and soul of progress means pro-

viding assistance and financial support to

those who work and invest, to those who

ride market dynamics, and to those who

plan management of their own assets for

themselves and their families.

Conquests and progress

well-beingand innovation

Millions of people jubilantly watched three men crossing a metal bridge that brought them inside thegigantic three-stage, 111 metre high Saturn V. Many followed them on television screens, still in blackand white, a few in colour, but the most fortunate were actually there, at Cape Canaveral in Florida.It was 2:32 P.M. on 16 July 1969: the world would never be the same. And, on the Moon, not even theSea of Tranquillity, while the decade closed with the most daring human adventure, the last of a longseries that in 20 years changed the world. Having conquered almost the entire Earth, man nowdreamt of conquering space to better dominate the world.

In 1957 the Cold War became stellar: the USAand USSR challenged each other in the rush toever greater successes in the launch of missilesand satellites, the one seeking to prevail over theother. The run to space began after the launch ofthe Soviet Sputnik. Space exploration and artifi-cial satellite technology blended in this competi-tion on both fronts: satellites can spy on a coun-try, while space successes propagate scientificcapabilities and military potential. Four monthsafter Sputnik, the United States launched its firstsatellite, Explorer I. Then the Soviets sent turtlesand dogs into space, the Americans sent chim-panzees. The Soviet cosmonaut Yuri Gagarinwas the first to reach space in 1961, while JohnGlenn was the first American to orbit the Earth.The milestones that the Soviets and Americansachieved brought much pride to both countries,but the objective was still to put a man on themoon. And President John Kennedy’s Apolloproject captured the collective imagination. Butexploration continued on Earth too: the farreaches of the Amazon, Congo, New Guinea,and the poles. The US admiral George Dufexlanded on the South Pole with a Douglas DC 3in 1956. A year later, the Commonwealth Trans-Antarctic Expedition completed the first cross-ing of the continent with motorised means.Edmund Hillary and his team were the first mento reach the South Pole by land in 1958, afterAmundsen and Scott. In 1968, Ralph Plaistedreached the North Pole by snow cat. This was the

first confirmed conquest occurring by surfacevehicle. The run had started, but a few years laterthe Antarctic Treaty prohibited exploitation ofthe Antarctic for military purposes and limits theuse of military personnel in support of scientificexpeditions. Though still linked to political pres-tige, science and technology have become partof everyday life, in part through the exceptionaldevelopment of television. It came to Europe inthe mid-1950s. At first it was an occasion tosocialise in front of store windows or in bars, butlater it let people see great catastrophes fromaround the world in their own living rooms: theAgadir earthquake, the Florence flood, theVajont, the Brussels Innovation in flames, andthe first oil-slicked sea off of Cornwall. A multi-tude of other US-invented appliances also cameinto people’s houses, demanded by the con-sumer society and which made the daily work of

TECHNOLOGICAL DEVELOPMENT AND NEW DEMANDS: CONQUESTS AND PROGRESS

housewives much easier. But many women pre-ferred to plan their role as mother by using thefirst birth-control pills on the market. The 1960swere also shaped by progress and discoveries inmedicine, biology, and surgery: in 1967 inCapetown, professor Christian Barnard per-formed the first heart transplant. Meanwhile inthe rest of Africa, Asia and Latin America, sys-tematic vaccinations and discoveries of newmedicines helped in the fight against meningitisand wiped out scourges like tuberculosis andmalaria. Birth control in emerging countries toohelped improve life expectancy around theglobe. So the baby boom and the economicboom also triggered explosive demands and con-sumption: uranium, electricity, oil, coal, alumini-um, plastic, glass, and cement became theengines of a world that ran ever faster, despiteKubrick’s dream of slowness in Space Odyssey.Not only were sports records set at the Olympicsin Rome, Tokyo, Mexico City, and Grenoble, andtransmission speed records on the streets of LeMans, the rails of Japan, and in the skies with theConcord, but also records in height and lengthwith the construction of dams, skyscrapers,motorways and bridges that link humanity andthat by now seem ready to embrace global wellbeing. With the passing of time, Banca delSempione SA has always evolved technological-ly, adapting to new customer demands.

AcknowledgementsWe would like to thank for their precious cooperation the persons and institutionsthat provided and permitted the reproduction and publication of the imagesnecessary for the making of this publication.

The pictures were taken by:

Cover, Verrazano Bridge - 1961, New York. T. Russell;Back cover, Vetture anni 60. J. Delbeck;

pag. 2, Locarno Station - 1961, Ticino Canton. M. Grandguillaume;pag. 4-5, The Beatles at Kingston Bridge. G. Birnie;pag. 8, Funicular of Lugano - 1961, Ticino. Rutishauser;pag. 11, Expo 1958, Bruxelles. Arbor vitae societas;pag. 13, Monorail Expo Lausanne - 1964, Lausanne. D. Stampfli;pag. 14, Highway A1 Geneva-Lausanne - 1964. D. Stampfli;

Delivery AVS - 1973, Zurich Canton. Kuhn;pag. 15, Paradeplatz - 1964, Zurich. Keller;

Mesoscaph at Expo Lausanne - 1964, Lausanne. D. Stampfli;pag. 16, Mont-Blanc Bridge - 1961, Geneva. RDB/ATP;pag. 41, Bignasco - 1963, Ticino Canton. Archives OFIMA;pag. 42, Postbus, Tremola - 60’s, Ticino Canton. Author unknown;

Marlene Dietrich - 1960, Locarno. Festival del film Locarno;pag. 43, headquarters Banca del Sempione SA - 60’s, Lugano;

Valmaggina - 1961, Rivo-Visletto, Ticino Canton. M. Grandguillaumepag. 44, Central Peccia - 1957, Ticino Canton. Archives OFIMA;pag. 53, Sixties - 1968, London UK, B. Reed;pag. 54, London Bridge - 60’s, London UK. Author unknown;

Citroën DS, Amsterdam. P. Greenspun;pag. 55, National Congress Building - 1958, Brasilia. Bettmann/CORBIS;

Pierre Cardin - 1968, Paris. J. Burlot;pag. 56, Rock Hudson & Gina Lollobrigida - 1961, Italy. Sunset Boulevard/Corbis;pag. 61, John F. Kennedy - 1960, San Diego. Bettmann/CORBIS;pag. 62, Shinkansen 0-Serie - 1965, Nagoya - Cobe. Bettmann/CORBIS;pag. 71, Apollo 11 astronauts - 1969, Kennedy Space Center Florida. Bettmann/CORBIS;pag. 72, Commonwealth Trans-Antarctic Expedition - 1958. Author unknown;

Shinkansen 0-Serie - 1964, Hiroshima. Kamoda;pag. 73, Pentaconta-Switchboard - 1968, Switzerland. Aeberli;

Le Mans - 1966, France. Bettmann/CORBIS;pag. 74, CERN -1965, Meyrin. H. Klein

The historical inserts were drafted by Francesco Mismirigo.

Progetto e coordinamento

Lucasdesign.ch

banca del sempione sa - bancasempione.ch

Documents