2019

These combinations (security and innovation, simplicity and expertise, transparency and individuality) are the approach that our clients love and that enables us to achieve significant volume and new clients growth.

The financial result of this commitment and our entrepreneurial approach is excellent. It is what allows us to be “your flexible bank”, combining tradition and the future with new Swiss banking. We increased our business volume by CHF 2.4 billion or 12.7%. Revenue was up by 12.6% to CHF 155 million and profitability rose by 15.3% to CHF 33.8 million, despite the high costs of modernising the bank. Our shareholder, the cooperative banking group Crédit Mutuel, contributes to our success both through close collaboration and also by forgoing dividends in order to enable our continued growth.

In the ever-changing banking business, Bank CIC positions itself in a clear and carefully considered manner. We are well equipped to react to changes with agility and flexibility, enabling us to remain a reliable long-term partner well into the future.

We would particularly like to thank our clients for their loyalty and trust. However, we are also immensely grateful to our employees, who make joint success stories possible thanks to their partnership-based collaboration with our clients. We look forward to continuing with our development strategy in a challenging environment and will do everything we can to ensure that the year 2020 is successful, sustainable and unifying in every respect.

Which three stocks in the Swiss Market Index would you buy for 2020, and which would you avoid?
L.C.: In our view this is a time for solid defensive stocks like Zurich, Givaudan and Swisscom. In 2019 the Swiss Market Index was largely driven by the three heavyweights Roche, Novartis and Nestlé. We suspect these three might run of out steam after gaining almost 30%.

In light of global uncertainties, we recommend high-quality, volatility-resistant securities. Unlike high-beta stocks, such securities prove more resistance in a crisis.

The price of gold went up 14% in 2019. What do you expect for 2020?
L.C.: Gold is one of our favourites. If you are looking for an outstanding way to hedge your portfolio, you should continue to hold gold. Low carrying costs due to very low interest rates and expansionary central banks monetary policy mean it looks set to do well again this year. Increasing numbers of central banks in developing countries are also replacing their dollar foreign currency reserves with gold. We are expecting a weaker dollar, which will buoy private demand from emerging markets. On top of all that, gold is a very cheap form of protection against all types of extreme risk.

Where will the SMI be twelve months from now?
M.G.: We think the SMI will end the year where it started. However, we expect 2020 to be a volatile year for equities.

Is there anything else the financial markets are concerned by present?
M.G.: We will be feeling the impact of the coronavirus for some time yet. The world economy will need time to recover because country economies are very closely integrated, making it hard to reboot them effectively. Expansive monetary policy is good for the financial markets in the short and medium term, but central banks need to take care that trust in them is preserved. They cannot remain in expansionary mode forever, otherwise they will lose credibility. In the long term, credibility is essential.

Replicating market performance at low cost sounds like a good idea; what are your views on passive investment using Exchange Trade Funds (ETFs)
M.G.: 2019 was a milestone for the investment industry. It marked the first time there was as much money invested in funds that are passively managed as in those that are actively managed. In our view, passive investment vehicles form an important part of portfolio management. But we would advise against holding 100% in ETFs. The ability to replicate market performance at low cost does sound like a good idea, but it involves certain risks. Firstly, 80% of the global ETF market are held by just five providers. Secondly, ETFs are based on the size of a company. The biggest stocks are included in the index, and the more prices go up the bigger the weighting. This can lead to a bubble, since most ETFs are automatically procyclical and invest in stocks that have already performed well. Finally, investors have to remember that ETFs replicate market performance in negative periods in the market, as seen in early March 2020, as well as in positive ones. An active manager can intervene and make a portfolio more defensive, but that is not possible for ETF investors.

After a great year for the markets in 2019, is there a need for caution in investing right now? What should investors be looking out for?
M.G.: Clients often ask us these questions. 2019 was indeed an exceptionally good year, unlike 2020 has not got off to such a good start. But central banks remain determined to keep the monetary taps open and will increase the money supply if necessary, which will continue to support the financial markets in the medium term. The key point about timing is that investing in equities is a matter for the long term. We do not engage in trading; we look for the ideal moment for our clients to get on board. You can invest in good companies with a sustainable business model, a stable dividend and a solid balance sheet at any time. Finally, you have to bear in mind that an equity portfolio should always be viewed over a period of at least ten years. That gives both the portfolio manager and the client the opportunity to go through the different stages of the economic cycle.

Free exam resits
Neither of the founders of the school is a teacher. They both studied at Zurich University: Fabrizio Fuchs did economics, Alexandre Touihri read law. Both see themselves primarily as entrepreneurs. And what the school promises sounds like an ambitious business objective: “Get your high school certificate in just a year.” They have a high success rate: Academic Gateway has grown to be the largest institution preparing people for the high school certificate. “Anyone here who fails their high school certificate can resit the exam free of charge”, insists Fabrizio Fuchs.

Most of the pupils, who all have to pass an aptitude test, are between the ages of 17 and 45. The oldest person to take the course so far was 57 when he started and got his certificate when he was 58.

In addition to the standard high school certificate, Academic Gateway also offers the “bridge” to the certificate for those coming from a vocational secondary school or IT school, and the like. There is a programme for foreign pupils too, which organises not just the entire curriculum including lessons in the national languages of Switzerland, but also a visa and accommodation. This is a service Academic Gateway is keen to expand. Finally, you can even study for your high school certificate on your own, online. “What makes this practical is that you can access our teaching platform at any time, wherever you are. We see great potential for cooperating with Swiss schools all over the world”, says Fabrizio Fuchs.

Straightforward financing
Academic Gateway started with nothing but equity capital. To finance expansion, though, it needed support from a bank. “We got in touch with various banks and encountered a great deal of interest in working with us”, Fabrizio Fuchs recalls.

Bank CIC was the only one to understand our objectives and our project from the very start; they asked the right questions, saw things from our perspective and came up with a customised financing solution.

Pierre Kammermann, Key Clients Manager at Bank CIC in Zurich, believes the idea of a high school certificate for rapid learners is right for today’s world, where technology and society are changing ever more quickly. That’s why Bank CIC helped to finance the working capital of Academic Gateway and the conversion work on the school building that was needed to expand the services offered.

“It was precisely because the bank checked the figures very thoroughly that the relationship grew deeper”, says Fabrizio Fuchs with satisfaction. “We even managed to beat our revenue forecast by 25%.” Reason enough to continue this partnership with long-term goals.

The two owners gave the corporate finance specialists the go-ahead to look for suitable potential buyers. They attached great importance to the sale process being conducted discreetly and to finding a buyer who would maintain quality and continue to employ the tried-and-trusted staff.

Several candidates
Ultimately, thanks to their international network, the Bank CIC specialists came up with several interested parties who met the sellers’ requirements. During the subsequent discussions, Sol Group of Italy emerged as the favourite. They employ 4000 people around the world and are a leading manufacturer of medical gases. Through its subsidiary Vivisol, they also have global home care activities. They had already established a foothold in French-speaking Switzerland, so Spitex Perspecta would be a perfect way for them to move into the German-speaking part of the country.

Along with a delegation from Bank CIC, Marlies Venezia and Alessandro Hunziker spent two days talking to Sol Group representatives in Monza, Italy. “We were given a very warm welcome. And we got the feeling that the chemistry was right,” recalls Marlies Venezia. Spitex Perspecta has been a part of the Sol Group since summer 2019.

New owners interested in development
“Thanks to Bank CIC we found a suitable owner and achieved an attractive selling price,” comments Alessandro Hunziker. The bank orchestrated the whole international transaction from start to finish.

But you will still find the two founders of Spitex Perspecta in the company’s offices every day. Nothing about their job has changed since the sale. “Sol Group is investing in our company and trusts us. But in the longer term, we would like to take things a bit easier though,” they both say almost in unison.

An enquiry from the USA
Last year Bucher + Walt encountered a strong favourable wind: as longstanding distribution partner, they took over Dakine Europe, based in Annecy, France. Saint-Blaise now has responsibility for the Dakine activities in the key markets of France, Germany, Benelux, Austria, Spain, Andorra, Switzerland, UK, Ireland and Italy.

Is a leap up in size like that reckless? Julien Bucher doesn’t think so: “It was the new US owners of Dakine Europe, Marquee Brands, who wanted us to take on their European business. They realised they lacked the expertise for European markets.” Also, they had taken a close look at the figures: Bucher + Walt were already generating the highest revenue per capita with the Dakine brand.

“It was not like when we were a start-up; a deal like that takes a lot more than just a handshake”, remarks Manfred Bucher. Plenty of banks expressed an interest at the discussion stage, but all then declined due to the complexity of the transaction with the target company in France. Until Bucher + Walt got a tip from an accountant, saying they should get in touch with the Corporate Finance department at Bank CIC.

A deal involving three legal systems
The entrepreneurs were greeted with interest by relationship manager Thierry P. Lovis, Head of Key Accounts at Bank CIC in Neuchâtel.

“Instead of just focusing on the numbers, Bank CIC took the time to understand our business model. That matches our way of thinking exactly”, explains Romain Walt. The timing was a challenge, admits Thierry P. Lovis. “One challenge was that the acquisition financing had to take account of three legal systems: American, French and Swiss”, notes Jean-Pierre Cuendet, the bank’s corporate finance specialist. “But thanks to the bank’s short decision-making paths, we were able to deal with the requirements flexibly and suggest a customised alternative solution”, he remarks.

After intense negotiations, a solution was identified that suited all involved. It acquired the inventory at market value and even got the rights to online marketing. In exchange, Marquee Brands got the certainty that its products would be professionally positioned in Europe. And best of all: “To our surprise, the employees in France were delighted to belong to us. They felt we would put their brand on the pathway to success”, adds Romain Walt with enthusiasm. The cultures in Annecy and Saint-Blaise fit perfectly. The two sites have complimentary expertise.

“Of course we face plenty of challenging tasks, like optimising the IT infrastructure,” admits Julien Bucher. But in the longer term, he has plans to further expand the European business.

Sociocultural commitment
As a traditional bank with a cooperative background, we are aware of our social responsibility and want to exercise this holistically.

We engage in long-term sponsorship in various ways to support culture and the community. For example, we have been supporting the internationally famous YOUNG STAGE circus festival as a presenting partner for more than five years. This is a springboard to a professional career for young artists from all over the world. What we have in common with the festival is a fundamental commitment to outstanding quality and to encouraging innovation.

Since 2018 we have also supported the Theodora Foundation, whose “dream doctors brighten up the day of children in hospitals and specialised clinics by bringing joy and laughter. Every week this recognised charity organises visits by 65 professional artists to 35 hospitals and institutions for children with health challenges. 

To find out more go to cic.ch/engagement