The fee schedules and pricing policies of European depositories are famously complicated and, in relation to the actual costs charged to particular clients, in much the same category as a British railway timetable: fiction. Today they got a little more complicated. The highlight of the general meeting of SIS Swiss Financial Services Group, held in Zurich today, was the presentation by SIS Segaintersettle AG of a fee incentive programme designed to attract clients by drastically reducing their custody and settlement costs.
SIS Segaintersettle predicts that the fee incentive programme, which offers fee remission for limited periods, will enable clients to halve their costs for securities settlement in 2002. “The programme, devised by SIS Segaintersettle AG as an investment in its future,” explains the Swiss CSD, “offers an excellent opportunity to realise cost savings in a difficult economic environment.”
The operational and financial performance of SIS certainly bears out the truth of this claim about the state of the market. The number of settled Swiss transactions fell by 7.7 per cent, and the value of securities in safe custody at SIS on 31 December 2001 was down 7 per cent to CHF 1,981 billion. Yet, at the year-end, a total of 71,739 securities (up 8 per cent) were settled through SIS. Of these, 17,011 were Swiss and 54,728 foreign.
Amid these conditions – which reflected slack stock exchange trading across the world and a concomitant decline in transaction volumes – the Swiss did well to keep income at CHF 174 million – marginally (1.7 per cent) below the CHF 177 million of the year before, especially with lower settlement tariffs in place. The performance reflected an increase in commission and services income (up 3.6 per cent) which owed more to the acquisition of 50 new clients during the year than organic growth.
Gross profit dropped by 12.4 percent from CHF 62.8 million to CHF 55 million, and consolidated profit fell by CHF 5.5 million to CHF 7.2 million. The balance sheet total, on the contrary, rose by 10.7 per cent to CHF 1,258 million in the year under review. The shareholders approved the SIS Group Board’s proposal that the dividend of 15 per cent for the preceding year be distributed unchanged for 2001.