Ladies and Gentlemen

“The Aduno Group improved its key key financial figures in the first half year of 2016: revenue improved to CHF 315.1 million, the operating result increased to CHF 89.6 million, and net profit rose to CHF 74.9 million.“

I am delighted that I can once again report on a successful first half year for the Aduno Group. Supported by positive consumer sentiment and low interest rates, the Aduno Group improved its key financial figures to new record levels: revenue improved considerably to CHF 315.1 million, the operating result increased to CHF 89.6 million and net profit rose to CHF 74.9 million. The turnover includes a substantial one-off contribution paid to the Aduno Group as a member of Visa Europe Ltd. following the latter’s takeover by Visa Inc. But even without this exceptional item, the Aduno Group posted an impressive organic increase in volumes that partially compensated for the regulatory reduction in the interchange fee in the cards business and the lower maximum interest rate for personal credits. This is a good performance.

The Aduno Group is not only able to present good figures for the first half of 2016, but it can also report on the good progress made by its strategic projects. The Payment division launched the VisecaOne and Viseca MasterPass digital services with great success. VisecaOne is a free service that uses a simple, two-tier authentication system to make online shopping and payment more secure and convenient. In only six months, more than 400,000 cardholders registered for this service, and in this time our VisecaOne app was the most downloaded iOS and Android app in its category. This success motivates us to add additional functions that will improve the attractiveness of VisecaOne, such as real-time messages confirming credit card transactions, authentication by fingerprint and an overview of all transactions. VisecaOne users can at the same time benefit from the new Viseca MasterPass online payment solution, a digital wallet developed in collaboration with MasterCard. With Viseca MasterPass, users can conveniently store their payment cards in a single location and use it to pay for transactions at thousands of online shops all over the world. Merchant acceptance of Viseca MasterPass is growing continuously and this is likely to become the global standard in the future. The successful launch of VisecaOne and Viseca MasterPass confirms the Aduno Group’s strategy and its focus on digital payment services.

Strategic considerations also motivated the acqui­sition of a stake in the Swiss fintech start-up Conto­vista. Contovista is the leading provider of personal finance management (PFM) solutions in Switzerland. The Aduno Group previously successfully collaborated with Contovista to develop a PFM product that can map creditcard transactions in e-banking applications for some of the cantonal banks. We are convinced of the enormous potential of such digital services based on data intelligence – a conviction that is confirmed by the fact that more banks will activate Contovista’s PFM solution in the course of this year. Through our partnership with Contovista, we can provide our distribution and shareholder banks with optimised support in this regard.

In April, Consumer Finance reduced its interest rates for personal credits to less than the maximum interest rate of 10 per cent that took effect at the beginning of July. The new fixed interest rates are 7.9 and 9.9 per cent. A special interest rate of 4.9 per cent was introduced for home-owners, a particularly low-risk target group. Thus cashgate is continuing its fair and transparent price policy that clearly states the conditions that have to be met for a specific interest rate.

The outlook for the second half of 2016 is optimistic. The economic climate remains favourable to business: there are no signs of weakening consumer sentiment and interest rates are likely to remain low and exchange rates stable. The market for cashless payment solutions is expected to see above-average growth and should be boosted further by the introduction of mobile payment solutions. We also do not see the reduction in the interchange fee as a purely negative development: it makes the acceptance of credit cards more attractive to merchants, which will boost volumes and partially compensate for the reduced fee. The picture is less rosy for the credit business. We expect the market for personal credits to remain sluggish, in particular under the full impact of the reduced maximum interest rate and continued price pressure in the leasing segment. But cashgate will continue to do well with its clearly formulated price strategy. We will continue to invest heavily in strategic projects.

Once again, the good financial result and important milestones reached by the Aduno Group in the first half of 2016 are due mainly to the efforts of our employees. On behalf of the Board of Directors, I would like to thank all of them for their commitment. I would also like to thank our customers for their trust and our partner banks for their support.

Dr Pierin Vincenz

Chairman of the Board of Directors