Bellevue Group - Annual Report 2020

7 Discontinued operations

On August 20, 2019, Bellevue Group AG and KBL European Private Bankers (new: Quintet Private Bank) signed an agreement on the sale of Bank am Bellevue AG (new: Quintet Private Bank (Switzerland) AG) (including its subsidiary Bellevue Investment Advisers AG).

After receiving all the necessary regulatory approvals, Bellevue Group successfully closed the sale of Bank am Bellevue AG to Quintet Private Bank on April 30, 2020, and Bank am Bellevue’s workforce and its client relationships with underlying assets of CHF 1.7 billion have been transferred to Quintet Private Bank.

On January 28, 2020, the General Meeting of Shareholders of Bank am Bellevue AG unanimously resolved to distribute the available earnings of CHF 49.1 million and the reserves from tax-exempt capital contributions of CHF 1.3 million to the wholly owned parent company, Bellevue Group AG. The total distribution of CHF 50.4 million was made on January 29, 2020, and is allocated to continuing operations under the item «Cash and cash equivalents» in the consolidated balance sheet.

Further detailed disclosures on the discontinued operation are made below:

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Income statement of discontinued operations
Operating income 1)	2 061	9 982
Personnel expenses	– 2 340	– 6 003
Other operating expenses	– 1 195	– 3 725
Depreciation and Amortization	–	– 403
Losses from revaluation to fair value less cost of disposal	–	– 599
Profit before tax from discontinued operations	– 1 474	– 748
Taxes 2)	5	2 921
Valuation adjustments and provisions 3)	751	– 7 600
Group net profit from discontinued operations	– 718	– 5 427

Statement of comprehensive income for discontinued operations
Currency translation adjustments	–	–
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	–	4 331
Remeasurements of post-employment benefit obligations	– 383	– 173
Other comprehensive income for discontinued operations	– 383	4 158

Statement of cash flows for discontinued operations
Net cash flow from operating activities	117 391	– 98 098
Net cash flow from investing activities	– 176 252	– 200
Net cash flow from financing activities	899	25
Currency translation effects	–	–
Net cash flow	– 57 962	– 98 273

Earnings per share (discontinued operations)
Basic earnings per share (in CHF)	– 0.05	– 0.41
Diluted earnings per share (in CHF)	– 0.05	– 0.41

1) The comparative period includes CHF 4.8 million dividend income from the SIX participation.

2) In the comparative period, deferred income taxes of CHF 3.1 million on tax loss carryforwards in connection with the sale of the SIX investment were capitalized as of June 30, 2019, and realized in the second half of 2019.

3) In connection with the completion of the sale of Bank am Bellevue in the first half of 2020, provisions of CHF 0.8 million no longer required were released to the income statement.

As the balance sheet items of the discontinued operations as of December 31, 2020, are not included in the consolidated balance sheet of Bellevue Group, they are shown in the following two tables with the old balance sheet structure.

CHF 1 000	31.12.2020	31.12.2019
Assets held for sale
Cash and cash equivalents (incl. due from banks)	–	57 962
Due from clients	–	85 648
Trading portfolio assets	–	6 640
Positive replacement values	–	295
Accrued income and prepaid expenses	–	521
Current tax assets	–	413
Deferred tax assets	–	81
Other assets	–	2 147
Total assets held for sale	–	153 707

Liabilities directly associated with assets held for sale
Due to clients	–	115 609
Negative replacement values	–	218
Accrued expenses and deferred income	–	1 087
Current tax liabilities	–	2 382
Provisions and pension obligations	–	428
Other provisions 1)	–	7 600
Other liabilities	–	300
Total liabilities directly associated with assets held for sale	–	127 624

CHF 1 000	31.12.2020	31.12.2019
Amounts included in accumulated OCI
Currency translation adjustments	–	–
Gains and losses arising on revaluation of financial assets	–	–
Remeasurements of post-employment benefit obligations	–	60
Total amounts included in accumulated OCI	–	60

1) In connection with the sale of Bank am Bellevue, there were one-off provisions based on the terms of sale contractually agreed between the parties.

CHF 1 000	31.12.2020	31.12.2019
Off-balance sheet

Irrevocable commitments
Undrawn irrevocable credit facilities	–	124
of which payment obligation to the protection of deposits	–	124
Total	–	124

Fiduciary transactions
Fiduciary placements with third-party banks	–	22 952
Total	–	22 952

The aggregated carrying amounts of net assets disposed of and the aggregated cash outflows on disposal of subsidiaries in 2020 were as follows:

CHF 1 000		30.4.2020
Cash and cash equivalents (incl. due from banks)		176 252
Due from clients		116 531
Trading portfolio assets		14 632
Positive replacement values		209
Accrued income and prepaid expenses		964
Current tax assets		454
Deferred tax assets		175
Other assets		405
Due to clients		– 270 066
Negative replacement values		– 527
Accrued expenses and deferred income		– 645
Current tax liabilities		– 2 382
Provisions and pension obligations		– 925
Other liabilities		– 248
Net assets disposed of		34 829

Selling price (cash and cash equivalents)		27 981
Cash and cash equivalents disposed of		– 176 252
Net cash flow from the sale of companies		– 148 271