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Management Report

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The annual profit of Swiss Life Holding consisted mainly of dividends, guarantee fees and interest income within the Group, as well as investment income. Dividend payments received by the holding company from subsidiaries increased from CHF 337 million to CHF 519 million. Guarantee fees including processing fees for new loans rose from CHF 45 million to CHF 49 million. Corpus Sireo units were granted new loans totalling EUR 15 million to finance new real estate projects. The volume of loans to Group companies rose from CHF 642 million to CHF 708 million. Interest earned on loans to Group companies increased from CHF 30 million to CHF 32 million. Most of the additional interest income arises from loans granted to subsidiaries in the previous year.

As at the end of the year Swiss Life Holding had assets (liquid funds, debt securities, investment funds and equities) of CHF 1440 million. Liquid funds reduced from CHF 183 million to CHF 119 million, and debt security, investment fund and equity holdings increased from CHF 1001 million to CHF 1321 million. All debt securities are eligible for repo transactions. Earnings from investments in bonds and fund units rose from CHF 29 million to CHF 36 million.

All loans granted internally and external investments in foreign currencies are hedged with currency futures. The cost of hedging during the reporting period was CHF 16 million (2015: CHF 9 million). An adjustment of CHF 220 million to various subsidiaries was made following the annual assessment of participations. The investment book value thus declined from CHF 3936 million to CHF 3716 million.

Swiss Life Holding’s profit distribution to shareholders in the period under review came to CHF 271 million or CHF 8.50 per share and was made out of the capital contribution reserve. The par value of the Swiss Life Holding share stands unchanged at CHF 5.10. The company’s nominal share capital at the end of the year remained at CHF 164 million.

As at the end of the year Swiss Life Holding held long-term debt capital amounting to CHF 919 million. This consists of two senior bonds in the total amount of CHF 425 million, comprising a tranche of CHF 225 million with a six-year maturity (coupon 1.125%; maturing 2019) and a tranche of CHF 200 million with a ten-year maturity (coupon 1.875%; maturing 2023), as well as a seven-year convertible bond in the amount of CHF 500 million (coupon 0%; maturing 2020). These debt financing instruments were issued in 2013. Interest on the bonds came to CHF 7 million. Staff costs and operating expenses including taxes could be lowered to CHF 15 million (2015: CHF 19 million) due to tax savings and reduced outlay to third parties. The convertible bond with a principal of CHF 35 000 was converted in 2016, which led in turn to the issue of 147 shares in Swiss Life Holding from conditional capital.

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