1. Significant accounting policies

Aduno Holding AG (Aduno Holding or Company) is a company domiciled in Zurich (Switzerland). The condensed consolidated interim financial statements of the Company as at 30 June 2017 and for the six months ended 30 June 2017 comprise Aduno Holding AG and its subsidiaries (together referred to as the Group). The Group provides financial services in the fields of cashless payment solutions and consumer finance services.

Statement of compliance

These unaudited condensed consolidated interim financial statements were prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2016. The condensed interim financial statements were approved on 27 July 2017.

Estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparation of these condensed consolidated interim financial statements, the significant judgements made by management in application of the Group’s accounting policies and the key sources of estimation were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2016.

Foreign currency transactions

The following exchange rates applied for significant currency exposures:

 

Average rates

Closing rates as per

CHF

First HY 2017

First HY 2016

30.06.2017

31.12.2016

EUR 1

1.0886

1.1086

1.1050

1.0866

USD 1

0.9984

0.9898

0.9658

1.0309

GBP 1

1.2675

1.4158

1.2579

1.2658

Significant accounting policies

Except as described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2016.

New and revised standards and interpretations newly adopted by the Group

The Group applied the following new and revised accounting standards and interpretations for the first time:

  • Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)
  • Disclosure Initiative (Amendments to IAS 7)

The above standards had no significant impact on the consolidated interim financial statements.

New and revised standards and interpretations

The following new and revised standards and interpretations have been issued, but are not yet effective and have not been applied early in these condensed consolidated interim financial statements. Their impact on the consolidated financial statements of the Group has not yet been systematically analysed. The table reflects a first assessment conducted by the Group’s management and the expected effects.

 

 

Effective date

Planned application by the Group

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

*

1 January 2018

Reporting year 2018

IFRIC 23 Uncertainty over Income Tax Treatments

*

1 January 2019

Reporting year 2019

* No or no significant impacts are expected on the consolidated financial statements of the Group.

IFRS 9 Financial Instruments (effective 1 January 2018)

IFRS 9 introduces new classification and measurement requirements for financial assets and financial liabilities, replaces the current rules for impairment of financial assets with the expected credit loss impairment model and amends the requirements for hedge accounting.

On the basis of the implementation work currently being carried out, the Group expects no changes in the classification of financial assets and financial liabilities except for additional disclosures.

The new rules for impairment of financial assets – the expected credit loss model – require that expected credit loss is recognised when consumer loan is granted, lease receivables are established or credit card purchases are made, and that this expected credit loss is updated on each reporting date to reflect the change in credit risks for the financial asset.

The Group is currently defining the specific components and inputs for the new impairment model. The expected credit loss models for the credit card, consumer loans and leasing portfolios are generally based on probability of default, exposure at default and loss given default. For other financial assets (e.g. other current receivables) a simplified approach is used.

The individual inputs will be determined on the basis both of empirical data and of forward-looking information. In general, comparable models will be used for the credit card, consumer loan and leasing portfolios, while taking into account the different features and characteristics of the individual portfolios.

Modelling expected credit loss requires extensive data analysis using a number of data sources. For that reason, it is not currently possible to determine a quantitative impact on the current need for impairment.

The amended requirements for hedge accounting will not have an impact on the Group’s financial statements except for additional disclosures.

IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018)

In May 2014, the IASB issued the new standard which specifies how and when revenue is recognised. IFRS 15 replaces several other IFRS standards and interpretations that currently govern revenue recognition under IFRS and provides a single, principles-based five-step model to be applied to all contracts with customers.

The five steps cover: identifying the contract(s) with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognising revenue when (or as) the Group satisfies a performance obligation. The standard also requires entities to provide users of financial statements with more informative and relevant disclosures.

The implementation of the new standard is currently ongoing. Based on our assessment, no material impact is expected except for additional disclosures.

IFRS 16 Leases (effective 1 January 2019)

The new standard introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability. 

The impact of the new standard on the Group’s financial statements is currently assessed.

2. Segment reporting

For reporting and managerial purposes, management has divided the Group’s business into four segments. The external segment reporting is based on the internal reporting to the chief operating decision maker, who is responsible for allocating resources and assesses the financial performance of the business. The Executive Board has been identified as the chief operating decision maker, as it is responsible for the operational management of the entire Group and reviews the management reporting of each business segment on a monthly basis. The Executive Board consists of the Group’s Chief Executive Officer (CEO) as well as Chief Officers for Finance (CFO), Sales (CSO), Marketing and Product Management (CMO) and Operations (COO).

Payment

The business unit Payment provides services for cashless payments via credit, debit and customer cards to private and corporate customers and runs the relevant transaction and customer services relating to the business. The major part of the business is run through the brands of Mastercard and Visa.

The business unit Payment is operated through Viseca Card Services SA and its subsidiary Aduno SA, as well as through Vibbek AG, Vibbek GmbH, AdunoKaution AG and SmartCaution SA. The major revenue streams in the business result from interchange fees and commissions, annual fees for cards and services, income from card transactions in foreign currency and interest income.

Consumer Finance

The business unit Consumer Finance sells and operates leasing contracts and credit facilities for consumer goods to private and corporate clients. The business unit Consumer Finance is operated by cashgate AG. The major income streams are interest income, commission income and fees for chargeable services.

Internal Financing

As the central treasury centre of the Group, Internal Financing provides financial services to the other members of the Group. The treasury services include the treatment of payments, the handling of foreign exchange transactions as well as the management of the Group’s brand assets. The major income streams result from foreign currency transactions and interest income.

Corporate Functions

The business unit Corporate Functions contains intercompany consolidation items as well as the financial results of Aduno Holding.

Segments’ assets and liabilities

Assets and liabilities, revenue and expenses are measured in accordance with the relevant IFRS standards.

Information about major customers

There is no major customer in any of the business segments whose revenues amount to 10% or more of the segment’s revenues (30 June 2016: none).

The following table presents certain information regarding the operating segments, based on management’s evaluation and the internal reporting structure, on 30 June 2017 and 30 June 2016 for the first half year (unaudited).

 

Payment

 

Consumer Finance

 

Internal Financing

 

Total operating segments

 

Corporate Functions/ Consolidation

Consolidated

In 1,000 CHF

2017

2016

2017

2016

2017

2016

 

2017

2016

 

2017

2016

2017

2016

Commission income

102,442

89,831

0

0

8,650

7,286

 

111,092

97,117

 

0

0

111,092

97,117

Annual fees

60,570

55,831

0

0

0

0

 

60,570

55,831

 

0

0

60,570

55,831

Interest income

7,274

7,783

42,759

44,488

13,696

14,301

 

63,729

66,572

 

(15,672)

(16,095)

48,057

50,477

Other income

30,808

100,455

4,490

3,933

28,447

26,487

 

63,745

130,875

 

(19,531)

(19,213)

44,214

111,662

Total revenue

201,094

253,900

47,249

48,421

50,793

48,074

 

299,136

350,394

 

(35,203)

(35,308)

263,933

315,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing and service expenses

50,771

46,934

612

662

0

0

 

51,383

47,596

 

(727)

(501)

50,656

47,095

Distribution, advertising and promotion expenses

47,553

43,583

9,436

10,304

0

0

 

56,989

53,887

 

(5,174)

(5,275)

51,815

48,612

Interest expenses

7,117

7,023

7,653

8,578

14,617

15,256

 

29,387

30,857

 

(18,913)

(19,349)

10,474

11,508

Impairment losses from Payment and Consumer Finance

1,282

1,226

6,127

5,578

0

0

 

7,409

6,804

 

0

0

7,409

6,804

Personnel expenses

48,708

46,196

9,471

9,342

387

369

 

58,566

55,907

 

0

0

58,566

55,907

Other expenses

31,082

47,660

6,204

6,053

2,178

2,353

 

39,464

56,066

 

(12,842)

(11,927)

26,622

44,139

Depreciation

2,242

2,188

278

322

69

205

 

2,589

2,715

 

386

386

2,975

3,101

Amortisation

5,297

4,633

1,931

2,293

1,198

1,324

 

8,426

8,250

 

2

63

8,428

8,313

Total expenses

194,052

199,443

41,712

43,132

18,449

19,507

 

254,213

262,082

 

(37,268)

(36,603)

216,945

225,479

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results from operating activities

7,042

54,457

5,537

5,289

32,344

28,567

 

44,923

88,313

 

2,065

1,295

46,988

89,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from associates

1,343

1,552

0

0

0

0

 

1,343

1,552

 

0

0

1,343

1,552

Profit before income tax

8,385

56,009

5,537

5,289

32,344

28,567

 

46,266

89,865

 

2,065

1,295

48,331

91,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expenses

1,078

11,678

1,151

1,099

3,428

3,286

 

5,657

16,063

 

328

224

5,985

16,287

Profit for the period

7,307

44,331

4,386

4,190

28,916

25,281

 

40,609

73,802

 

1,737

1,071

42,346

74,873

3. Commission income

In 1,000 CHF

First half year 2017

First half year 2016

Interchange revenue and related revenue

71,576

67,155

Currency exchange commissions

29,085

19,126

Other commission revenue

10,431

10,836

 

 

 

Commission income

111,092

97,117

4. Interest income and interest expenses

In 1,000 CHF

First half year 2017

First half year 2016

Interest income

48,057

50,477

Interest expenses

10,474

11,508

 

 

 

Interest income, net

37,583

38,969

The interest income contains income from the Group’s Consumer Finance activities and also from credit lines arising out of the Payment business.

In the Payment business, creditcardholders are eligible to convert their debit on the credit card into a consumer credit for which the Group then charges interest for the period of the short-term loan.

The interest expenses are the refinancing expenses to finance the open credit lines of the Payment and Consumer Finance businesses.

5. Other income

In 1,000 CHF

First half year 2017

First half year 2016

Foreign exchange gain or loss, net

22,592

20,481

Income from services

18,480

17,130

Income from terminal sales

1,487

973

Other income

1,655

73,078

 

 

 

Other income

44,214

111,662

Foreign exchange gains and losses arise on transactions which are not settled in Swiss francs. Customers in the Group’s Payment business are billed based on a typical exchange rate close to spot rates whereas the Group is billed near the interbank rate (interbank rate plus Group’s credit spread).

As a former member of Visa Europe Ltd., the business unit Payment benefited from selling Visa Europe Ltd. to Visa Inc. in the first half year 2016. The Group received contributions at a total value of CHF 71.7 million, including preferential Visa Inc. shares at a value of CHF 17.3 million as per date of transaction as well as an entitlement to a deferred cash payment of CHF 4.3 million. The contribution of CHF 71.7 million has been recorded as other income.

6. Impairment losses from Payment and Consumer Finance

In 1,000 CHF

First half year 2017

First half year 2016

Impairment losses on commission income

1,281

1,225

Impairment losses on interest income

6,128

5,579

 

 

 

Impairment losses

7,409

6,804

The impairment losses on commission income are attributable to losses arising from bad debts, fraud and charge back in the Payment business, whereas the impairment losses on interest income mainly represent incurred but not reported losses in the Consumer Finance business.

7. Other expenses

In 1,000 CHF

First half year 2017

First half year 2016

Audit and professional services

7,402

6,427

IT expenses

9,697

8,904

Telephone and postage

1,293

1,031

Premises expenses

3,763

3,778

Travel and representation

468

492

Loss on sale of property and equipment and intangible assets

3

12

Other administration expenses

3,996

23,495

 

 

 

Other expenses

26,622

44,139

The item “Other administration expenses” includes a deferral relating to the outsourcing of business activities between the business units Payment and Internal Financing in the amount of CHF 0.1 million (first half year 2016: CHF 18.0 million).

8. Receivables from Payment and Consumer Finance

In 1,000 CHF

30.06.2017

31.12.2016

Receivables from cardholders

394,820

452,704

Receivables from card schemes

84,835

85,439

Receivables from debt collection

3,806

3,604

Receivables for which fraud is assumed

133

223

Other receivables from Payment business

7,008

8,163

Allowance for doubtful debts

(932)

(921)

 

 

 

Total receivables from business unit Payment

489,671

549,213

In 1,000 CHF

30.06.2017

31.12.2016

Short-term receivables from Consumer Finance

468,873

467,674

Short-term allowance for doubtful debts

(9,280)

(8,818)

Short-term receivables from Consumer Finance

459,593

458,856

 

 

 

Long-term receivables from Consumer Finance

856,921

826,625

Long-term allowance for doubtful debts

(17,388)

(15,963)

Long-term receivables from Consumer Finance

839,532

810,662

 

 

 

Total receivables from Consumer Finance

1,299,125

1,269,519

The ageing of the receivables contained in the statement of financial position that are not individually impaired at the reporting date are as follows:

 

Gross amount

Allowance

Gross amount

Allowance

In 1,000 CHF

30.06.2017

30.06.2017

31.12.2016

31.12.2016

Receivables from cardholders

 

 

 

 

Not past due

391,094

0

449,127

0

Past due 1–30 days

2,818

0

2,561

0

Past due 31–60 days

655

0

619

0

Past due 61–90 days

188

0

279

0

Past due for more than 90 days

66

0

117

0

Total

394,820

0

452,704

0

 

 

 

 

 

Receivables from debt collection

 

 

 

 

Past due for more than 90 days

3,806

(716)

3,604

(656)

Total

3,806

(716)

3,604

(656)

 

 

 

 

 

Receivables for which fraud is assumed

 

 

 

 

Past due 1–30 days

119

(47)

213

(91)

Past due 31–60 days

13

(13)

11

(11)

Past due 61–90 days

1

(1)

0

0

Past due for more than 90 days

0

0

0

0

Total

133

(61)

223

(102)

 

 

 

 

 

Receivables from card schemes and others

 

 

 

 

Due on sight

86,961

0

88,422

0

Due within 1–3 years

4,385

0

4,311

0

Past due

497

(155)

870

(163)

Total

91,843

(155)

93,603

(163)

 

 

 

 

 

Receivables from business unit Consumer Finance

 

 

 

 

Past due

29,651

(839)

28,440

(736)

Due on sight

12,002

(324)

14,297

(373)

Due within up to 3 months

130,687

(2,311)

130,775

(2,217)

Due within 4–12 months

296,533

(5,806)

294,162

(5,492)

Total current receivables

468,873

(9,280)

467,674

(8,818)

 

 

 

 

 

Due within 1–3 years

620,247

(12,592)

614,775

(11,859)

Due after more than 3 years

236,674

(4,797)

211,850

(4,104)

Total non-current receivables

856,921

(17,388)

826,625

(15,963)

 

 

 

 

 

Total

1,325,792

(26,668)

1,294,299

(24,780)

Receivables from Payment business

Receivables from cardholders consist of regular open balances on the credit card account of credit cardholders. Open balances from cardholders due more than 90 days are transferred into a dedicated and monitored collection portfolio. The balance of the collection portfolio amounts to CHF 3.8 million as at 30 June 2017 (31 December 2016: CHF 3.6 million) and is shown under receivables from debt collection.

If a cardholder transaction tends to be fraudulent, the respective balance is transferred into a dedicated fraud portfolio until the case is settled – CHF 0.1 million as at 30 June 2017 (31 December 2016: CHF 0.2 million). An adequate allowance is set up for all receivables for which fraud is assumed. The respective balance of all fraudulent transactions under clarification is shown under receivables for which fraud is assumed.

The open settlement balance to the card schemes of CHF 84.8 million as at 30 June 2017 (31 December 2016: CHF 85.4 million) reflects the transmitted merchant transactions of the last days before closing. The open settlement balances to the card schemes are settled daily. In the history of the Company all daily balances to the schemes have been settled as announced by the card schemes. Therefore, no allowances for doubtful debts were built.

Receivables from terminal sales are open balances to customers totalling CHF 0.9 million as at 30 June 2017 (31 December 2016: CHF 1.7 million) and are contained in the other receivables from Payment business. This is 0.2% (31 December 2016: 0.3%) of the total receivables of the Payment business. Allowances for doubtful debts are built according to the ageing of the overdue receivables and for receivables overdue for more than 12 months are provided for 100%.

Other receivables from Payment business also contain receivables related to the currency conversion amounting to CHF 1.3 million (31 December 2016: CHF 1.9 million). Such receivables are usually settled within less than one week.

Receivables from Consumer Finance activities

These receivables consist of consumer loans and finance lease receivables out of the car leasing business. Finance lease receivables are collateralised by the financed cars, while consumer loans are not collateralised.

Open balances from the business unit Consumer Finance due for more than 90 days are transferred into a dedicated and monitored collection portfolio. Allowances for doubtful debts are built using sophisticated analytical and statistical methods as described below. The total balance is shown under the position ”Allowance for doubtful debts”.

In 1,000 CHF

30.06.2017

31.12.2016

Receivables from consumer loans

725,014

700,772

Receivables from finance lease

600,778

593,527

 

 

 

Total receivables from business unit Consumer Finance

1,325,792

1,294,299

Receivables from finance lease

In 1,000 CHF

30.06.2017

31.12.2016

Current receivables from finance lease

 

 

Gross investment in finance lease

286,541

287,851

Unearned finance income

66,840

66,224

 

 

 

Present value of minimum lease payments

219,701

221,627

 

 

 

Non-current receivables from finance lease

 

 

Gross investment in finance lease

419,496

408,070

Unearned finance income

38,419

36,171

 

 

 

Present value of minimum lease payments

381,077

371,899

 

 

 

Gross receivables from finance lease

 

 

Due within up to 1 year

286,541

287,851

Due within 1–5 years

419,496

408,070

Unearned finance income

105,259

102,395

 

 

 

Present value of minimum lease payments

600,778

593,527

Allowance for doubtful debts

Recognised allowances for doubtful debts for the business units at the reporting date are shown in the following tables.

In 1,000 CHF

30.06.2017

31.12.2016

Allowance for doubtful debts, business unit Payment

 

 

Balance at 1 January

(921)

(1,516)

(Increase)/decrease

(11)

594

 

 

 

Balance at reporting date

(932)

(921)

The allowance for doubtful debts on receivables from cardholders is composed of impairment on receivables due to late payment, fraudulent payments and non-recoverable chargeback at both the specific and collective level. All individually significant receivables from cardholders are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. The allowance for all three categories is determined according to historical data based on sophisticated analytical methods and evaluation models. The allowance is adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than those suggested by historical trends. Management qualifies the allowance for doubtful debts in the Payment business as adequate.

In 1,000 CHF

30.06.2017

31.12.2016

Allowance for doubtful debts, business unit Consumer Finance

 

 

Balance at 1 January

(24,780)

(24,904)

(Increase)/decrease

(1,888)

124

 

 

 

Balance at reporting date

(26,668)

(24,780)

The allowance for doubtful debts on receivables from Consumer Finance is composed of impairment on receivables due to late payment and also comprises a portion for those found not to be specifically impaired but which are then collectively assessed for any impairment that will be incurred but not yet identified. The Group recognises for the allowance in its Consumer Finance business at the time the credit facility or the leasing contract is paid out to the customer.

The collective allowance is determined for clusters of customers by combining historical data based on sophisticated analytical methods and evaluation models that consider the particular risks of each cluster. The allowance is adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than those suggested by historical trends. Currently, no specific allowances that are individually significant are recognised on receivables in the Consumer Finance business unit. Management qualifies the allowance for doubtful debts in the Consumer Finance business unit as adequate.

Except for allowances for fraudulent transactions in the Payment business, all impairments of receivables are due to late payment of customers or those that have been incurred but not yet identified. Based on the Group’s experience, impairments are calculated as a percentage of the overdue balance by customers, including the estimated amount of receivables becoming overdue in the near future.

In the Payment business and Consumer Finance, on average about 98% (31 December 2016: 98%) of the receivables outstanding are not past due. Based on past experience, the Group includes the impairment allowance for these receivables in the allowance calculated on the basis of the default risk of the total debts.

9. Inventories

In 1,000 CHF

30.06.2017

31.12.2016

Raw materials

2,071

2,306

Terminals – new

1,841

1,651

Terminals – used

97

74

 

 

 

Total inventories

4,009

4,031

In the first six months of 2017, costs of CHF 3.3 million were recognised as an expense (first six months of 2016: CHF 3.8 million). Write-downs of less than CHF 0.1 million were recognised on inventories to net realisable value (first six months of 2016: CHF 0.5 million).

10. Interest-bearing liabilities

In 1,000 CHF

30.06.2017

31.12.2016

Other bank liabilities

2,951

8,584

Current portion of syndicated loan

390,000

390,000

Current portion of unsecured bond issues

350,158

449,669

Short-term interest-bearing liabilities

743,109

848,253

 

 

 

Unsecured bond issue

373,886

273,749

Other long-term liabilities

1,689

1,929

Long-term interest-bearing liabilities

375,574

275,678

 

 

 

Total interest-bearing liabilities

1,118,683

1,123,930

Terms and debt repayment schedule

 

Currency

Nominal interest rate

Year of maturity

Nominal value

Carrying amount

Nominal value

Carrying amount

In 1,000 CHF

 

 

 

30.06.2017

30.06.2017

31.12.2016

31.12.2016

Syndicated loan

CHF

0.68%

2017

390,000

390,000

390,000

390,000

 

 

 

 

 

 

 

 

Unsecured bond issue

CHF

3 M Libor1

2017

0

0

100,000

99,995

Unsecured bond issue

CHF

0.00%

2017

0

0

100,000

99,987

Unsecured bond issue

CHF

2.25%

2017

250,000

249,911

250,000

249,687

Unsecured bond issue

CHF

0.00%

2018

100,000

100,247

0

0

Unsecured bond issue

CHF

3 M Libor1

2019

100,000

100,000

0

0

Unsecured bond issue

CHF

1.125%

2021

275,000

273,884

275,000

273,749

 

 

 

 

 

 

 

 

Other bank liabilities

CHF

0.78%

current account

2,919

2,919

5,536

5,536

Other bank liabilities

various

0.78%

current account

33

33

3,047

3,047

Other long-term liabilities

CHF

0.00%

2021

1,689

1,689

1,929

1,929

 

 

 

 

 

 

 

 

Total

 

 

 

1,119,641

1,118,683

1,125,512

1,123,930

1)Floor at 0.0% and Cap at 0.05%

Syndicated loan

As at 30 June 2017, the Group has a syndicated loan facility of CHF 1,050 million headed by Zürcher Kantonalbank (ZKB) (31 December 2016: CHF 1,050 million) at its disposal. The interest conditions of the facility are quoted by ZKB at market conditions at the fixing date according to the maturity plus a margin, depending on the Company’s credit rating.

As at 30 June 2017, the syndicated loan amounts to CHF 390 million nominal (31 December 2016: CHF 390 million).

Unsecured bond issues

Since 27 October 2011, Aduno Holding has an outstanding fixed-rate bond of CHF 250 million with a maturity in 2017. The nominal interest rate is set at 2.25% and is paid yearly to the bondholders. The effective interest rate, including all fees paid for this bond, amounts to 2.44%.

Two new bonds have been issued in 2017 with maturity in 2018 and 2019 respectively, replacing the two bonds issued in 2015. A fixed-rate bond of CHF 100 million with its maturity in 2018 and with a coupon of 0.00% with an effective interest rate of -0.3%, and a bond of CHF 100 million disposes of a floating rate based on Libor interest rate with a floor at 0% and a cap at 0.05% expiring in 2019.

A fixed-rate bond of CHF 275 million issued in 2014 with its maturity in 2021 disposes of a nominal interest rate of 1.125%. Including fees, the effective interest rate amounts to 1.241%.

Other bank liabilities

As at 30 June 2017, the Group has access to bilateral credit facilities with ZKB of CHF 700 million (31 December 2016: CHF 700 million). The interest rate for these facilities is set at the market interest rate according to the maturity plus a margin, depending on the Company’s credit rating.

As at 30 June 2017, the total of the other bank liabilities amounts to CHF 2.9 million (31 December 2016: CHF 8.6 million).

11. Share capital and reserves

Dividends

The following dividends were declared and paid by the Group.

In 1,000 CHF

Paid in first half year 2017

Paid in 2016

Total dividend

40,000

20,000

Dividend per share in CHF

1,600

800

12. Financial risk management

Fair values

The fair values of financial assets and liabilities together with the carrying amounts shown in the statement of financial position are as follows:

In 1,000 CHF

Carrying amount

30.06.2017 Fair value

Carrying amount

31.12.2016 Fair value

Cash and cash equivalents

15,990

15,990

41,489

41,489

Receivables from business unit Payment

485,286

485,286

549,213

549,213

Receivables from business unit Consumer Finance

1,299,125

1,299,125

1,269,519

1,269,519

Other trade receivables and other receivables

80,548

80,548

81,498

81,498

Total loans and receivables

1,880,949

1,880,949

1,941,718

1,941,718

 

 

 

 

 

Financial investments available for sale

21,093

21,093

18,732

18,732

Derivatives held for trading

154

154

49

49

 

 

 

 

 

Total financial assets

1,902,196

1,902,196

1,960,499

1,960,499

 

 

 

 

 

Payables to counterparties

375,574

387,713

286,898

286,898

Other trade payables

262,630

262,630

10,407

10,407

Short-term interest-bearing liabilities

743,109

745,205

848,253

853,218

Other payables

12,625

12,625

16,770

16,770

Accrued expenses

60,343

60,343

67,609

67,609

Long-term interest-bearing liabilities

375,574

389,401

275,678

288,008

Total financial liabilities at amortised cost

1,829,855

1,857,917

1,505,614

1,522,909

 

 

 

 

 

Derivatives held for trading

(291)

(291)

(255)

(255)

Derivatives used for hedging

(145)

(145)

(289)

(289)

 

 

 

 

 

Total financial liabilities

1,829,418

1,857,480

1,505,071

1,522,366

Basis for the determination of fair value

The following summarises the significant methods and assumptions used in estimating the fair value of financial instruments reflected in the table above.

Receivables and payables
Trade accounts receivable and payable are stated in the statement of financial position at their carrying value less impairment allowance. Due to their short-term nature, receivables from card activities are assumed to approximate their fair value.

The fair value of long-term financial instruments with a maturity or a refinancing profile of more than one year and for which observable market transactions are not available, the fair value is estimated using valuation models such as discounted cash flow techniques. Input parameters into the valuation include expected lifetime credit losses, interest rates, prepayment rates and primary origination or secondary market spreads.

Non-derivative financial liabilities
The fair value of financial instruments for disclosure purposes is calculated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

The difference between the carrying amount and the fair value in the interest-bearing liabilities (short-term as well as long-term) is caused by the unsecured bond issues and amounted to a total of CHF 15.9 million as per half year 2017 (at year end 2016: CHF 17.3 million). These unsecured bonds are categorised in level 1 of the fair value hierarchy.

Financial instruments carried at fair value, fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows.

  • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date
  • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
  • Level 3: unobservable inputs for the asset or liability

 

30.06.2017

31.12.2016

In 1,000 CHF

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 

 

 

 

 

 

 

 

 

Financial investments available for sale

0

21,093

0

21,093

0

18,732

0

18,732

Derivative financial instruments

0

154

0

154

0

49

0

49

Total financial assets carried at fair value

0

21,247

0

21,247

0

18,780

0

18,780

 

 

 

 

 

 

 

 

 

Derivative financial instruments

0

(437)

0

(437)

0

(544)

0

(544)

Total financial liabilities carried at fair value

0

(437)

0

(437)

0

(544)

0

(544)

Input for Level 2 valuation

Level 2 fair values for simple over-the-counter derivative financial instruments are based on broker quotes. Those quotes are tested for reasonableness by discounting expected future cash flows using market rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the non-performance risk when appropriate. Level 2 fair values for available for sale financial instruments are based on market prices multiples without any unobservable input.

13. Group companies

In 1,000

Country of incorpo- ration

Currency

Share capital 30.06.2017

Share capital 31.12.2016

Ownership interest 30.06.2017

Ownership interest 31.12.2016

Aduno Holding AG, Zurich (ZH), parent company

Switzerland

CHF

25,000

25,000

-

-

Accarda AG, Brüttisellen (ZH)*

Switzerland

CHF

18,500

18,500

30%

30%

Aduno Finance AG, Stans (NW)

Switzerland

CHF

1,000

1,000

100%

100%

AdunoKaution AG, Zurich (ZH)

Switzerland

CHF

1,365

1,365

100%

100%

Aduno SA, Bedano (TI)

Switzerland

CHF

120

120

100%

100%

cashgate AG, Zurich (ZH)

Switzerland

CHF

35,000

35,000

100%

100%

Contovista AG, Schlieren (ZH)*

Switzerland

CHF

140

140

14.3%

14.3%

SmartCaution SA, Geneva (GE)

Switzerland

CHF

500

500

100%

100%

SwissWallet AG, Zurich (ZH)*

Switzerland

CHF

105

105

33.3%

33.3%

Vibbek AG, Urdorf (ZH)

Switzerland

CHF

1,300

1,300

67%

67%

Vibbek GmbH, Hamburg**

Germany

EUR

25

25

67%

67%

Viseca Card Services SA, Zurich (ZH)

Switzerland

CHF

20,000

20,000

100%

100%

*   Associates, the Group has significant influence
**  Vibbek GmbH is fully owned by Vibbek AG.

14. Subsequent events

There are no subsequent events to be reported.

Zurich, 27 July 2017

Pascal Niquille
Chairman of the Board of Directors

Martin Huldi
Chief Executive Officer

Conrad Auerbach
Chief Financial Officer