Financial Financial Report Report Q2-2011 Q2-2011

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITIONS

Notes

30 June 2011 2010

31 December 2010

ASSETS Cash and balances with central bank Treasury bills and other eligible bills Loans and advances to banks Derivative financial instruments Trading assets Loans and advances to customers Investment securities Deferred income tax assets Intangible assets Information technology systems 6 Property, plant and equipment 7 Other assets 15,487,975 930,413,738 649,377,806 28,803,092 3,552,541 124,833,037 671,688,402 3,456,987 23,094,021 19,926,030 22,171,800 23,311,501 54,594,600 806,219,393 485,351,865 32,949,267 1,246,014 114,396,638 583,685,053 - 3,285,944 14,203,735 19,517,005 25,877,519 57,622,629 768,603,990 595,836,109 24,364,014 1,632,444 118,677,323 670,155,319 7,131,987 23,204,125 17,604,890 22,377,337 31,617,899 2,338,828,066

Total assets 2,516,116,930 2,141,327,033

LIABILITIES AND EQUITY Liabilities Deposits from banks 10,681,163 6,868,301 6,861,100 Derivative financial instruments 3,214,108 27,234,280 5,339,030 Due to customers 2,256,697,643 1,905,192,494 2,092,110,513 Other liabilities 17,433,379 16,345,352 20,309,511 Current income tax liabilities 1,671,744 - 5,915,348 Deferred tax liabilities 965,670 1,202,743 1,155,919 Provisions 6,747,162 1,351,921 8,126,044 Total liabilities 2,297,410,869 1,958,195,091 Equity Ordinary shares 8 Share premium Share option reserve Other reserve Treasury shares 9 Retained earnings Total equity 2,139,817,465

2,927,674 39,418,265 2,696,927 (368,973) (7,515,613) 181,547,781 218,706,061

2,927,674 39,191,788 2,372,086 (1,474,993) (24,029,256) 164,144,643 183,131,942

2,927,674 40,011,434 2,455,677 (604,855) (17,808,463) 172,029,134 199,010,601 2,338,828,066

Total liabilities and equity 2,516,116,930 2,141,327,033

The notes on pages 6 to 12 form an integral part of this condensed interim financial information All amounts in Swiss Francs 1

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

Notes

Quarter ended 30 June 2011 16,017,777 (1,664,522) 14,353,255 5,550,888 (1,592,294) 3,958,594 12,694,104 31,005,953 (21,507,039) 9,498,914 (2,339,793) - 7,159,121
0.50 0.50 14,435,893

6 months ended 30 June 2011 37,466,980 (4,203,721) 33,263,259 11,026,021 (3,185,247) 7,840,774 26,365,407 67,469,440 (44,345,973) 23,123,467 (5,309,298) - 17,814,169
1.24 1.23 14,422,551

2010 18,923,263 (2,299,925) 16,623,338 4,628,074 (1,589,149) 3,038,925 6,493,614 26,155,877 (17,060,245) 9,095,632 (1,956,395) 777,257 7,916,494
0.56 0.56 14,146,520

2010 36,814,029 (4,289,580) 32,524,449 8,512,510 (3,165,820) 5,346,690 11,686,893 49,558,032 (33,012,189) 16,545,843 (3,611,803) 777,257 13,711,297
0.97 0.97 14,,118,025

Fee and commission income Fee and commission expense Net fee and commission income Interest income Interest expense Net interest income Net trading income 3

Operating income Operating expenses 4

Operating profit Income tax expense Gain recognised on acquisition of subsidiary Net profit
Earning per share Diluted earning per share Weighted average number of ordinary shares 5 5 5

The notes on pages 6 to 12 form an integral part of this condensed interim financial information All amounts in Swiss Francs

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

Notes

Quarter ended 30 June 2011 7,159,121 2010 7,916,494

6 months ended 30 June 2011 17,814,169 2010 13,711,297

Net profit for the period Other comprehensive income: Gains / (losses) recognised directly in equity Available-for-sale financial assets

201,225 (45,014) (22,719) 5,082 138,574 7,297,695

(989,380) 221,325 14,528 (3,251) (756,778) 7,159,716

521,315 (116,618) 24,939 (5,579) 424,057 18,238,226

(257,886) 57,689 41,252 (9,228) (168,173) 13,543,124

Income tax relating to components of other comprehensive income (AFS assets) Hedge reserve Income tax relating to components of other comprehensive income (Hedge reserve) Other comprehensive income for the period, net of tax Total comprehensive income for the period

The notes on pages 6 to 12 form an integral part of this condensed interim financial information All amounts in Swiss Francs 3

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

Share Share capital premium Share Option reserve Other reserve Treasury shares Retained earnings

Total

Balance at 1 January 2011 2,927,674 40,011,434 2,455,677 (604,855) (17,808,463) 172,029,134 199,010,601 Change in investment securities Tax impact on investment securities Net profit of the period - - - - - - - - - - - - - - - - - - 546,254 (122,197) - 424,057 - (188,175) - - - - 546,254 (122,197) 17,814,169 18,238,226 (8,607,208) (188,175) 552,936 -

- 17,814,169 - 17,814,169 - (8,607,208) - -

Total comprehensive income for the period Dividend Currency translation differences

Employee stock option plan: Value of services provided - - 552,936 - - - Reclassification of value of services provided for stock options exercised, lapsed or expired in the period - - (311,686) - - 311,686

Purchase of treasury shares - - - - (4,813,712) - (4,813,712) Sale of treasury shares - (593,169) - - 15,106,562 - 14,513,393 Balance at 30 June 2011 2,927,674 39,418,265 2,696,927 (368,973) (7,515,613) 1 81,547,781 218,706,061

Balance at 1 January 2010 2,927,674 38,314,296 2,042,605 (1,306,820) (26,518,573) 158,781,171 174,240,353 Change in investment securities Tax impact on investment securities Net profit of the period - - - - - - - - - - - - - - - (216,634) 48,461 - (168,173) - - - - - (216,634) 48,461 13,711,297 13,543,124 (8,548,519) 530,175 (3,276,626) 6,643,435

- 13,711,297 - 13,711,297 - (8,548,519) - 200,694 - -

Total comprehensive income for the period Dividend

Employee stock option plan: Value of services provided - - 530,175 - - Reclassification of value of services provided for stock options exercised, lapsed or expired in the period - - (200,694) - - Purchase of treasury shares Sale of treasury shares Balance at 30 June 2010 - - - 877,492 - - - (3,276,626) - 5,765,943

2,927,674 39,191,788 2,372,086 (1,474,993) (24,029,256) 164,144,643 183,131,942

The notes on pages 6 to 12 form an integral part of this condensed interim financial information All amounts in Swiss Francs

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

Notes

6 months ended 30 June 2011 36,964,747 (4,141,430) 17,979,820 (3,163,399) (1,920,097) 19,613,232 (39,768,537) 25,564,336 2010 35,422,789 (4,557,522) 5,664,152 (3,041,891) (650,947) 6,209,139 (7,363,183) 31,682,537

Cash flow from / (used in) operating activities Fees and commission receipts Fees and commission paid Interest receipts Interest paid Purchase of trading assets Net trading income Cash payments to employees and suppliers Cash flow from operating profit before changes in operating assets and liabilities

Net (increase) / decrease in operating assets and net increase / (decrease) in operating liabilities Loans and advances to customers (6,155,714) Loans and advances to banks (488,312) Due to customers 164,587,130 Other liabilities (9,245,654) Net cash from operating activities Cash flow from / (used in) investing activities Purchase of property, plant and equipment and Information technology systems 4/5 Proceeds from sale/reimbursement of investment securities Purchase of investment securities Purchase of subsidiary, net of cash acquired Net cash used in investing activities Cash flow from / (used in) financing activities Purchase of treasury shares Sale of treasury shares Dividend Net cash used in financing activities Increase/decrease in cash and cash equivalents Movements in cash and cash equivalents Balance at beginning of year Increase / (Decrease) Balance at 30 June 174,261,786

(22,636,901) (66,704,959) 230,395,949 (6,915,686) 165,820,940

(6,631,082) 172,912,862 (172,727,623) - (6,445,843) (4,813,712) 14,513,393 (8,607,208) 1,092,473 168,908,416 1,415,201,628 168,908,416 1,584,110,044

(5,710,182) 47,004,252 (270,817,706) (3,604,465) (233,128,101) (3,276,626) 6,643,435 (8,548,519) (5,181,710) (72,488,871) 1,344,671,380 (72,488,871) 1,272,182,509

The notes on pages 6 to 12 form an integral part of this condensed interim financial information All amounts in Swiss Francs 5

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

ACCOUNTING POLICIES, REPORTABLE SEGMENTS AND EXPLANATORY NOTES

1. Accounting policies and presentation matters

The Condensed Consolidated Interim Financial Statements are prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies used in the preparation of the Interim Financial Statements are consistent with those used in the Annual Financial Statements. Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would be appropriate to anticipate or defer such costs at the end of the financial year. The Consolidated Interim Financial Statements should be read in conjunction with the 2010 Annual Consolidated Financial Statements.

2. Reportable segments
The analysis of reportable segments for the 6 months period ending 30 June 2011 and 2010 are as follows:

6 months ended 30 June In CHFm 2011 Net Revenues - Private Clients Direct Operating Costs - Private Clients Direct Marketing Costs - Private Clients 36.1 (3.6) (2.7)

2010 39.3 (3.2) (3.1)

Direct Contribution margin - Private Clients

Net Revenues - B2B Clients Direct Operating Costs - B2B Clients Direct Marketing Costs - B2B Clients

29.8
11.1 (2.6) (0.3)

33.0
10.2 (1.8) (0.3)

Direct Contribution margin - B2B Clients

Direct Contribution margin - Securities Net Revenues - eForex Direct Operating Costs - eForex Direct Marketing Costs - eForex Direct Contribution margin - eForex

8.2
38.0 20.2 (7.2) (2.5) 10.5 (8.1) (9.1) (2.0) (6.2) (25.4) 23.1 (5.3) - 17.8

8.1
41.1 (6.8) (9.2) (2.3) (6.3) (24.6) 16.5 (3.6) 0.8 13.7

Operating Cost - Technology Operating Cost - Operations Operating Cost - Marketing Operating Cost - G&A Total Platform and Infrastructure Operations Costs Operating profit Income tax expense Gain on acquisition of subsidiary Net profit

In Q2 2010, eForex Net revenues amounting CHF 5.5m were included in Net revenues from Private Clients and CHF 0.8m from B2B Clients. The Group does not have any client representing more than 10% of its revenues.

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

2. Reportable segments (continued)

30 June 2011 Assets - Securities / Private Clients Liabilities - Securities / Private Clients Assets - Securities / B2B Clients Liabilities - Securities / B2B Clients Assets - eForex Liabilities - eForex Assets - Platform and Infrastructure Liabilities - Platform and Infrastructure Net Balance - Equity 1,912.8 (1,864.5) 367.9 (281.9) 155.7 (133.5) 79.7 (17.5) 218.7 30 June 2010 1,646.3 (1,601.8) 443.1 (343.7) 51.9 (12.7) 183.1

3. Net trading income

Foreign exchange revenues Results from Trading assets Results from Investment securities Gain less losses from Investment securities Total 6 months ended 30 June 2011 26,733,295 (127,043) (323,809) 82,964 26,365,407 2010 11,675,774 (6,125) 17,244 11,686,893

Results from Investment securities consist of results from those classified as fair value through profit and loss.

4. Operating expenses
Payroll & related expenses Other operating expenses Marketing expenses Provisions Depreciation Total 6 months ended 30 June 2011 19,717,349 12,333,968 7,469,072 200,000 4,625,584 44,345,973 2010 12,849,737 10,609,346 5,812,895 200,000 3,540,211 33,012,189

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

5. Earning per share

a) Basic Net Profit Weighted average number of ordinary shares in issue Basic earning per share Quarter ended 30 June 2011 7,159,121 14,435,893 0.50 2010 7,916,494 14,146,520 0.56 6 months ended 30 June 2011 17,814,169 14,422,551 1.24 2010 13,711,297 14,118,025 0.97

b) Diluted Net Profit Weighted average number of ordinary shares in issue Adjustments for share options Weighted average number of ordinary shares for diluted earnings per share options

Quarter ended 30 June 2011 7,159,121 14,435,893 9,486 14,445,379 0.50 2010 7,916,494 14,146,520 6,963 14,153,483 0.56

6 months ended 30 June 2011 17,814,169 14,422,551 19,225 14,441,776 1.23 2010 13,711,297 14,118,025 9,551 14,127,576 0.97

Diluted earning per share

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

6. Information technology systems

Software Third Party Licences 6 months ended 30 June 2011 Opening net book amount Addition Amortisation / depreciation Closing net book amount 6 months ended 30 June 2010 Opening net book amount Addition Amortisation / depreciation Closing net book amount 4,648,142 1,733,651 (890,135) 5,491,658 1,481,824 832,796 (479,630) 1,834,990 Proprietary Software 10,029,782 3,822,634 (1,957,532) 11,894,884 7,273,665 4,061,304 (1,458,862) 9,876,107 Hardware & Telecom Systems 2,926,966 477,962 (865,440) 2,539,488 2,643,448 855,694 (1,006,504) 2,492,638 Total 17,604,890 6,034,247 (3,713,107) 19,926,030 11,398,937 5,749,794 (2,944,996) 14,203,735

Additions to Information technology systems include an amount of CHF 3,521,055 (2010: CHF 3,233,450) representing own costs capitalised in connection with the development of the systems of the Bank.

7. Property, plant and equipment

6 months ended 30 June 2011 Opening net book amount Addition Amortisation / depreciation Closing net book amount 6 months ended 30 June 2010 Opening net book amount Addition Amortisation / depreciation Closing net book amount Land & Building 18,045,696 125,367 (277,703) 17,893,360 16,659,549 79,208 (275,606) 16,463,151 Leasehold Improvements Equipments 2,229,921 230,294 (249,240) 2,210,975 1,360,539 62,681 (161,240) 1,261,980 2,101,720 241,174 (275,429) 2,067,465 1,811,525 124,662 (144,313) 1,791,874 Total 22,377,337 596,835 (802,372) 22,171,800 19,831,613 266,551 (581,159) 19,517,005

The total cost of the property includes an aggregate CHF 87,171 of own costs capitalised (2010: CHF 55,782). On 19 October 2010, Swissquote Bank Ltd entered into a contract with a construction company, which purpose is the realisation of the extension of the Swissquote headquarters in Gland, Switzerland. The value of the contract is CHF 42.2m, including applicable VAT. The extension will consist of 6,700 sqm office space (max. 500 work places), storage rooms and parking, and is scheduled to be delivered in December 2013. Up to 30 June 2011, the Bank made an aggregate advanced payment of CHF 1.75 to the construction company. The payment schedule of the amount payable to the construction company is as follows : CHF 13.8m in 2011, CHF 16.0m in 2012 and CHF 10.65m in 2013.

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

8. Ordinary shares
a) Numbers of Shares in 2011 1 January Change 30 June Issued shares Ordinary share capital Number of shares Nominal value per share (CHF) Total nominal value (CHF) Unissued shares Conditional capital Number of conditional shares Nominal value per share (CHF) Total nominal value (CHF) Authorised capital Amount authorised (CHF) Nominal value per share (CHF) Number of authorised shares

14,638,370 0.20 2,927,674

- - -

14,638,370 0.20 2,927,674

211,060 0.20 42,212 800,000 0.20 4,000,000

538,940 - 107,788 (100,000) - (500,000)

750,000 0.20 150,000 700,000 0.20 3,500,000

The Annual General Meeting approved on 6 May 2011 the increase of the conditional capital to 750,000 conditional shares for a nominal value of CHF 150,000 and the decrease of the authorised capital to an authorised amount of CHF 700000 (corresponding to 3,500,000 authorised shares). b) Numbers of Shares in 2010 Issued shares Ordinary share capital Number of shares Nominal value per share (CHF) Total nominal value (CHF) Unissued shares Conditional capital Number of conditional shares Nominal value per share (CHF) Total nominal value (CHF) Authorised capital Amount authorised (CHF) Nominal value per share (CHF) Number of authorised shares 1 January Change 30 June

14,638,370 0.20 2,927,674

- - -

14,638,370 0.20 2,927,674

211,060 0.20 42,212 800,000 0.20 4,000,000

- - - - - -

211,060 0.20 42,212 800,000 0.20 4,000,000

All amounts in Swiss Francs

10

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

9. Treasury shares
Beginning of the year (shares) 2011 303,404 2010 583,692 78,336 38.19 to 54.80 41.83 (100,500) 46.24 to 47.46 47.46 (104,530) 17.00 to 47.00 17.93 456,998 24,029,256 52.58 3.12%

Acquisition - shares 92,427 unit price ranging from CHF 41.93 to 61.70 average price in CHF 52.08 Disposal - shares (229,423) unit price ranging from CHF 46.86 to 58.91 average price in CHF 56.02 Remittance to optionees - shares (38,174) unit price ranging from CHF 34.00 to 47.00 average price in CHF 43.49 End of the period - 30 June (shares) Total cost in CHF Average cost per share in CHF % of the issued shares 128,234 7,515,613 58.61 0.88%

The Treasury shares are primarly acquired for the purpose of covering the employees stock option plans.

All amounts in Swiss Francs

11

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

10. Miscellaneous financial information

Pension obligations - The Group (a) uses the so called corridor approach (IAS 19) and (b) examines the impact of possible discrepancies between long-term actuarial assumptions used in the actuarial calculations at the end of the previous calendar year and actual short term data applicable at the date of interim reporting, in order to determine the requirement for the recording of actuarial gains and losses in condensed consolidated interim financial statements as a result of pension obligations. No actuarial adjustment to the financial cost of the pension plan (consisting in the contribution payable by the Group to the Fund in accordance with its statutory rules) was required at 30 June 2011, nor in the former quarters.
Tier One ratio (Basel II ratio) At 30 June 2011, the Group had a Tier One ratio (Basel II ratio) of 22.30%. (30 June 2010: 22.12%; 31 December 2010: 19.0%).

All amounts in Swiss Francs

12

All amounts in Swiss Francs

13