Financial Financial Report Report Q3-2011 Q2-2011

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITIONS

Notes

30 September 2011 2010

31 December 2010

ASSETS Cash and balances with central bank 1,199,959,180 Treasury bills and other eligible bills 20,655,278 Loans and advances to banks 371,006,664 Derivative financial instruments 51,275,094 Trading assets 3,855,133 Loans and advances to customers 108,563,944 Investment securities 5 744,875,014 Deferred income tax assets 1,785,387 Intangible assets 23,038,970 Information technology systems 7 20,282,874 Property, plant and equipment 8 29,317,844 Other assets 28,836,279 16,055,764 934,012,530 476,231,778 36,301,659 1,598,992 113,114,945 645,145,803 - 3,229,705 16,140,658 19,455,160 24,205,441 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 2,603,451,661 2,285,492,435

LIABILITIES AND EQUITY Liabilities Deposits from banks 14,869,781 1,881,605 6,861,100 Derivative financial instruments 18,302,785 32,265,805 5,339,030 Due to customers 2,316,461,788 2,046,048,584 2,092,110,513 Other liabilities 21,425,772 14,497,597 20,309,511 Current income tax liabilities 1,435,040 - 5,915,348 Deferred tax liabilities 1,112,916 1,208,461 1,155,919 Provisions 5,631,238 1,260,093 8,126,044 Total liabilities 2,379,239,320 2,097,162,145 Equity Ordinary shares 9 Share premium Share option reserve Other reserve Treasury shares 10 Retained earnings Total equity 2,139,817,465

2,927,674 39,418,265 2,506,526 (2,089,660) (9,057,315) 190,506,851 224,212,341

2,927,674 39,243,259 2,266,733 (617,070) (25,914,811) 170,424,505 188,330,290

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 2,603,451,661 2,285,492,435

The notes on pages 6 to 14 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 September 2011 18,531,703 (1,567,663) 16,964,040 5,404,901 (1,604,731) 3,800,170 12,005,169 32,769,379 (22,226,799) 10,542,580 (2,057,250) - 8,485,330
0.59 0.59 14,487,801

9 months ended 30 September 2011 55,998,683 (5,771,384) 50,227,299 16,430,922 (4,789,978) 11,640,944 38,370,576 100,238,819 (66,572,772) 33,666,047 (7,366,548) - 26,299,499
1.83 1.83 14,400,216

2010 16,167,476 (1,927,158) 14,240,318 5,149,948 (1,818,455) 3,331,493 5,258,439 22,830,250 (15,708,586) 7,121,664 (1,192,556) - 5,929,108
0.42 0.42 14,160,926

2010 52,981,505 (6,216,738) 46,764,767 13,662,458 (4,984,275) 8,678,183 16,945,332 72,388,282 (48,720,775) 23,667,507 (4,804,359) 777,257 19,640,405
1.39 1.39 14,097,579

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 6 6 6

The notes on pages 6 to 14 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 September 2011 8,485,330 2010 5,929,108

9 months ended 30 September 2011 26,299,499 2010 19,640,405

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

(2,330,786) 521,397 45,655 (10,213)

1,146,568 (256,487) (41,425) 9,267 857,923 6,787,031

(1,809,471) 404,779 70,594 (15,792) (1,349,890) 24,949,609

888,682 (198,798) (173) 39 689,750 20,330,155

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 (1,773,947) Total comprehensive income for the period 6,711,383

The notes on pages 6 to 14 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 - - - - - - - - - - - - - (1,738,877) - 388,987 - - - - - - (1,738,877) 388,987 26,299,499 24,949,609 (8,607,208) (134,915) 836,275 -

- 26,299,499 - 26,299,499 - (8,607,208) - -

Total comprehensive income for the period Dividend Currency translation differences

- (1,349,890) - - - (134,915)

Employee stock option plan: Value of services provided - - 836,275 - - - Reclassification of value of services provided for stock options exercised, lapsed or expired in the period - - (785,426) - - 785,426

Purchase of treasury shares - - - - (6,355,414) - (6,355,414) Sale of treasury shares - (593,169) - - 15,106,562 - 14,513,393 Balance at 30 September 2011 2,927,674 39,418,265 2,506,526 (2,089,660) (9,057,315) 1 90,506,851 224,212,341

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 - - - - - - - - - - - - - - - 888,509 (198,759) - 689,750 - - - - - 888,509 (198,759) 19,640,405 20,330,155 (8,548,519) 775,576 (5,874,133) 7,406,858

- 19,640,405 - 19,640,405 - (8,548,519) - 551,448 - -

Total comprehensive income for the period Dividend

Employee stock option plan: Value of services provided - - 775,576 - - Reclassification of value of services provided for stock options exercised, lapsed or expired in the period - - (551,448) - - Purchase of treasury shares Sale of treasury shares Balance at 30 September 2010 - - - 928,963 - - - (5,874,133) - 6,477,895

2,927,674 39,243,259 2,266,733 (617,070) (25,914,811) 170,424,505 188,330,290

The notes on pages 6 to 14 form an integral part of this condensed interim financial information All amounts in Swiss Francs

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW

Notes

9 months ended 30 September 2011 53,848,195 (5,717,683) 21,267,310 (4,377,040) (2,222,689) 24,288,336 (79,875,633) 7,210,796 2010 52,921,216 (6,344,594) 8,163,996 (4,374,555) (1,003,925) 13,146,711 (13,611,464) 48,897,385

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 10,113,379 Loans and advances to banks - Due to customers 224,351,275 Other liabilities (7,241,490) Net cash from operating activities Cash flow from / (used in) investing activities Purchase of property, plant and equipment and Information technology systems 7/8 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 September 234,433,960

(21,355,208) (66,606,858) 371,252,039 (9,521,428) 322,665,930

(16,556,774) 258,029,406 (313,907,650) - (72,435,018) (6,355,414) 14,513,393 (8,607,208) (449,229) 161,549,713 1,415,201,628 161,549,713 1,576,751,341

(9,716,559) 72,401,856 (362,098,929) (3,604,465) (303,018,097) (5,874,133) 7,406,858 (8,548,519) (7,015,794) 12,632,039 1,344,671,380 12,632,039 1,357,303,419

The notes on pages 6 to 14 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 9 months period ending 30 September 2011 and 2010 are as follows:

9 months ended 30 September In CHFm 2011 Net Revenues - Private Clients Direct Operating Costs - Private Clients Direct Marketing Costs - Private Clients 55.3 (5.5) (4.1)

2010 57.1 (4.9) (4.3)

Direct Contribution margin - Private Clients

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

45.7
16.9 (4.0) (0.4)

47.9
15.3 (2.8) (0.5)

Direct Contribution margin - B2B Clients

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

12.5
58.2 30.1 (10.1) (3.6) 16.4 (12.5) (14.0) (3.0) (9.2) (2.1) (40.8) 33.7 (7.4) - 26.3

12.0
59.9 (10.4) (14.0) (3.2) (8.6) (36.2) 23.7 (4.9) 0.8 19.6

Operating Cost - Technology Operating Cost - Operations Operating Cost - Marketing Operating Cost - G&A Fair value impact on trading assets & investment securities Total Platform and Infrastructure Operations Costs Operating profit Income tax expense Gain on acquisition of subsidiary Net profit

In Q3 2010, eForex Net revenues amounting CHF 7.6m were included in Net revenues from Private Clients and CHF 1.4m 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 September 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 30 September 2010 1,801.6 (1,755.2) 434.5 (330.5) 49.4 (11.5) 188.3

1,925.7 (1,885.1) 430.5 (337.7) 156.7 (132.6) 90.6 (23.9) 224.2

3. Net trading income

9 months ended 30 September 2011 2010 9,053,825 7,814,748 16,868,573 24,904 24,904 51,855 16,945,332

Foreign exchange revenues - eForex 30,061,017 - Others 10,409,653 40,470,670 Unrealised fair value gains/(losses) - From Investment securities (1,334,275) - From Trading assets (842,771) (2,177,046) Realised gains/(losses) - Gain less losses from investment securities 76,952 Total 38,370,576

4. Operating expenses
Payroll & related expenses Other operating expenses Marketing expenses Provisions Depreciation Total 9 months ended 30 September 2011 29,638,324 18,321,608 11,209,402 300,000 7,103,438 66,572,772 2010 19,936,769 15,017,736 8,044,684 300,000 5,421,586 48,720,775

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

5. Investment securities
R ecognition as per IAS 39 9 months ended 30 September 2011 o f unrealised gains/(losses) Unrealised gains/ Comprehensive Income Carrying value Fair value (losses) income Statement Not recognised Available-for-sale Held-to-maturity 357,253,504 370,924,376 357,253,504 386,117,768 (1,809,471) (1,809,471) 15,193,392

- -

15,193,392 15,193,392

Fair value through profit & loss 16,697,134 16,697,134 744,875,014

(1,334,275)

- (1,334,275)

760,068,406

12,049,646 (1,809,471) (1,334,275)

Available-for-sale Held-to-maturity

Quarter ended 30 September 2011 Unrealised g ains/(losses) (1,809,471) 15,193,392 Change in quarter (2,330,786) 5,791,900

Fair value through profit & loss

(1,334,275)

(1,010,466) 2,450,648

12,049,646

R ecognition as per IAS 39 9 months ended 30 September 2010 o f unrealised gains/(losses) Unrealised gains/ Comprehensive Income Carrying value Fair value (losses) income Statement Not recognised Available-for-sale Held-to-maturity 216,389,070 428,756,733 216,389,070 447,089,079 663,478,149 888,682 18,332,346

888,682 - 888,682

- - -

18,332,346 18,332,346

645,145,803

19,221,028

Available-for-sale

Quarter ended 30 September 2010 Un realised gains/(losses) 888,682 Change in quarter 1,146,568 3,943,667 5,090,235

Held-to-maturity 18,332,346 19,221,028

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

6. Earning per share

a) Basic Net Profit Weighted average number of ordinary shares in issue Basic earning per share Quarter ended 30 September 2011 8,485,330 14,487,801 0.59 2010 5,929,108 14,160,926 0.42 9 months ended 30 September 2011 26,299,499 14,400,216 1.83 2010 19,640,405 14,097,579 1.39

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 September 2011 8,485,330 14,487,801 - 14,487,801 0.59 2010 5,929,108 14,160,926 2,897 14,163,823 0.42

9 months ended 30 September 2011 26,299,499 14,400,216 - 14,400,216 1.83 2010 19,640,405 14,097,579 3,921 14,101,500 1.39

Diluted earning per share

All amounts in Swiss Francs

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

7. Information technology systems

Software Third Party Licences 9 months ended 30 September 2011 Opening net book amount Addition Amortisation / depreciation Closing net book amount 9 months ended 30 September 2010 Opening net book amount Addition Amortisation / depreciation Closing net book amount 4,648,142 2,108,668 (1,382,416) 5,374,394 1,481,824 1,383,184 (722,160) 2,142,848 Proprietary Software 10,029,782 5,577,989 (3,046,186) 12,561,585 7,273,665 6,289,258 (2,324,245) 11,238,678 Hardware & Telecom Systems 2,926,966 656,165 (1,236,236) 2,346,896 2,643,448 1,545,788 (1,430,104) 2,759,132 Total 17,604,890 8,342,822 (5,664,838) 20,282,874 11,398,937 9,218,230 (4,476,509) 16,140,658

Additions to Information technology systems include an amount of CHF 5,205,908 (2010: CHF 5,016,602) representing own costs capitalised in connection with the development of the systems of the Bank.

8. Property, plant and equipment

9 months ended 30 September 2011 Opening net book amount Addition Amortisation / depreciation Closing net book amount 9 months ended 30 September 2010 Opening net book amount Addition Amortisation / depreciation Closing net book amount Land & Building 18,045,696 7,686,956 (417,226) 25,315,426 16,659,549 149,602 (413,736) 16,395,415 Leasehold Improvements Equipments 2,229,921 252,197 (446,109) 2,036,009 1,360,539 158,973 (243,290) 1,276,222 2,101,720 274,799 (410,110) 1,966,409 1,811,525 189,754 (217,756) 1,783,523 Total 22,377,337 8,213,952 (1,273,445) 29,317,844 19,831,613 498,329 (874,782) 19,455,160

The total cost of the property includes an aggregate CHF 144,466 of own costs capitalised (2010: CHF 91,412). 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 offices 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 September 2011, the Bank made an aggregate advanced payment of CHF 9.27m to the construction company (of which CHF 1.75m paid in 2010). The payment schedule of the amount payable to the construction company is as follows : a total of CHF 13.8m in 2011, CHF 16.0m in 2012 and CHF 10.65m in 2013. Depreciation is expected to start once the construction is delivered (Q4-2013).

All amounts in Swiss Francs

10

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

9. Ordinary shares
a) Numbers of Shares in 2011 1 January Change 30 September 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 700,000 (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 September

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

11

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

10. Treasury shares

Beginning of the year (shares) 2011 303,404 2010 583,692 140,963 37.53 to 54.80 (110,063) 39.62 to 47.46 (116,701) 17.00 to 47.00 497,891 25,914,811 3.40%

Acquisition - shares 137,097 unit price ranging from CHF 29.67 to 61.70 Disposal - shares (229,423) unit price ranging from CHF 46.86 to 58.91 Remittance to optionees - shares (38,174) unit price ranging from CHF 34.00 to 47.00 End of the period - 30 September (shares) Total cost in CHF % of the issued shares 172,904 9,057,315 1.18%

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

All amounts in Swiss Francs

12

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

11. Stock options

The movement in options granted, exercised and lapsed are reported below::

Conditional Allocation shares available 7th - 8th 9th 10th 11th 12th 13th Total for exercise Balance at 1 January 2010 131,922 102,000 125,284 85,032 - - 444,238 211,060

Grants - - - - 132,735 - 132,735 Exercised Covered by: the issue of new shares - - - - - - - treasury shares (116,635) - (66) - - - (116,701) Lapsed - (36,302) (4,304) (3,120) - - (43,726) Balance at 30 September 2010 Balance at 1 January 2011 15,287 12,380 65,698 65,698 120,914 111,971 81,912 81,720 132,735 132,495 - - 416,546 404,264 211,060 211,060 538,940

Increase of conditional capital Grants - - - - - 237,657 237,657 Exercised Covered by: the issue of new shares - - - - - - - treasury shares (10,315) - (27,859) - - - (38,174) Lapsed - (2,065) (34,940) (15,692) (3,600) (5,400) - (61,697) Balance at 30 September 2011 - 30,758 68,420 78,120 127,095 237,657 542,050

750,000

Less options outstanding (542,050) Intermediary balance (including conditional shares) 207,950 207,950 Number of treasury shares available at 30 September 2011 172,904 380,854 Balance shares available for future grants

Strike price Share price at 30.09.2011

8th 34.00 37.45

9th 75.00 37.45

10th 47.00 37.45

11th 63.24 37.45

12th 47.50 37.45

13th 34.27 37.45

The CHF 5.13 fair value of the options granted in Q3-2011 in the 13th allocation has been determined using the following parameters: Strike price CHF 34.27; Spot price at grant: CHF 30.80; Volatility :39.31%. Options granted are exercisable in 3 equal tranches and each tranche has a maximum duration of exercise of two years. The exercise of the first tranche starts one year after the date of grant, the second tranche two years and the third three years after the date of grant. For the determination of the fair value of the options, the Group assumes that options will be exercised in average one year after the date they respectively become exercisable. Further the calculation assumes that 20% of the options will lapse in the vesting period.

All amounts in Swiss Francs

13

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

12. 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 September 2011, nor in the former quarters.
Tier One ratio (Basel II ratio) At 30 September 2011, the Group had a Tier One ratio (Basel II ratio) of 22.35%. (30 September 2010: 22.40%; 31 December 2010: 19.0%).

All amounts in Swiss Francs

14

All amounts in Swiss Francs

15