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                             Swissquote Bank                   OUR COMMENTS
                             Founded: 1996                     Swissquote was, in our view, one of the big winners in the
                             Headquarters: Gland, SW           Swiss regulator FINMA’s decision to require firms offering
                             Website:        Forex trading to hold a bank license. Swissquote was in the right
                                                               place at the right time when ACM, one of the three leading
COMPANY PROFILE                                                Swiss based Forex firms, was denied its banking license, and
Swissquote Bank has for years been Switzerland’s leading       essentially was forced to sell to a company with one. The ACM
provider of online financial and trading services. With its    acquisition gave Swissquote instant critical mass in Forex, and
2010 acquisition of Geneva-based ACM (Advanced                 also provides Swissquote with a platform for international
Currency Markets AG) for $43 million, Swissquote has also      expansion in its other businesses. And since acquiring ACM,
now vaulted into a leading position in online Forex trading.   Swissquote has continued to grow its “eForex” volumes nicely,
                                                               hitting $40 billion per month in the first half of 2011.
Swissquote is publicly traded on the SIX Swiss Exchange
(SIX: SQN), with a market capitalization of approximately      We believe that the timing of the Swissquote-ACM combination
$650 million. Its two largest shareholders remain its          is near-perfect. Clients of “traditional” brokerages such as
founding management, Marc Burki (CEO) and Paolo Buzzi          Swissquote are increasingly looking to the currency markets as
(CTO), each holding 14.5%. Its business lines include:         an asset class to which they want access. At the same time,
- Online multi-asset brokerage and custody services,           online Forex traders have been increasingly diversifying their
- Online Forex trading,                                        trading vehicles to include non-Forex instruments such as shares
- ePrivate banking, and                                        and indices (mainly via CFDs) and commodities such as Gold
- Savings accounts.                                            and Oil. Swissquote now has solutions for both. There remain
                                                               the challenges of integrating ACM’s brand with its own, but
Trading platform:         proprietary and MetaTrader           Swissquote was successfully built via acquisitions. We feel that
Employees:                350                                  this marriage of a leading online stock broker and Forex broker
Market maker / Agency:    Market maker                         is the right combination, giving Swissquote an edge over most
Fixed Spreads:            no                                   firms having only one or the other type of service to offer.
Regulation:               FINMA (Switzerland), Dubai
                                                               FINANCIAL SUMMARY AND KEY RATIOS
SWISSQUOTE BANK – PROS                                         in $ millions (converted from CHF), except volume and ratios
   Regulation – Customers have the security and safety of                                                LTM                 2010
    dealing with a fully licensed Swiss bank.                      Client assets under custody             $9,264             $8,585
   Experience – Swissquote has been in the online                 Cash (excess Equity)                      N/A                 127
    brokerage business for more than a decade.                     Long-term Debt                               0                  0
   Transparency – only Swiss-based public company in              Equity Capital                             262                213
    the online Forex business, fully disclosed financials.         Revenues                                   147                112

                                                                                                                0                  0
    Product Diversification – combination of an online             Net Income                                  31                 23
    stock brokerage with a leading retail Forex operation          Volume (mo., $B)*                           41                 34
    gives clients an online one-stop-shop opportunity.             Debt as % of Equity
   Management – Strong and experienced management,                Cash Flow Debt Coverage                   N/M                N/M
    have been with the company since its inception.                Net Income Margin                         21%                20%
    Management’s background in online financial                    Cash / Client Funds                       N/A                 6%
    information focused on the retail user meshes well with        Excess Capital                            N/A               137%
    the online Forex business.                                 * LTM to June 30, 2011. Volume 2010 figures based on Q4-2010 only.

 Rebranding – Swissquote has completed the LeapRate users rate Swissquote (from 1-low/bad to 5-hi/good):
    integration of ACM’s systems and clients into its own.           Trading Platform………. 3
    However, there remains work (and some uncertainty)               Execution……………… 4
    as to the rebranding of the ACM-Swissquote                       Customer Service………3
    combination.                                                     Competitive Pricing…… 4
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