We Are Your Sparring Partner. · Dividends on certificate capital 18.8 18.8 18.8 17.1 24.0 Profit distribution to the Canton 40.0 40.0 40.0 34.0 34.0 Further details Personnel (head

1QUISQUERRUTRUMLOREM IPSUM DOLORSIT AMETCONSECTET

BASELLANDSCHAFTLICHE KANTONALBANK

We Are Your Sparring Partner.Annual report 2011.


2AT A gLANCE

2011 CHF m

2010 CHF m

2009 CHF m

2008 CHF m

2007 CHF m

Balance sheet

Balance sheet total 2) 18,741.9 17,119.8 17,239.5 16,887.8 15,739.0

Mortgage loans 14,393.8 13,696.6 13,226.6 12,711.8 12,368.8

Due to customers in savings and deposits 8,765.0 8,148.0 7,640.4 6,593.1 5,789.8

Income statement

Net operating income 2) 360.2 361.4 368.7 335.8 349.5

Gross profit 1) 2) 202.4 186.9 207.3 184.8 199.1

Annual net profit 109.0 108.9 106.3 96.1 98.9

Dividends on certificate capital 18.8 18.8 18.8 17.1 24.0

Profit distribution to the Canton 40.0 40.0 40.0 34.0 34.0

Further details

Personnel (head count) 6) 767 749 738 721 715

Personnel (full-time equivalents) 6) 658 642 633 621 617

Number of branches 25 27 27 27 31

Assets under management 12.489 12.369 12.511 11.450 12.640

Average interest margin 1.528 % 1.497 % 1.521 % 1.355 % 1.498 %

Return on equity 2) 4) 10.45 % 11.11 % 14.96 % 11.75 % 12.52 %

Cost-income ratio1) 2) 5) 43.82 % 43.35 % 41.87 % 44.96 % 43.03 %

Kantonalbank Certificate

Share price (CHF), end of year 1,300.00 1,280.00 1,036.00 975.00 973.00

Nominal value (CHF) 100.00 100.00 100.00 100.00 100.00

Dividend per certificate (CHF) 33.00 33.00 33.00 30.00 30.00

Market capitalisation 3) 2,821.0 2,777.6 2,248.1 2,115.8 2,335.2

1) 2008 / 2009: key figure adjusted by expenses and provisions for financial restructuring of pension fund (FER 16)

2) 2008: restatement according to the principle of “true and fair view”

3) Certificate and endowment capital, see calculation page 12

4) 2008: key figure adjusted by provisions for IT migration

5) 2008 / 2009 / 2010: key figure adjusted by expenses for IT migration

6) Restatement values 2007 – 2010: Including employees paid by the hour

At a glance


3HIgHLIgHTS

32.4%

–48% CO2

Reliable lending bankBasellandschaftliche Kantonalbank successfully assumed its part as a promoter of the regional economy. Dues from custom-ers (including repo transactions) increased by 32.4 %.

CO2 emissionsIn the past ten years, Basellandschaftliche Kantonalbank re-duced its CO2 emission by 48 % which corresponds to twice the amount originally planned.

Private Banking smack in the middle of BaselWith the opening of a Private Banking office at “Bankenplatz”, Basellandschaftliche Kantonalbank offers its products to well-to-do customers right in the centre of Basel. The existing team was enlarged with top advisors who have successfully been working in Basel for many years.

e-mortgageLast summer, Basellandschaftliche Kantonalbank launched the first e-mortgage in cooperation with Swissquote. On the level of financial products, Bankrat’s newly adopted e-strategy was successfully implemented.

Highlights 2011

Elisabeth Schirmer-MossetFrenk MutschlechnerAndreas Spindler AAANew Bankrat (Board of Directors)The new four-year term of office of the Board of Directors started on 1 July 2011 with Elisabeth Schirmer-Mosset as its chair woman. Frenk Mutschlechner and Andreas Spindler are two new additions to the Bankrat’s members. The Human Re-sources and Organization committee is a new panel dealing with personnel matters, remuneration schemes, and organisa-tional issues.

For the eleventh consecutive time, the rating agency Standard & Poor’s awarded Basellandschaftliche Kantonalbank its top rat-ing AAA thus placing it among the safest and soundest banks in the world.


4HIgHLIgHTS

Ballet partnerBasellandschaftliche Kantonalbank prolonged its partner-ship with Ballet Basel by another three years. This underlines the banks commitment to the regional top performers in art and culture.

Jobs for JuniorsWith the new Maestro Card Jobs for Juniors, Basellandschaft-liche Kantonalbank and its customers support the Job Factory and the Lehrbetriebsverbund Baselland (network of training companies) with each time the card is used for shopping. These two institutions offer different concepts that help young people to join the world of work.

Anti-skimming devices and mTANAll automated teller machines of Basellandschaftliche Kan-tonalbank were equipped with anti-skimming devices. Bank-ing security improved considerably with the introduction of the mTAN. Both measures were established in order to offer our customers the highest possible security in electronic banking.

Facebook, Twitter, YouTubeIn line with the new e-strategy, Basellandschaftliche Kantonal-bank developed a concept that helps to intensify the e-channel in communication and establishes a new presence in the so-cial media.

14 393 816 000The mortgage portfolio of Basellandschaftliche Kantonalbank reached a new high of CHF 14,400 m which corresponds to a growth of 5.1 %.

Elisabeth Schirmer-Mosset Chairwoman of the Board of Directors, Dr. Beat Oberlin Chairman of the Executive Board


6FOREWORD

“In difficult times, BLKB serves as a stimulating

agent for the economy.”

For many years, BLKB has been among the safest and soundest banks in the world.

Demanding times2011 was a very demanding year for the financing world. State indebtedness, strong Swiss franc, euro crisis, zero-interest policy of the Swiss National Bank, and new specifications by the Swiss financial regulators have all taken their toll – also from Basellandschaftliche Kantonalbank (BLKB).

In these unstable times, our business philosophy has once more proved its worth. Income at CHF 360.2 m is at the same level as in the previous year (– 0,3 %), gross profit increased by 8.3 %. The most decisive criterion for the further development is the trust customers put in our bank. We are happy to state that trust remains very high; a fact that is underlined by the net new money of CHF 494.9 m.

A traditional universal bank such as Basellandschaftliche Kan-tonalbank has two essential tasks. On the one hand, the bank carefully manages assets it has been trusted with, on the other hand it puts loans at the disposal of private and corporate customers. The second task in particular is very important in economically difficult times. Smaller and bigger businesses in our region rely on these loans. This is where Basellandschaft-liche Kantonalbank plays an important role in stimulating the economy. In the year under review, it has intensified its efforts in that respect. Other loans to corporate customers went up to CHF 1,300 m (including repo transactions of CHF 200 m).

New Bankrat (Board of Directors), new chairperson, and a new committeeBasellandschaftliche Kantonalbank tackles its current chal-lenges with a new Bankrat. On 1 July 2011, the new panel started its work. Elisabeth Schirmer-Mosset is chairwoman of the eleven-member Board of Directors. Frenk Mutschlechner

was elected into the Bankrat to take over from Paul Hug who resigned. Frenk Mutschlechner is a managing partner at CFM PARTNERS AG. He holds a degree in economics (lic. rer. pol.) and an Executive MBA. Another addition to the Bankrat is Andreas Spindler. He is CEO and board member of OKC AG. As a member of the municipal council of Aesch he is responsi-ble for the communal finances. All the other Bankrat members were re-elected.

The new Bankrat (Board of Directors) was submitted to some organisational changes. In addition to the Executive Commit-tee and the Audit and Risk Committee, the Bankrat created a Human Resources and Organization Committee. In coopera-tion with the Executive Board and internal or external experts this committee deals with all Bankrat issues concerning person-nel or organisational matters. It evaluates suitable candidates for the election into the Board of Directors and the Executive Board and submits its proposals to the Bankrat. It designs the remuneration policy and scheme for the Bankrat members and the members of the Executive Board for the attention of the Bankrat (see details page 25 of this annual report).

Implementation of strategic measuresIn 2010, Bankrat and the Executive Board adopted strategic guidelines with the aim of further developing business with private and corporate customers, particularly in the area of


7FOREWORD

SMEs, of strengthening business with significant corporate cus-tomers and intensifying the use of the e-channel. The year un-der review saw the following steps of implementation:

In mid-2011, Basellandschaftliche Kantonalbank opened an of-fice for Private Banking in the centre of Basel which enables the bank to tend to the growing number of customers who wish to get service and advice in the city.

Corporate customers are now being advised in the business area Private Customers. In this way, BLKB caters for the in-creased demand of expert advice in the area of Corporate Customers. The newly created Key Account Management Cor-porate Customers acquires and advises the more eminent com-panies in our region and the whole of Switzerland.

In cooperation with Swissquote, BLKB launched the first e-mort-gage in Switzerland. It is exclusively marketed by Swissquote and offers customers in Switzerland the first opportunity to set-tle a mortgage electronically and at attractive conditions.

Since mid-2011, BLKB has an active presence in the social me-dia putting its weight on Facebook and Twitter. BLKB’s business concept and its social media presence places the bank among the leading cantonal banks.

Advising of customers of external asset managersAfter a pilot phase in the year under review, catering for customers of external asset managers was centralised in the business area of Trade. With the introduction of a multitenant e-banking system, BLKB is now in a position to offer most of the e-banking-related services from a single provider. Conse-

quently, the external asset managers and BLKB were able to make good use of the potential synergies.

good position at the capital marketBLKB successfully enhanced its image as a public issuer at the capital market. In cooperation with CBZ (Cantonal Bank Zurich) and UBS, the bank launched a bond for the Canton of Basel-Landschaft in two tranches of CHF 100 m each at a maturity of 18 or rather 19 years. That was in May. In Novem-ber, it successfully placed a bond of its own of CHF 225 m

at a maturity of 13 years. In cooperation with well-reputed big customers BLKB reached a volume of more than 200 m in the field of loans.

Risk under controlBLKB has its risks under control and counts among the safest banks in the world. The latest report by the rating agency Standard & Poor’s confirmed this. BLKB was again assigned AAA, the highest possible mark, and the outlook was set at “stable”. The following criteria were key factors for the deci-sion: good market position, excellent equity base, strong earn-ings position, solid credit portfolio, and strong liquidity. In ad-dition, there is the guarantee of a strong canton in case of financial stress.

Another impressive proof of BLKB’s successful risk policy is the very low need for provisions from risk positions.

“In 2011, Swissquote and BLKB issued the first e-mortgage

of Switzerland.”


8FOREWORD

Moreover, BLKB’s balance does not show any toxic government securities of doubtful nations, neither has the bank granted any major loans abroad. Last but not least, BLKB passed the audit of the Qualified Intermediary regulations of the United States without any blemish.

UNO: the first tenants moved inAt the end of the reporting year, the first tenants moved into the offices of the UNO business building at Bahnhofsplatz in Liestal thus completing the most ambitious building project of BLKB of the last years. The project was finished on time and realised in the budget.

Commitment to the regionNext to its economic duties in the region, BLKB also plays an important part in the social and cultural life of the region and thereby fulfils its self-assigned duties within the framework of sustainable actions. In the year under review, the bank re-launched the Job Factory Maestro Card. The card is now called “Jobs for Juniors” and lends support to the Lehrbetriebs-verbund of Baselland (network of training companies). BLKB’s sponsorship for Ballet Basel was extended for another three years, and with its role as main sponsor for Viva Cello, the bank brought top musicians to the canton. BLKB also plays an important role in the associate life of the region. In the report-ing year, the bank lent a “financial hand” to roughly 400 associations, offered them services or supported their work by actively taking part in their organisation committees.

A look aheadThe serious crises affecting the whole world such as rampant indebtedness, continuing insecurity particularly in the euro zone, the more than gloomy economic forecast, and the zero

interest policy of the Swiss National Bank will all take a toll on the results of Basellandschaftliche Kantonalbank. We expect the results of 2012 to decline. The interest earnings business, our bank’s most important source of earnings, will be particu-larly affected by the persisting zero interest policy. In view of the prevailing conditions the fee and commission business will not improve much. Two things that will continue their positive influence on BLKB are the north-western part of Switzerland which belongs to the strongest economic areas of the world, and the bank’s business policy offering stability and making BLKB attractive for customers, particularly in these financially messy times. All things considered, we expect the results of 2012 to be slightly lower than those of 2011.

Dr. Beat OberlinChairman of the Executive Board

Elisabeth Schirmer-MossetChairwoman of the Board of Directors


9IN BRIEF

In comparison to the previous year, gross profit increased by 8.3 % to CHF 202.4 m in 2011. Net profit for the year re-mained unchanged at CHF 109 m. The increase of net new money is CHF 494.9 m. Dividends at CHF 33 per KB cer-tificate remained unchanged. Profit distribution to the canton went up by CHF 5 m to CHF 8.5 m. The coverage ratio of equity capital is 208 %.

Interest-related business: further growthAt CHF 276.1 m, net interest business went up by 1.8 % com-pared to the previous year. Rising numbers of loans and an increase in savings and deposits as well as the consistent im-plementation of the long-term ALM strategy led to the increase in interest-related business.

Increase in mortgages and loans to private and corporate customersBLKB saw a further increase in its loans to private and corpo-rate customers. In line with the growing market for mortgages BLKB’s mortgage loans grew as well. Mortgage loans went up by 5.1 % to a new record high of CHF 14,400 m. Other loans – the majority of which unsecured – rose by 32.4 % to CHF 1,300 m (of which repo transactions of CHF 200 m).

Consistent risk policyThe bank consistently maintained its responsible risk policy which is reflected in the balance sheet item value adjustments, provisions, and losses. At CHF 2.4 m this item is as low as ever. BLKB is not involved in any high-risk countries but invests its money with the Swiss National Bank.

Further growth of savingsSavings and deposits grew by CHF 617 m (7.6 %) to CHF 8,800 m. In the area of deposits, the savings account remains attractive for the customers. However, due to the low level of interest rates cash bonds decreased considerably. They went down by 28 % to CHF 321 m.

Slumping fee and commission businessNet fee and commission income went down by 5.3 % to CHF 65 m. Net commission income from securities and investment decreased by 9.5 % to CHF 50.1 m. Net commission income from lending activities rose distinctly by 69.0 % to CHF 4.2 m.

Trading business stableNet income from the trading business, which at BLKB is almost exclusively client trading business, rose by 5.3 % to CHF 16.1 m.

Net operating income stableNet operating income of CHF 360.2 m is at the previous year’s level (– 0.3 %). The decrease in off-balance sheet trans-actions was compensated by the interest-related business. The operating income (not including net other ordinary income) went up slightly (0.6 %).

Costs on the downtrendIn 2011, as before, cost discipline played an important role. Operating expenses went down by CHF 16.6 m (9.5 %) to 157.8 m. Personnel expenses remained stable at CHF 98.2 m. Other operating expenses declined by 21.9 % to CHF 59.6 m. This significant decrease is due to the IT migration which, in 2010, debited the balance sheet with CHF 17.8 m. In the year under review, these costs did not apply anymore.

The classical philosophy of Cantonal Banks stands the test.


10IN BRIEF

Increase in gross profitGross profit rose 8.3 % to CHF 202.4 m while net operat-ing income remained unchanged due to the decrease in other operating expenses. At CHF 308,000 per employee, BLKB achieved a very high added value.

Cost-income ratio within targeted rangeCost-income ratio at 43.8 % lies within BLKB’s targeted range of 40 % – 50 %.

High level of equity capitalThe coverage ratio of equity capital is 208.3% which corre-sponds to a Tier I of 16.7 %. This places the capital requirement clearly above the level required by FINMA regulations. In the reporting year, BLKB again allocated a total of CHF 90 m to reserves. The high level of equity capital is one of the reasons the rating agency Standard & Poor’s assigned BLKB once more its top rating of AAA.

Higher compensation to the canton for the state guaranteeThe very positive result allows for a higher compensation to the owners. Dividend per KB certificate of CHF 33 remains unchanged, so does the profit share of the canton which is CHF 40 m. However, compensation for the state guarantee was increased by 5 m and is now CHF 8.5 m. The canton received a total of 53.1 m (+ 10.2 %). Cash-out ratio is 45.3 % of the annual profit.

Annual profit increasedAfter a further deposit of CHF 50 m into reserves for general bank risks, net profit for the year remains at the previous year’s level of CHF 109 m.


11CORPORATE gOvERNANCESTRUCTURE AND SHAREHOLDERS

Basellandschaftliche Kantonalbank is a company under public law, independent of state administration.The legal basis is formed by the following cantonal laws:– Cantonal Law on Kantonalbank of 24 June 2004, in force

since 1 January 2005 (Systematische Gesetzessammlung des Kantons Basel-Landschaft SGS 371).

– Decree on the determination of certificate and endowment capital of Basellandschaftliche Kantonalbank of 23 June 2005, in force since September 2005 (SGS 371.1).

– Ordinance on the Cantonal Law on Kantonalbank of 14 De-cember 2004, in force since 1 January 2005 (SGS 371.11).

– Rules on the issuance of Kantonalbank certificates of 26 October 2009, in force since 1 January 2010.

On the basis of the Cantonal Law on Kantonalbank of 24 June 2004, the Board of Directors (Bankrat) of Basellandschaftliche Kantonalbank passed several rules.

The enactments mentioned below are posted on the Internet (blkb.ch/rechtsgrundlagen).

– Rules of procedure and organisation of 1 July 2011, in force since 1 July 2011.

– Rules on the issuance of Kantonalbank certificates of 26 October 2009, in force since 1 January 2010.

– Rules on the Executive Committee of 1 July 2011, in force since 1 July 2011.

– Rules on the Audit and Risk Committee of 31 August 2009, in force since 1 January 2010.

– Rules on the Human Resources and Organization Committee of 1 July 2011, in force since 1 July 2011.

– Rules on controlling of 31 August 2009, in force since 1 January 2010.

– Rules on risk control of 31 August 2009, in force since 1 January 2010.

– Rules on compliance function of 31 August 2009, in force since 1 January 2010.

– Rules on the remuneration scheme of 23 June 2010, in force since 1 October 2010.

Purpose, legal form, and state guarantee are governed by the Cantonal Law on Kantonalbank of 24 June 2004:

Art. 1 Company and Head Office1 The name of “Basellandschaftliche Kantonalbank” in the follow-

ing called “the bank” is a bank with its head office in Liestal.2 The bank may set up branches or establish subsidiaries or

participate in other companies.

Art. 2 Purpose1 The bank offers all the services of a universal bank.

2 The bank serves the purpose of contributing, within the framework of competition and its own financial means, to a balanced development of the Canton and the region of north-western Switzerland.

Art. 3 Legal Form The bank is an independent public law company with its own legal personality.

Art. 4 State guarantee1 The canton guarantees for the liabilities of the bank, in the

case of the bank’s own means not being sufficient.2 The bank compensates the canton for the state guarantee.

Payment is calculated according to the risk amount and the probability of non-payment.

Details are set down in the ordinance.

For the first time in BLKB’s history there is a chairwoman at the head of Bankrat.



Below, the terms “Regierungsrat” and “Landrat” are being used repeatedly.– Regierungsrat is the executive body of the Canton of Basel-

Landschaft, elected by the people.– Landrat is the legislative body of the Canton of Basel-Land-

schaft, elected by the people.

The following notes are structured along the “Directive on In-formation Relating to Corporate Governance” (DCG), issued by the SIX Swiss Exchange in the version being valid on 1 July 2009. For reasons of clarity, subtitles may be combined with a relevant remark. In cases of facts not being applicable or relevant for Basellandschaftliche Kantonalbank, this will be in-dicated explicitly.

As of closing date of 31 December 2011, there have not been any essential changes.

1 STRUCTURE AND SHAREHOLDERS1.1 Structure1.1.1 Description of the operational structureBasellandschaftliche Kantonalbank restricts its market pres-ence on the region of Basel focusing thereby on the Canton of Basel-Landschaft where it operates, at a total of 24 locations, retail banking, private banking (at seven locations) credit and investment business for private customers and financing solu-tions for corporate customers. Additional locations are being served by a mobile bank.

Bank authorities of Basellandschaftliche Kantonalbank are the Bankrat (Board of Directors) of Basellandschaftliche Kantonal-bank, the chairperson of the Board of Directors, the Bankrat com-mittees “Executive Committee”, “Audit and Risk Committee”, “Hu-man Resources and Organization Committee”, and the Executive Board. Responsibilities and competencies of the different bodies are detailed below, in items 3 (Bankrat) and 4 (Executive Board).

1.1.2 ListingCompany: Basellandschaftliche Kantonalbank (BLKB)Registered office: LiestalListed in: Zurich, SIX Swiss Exchange AGMarket capitalisation:– Market capitalisation of Kantonalbank certificates

(570,000 at a nominal value of CHF 100) at year-end rate of CHF 1,300.–: CHF 741 m.

– Market capitalisation of endowment capital of CHF 160 m assuming an analogous valuation: CHF 2,080 m.

– Total market capitalisation (Kantonalbank certificates and endowment capital): CHF 2,821 m.

Percentage of shares of group companies: noneSecurities identification number: 147.355ISIN number: CH0001473559



Bank ManagementDr. Beat Oberlin

Staff, Sustainability Christoph Loeb

Human Resources Daniel Kern

Legal Service / Compliance Dr. Erich Maeder

general Secretariat / Cor-porate Communications Remo Ponti

Strategie Projects Simon Leumann

Market Communication Urs Uehlinger

Chairman of theExecutive BoardDr. Beat Oberlin

Chairwoman of the Board of DirectorsElisabeth Schirmer-Mosset

Bankrat(Board of Directors)

Internal AuditingRoger Kübler

Private CustomersOthmar Cueni

Branches: Arlesheim Fredy Werder Binningen Dieter Halbeisen gelterkinden Esther Freivogel Laufen Fredi Mendelin Liestal Andreas Röthlisberger Muttenz Urs Hofmann Oberdorf Kurt Tschopp Sissach Jacques Handschin

Centre of Responsibility Private Customers Paul Schmid

Centre of Responsibility Private Banking Christian Staudenmann

Key Account ManagementPrivate Banking Ivan Krattiger

Management of Segments and Distribution Bertrand Comte



External AuditingErnst & Young

Finance and Risk OfficeHerbert Kumbartzki

Controlling Thomas Börlin

Financial Accounting Michael Obrecht

Risk Office, ICU Michel Degen

Corporate CustomersDaniel Brändlin

Centre of Responsibility Corporate Customers Roman Hügli

Credit Management Thomas Oehler

Corporate Customers Arlesheim Jürg Zumbrunn

Market ServicesJean-Daniel

Neuenschwander

Product Management Manuel Kunzelmann

Corporate ServicesKaspar Schweizer

IT / Platform Management / Projects Beat Gass

Central Loan Processing Markus Berger

Corporate Customers Binningen Werner Deck

Structured Financing Lukas Fiechter

Corporate Customers Liestal Patrick Scheuber

Institutional Asset Management Rolf Rudin

Portfolio-Management Private Clients Mike Billich

Trade Jörg Salzmann

Financial Planning Martin Voléry

Handling Centre Financial Products Roland Hofstetter

Service Centre Chantal Schmidt

IT-Security Jörg Seeholzer

Central Services / Security Felix Chrétien

Real Estate / Buildings Kurt Heiniger

Key Account Management Corporate Customers Stefan Fischler


15CORPORATE gOvERNANCECAPITAL STRUCTURE

1.2 Significant shareholdersDue to its legal form BLKB has non-voting share capital only, and consequently shareholders have no voting rights. All voting rights are exclusively held by the Canton of Basel-Landschaft.

1.3 Cross-shareholdingsThere are no cross-shareholdings.

2 CAPITAL STRUCTURE2.1 CapitalThe original capital of the bank consists of the endowment capital of the Canton and the certificate capital (the term “cer-tificate” corresponds to participation certificate and the term “certificate capital” to non-voting share capital in other com-panies). According to article 5, section 2 of the Cantonal Law on Kantonalbank, the Landrat is responsible for changes of the endowment capital, whereas responsibility for the issuance of certificates, according to section 3 of the said law, lies with the bank. The endowment capital of the canton is CHF 160 m. The certificate capital is CHF 57 m and is broken down into 570,000 bearer certificates of CHF 100.– nominal value, each. Free float is 100 %.

According to article 5, section 3 of the Cantonal Law on Kanto-n albank, the certificate capital must not exceed 50 % of the endowment capital.

2.2 Conditional and authorised capital in particularThe legislative body (Landrat) may create authorised capital upon request by the executive body (Regierungsrat). Within this framework, Bankrat may raise the certificate capital and Re-gierungsrat may raise the endowment capital. As per 31 Decem-ber 2011, there is neither conditional nor authorised capital.

2.3 Changes in capitalIn the year 2008, the certificate capital of CHF 80 m was reduced to CHF 57 m.

2.4 Shares and participation certificatesThe certificate capital amounts to CHF 57 m and is broken down into 570,000 bearer certificates of CHF 100.– nominal value (see item 2.1 above).

Certificates entitle the holder to dividend payments, subscrip-tion rights and to a proportional share of potential liquidation proceeds.

Certificates do not entitle the holder to exercise any participa-tion rights such as the right to vote, object or challenge. The Board of Directors and the Executive Board may invite bearers of certificates to meetings in order to inform them of the course of the bank’s business. These meetings are purely informative; resolutions cannot be passed (Cantonal Law on Kantonal-bank art. 5, section 3; rules on the issuance of Kantonalbank certifi-cates, arts. 8 and 9) (blkb.ch/rechtsgrundlagen).

2.5 Dividend-right certificatesThere are no dividend-right certificates.

2.6 Limitations on transferability and nominee registrationsThere is non-voting share capital only (see item 2.4); conse-quently nominee registrations are not possible. There are no limitations as to transferability of certificates. Due to this particu-lar legal form the following rules of DCG are not applicable:

2.6.1 Limitations on transferability for each share category, along with an indication of statutory group clauses, if any, and on rules for granting exceptions


16CORPORATE gOvERNANCECAPITAL STRUCTURE

2.6.2 Reasons for granting exceptions in the year under review.

2.6.3 Admissibility of nominee registrations along with an in-dication of percent clauses, if any, and registration conditions.

2.6.4 Procedure and conditions for cancelling statutory privi-leges and limitations on trans-ferability.

2.7 Convertible bonds and optionsThere are no outstanding convertible bonds and options.

3 BANKRAT (BOARD OF DIRECTORS)The Cantonal Law on Kantonalbank (blkb.ch/rechtsgrundlagen) uses the term “Bankrat”. The following explanations on item 3 “Board of Directors” refer to the Bankrat of Baselland-schaftliche Kantonalbank.

3.1 and 3.2 combine: education and professional career (3.1) as well as other activities and vested interests (3.2). All mem-bers of Bankrat are Swiss citizens. All members of Bankrat are non-executive; they do not exercise any operational manage-ment tasks for BLKB. No mem-ber of Bankrat is employed by BLKB for advisory or other services.

In line with the FINMA circular 2008 / 24 “Supervision and internal control”, at least one third of the Bankrat should con-sist of members meeting the requirements of independence as stated by margin no. 20 ff. FINMA circular 2008 / 24. With the exception of Adrian Ballmer, who as a member of the Regierungsrat of the Canton of Basel-Landschaft, does not meet the criteria (margin no. 25 f. FINMA circular 2008 / 24), all the other members of Bankrat are considered independent in accordance with the principles of the said circular.

The following overview of Bankrat members also contains infor-mation on first election and the remaining term of office which is again listed in a table in item 3.4.2.

Board of Directors


17CORPORATE gOvERNANCEBOARD OF DIRECTORS

01Elisabeth Schirmer-Mosset. Born in 1958. Chairwoman of the Board of Directors (Bankrat) and chairwoman of the Executive Committee. Member of the Human Resources and Organization Committee. First election: 2000; current term of office 1-7-2011 to 30-6-2015. Lic. rer. pol. (university degree in economics); co-owner of Ronda AG, Lausen; member of the Board of Di-rectors and the Executive Board; chairwoman of Personalvor-sorgestiftung Ronda, Lausen. Business connections with BLKB.

02Adrian Ballmer. Born in 1947. Vice chairman of the Board of Directors. First election: 1995; current term of office: 1-7-2011 to 30-6-2015. Lic. jur. (university degree in law), lawyer. 1978 to 2000 member of the executive board of Elektra Birseck (EBM), Münchenstein. Member of Regierungsrat of the Canton of Basel-Landschaft since 1-7-2000, head of the cantonal depart-ment of Finance and Churches. Board membership of: Basel land-schaftliche Gebäudeversicherung (house insurance, chm), Basel-landschaftliche Pensionskasse (pension fund, chm of the board of directors on behalf of employers), Sozialversicherungs anstalt Basel-Landschaft (social insurance, chm of the supervisory commission), member of board panels of: Euro-Airport Basel-Mulhouse-Freiburg, Kraftwerk Birsfelden AG (power station), Vereinigte Schwei zerische Rheinsalinen (Swiss salt-works, mem-ber of the board committee), member of Georg H. Endress Stiftung, Reinach BL.

03Urs Baumann. Born in 1949. Member of the Executive Com-mittee. First election: 2003; current term of office: 1-7-2011 to 30-6-2015. BBA. Board member of: Ad. Stebler-Gyr AG, Nunningen (chm); Asphaltierung Nordwest AG, Basel (chm); Autogesellschaft Sissach-Eptingen AG, Eptingen (chm); BG

Treuhand AG, Basel (chm); CB IT Consulting AG, Pratteln; Dixen dris AG, Basel; cBcon Services, Pratteln; AXIS Consulting AG, Reinach, in Liquidation (bm and liquidator); Böhi + Wirz AG, Liestal (chm); Hasbo AG, Therwil (chm); Hasler Fenster AG, Therwil (v-chm); Heime auf Berg AG, Seltisberg (chm); Itamcar Immobilien AG, Oberwil; JCK-Holding AG, Oberwil; Luigi Mazzotti AG, Basel (chm); Möbel Rösch AG, Basel; Neon-widmer AG Werbeanlagen, Aesch; Neonwidmer AG Immobi-lien, Aesch; Recchiuto Gipser AG, Basel (chm); Ringo Türen AG, Aesch (chm); Rudolf Wirz Strassen- und Tiefbau AG, Liestal (chm); Schneider Planung und Beratung AG, Oberwil; Schnei-der Gartengestaltung AG, Oberwil (chm); Swiss Planning Group AG, Basel (v-chm); Swissterminal AG, Frenkendorf; Swissterminal Holding AG, Frenkendorf; Urs Baumann & Part-ner AG (single bm), Reinach. Additional positions: CEO and partner of: Alenco GmbH, Reinach; Take One GmbH, Rein-ach. CEO of: Bodima GmbH, Therwil; Lockwood Europe Elekt ronische GmbH, Reinach; Turner & Townsend Schweiz GmbH, Reinach. Delegate of Milchhändlerverband (associa-tion of dairy trade), Basel-Stadt and Baselland, Basel. Verein Basler Lehrlingsheim, Basel, (v-chm). Aussenstelle Nord-west-schweiz der BG Mitte, Bürgschaftsgenossenschaft für KMU, Burgdorf. Member of Landrat (until 30-6-2003), Member of Gemeinderat (municipal council) Reinach (until 30-6-2004). Business connections with BLKB.

04Doris greiner. Born in 1977. Deputy chairwoman of the Audit and Risk Committee. First election: 2002; current term of office 1-7-2011 to 30-6-2015. Lic. phil. (university degree in psychol-ogy, subsidiary subjects: economics / business administration and state / private law). BA in Business and Economics. Certi-fied external auditor.



05Wilhelm Hansen. Born in 1953. Member of the Audit and Risk Committee. First election: 2007; current term of office: 1-7-2011 to 30-6-2015. Lic. rer. pol. (university degree in eco-nomics); independent management consultant. Board member of: Scobag AG, Basel; TARENO AG, Basel; Mobimo Hold-ing AG, Lucerne; Sugro Holding AG, Reinach; chairman of DOMS-foundation, Basel; chairman of Personalvorsorgestif-tung Scobag Privatbank AG, Basel.

06Claude Janiak. Born in 1948. Deputy chairman of the Human Resources and Organization Committee. First election: 1991; current term of office 1-7-2011 to 30-6-2015. Dr. iur. (doctorate in law), lawyer, independent lawyer since 1978 (at Janiak, Freivogel, Schweighauser, von Wartburg, Aeschlimann, Maier, Binningen). Board member of: Peter Reichenstein AG, Pratteln; vice chairman of the board of directors of St. Claraspital AG, Basel; member of the National Council; chairman of the Cul-tural Foundation of BLKB. Business connections with BLKB.

07Frenk Mutschlechner. Born 1969. Member of the Executive Committee. First election: 2011; current term of office: 1-7-2011 to 30-6-2015. Lic. rer. pol. (university degree in economics), managing partner of CFM PARTNERS AG, Zürich. Executive MBA in Business Administration. Business connections with BLKB.

08Hans Ulrich Schudel. Born in 1951. Chairman of the Human Resources and Organization Committee. First election: 1998; current term of office: 1-7-20117 to 30-6-2015. Lic. iur. (uni-versity degree in law); lawyer and mediator of the Swiss Bar Association; independent lawyer since 1981, offices in Basel and Bottmingen. Chairman of the school board, Bottmingen; board member of: Pico Vorsorge AG; Assubera AG; chair-man of Stift ungsrat der Stiftung Volkshochschule und Senioren-Universität beider Basel, Basel; vice chairman of the Swiss Foundation for Solidarity in Tourism, Basel. Business connec-tions with BLKB.

09Daniel Schenk. Born in 1952. Deputy chairman of the Executive Committee. First election: 2000; current term of office: 1-7-2011 to 30-6-2015. Lic. rer. pol. (university degree in economics), ex-ecutive positions in international industrial group. Owner and CEO of van Baerle AG, Münchenstein since 1997. Board mem-ber of: Van Baerle AG, Münchenstein; Sichem Holding AG, Zug; Häring & Cie. AG, Pratteln; Elektra Birseck (EBM), Münchenstein; EBM Trirhena AG, Münchenstein. Board member of Handelskam-mer beider Basel (Chamber of Commerce). Chairman of Stiftung van Baerle, Münchenstein; member of Wohlfahrtsstiftung EBM, Münchenstein. Business connections with BLKB.

10Andreas Spindler. Born in 1968. Member of the Audit and Risk Committee. First election: 2007; current term of office: 1-7-2011 to 30-6-2015. Municipal council in Aesch, BL. Head of Finance. Board member and CEO of OKC AG, Aesch. Business con-nections with BLKB.

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03BASELLANDSCHAFTLICHE KANTONALBANK



11Dieter völlmin. Born in 1956. Chairman of the Audit and Risk Committee. First election: 2007; current term of office: 1-7-2011 to 30-6-2015. Dr. iur. (doctorate in law), lawyer. Independent lawyer in Muttenz since 1988. Board member of: Autobus AG, Liestal; bemag Objekteinrichtungen AG, Zunzgen; Ber-nold AG, Amsteg; Herrenknecht Schweiz Holding AG, Altdorf; Herrenknecht Schweiz AG, Amsteg. Chairman of the cantonal taxation commission. Business connections with BLKB.

Paul Hug. Born in 1946. Member of the Executive Committee. First election: 1987. Resignation as per 30-6-2011. Training on sev-eral levels of building and construction; Eidg. Dipl. Baumeister (master builder with a federal diploma). CEO of Verband der Bauunternehmer der Region Basel (association of building con-tractors) since 1986. Secretary of Paritätische Berufs kommission Bauhauptgewerbe der Region Basel (organisation to improve training, work conditions and chances in the building industry of the region). Business connections with BLKB.

3.4 Elections and terms of office3.4.1 Principles of election proceduresThe Cantonal Law on Kantonalbank stipulates the following on the election of the members of Bankrat:

Art. 10 Cantonal Law on Kantonalbank“The Bankrat consists of nine to eleven members. One member of the Regierungsrat is also part of the Bankrat. All members of the Board of Directors (Bankrat) are elected by the Landrat upon proposal by the Regierungsrat. The Landrat is bound to the election proposals.”

Based on these provisions, the members of the Board of Di-rectors are elected in globo. Furthermore, the law lays down

material criteria for the election into the Bankrat which were de-tailed by the executive body in the ordinance on the Cantonal Law on Kantonalbank (blkb.ch/rechtsgrundlagen).The Board of Directors is self-constituting. Membership ends at age 70. The current term of office for all members of the Board of Directors (Bankrat) started on 1 July 2011 and will end on 30 June 2015.

3.4.2 First election and remaining term of office of each mem-ber (see item 3.1 / 3.2)

Elisabeth Schirmer-Mosset */***Chairwoman 2000 to 30-6-2015Adrian BallmerVice chairman 1995 to 30-6-2015Claude Janiak *** 1991 to 30-6-2015Hans Ulrich Schudel *** 1998 to 30-6-2015Daniel Schenk * 2000 to 30-6-2015Doris greiner ** 2002 to 30-6-2015Urs Baumann * 2003 to 30-6-2015Wilhelm Hansen ** 2007 to 30-6-2015Dieter völlmin ** 2007 to 30-6-2015Frenk Mutschlechner * 2011 to 30-6-2015Andreas Spindler ** 2011 to 30-6-2015Paul Hug * 1987 resignation as per 30.6.2011* Member of the Executive Committee ** Member of the Audit and Risk Committee*** Member of the Human Resources and Organization Committee

3.5 Internal organisation3.5.1 Allocation of tasks within the Board of Directors (Bankrat)Chairwoman: Elisabeth Schirmer-Mosset (from 1 July 2011)Chairman: Wilhelm Hansen (to 30 June 2011)Vice chairman: Adrian Ballmer



3.5.2 Members list of Bankrat committees, tasks and areas of responsibility

Executive Committee (ExC)Members of the Executive Committee are: Elisabeth Schirmer-Mosset (chairwoman), Daniel Schenk (deputy chairman), Urs Baumann, and Frenk Mutschlechner. Organisation, responsi-bility and tasks of the Executive Committee are detailed in the rules on the Executive Committee.

Members of the Executive Committee possess the knowledge and experience necessary for the fulfilment of their duties. Knowledge and experience preferably extend to the areas of leadership, strategy, corporate development, and the capability to defend an opinion in a knowledgeable and sustainable way, even against the current opinion of the Executive Board or any other operational authority. Members of the Executive Commit-tee keep up, in theory and practice, with the development of the banking environment. Once a year at least, the Executive Committee checks, if its composition, organisation, and working methods still comply with regulatory requirements, if they meet the internal guidelines, and if they follow their own objectives.

The Executive Committee examines the developments in the banking environment on a regular basis and critically assesses business policy and strategic alignment of the bank. The com-mittee proposes adjustments for the attention of Bankrat con-cerning the normative disposition of the bank. In cooperation with the Audit and Risk Committee it analyses annual or multi-year planning, budgeting, reporting on the course of affairs as well as the economic and financial situation of the bank.

The Executive Committee prepares the requests made by the Executive Board to the Bankrat and formulates a recommenda-tion, for example in the assessment of cooperations and alli-

ances, the evaluation of acquisitions and participations, activi-ties in new fields of business, expansion into new market areas and the choice of the IT platform.

The Executive Committee does not take any operational deci-sions with the exception of loans and exposures to members of the bank’s governing bodies and lending activities relevant to the bank’s reputation.

The rules on the Executive Committee are posted on the Internet (blkb.ch/Executive-Committee).

Audit and Risk Committee (ARC)Members of the Audit and Risk Committee are: Dieter Völlmin (chairman), Doris Greiner (deputy chairwoman), Wilhelm Hansen, and Andreas Spindler.

Similarly to the Executive Committee, the members of the Audit and Risk Committee possess the required knowledge and expe-rience whereby Bankrat specifically expects expertise in finance and accounting, knowledge of internal and external auditing and the basic principles of an internal control system. Members of the Audit and Risk Committee, therefore, regularly take part in trainings in order to keep up in theory and practice with the latest requirements of accounting and financial reporting.

The Audit and Risk Committee, among other things, evaluates the efficacy of the auditing company, the internal auditing, and the bank’s internal control. It monitors and assesses the bank’s financial statement and risks. It regularly evaluates the adequa-cy of implementation of the regulatory framework with respect to the complexity of the bank and its risk profile. If necessary, it sees to the implementation of relevant measures. The Audit and Risk Committee decides whether acceptance of the annual financial statements is to be recommended to the Bankrat.



The rules on the Audit and Risk Committee are posted on the Internet (blkb.ch/audit-risk-committee).

Human Resources and Organization Committee (HROC)Members of the Human Resources and Organization Commit-tee are: Hans-Ulrich Schudel (chairman), Claude Janiak (deputy chairman), and Elisabeth Schirmer-Mosset.

Members of the Human Resources and Organization Commit-tee possess the knowledge and experience necessary for the fulfilment of their duties as well as the required amount of time. Knowledge and experience preferably extend to the areas of leadership, strategy, corporate development, and the capabil-ity to defend an opinion in a knowledgeable and sustainable way, even against the current opinion of the Executive Board or any other operational authority.

Members of the Human Resources and Organization Com-mittee keep up, in theory and practice, with the development of the banking environment, and personnel and pension fund matters.

Once a year at least, the Human Resources and Organization Committee checks, if its composition, organisation, and work-ing methods still comply with regulatory requirements and if they follow their own objectives.

Among other duties, the members of the Human Resources and Organization Committee prepare personnel matters the Board of Directors (Bankrat) has to deal with, check the usefulness and compliance of personnel policy and personnel planning with corporate policy and strategic alignment of the bank. They treat all personnel and organisational issues of the Bank-rat in cooperation with the Executive Board and internal or external experts. On behalf of the Bankrat, the members of the

Human Resources and Organization Committee also formulate principles and practice in selecting the Bankrat members and its committees.

In accordance with the chairperson of the Executive Board, the Human Resources and Organization Committee evaluates personnel policy of the bank, adopts the rules and procedures on salaries and pensions on behalf of Bankrat, elects the members of possible group panels, evaluates and proposes suitable candidates for the election into the Executive Board. And it regularly checks on the efficacy of the bank’s internal organisational structures.

The Human Resources and Organization Committee is respon-sible for the remuneration policy, remuneration practice, and pension plans for the personnel and the remuneration guide-lines for Bankrat members and its committees. It is responsible for the remuneration of the chairperson and the members of the Executive Board, the evaluation of participation plans or certificates for employees and the bank’s overall remuneration policy. The Board of Directors (Bankrat) decides on its own remuneration upon application by the Human Resources and Organization Committee.

The rules on the Human Resources and Organization Com-mittee are posted on the Internet (blkb.ch/human-resources-and-organization-committee).

3.5.3 Work methods of the Board of Directors and its committeesThe Bankrat (Board of Directors) is the governing and con-trolling body of the bank. It convenes upon invitation by the chairwoman of the Board of Directors as often as required by the course of business. Bankrat meetings may be requested by three members of the Bankrat, the Executive Board or the



auditors. In the year under review, the Board of Directors held eleven meetings and a two-day workshop. Meetings lasted for an average of four hours.

Bankrat meetings are usually attended by the Executive Board upon invitation by the chairwoman of the Board of Directors. Meetings dealing with the balance of accounts and the report of the external auditing are always attended by the head of the internal auditing and a representative of the external audi-tors. For specific topics, further internal and external experts are invited to the meetings.

In general, the Board of Directors (Bankrat) makes its decisions on the basis of a written presentment prepared and preliminar-ily discussed by the Executive Board and / or by the Executive Committee, the Audit and Risk Committee, or the Human Re-sources and Organization Committee.

The Bankrat constitutes a quorum, if at least two thirds of the members are present. Votes are decided by a simple majority. The chairwoman has a casting vote which decides the issue in the event of a tied vote. Election is usually not secret; in the first ballot the absolute majority decides, in the second ballot a relative majority is required, in a tied vote lots are drawn.

In the reporting year, the Executive Committee held ten meet-ings, the Audit and Risk Committee eight, and the Human Resources and Organization Committee six. Rules stipulate a minimum of one quarterly meeting for each of the three com-mittees. On average, meetings lasted four hours.

Valid decisions require the presence of a majority of members. Votes are decided by a simple majority. The chairperson has a casting vote which decides the issue in the event of a tied vote. Reporting relations are defined, so is interaction of all

three committees with each other, with Bankrat, the Executive Board, and further panels.

The relevant rules are posted on the Internet (blkb.ch/rechts-grundlagen).

3.6 Definition of areas of responsibilityResponsibilities of the individual panels and their interactions are regulated in detail in the regulation framework mentioned earlier (blkb.ch/rechtsgrundlagen).

3.7 Information and control instruments vis-à-vis the Executive BoardInternal auditing: internal auditing acts independently of the Executive Board and follows the instructions of the chairwoman of the Board of Directors (Bankrat). The head of internal audit-ing is answerable to the chairwoman of Bankrat and reports to her directly. Internal auditing is conducted in accordance with recognised auditing standards; the head of internal audit-ing and his / her collaborators are qualified auditors. Auditing reports and management letters are discussed in detail by the Audit and Risk Committee.

Calls by Bankrat delegations: every year, on behalf of the chairwoman of the Board of Directors, internal auditing sets up a schedule for calls on the branches and the central depart-ments. The findings of these calls are put down in reports and forwarded for the attention of the Bankrat.

Reporting: the Executive Board regularly informs the Board of Directors of the course of business, the income situation, risk ex-posure, and the advancement of projects with respect to strat-egy and yearly planning. A monthly report by the Executive Board with the financial results (monthly balance and monthly income statement with comparisons of the previous year and


25CORPORATE gOvERNANCEExECUTIvE BOARD

the budget), is forwarded to the Board of Directors. A compre-hensive report evaluating all the relevant risks for the bank is submitted to the Bankrat on a biannual basis.

External auditing: the representative of the auditors attends Bankrat meetings dealing with the annual financial statements, the annual report and the auditing report. S/he is also present at the yearly meeting with the Financial Commission of the Landrat (executive body) dealing with the financial statement. The auditor communicates regularly with the chairperson of the Board of Directors, the head of the Audit and Risk Committee, the head of internal auditing, and the Chief Risk Officer (CRO). External auditing takes note of the reporting of the internal auditing and, if necessary, comments on it.

4 ExECUTIvE BOARD4.1 and 4.2 combine: education and professional career (4.1) other activities and vested interests (4.2). The Executive Board of Basellandschaftliche Kantonalbank consists of six members. They are all Swiss citizens.

01 Beat Oberlin. Born in 1955. Chairman of the Executive Board since 1 January 2005. Dr. iur. (doctorate in law), counsel and notary (Canton of Solothurn). Management training at Stanford University, USA. More than 20 years of banking experience with UBS as head of retail and head of corporate customers of the region of Basel, chief of staff and head of market and distribution management business banking Switzerland, board member of leasing and factoring companies. Board member of: Erfindungsverwertungs AG (EVA), Basel; Swisscom IT Serv-ices Sourcing AG, Münchenstein, (v-chm); St. Claraspital AG, Basel. Board member of Handelskammer beider Basel (Cham-ber of Commerce).

02 Daniel Brändlin. Born in 1961. Member of the Executive Board; head of Corporate Customers since 2010. Lic. rer. pol. (university degree in economics); 2 years as head of finance and deputy CEO of the Congrex group. Eight years as deputy CEO of ALLDOS International AG, Reinach (BL). Ten years in the corporate customers business of Union Bank of Switzerland / UBS with positions in Basel, Zurich, and Sydney. Board mem-ber of Job Factory AG, Basel.


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27CORPORATE gOvERNANCEExECUTIvE BOARD

03Othmar Cueni. Born in 1952. Member of the Executive Board; head of Private Customers since 2008. Training in commerce, federal diploma in PR; training in HR, banking; Advanced Management Program of SKU; London Business School and Harvard Business School; assignments in London and US. 35 years of experience with Credit Suisse in Geneva, Basel, Berne, and Zurich, in positions such as head of Advertising and PR, head of HR, head of Retail Banking & Branches of the area of Basel; head of Sales Support, Berne; head of overall bank projects, Zurich; head of Private Customers north-western Switzerland; head of Private Banking Institute & Region Switzer-land CS Business School, Zurich (MD).

04Herbert Kumbartzki. Born in 1962. Member of the Executive Board; head of Finance and Risk Office since 2010. Studies of theology and philosophy (lic. theol.), Basel; studies of economy (lic. rer. pol.), Basel; financial analyst CFA; Executive Master in HR management FHNW (University of Applied Sciences Northwestern Switzerland) Olten; head of HR and Chief Invest-ment Officer with CIC Bank, Switzerland; Chief Investment Officer with Bank Ehinger (UBS), financial analyst and portfolio manager UBS. Board member of ZW Hydraulik AG, Rümligen.

05Jean-Daniel Neuenschwander. Born in 1962. Member of the Executive Board; head of Market Services since 2007. In 1995, Swiss Banking School Diploma, Trust und Investment Banking; 1998 Federal Diploma in financial analysis and asset management, CEFA; head of Portfolio Management Switzer-land with UBS in Basel; CIO with Bank Ehinger und Cie AG, Basel; head of Private Banking Bank Cial (Schweiz), Basel. Joined BLKB as chief of staff, 1 January 2005. Board member of: Aduno Holding AG, Zurich; Aduno S.A., Bedano; Basel-landschaftliche Pensionskasse (BLPK), Liestal; Viseca Card Ser-vices AG, Zurich; Zum Löwenzorn AG, Basel.

06Kaspar Schweizer. Born in 1964. Member of the Executive Board; head of Corporate Services since 2001. Lic. oec. (uni-versity degree from HSG); Executive Master of Business Admin-istration in Business Engineering (E MBA in BE HSG). Joined BLKB in 1992: assistant to the senior management; head of IT-project “Migration” (changeover of bank IT to RTC); head of Strategy, Planning, Bank Logistics.

4.3 Management contractsMembers of the Executive Board do not have any other per-manent managing or advising functions. There are no manage-ment contracts.


28CORPORATE gOvERNANCECOMPENSATION, SHAREHOLDINgS AND LOANS

5 COMPENSATION, SHAREHOLDINgS AND LOANS5.1 Remuneration schemeThe bank pursues a modern, transparent and performance-based remuneration policy.

The “Rules on the remuneration scheme” the Bankrat adopted on 23 June 2010, detail the bank’s characteristic design of remuneration. The Board of Directors (Bankrat) decides on the remuneration policy, the total amount of fixed remuneration, the total amount of variable remuneration, the fixed and variable remuneration to Bankrat members, and on the fixed and vari-able remuneration to the members of the Executive Board. The Human Resources and Organization Committee, consisting of three members of Bankrat allocates the variable remuneration at the different levels of function.

Remuneration to the employees (levels of function 1 – 7) consists of a fixed amount based on the level of function, and a vari-able amount based on the overall result, the level of function, and the individual performance. Members of the Board of Di-rectors (Bankrat) are paid a fixed and a variable remuneration based on the individual person’s level of function.

The variable remuneration is based on the gross profit adjusted for special items. 6.5 % of the adjusted gross profit is deducted as variable remuneration and funnelled into a pool. If the bank doesn’t leave an adjusted gross profit, all variable remunera-tion is being omitted.

The ratio of highest and lowest total remuneration in the report-ing year was 14.5 to 1.

5.2 Determination of fixed remunerationIn order to determine the fixed remuneration, a branch-of-busi-ness comparison is conducted. Fixed remuneration to the em-ployees is defined according to their level of function.

Internal margins have been defined for the levels of function 1 – 7. Within the respective margins, fixed remuneration is deter-mined by the individual person’s professional training, experi-ence, and managerial responsibility. Based on these criteria, the employee’s manager / superior decides according to his / her own best judgement on an amount within the relevant margin.

The fixed remuneration to the members of the Executive Board is determined by the Bankrat upon application by the Human Resources and Organization Committee (HROC). This deci-sion is based on the sole discretion of the Bankrat and takes into account the position, experience, capabilities, and indi-vidual performance of the person in question.

The sum of the fixed remuneration to Bankrat members de-pends on the level of responsibility of the individual member within the whole panel and the committees.

The sum of the fixed remuneration to Bankrat members is decid-ed by the Bankrat upon application by the Human Resources and Organization Committee (HROC). Equal levels of function are remunerated equally. In determining the amount, a compar-ison with similar institutions is taken as a criterion.

5.3 Distribution of variable remuneration according to the levels of functionEach level of function is allocated a fixed percentage of the remuneration total. At each level of salary, the percentage of the variable remuneration with respect to the remuneration total increases. The highest percentage of remuneration is paid to


29CORPORATE gOvERNANCECOMPENSATION, SHAREHOLDINgS AND LOANS

the chairman of the Executive Board. Allocation to the levels 1 – 7 is decided by the Human Resources and Organization Committee whereas the allocation to the Executive Board and its individual members is decided by the Bankrat upon applica-tion by the Human Resources and Organization Committee.

The following principles are valid for the allocation of variable remuneration: top performers and employees with extraordi-nary performances (daily work, assignments not belonging to their usual scope of activity, bank as a whole) should be con-sidered. The personal performance appraisal serves as the basis for the evaluation each employee has to undergo at least once a year. The interview is conducted by the respective man-ger / superior according to established procedures. The margin of the ratio between fixed and variable remuneration to the Executive Board is between 53.5 % and 47.8 % with the share of the chairman of the Executive Board being the highest. The margin of the ratio between fixed and variable remuneration of the Bankrat is between 62.3 % and 48.6 %.

5.4 variable remuneration of the employeesVariable remuneration of the employees is paid in cash.

The bank pays those non-wage benefits which are customary in the banking business (price reduction on REKA cheques, lunch allowance), the bank does not provide any severance payments.

5.5 variable remuneration for the Executive BoardThe CEO and the members of the Executive Board are evalu-ated according to qualitative and quantitative targets based on the strategic objectives of the bank. Within the total vari-able remuneration paid by the bank, there is a percentage set aside for the remuneration to the Executive Board. Achieving the above mentioned target is the essential criterion for the determination of the individual remuneration. Part of the vari-able remuneration to the members of the Executive Board is paid in KB certificates at a reduced subscription price. The CEO is required to own a minimum of 50 KB certificates, the remaining members of the Executive Board 30 KB certificates. All certificates are restricted for five years starting from the date of acquisition. Acquisition is done at a reduction of 25.27 % on the price ex-dividend.

The bank pays those non-wage benefits which are customary in the banking business (price reduction on REKA cheques, lunch allowance, company cars). The bank does not provide any severance payments.

Fees and compensation resulting from board memberships paid to members of the Executive Board are remitted to the bank and entered in other ordinary income.

5.6 variable remuneration to the BankratAccording to the “Rules on the remuneration scheme” the Bank-rat establishes the sum of the individual elements of the total remuneration paid to its members.

Within the percentage of the total variable remuneration set aside for the Bankrat, the sum of the individual remuneration to Bankrat members depends on the level of responsibility of the individual member within the complete panel and its com-mittees. Equal functions are remunerated equally. The Bankrat


30CORPORATE gOvERNANCESHAREHOLDER PARTICIPATION

decides on the amount of the variable remuneration to the individual Bankrat members upon application by the Human Resources and Organization Committee (HROC).

Part of their variable remuneration is paid in restricted KB cer-tificates at a reduced price. Bankrat members are required to own a minimum of 20 KB certificates. All certificates are restricted for five years starting from the date of acquisition. Acquisition is done at a reduction of 25.27 % on the price ex-dividend.

Bankrat members are not entitled to attendance fees. Member-ship in the Board of Directors does not entail the right to mem-bership in the bank’s pension fund. The bank does not provide any severance payments nor are there any benefits in kind.

5.7 Overview of the remuneration paid to the Bankrat and the Executive BoardDetails of remuneration, ownership of KB certificates and loans to members of the Board of Directors and the Executive Board of BLKB are listed in the financial report page 63 and posted on the Internet (blkb.ch/geschaeftsbericht).

6 SHAREHOLDER PARTICIPATIONDue to its legal form BLKB has non-voting share capital only, and consequently shareholders have no voting rights. All voting rights are exclusively held by the Canton of Basel-Landschaft. The Bankrat and the Executive Board may invite bearers of certificates to meetings and inform them of the bank’s course of affairs. These meetings are purely informative; resolutions cannot be passed. Certificates do not entitle their holders to any participation rights such as the right to vote, object or chal-lenge. (Cantonal Law on Kantonalbank, Art. 3 section 3, and Rules on the issuance of Kantonalbank certificates, Arts. 8 and 9; (blkb.ch/rechtsgrundlagen).

Items 6.1 to 6.5 of DCG (voting right restrictions, statutory quorums, convocation of the general meeting, rules on the agenda, and inscriptions into the share register) are not ap-plicable due to BLKB’s legal form.

BLKB makes use of the possibility of holding an informative meeting. Notice is given by mail to the addresses of those shareholders known to the bank. Additionally, the invitation is published in the official gazettes and the regional daily papers.


31CORPORATE gOvERNANCECHANgE OF CONTROL AND DEFENCE MEASURES

7 CHANgE OF CONTROL AND DEFENCE MEASURESDue to the legal form of BLKB (see explanations item 6) a change of ownership by means of buying certificates may not take place under any circumstances whatsoever. The question of duty to make an offer and the clauses on change of control (item 7.1 and 7.2 DCG) are therefore not applicable.

8 AUDITINg BODY8.1 Duration of the mandate and term of office of the auditor in chargeThe Board of Directors (Bankrat) files an application for the auditor who is then set in by the Regierungsrat. The audit is performed by Ernst & Young.

8.1.1 Date of assumption of the existing auditing mandateErnst & Young AG: assumption of mandate in 1997.

8.1.2 Assumption of mandate of the auditor in charge of the existing auditingPatrick Schwaller, auditor in charge of Ernst & Young AG, who is responsible for the existing auditing mandate, took up office in 2011. For the first time in this function, he performed the audit of the annual accounts of 2011. Pascal Berli has been lead auditor since 2010.

8.2 Auditing feesThe total auditing fee charged in the year under review by the auditors for the fulfilment of their legally required duties was CHF 463,360. Calculation of these auditing expenses was done according to the principle of accrual.

8.3 Additional feesFees for additional duties ordered by the bank (regular audits of IT and data security platform, as well as audit-related ser-vices) amounted to CHF 140,319 in the year under review. Calculation of these auditing expenses was done according to the principle of accrual.

8.4 Informational instruments pertaining to an external auditOne of the tasks of the Audit and Risk Committee (ARC) is to assess the efficiency of the external auditors, the internal auditors, and the internal control. The ARC discusses the re-ports and planning documentation in several meetings with the auditor in charge of the external auditors and regularly informs the Board of Directors (Bankrat) of their findings. In the business year 2011, representatives of the external audi-tors took part in two ARC meetings. Once a year at least, the auditor in charge meets the complete Board of Directors. In the course of this meeting, the Bankrat evaluates the auditing and supervising reports done by the external auditors and receives information on their most relevant findings. In the business year 2011, representatives of the external auditors took part in two Bankrat meetings.

The ARC regularly assesses the risk-oriented auditing strategy and the relevant auditing plan of the external auditors, analy-ses the auditing reports making sure that shortcomings are rectified and the auditors’ recommendations implemented. The ARC discusses the results of its analyses with the auditor in charge.


32CORPORATE gOvERNANCEINFORMATION POLICY

With the help of systematised tools and the results from the yearly evaluation interview of ARC and the external auditors, the ARC assesses the performance and remuneration of the auditors, asserts itself of their independence, and evaluates the combined actions of the auditing company and the inter-nal auditors.

9 INFORMATION POLICYBasellandschaftliche Kantonalbank pursues a policy of com-munication based on the truthful presentation of facts and the openness towards questions put forward by relevant groups of stakeholders, within or without the company. The head of Cor-porate Communications is directly answerable to the chairman of the Executive Board.

Basellandschaftliche Kantonalbank publishes the annual results at the media conference on balances in February / March. At the beginning of the second term, the mid-year results are made public.

The annual report in German is available in printed form and online. An English translation of the financial section and selected parts of the report section is posted on the Internet (blkb.ch/geschaeftsbericht).

Since 2005, the sustainability report has been integrated into the annual report. In this way, the Board of Directors and the Executive Board want to emphasise that sustainable actions are firmly anchored in BLKB’s corporate strategy and philosophy.

Further press releases concern the yearly meeting of bearers of BLKB certificates (April). Ad hoc releases follow according to relevance and need. The complete press releases are avail-able on the Internet (blkb.ch/medien).

It is part of BLKB’s information policy to communicate informa-tion to the employees before, or at least at the same time as to relevant external groups of stakeholders. Our Intranet platform “blkb Piazza” is regularly and consistently used for that purpose.

For Investor Relations contact:Remo Ponti, phone + 41 61 925 92 [email protected]

Information for investors:www.blkb.ch/investor-relations

Information for the media:Current news: www.blkb.ch/medien

33Financial Section

BaSellanDScHaFtlicHe KantonalBanK

assets

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Change CHF 1000

Change %

Liquid funds 549,555 114,045 435,510 381.87

Money market instruments 12,131 12,001 131 1.09

Due from banks 377,652 369,804 7,849 2.12

Due from customers 1,301,604 982,921 318,683 32.42

Mortgage loans 14,393,816 13,696,590 697,226 5.09

Securities and precious metal trading portfolios 6,336 4,342 1,994 45.91

Financial investments 1,653,140 1,563,651 89,490 5.72

Participations 42,101 18,461 23,641 128.06

Tangible fixed assets 164,162 167,660 – 3,498 – 2.09

Intangible assets 16,335 28,110 – 11,775 – 41.89

Accrued income and prepaid expenses 114,609 124,030 – 9,421 – 7.60

Other assets 110,483 38,225 72,258 189.03

Company capital not paid 0 0 0 0.00

total assets 18,741,924 17,119,838 1,622,086 9.47

Total subordinated claims 8,520 8,000 520 6.50

Total due from the Canton of Basel-Landschaft 20,900 3,900 17,000 435.86

Balance sheet on 31 December 2011 (before profit appropriation)

34Financial Section


liabilities

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Change CHF 1000

Change %

Money market instruments 237 94 143 153.01

Due to banks 357,083 168,214 188,869 112.28

Due to customers in savings and deposits 8,764,977 8,148,024 616,953 7.57

Due to customers, other 4,192,636 3,710,122 482,515 13.01

Cash bonds 320,978 445,688 – 124,710 – 27.98

Bonds and mortgage-backed bonds 2,977,000 2,546,442 430,558 16.91

Accrued expenses and deferred income 166,589 162,604 3,985 2.45

Other liabilities 156,361 117,131 39,230 33.49

Value adjustments and provisions 167,348 278,770 – 111,422 – 39.97

Reserves for general bank risks 804,000 754,000 50,000 6.63

Company capital 217,000 217,000 0 0.00

Legal reserve 496,860 456,860 40,000 8.76

Own equity – 2,633 – 6,423 3,791 – 59.01

Revaluation reserves 0 0 0 0.00

Other reserves 2,187 1,992 196 9.82

Retained earnings brought forward 12,300 10,463 1,837 17.56

Annual net profit 109,000 108,859 141 0.13

total liabilities and equity 18,741,924 17,119,838 1,622,086 9.47

Total subordinated liabilities 0 0 0 0.00

Total due to the Canton of Basel-Landschaft 477,565 555,748 – 78,182 – 14.07

off-balance-sheet transactions

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Change CHF 1000

Change %

Contingent liabilities 114,546 90,140 24,407 27.08

Irrevocable commitments 210,348 366,683 – 156,335 – 42.63

Liabilities for calls on shares and other equities 34,953 35,568 – 615 – 1.73

Confirmed credits 0 0 0 0.00

Derivative instruments

Positive replacement value 91,583 22,861 68,722 300.61

Negative replacement value 47,001 13,304 33,696 253.27

Contract volume 7,325,772 6,222,312 1,103,461 17.73

Fiduciary transactions 9,276 6,746 2,530 37.50

35Financial Section


Income statement

income and expenses from the ordinary bank business

2011 CHF 1000

2010 CHF 1000

Change CHF 1000

Change %

net interest income 276,084 271,281 4,803 1.77

Interest and discount income 451,827 459,933 – 8,106 – 1.76

Interest and discount income on trading portfolio 0 0 0 0.00

Interest and discount income on financial investments 38,082 38,696 – 614 – 1.59

Interest expenses – 213,826 – 227,348 13,522 – 5.95

net fee and commission income 65,036 68,682 – 3,646 – 5.31

Commission income from lending activities 4,246 2,512 1,734 69.02

Commission income from securities and investment transactions 50,824 56,139 – 5,315 – 9.47

Commission income from other services 15,660 15,915 – 255 – 1.60

Commission expenses – 5,695 – 5,885 190 – 3.23

net trading income 16,086 15,280 806 5.28

net other income 2,979 6,116 – 3,137 – 51.30

Income from the sale of financial investments 1,807 1,415 392 27.74

Participations 2,585 2,083 502 24.09

Real estate income 2,823 3,022 – 199 – 6.58

Other ordinary income 154 210 – 57 – 26.97

Other ordinary expenses – 4,390 – 614 – 3,776 614.67

net operating income 360,184 361,358 – 1,174 – 0.32

operating expenses – 157,820 – 174,433 16,613 – 9.52

Personnel expenses – 98,205 – 98,100 – 105 0.11

Other operating expenses – 59,615 – 76,333 16,718 – 21.90

Gross profit 202,364 186,925 15,439 8.26

annual net profit

Gross profit 202,364 186,925 15,439 8.26

Depreciation and write-offs of non-current assets – 47,426 – 25,540 – 21,887 85.70

Value adjustments, provisions and losses – 2,398 – 2,785 388 – 13.92

interim result 152,540 158,600 – 6,060 – 3.82

Extraordinary income 6,694 1,210 5,484 453.23

Extraordinary expenses – 50,045 – 50,771 726 – 1.43

Taxes – 190 – 180 – 10 5.56

annual net profit 109,000 108,859 141 0.13

Profit appropriation

Annual net profit 109,000 108,859 141 0.13

Retained earnings brought forward previous year 12,300 10,463 1,838 17.57

Retained earnings 121,300 119,321 1,979 1.66

Interest on endowment capital – 4,646 – 4,711 65 – 1.37

Dividend paid on certificate capital – 18,810 – 18,810 0 0.00

Compensation for state guarantee – 8,500 – 3,500 – 5,000 142.86

Payment to the Canton of Basel-Landschaft – 40,000 – 40,000 0 0.00

Allocation to legal reserve – 40,000 – 40,000 0 0.00

Retained earnings brought forward 9,344 12,300 – 2,957 – 24.04

36Financial Section


Statement of cash flow

2011 Source of funds

CHF 1000

2011 Use of funds CHF 1000

2010 Source of funds

CHF 1000

2010 Use of funds CHF 1000

cash flow from operations (internal financing) 41,390 84,697

Annual net profit 109,000 108,859

Depreciation and write-offs of non-current assets 47,426 25,540

Value adjustments and provisions 111,422 23,999

Allocation to the reserves for general bank risks 50,000 50,000

Accrued income and prepaid expenses 9,421 15,589

Accrued expenses and deferred income 3,985 7,913

Profit distribution previous year 67,021 68,026

Other

cash flow from capital transactions 3,986 253

Endowment capital

Certificate capital

Legal reserve

Own equity 3,986 253

cash flow from transactions with fixed assets 55,794 42,887

Participations 42,704 81

Tangible fixed assets 13,090 42,806

cash flow from banking operations 342,908 301,752

operations with banks 78,013 2,662

Due from banks (over 90 days) 55,000 10,000

Due to banks (over 90 days) 23,000 13,116

Money market instruments (assets) 131 360

Money market instruments (liabilities) 143 94

operations with clients 41,152 601,793

Savings and deposits 616,953 507,601

Cash bonds 124,710 307,641

Due to customers, other 482,515 59,582

Mortgage loans 697,226 469,999

Due to customers 318,683 272,173

operations in the capital market 339,075 338,437

Bonds and mortgage-backed bonds 430,558 51,001

Securities and precious metal trading portfolio 1,994 1,288

Financial investments 89,490 288,723

other balance sheet items 33,028 35,733

Other assets 72,258 45,765

Other liabilities 39,230 81,498

changes in liquidity of funds 332,489 259,689

Liquid funds 435,510 71,273

Due from banks up to 90 days 62,849 479,893

Due to banks up to 90 days 165,869 291,477

37Financial Section


1 noteS on BUSineSS actiVitieS anD nUMBeR oF eMPloYeeS

1 GeneralBasellandschaftliche Kantonalbank (BLKB), incorporated in Liestal, is the leading bank in Baselland and one of the lead-ing banks in the north-western part of Switzerland. Legitimised by cantonal law, the bank operates independently from state administration as a public law company with its own legal personality. On 31 December 2011, the Canton of Basel-Land-schaft holds 74 % of the capital stock, another 26 % is spread in private ownership. The Canton of Basel-Landschaft holds all voting rights and, according to the law, guarantees for the bank’s liabilities.

Geographically seen, the bank operates in the economic re-gion of Basel providing an extensive range of bank services for the private sector, institutional or corporate customers, and the public sector with its 22 branches in the Canton of Basel-Landschaft, one in Breitenbach (SO), and one for Private Bank-ing in Basel. A number of ATMs at various locations as well as a mobile bank catering for smaller communities are completing the services BLKB offers to its customers in the canton.

2 Retail and commercial bankingThe interest balance at about 77 % contributes significantly to the income statement. The assets-side business is dominated by the mortgage business with the chief segment being residential real estate. On the liabilities side, there are the customer de-posits at approximately 71 % of the balance sheet total.

3 Fee and commission businessFee and commission business contributes approx. 18 % to the net operating income. The principal source of this income originates from the investment and securities business with customers.

4 trading incomeTrading income sums up income from customer and proprietary trading (foreign exchange, foreign currencies, precious metals, securities), the latter being done to a rather limited extent.

5 other incomeFinancial investment consists primarily of fixed-interest securities held to maintain liquidity by means of repo transactions with the Swiss National Bank and other banks. Financial investment also includes equity and other securities held by the bank for a medium to long-term horizon.

6 notes on risk management and risk controlBLKB applies an implemented risk management and an inde-pendent risk control headed by the Chief Risk Officer. Decem-ber 5, 2011 was the last date when the Board of Directors (Bankrat) or its committees assessed the relevant risks for the bank in view of the likelihood of occurrence and their poten-tial financial effects. These risks are avoided, decreased or passed on the basis of relevant measures decided on by the Bankrat. Those risks the bank has to bear itself are persist-ently monitored. On the basis of the last risk assessment by the Board of Directors, the present annual statement adequately covers current risks by means of value adjustments or provi-sions. For further details concerning risk management we refer to the explanations below.

Risk management and risk controlRecognising, assessing, managing, and monitoring of risks is a task of substantial importance for BLKB. An integral part of any bank business is the taking on, managing and controlling of risks. The general framework for risk policy is established by the Bankrat. Equipped with an efficient control system, the Executive Board is responsible for achieving the targets and complying with specifications. The purpose of risk manage-ment and risk control is to obtain a well-balanced proportion of risk and income.

Notes on the financial statement (combined individual statement)

38Financial Section


Risk acceptabilityIn its business principles, the bank takes responsibility for a business behaviour compliant with the risk strategy and thereby guarantees the acceptability of the risks. The intention is to cover potential risks, lying within an ordinary range of expecta-tion, by means of the current income. Extraordinary losses – in the framework of stress scenarios – are to be covered by the current income and free reserves.

PrinciplesPrinciples for the management and control of risks are speci-fied in the risk policy which stipulates a strict division of risk management and risk control. Risk management, according to BLKB’s rules, means authorising individual persons (eg heads of branches) or groups of persons (eg trade) to incur risks, in line with the rules of responsibility or the rules of limits, on be-half of the bank and to manage them. The incurrence of risks requires an approved limit as well as the identification, measur-ing, and monitoring of risks. The introduction of a new product necessitates a preceding clarification of the risks involved.

The Risk Office is independent of risk management and is re-sponsible for risk control. It helps to identify risks and decides on the risk measuring method, it decides on procedures for new products and evaluation methods, and it implements qual-ity assurance of the applied risk measuring method.

Under the supervision of the Chief Risk Officer all risks incurred by the bank are consolidated and commented on for the atten-tion of the Executive Board. The Board of Directors (Bankrat) is informed of the findings in the course of the risk report as per 31 December and 30 June each year. Scenario analyses are periodically submitted to checks and, if necessary, adjusted.

Systemic risks, strategic risks, reputational risks, and compliance risks

The highest level encloses the systemic risks of the Swiss finan-cial market. Supervision and regulation thereof are carried out by the Swiss National Bank and the Swiss Financial Market Super visory Authority (FINMA). The financial crisis demonstrat-ed that in extraordinary situations the Federal Council may also be actively involved. Strategic risks may result from the overall bank strategy and come under the responsibility of the senior bank manage-ment. The reputational risk means the danger of damage to the bank’s reputation. Managing of reputational risks consists mainly of assuring competency, integrity, and reliability of all the business activities of the entire bank, as this risk may easily arise from the bank’s business and operating activities. It is a very complex task comprising a whole range of operational and strategic guiding instruments on the side of the bank. At BLKB, strategic risks and reputational risks are qualitatively con-trolled. Compliance risks may result from a breach of rules, standards, or codes of conduct, and may lead to regulatory sanctions, financial losses, and damage to the reputation. The unit Legal Services / Compliance assures that business activities are consistent with current regulatory specifications and the due diligence of a financial intermediary. This unit is responsible for

Systemic risks

Strategic risks

Reputational risks

Floatingrate risks

Operationalrisks

Com-pliance

risksDefaultrisks

Marketrisks

39Financial Section


the implementation of requirements and developments on the part of supervisory and legislative bodies or other organisa-tions. It is also responsible for the adjustment of directives to the regulatory developments and the compliance therewith.

Default, market and operational risksThe Executive Board is responsible for the operational imple-mentation of the management and control of credit, market, and operational risks as defined by Basel II. They comprise the entirety of the capital accord for banks which was imple-mented in Switzerland by means of the Swiss Federal Ordi-nance on Capital Adequacy and Risk Diversification for Banks and Securities Dealers (CAO) and incorporated into national legislation on 1-1-2007. For that purpose, the Executive Board issues detailed guidelines, directives, and instructions, with particular regard to strategy-compliant risk behaviour. It makes sure that risk acceptability is guaranteed and risk-adequate prices are ensured.

In order to harmonise and simplify BLKB’s implementation of risk policy, the different risks were split into three commonly used and internationally recognised risk categories: 1. Credit- and default risks2. Market-, price- and liquidity risks3. Operational and legal risks

The individual risk types will be explained below including the precautions taken by BLKB. Details are laid down in the risk policy and the relevant internal procedures. Risk management will continue to pose a challenge for the entire banking world, a point thoroughly proven by the current efforts to overcome the financial crisis.

6.1 Default and credit risksDefault or credit risk is the risk of involuntary or deliberate non-compliance with an obligation a counter party has incurred with BLKB. Due to its strong lending business and the con-centration of risks, particularly in home building in the north-western part of Switzerland (a geographically restricted area), managing credit risk is top of the agenda for the risk manage-ment at BLKB. Default risks are limited by quality requirements and covering margins.

The appraisal of real estate is laid down in the relevant proce-dures. In the event of re-capitalisation of residential mortgages exceeding CHF 5 m, or commercial mortgages exceeding CHF 3 m, appraisal is done by consulting an external quali-fied third party. Based on a risk-oriented scheme, recoverabil-ity of a property is reappraised periodically. The frequency of reappraisal ranges between three and twenty years and depends on the:– type of real estate– coverage ratio– acceptability

As soon as a loan is assessed as doubtful or profitless, a re-appraisal is done. The current market value serves as a basis for lending and is determined as follows:– property inhabited by owner: real value– income property: earnings value– commercial or industrial property used by owner:

current market value or use value– building estate: market value in view of future use

The highest possible financing depends on the one hand on internally defined collateral value and on the other hand on its acceptability. Second mortgages without marketable ad-ditional cover must be amortised. Depending on the amount and complexity of the loan, decisions are made at differ-ent hierarchical levels and branches. BLKB is confident that branch managers know their customers best and are there-fore in a good position to assess credit risk. Creditworthiness and possible collateral are important factors in assessing the probability of default risk. Default risk of the bank’s commer-cial borrowers is measured and managed by a rating system. Ratings are periodically reassessed. This system is extremely helpful in assessing the credit risk of exposures and in deter-mining value adjustments.

Periodical meetings and continued training of the persons in charge of lending help to reduce losses and ensure a consist-ent lending policy of BLKB.

40Financial Section


A team of specialists at the head office takes care of excep-tional cases and deals with non-performing loans. The Loan Committee, consisting of members of the Executive Board, is-sues relevant rules and procedures, assures a consistent lend-ing policy, a competitive pricing policy and monitors compli-ance with the rules. Changes in the credit rating of counter parties as well as compliance with the regulations aimed at avoiding large risks in the case of large counter parties or customers are part of the same risk category.

Unilateral decisions by governments restricting currency trans-fers and payments, or moratoria of all kinds, are referred to as country risks.

BLKB, in close cooperation with Zürcher Kantonalbank (CBZ), adopts CBZ’s country rating and chooses its partners abroad according to strict criteria in order to minimise country risk as much as possible.

Money market business on the basis of unsecured transactions, and over-the-counter derivatives may only be concluded with approved counter parties and within approved limits.

6.2 Market-, price- and liquidity risksMarket risks emerge as the result of price movements in the stock-, interest-, foreign exchange-, and commodity markets. Compliance with internal limits as well as the development of the individual markets are constantly being monitored.

6.2.1 Interest rate risks in the banking bookInterest rate risks are controlled by the income and price ef-fect. The income effect measures the impact of interest rate changes on the performance of a certain period of time (eg 12 months). In this case, the interest rate changes influence those items on the balance sheet which will expire within 12 months and will be renewed or whose reset date recurs within the next twelve months. The price effect analyses changes of the cash value of equity under different assumed rate scenarios (eg parallel shift of the rate curve by 100 basis points). BLKB controls the interest rate risk primarily by means of the income effect. Calculation of the price effect is also done in line with supervisory requirements.

Balance sheet items which grant the customer the right to give notice (eg variable rate mortgages and savings) will be simulated by benchmark portfolios, in a way that variance of the margin between customer rate and yield of the replicat-ing portfolio is minimised taking into account the fluctuation of volumes on these balance sheet items. Historic products and market rates serve as a basis for the simulation. Replication keys determined in this way are checked for their relevance on a yearly basis. Limits for the different scenarios of income and price effect have been determined.

6.2.2 Market-, price- and liquidity risks in the trading bookIn order to assess market risks in the trading book, the compli-ance with market value and nominal limits is checked daily. A “List of Instruments” ensures that BLKB only uses products which can be correctly assessed and entered.

Market liquidity risks are generated by the failure of markets to have fair buying and selling prices for certain products at all times. Market liquidity risks are restricted by limitations of the delta equivalent per issuer.

Central Risk Controlling uses integrated systems to monitor these limits. Trading is centralised at the head office in Liestal and is operated by qualified and experienced dealers.

41Financial Section


6.3 operational and legal risksOperational risks are defined as “danger of direct or indirect losses resulting from inappropriateness or failure of internal processes, people and systems, or external events”. They are limited by means of internally defined rules and directions as to organisation and control. A security committee coordinates the individual areas and sets priorities. Internal auditing regularly checks internal controlling and reports the findings. The inter-nal control unit, an internal, central body, monitors compliance with the procedures and authorises IT-access rights to the staff in order to minimise operational risks. Internal operational pro-cedures, processes and systems are reviewed on an ongoing basis and are prioritised with respect to their importance for the operation of the bank. Follow-up and adaptation to new systems, processes and operational procedures are thereby assured. Scope and frequency of different checks executed by superior bodies are defined in an internal-control manual. A disaster plan defines backup procedures in case of failure of individual systems or system groups.

Systemic risks (failure of IT-platform) are analysed in coopera-tion with the outsourcing partners Swisscom IT Services and Atos IT Solutions and Services AG on an ongoing basis, and appropriate measures are in place to minimise these risks. Continued training for all employees, the transparent organisa-tion of the bank and open communication, however, represent the most efficient method of minimising operational risks. Legal risks include:– Lack of authorisation or lack of competence and expertise

required for concluding a contract (risk of concluding un-wanted commitments).

– Conclusion of incorrect or incomplete contracts (the risk of a counter party not being able to meet its obligations, risk as-sociated with claims for damages or negligence).

To minimise these risks, the bank uses standardised contracts and individual transaction confirmations. Moreover, certain transactions may only be carried out at the head office by authorised bodies. Mandatory procedures ensure that due care is exercised when signing contracts. Legal risks also include the possibility of changes in the regulations issued by national (FIN-MA, SBA, SIX etc.) or international institutions (BIS, SEC etc.).

6.4 outsourcing of business areasBasellandschaftliche Kantonalbank delegated a number of functions belonging to the business areas of securities back-office and payment transactions to Swisscom IT Services Sourc-ing AG, Münchenstein. The operation of the computer centre and the development of bank applications were entrusted to Swisscom IT Services. Decentralised IT is looked after by Atos IT Solutions and Services AG. Both outsourcing orders were regulated in detail in service level agreements as stipulated by FINMA. Confidentiality is assured by the fact that the entire staff of these providers are subject to bank secrecy.

7 employeesIn line with the FINMA counting method the number of employ-ees was established as:

2011 20101)

Full-time equivalents (acc. to FinMa) 658 642

Head count was established as:

2011 20101)

number of employees 767 749– apprentices 28 28– trainees 11 10

1) Restatement: including employees paid by the hour

42Financial Section


General accounting policiesThe annual financial statement is set up according to the rel-evant Swiss accounting principles for banks. It provides a view of the bank’s asset-, finance-, and income situation according to the principle of “true and fair view” (combined individual statement). It meets the legal requirements laid down in the regulation of the Canton of Basel-Landschaft and complies with the accounting rules for listed companies of the Swiss stock exchange as well as with the directives of FINMA.

closing dateBLKB closes its financial year on December 31.

Reporting of transactionsAll transactions (on-balance and off-balance sheet) are record-ed as of the closing date and valued according to the account-ing and valuation principles.

Foreign currenciesForeign currency transactions are entered at the respective day’s rate. Monetary assets are translated into Swiss francs at rates valid on balance-sheet date and entered affecting net income. Exchange rate differences between the day of conclu-sion and the day of fulfilment of the transaction are entered in the income statement.

The following rates on balance sheet date are used for the currency translation:

2011 2010

Average exchange rate EUR / CHF 1.2308 1.3699Year-end rate EUR / CHF 1.2139 1.2504Average exchange rate USD / CHF 0.8804 1.0373Year-end rate USD / CHF 0.9351 0.9321

accounting and valuation principlesLiquid funds, depositsValuation is done at nominal value.

Repurchase and reverse repurchase transactionsReverse repurchase transactions are securities purchased under the condition of resale. Repurchase transactions are securities sold under the condition of repurchase. Reverse repurchase transactions are recorded in the balance sheet as advance against collateral and repurchase transactions are recorded as secured payables.

Market value of obtained or supplied securities is monitored daily in order to make available or claim additional securities, if need be.

Interest income from reverse repurchase transactions and interest expenses on repurchase transactions are accrued by maturity.

Dues from bills and money market receivablesBills of exchange and chequesAccounting is done at nominal value. Bills of exchange are accrued by a discount.

Money market receivablesAccounting is done at cost value.

2 accoUntinG PRinciPleS

43Financial Section


Dues from banks and customers, mortgage loansRecording is done at nominal value with the exception of claims and liabilities from non-monetary values such as pre-cious metal accounts and securities lending and borrowing which are entered at market value. Specific provisions are built for doubtful dues, which means dues from customers who have failed to meet their capital and interest liabilities for 90 days or longer. The same applies to the probability of a customer fail-ing to meet his liabilities in full or in part in the future. Valuation adjustment is determined by the difference between the book value of the claim and the likely income, taking into account the risk of the counter party and the net income from selling off collateral. When determining net income of the collateral, cost of carry such as interest, maintenance and sales costs etc. up to the estimated time of sale are deducted, so are potential taxes and fees.

Securities and precious metal trading portfoliosTrading portfolios are always valued and recorded at fair value on balance sheet date. Fair value is the price deter-mined on the basis of a price-efficient and liquid market or a price determined on the basis of a valuation model. In the exceptional case of fair value not being available recording and valuation is done according to the principle of minimum value. Valuation income is reflected in the income statement as net trading income. Interest and dividend income is also entered as net trading income. Funding expenditure for trading of securities is debited to net trading income and credited to net interest income.

Financial investmentOwn equity and precious metals are valued according to the principle of minimum value. On purchase of fixed-interest debt securities, they are divided into two categories and val-ued as follows:

Held-to-maturity: valuation at cost, premiums and discounts are accrued over the remaining term of the financial investment. Capital gains, realised on premature sale of the financial in-vestment, are accrued over the remaining term.

Available-for-sale: valuation according to the principle of mini-mum value. Crediting is done at lower of cost or market. Real estate and participations taken over from the credit business and intended for sale are recorded in financial investments and valued at lower of cost or market. BLKB purchases real estate on behalf of the Canton of Basel-Landschaft and the communities in trust. Fiduciary ownership of such real estate is entered in financial investments and fiduciary obligation in other liabilities.

ParticipationsParticipations are valued at acquisition cost less economically necessary depreciation.

Tangible fixed assetsTangible fixed assets are recorded at cost value on the basis of the estimated time of use determined in the following way:

2011

bank buildings 30 yearsother real estate 33 years other tangible assets 3 – 5 years

Recoverability of tangible fixed assets is checked yearly. If there is a change in the period of use or a depreciation, an extraordinary write-off is done. Ordinary and extraordinary write-offs, if any, are recorded in depreciation and write-offs of non-current assets of the income statement. Maintenance costs are debited to the income statement.

44Financial Section


Intangible assetsPurchased intangible assets are recorded, if there is a measur-able benefit for the company over a period of several years. Worked-for intangible assets are not recorded. Recording is done at cost value based on the estimated time of use of the assets. Recoverability of intangible assets is checked yearly. If there is a change of use or a depreciation, an extraordinary write-off is done. Ordinary and extraordinary write-offs, if any, are recorded in depreciation and write-offs of non-current as-sets of the income statement.

GoodwillGoodwill is written off linearly according to a carefully esti-mated time of use (five years maximum).

Other intangible assetsOther intangible assets are written off over a period of three years.

Accrued income and expenses, prepaid expenses, deferred incomeAccruals are established according to the matching principle.

Other assets and liabilitiesThese balance sheet items contain, among others, the positive and negative replacement values of derivative instruments, val-ued at market value as of balance sheet date.

Valuation adjustments and provisionsSpecific provisions and reserves are made for all risks recog-nisable on balance sheet date. Valuation adjustments represent gross values. Interest and commission income from customers overdue 90 days and more are adjusted. Provisions from one accounting period, which from an economic point of view are not needed any more, are liquidated and recorded in the in-come statement or used for new specific provisions. Historic experience has shown that specific provisions cover latent risks sufficiently. Therefore, general provisions were not made.

Provisions for pension schemesBLKB employees benefit from a contribution defined pension plan. The economic benefit and economic costs of this pension plan are calculated periodically, following a static method ac-cording to Swiss GAAP FER 26 (accounting of pension fund) by an independent qualified actuary. Underfunding or over-funding of the pension plan may result in an economic benefit or liability which is entered in other receivables or in value adjustments and provisions. The difference between the year under review and the previous year is recorded as personnel expenses in the income statement. The employer’s contribution of the pension scheme is accrued in personnel expenses.

Own debt and participation securitiesPositions in own debenture and cash bonds are offset with the relevant liability item. Positions in own equity are deduct-ed from equity capital in a separate section Own Equity at cost value.

Reserves for general bank risksThese reserves are added to the equity capital in line with art. 18 lit. b of the Capital Adequacy Ordinance (CAO).

Legal reserveLegal reserve results from the surplus of issues carried out in the parent company since the introduction of certificate capital.

Other reservesThe balance sheet item other reserves records the income of own equity in the trading portfolio. Dividend payments and in-come from resale of own equity are recorded in other reserves.

45Financial Section


Annual net profitThe annual net profit comprises BLKB’s worked-for profit.

TaxesBLKB, as a public law institution, is exempt from direct federal tax and from cantonal tax in the canton of Basel-Landschaft. It is, however, not exempt from taxes for branches outside the canton. Direct tax due for ongoing assessment is recorded in accrued expenses and deferred income. According to GAAP FER 11 current and future fiscal effects are entered as provi-sions in the annual statement.

Contingent liabilities, irrevocable commitments, liabilities for calls on shares and other equity, confirmed credits and fiduciary transactionsOff-balance sheet transactions are recorded at par value. Appropriate provisions are made for all risks recognisable.

Forward transactions, derivative instrumentsBLKB records positive and negative replacement costs vis-à- vis the same counter party in line with concluded netting agreements.

Trading transactionsValuation of all derivative instruments concluded as trading transactions are done at fair value. They are recorded as posi-tive or negative replacement costs in other assets or other li-abilities. Fair value is based on market rates or calculation models. For transactions with derivative instruments concluded for trading reasons, realised and non-realised income is re-corded in income from trading transactions.

Hedging transactionsFurthermore, the bank uses derivative instruments within the framework of asset and liability management in order to con-trol changes of interest rate risks. Hedging transactions are valued analogously to the secured basic transactions. Income from hedging transactions is allocated to the same balance sheet item as income from secured transactions.

In order to secure changes of interest rate risks macro-hedges are used. Income of those derivatives held for hedging and managing interest rate risks is accrued. Positive and negative replacement costs are recorded in other assets or other liabili-ties. Accrued interest on the hedging item is recorded in the compensation account of other assets or other liabilities.

Hedge relations, aims and strategies of hedging transactions are documented by the bank upon conclusion of derivative hedging transactions. Efficiency of hedge relations is checked at regular intervals. Hedging transactions where hedge rela-tions have partly or fully become ineffective are treated as trad-ing transactions as far as the non-effective part is concerned.

Changes compared to the previous yearNone

Events after balance sheet dateAfter balance sheet date, there were no extraordinary events which might have had a major influence on the asset-, finance-, and income situation of the bank in the past financial year.

46Financial Section


3 inFoRMation on tHe Balance SHeet

3.1 Summary of collaterals

Mortgage cover

CHF 1000

Other cover

CHF 1000

Without cover

CHF 1000Total

CHF 1000

Receivables

Due from customers 1,301,604

– public bodies 10,304 92,860 103,164

– others 218,108 346,028 634,303 1,198,440

Mortgage loans 14,393,816

– residential real estate 12,261,327 12,261,327

– office and business buildings 493,153 493,153

– trade and industry 1,040,593 1,040,593

– others 598,743 598,743

total due from customers as per 31-12-2011 14,622,228 346,028 727,163 15,695,420

Previous year 13,910,344 247,126 522,041 14,679,511

off-balance-sheet

Contingent liabilities 9,217 4,457 100,872 114,546

Irrevocable commitments 70,715 6,938 132,695 210,348

Liabilities for calls on shares and other equities 34,953 34,953

Confirmed credits 0

total off-balance-sheet as per 31-12-2011 79,932 11,395 268,521 359,847

Previous year 242,533 11,917 237,942 492,391

Total dept

Estimated realisation of

securities Net debtSpecific

provisions

Doubtful receivables as per 31-12-2011 469,217 286,317 182,900 165,535

Previous year 440,613 248,928 191,685 169,058

47Financial Section


3.2 Securities and precious metal trading portfolio, financial investments and participations

3.2.1 Securities and precious metal trading portfolio

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Dept securities 6,107 3,656

– listed on an exchange 6,107 3,656

– not listed 0 0

Equities 0 374

Precious metals 229 313

total trading portfolios in securities and precious metals 6,336 4,343

– of which securities eligible for repo transactions 796 2,395

3.2.2 Financial investments

Book value 31-12-2011

CHf 1000


CHf 1000

Fair Value 31-12-2011

CHF 1000

Fair Value 31-12-2010

CHF 1000

Debt securities 1,510,039 1,438,262 1,568,697 1,467,457

– of which valued according to the amortised cost method 1,510,039 1,438,262 1,568,220 1,467,020

– of which valued according to the lower of cost or market method 0 0 478 437

Equities 94,862 74,913 97,030 78,915

– of which qualified participations 501 501 501 501

Precious metals 1,369 1,369 5,073 4,458

Fiduciary real estate 38,790 39,311 38,790 39,311

Real estate for sale 8,081 9,796 8,081 9,796

total financial investments 1,653,140 1,563,651 1,717,671 1,599,937

– of which securities eligible for repo transactions 1,305,051 1,223,193 1,363,612 1,252,802

3.2.3 Participations

31-12-2011 Book value

31-12-2010 Book value

With quoted value 24,153 0

Without quoted value 17,948 18,461

total non-consolidated holdings 42,101 18,461

48Financial Section


3.3 Participations

Business activitiesShare capital

CHF 1000

Interest share 31-12-2011

%

Interest share 31-12-2010

%

Disclosed in financial investments

Landwirtschaftliche Trocknungsanlage, Pratteln Drying plant 900 16.28 16.28

AEB Alternativ-Energie Bf AG, Birsfelden Energy generation 3,300 12.12 12.12

Ultra-Brag AG, MuttenzShipping / warehous-

ing / trade 3,000 11.67 11.67

BTG Mezzfin AG, Basel1) Financial services 1,400 14.29 0.00

Disclosed in non-consolidated participations

ATAG Asset Management (Lux), Luxembourg (in Liquidation) Financing company 1,500 * 100.00 100.00

Swisscom IT Services Sourcing AG, Münchenstein Services for banks 3,000 20.00 20.00

Erfindungsverwertungs AG, Basel 2) Knowledge transfer 1,112 42.67 42.67

Caleas AG, Zurich Financing company 6,000 11.19 11.19

Swissquote Group Holding SA, Gland Financial services 2,928 5.00 0.00

Pfandbriefzentrale der Schweiz. Kantonalbanken, Zurich Bank financing 825,000 5.18 5.18

Swisscanto Holding AG, Bern Financial services 24,204 5.02 5.02

Aduno Holding AG, Opfikon Credit cards 25,000 3.08 3.08

SIX Group AG, Zurich Financial services 19,521 0.41 0.41

S.W.I.F.T., La Hulpe, Belgium Bank telecommunications 10,890 * 0.02 0.02

* EUR

None of the participations recorded in the balance sheet holds voting shares therefore, capital quota corresponds to voting rights quota.

1) Plus participation certificates worth CHF 800,000 (representing 50 % of non voting share capital)

2) Effects of a theoretical application of the equity method: applying this method, the year 2011 results in a positive amount of CHF 357,000 recorded in the income statement. The equity share in the balance sheet is CHF 997,000.

49Financial Section


3.4 analysis of capital assets

Historical cost

CHF 1000

Write-offs / depreciation CHF 1000


CHF 1000

Transfers 2011

CHF 1000

Additions 2011

CHF 1000

Disposals 2011

CHf 1000

Write-offs / depreciation

2011 CHF 1000


CHF 1000

total non-consolidated participations 32,665 – 14,205 18,461 0 42,704 0 – 19,063 42,101

– of which majority interest 0 0 0 0 0 0 0 0

– of which minority interest 32,665 – 14,205 18,461 0 42,704 0 – 19,063 42,101

total Real estate 250,643 – 82,984 167,660 0 17,895 – 9,781 – 11,612 164,162

Real estate 230,346 – 69,617 160,729 0 13,680 – 9,781 – 7,074 157,555

– of which bank buildings 163,741 – 58,803 104,938 0 3,171 – 3,505 – 5,124 99,480

– of which other real estate 66,605 – 10,814 55,791 0 10,509 – 6,276 – 1,950 58,075

other tangible fixed assets 20,297 – 13,366 6,931 0 4,214 0 – 4,538 6,607

assets arising from finance leases 0 0 0 0 0 0 0 0

others 0 0 0 0 0 0 0 0

total intangible assets 52,525 – 24,414 28,110 0 5,849 – 873 – 16,751 16,335

– of which goodwill 0 0 0 0 0 0 0 0

– of which remaining intangible assets 52,525 – 24,414 28,110 0 5,849 – 873 – 16,751 16,335

Fire insurance value of real estate 243,647 262,336

Fire insurance value of other tangible fixed assets 45,347 44,567

Liabilities: future commitments under operational lease agreements 0 0

3.5 other assets and other liabilities

31-12-2011 Other assets CHF 1000

31-12-2011 Other liabilities

CHF 1000

31-12-2010 Other assets CHF 1000

31-12-2010 Other liabilities

CHF 1000

Replacement values from derivative instruments 91,583 47,001 22,861 13,304

Principal transactions 91,583 47,001 22,861 13,304

– of which held for trading 17,204 16,947 13,903 13,304

– of which held for hedging 74,379 30,054 8,958 0

Agency transactions 0 0 0 0

Compensation account 0 44,326 0 9,387

Capitalised organisational costs 0 0 0 0

Interest on endowment capital 4,646 0 4,711 0

Value added tax and other taxes 2,579 18,080 2,183 19,101

Other receivables / payables 11,675 46,954 8,469 75,338

total 110,483 156,361 38,225 117,131

50Financial Section


3.6 assets pledged or ceded to secure own commitments, and assets subject to retention of title

31-12-2011 CHF 1000 Book value

31-12-2011 CHF 1000

Effective commitment

31-12-2010 CHF 1000 Book value

31-12-2010 CHF 1000

Effective commitment

Not freely available assets on balance sheet date:

Pledged or ceded mortgage loans for mortgage backed securities 1,566,840 1,252,000 1,561,126 1,047,000

Financial investments 153,361 2,661 153,344 3,479

Fiduciary real estate 38,790 38,790 39,311 39,311

total assets pledged or ceded 1,758,992 1,293,451 1,753,781 1,089,790

Loan business and repurchase agreement with securities

31-12-211 CHF 1000

31-12-2010 CHF 1000

Book value of claims from cash deposits in securities borrowing and reverse repurchase business 402,800 288,080

Book value of liabilities from cash deposits in securities lending and repurchase business 0 0

Book value of own securities lent in securities lending or deposited as collateral in securities borrowing or transferred in repurchase business 0 0

– of which securities with unlimited right of disposal or pledge 0 0

Fair value of securities deposited as collateral in securities lending or borrowed in securities borrowing or received in reverse repurchase business for which unlimited right of disposal or pledge has been granted 398,921 287,945

– fair value of those securities which were disposed of or pledged 0 0

51Financial Section


3.7 commitment to pension schemes

All employees of BLKB are insured with the pension fund of Basellandschaftliche Kantonalbank (BLPK) for the compulsory benefits of BVG as well as for additional benefits. Part-time employees with a minimal workload are exempt from this scheme. The pension scheme is contribution defined. Regular retirement is reached after the age of 63 years. Early retirement is possible after attaining the age of 60 years.

economic benefit / economic liability / Pension expenses

31-12-2011 Excess cover /

Deficient cover

CHF 1000

31-12-2011 Economic

share of BLKB

CHF 1000

1-1-2011 Economic

share of BLKB

CHF 1000

Changes compared to previous year CHF 10003)

Accrued amounts

CHF 1000

2011 Pension

expenses within personnel

expenses CHF 1000

2010 Pension

expenses within personnel

expenses CHF 1000

Pension fund: defined benefit 1) 0 0 – 103,242 103,242 0 0 8,091

Pension fund: defined contribution 2) 13,365 0 0 0 9,125 9,125 1,365

total 13,365 0 – 103,242 103,242 9,125 9,125 9,456

1) In 2009, the Bankrat of BLKB decided to convert the existing benefit defined pension plan for employees into a new, contribution defined pension plan with BLPK as per 1 January 2011. The existing contribution defined pension plan for the senior management was integrated into the new scheme as per 1 January 2011. Employer contribution is continually debited to the income statement. Pension expenses consist of the accrued contributions and the changes in the economic liabilities which are recorded in provisions.

2) BLKB’s share of deficient or excess cover in this pension fund was established by an independent expert on pension funds as per 30 September of the current business year. On 30-09-2011, cocverage was 104.2 %. The set margin of the value fluctuation reserve has not been reached therefore, the bank did not enjoy any economic benefit. There are no employer’s reserves either. The employer’s contributions are continually debited to the income statement. Pension expenses consist of the accrued contributions and the changes in the economic liabilities which are recorded in provisions.

3) In the business year of 2011, in order to be consistent with the Bankrat decisions, provisions in favour of the pension fund (FER 16) were used to fully cover the pension scheme and to establish a value fluctuation reserve.

3.8 Bonds and mortgage-backed securities

Year of issueInterest rate

% Due date

31-12-2011 Balance

CHF 1000

31-12-2010 Balance

CHF 1000

2002 4.000 27.02.2012 300,000 300,000

2007 3.000 14.12.2017 300,000 300,000

2009 2.500 16.12.2019 300,000 300,000

2010 1.750 25.06.2019 300,000 300,000

2010 1.750 09.11.2020 300,000 299,442

2011 1.750 22.11.2024 225,000 0

Total bonds 1,725,000 1,499,442

Total mortgage-backed securities 2.380 1,252,000 1,047,000

total bonds and mortgage-backed securities 2.443 2,977,000 2,546,442

52Financial Section


3.9 Value adjustments / Fluctuation reserve for credit risks / Reserves for general bank risks

Balance 31-12-2010

CHF 1000Usage

CHF 1000

Change of purpose

(reclassification) CHF 1000

Recoveries, interest

overdue, translation differences CHF 1000

Wirte-offs (debit to income

statement) CHF 1000

Recoveries (credit to income

statement) CHF 1000

Balance 31-12-20110

CHF 1000

Value adjustments and provisions for default risks and other risks:

Value adjustments and provisions for default risks (including country risks) 169,058 – 3,404 30 65 15,675 – 14,076 167,348

Value adjustments and provisions for other business risks 0 0

Provisions for pension plans (FER 16) 103,242 – 103,242 0

Other provisions (provisions for migration) 6,470 – 5,473 – 997 0

total value adjustments and provisions 278,770 – 112,118 30 65 15,675 – 15,073 167,348

less: value adjustments offset against receivables 0 0

total value adjustments and provisions according to the balance sheet 278,770 – 112,118 30 65 15,675 – 15,073 167,348

Fluctuation reserves for credit risks 0 0

Reserves for general bank risks 754,000 50,000 804,000

Basellandschaftliche Kantonalbank is exempt from tax on profit and capital. Building of latent tax on the reserve for general bank risks is not necessary.

3.10 company capital, owners with voting rights exceeding 5 %

31-12-2011 Total

nominal value

CHF 100031-12-2011

Quantity

31-12-2011 Capital

entitled to dividend

CHF 1000

31-12-2010 Total

nominal value

CHF 100031-12-2010

Quantity

31-12-2010 Capital

entitled to dividend

CHF 1000

Endowment capital 160,000 – 160,000 160,000 – 160,000

Certificate capital 57,000 570,000 57,000 57,000 570,000 57,000

total company capital 217,000 570,000 217,000 217,000 570,000 217,000

Approved capital 0 0

of which capital icrease carried out 0 0

The canton holds 100 % of the endowment capital. The funds are brokered by BLKB who assumes responsibility for the debt service.

Certificates do not entitle the holder to any voting rights.

53Financial Section


The endowment capital is divided as follows:

Year of issueInterest rate

% Due date

31-12-2011 Balance

CHF1000

31-12-2010 Balance

CHF1000

Loan 2,004 2.845 01.10.2012 40,000 40,000

Bond 2,002 3.250 30.09.2014 50,000 50,000

Bond 2,010 2.550 05.03.2025 70,000 70,000

total 160,000 160,000

31-12-2011 Nominal value

CHF 1000

31-12-2011 Share

%

31-12-2010 Nominal value

CHF 1000

31-12-2010 Share

%

Canton of Basel-Landschaft 160,000 74 160,000 74

Owners of certificates 57,000 26 57,000 26

54Financial Section


3.11 Statement of equity

CHF 1000

equity at the beginning of the year

Company capital 217,000

– less capital not paid 0

Company capital paid (subtotal) 217,000

Legal reserve 456,860

Reserves for general bank risks 754,000

Own equity – 6,423

Other reserves 1,992

Retained earnings 119,321

total equity at beginning of reporting year (before profit appropriation) 1,542,750

– Capital reduction 0

– Premium on capital reduction 0

+ Allocation to reserve for general bank risks 50,000

+ Requalification reserve for own equity in reserves for general bank risks 0

– Requalification reserve for general bank risks in reserve for own equity 0

– Release from reserves 0

– Dividend and other distributions from the annual result of the previous year – 67,021

+ Net profit of the reporting year 109,000

+ Balance of own equity in trading portfolio and financial investment 3,791

+/– Profits / losses from disposal of own equity 196

+/– Profits / losses from rate translations 0

total equity on 31-12-2010 (before profit appropriation) 1,638,715

of which:

Company capital 217,000

– less capital not paid 0

Company capital paid (subtotal) 217,000

Legal reserve 496,860

Reserves for general bank risks 804,000

Own equity – 2,633

Other reserves 2,187

Retained earnings 121,300

2011 Quantity

2010 Quantity

Own equity on 01-01 5,018 6,198

+ aquisitions 13,640 16,622

– sales – 16,633 – 17,802

Balance on 31-12 2,025 5,018

55Financial Section


3.12 Maturity structure of current assets and borrowed funds

On demand CHF 1000

Callable CHF 1000

Due within 3 months

CHF 1000

Due after 3 to 12 months

CHF 1000

Due after 12 months to 5 years

CHF 1000

Due after 5 years

CHF 1000Immobilised CHF 1000

Total CHF 1000

current assets

Liquid funds 549,555 549,555

Money market instruments 331 8,638 3,163 12,131

Due from banks 102,553 250,100 25,000 377,652

Due from customers 344,935 653,322 92,771 195,170 15,405 1,301,604

Mortgage loans 2,802 820,370 1,011,728 2,136,709 8,146,331 2,275,875 14,393,816

Securities and precious metal trading portfolios 6,336 6,336

Financial investments 96,232 146,048 71,480 503,136 789,374 46,871 1,653,140

total current assets on 31-12-2011 757,808 1,165,305 2,069,836 2,329,123 8,844,637 3,080,655 46,871 18,294,235

Previous year 284,654 1,321,224 1,364,865 2,105,695 9,633,081 1,984,728 49,107 16,743,353

liabilities

Money market instruments 237 237

Due to banks 28,339 255,744 23,000 50,000 357,083

Due to customers in savings and deposits 8,764,977 8,764,977

Due to customers, other 3,649,094 680 14,144 44,372 376,348 108,000 4,192,636

Cash bonds 45,964 81,112 173,352 20,550 320,978

Bonds and mortgage-backed bonds 390,000 112,000 625,000 1,850,000 2,977,000

total liabilities on 31-12-2011 3,677,670 8,765,656 705,852 260,484 1,224,700 1,978,550 0 16,612,911

Previous year 3,133,645 8,149,874 135,276 536,162 1,510,610 1,553,016 0 15,018,583

3.13 Payables and receivables to / from affiliated companies as well as receivables from loans and exposuresto the bank’s governing bodies

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Due from affiliated companies 18,443 29,294

Due to affiliated companies 473,886 331,494

Due from members of the bank's governing bodies 75,800 85,339

transactions with related partiesTransactions (securities transactions, payment, credit accommodation, compensation on deposits) with related parties are doneat conditions valid for third parties. The bank’s employees enjoy the conditions valid for personnel.

56Financial Section


3.14 assets and liabilities by domestic and foreign origin

31-12-2011 Domestic

CHF 1000

31-12-2011 Foreign

CHF 1000

31-12-2010 Domestic

CHF 1000

31-12-2010 Foreign

CHF 1000

assets

Liquid funds 549,555 0 114,045 0

Money market instruments 12,131 0 12,001 0

Due from banks 93,464 284,188 127,734 242,070

Due from customers 1,247,002 54,602 943,154 39,767

Mortgage loans 14,393,816 0 13,696,590 0

Securities and precious metal trading portfolios 4,889 1,447 1,528 2,814

Financial investments 1,171,483 481,657 962,463 601,188

Participations 42,101 0 18,461 0

Intangible fixed assets 164,162 0 167,660 0

Accrued income and prepaid expenses 16,335 0 28,110 0

Intangible assets 104,245 10,364 114,264 9,766

Other assets 110,479 4 38,212 13

total assets 17,909,662 832,262 16,224,220 895,618

liabilities

Money market instruments 237 0 94 0

Due to banks 322,103 34,980 149,605 18,609

Due to customers in savings and deposits 8,355,733 409,244 7,767,355 380,669

Due to customers, other 4,134,855 57,781 3,656,932 53,190

Cash bonds 320,978 0 445,688 0

Bonds and mortgage-backed bonds 2,977,000 0 2,546,442 0

Accrued expenses and deferred income 162,834 3,755 159,633 2,971

Other liabilities 156,361 0 117,131 0

Value adjustments and provisions 167,348 0 278,770 0

Reserves for general bank risks 804,000 0 754,000 0

Company capital 217,000 0 217,000 0

Legal reserve 496,860 0 456,860 0

Own equity – 2,633 0 – 6,423 0

Revaluation reserve 0 0 0 0

Other reserves 2,187 0 1,992 0

Retained earnings brought forward 12,300 0 10,463 0

Annual net profit 109,000 0 108,859 0

total liabilities and equity 18,236,164 505,760 16,664,399 455,439

57Financial Section


3.15 assets by country groups

31-12-2011 CHF 1000

31-12-2011 Share %

31-12-2010 CHF 1000

31-12-2010 Share %

assets

Switzerland 17,909,662 95.56 16,224,220 94.77

Europe 783,384 4.18 859,196 5.02

North America 33,376 0.18 18,318 0.11

Asia / Australasia 15,411 0.08 17,968 0.10

Other 91 0.00 135 0.00

total assets 18,741,924 100.00 17,119,838 100.00

58Financial Section


3.16 assets and liabilities by currencies

CHF CHF 1000

USD CHF 1000

Euro CHF 1000

Other CHF 1000

Total CHF 1000

assets

Liquid funds 540,093 421 8,706 335 549,555

Money market instruments 11,920 126 84 1 12,131

Due from banks 91,390 47,760 188,711 49,791 377,652

Due from customers 1,157,622 24,360 117,555 2,067 1,301,604

Mortgage loans 14,393,816 14,393,816

Securities and precious metal trading portfolios 6,115 221 6,336

Financial investments 1,454,873 27,553 169,346 1,369 1,653,140

Participations 42,101 42,101

Tangible fixed assets 164,162 164,162

Intangible assets 16,335 16,335

Accrued income and prepaid expenses 110,059 482 4,067 114,609

Other assets 109,914 114 47 408 110,483

Total on-balance-sheet assets 18,098,400 100,815 488,518 54,191 18,741,924

Delivery claims from spot exchange dealings, forward exchange deals and foreign exchange options 251,489 59,379 91,954 18,950 421,772

total assets 31-12-2011 18,349,889 160,194 580,472 73,141 19,163,697

liabilities

Money market instruments 237 237

Due to banks 160,701 43,531 151,595 1,255 357,083

Due to customers in savings and deposits 8,581,658 183,319 8,764,977

Due to customers, other 3,912,948 55,566 174,572 49,551 4,192,636

Cash bonds 320,978 320,978

Bonds and mortgage-backed bonds 2,977,000 2,977,000

Accrued expenses and deferred income 166,510 2 71 6 166,589

Other liabilities 155,497 410 454 156,361

Value adjustments and provisions 167,347 1 167,348

Reserves for general bank risks 804,000 804,000

Company capital 217,000 217,000

Legal reserve 496,860 496,860

Own equity – 2,633 – 2,633

Other reserves 2,187 2,187

Retained earnings brought forward 12,300 12,300

Annual net profit 109,000 109,000

Total on-balance-sheet liabilities and equity 18,081,590 99,509 509,558 51,267 18,741,924

Delivery liabilities from spot exchange dealings, forward exchange deals and foreign exchange options 226,252 59,379 117,155 18,986 421,772

total liabilities 31-12-2011 18,307,842 158,888 626,713 70,253 19,163,697

Net position per currency 42,047 1,306 – 46,241 2,888

Delivery claims or delivery liabilities from currency forward exchange contracts and currency exchange options = contract volume.

59Financial Section


4 inFoRMation on oFF-Balance-SHeet tRanSactionS

4.1 contingent liabilities

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Guarantee for collateralisation of loans and similar 46,982 17,220

Guarantee for warranty and similar 55,578 55,318

Irrevocable commitments 11,986 11,923

Other contingent liabilities 0 5,679

total contingent liabilities 114,546 90,140

Joint liability SBtccJoint liability of Swiss Bankers Travelers Cheque Center from the obligation to refund the customer’s deposit until 28-04-2011.

4.2 confirmed credits

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Liabilities from deferred payments 0 0

Acceptance liabilities 0 0

Other confirmed credits 0 0

total confirmed credits 0 0

60Financial Section


4.3 Derivative financial instrumentstrading instruments Hedging instruments

Positive replacement

value 31-12-2011

CHF 1000

Negative replacement

value 31-12-2011

CHF 1000

Contract volume

31-12-2011 CHF 1000


value 31-12-2011

CHF 1000


value 31-12-2011

CHF 1000

Contract volume

31-12-2011 CHF 1000

interest rate contracts

Futures contracts incl. FRAs 0 0 0 0 0 0

Swaps 11,010 10,894 134,000 191,603 147,278 6,770,000

Futures 0 0 0 0 0 0

Options (OTC) 0 0 0 0 0 0

Options (exchange traded) 0 0 0 0 0 0

Foreign exchange contracts

Futures contracts 5,764 5,813 312,478 0 0 0

Combined interest and currency swaps 0 0 0 0 0 0

Futures 0 0 0 0 0 0

Options (OTC) 1,274 1,085 109,295 0 0 0


Precious metal contracts

Futures contracts 0 0 0 0 0 0

Futures 0 0 0 0 0 0



equities / index contracts

Futures contracts 0 0 0 0 0

Futures 0 0 0 0 0 0



other contract

Futures contracts 0 0 0 0 0 0

Futures 0 0 0 0 0 0



total before inclusion of netting contracts 18,049 17,792 555,772 191,603 147,278 6,770,000

Previous year 13,903 13,733 372,312 101,151 91,764 5,850,000


value (cumulated)


value (cumulated)

total after inclusion of netting contracts 91,583 47,001

Previous year 22,861 13,304

61Financial Section


4.4 Fiduciary transactions

31-12-2011 CHF 1000

31-12-2010 CHF 1000

Fiduciary deposits with third-party banks 9,276 6,746

Fiduciary deposits with associated banks 0 0

Fiduciary credits 0 0

Other fiduciary transactions 0 0

total fiduciary transactions 9,276 6,746

62Financial Section


5 inFoRMation on tHe incoMe StateMent

5.1 Refinancing income included in interest and discount income

2011 CHF 1000

2010 CHF 1000

Refinancing income from trading positions 18 27

5.2 net trading income

2011 CHF 1000

2010 CHF 1000'

Foreign exchange and precious metals 14,949 13,026

Securities 1,132 2,134

Interest rate contracts 5 120

total net trading income 16,086 15,280

5.3 Personnel expenses

2011 CHF 1000

2010 CHF 1000'

Salaries and bonuses incl. attendance fees and compensation paid to bank authorities – 78,540 – 78,762

AHV, IV, ALV (pension, disability and unemployment) and other legal benefits – 6,849 – 6,788

Contributions to personnel and welfare facilities and pension fund for middle management – 9,125 – 9,456

Other personnel expenses – 3,692 – 3,094

total personnel expenses – 98,205 – 98,100

5.4 other operating expenses

2011 CHF 1000

2010 CHF 1000'

Premises expense – 6,723 – 5,699

Expense for IT, machinery, furniture, vehicles and other equipment – 23,610 – 22,682

Other – 29,282 – 47,952

total operating expenses – 59,615 – 76,333

63Financial Section


5.5 Refinancing income included in interest and discount

2011 CHF 1000

2010 CHF 1000

extraordinary income 6,694 1,210

– Profits from disposal of tangible fixed assets 4,793 66

– Other extraordinary income 1,902 1,144

extraordinary expenses – 50,045 – 50,771

– Deposits for reserves for general bank risks – 50,000 – 50,000

– Other extraordinary expenses – 45 – 771

5.6 Revaluation of tangible fixed assets at acquisition value (art. 665 and 665a of the Swiss code of obligations)

None

64Financial Section


6 inFoRMation on ReMuneRation anD PaRticiPationS

6.1 Responsibilities and proceduresThe following table details the responsibilities and procedures involved in establishing remunerations.

BD ChwBD ExC ARC HROC EB

Fixed and variable remuneration

Remuneration policy D P

Determination of fixed remuneration total D P

Fixed remuneration to the total of the Executive Board D P

Fixed remuneration to the members of the Board of Directors D P

Fixed remuneration to CEO D P P

Fixed remuneration to the members of the Executive Board D P P (CEO)

Fixed remuneration to the head of Internal Auditing D P

Fixed remuneration to the members of the Senior Management D

Fixed remuneration to the remaining personnel D

Annual determination of pool total of variable remuneration D P P

Annual allocation ratio of variable remuneration according to level of function TN D P

non-wage benefits tn D P

Pension regulation D P P

BD = Board of Directors; ChwBD = Chairwoman of the Board of Directors; ExC = Executive Committee; ARC = Audit and Risk Committee; HROC= Human Resources and Organization Committee; EB = Executive Board; CEO = chairman of the Executive Board; D = decision; P = petition; TN = Takes note

65Financial Section


6.2 overview of remuneration paid to the Board of Directors (Bankrat) and the bank’s employees for the business year 2011 and 2010Below, there is a summarised overview of the most important key figures:

Fixed remuneration

Variable remuneration

Non-wage benefits1)

Lump sum expenses

Value of reduced price

of KBCRemuneration

total

Employer’s contribution to social benefits

2011 65,104,627 11,355,800 1,037,350 776,826 1,617,337 79,891,941 15,973,196

2010 65,446,830 12,018,300 1,017,437 742,674 1,446,149 80,671,390 16,244,109

1) Benefits for REKA checks and lunch allowance

Amount of outstanding postponed benefits

31.12.2011 19,264 pcs.

31.12.2010 17,727 pcs.

Ratio of highest to lowest gross remuneration

2011 1 to 14.25

2010 1 to 13.45

In 2011 / 2010, no severance packages were paid.

66Financial Section


6.3 Remuneration paid to the members of Board of Directors for the business year 2011 and 2010

NameFixed

remunerationVariable

remunerationNon-wage

benefitsLump sum expenses


of KBCRemuneration

total


Total personnel expenses

e. Schirmer,chairwoman1

2011 71,000 67,000 – 9,100 15,120 162,220 8,584 170,804

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

a. Ballmer,Vice chairman

2011 20,000 33,000 – 2,950 7,560 63,510 3,876 67,386

2010 20,000 30,000 – 2,500 6,450 58,950 3,400 62,350

D. Völlmin 2

2011 42,500 53,000 5,450 11,340 112,290 6,381 118,671

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

H.u. Schudel 3

2011 46,500 53,000 – 5,550 15,120 120,170 6,729 126,899

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

u. Baumann

2011 35,000 44,000 – 4,400 15,120 98,520 5,858 104,378

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

D. Greiner

2011 35,000 44,000 – 4,400 15,120 98,520 5,858 104,378

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

W. Hansen 4

2011 67,500 67,000 – 8,100 15,120 157,720 13,295 171,015

2010 100,000 110,000 – 11,800 12,900 234,700 12,264 246,964

P. Hug

2011 17,500 22,000 – 2,200 15,120 56,820 4,533 61,353

2010 35,000 40,000 – 4,400 12,900 92,300 4,979 97,279

c. Janiak 5

2011 38,000 44,000 – 4,400 7,560 93,960 5,768 99,728

2010 38,000 40,000 – 4,400 12,900 95,300 4,979 100,279

F. Mutschlechner

2011 17,500 22,000 2,200 0 41,700 1,325 43,025

2010 0 0 – 0 0 0 0 0

D. Schenk 6

2011 42,500 53,000 – 5,450 15,120 116,070 7,562 123,632

2010 50,000 55,000 – 6,500 12,900 124,400 6,800 131,200

a. Spindler

2011 17,500 22,000 2,200 0 41,700 1,325 43,025

2010 0 0 – 0 0 0 0 0

Remuneration total

2011 450,500 524,000 – 56,400 132,300 1,163,200 71,093 1,234,293

2010 418,000 475,000 – 51,600 122,550 1,067,150 57,317 1,124,467

1) Chairwoman of the Board of Directors and chairwoman ExC since 1-7-2011 4) Chairman of the Board of Directors and chairman of the Executive Board up to 30-6-2011

2) Chairman ACR since 1-7-2011 5) Including CHF 3,000 fee for chairperson of Cultural Foundation

3) Chairman of the HROC 6) Chairman of the ARC up to 30-6-2011

67Financial Section


6.4 Remuneration paid to the members of the executive Board for the business year 2011 / 2010

NameFixed

remunerationVariable

remunerationNon-wage

benefits1)

Lump sum expenses


of KBCRemuneration

total


Total personnel expenses

B. oberlin, ceo

2011 381,966 440,000 9,616 24,000 37,800 893,382 167,814 1,061,196

2010 380,016 400,000 8,069 24,000 32,250 844,335 131,470 975,805

Remaining members of the executive Board

2011 1,470,677 1,250,000 35,305 80,000 69,930 2,905,912 579,127 3,485,038

2010 1,391,224 1,025,000 32,897 74,667 129,000 2,652,788 481,516 3,134,304

total executive Board

2011 1,852,643 1,690,000 44,921 104,000 107,730 3,799,294 746,941 4,546,235

2010 1,771,240 1,425,000 40,966 98,667 161,250 3,497,123 612,986 4,110,109

1) Benefits for REKA checks, lunch allowance, company car

On 1 January 2011, the remaining Executive Board consisted of five members. In the course of the year there were no changes. On 1 January 2010 the remaining Executive Board consisted of four members. In the course of the year there were the following changes: 1 May 2010, D. Brändlin joined blkb; 30 Sept 2010, L. Spiess retired; 1 October 2010, H. Kumbartzki joined blkb.

68Financial Section


6.5 loans and credits, subscription to KB certificates (in the business year) and KBc balance of the Board of Directors and the executive Board as per 31 December 2011 and 31 December 2010

Name Function

Loans andcredits per

year-end 2011

Loans andcredits per

year-end 2010KBC subscribed

for in 2011KBC subscribed

for in 2010

KBC balance (restricted) per

year-end 2011

KBC balance (restricted) per

year-end 2010

E. SchirmerChairwoman of the Board of Directors 600,000 900,000 40 40 240 (200) 200 (200)

A. Ballmer Vice chairman 808,500 808,500 20 20 227 (120) 207 (120)

D. Völlmin Member 430,000 430,000 30 40 130 (130) 100 (100)

H.U. Schudel Member 575,000 575,000 40 40 290 (190) 270 (190)

U. Baumann Member 0 0 40 40 410 (200) 370 (200)

D. Greiner Member 0 0 40 40 260 (190) 220 (170)

W. Hansen Member 0 0 40 40 140 (140) 100 (100)

P. Hug1) Member – 0 – 40 – 640 (200)

C. Janiak Member 639,500 642,875 20 40 160 (160) 170 (170)

F. Mutschlechner2) Member 0 – 0 – 0 –

D. Schenk Member 0 0 40 40 380 (200) 340 (200)

A. Spindler2) Member 600,000 – 0 – 0 –

Bankrat total 3,653,000 3,356,375 310 380 2237 (1530) 2617 (1750)

Beat oberlinchairman of the executive Board 564,500 564,500 100 100 1005 (625) 905 (750)

Remaining members of the executive Board

Members of the executive Board 600,000 500,000 185 400 1269 (1269) 1189 (1154)

total of the executive Board 1,164,500 1,064,500 285 500 2274 (1894) 2094 (1904)

1) Resigned as per 30-06-2011

2) Joined as per 01-07-2011

69Financial Section


Report of the statutory auditor on the financial statements

70Financial Section


71Financial Section


Basellandschaftliche Kantonalbank Rheinstrasse 7 CH-4410 Liestal

phone + 41 61 925 94 [email protected]

Documents

We Are Your Sparring Partner. · Dividends on certificate capital 18.8 18.8 18.8 17.1 24.0 Profit distribution to the Canton 40.0 40.0 40.0 34.0 34.0 Further details Personnel (head