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26 Equity

Share capital

As at 31 December 2021, the share capital of Swiss Life Holding consisted of 31 528 567 fully-paid shares with a par value of CHF 0.10 each (2020: 32 014 391 fully-paid shares with a par value of CHF 0.10 each). In exercising voting rights, no shareholder can collect more than 10% of the total share capital directly or indirectly in respect of own shares or shares they represent. Conditional share capital was CHF 385 794.80 as at 31 December 2021 (2020: CHF 385 794.80).

Share premium

Share premium comprises additional paid-in capital in excess of the par value (net of transaction costs), gains /losses on own equity instruments and equity compensation benefits.

Share buyback programmes

As announced during the investor’s day on 25 November 2021, Swiss Life started a new CHF 1 billion share buyback programme in December 2021. By 31 December 2021, 68 000 shares had been purchased for CHF 38 million at an average price of CHF 552.15 per share. The programme will be completed in May 2023.

In May 2021, Swiss Life completed the CHF 400 million share buyback programme, which had been announced in February 2020. Between March 2020 und May 2021 a total of 908 423 own shares were repurchased at an average purchase price of CHF 440.32 per share. In 2021, 829 099 shares were purchased for CHF 371 million (2020: 79 324 shares for CHF 29 million). 485 824 of the repurchased shares were cancelled in July 2021.

Number of shares

The following table shows the development of Swiss Life Holding shares issued and treasury shares held by the Swiss Life Group during the period.

Number of shares
    2021   2020
         
Shares issued
Balance as at 1 January   32 014 391   33 594 606
Cancellation of treasury shares   –485 824   –1 580 215
Balance as at end of period   31 528 567   32 014 391
         
Treasury shares
Balance as at 1 January   219 132   1 721 351
Purchases of treasury shares   35 000   45 000
Share buyback   897 099   79 324
Allocation under equity compensation plans   –44 565   –46 328
Cancellation of treasury shares   –485 824   –1 580 215
Balance as at end of period   620 842   219 132
Accumulated other comprehensive income

Accumulated other comprehensive income comprises items of income and expense that are recognised directly in equity rather than in profit or loss, as required or permitted by certain IFRSs.

Items presented in other comprehensive income are grouped on the basis of whether they will be reclassified subsequently to profit or loss when specific conditions are met, and those that will not be reclassified.

The amounts are presented net of certain policyholder bonuses and other policyholder liabilities, deferred acquisition costs, deferred income taxes and non-controlling interests.

Items that may be reclassified to profit or loss comprise:

  • Foreign currency translation differences arising on the translation of assets, liabilities, income and expenses of Group entities denominated in foreign currencies into Swiss francs.
  • Gains and losses from fair value changes of financial assets available for sale.
  • Effective portion of gains and losses on hedging instruments in qualifying cash flow hedges.
  • Unrealised losses on financial assets reclassified from available for sale to loans and receivables in 2008 due to disappearance of an active market.

Items that will not be reclassified to profit or loss comprise:

  • Revaluation surplus on the transfer of owner-occupied property to investment property following a change in use evidenced by the end of owner-occupation.
  • Remeasurements of the net defined benefit liability relating to employee benefit plans.

The following table provides information relating to amounts recognised in accumulated other comprehensive income.

Accumulated other comprehensive income for the year 2021

In CHF million
    Items that may be reclassified to the income statement   Items that will not be reclassified to the income statement
    Foreign currency translation differences   Gains/ losses financial assets available for sale   Gains/ losses cash flow hedges   Debt securities reclassified to loans and receivables   Total   Revalu-ation surplus investment property   Remea-sure-ments net defined benefit liability   Total    
Net balance as at 1 January   –1 178   5 118   383   6   4 328   64   –397   –333   3 995
Net other comprehensive income   –173   –1 052   –69   –14   –1 308   –19   136   117   –1 191
Net balance as at end of period   –1 351   4 066   314   –9   3 020   45   –261   –216   2 804
                                     
Net other comprehensive income is composed of the following:
Revaluation – gross   –153   –3 364   –267     –3 784     327   327   –3 457
Net investment hedges – gross   –19         –19         –19
Reclassification to profit or loss – gross   –3   –525   –49   2   –574         –574
Effects of                                    
policyholder participation   1   2 476   228   –16   2 688   –18   –161   –179   2 509
shadow accounting     122   3   0   125   0     0   125
income tax   0   274   18   0   292   –1   –31   –32   260
foreign currency translation differences     –36   –2   0   –38   –1   2   1   –38
Net other comprehensive income before non-controlling interests   –175   –1 052   –69   –14   –1 310   –19   136   117   –1 193
Non-controlling interests   2   0   0   0   2   0   0   0   2
Net other comprehensive income   –173   –1 052   –69   –14   –1 308   –19   136   117   –1 191

Accumulated other comprehensive income for the year 2020

In CHF million
    Items that may be reclassified to the income statement   Items that will not be reclassified to the income statement
    Foreign currency translation differences   Gains/ losses financial assets available for sale   Gains/ losses cash flow hedges   Debt securities reclassified to loans and receivables   Total   Revalu-ation surplus investment property   Remea-sure-ments net defined benefit liability   Total    
Net balance as at 1 January   –1 150   4 574   451   –2   3 873   67   –397   –330   3 542
Net other comprehensive income   –28   545   –68   8   456   –3   0   –3   453
Net balance as at end of period   –1 178   5 118   383   6   4 328   64   –397   –333   3 995
                                     
Net other comprehensive income is composed of the following:
Revaluation – gross   –347   3 069   663     3 385     0   0   3 385
Net investment hedges – gross   322         322         322
Reclassification to profit or loss – gross   –1   –181   –404   9   –578         –578
Effects of                                    
policyholder participation     –2 130   –347   1   –2 476   –3   –2   –4   –2 480
shadow accounting   –2   –46   5   0   –42   0     0   –42
income tax     –158   14   –1   –145   0   1   1   –144
foreign currency translation differences     –9   0   0   –9   0   0   0   –9
Net other comprehensive income before non-controlling interests   –28   545   –68   8   456   –3   0   –3   453
Non-controlling interests   0   0   0   0   0   0   0   0   0
Net other comprehensive income   –28   545   –68   8   456   –3   0   –3   453
Retained earnings

Retained earnings comprise accumulated retained earnings of the Group entities which have not been distributed to the shareholders. The distribution of profit is subject to restrictions in the various jurisdictions where the Group entities are located.

The Group’s insurance subsidiaries are subject to regulatory restrictions on the amount of dividends, cash loans and advances which can be remitted to the Group. Certain foreign jurisdictions have restrictions that allow the payment of dividends but may cause a delay in their remittance. Dividends payable are not accrued until they have been ratified at the General Meeting.

In 2021, a dividend payment of CHF 654 million or CHF 21.00 per registered share was made (2020: CHF 477 million or CHF 15.00 per registered share).

Hybrid equity

On 29 March 2021, Swiss Life Ltd placed a perpetual subordinated bond in the amount of CHF 250 million , presented in equity . The bonds are guaranteed by Swiss Life Holding and are first callable on 30 September 2026 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed at 1.75% p.a. until 30 September 2026. If the bonds are not redeemed on 30 September 2031, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then-prevailing five-year CHF mid-market swap rate vs. SARON plus initial margin (218.2 bps).

On 22 March 2018, Swiss Life Ltd issued subordinated perpetual callable bonds in the amount of CHF 425 million. The bonds are guaranteed by Swiss Life Holding, have no fixed maturity date and are first callable on 25 September 2024 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed at 2.00% p.a. until 25 September 2024. If the bonds are not redeemed on 25 September 2024, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then-prevailing five-year CHF swap rate and the initial margin of 1.842% p.a. The bonds are classified as equity instruments.

Interest payments for hybrid equity become mandatory depending on other transactions, which are themselves at the discretion of the Swiss Life Group, such as dividend payments. There is no accrual of interest to be recorded for the annual financial statements. The interest net of tax of CHF 9 million (2020: CHF 7 million) is accounted for as a deduction from equity.

Non-controlling interests

Summarised financial information for subsidiaries with material non-controlling interests is as follows.

In CHF million
    SwissLife Banque Privée Paris   TECHNOPARK Real Estate LTD Zurich   Swiss Life Asset Managers Holding (Nordic) AS Oslo
    2021   2020   2021   2020   2021   2020
Principal place of business   France   France   Switzerland   Switzerland   Norway  
Ownership interests held by non-controlling interests   40.0%   40.0%   33.3%   33.3%   10.0%  
Voting rights held by non-controlling interests   40.0%   40.0%   33.3%   33.3%   10.0%  
                         
Summarised financial information before intragroup eliminations
Current assets   2 875   2 075   11   7   22  
Non-current assets   395   414   231   224   134  
Current liabilities   –3 139   –2 358   –68   –69   –16  
Non-current liabilities   –16   –21   –24   –24   –9  
Net assets   115   110   150   138   131  
Accumulated non-controlling interests   46   44   49   46   13  
                         
Revenue   139   98   16   12    
Profit or loss   15   8   13   7    
Total comprehensive income   15   8   13   7    
Profit or loss allocated to non-controlling interests   6   3   4   2    
                         
Net cash flows from operating activities   788   –417   6   1    
Net cash flows from investing activities   –1   –1   0   0    
Net cash flows from financing activities   –5   0   –1   0    
Net change in cash and cash equivalents   782   –418   5   1    
Dividends paid to non-controlling interests   –2     –1   –1