Banking Liechtenstein & Regional Market
in CHF 1,000 | 2012 | 2011 | Variance | Variance |
Total interest income | 32,262 | 36,627 | –4,365 | –11.9 |
Total income from commission business and services | 82,740 | 86,908 | –4,168 | –4.8 |
Income from trading activities | 10,952 | 12,687 | –1,735 | –13.7 |
Income from financial investments | 323 | –72 | 395 | n.a. |
Other income | 79 | 173 | –94 | –54.3 |
Total net operating income | 126,356 | 136,323 | –9,967 | –7.3 |
Personnel expenses | 26,745 | 26,416 | 329 | 1.2 |
General and administrative expenses | 3,640 | 3,704 | –64 | –1.7 |
Services to/from other segments | 42,112 | 47,260 | –5,148 | –10.9 |
Operating expenses | 72,497 | 77,380 | –4,883 | –6.3 |
Gross income | 53,859 | 58,943 | –5,084 | –8.6 |
Depreciation and amortisation | 61 | 289 | –228 | –78.9 |
Valuation allowances, provisions and losses | 6,260 | 5,560 | 700 | 12.6 |
Divisional earnings before income tax | 47,538 | 53,094 | –5,556 | –10.5 |
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Additional information |
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Operating expenses excluding depreciation and amortisation / total operating income (in %) | 57.4 | 56.8 |
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Operating expenses including depreciation and amortisation / total operating income (in %) | 57.4 | 57.0 |
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Client assets under management (in CHF billion) | 17.8 | 17.3 |
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Change in client assets under management compared to previous year (in %) | 3.0 | –7.8 |
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Net new money (in CHF billion) | –0.2 | –0.3 |
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Gross income / average client assets under management (bp) 1 | 71.8 | 75.4 |
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Divisional result / average client assets under management (bp) 1 | 27.0 | 29.4 |
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Cost/income ratio operating income (in %) 2 | 57.6 | 56.8 |
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Headcount (number of employees) | 162 | 171 | –9 | –5.3 |
Headcount (expressed as full-time equivalents) | 156.2 | 165.3 | –9.1 | –5.5 |
Structure
The Banking Liechtenstein & Regional Market business segment encompasses the universal-banking business in Liechtenstein, the home market, and in Switzerland as well as the international private-banking, intermediaries and fund-solutions businesses conducted in Liechtenstein. Those entities of Verwaltungs- und Privat-Bank Aktiengesellschaft having direct contact with clients, IFOS Internationale Fonds Service Aktiengesellschaft and VPB Finance S.A. are allocated to this business segment.
Segment results
The 2012 financial year was marked with daunting challenges. The strong Swiss franc, the uncertainties on markets and the low level of interest rates adversely impacted business in this segment. Interest-rate margins were under pressure because of further declining interest rates. The lower level of client activities principally in the first half of the year reflected in trade-related commissions. Pre-tax segment results in 2012 suffered a decline of CHF 5.6 million to CHF 47.5 million year-on-year (prior year: CHF 53.1 million). The gross margin was 71.8 basis points (prior year: 75.4 basis points). The cost/income ratio increased from 56.8 to 57.6 per cent. Total operating revenues sank by 7.3 per cent as a result of the declining income from both the interest-differential business as well as commission and service income from CHF 136.3 million to CHF 126.4 million. At the same time, operating expenses fell by 6.3 per cent to CHF 72.5 million (prior year: CHF 77.4 million). This decline primarily is a result of lower recharges from other segments. In 2012, charges for valuation allowances, provisions and losses year-on-year increased by CHF 0.7 million to CHF 6.3 million.
The segment recorded a minor outflow of client assets of CHF 0.2 billion. As of 31 December 2012, client assets under management aggregated CHF 17.8 billion (prior year: CHF 17.3 billion). Employee headcount fell from 165.3 (prior year) to 156.2 positions.