Banking Liechtenstein & Regional Market

2012

2011

Variance
absolute 

Variance
in %

32,262

36,627

–4,365

–11.9

82,740

86,908

–4,168

–4.8

10,952

12,687

–1,735

–13.7

323

–72

395

n.a.

79

173

–94

–54.3

126,356

136,323

–9,967

–7.3

26,745

26,416

329

1.2

3,640

3,704

–64

–1.7

42,112

47,260

–5,148

–10.9

72,497

77,380

–4,883

–6.3

53,859

58,943

–5,084

–8.6

61

289

–228

–78.9

6,260

5,560

700

12.6

47,538

53,094

–5,556

–10.5

 

 

 

 

 

 

 

 

 

57.4

56.8

 

 

57.4

57.0

 

 

17.8

17.3

 

 

3.0

–7.8

 

 

–0.2

–0.3

 

 

71.8

75.4

 

 

27.0

29.4

 

 

57.6

56.8

 

1.3

162

171

–9

–5.3

156.2

165.3

–9.1

–5.5

  1. Annualised, average values.
  2. Operating expenses / gross income less other income.

 

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.