VP Bank shares
Economic environment
Economic data in the first quarter of 2012 were mainly positive and in many cases even exceeded analysts’ expectations. By ensuring sufficient liquidity for European financial institutions, the long-term refinancing operations of the ECB also managed to avert a system crisis and brightened the mood in the financial markets.
Nonetheless, hopes for a sustained stabilisation of the global economy were put to the test again already in the second quarter. Not only a revival of economic concerns about weakness in some of the key leading indicators, but also the rekindled European debt crisis was cause enough for a number of turbulent weeks last spring in the international financial markets.
In particular, the Greek elections led to tremendous uncertainty about the country’s ability to remain in the Eurozone as well as the consequences of a “Grexit”. And for the first time, a European heavyweight was drawn into the cauldron of the financial crisis, namely Spain. The burst real estate bubble on the Iberian Peninsula and accompanying economic breakdown led to an enormous need for capital on the part of Spanish banks, and they were not in the position to obtain it on their own. But aid from the EU and IMF was not long in coming.
ECB President Draghi made it clear in public that the central bank would take all steps necessary to preserve the euro. Shortly thereafter the ECB announced that, under certain circumstances, it would buy the bonds of beleaguered member states in order to reduce the risk premium on those bonds. That, in combination with the US Federal Reserve Bank’s announcement of yet another round of “quantitative easing”, represented the starting shot for a significant re- covery in all riskier asset classes. On the economic front, the third quarter witnessed a progressively divergent matrix of signals from our main markets.
The Eurozone economy was losing steam already in early 2012. Necessary austerity measures and the uncertainty amongst consumers led to a decline in gross domestic product in the second and third quarters, thereby drawing the eurozone into its second recession since 2009.
In Switzerland, lively private consumption managed to buoy the economy at least temporarily. However, owing to the country’s high degree of commercial interlinkage, the Swiss economy was unable to entirely escape the weakness in Eurozone business activity. The only thing that prevented a renewed decline in third-quarter GDP was a significant increase in inventories.
On the other hand, the second half of the year saw increasingly upbeat news from the USA. Following the second-quarter dip in the road, the recovery appeared to be back on a broader, more solid footing. Encouraged also by a further easing of monetary policy, households became more ready to spend again and the long-hoped-for revival of the real estate market finally set in. As the year drew to a close, all eyes were on the “fiscal cliff” debate in Congress. Tax increases and automatic spending cuts threated to push the USA into another recession in 2013. The necessary compromise only came shortly after the turn of the year, but the negotiations over spending cuts have merely been put off.
Equity markets
The 2012 year for stocks was dichotomous. After a favourable start for the equity markets, the European debt crisis garnered centre stage again in May and disappointing economic data only aggravated an already tense situation. Within the space of two months, the global equity market (as measured by the MSCI World index) declined in value by more than 13 per cent. Despite the fundamentally cheap valuations and generally positive earnings surprises, it was only the unexpectedly upbeat macroeconomic data from the USA that finally triggered the anxiously awaited turnaround. The announcement of vast monetary support measures on the part of the Fed and ECB underpinned the positive trend and saw to it that most of the major stock exchanges closed out the year with significant gains.
Although the price trends in most regions were quite simi- lar, there were dramatic divergences in certain instances. In Europe, investors ignored the austerity programmes and global economic weakness while continuing to bet on the tried and tested German equity market. The result: a 29 per cent gain in the benchmark DAX index. Despite promises by the ECB to buy, if necessary, unlimited amounts of ailing member states’ government bonds, the Spanish and Italian equity markets were unable to keep pace with the annual stock performance in the core countries. Following the lows registered at mid-year, those two markets registered almost twice the gain of the DAX; however, that was no longer sufficient to make up for their catastrophic performance in the first half and therefore left them in the cellar of the European rankings.
Major divergences were also to be seen in the emerging- market stock indices. While Asian shares as well as those in the Eastern European region generated returns of close to 18 per cent, the commodity-heavy South American equity markets were not able to match that after their dive in May.
The shares of VP Bank
VP Bank shares have been listed on Switzerland’s stock exchange (SIX Swiss Exchange) since 1983. As at 31/12/2012, the company’s market capitalisation amounted to CHF 378 million.
Following several years of weakness, the European banking sector managed to record what in part were significant price gains. Especially banks in Great Britain and France were amongst the winners. In Switzerland and Liechtenstein, however, the picture was ambiguous. Although the action in the equity markets had a positive influence on client funds and returns, the rock-bottom interest rates as well as the structural change under way still posed a challenge. On the whole, the Swiss banking sector rose by a robust 14 per cent but nonetheless lagged its European counterparts.
With a loss in price (including dividends) of 19 per cent, the shares of VP Bank were unable to benefit from the recovery. A high of CHF 85 was reached in January and a low of CHF 60 in November. VP Bank’s average share price for the year stood at CHF 74. The earnings breakdown in the 2011 financial year and related reduction of the dividend gave investors cause for uncertainty, and even the lower cost/income ratio at the halfway mark of 2012 was unable to generate price momentum in the stock.
Investor relations
The goal of VP Bank’s investor relations efforts is to foster an open, ongoing dialogue with shareholders and other capital market participants by providing them with a true and fair view of VP Bank Group while also informing the interested public in a timely manner about the latest developments at the company.
The tasks involved in this investor relations work include conducting discussions with analysts and investors, disclosing ad hoc information regarding business issues of relevance under securities law, producing the company’s annual and semi-annual reports and publishing the related financial results, as well as organising the annual general meeting of shareholders. Again in 2012, analyst and media conferences were key events for intensifying the communication with investors and financial intermediaries.
Regular presentations addressing the latest trend in financial results serve to enhance the dialogue with institutional and private investors. An additional means of communication is the newly designed website www.vpbank.com, where all current information on VP Bank can be accessed.
VP Bank’s 2011 annual report was a “Gold Award” winner within the framework of the international “Galaxy Awards”. In the world’s largest assessment of annual reports conducted by the “League of American Communications Professionals”, the 2011 annual report of VP Bank also won the “Silver Award”. These prizes attest to the high quality of VP Bank’s information policy.
Research coverage of VP Bank is provided by analysts at Crédit Agricole Cheuvreux Switzerland and Zürcher Kantonalbank.
Standard & Poor’s has accorded VP Bank Group an “A–” rating.
VP Bank is one of the few private banks in Liechtenstein and Switzerland that are evaluated by a major international rating agency.
Agenda for 2013 |
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Media and analyst conference, 2012 financial results | Tuesday, 12 March 2013 |
Annual general meeting | Friday, 26 April 2013 |
Dividend payment | Tuesday, 7 May 2013 |
Round-table discussion | Tuesday, 27 August 2013 |
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VP Bank share details | |
Bearer shares, listed on SIX Swiss Exchange | |
Amount listing | 5,314,347 |
Free float | 62.14% |
Symbol on SIX | VPB |
Bloomberg ticker | VPB SW |
Reuters ticker | VPB.S |
Security number | 1073721 |
ISIN | LI0010737216 |
SEDOL number | 5968006 CH |
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Share-related statistics 2012 |
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High (27/01/2012) | 85.00 |
Low (22/11/2012) | 60.00 |
Year-end close | 65.00 |
Average price | 73.91 |
Market capitalisation in CHF million | 378 |
Consolidated net profit/loss per bearer share | 8.17 |
Price/earnings ratio (PE) | 7.96 |
Dividend per bearer share (proposed) | 2.50 |
Net dividend yield in % | 3.8 |
Standard & Poor’s rating | A– (A–/Negative/A–2) |
Further information on VP Bank’s shares, capital structure and major shareholders can be found in the “Corporate governance” section.
Contact
Tanja Muster - Head of Group Communications & Marketing
Tel +423 235 66 55 - Fax +423 235 65 00