Client Business Liechtenstein

Segment results

in CHF 1,000

2016

2015

Variance
absolute

Variance
in %

Total net interest income1

67,609

51,366

16,243

31.6

Total net income from commission 
business and services

90,176

91,847

–1,671

–1.8

Income from trading activities1

20,267

23,866

–3,599

–15.1

Income from financial instruments

10

16

–6

–37.5

Other income

0

0

0

0.0

Total operating income

178,062

167,095

10,967

6.6

Personnel expenses

33,768

32,565

1,203

3.7

General and administrative expenses

3,292

2,952

340

11.5

Depreciation and amortisation

3,682

3,672

10

0.3

Valuation allowances, provisions and losses

2,270

2,917

–647

–22.2

Services to/from other segments

40,389

47,691

–7,302

–15.3

Operating expenses

83,401

89,797

–6,396

–7.1

Segment income before income tax

94,661

77,298

17,363

22.5

 

 

 

 

 

Additional information

 

 

 

 

Operating expenses excluding depreciation and amortisation, valuation allowances, provisions and losses / total operating income (in %)

43.5

49.8

 

 

Operating expenses excluding valuation allowances, provisions and losses / total operating income (in %)

45.6

52.0

 

 

Client assets under management (in CHF billion)

24.6

24.3

 

 

Change in client assets under management
compared to 31.12. prior year (in %)

1.3

24.4

 

 

Net new money (in CHF billion)

–0.2

5.8

 

 

Gross income / average client assets under management (bp)1

72.8

76.3

 

 

Segment result / average client assets under management (bp)1

38.7

35.3

 

 

Cost/income ratio operating income (in %)2

43.5

49.8

–6.3

–12.7

Headcount (number of employees)

185

171

14.0

8.2

Headcount (expressed as full-time equivalents)

174.1

161.5

12.6

7.8

  1. Annualised, average values.
  2. Operating expenses excluding depreciation and amortisation, valuation allowances, provisions and losses / gross income less other income and income from financial instruments.

Structure

The business segment “Client Business Liechtenstein” encompasses the international private banking business and the business with intermediaries located in Liechtenstein as well as the local universal banking and credit-granting businesses. It includes the units of VP Bank Ltd, Vaduz which are in direct client contact. In addition, Group Investment, Product & Market Management and VP Fund Solutions (Liechtenstein) AG are allocated to this business segment. 

 

Segment result

The pre-tax segment result in 2016 increased by CHF 17.4 million (22.5 per cent) over the prior year. In 2016, operating income could be improved by CHF 11.0 million (6.6 per cent). This growth results from interest income from clients (+31.6 per cent). Primarily trends in USD interest rates as well as margin increases in credit-granting activities contributed to this positive result. Operating expenses could be reduced by CHF 6.4 million (7.1 per cent) to CHF 83.4 million (prior year: CHF 89.8 million). This decrease is primarily attributable to a lower level of inter-segmental recharges. The lower recharges are due to the synergy effects of the Centrum Bank merger. 

Intersegmental recharges in Client Business Liechtenstein are based upon fixed internal transfer prices. Indirect costs for internal services are reported in the caption “services to/from other segment(s)”. In 2016, the charges for valuation allowances, provisions and losses fell, year-on-year, by CHF 0.6 million to CHF 2.3 million (prior year: CHF 2.9 Mio.). The gross margin fell to 72.8 basis points (prior-year: 76.3 basis points). The cost/income ratio improved from 49.8 per cent to 43.5 per cent.

In the financial year, the segment reported a lower level of net new money inflows from clients in the amount of CHF 0.2 billion. Net new money inflows resulting from market-development activities could not completely offset money outflows resulting from the regulatory environment and taxation-related issues. Assets under management on 31 December 2016 totalled CHF 24.6 billion (31 December 2015: CHF 24.3 billion). The employee headcount rose from 162 (31 December 2015) to 174 individuals.