Client Business Liechtenstein
Segment results
in CHF 1,000 | 2016 | 2015 | Variance | Variance |
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Total net interest income1 | 67,609 | 51,366 | 16,243 | 31.6 |
Total net income from commission | 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 |
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Additional information |
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Operating expenses excluding depreciation and amortisation, valuation allowances, provisions and losses / total operating income (in %) | 43.5 | 49.8 |
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Operating expenses excluding valuation allowances, provisions and losses / total operating income (in %) | 45.6 | 52.0 |
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Client assets under management (in CHF billion) | 24.6 | 24.3 |
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Change in client assets under management | 1.3 | 24.4 |
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Net new money (in CHF billion) | –0.2 | 5.8 |
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Gross income / average client assets under management (bp)1 | 72.8 | 76.3 |
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Segment result / average client assets under management (bp)1 | 38.7 | 35.3 |
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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 |
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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.