VP Bank shares

2016 was a po­lit­i­cally event­ful year. In June, British vot­ers opted to exit the Eu­ro­pean Union and in No­vem­ber Don­ald Trump won the U.S. pres­i­den­tial elec­tion. Fi­nan­cial mar­kets ap­peared to take both elec­toral out­comes in stride, thanks in part to an im­prov­ing global eco­nomic out­look in the sec­ond half of 2016. Grow­ing con­fi­dence in the economies of com­mod­ity-ex­port­ing emerg­ing coun­tries as a re­sult of ris­ing oil prices as well as sta­ble growth rates in China were the most no­table fac­tors un­der­pin­ning the favourable news flow. 

In the United States, growth was ini­tially weak in the first half but the world’s largest econ­omy re­gained mo­men­tum in the sec­ond. The US labour mar­ket nev­er­the­less per­formed well through­out the year, as job growth con­tin­ued its up­ward trend in 2016. The un­em­ploy­ment rate fell from 5 per cent at the start of the year to 4.7 per cent at the end. These gains in em­ploy­ment ul­ti­mately led to ris­ing wages. Given ris­ing oil prices that pushed in­fla­tion higher and the lack of neg­a­tive con­se­quences from Don­ald Trump’s vic­tory, as had been widely feared, the US cen­tral bank re­sponded by rais­ing rates for the sec­ond time in the cur­rent mon­e­tary tight­en­ing cy­cle. 

The euro zone econ­omy proved to be sur­pris­ingly ro­bust. De­spite fears of eco­nomic col­lapse in the event of a pro- Brexit vote dur­ing the pe­riod lead­ing up to the ref­er­en­dum, the real econ­omy re­sponded to the event rel­a­tively calmly. In the United King­dom, eco­nomic sen­ti­ment even bright­ened con­sid­er­ably in au­tumn, as British com­pa­nies wel­comed the sig­nif­i­cant slide in the pound and im­proved com­pet­i­tive­ness in the wake of the Brexit vote. No fur­ther eco­nomic dam­age was felt on the Eu­ro­pean Con­ti­nent ei­ther, such that the im­pact of the UK ref­er­en­dum has been only the­o­ret­i­cal so far. The con­se­quences will only be­come ap­par­ent once the con­trac­tual pa­ra­me­ters of the fu­ture re­la­tion­ship be­tween the United King­dom and Eu­ro­pean Union are known and the ac­tual exit oc­curs. 

Even though in­fla­tion rates in the euro zone inched slightly higher dur­ing the au­tumn months, the Eu­ro­pean Cen­tral Bank (ECB) opted to con­tinue its ex­pan­sive mon­e­tary pol­icy. Ad­justed for the en­ergy price com­po­nent, in­fla­tion re­mained at a stand­still. ECB Pres­i­dent Mario Draghi is there­fore ex­pected to con­tinue monthly se­cu­ri­ties pur­chases – al­beit at a slower pace – through end-2017. The di­ver­gent mon­e­tary poli­cies on ei­ther side of the At­lantic put fur­ther pres­sure on the euro against the US dol­lar. In De­cem­ber 2016, the EUR/​USD ex­change rate was only slightly above par­ity.

The state of the Swiss econ­omy can best be de­scribed as “light at the end of the tun­nel”. Af­ter a chal­leng­ing year in 2015 fol­low­ing the sharp rise in the Swiss franc, the econ­omy re­bounded in 2016. The coun­try’s ex­port econ­omy even man­aged to re­cover as com­pa­nies squeezed profit mar­gins. The de­fla­tion­ary phase also bot­tomed out. In De­cem­ber, in­fla­tion was flat, mark­ing more than two years with­out any neg­a­tive signs. With up­ward pres­sure still ev­i­dent on the Swiss franc, the SNB took ad­van­tage of the lack of de­fla­tion­ary ef­fects as well as the sub­stan­tially im­proved com­pany sen­ti­ment to tol­er­ate a slight ap­pre­ci­a­tion in the Swiss cur­rency. The over­all mon­e­tary pol­icy ori­en­ta­tion nev­er­the­less re­mained un­changed through­out 2016. While the SNB con­tin­ued to in­ter­vene in cur­rency mar­kets, it did not need to ad­just in­ter­est rates. 

From a geopo­lit­i­cal and macro-eco­nomic per­spec­tive, 2016 was a very event­ful year. Early on, many in­vestors fo­cused on eco­nomic is­sues such as the threat of weaker eco­nomic growth in China and the ac­com­pa­ny­ing de­fla­tion­ary ef­fects. With the Brexit vote, this fo­cus nev­er­the­less shifted in­creas­ingly to­ward po­lit­i­cal con­cerns and reached its zenith with the elec­tion of Don­ald Trump as the 45th US pres­i­dent. As un­ex­pected as these de­vel­op­ments were, the oft-pre­dicted panic sell­ing in eq­uity and bond mar­kets largely failed to ma­te­ri­alise de­spite these huge geopo­lit­i­cal events. Nei­ther Trump and Brexit on the one hand nor con­tin­ued high val­u­a­tions with falling earn­ings and a ris­ing in­ter­est rate en­vi­ron­ment on the other led to any note­wor­thy or per­sis­tent desta­bil­i­sa­tion. 

The MSCI World global eq­uity mar­ket in­dex rose by around 8.2% dur­ing the past cal­en­dar year. This favourable eq­uity price trend was largely dri­ven by emerg­ing coun­try shares, which rose by ap­prox­i­mately 11.6 per cent. The most spec­tac­u­lar gains were recorded by Latin Amer­i­can emerg­ing coun­tries, as the rel­a­tively ro­bust re­cov­ery in crude oil prices led to a ver­i­ta­ble surge in eq­uity prices (31.5 per cent). The sit­u­a­tion in Eu­rope was less sat­is­fac­tory. The Euro Stoxx 50 In­dex, which in­cludes the euro zone’s 50 largest com­pa­nies, posted only a mea­gre 4.7 per cent gain while the Swiss Mar­ket In­dex even ended the year on a down note. 

For the most part, the ris­ing share prices were not jus­ti­fied by higher earn­ings and there­fore in ef­fect re­flect higher val­u­a­tion.

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, whilst also in­form­ing the in­ter­ested pub­lic promptly about the com­pa­ny’s lat­est de­vel­op­ments.

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 in­terim re­ports and pub­lish­ing the re­lated fi­nan­cial re­sults, as well as or­gan­is­ing the an­nual gen­eral meet­ing of share­hold­ers. 

For the 54th An­nual Gen­eral Meet­ing at 28 April 2017, the en­tire no­tice and in­vi­ta­tion process was over­hauled and op­ti­mised with the help of a renowned spe­cial­ist. Share­hold­ers now re­ceive a con­ve­nient on­line an­nounce­ment and also have the op­tion of early on­line vot­ing through elec­tronic vot­ing or vot­ing at the meet­ing through televot­ing. As part of VP Bank’s dig­i­tal­i­sa­tion strat­egy, these changes led to en­hanced con­ve­nience, se­cure anonymity and quicker vot­ing re­sults. 

As part of its in­vestor re­la­tions ac­tiv­i­ties in 2016, VP Bank held nu­mer­ous an­a­lyst meet­ings and me­dia con­fer­ences in or­der to fur­ther strengthen its com­mu­ni­ca­tions with in­vestors and fi­nan­cial in­ter­me­di­aries. The 3rd VP Bank In­vestor Day is sched­uled for May 2017 in Lux­em­bourg.

VP Bank’s In­vestor Re­la­tions de­part­ment is re­spon­si­ble for en­sur­ing the Group’s “Cor­po­rate Lan­guage”, i.e. a com­mon lan­guage used both in­side and out­side the com­pany in or­der to speak to all tar­get au­di­ences in one voice. Through the cor­re­spond­ing in­ter­faces, VP Bank en­sures that con­sis­tent com­pany in­for­ma­tion is dis­sem­i­nated across the var­i­ous pub­li­ca­tions plat­forms.

VP Bank’s reg­u­lar pre­sen­ta­tions on cur­rent events lay the foun­da­tion for com­mu­ni­ca­tions with in­sti­tu­tional and pri­vate in­vestors. The www.vpbank.com web­site and on­line an­nual re­port avail­able at vpbank.wsc.ch pro­vide all the lat­est in­for­ma­tion on the com­pany. 

Since 2015, VP Bank’s in­terim re­port is also avail­able in an on­line ver­sion. 

The con­tin­ued im­prove­ments to VP Bank Group’s an­nual re­port, in line with in­ter­na­tional trends and reg­u­la­tory re­quire­ments, was also em­pha­sized in 2016. The theme of that year’s re­port was “60 Years of VP Bank.”

The VP Bank Group’s 2015 an­nual re­port won a to­tal of five in­ter­na­tional awards last year, demon­strat­ing the high qual­ity of VP Bank’s in­for­ma­tion pol­icy as well as its cre­ative de­sign ex­cel­lence. The bank’s an­nual re­port won gold at the ARC Awards for the com­pelling il­lus­tra­tions sur­round­ing the theme of the com­pa­ny’s 60-year an­niver­sary. The pres­ti­gious ARC Awards have been held in the United States for the past 30 years. The an­nual re­port also won gold in the US “Ste­vie Awards” for “Best An­nual Re­port – Print”. Other awards in­cluded the “Galaxy Award”, “Vi­sion Award” and “League of Amer­i­can Com­mu­ni­ca­tions Pro­fes­sion­als” (LACP) award.

Mean­while, VP Bank’s 2015 on­line an­nual re­port re­ceived four in­ter­na­tional awards. For the 2015 Swiss An­nual Re­port Rat­ings, a jury of com­mu­ni­ca­tions and fi­nance pro­fes­sion­als also placed the VP Bank Group’s an­nual re­port in the top 15 in Switzer­land and Liecht­en­stein.

In July 2017, the Stan­dard & Poor’s rat­ing agency con­firmed VP Bank’s “A–” rat­ing and raised its out­look from “Neg­a­tive” to “Sta­ble”. The con­firmed rat­ing and im­proved out­look re­flected VP Bank’s op­er­at­ing im­prove­ments and pru­dent risk man­age­ment as well as the bank’s very strong cap­i­tal po­si­tion and its suc­cess­ful in­te­gra­tion of Cen­trum Bank. The favourable Stan­dard & Poor’s as­sess­ment cites VP Bank’s abil­ity to gen­er­ate prof­itable growth with­out com­pro­mis­ing its cap­i­tal ad­e­quacy. As of 2 March 2017, Stan­dard & Poor’s im­proved the out­look from “Sta­ble” to “Pos­i­tive”.

VP Bank there­fore holds a rat­ing of “A–/​Pos­i­tive/​A–2”. This out­stand­ing rat­ing and the pos­i­tive out­look con­firm the VP Bank Group’s sound and suc­cess­ful busi­ness model. VP Bank is one of the few pri­vate banks in Liecht­en­stein and Switzer­land to be rated by an in­ter­na­tional rat­ing agency. The cur­rent Stan­dard & Poor’s rat­ing re­port can be down­loaded as a pdf file from the VP Bank web­site un­der “In­vestors & Me­dia”.

An­a­lysts from Mirabaud Se­cu­ri­ties LLP, Re­search Part­ners AG and Zürcher Kan­ton­al­bank pro­vide analy­ses on VP Bank on a reg­u­lar base. 

1. 1
   In­clud­ing reg­is­tered shares B
2. 2
   As of 2 March 2017

Fur­ther in­for­ma­tion on the cap­i­tal struc­ture and an­chor share­hold­ers of VP Bank can be found in the “Corporate governance” section.