Client Business Liechtenstein
Segment results |
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in CHF 1,000 | 2017 | 2016 | Variance | Variance |
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Total net interest income | 74,227 | 67,609 | 6,618 | 9.8 |
Total net income from commission | 90,612 | 90,176 | 436 | 0.5 |
Income from trading activities | 20,059 | 20,267 | –208 | –1.0 |
Income from financial instruments | 8 | 10 | –2 | –20.0 |
Other income | 0 | 0 | 0 | 0.0 |
Total operating income | 184,906 | 178,062 | 6,844 | 3.8 |
Personnel expenses | 35,216 | 33,768 | 1,448 | 4.3 |
General and administrative expenses | 3,744 | 3,292 | 452 | 13.7 |
Depreciation of property, equipment and intangible assets | 3,430 | 3,682 | –252 | –6.8 |
Valuation allowances, provisions and losses | –1,000 | 2,270 | –3,270 | –144.1 |
Services to/from other segments | 39,689 | 40,389 | –700 | –1.7 |
Operating expenses | 81,079 | 83,401 | –2,322 | –2.8 |
Segment income before income tax | 103,827 | 94,661 | 9,166 | 9.7 |
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Additional information |
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Operating expenses excluding depreciation and amortisation, valuation | 42.5 | 43.5 |
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Operating expenses excluding valuation allowances, provisions and losses / | 44.4 | 45.6 |
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Client assets under management (in CHF billion) | 26.7 | 24.6 |
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Change in client assets under management | 8.6 | 1.3 |
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Net new money (in CHF billion) | 0.4 | –0.2 |
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Total operating income / average client assets under management (bp)1 | 72.1 | 72.8 |
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Segment result / average client assets under management (bp)1 | 40.5 | 38.7 |
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Cost/income ratio operating income (in %)2 | 42.5 | 43.5 | –1.0 | –2.2 |
Headcount (number of employees) | 195 | 185 | 10.0 | 5.4 |
Headcount (expressed as full-time equivalents) | 183.4 | 174.1 | 9.3 | 5.3 |
- Annualised, average values.
- 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 2017 increased by CHF 9.2 million (9.7 per cent) over the prior year. In 2017, operating income could be improved by CHF 6.8 million (3.8 per cent). This growth results from interest income from clients (9.8 per cent) as well as commission and service income (0.5 per cent). Primarily developments in USD interest rates as well as margin increases in credit-granting activities contributed to this positive result. As regards commission income, both trade-related revenues from clients as well as portfolio-based revenues reported an increase year-on-year, the former because of the increased level of client activities. Operating expenses could be reduced by CHF 2.3 million (2.8 per cent) to CHF 81.1 million (prior year: CHF 83.4 million). This decrease is primarily attributable to the caption valuation allowances, provisions and losses as well as a lower level of inter-segmental recharges. In 2017, charges for valuation allowances, provisions and losses, year-on-year, declined by CHF 3.3 million to CHF minus 1.0 million (prior year period: CHF 2.3 million) due to the release of valuation allowances no longer required. Intersegmental recharges in the business segment 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)”. With 72.1 basis points, the gross margin could be held at the prior-year’s level (prior-year: 72.8 basis points). The cost/income ratio improved from 43.5 per cent to 42.5 per cent.
In the financial year, the segment reported net new money inflows from clients of CHF 0.4 billion. The welcome new money inflows resulting from market-development activities thereby offset money outflows resulting from the regulatory environment and taxation-related issues. Assets under management at 31 December 2017 totalled CHF 26.7 billion (31 December 2016: CHF 24.6 billion). The employee headcount rose from 174 (31 December 2016) to 183 individuals.