Segment reporting

Structure

External segment reporting reflects the organisational structure of VP Bank Group and the internal reporting to Management. The latter form the basis for assessing financial performance of the segments and the allocation of resources to the segments. 

VP Bank Group consists of the six organisational units “Client Business”, “Investment Solutions”, “Chief Executive Officer”, “Chief Financial Officer”, “Chief Operating Officer” and “General Counsel & Chief Risk Officer”. 

For segment-reporting purposes, the organisational unit “Client Business” is divided into two business segments “Client Business Liechtenstein” and “Client Business International”. The unit “Investment Solutions” is managed, for segment-reporting purposes, in “Client Business Liechtenstein” and “Client Business International”. The four organizational units “Chief Executive Officer”, “Chief Financial Officer”, “Chief Operating Officer” and “General Counsel & Chief Risk Officer” are regrouped together, for segment reporting, under the business segment “Corporate Center”. 

Revenues and expenditures as well as assets and liabilities are allocated to the business segments based on the responsibilities for the clients and the principle of origi­nation. Insofar as a direct allocation is not possible, the positions in question are reported under the Corporate Center. Furthermore, the Corporate Center includes adjustments made on consolidation.

 

Business segment reporting 2019

 

 

 

 

in CHF 1,000

Client
Business

Client
Business

Corporate
Center

Total
Group

 

Liechtenstein

International

 

 

Total net interest income1

66,111

52,928

–3,938

115,101

Total net income from commission 
business and services

86,751

57,443

–7,028

137,166

Income from trading activities

16,840

13,947

30,198

60,985

Income from financial instruments

0

171

14,100

14,271

Other income

300

3,252

–3,300

252

Total operating income

170,002

127,741

30,032

327,775

Personnel expenses

34,006

62,207

69,178

165,391

General and administrative expenses

3,895

24,695

27,708

56,298

Depreciation of property, equipment and intangible assets

4,945

7,918

16,480

29,343

Credit loss expenses

–603

–6,150

 

–6,753

Provisions and losses

309

246

 

555

Services to/from other segments

43,258

 

–43,258

0

Operating expenses

85,810

88,916

70,108

244,834

Earnings before income tax

84,192

38,825

–40,076

82,941

Taxes on income

 

 

 

9,398

Group net income

 

 

 

73,543

 

 

 

 

 

Segment assets (in CHF million)

4,275

5,689

3,436

13,400

Segment liabilities (in CHF million)

6,742

5,046

580

12,368

Client assets under management (in CHF billion)2

26.9

20.7

0.0

47.6

Net new money (in CHF billion)

–0.6

2.9

0.0

2.3

Headcount (number of employees)

195

345

403

943

Headcount (expressed as full-time equivalents)

179.5

326.2

368.0

873.7

  1. As of 1 January 2019, the new funds transfer pricing was introduced within the Group. With funds transfer pricing, the internal bank recharges between the Treasury department and Client Business segments are determined and computed. Funds transfer pricing is a central instrument to manage market-price and liquidity risks. With funds transfer pricing, refinancing and liquidity costs between Client Business segments and Treasury are recharged at market-oriented prices. This recharging is applied for new business and resubmissions as from 1 January 2019. The result of this change for the year 2019 amounts to CHF -10.1 million for Client Business Liechtenstein, CHF -0.1 million for Client Business International and CHF 10.2 million for the Corporate Center. The prior-year comparatives were not restated as the change for prior periods was impracticable because of the passage of time as well as the lack of an appropriate data base and the cost of assembling this data retrospectively on an individual-transaction basis would be so high that it would bear no relationship to the benefit to be derived therefrom. The introduction of funds transfer pricing has no impact on the consolidated results of VP Bank Group.
  2. Calculation in accordance with Table P of the Guidelines to the Liechtenstein Banking Ordinance issued by the Government of Liechtenstein (FL-BankO).

 

Business segment reporting 2018

 

 

 

 

in CHF 1,000

Client
Business

Client
Business

Corporate
Center

Total
Group

 

Liechtenstein

International

 

 

Total net interest income

78,876

39,340

–7,239

110,977

Total net income from commission 
business and services

91,261

39,015

–6,004

124,272

Income from trading activities

18,734

8,968

27,282

54,984

Income from financial instruments

0

86

–1,732

–1,646

Other income

100

2,490

–339

2,251

Total operating income

188,971

89,899

11,968

290,838

Personnel expenses

34,383

54,313

68,988

157,684

General and administrative expenses

4,538

30,555

27,776

62,869

Depreciation of property, equipment and intangible assets

4,838

3,311

16,968

25,117

Credit loss expenses

–2,992

–11,314

1,647

–12,659

Provisions and losses

134

252

–1,090

–704

Services to/from other segments

41,888

 

–41,888

0

Operating expenses

82,789

77,117

72,401

232,307

Earnings before income tax

106,182

12,782

–60,433

58,531

Taxes on income

 

 

 

3,814

Group net income

 

 

 

54,717

 

 

 

 

 

Segment assets (in CHF million)

4,112

4,761

3,556

12,428

Segment liabilities (in CHF million)

6,961

4,102

384

11,447

Client assets under management (in CHF billion)1

25.0

16.5

0.0

41.5

Net new money (in CHF billion)

–0.2

3.4

0.0

3.2

Headcount (number of employees)

197

330

407

933

Headcount (expressed as full-time equivalents)

183.3

313.3

371.9

868.4

  1. Calculation in accordance with Table P of the Guidelines to the Liechtenstein Banking Ordinance issued by the Government of Liechtenstein (FL-BankO).

 

The recharging of costs and revenues between the business units takes place on the basis of internal transfer prices, actual recharges or on prevailing ­market conditions. Recharged costs within the segments are subject to an annual review and are amended to reflect new economic conditions, where­ ­necessary.