Strategic orientation

VP Bank’s Strategy 2026 builds on its strong existing business and develops it further in a targeted manner. In addition to this, it also opens up new forward-­looking business opportunities. With an open platform for investment-related services, traditional banking will in future be combined with the advantages of digital ecosystems. In this approach, VP Bank is thus pursuing its vision of becoming an international Open Wealth Service pioneer.

Founded in 1956 in Vaduz, VP Bank has evolved into an internationally oriented banking group and is one of the three largest banks in Liechtenstein. The Bank’s strengths and unique selling propositions have emerged from its intermediary business. VP Bank’s founder, Guido Feger, was a successful entrepreneur and one of Liechtenstein’s most important trustees. Building on this tradition and the accompanying track record, it continues to offer top-notch solutions and professional services for trustees, external asset managers, family offices and other professional financial service providers. It also makes its in-depth expertise, personal advice and international network available to wealthy private clients in the area of private banking. In the Bank’s home market of Liechtenstein, retail and corporate client business is a further strategic focus area.

VP Bank also has an international fund competence centre that encompasses business with third-party funds, private label funds and in-house funds. The fund-related services range from setting up funds through to fund administration, risk management, custodian services, UCITS or AIFMD compliant management companies, distribution support, fund brokerage and portfolio management.

Intermediaries include professional financial service providers, in particular trustees, external asset managers and family offices. VP Bank focuses on medium-sized and large partners, offering them a comprehensive service platform. Business with intermediaries is a strategic focus area, and the Bank invests accordingly in the continuous expansion of its range of services. With the exception of the British Virgin Islands (BVI), this business segment is represented at all locations.

VP Bank is an experienced partner for wealthy private individuals. Its core competencies consist of customised wealth management, investment consulting, wealth planning and financing. Sustainability in all investment and advisory processes plays a decisive role in this regard. Key services are provided in all locations, and holistic advisory services are provided at select locations.

In the Bank’s home market of Liechtenstein, business with intermediaries and wealthy private clients is supplemented by retail business and corporate client business. This business segment is an important element of the Group-wide earnings mix, including basic banking services and the financing of real estate and business ventures. Products and services are sold on a mix of digital channels as well as through personal consultation.

Forward-looking business opportunities are developed through the Client Solutions division, which brings together the associated specific know-how such as structuring expertise, an extensive network and digital capabilities. With ORBIT, this includes building a curated ecosystem and hence systematic access to private market investments, digitising previously unbankable assets such as art, or ­creating added value from data analysis. With the development and expansion of the service, Client Solutions is ­bolstering VP Bank’s attractiveness significantly as a wealth management service provider for existing client segments and attracting new target groups such as pension funds, insurance companies and private banks. Client Solutions also includes the established international fund competence centre.

VP Bank Group’s services are offered in key financial centres through its home market of Liechtenstein and its five international locations in Switzerland, Luxembourg, Singapore, Hong Kong and the British Virgin Islands. Each location focuses on its specific target markets, allowing the respective market opportunities to be served in a focussed manner and with offers tailored to local requirements.

The defined target markets for Europe include Liechtenstein, Switzerland, Germany, Luxembourg, some markets in Central Europe and the Nordics markets (Denmark, Norway, Sweden). In Asia, the focus is on Singapore, Hong Kong, Indonesia, Malaysia, Thailand, the Philippines and China.

Responsibility for market development lies with the respective locations, with coordination provided through the Group. The Nordics region and Germany are served from Luxembourg and Switzerland. The Zurich location is responsible for market development of Central and Eastern Europe.

The goal of VP Bank Group is to grow in its target markets on a profitable and sustainable basis. Regional strategies that are tailored to growth opportunities provide support for this.

Liechtenstein is the location of the VP Bank Group head office. Founded in 1956, the location in the Vaduz offers services relating to private banking and the intermediaries business. In Liechtenstein and the adjacent region, these services are complemented by Retail & Commercial Banking. All services of the key staff and the back office are located at the head office in Liechtenstein and are controlled by means of the functional management in the Group companies. In addition to the Bank, VP Bank  Group in Liechtenstein also operates VP Fund Solutions ­(Liechtenstein) AG, which, as a one-stop shop, has been offering comprehensive fund-related services for more than 20 years.

Since 1988, VP Bank has been represented in Zurich by its subsidiary VP Bank (Switzerland) Ltd, which offers a ­state-of-the-art service platform for intermediaries and comprehensive advice for wealthy individuals. The core competencies are wealth management and investment advisory services for private and institutional investors, ­support for external asset managers and the lending ­business. The target markets of Germany and Central and Eastern Europe are managed from Zurich. Germany has traditionally been a target market for VP Bank for many years. VP Bank takes ad­vantage of the opportunities afforded by an EU passport in Switzerland. This exemption allows VP Bank (Switzerland) Ltd, with the head office in Liechtenstein acting as an intermediary, to actively attract clients in Germany and to subsequently provide cross-­border management services to these clients.

Luxemburg is a financial centre for international investors. VP Bank (Luxembourg) SA offers cross-border wealth management services to wealthy individuals in Scandinavia (Denmark, Norway and Sweden) as well as a state-of-the-art e-banking platform, comprehensive fund solutions and ESG products and services to intermediaries. This enables the Bank to position itself as the preferred partner for Scandinavian asset managers and their clients. Founded in 1988, the Luxembourg location has also had a fund competence center in the form of VP Fund Solutions (Luxembourg) SA since 1993.

The Asian region is a market with great growth opportunities, including for VP Bank. VP Bank has been represented in Hong Kong since 2006 and in Singapore since 2008. In Asia, this provides a growing number of intermediaries with a state-of-the-art service platform, and wealthy private clients with advisory services in wealth management. The partnership with recognised Chinese financial services provider Hywin Wealth International, which operates out of Hong Kong, also offers an opportunity to further accelerate our business activities in this attractive region, without expanding our own physical presence.

VP Bank has been represented by a subsidiary in the British Virgin Islands (BVI) since 1995. VP Bank (BVI) Ltd offers credit financing and mortgages on local real estate in addition to traditional banking services. In the BVI, VP Bank acts as a top-notch real-estate financier and as a partner to international investors and family office networks.

Strategy 2026 “Seize opportunities” continues to focus on profitable, sustainable growth.

The strategy builds on successful existing business with intermediaries and private clients, which is being deve­loped in a targeted manner. The regional strategies are aimed at achieving growth in the home market and at all five international locations in a focussed approach based on the respective local strengths. In doing so, VP Bank remains true to the principle of always looking to the future and using change as an opportunity.

Wealth management needs new ideas and business models to remain successful in the future. The key drivers in this regard are the accelerated transformation due to tech­nological change, the core issues concerning sustainability and the upcoming shift to the first generation of digital natives. The value chains of financial service providers are being reorganised and client needs are becoming more individual. Combining the traditional wealth management business with the benefits of digital ecosystems is therefore at the heart of VP Bank’s strategic development. By combining trustworthy and competent advice with open platforms and ecosystems, VP Bank is focussing on expanding its existing business model and on additional income sources it regards as decisive for a successful future in wealth management.

Strategy 2026 therefore pursues the goal of establishing VP Bank as an international Open Wealth Service pioneer. This will result in the creation of a completely new concept of service. In future, clients will choose from a set of modular options that will include services that not only VP Bank provides, but also those on offer from complementary third-party service providers. They will be able to do this in a user-friendly way, seamlessly across all media, without necessarily having to be a banking or securities account holder with VP Bank. Providing non-clients with access to parts of the offer enables the Bank to increase the available market significantly by tapping into its existing strong network of intermediaries. The long-term personal collaboration we offer through our advisers remains key to this strategy. Wealth is a personal matter, and in these times of a multiplicity of interchangeable options, the Bank continues to attach the highest importance to advice and trust.

VP Bank pursues its goals through clearly defined strategic focus areas. With “Evolve”, it builds on its strengths and further develops the existing Group-wide business in the home market and at the international locations. With “Scale”, Bank-wide processes and systems are optimised and scaled to create the technical basis for the business model. With “Move”, new business opportunities are opened up. This includes, for example, curated access to private market solutions or the digitisation of previously unbankable assets.

The three strategic focus areas of “Evolve”, “Scale” and “Move” are flanked by three further initiatives that form the foundation of the strategy.

The financial steering framework will automate the Bank’s reporting and improve the corresponding analytical ­processes. This is intended to support the Bank’s financial steering and facilitate a more efficient and effective ­reporting system overall.

The People Strategy aims to support, motivate and inspire employees. Through regular training, targeted employee development, agile working practices, a culture of trust and entrepreneurial thinking, VP Bank empowers employees with their diverse talents to share their knowledge and effectively contribute their skills.

The risk robustness initiative is a response to the increasing complexity of legal and regulatory requirements. Compliance approaches, standards and controls are being centralised and standardised throughout the Group and the ­overall credit organisation is being made more resilient.

The interplay of the three strategic focus areas “Evolve”, “Scale” and “Move” gives rise to the financial targets that form part of Strategy 2026. VP Bank is striving to achieve Group net income after taxes of CHF 100 million by 2026. Other targets include a profit margin of more than 15 basis points and a cost / income ratio of at most 70 per cent by the end of 2026, a tier 1 ratio of more than 20 per cent over the strategy cycle and 4 per cent net new money growth per year over the cycle. These financial benchmarks secure the Bank’s ability to adequately position solutions and services in the market. In addition, they will make it possible to finance the investments and inno­vations that are needed to achieve these targets from the Bank’s own resources and to generate an attractive risk-­adjusted return for shareholders.

The clearly defined location strategies for each region are aimed at achieving profitable and sustainable growth in the home market and at all five international locations, in line with market circumstances. In January, the purchase of the client business of the private bank Öhman Bank S.A. based in Luxembourg was completed. The acquisition of employees and the migration of client assets will contribute signi­ficantly to the expansion of activities in the Luxembourg and Scandinavian markets. The signing of a cooperation agreement with Hywin Wealth Management Co. and the equity investment in Hywin Holdings Ltd. followed in March as another important step in the development of the Asian business. The targeted expansion of complementary partnerships in this region is an important building block in the development of a new client base. With the appointment of a new person with overall responsibility for all activities of VP Bank in Asia in the new role of CEO VP Bank Asia and other new staff members who bring with them an extensive local client network, the two locations of Singapore and Hong Kong have been strengthened with additional expertise. In addition to the development of an Asia road map, local management in Hong Kong set up new office premises for VP Bank in November 2021.

The systematic consideration of sustainability issues at both bank and investment level is a further important key cornerstone of Strategy 2026. The inclusion of VP Bank in the two SIX sustainability indices “SPI ESG” and “SPI ESG Weighted” in February is proof that VP Bank is on the right track. Since the beginning of the year, sustainability criteria have been an integral part of all investment and advisory processes. Clients receive transparent information on the sustainability profile of their investments on the basis of the specially developed VP Bank Sustainability Score, which has been integrated into all mandates since January and has been shown on all asset statements since March. VP Bank also launched the new Sustainable Plus discretionary mandate in October, and a commitment to sustain­ability is being implemented systematically at Bank level. VP Bank published a sustainability report for the first time in 2021. In addition, VP Bank is a new signatory to the UN Principles for Responsible Investment (PRI) and the UN Principles for Responsible Banking (PRB), and has joined the Net-Zero Banking Alliance (NZBA) to reaffirm its net-zero ambition.

In January, the RM Cockpit was introduced as a central tool that provides client advisors with a comprehensive overview of their clients and enables them to provide even more targeted advice. The RM Cockpit also allows processes to function efficiently and the focus to remain on the core competence of providing personal advice against the ­backdrop of increasingly regulatory requirements.

A system architecture open to products from complementary third-party providers forms the backbone of Strategy 2026, with technology partners playing an important role. With this in mind, VP Bank entered into a strategic cooperation with Swisscom for the operation of the IT infrastructure at the beginning of the year. In June, an innovation partnership with InvestCloud was also entered into with the aim of creating the technical prerequisites for providing personalised wealth management services through eco­systems. Both the opening up of the core banking system and the activities surrounding the outsourcing of the IT infrastructure are proceeding according to plan.

VP Bank was added to the token and TT service provider register in November, making it the first of the three big banks in Liechtenstein able to register ownership claims for real assets digitally on the blockchain and store them as tokens. The first art object was successfully tokenised, laying the foundation for the widespread use of blockchain-based applications.

The ORBIT ecosystem was launched in August, providing participants with carefully curated access to the previously difficult-to-invest asset class of private market investments. ORBIT represents a significant step towards Open Wealth Services. The Bank’s own investment and structuring solutions are combined with the services of innovative partners. For investors, this creates new investment opportunities in growth capital, real estate transactions and alternative credit products, which can be both offered and requested by participants in the ecosystem on a modular basis. Co-­investments are also possible thanks to systematic interest management. The use of ORBIT does not require an account or securities account with VP Bank. Access to the investment and structuring platform is thus also open to third parties as well as existing clients.

In the second year of the strategy cycle, VP Bank continues to implement its Strategy 2026 of “Seize opportunities” in a targeted manner and within the framework of the 13 strategic initiatives along a series of milestones. 

The introduction of a new advisory tool at all locations is another important goal in providing comprehensive and profile-oriented advice to a demanding client base. The tool will allow for a flexible and modular expansion of advisory services.

Further areas of focus will include the further development of the Asia strategy under the leadership of new management, and the targeted implementation of the respective location strategies in Europe and the BVI. With the expansion of digital solutions for intermediaries, the catalogue of services for this important client segment is also being further developed.

Last year – the first phase of our strategy implementation – was all about investments. Following the initial success and looking ahead to the investments of 2022, it is important that the measures planned under “Scale” are continuously pursued. In addition to growth, increasing productivity and digitisation are further focus areas of Strategy 2026. This phase of the strategy implementation will therefore attach great importance to the examination of optimi­sation potentials and scalability options.

An important step in the opening up of the core banking system and thus in the development towards Open Wealth Services will be the implementation of the integration layer. This will enable the flexible integration of external services using APIs.

The gradual migration of the infrastructure to Swisscom will also be completed in 2022. This step will enable VP Bank to benefit from the high level of expertise of the technology specialist while also exploiting synergies in the use of further innovative technologies and strengthening its cybersecurity.

Under the leadership of the new Chief Transformation Officer, who joined VP Bank in December 2021, all ­processes relating to future client experiences are being systematically reviewed and further developed in an agile approach.

In 2022, “Move” activities will focus on the further development of the platform and systematic market cultivation within the ORBIT ecosystem for private market investments.

With the new solutions in the area of art tokenisation, VP Bank is only at the beginning of the numerous opportunities that arise on the basis of blockchain technology in conjunction with the unique regulatory environment in Liechtenstein. The services will be systematically taken to market and further expanded in 2022. In the field of art, the aim is to create an ecosystem or network with selected partners. In doing so, VP Bank is underscoring its intention to combine the advantages of technology with tangible added value for its clients, and to develop new sources of income by integrating previously unbankable assets.