Statement of the Chairman of the Board of Directors and the Chief Executive Officer

Dear Shareholders,

Ladies and Gentlemen


Financial markets were very turbulent in the first half of 2018. After a strong start, they experienced a sudden correction in early February. The US Federal Reserve tightened interest rates, equity markets trended downward and volatility increased. Euro zone economic growth also turned out to be weaker than expected, clearly demonstrating that growth forecasts for the region were overly optimistic. In these choppy waters, VP Bank Group stayed the course and posted a solid result. 


Solid interim result

In the first half of 2018, VP Bank Group recorded consolidated net income of CHF 29.3 million, compared with CHF 31.5 million the previous year. 

Continued inflows of client deposits totalling CHF 0.6 billion were very satisfying (first half 2017: CHF 1.1 billion). Client assets under management increased by 1.3 per cent (CHF 0.5 billion). These figures attest to the success of our intensive market development initiatives. 

The 2.2 per cent decline in operating income was due to equity market volatility in the first half of 2018. 

Operating expense fell by CHF 1.7 million (1.5 per cent).


Medium-term goals

In 2015, we defined VP Bank Group’s medium-term goals through 2020 as part of our “Strategy 2020” business plan:

  • CHF 50 billion in client assets under management
  • CHF 80 million in consolidated net income
  • Cost/income ratio below 70 per cent

At 30 June 2018, assets under management totalled CHF 40.9 billion (up 1.3 per cent, or CHF 0.5 billion, since 31 December 2017), first-half consolidated net income was CHF 29.3 million (first half 2017: CHF 31.5 million). At 30 June 2018 the cost/income ratio was 70.3 per cent (compared with 64.6 per cent one year earlier). 

These latest results as well as our solid financial position with a 22.6 per cent tier 1 ratio show that we are on the right track to achieve our 2020 objectives by taking advantage of organic and external growth opportunities in a targeted manner and by maintaining strict cost controls.


Three strategic pillars

The 2020 strategy comprises three pillars with a long-term orientation. 

As regards growth, we continued the favourable inflow trend of 2017 with net new money totalling CHF 603.1 million. Our “Relationship Manager Hiring” project is proceeding apace, as we have hired a total of 31 new client advisors since the start of the project in 2016. 

In the focus pillar, we continued our cost management efforts and optimised our product and service offerings in the first half of 2018. These measures included, among others, the launch of VP Bank’s new e-banking service, a redesigned website for VP Fund Solutions and additional corporate client advisory packages rolled out as from July. 

The third pillar revolves around culture, including the sales and performance culture as well as the company culture. During the first half of the year, we continued to implement our leadership training programme, successfully conducted two “VP Bank Journeys” for employees to Munich and Hamburg and helped to promote dialogue between management and employees through regular joint breakfast events.

“Volunteering Day” continues to be very popular. Some 84 participants have worked on public interest projects since we introduced this programme.


Key first half events

Persistent low market interest rates forced us to adjust our own interest rate schedule and fees. The regulatory environment also poses challenges for the industry given the new EU data protection scheme (GDPR) and US sanctions against Russia. Meanwhile, VP Bank successfully reached a legally binding agreement with the German authorities on untaxed assets of German clients.

In February 2018, the new Group Projects & Processes unit was created in the Chief Operating Officer business segment. This unit combines the bank’s know-how and developmental resources and focuses them in targeted fashion on the Group’s priorities. It acts as a competency centre for project and process management and coordinates the bank’s digital transformation.

A total of 435 shareholders attended VP Bank’s 55th Annual General Meeting on 27 April 2018. All resolutions were approved. 

On the occasion of World Fund Day in April 2018, VP Fund Solutions announced record figures and steady demand for fund solutions from fund initiators and investors. Our international funds competency centre can take pride in the on-going growth of the two fund sites in Liechtenstein and Luxemburg.

In the first half of 2018, VP Bank again successfully positioned its brands and products through sponsorships of the “VP Bank Ladies Open” pro golf tournament, the “Next Generation Festival” for up-and-coming international musical talent, and the anniversary activities of the “Harmoniemusik Schaan” ensemble. 


Anniversaries and investments in growth

2018 is an anniversary year for VP Bank Group. We have been doing business in the Grand Duchy of Luxembourg for the past 30 years through VP Bank (Luxembourg) SA. In 2018, our fund competency centre celebrates its 20-­year anniversary. In June, we celebrated this anniversary in Luxembourg with an elegant event and delightful supporting programme for 90 guests. The move to a new office building is scheduled for November. 

VP Bank has also been represented through a subsidiary in Zurich since 1988. In March, after a building renovation and high-quality interior design project, we moved into new offices in Zurich. The prestigious building leaves a lasting impression thanks to its well-equipped client area, modern workspaces with the state-of-the-art infrastructure and central location. Various public relations measures and a client event scheduled for the fourth quarter will mark this anniversary year.

In 2018 our Singapore site celebrates its 10th anniversary, and we are hosting client and media events there as well. In April, we already doubled the size of our office space in order to keep pace with the growth of the business and now have room for 40 additional employees.

As reported in our 2017 annual report, our growth targets for Singapore require modifications to the existing structures. Going forward, VP Bank will therefore operate in Singapore through a branch instead of a subsidiary. As such, our business currently operating through our Singapore subsidiary VP Bank (Singapore) Ltd will be transferred to a new VP Bank Singapore branch which was registered on 29 June 2018. The banking license has also been expanded from “merchant bank” to “wholesale bank”.

The transfer process is targeted to be completed by 1 September 2018. Upon completion, VP Bank’s business in Singapore will be operated through our new branch, named VP Bank Ltd Singapore branch.

At our headquarters site in Liechtenstein, we undertook a renovation project on the head office building to create a modern and flexibly designed work environment. The renovation uses an open space concept that allows for different configurations and adds new furniture. 

Through these activities, we are supporting VP Bank Group’s growth and making significant investments in our future.


Personnel changes

At the 55th Annual General Meeting, elections were held to renew the terms of members of the VP Bank Board of Directors. The terms of Fredy Vogt and Dr Florian Marxer, which were expiring, were renewed for another three-year period. Fredy Vogt was re-elected Chairman of the Board of Directors at the extraordinary meeting of the Board of Directors directly following the Annual General Meeting.

Dr Thomas R. Meier was newly elected to a three-year term on the Board of Directors. He has more than three decades of international banking industry experience with a focus on Asia. The Board of Directors thereby strengthens its competencies, ensures a long-term succession planning and makes a sizeable contribution to the continued strategic development of our Asian business.

Dr Felix Brill was appointed to head the “Investment Solutions” business unit as from 1 March 2018, and Dr Urs Monstein was named Chief Operating Officer (COO) as from 1 May 2018. With these two personnel changes, VP Bank’s Group Executive Management brought in two professionals with many years of experience in the financial sector and is now fully staffed. 


VP Bank shares

As in 2017, VP Bank shares recorded strong gains in the first half of 2018. The shares began the year trading at CHF 133.00, then briefly hit a low of CHF 130.80 in January before beginning their steady rise. In June they reached a six-month high of CHF 194.00 before easing slightly to CHF 188.80 at the end of the period. This 41.95 per cent gain in the first half (including reinvested dividends) thus outperformed the broader Swiss equity market as well as the Swiss banking sector. During the period, VP Bank shares outperformed the SIX banking index (which fell by 10.82 per cent) by +52.77 per cent and the SMI (which fell by 8.23 per cent) by +50.18 per cent. Compared to shares of other banks, those of VP Bank were once again a solid investment.

The Annual General Meeting approved a resolution to pay out an increased dividend of CHF 5.50 per registered share A and CHF 0.55 per registered share B. The dividend payment date was 4 May 2018. 

Using the authorisation granted to it by the 24 April 2015 Annual General Meeting, VP Bank decided to increase its treasury share position through yet another share buy-back programme of up to 10 per cent of the share capital. This latest buy-back programme follows three earlier successful programmes in 2015 and 2016. The repurchased registered shares are to be used for future acquisitions or treasury management purposes. 

At 30 June 2018, VP Bank Ltd directly or indirectly owns 495,285 registered treasury shares A and 143,862 registered treasury shares B (7.70 per cent of the share capital and 5.32 per cent of the voting rights). As the shares will not be cancelled, both capital structure and voting rights will remain the same.

In May 2018, the rating agency Standard & Poor’s raised VP Bank’s already favourable “A–“ rating to “A” and listed the outlook as “stable”. As a result, VP Bank now has an “A/A–1” rating. This outstanding rating and stable outlook were confirmed on 9 August 2018 and again reaffirm our Group’s solid and successful business model. 



We have also laid the groundwork for growth in the second half. We expect growth to accelerate even further in 2018, building on the successful results of 2017. We are supporting this effort by actively recruiting new client advisors, with an emphasis on Singapore, Hong Kong, Luxembourg, Zurich and Vaduz. 

The upgrading of our Singapore subsidiary to a branch and wholesale bank attests to the growing importance of our Asia business. 

We show our commitment to the Luxembourg funds and financial centre and are investing in the future by moving to a new, highly modern office building in November.

To counter the relentless pressure of rising costs and shrinking margins, we continue to develop our digital services, online products and services and new client advisory packages, thereby creating tangible value added for our clients and employees.

The continued development of our products and services in the Investment Solutions segment will be another key emphasis in the second half of the year. 



We have come through a turbulent six-month period and successfully implemented growth-oriented projects and organisational changes. We would like to offer heartfelt thanks to our employees for their commitment, and we look forward to continued success together in the second half of 2018.

We would also like to thank our clients and shareholders for the trust they continue to place in us.

Alfred W. Moeckli, Chief Executive Officer
Alfred W. Moeckli
Chief Executive Officer
Fredy Vogt, Präsident des Verwaltungsrates
Fredy Vogt
Chairman of the Board of Directors