­Consolidated semi-annual report of VP Bank Group

Consolidated results

In the first half of 2021, VP Bank Group recorded a Group net income of CHF 29.9 million. Group net income for the same period of the previous year was CHF 14.4 million. 

VP Bank Group has a strong capital base. As of 30 June 2021, the tier 1 ratio was 20.8 per cent (December 2020: 20.8 per cent). This solid capital base confirms VP Bank’s robust and successful business model. 


Client assets under management

As of 30 June 2021, VP Bank Group’s client assets under management amounted to CHF 52.6 billion. This represents an increase of CHF 10.8 per cent (CHF 5.1 billion) on the CHF 47.4 billion recorded as of 31 December 2020. This increase was the result of another positive net new money inflow of CHF 0.7 billion, the addition of client assets from the acquisition of the client business of Öhman Bank S.A. of CHF 0.9 billion and a positive market valuation (performance) of CHF 3.5 billion. 

Custody assets increased by CHF 0.8 billion (10.6 per cent) from CHF 7.4 billion to CHF 8.2 billion compared to 31 December 2020. Client assets including custody assets were listed at CHF 60.8 billion as of 30 June 2021, an increase of CHF 5.9 billion compared to 31 December 2020 (CHF 54.9 billion).


Income statement

Operating income

During the reporting period, VP Bank’s operating income remained stable at CHF 166.6 million (previous-year period: CHF 166.8 million). 

Income from commission business and services increased by CHF 6.5 million (plus 9.1 per cent) to CHF 78.0 million in the reporting year (previous year: CHF 71.5 million). Due to the positive trends on the financial markets, recurring commission income from asset management increased by CHF 4.6 million to CHF 32.0 million (plus 16.6 per cent) (previous year: CHF 27.4 million). Brokerage income remained stable at CHF 20.4 million (previous year: CHF 20.6 million). Securities account fees increased by CHF 2.7 million (plus 29.0 per cent) to CHF 11.9 million (previous year: CHF 9.2 million), and so did earnings from fund management, which increased by 6.4 per cent from CHF 27.1 million to CHF 28.8 million.

Net interest income fell by CHF 1.5 million from CHF 57.4 million in the previous year to CHF 55.9 million in the report­ing period. Interest income fell by CHF 11.5 million (minus 15.4 per cent). Interest expenses also fell by CHF 10.0 million (minus 58.4 per cent) due to interest rate trends. This decrease is mainly due to the lowering of US dollar and euro interest rates by the central banks in the first half of 2020. 

Income from trading activities amounted to CHF 24.1 million, a decrease of CHF 8.4 million (minus 25.8 per cent) compared to the previous year. This decrease is also related to a further reduction of US dollar and euro interest rates by the central banks in the first half of 2020, which had a negative effect on swap transaction margins. 

Financial investments made a positive contribution of CHF 7.3 million to the results of the reporting period ­(previous year: CHF 4.9 million). The increase in corpo­rate earnings from financial investments is mainly due to higher dividend income from financial instruments (CHF 5.8 million compared to CHF 3.7 million in the same period of the previous year).


Operating expenses

Operating expenses fell significantly by CHF 14.0 million (minus 9.6 per cent) from CHF 146.2 million in the previous year to CHF 132.2 million in the reporting period. The pre­vious-year period includes a one-time allowance on a credit position of around CHF 20 million. 

Compared to the same period of the previous year, personnel expenses increased by CHF 4.7 million (5.8 per cent) to CHF 86.0 million. The growth in personnel is due to the takeover of the personnel of the client business of Öhman Bank S.A. and the investments in the new Client Solutions business segment. 

General and administrative expenses rose by CHF 2.0 million to CHF 31.0 million (previous-year period: CHF 29.0 million). The increase is related to the implementation of the strategy and investments in IT. Depreciation and amortisation increased by CHF 1.3 million from CHF 14.2 million to CHF 15.5 million due to the commissioning of strategic projects.

In the reporting period, valuation adjustments, provisions and losses of CHF 0.3 million net were released, whereas in the previous-year period CHF 21.7 million had to be ­created, mainly in connection with a one-time allowance on a credit position of around CHF 20 million.


Balance sheet

Total assets as of 30 June 2021 remained unchanged ­compared to 31 December 2020 at CHF 13.5 billion. While client receivables increased by CHF 0.2 billion (3.8 per cent) and financial instruments by CHF 0.1 billion, cash and bank receivables each decreased by CHF 0.2 billion. On the liabilities side, other liabilities due to clients increased by CHF 0.2 billion (1.9 per cent). Bonds decreased by CHF 0.1 billion due to a repayment of a maturing bond in April 2021. 

VP Bank Group has a very comfortable liquidity structure with liquid assets of around 18 per cent of total assets worth CHF 2.4 billion (CHF 2.6 billion as of 31 December 2020). This is reflected in an optimum liquidity coverage ratio (LCR) of 153 per cent.

The tier 1 ratio calculated in accordance with Basel III as of 30 June 2021 was 20.8 per cent (as of 31 December 2020: 20.8 per cent), which represents a strong capital base ­ and an excellent strategic starting point for the further development of VP Bank Group.