Interim Group net profit of CHF 13.6 million
Implementation of «Focus2015» progressing as planned
Vaduz, 29 August 2013. The LLB Group significantly increased its operative
performance in the first half year of 2013. Adjusted for one-off effects,
operating income rose by 8.2 percent and operating expenses fell by 6.9
percent. Extraordinary factors tarnished the Group result which stood at CHF
13.6 million. The implementation of the strategic initiatives is progressing
*Driven by market performance, client assets increased by 1.2 percent to
CHF 50.5 billion. Net new money outflow amounted to CHF 210 million. Loans
to clients climbed by 0.8 percent to CHF 10.7 billion.
*Net fee and commission income rose by 3.5 percent to CHF 106.7 million,
while interest income after credit loss expense fell by 4.2 percent to CHF
*Provisions for the US taxation dispute, a net goodwill value adjustment
for swisspartners, the closure of LLB (Switzerland) Ltd., and provisions
for restructuring measures within the scope of «Focus2015» depressed the
interim result by around CHF 58.4 million.
*Personnel expenses expanded by 19.0 percent to CHF 90.1 million. Taking
into consideration the one-time reduction in expenses due to the change
over made in the previous year by the Personnel Pension Fund Foundation of
LLB AG to a defined contribution pension plan, and to provisions for
restructuring measures in the current year, they fell by 7.8 percent.
*General and administrative expenses climbed to CHF 137.6 million; adjusted
to eliminate one-off effects they decreased by 20.4 percent.
*Group net profit amounted to CHF 13.6 million (-77.7 %). Without the
one-off effects, Group net profit would have been CHF 72.0 million, and
therefore above the previous year's figure.
*With a tier 1 ratio of 17.4 percent, the LLB Group stands for safety and
*The LLB Vaduz has achieved a definitive solution to the US taxation
Key figures at a glance
First half 2013 First half 2012* Change in %
Operating income 279.9 207.1 35.2
(in CHF millions)
Operating expenses -261.2 -138.1 89.1
(in CHF millions)
Group net profit 13.6 60.9 -77.7
(in CHF millions)
Net new money inflow in % -0.4 0.0
ROE in % 1.5 7.5
Earnings per share in CHF 0.41 2.08 -80.3
Cost-Income-Ratio in % 70.2 58.5
30 June 2013 31 December 2012 Change in %
Tier 1 ratio in % 17.4 15.7
Client assets under management 50.5 49.9 1.2
(in CHF billions)
Total assets 21.2 21.3 -0.4
(in CHF billions)
* Comparison period was restated in conformance with IAS 19 (revised).
Group CEO Roland Matt commented on the 2013 interim result: «For the LLB Group
the key priority in 2013 is the «Focus2015» strategy. Its implementation is
progressing according to plan and the positive development of our operative
performance is in line with our expectations. At the same time, however,
one-off effects in connection with restructuring measures at the LLB Group, as
well as the US taxation issue weighed on our interim result.»
Net new money inflow in home markets
Driven by a strong market performance, client assets managed by the LLB Group
rose in the first half of 2013 to CHF 50.5 billion (31 December 2012: CHF 49.9
billion). In the onshore markets of Liechtenstein, Switzerland and Austria, as
well as in the strategic growth markets of Central and Eastern Europe, as well
as in the Near and Middle East, the LLB Group posted solid net new money
inflows. As expected, asset outflows were registered in the traditional
cross-border markets and due to the planned closure of LLB (Switzerland) Ltd.
In total a net new money outflow of CHF 210 million was recorded for the first
half year of 2013 (first half year 2012: inflow of CHF 2 million).
Loans to clients increased by 0.8 percent to CHF 10.7 billion (31 December
2012: CHF 10.6 billion). Mortgage loans remained unchanged at CHF 9.1 billion.
Extraordinary factors tarnish result
Four one-off effects tarnished the 2013 interim financial result: the LLB
Group allocated further provisions amounting to CHF 31.2 million for a
possible outflow of assets in connection with payments to the US authorities.
In addition, the changed basic conditions in international wealth management
business made a value adjustment of the goodwill of the subsidiary
swisspartners Investment Network AG necessary, which resulted in a net charge
to the interim financial statement of CHF 14.3 million. The closure of LLB
(Switzerland) Ltd. caused extraordinary write-downs of CHF 9.6 million on
business premises in Lugano and Zurich. Furthermore, provisions of CHF 3.3
million were set aside for restructuring measures within the scope of the
implementation of the «Focus2015» strategy.
Stronger operative performance
As per 30 June 2013, the LLB Group reported a net profit of CHF 13.6 million,
corresponding to a fall of 77.7 percent compared with the previous year (30
June 2012: CHF 60.9 million). Adjusted for the mentioned one-off effects, the
LLB Group would have reported a net profit of CHF 72.0 million for the first
half year. The stronger operative performance is demonstrated by the fact that
- adjusted for the one-off effects - operating income increased by 8.2 percent
and operating expenses fell by 6.9 percent.
Operating income rose by 35.2 percent to CHF 279.9 million (30 June 2012: CHF
207.1 million), this was largely due to an adjustment of the purchase price
obligation in connection with swisspartners of CHF 55.8 million, which was
recognised in other income.
Net fee and commission income climbed to CHF 106.7 million, representing an
increase of 3.5 percent (30 June 2012: CHF 103.1 million). Interest income
after credit loss expense decreased by 4.2 percent to CHF 68.7 million (30
June 2012: CHF 71.7 million).
Net trading income expanded by CHF 37.7 million to CHF 42.8 million (30 June
2012: CHF 5.1 million). Whereas hedging costs for interest rate swaps of CHF
9.1 million were incurred in the first half of 2012, in the first six months
of 2013 income of CHF 28.2 million was attained from interest rate swaps as a
result of higher market interest rates. Client trading with foreign exchange,
notes and precious metals also showed a pleasing gain of 5.7 percent to CHF
14.6 million (30 June 2012: CHF 13.8 million).
Net income from financial investments at fair value through profit and loss
stood at CHF 4.1 million (30 June 2012: CHF 22.1 million). The decline of 81.5
percent in comparison with the previous year is attributable to valuation
losses on the bond portfolio due to rising interest rates.
Operating expenses climbed to CHF 261.2 million and were therefore 89.1
percent higher than in the previous year (30 June 2012: CHF 138.1 million). In
2012 a one-time reduction in personnel expenses in connection with the change
over to a defined contribution pension plan by the Personnel Pension Fund
Foundation of Liechtensteinische Landesbank AG led to a decrease of CHF 19.8
million in operating expenses. In contrast, in the first half year of 2013
expenses due to one-off effects adversely influenced operating expenses.
Without these one-off effects operating expenses would have been lower by 6.9
Personnel expenses rose by 19.0 percent to CHF 90.1 million (30 June 2012: CHF
75.7 million). Adjusted to take into consideration the reduction in expenses
of CHF 19.8 million caused by the change in pension plans in 2012 and
provisions for restructuring measures in 2013, personnel expenses would have
amounted to CHF 7.5 million, or 7.8 percent lower than in the previous year.
In line with the cost-cutting and efficiency improvement programme, total
headcount at the LLB Group decreased by 5.4 percent to 1'031 full-time
equivalents (31 December 2012: 1'090). General and administrative expenses
rose to CHF 137.6 million (30 June 2012: CHF 44.6 million). They were
adversely influenced by the value adjustment for impairment of goodwill, the
provisions for the US taxation dispute and for restructuring costs at the LLB
Group. Without these one-off effects, general and administrative expenses
would have stood at CHF 35.5 million, corresponding to a decrease of 20.4
percent compared with the previous year. The Cost-Income-Ratio stood at 70.2
percent (30 June 2012: 58.5 %).
Key figures of the business segments
Retail & Private Institutional Corporate
Corporate Banking Clients Center Total
Operating income 58.0 53.7 118.7 49.5 279.9
(in CHF millions)
Operating expenses -38.4 -45.9 -148.8 -28.0 -261.2
(in CHF millions)
Business segment profit
before tax 19.6 7.8 -30.1 21.4 18.7
(in CHF millions)
Net new money inflow /
outflow -51 -230 76 -210
(in CHF millions)
Client assets under
management 7.7 16.8 25.9 50.5
(in CHF billions)
Employees 247 160 207 417 1'031
Balanced financing structure
As per 30 June 2013, the consolidated balance sheet total stood at CHF 21.2
billion, virtually unchanged compared with 31 December 2012. The subsidiary,
swisspartners Group, was again fully consolidated as per 30 June 2013 because
sales negotiations with regard to the company have been suspended for the time
being until the US taxation issues have been resolved.
The LLB Group's equity stood at CHF 1.7 billion. The tier 1 ratio amounted to
17.4 percent (31 December 2012: 15.7 %). The return on equity attributable to
LLB shareholders stood at 1.5 percent (30 June 2012: 7.5 %).
Resolution of the US taxation dispute for LLB Vaduz
On 30 July 2013, Liechtensteinische Landesbank AG, Vaduz, reached agreement
with the US authorities in finding a definitive solution. The LLB Vaduz, the
US Department of Justice and the District Attorney for the Southern District
of New York signed a «Non-Prosecution Agreement». This agreement marks the end
of the US investigation of the LLB Vaduz. For its part, the LLB Vaduz will
make a payment of USD 23.8 million.
Under the terms of the Non-Prosecution Agreement the US authorities explicitly
undertake not to impose a fine or penalty on the LLB Vaduz. In this manner
they acknowledge the bank's willingness to cooperate with them and the fact
that, even before the investigation commenced, the bank had voluntarily
implemented measures to terminate US client relationships that did not have
the appropriate documentation.
The Non-Prosecution Agreement achieved by the LLB Vaduz is covered by
provisions set aside by the LLB Group totalling CHF 47.4 million, and will
have no further adverse impact on the income statement in the second half of
The LLB Group will continue negotiations with the US authorities to find a
definitive solution for LLB (Switzerland) Ltd. and swisspartners Investment
Network AG. Corresponding provisions for both companies were allocated by the
In relation to the outlook for the second half of 2013, Group CEO Roland Matt
stated: «In a challenging environment, the LLB Group is pursuing ambitious
goals. We have taken several important and far-reaching decisions, and
prepared ourselves to deal with a volatile business environment, sharper
competition and additional regulatory requirements. Business operations are
going well and the implementation of our strategic initiatives is progressing
as planned. The resolution of the US taxation dispute establishes clear
conditions for the LLB Vaduz, which also benefit our clients and shareholders.
Liechtensteinische Landesbank (Switzerland) Ltd. will cease its banking
activities at the end of 2013. It is envisaged that the branch in Lugano will
be sold in the next few weeks. We also want to finalise the sale of Jura Trust
AG by the end of the year.»
Detailed information about the 2013 interim result
The documents of the 2013 interim financial reporting of the LLB Group
(presentation, 2013 interim report and media communiqué) will be available
from 7.00 a.m. on 29 August 2013 at our website www.llb.li. We shall also
provide the 2013 consolidated interim financial reporting in an interactive
online version (German: http://hb2013.llb.li and English:
The presentation of the 2013 interim business result of the LLB Group will be
made by Roland Matt, Group Chief Executive Officer, and Christoph Reich, Group
Chief Financial Officer, on Thursday, 29 August 2012, at 10.30 a.m. The
conference call will be held in German. Please use the following telephone
number to dial in to the conference:
Europe: +41 58 310 50 00
A recording of the conference call can be downloaded from 1.00 p. m. as an
audio file from our website: www.llb.li
*Tuesday, 25 March 2014, presentation of the 2013 business result
*Friday, 9 May 2014, 22nd ordinary Annual General Meeting
The Liechtensteinische Landesbank AG (LLB) is the longest established
financial institute in the Principality of Liechtenstein. The Principality of
Liechtenstein holds the majority of the company's share capital. The LLB's
shares are listed on the SIX Swiss Exchange (symbol: LLB). The LLB Group
offers its clients comprehensive wealth management services, as a universal
bank, in private banking, asset management, fund services and trust services.
With around 1'000 employees, the LLB is represented in Liechtenstein,
Switzerland, Austria, and the United Arab Emirates (Abu Dhabi and Dubai). As
per 30 June 2013 the LLB Group managed client assets totalling CHF 50.5
Dr. Cyrill Sele
Head Group Corporate Communications & General Secretary
Liechtensteinische Landesbank Aktiengesellschaft
Staedtle 44, P. O. Box 384, 9490 Vaduz, Liechtenstein
Telephone +423 236 82 09
Fax +423 236 87 71
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