LLB - Net profit of CHF 53.8 million-

Net profit of CHF 53.8 million

Successful reorientation with Focus2015 strategy

Vaduz, 25 March 2014. The LLB Group increased its operating performance in the
2013 business year. The strategic reorientation is having an impact. The net
profit of CHF 53.8 million is affected by special factors, however. Adjusted
for those special factors, the LLB Group's net profit would be CHF 112.4

  *Operating income rose by 19.1% to CHF 487.0 million, and operating
    expenses rose by 41.6% to CHF 426.0 million.
  *Special factors, including provisions for the US taxation issue and
    restructuring in the course of Focus2015, reduced the net profit by CHF
    58.6 million.
  *Adjusted for these special factors, the net profit is at the level of the
    previous year, and operating expenses fell by 10.2%.
  *Assets under management as of 31 December 2013 amounted to CHF 49.1
    billion. Net new money outflow was CHF 2.2 billion. Not counting outflows
    resulting from the closure of LLB (Switzerland) Ltd., the strategic target
    markets recorded solid new money inflows of CHF 1.7 billion.
  *The headcount fell from 1'090 at the end of 2012 to 925 full-time
  *With a Tier 1 ratio of 18.8%, the LLB Group stands for security and
  *The Board of Directors proposes that the General Meeting of Shareholders
    approve an unchanged dividend of CHF 1.50 per LLB share.

Key figures of the LLB Group

in CHF millions                     2013          2012*         Change in %
Operating income                    487.0         408.9         19.1
Operating expenses                  -426.0        -300.9        41.6
Net profit                          53.8          95.1          -43.4
ROE (in %)                          3.0           5.8           ã??
Earnings per share (in CHF)         1.75          3.22          -45.7
Dividend per share (in CHF)         **1.50        1.50          0.0
Cost/income ratio (in %)            67.7          62.3          ã??
Net new money inflow/outflow        -2'167        -392          452.7
Assets under management             49'104        49'890        -1.6
Due from customers                  10'240        10'615        -3.5
Tier 1 ratio (in %)                 18.8          15.7          ã??

*Comparison period was adjusted in accordance with IAS 19 (revised).

**Proposal of the Board of Directors to the General Meeting of Shareholders on
9 May 2014

«In 2013 the LLB Group's focus was on implementation of the Focus2015
strategy», says Dr. Hans-Werner Gassner, Chairman of the Board of Directors of
the LLB Group. «The strategic initiatives progressed as planned and are having
an impact. The improvement of our operating performance continued. At the same
time, one-off special factors reduced net profit in connection with the
restructuring of the LLB Group and the US taxation issue.»

Net new money inflows in strategic target markets

The LLB Group's assets under management fell by 1.6% to CHF 49.1 billion (31
December 2012: CHF 49.9 billion). In the onshore markets of Liechtenstein,
Switzerland, and Austria as well as in the growth markets of Central and
Eastern Europe and the Middle East, the LLB Group recorded solid net new money
inflows of CHF 1.7 billion from acquisition. As expected, there was an outflow
of assets in the traditional cross-border markets and as a consequence of the
closure as planned of LLB (Switzerland) Ltd. In total, the net new money
outflow in the 2013 business year ended up being CHF 2.2 billion (2012:
outflow of CHF 0.4 billion).

Due to the closure of LLB (Switzerland) Ltd., loans to clients fell by 3.5% to
CHF 10.2 billion (31 December 2012: CHF 10.6 billion). Mortgage loans fell to
CHF 8.9 billion (31 December 2012: CHF 9.1 billion). Adjusted for the loss of
business due to the closure of LLB (Switzerland) Ltd., loans to clients rose
by 3.0%.

One-off special factors

Five special factors reduced the 2013 financial result: The LLB Group set
aside provisions in the amount of CHF 33.2 million in connection with the US
taxation issue. Additionally, the changed environment in the international
wealth management business necessitated a value adjustment of goodwill and a
simultaneous positive value adjustment of a purchase price liability from
acquisition in the net amount of CHF 14.7 million. The deconsolidation of the
trust company Jura Trust AG led to net expenses of CHF 8.1 million. Moreover,
provisions in the amount of CHF 5.8 million were set aside for restructuring
in the course of implementation of the Focus2015 strategy. The closure of LLB
(Switzerland) Ltd. resulted in total net proceeds of CHF 3.2 million.

Improvement of operating performance

The net profit of the LLB Group was CHF 53.8 million, 43.4% lower than the
previous year (2012: CHF 95.1 million). Adjusted by the special factors
mentioned above, the LLB Group would have had a net profit of CHF 112.4
million. The stronger operating performance is seen in the fact that -
adjusted for the special factors - operating income remained stable at the
level of the previous year, despite difficult market circumstances and fewer
employees, and operating expenses fell by 10.2%.

Operating income rose by 19.1% to CHF 487.0 million (2012: CHF 408.9 million).
This was due especially to the changes in the values of the purchase price
liabilities from acquisitions and the proceeds from the sale of Jura Trust AG
and the branch in Lugano.

Fee and commission income rose by 3.4% to CHF 210.4 million (2012: CHF 203.5
million). Net interest income fell by 19.6% to CHF 145.7 million (2012: CHF
181.2 million). Interest income from clients remained stable at CHF 141.8
million. The decrease in interest income from banks to CHF 3.9 million was a
consequence of the low interest rate level and normalised risk premiums.

Net trading income rose to CHF 58.6 million (2012: CHF 18.6 million). While in
the 2012 business year, interest rate hedging costs were CHF 10.7 million, the
higher medium- and long-term market interest rates in 2013 resulted in income
from interest rate swaps in the amount of CHF 30.3 million. Income from
foreign exchange, foreign note, and precious metal trading fell by 1.8% to CHF
28.1 million (2012: CHF 28.6 million).

Operating expenses climbed to CHF 426.0 million, 41.6% higher than the
previous year (2012: CHF 300.9 million). In 2012 a one-time reduction in
personnel expenses in connection with the changeover to a defined contribution
plan for the Personnel Pension Fund Foundation of the Liechtensteinische
Landesbank AG had resulted in a reduction of operating expenses by CHF 19.8
million. During the reporting period, in contrast, expenses arising from
special factors in the amount of CHF 138 million increased operating expenses.
These included provisions for the US taxation issue, the value adjustment of
goodwill, and provisions for restructuring in the course of implementation of
the Focus2015 strategy. Without these special factors, operating expenses
would have fallen by 10.2%.

In connection with the closure of LLB (Switzerland) Ltd. and the sale of Jura
Trust and other measures in the course of restructuring, the headcount of the
LLB Group fell by 15.1% to 925 full-time equivalents (31 December 2012:

General and administrative expenses rose by 89.0% to CHF 194.1 million due to
the special factors (2012: CHF 102.7 million). Without the special factors,
general and administrative expenses would have been CHF 78.2 million, meaning
a reduction of 23.8%. The LLB Group achieved savings in marketing and public
relations, IT, and consulting fees.

Key figures of the market segments

in CHF millions               Retail & Corporate Private Banking Institutional
                              Banking                            Clients
Operating income              118.3              108.2           173.3
Operating expenses            -74.4              -88.1           -208.9
Segment profit before tax     43.9               20.1            -35.6
Employees (full-time          235                124             166
Net new money inflow/outflow  -2                 -1'474          -688
Assets under management       8'089              15'770          25'228
Due from customers            8'827              1'103           339

Gross margin (in basis points) 71.4 *71.6 48.4

* adjusted for special factors: 62.8 basis points

Strong equity base

The consolidated balance sheet total fell by 1.2% to CHF 20.9 billion (31
December 2012: CHF 21.2 billion).

The equity capital of the LLB Group was CHF 1.8 billion. The Tier 1 ratio was
18.8% (31 December 2012: 15.7%). The return on equity attributable to the
shareholders of the LLB was 3.0% (2012: 5.8%).

Implementation of Focus2015 strategy as planned

The goal of the Focus2015 strategy is to create a solid basis for the
sustainable success of the LLB Group beyond 2015 in a time of fundamental
change in the banking sector. As planned, the LLB Group was able to implement
a series of milestones.

In 2013 LLB (Switzerland) Ltd. was closed and the branch in Lugano was sold.
At the end of the year, LLB (Switzerland) Ltd. shut down its banking
operations. LLB Verwaltung (Schweiz) AG, the successor company domiciled in
Zürich-Erlenbach, is responsible for the remaining winding-up. It is subject
to oversight by FINMA. Effective the end of 2013, the Lugano branch was sold
to PKB PRIVATBANK SA, which specialises in wealth management. After being sold
to its CEO, the trust company Jura Trust AG has no longer been part of the LLB
group of consolidated companies since autumn 2013. Moreover, the network of
branch offices was adjusted to market requirements: Five branch offices of
Bank Linth and two branch offices of the LLB were closed.

At the same time, the LLB Group invested in the future and drove innovations
forward. In order to offer intermediary clients structured, proven expertise
and intensify cooperation with them, the online platform «LLB Xpert views» was
launched in November 2013. This innovative portal grants access to information
that previously was available only internally in regard to investment, law,
and taxes. In parallel, digital challenges were expanded. Since December 2013
the LLB Group has been offering an attractive mobile banking solution. With
the introduction of the Customer Service Centers in Vaduz and Uznach, hubs for
private and corporate clients have been created. In Private Banking,
investments were made in the sustainable expansion of our international growth
markets. Product offerings were expanded for clients in Central and Eastern


Stable dividend for 2013

In light of the improved operating performance in the 2013 business year and
the comfortable equity base with a Tier 1 ratio of 18.8%, the Board of
Directors will propose that the General Meeting of Shareholders on 9 May 2014
approve an unchanged dividend of CHF 1.50 per LLB share. In terms of the share
price of CHF 37.00 at the end of the year, this corresponds to a dividend
yield of 4.1%.


The environment remains challenging in 2014. The structural change in the
banking sector is in full swing, and the regulatory environment is becoming
increasingly complex. At the same time, the recovery of different economic
areas is not uniform; the economy in the Eurozone, for instance, is improving
only sluggishly. The persistently low interest rate level is also a burden.
The restraint and uncertainty of clients and investors continue to be felt,
while demands are growing at the same time. Margins remain under pressure, and
the intensity of competition is rising.

In the current business year, the LLB Group is focusing on consistent
implementation of the Focus2015 strategy. For this purpose, it is developing
an innovative product and price model in investing, improving excellence in
distribution, and expanding advisory capacities in growth markets. In
addition, the Fund Services growth area is being expanded, efficiency is being
improved through process optimisations, and the product structure for
corporate clients is being expanded.

«In the past year we have implemented the strategic initiatives as planned and
in this way significantly tightened the focus of the LLB Group,» Group CEO
Roland Matt says, summarising the good starting position. «Through targeted
investments and outstanding investment performance, we have created added
value for our clients. With our dedicated teams of employees, we were able to
achieve significant progress in all areas in a short period of time during the
2013 business year. We are on course and will further invest in the
sustainably successful future of the LLB Group in 2014.»

Information on the 2013 financial result
The 2013 financial result of the LLB Group will be available at www.llb.li
from 7 a.m. on 25 March 2014. The 2013 annual report will be available in an
interactive online version at: http://gb2013.llb.li

Important dates

  *Friday, 9 May 2014, 22nd Ordinary General Meeting of Shareholders
  *Tuesday, 13 May 2014, Ex-dividend date
  *Friday, 16 May 2014, Dividend payout date
  *Thursday, 28 August 2014, Semi-Annual Financial Statement 2014
  *Tuesday, 10 March 2015, 2014 Annual Results

Brief portrait

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 and fund services. With around 925
employees (full-time equivalents), the LLB is represented in Liechtenstein,
Switzerland, Austria, and in the United Arab Emirates (Abu Dhabi and Dubai).
As per 31 December 2013, the LLB Group managed client assets totalling CHF
49.1 billion.

LLB-AR 2013 MC

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