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 million.    *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     equivalents.   *With a Tier 1 ratio of 18.8%, the LLB Group stands for security and     stability.   *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: 1'090).  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 equivalents) 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 Europe.  ã??  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%.  Outlook  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  Provider                  Channel         Contact Tensid Ltd., Switzerland  newsbox.ch      Provider/Channel related enquiries www.tensid.ch             www.newsbox.ch  marco@tensid.ch                                           +41 41 763 00 50