Annual Report 2011 LGT Bank in Liechtenstein Ltd., Vaduz

6
Annual report
Annual report
In 2011, the world economy and the capital markets
were strongly affected by the political changes in
North Africa and the Middle East, by the devastating
effects of the tsunami and nuclear disaster in Japan,
and also by the ongoing debt crisis on both sides of
the Atlantic. The resulting turbulent market and currency
developments presented investors and the financial
industry as a whole with opportunities, but also
with many risks. In this challenging environment,
LGT Bank in Liechtenstein Ltd achieved a pleasing
business result.
In the 2011 business year, gross operating income de-
clined by CHF 147.6 million or 30 percent. This decrease
was largely attributable to a one-time extraordinary
effect, i.e. in the previous year the bank was able to
book extraordinary income of CHF 98.0 million from
shares in affiliated companies. Income from commission
business and services was down by 7.6 percent
to CHF 149.9 million. This was primarily due to the
restraint in making securities transactions shown by
our clients and to currency influences. In contrast, net
interest income rose by 13.2 percent to CHF 145.0
million thanks to the successful expansion of our onbalance-sheet
business. Largely as a result of losses in
value on own securities, income from financial transactions
decreased year on year by CHF 49.6 million.
Operating expenses fell by 2 percent to CHF 218.9
million, largely as a result of cost savings made with
business and office expenses. The cost/income ratio
climbed from 45 percent to 63 percent.
Profit for the year was down by 64.3 percent to CHF
91.8 million. This reduction was attributable, on the
one hand, to the previously-mentioned extraordinary
effect on the earnings side, and on the other from the
fact that the previous year’s result had benefitted from
the release in 2010 of provisions for general banking
risks totalling CHF 30 million, as well as from tax provisions
set aside in connection with the changes made
to the taxation system in Liechtenstein. At the end of
2011, LGT Bank in Liechtenstein Ltd continued to be
extremely well capitalized. The bank’s equity capital
ratio of 18.8 percent at the end of 2011 exceeded the
legally required 8 percent of risk-weighted exposure
by 135 percent.
On account of currency influences, client assets under
administration decreased by 5.3 percent to CHF 43.0
billion. The bank was successful in halting asset outflows.
In total, in the year under report, a positive net
new money result was again attained.
The shares of LGT Bank in Liechtenstein Ltd are wholly
owned by LGT Group Foundation. No own shares were
acquired or taken as pledge, either directly or indirectly.
LGT Bank in Liechtenstein Ltd is a part of the LGT Group,
a globally active private banking and asset management
group, which takes an integrated approach to
the management and development of the individual
Group companies. A separate annual report provides
information about LGT Group’s financial capacity,
expertise and development.
The basic economic conditions and the uncertain de-
velopment on the international financial markets will
also present major challenges in 2012. Against this
backdrop, the Liechtenstein financial center will benefit
from the economic and political stability of the country,
as well as from the strong currency and the expertise
in private banking gained over decades. As a longterm-oriented,
family-owned company with a very
strong capital base, we believe we are well positioned
to take full advantage of the opportunities that are
also presented by a difficult business environment. We
are convinced that our strong international business
presence, our long-term strategy, the quality and
commitment of our employees, and above all the trust
that our clients place in us, provide us with the key
prerequisites for our future success.
We thank you for the trust you have shown in us
and we look forward to continuing to be your
Liechtensteiner bank in 2012.
Thomas Piske
Chairman of the Board of Directors