Annual Report 2010 LGT Bank in Liechtenstein Ltd., Vaduz

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Annual report
Annual report
In 2010, the financial markets were significantly affected
by the consequences of the financial and economic
crisis. Although the economy has recovered more or
less across the globe, the economic challenges faced
by individual countries and regions still vary widely.
In this challenging environment, LGT Bank in Liechtenstein
Ltd. achieved a good business result.
In the 2010 business year, gross operating income
decreased slightly by CHF 13.9 million, or 3 percent,
to CHF 495.6 million. Earnings were held back by
low interest rates and the strength of the Swiss Franc
against the Euro and US Dollar. Offsetting these developments
was a general pick-up in client stock market
activity over the course of the second six months.
Income from commission business and services fell by
CHF 10.9 million (6 percent) to CHF 162.1 million,
while net interest income declined by 38 percent to
CHF 128.1 million. In the previous year, income from
financial transactions had increased sharply thanks to
profits realized on own securities. In the year under
report, the bank was no longer able to benefit from
this special effect. Consequently – and in spite of significantly
higher earnings from trading activities – income
from financial transactions was down by CHF 34.6 million,
or 33 percent. In 2010, operating expenses decreased
by CHF 17.3 million, or 7 percent. The decrease
encompassed a parallel fall in personnel expenses and
business expenses. The cost / income ratio improved
marginally from 47 to 45 percent.
Profit for the year was increased substantially by CHF
71.3 million, or 38 percent, to CHF 257.3 million. This
improved result was attributable, among other factors,
to various special effects. On the one hand, in 2010
the bank was able to release tax provisions that had
been allocated in 2009 in connection with tax changes
in Liechtenstein. On the other, the bank booked extraordinary
revenues in 2010 of CHF 98.7 million from its
shares in affiliated companies. Moreover, it also released
provisions of CHF 30 million for general banking risks.
The capital resources of LGT Bank in Liechtenstein Ltd.
remained at a very sound level. At 21.0 percent at the
end of 2010, the bank’s equity capital exceeded the
statutory requirement of 8 percent of risk-weighted
exposure by 163 percent.
On account of currency influences, client assets under
administration declined by CHF 2.2 billion, or 5 percent,
to CHF 45.4 billion. Asset outflows were further reduced
while new money inflows rose, resulting on the whole
in a sharply improved net new money balance.
The shares of LGT Bank in Liechtenstein Ltd. are wholly
owned by LGT Group Foundation. No own shares
were acquired or taken as a pledge, either directly or
indirectly. LGT Bank in Liechtenstein Ltd. is a part of
LGT Group, a globally active wealth and asset management
group, which takes an integrated approach to
the management and development of the individual
Group companies. LGT Group's annual report provides
information about the financial capacity, expertise and
development of LGT Group.
Thanks to the continuing economic recovery in many
areas, the operating conditions for banking business
have gradually improved. Liechtenstein’s economic
and political stability, its strong currency and the expertise
built up over many years in private banking all
strengthen the attractiveness of its financial center –
especially in view of the weakness of the Euro and
the US Dollar. As a family company with a long-term
perspective and a strong capital base, LGT Bank in
Liechtenstein Ltd. is well positioned to meet and
master future challenges in this environment. The
international structure of the company, its consistent,
long-term strategy and its dedicated employees form
key components of its success by guaranteeing safety,
performance and quality.
H.S.H. Prince Max von und zu Liechtenstein
Chairman of the Board of Directors