Value-oriented corporate management

Profit orientation is a central corporate value within the LLB Group. In our opinion, economic success, however, goes hand in hand with our social responsibilities for both clients and employees and – as a bank rooted in the region – for the general public. We take care to ensure that we remain viable in the long term. To this end, we measure the capital appreciation of our company according to the economic profit model, which encompasses all financial and operative key performance indicators (KPIs).

In order to create sustained value for clients, shareholders and staff the LLB Group adheres to the following principle: our return on equity shall clearly exceed capital costs. Profit after capital costs is our key performance indicator and control parameter. This is reflected in our risk policy, which is aimed at obtaining an adequate and preferably permanent return. Profit after capital costs is used by us to take into account that shareholders expect interest on the capital they have provided.

Relevant criteria:

  • Every business decision is based on a risk/return profile.
  • Value-oriented control parameters make strategy and investments comparable.
  • Strategic and operative planning are closely linked, responsibilities are clearly defined.
  • The aspects return and risk are given due consideration for employee remuneration and profit sharing.

Financial and operative performance indicators

Supreme objectives

 

 

 

Economic profit model

 

Economic profit = profit – (equity expense ratio × equity)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth

 

 

Cost efficiency

 

Capital efficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial key performance indicators (KPI)

Balanced scorecard

 

 

 

 

 

 

 

 

 

 

* Assuming regular market conditions.

 

Operative key performance indicators

 

 

 

 

 

 

 

 

 

 

 

 

 

Clients

 

Employees

 

Processes

 

 

 

Operational risks

 

 

 

 

 

 

 

 

 

 

 

 

Client satisfaction3

Motivation/performance1

Process efficiency2

 

 

Optimisation risk profile

 

 

 

 

 

 

 

 

 

 

 

 

1

In 2010, we conducted an employee satisfaction survey within the LLB Group (see Annual Report 2010, chapter «Employee satisfaction survey»).

2

In 2011, we focused on the operative «processes» performance indicator (see section «Corporate Center, Our five priorities in 2011» in chapter «Business Divsions»).

3

In the 2012 business year, we intend to put our main focus on the operative «clients» performance indicator.

 

 

 

 

 

 

 

 

 

 

 

 

Financial key performance indicators

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth

 

 

 

Cost efficiency

 

 

 

Capital efficiency

 

 

 

 

 

 

 

 

 

 

 

 

Net new money inflow > 3 % p. a.

Cost/income ratio holds top
position in banking industry comparison.
New as of 2012: 55–60 %


Return on equity > 12 %*
Tier 1 ratio = 16 %

 

 

 

 

 

 

 

 

 

 

 

 

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