Business division result

The most important growth driver in the Institutional Market Business Division is the fund services sector. This enables us to provide tailor-made funds for independent asset managers and other fund promoters. However, this business sector is extremely cyclical and its development is sharply dependent on the performance of the financial markets. In 2011, clients were restrained in their propensity to launch new funds; moreover, individual redemptions of units in existing funds were registered. Nevertheless, we succeeded in increasing the number of custodian bank mandates by 22 and therefore attained a rise in the total number from 218 to 240. Accordingly, measured by the number of mandates, the Liechtensteinische Landesbank is the clear market leader in Liechtenstein. The total fund volume declined by 7.2 percent to CHF 8.6 billion.

Client assets decreased by 4.0 percent to CHF 18.1 billion (31 December 2010: CHF 18.8 billion, 31 December 2009: CHF 17.2 billion). Net new money outflow amounted to CHF 64 million compared with net new money inflows of CHF 811 million in 2010 and CHF 89 million in 2009. The low level of interest rates had a negative impact on net interest income. Net fee and commission income also came under pressure. In total, operating income declined by 9.3 percent to CHF 96.8 million (2010: CHF 106.7 million, 2009: CHF 106.3 million). Operating expenses rose to CHF 96.5 million (2010: CHF 45.8 million, 2009: CHF 26.3 million). This was largely due to the volume of value adjustments, which increased to CHF 65.9 million. Year on year, the business division profit before tax fell markedly to CHF 0.3 million (2010: CHF 60.8 million, 2009: CHF 79.9 million). The cost/income ratio amounted to 99.7 percent (2010: 43.0 %, 2009: 24.8 %). The gross margin stood at 52.5 basis points (2010: 59.2 basis points, 2009: 65.7 basis points).

4-year trend

The Liechtenstein fund centre is now well established in Europe; its total fund volume is constantly expanding. Nevertheless, both the fund and custodian bank business operations are strongly subject to market fluctuations. During weak market phases clients show restraint in launching new funds. In Liechtenstein, trust business and the activities of external asset managers are undergoing a structural consolidation. Against the backdrop of the introduction of the EU's UCITS IV directive, however, we regard prospects on the whole as being positive. The law concerning certain undertakings for collective investments in transferable securities (UCITSG) came into force in Liechtenstein on 1 August 2011. This law implements the provisions of the EU's UCITS IV directive. As a result, considerably less time is required for the licensing of new fund products. At the same time, fund management companies in Liechtenstein benefit from their eligibility for an EU passport.

Development of operating income

2008 – 2011, in CHF thousands

Institutional Market – Development of operating income (bar chart)
Development of profit before tax

2008 – 2011, in CHF thousands

Institutional Market – Development of profit before tax (bar chart)
Development of cost/income ratio

2008 – 2011, in percent

Institutional Market – Development of cost / income ratio (bar chart)

Segment reporting

 

(XLS:)

 

 

 

 

in CHF thousands

2011

2010

+/– %

Net interest income

13'158

14'286

–7.9

Net fee and commission income

73'673

80'217

–8.2

Net trading income

9'391

12'147

–22.7

Other income

561

0

 

Total operating income

96'783

106'650

–9.3

Personnel expenses

–12'590

–13'976

–9.9

General and administrative expenses

–2'653

–2'685

–1.2

Depreciation and amortisation

–258

–67

285.1

Value adjustments, provisions and losses

–65'896

–15'864

315.4

Services from/to segments

–15'124

–13'226

14.4

Total operating expenses

–96'521

–45'818

110.7

Business division profit before tax

262

60'832

–99.6

Performance figures

(XLS:)

 

 

 

 

2011

2010

Net new money (in CHF millions)

–64

811

Growth of net new money (in percent)

–0.3

4.7

Cost/income ratio (in percent)

99.7

43.0

Operating income/average assets under management (in basis points)

52.5

59.2

Additional information

 

(XLS:)

 

 

 

 

in CHF millions

31.12.2011

31.12.2010

+/– %

Assets under management

18'059

18'814

–4.0

Employees (full-time equivalents, in positions)

79

80

–1.3

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