Business division result

The situation in the international private banking market remained tense in 2011. As a result of the turbulence on the capital markets, uncertainty was widespread among many clients and in general their confidence in the financial services industry and the financial markets declined. Investors were primarily interested in low-risk, and therefore low-margin, products. The LLB Group increased its business capacity in Eastern Europe as well as in the Near and Middle East. It was able to record good growth in these regions. In total, the development of exchange rates and the weak performance of the stock markets caused the value of assets under management to fall.

In total, operating income decreased by 1.9 percent to CHF 119.2 million (2010: CHF 121.5 million, 2009: CHF 142.7 million). Operating expenses rose by 8.3 percent to CHF 118.8 million (2010: CHF 109.7 million, 2009: CHF 119.0 million). At CHF 0.4 million, profit before tax was substantially below the value for the previous year (2010: CHF 11.8 million, 2009: CHF 23.7 million). The decrease was largely attributable to value adjustments, provisions and losses. The cost/income ratio rose to 99.7 percent (2010: 90.3 %, 2009: 83.4 %). The gross margin expanded by 2.9 to 85.3 basis points (2010: 82.4 basis points, 2009: 92.9 basis points). Client assets fell by 7.0 percent to CHF 13.5 billion (31 December 2010: CHF 14.5 billion, 31 December 2009: CHF 15.0 billion). Net new money inflow stood at CHF 216 million (2010: inflow of CHF 955 million, 2009: outflow of CHF 939 million).

4-year trend

In continuation of the trend in 2010, last year the Liechtenstein financial centre was able to further reduce the uncertainty that was generated by the international taxation debate in 2008 and 2009. The LLB Group registered new money inflows. However, this growth was completely offset by the development on the stock markets and the unfavourable exchange rates. Increasing regulatory requirements were also causing costs to rise, which in turn had a negative impact on margins. We foresee further growth potential for the International Market Business Division in the emerging markets, predominantly in our target markets of Russia, Eastern Europe as well as the Near and Middle East. By contrast, the traditional core markets are stagnating.

Development of operating income

2008 – 2011, in CHF thousands

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

2008 – 2011, in CHF thousands

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

2008 – 2011, in percent

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

Segment reporting

 

(XLS:)

 

 

 

 

in CHF thousands

2011

2010

+/– %

Net interest income

14'333

11'014

30.1

Net fee and commission income

91'073

98'840

–7.9

Net trading income

6'812

6'723

1.3

Other income

6'970

4'907

42.0

Total operating income

119'188

121'484

–1.9

Personnel expenses

–64'507

–67'257

–4.1

General and administrative expenses

–23'979

–22'740

5.4

Depreciation and amortisation

–9'496

–9'929

–4.4

Value adjustments, provisions and losses

–12'732

–5'874

116.8

Services from/to segments

–8'124

–3'882

109.3

Total operating expenses

–118'838

–109'682

8.3

Business division profit before tax

350

11'802

–97.0

Performance figures

(XLS:)

 

 

 

 

2011

2010

Net new money (in CHF millions)

216

955

Growth of net new money (in percent)

1.5

6.4

Cost/income ratio (in percent)

99.7

90.3

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

85.3

82.4

Additional information

 

(XLS:)

 

 

 

 

in CHF millions

31.12.2011

31.12.2010

+/– %

Assets under management

13'467

14'474

–7.0

Employees (full-time equivalents, in positions)

296

293

1.0

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