A good equity base not only protects reputations, it helps form the economic policies and financial credibility of a bank. LLB is considered to be of systemic relevance to the national economy of Liechtenstein. It is therefore part of our identity to have a sufficiently high-quality equity base at our disposal. A solid equity base provides clients, shareholders and employees with an important added value.
Our capital base covers the capital needs required for our objectives. The LLB Group continues to enjoy a high level of financial stability and security on account of its solid equity base with exclusively “hard” core capital. As at the end of 2014, it had an equity base of CHF 1.8 billion (31 December 2013: CHF 1.8 billion) at its disposal, which corresponds to a Tier 1 ratio of 18.3 percent (31 December 2013: 18.8 %). By the end of 2014, we had again achieved our goal to raise the Tier 1 ratio to over 16 percent.
The LLB Group’s financial power shall remain unaffected by the capital markets’ fluctuations. We simulate external influences and analyse how these affect our capital base using scenario analyses and stress tests and, where necessary, we take measures to minimize risks.
The comprehensive reform package of the Basel Committee on Banking Supervision (Basel III) has been in effect in the EU since 17 July 2013. It aims to improve the equity base of banks with regard to equipment and quality and to increase the requirements concerning liquidity regulations. The additional introduction of a debt limit ceiling and of an anti-cyclical buffer aims to ensure better protection for the banking sector against shocks to the financial system (see chapter “”). As of 1 February 2015, the EEA member country Liechtenstein implemented the EU Capital Requirements Directive (CRD IV) and, with it, the Basel III standard, which will come into effect from 2019.