“Inspiring clients anew”

A discussion with Hans-Werner Gassner and Roland Matt

Thanks to the Focus2015 strategy, the LLB Group has achieved a clear position in the market. Is it fit for the future now?

Hans-Werner Gassner: Yes. Three years ago, we promised to make the LLB Group fit for the future. We have delivered on our promise. We have refocused and restructured. We have reduced costs and complexity substantially. And we have increased profitability significantly. By concentrating on our core competences, we are able to generate more efficiency.

Crucially, we did not just drive down costs, we also pushed ahead with innovations and placed ourselves at the service of our clients. Through our three market divisions, our clients can experience in a tangible way that we are committed to a concept of banking which resolutely upholds values.

What values distinguish your company from others?

Hans-Werner Gassner: To take a company with over 900 employees successfully into the future, we need a common vision of what we would like to achieve and how we would like to achieve it. “We set standards for banking with values.” This will be our claim and ambition in the years ahead. At the same time, we exemplify our common values – integrity, respectfulness, excellence and pioneering. The statement “Tradition Meets Innovation” summarises in a nutshell how LLB sets itself apart: We create added value by synthesising competing values. Our position is based on stable foundations: our strong, deep roots in Liechtenstein. And another factor is our strength in innovation.

And staff trust is reflected in the trust of the clients?

Roland Matt, Group CEO (photo)

Roland Matt, Group CEO

Roland Matt: Our employees are our most important factor for success. The successful completion of Focus2015 is a credit to them. We value their opinion. This is why we regularly conduct employee surveys. In the 2015 employee survey, the LLB Group scored above the average for the sector in all relevant points. The commitment of our employees is remarkably high, scoring 85 out of 100 points, and guarantees partnership-based dialogue with our clients, which we consider key.

The LLB Group is operating from a position of strength. What are the decisive elements?

Roland Matt: With a focused business model, we know where we are going. In terms of contribution to net profit, we have three equally strong market divisions. They are client-centered. The income structure is diversified, balanced between interest and investment business. And we have cost management under control.

Our culture of service excellence has proved outstanding. And renowned international ratings confirm time and again that investment competence is one of our great strengths. We have solid foundations and a stable ownership situation. The Principality of Liechtenstein, which is one of thirteen countries worldwide with an AAA rating, is the majority shareholder of the LLB, holding 57.5 percent of the share capital.

To participate in shaping the future, you need to keep coming up with innovations to inspire your clients anew. What have you introduced in 2015?

Roland Matt: Clients are smart: They inform themselves, compare, interact and react in their preferred channels, and they do this increasingly through digital channels. This gives rise to opportunities, which we then selectively target. Whether for young adults, private clients, corporate clients or financial intermediaries, we demonstrate our strength in innovation through various initiatives. To give you just three examples:

Our corporate clients benefit from a comprehensive advice and support concept with transparent services and conditions. We have also developed an omnichannel banking concept, which describes our vision of the seamless client experience. Bank Linth provides clients with a particularly positive experience at its branch office in Sargans. In a multimedia client zone, the advisory service is made into an experience, while self-service for banking and financial transactions is made the norm.

In order to invest, the results must be right...

Roland Matt: This was happily the case again in 2015, and this despite the challenging economic conditions, volatile financial markets, historically low interest rates and greater regulation. The Swiss National Bank’s decision to abandon the minimum exchange rate of the Swiss franc to the euro and to introduce negative interest rates only compounded the situation. We nevertheless increased profit for the year ended December 2015 by as much as 19.7 percent. Net profit amounted to CHF 86.3 million. Operating expenses were reduced to under CHF 240 million. The headcount fell below the target level of 840 full-time equivalents. Operating net profit increased significantly. We managed this not only through strict cost management but also through the profitability of our services as well as numerous innovative products and services.

A word on stability and security: what do these mean in the digital age?

Hans-Werner Gassner: Clients, shareholders and employees value a financially stable bank. Reliability and security have never been more important than now for the financial industry. And this is reflected in the discussions at international level on the necessary level of capital. An adequate capital base is a prerequisite for a solid bank. This has been part of the tradition of the LLB Group for many years.

With CHF 1.8 billion in equity capital and a Tier 1 ratio of 20.6 percent, we are a safe haven of stability. Security in the digital age means not only handling client funds responsibly but also client data and information. We have never had such easy access to knowledge and information as we do today. We have digitalisation to thank for this. And yet we must remember that a person is more than simply a data profile.

After Focus2015 comes StepUp2020. What are its key features?

Hans-Werner Gassner: Following the successful completion of Focus2015, we are at a decisive turning point. We are ready for a new strategic direction with StepUp2020. The name of the new strategy is self-explanatory: “step up” is associated with terms such as “enhance”, “accelerate” and “increase step-by-step”. Following a phase of strategic refocusing and retrenchment, growth ambitions represent a sea change. Going forward, the emphasis will be on the four core elements of growth, profitability, innovation and excellence.

What do you have planned for the next five years?

Dr. Hans-Werner Gassner, Chairman of the Board of Directors (photo)

Hans-Werner Gassner,
Chairman of the Board of Directors

Roland Matt: The LLB Group will pursue greater organic or internal growth and targeted acquisitions in its home markets of Liechtenstein, Switzerland and Austria. We intend to launch products and services that are outstanding in order to boost our income in the prevailing low interest rate environment. Our omnichannel banking concept includes pioneering digital solutions combined with a leading branch concept. By 2020, we intend to invest around CHF 30 million in digitalisation alone. We want to automate our standard business and take a personalised approach to our business based on trust. At the same time, we will embed lean management principles in all processes throughout the organisation. And last but not least, we will set ourselves exacting compliance standards and maintain an outstanding level of expertise.

Which financial targets does StepUp2020 have?

Hans-Werner Gassner: In 2015, as part of a very detailed strategy process, we defined where we would like to be in 2020. We will build on what we have already achieved, while maintaining strict cost discipline. We want to increase the business volume to over CHF 70 billion and to lower the cost-income ratio to under 65 percent. Over the next five years, we want to generate a cumulative net profit of more than CHF 500 million and maintain a strong capital base with a Tier 1 ratio of over 14 percent.

Consolidation in the banking sector is accelerating. Reason enough for the LLB Group to make some selective acquisitions?

Hans-Werner Gassner: There are in fact some good opportunities in the current concentration process to grow acquisitively in the home markets. We have earmarked some CHF 450 million for acquisitions. This will enable us to reap further synergies: economies of scale, cost reductions and increased profitability. A bank or portfolio must, however, be a good fit with our sustainable business model. This begins with the strategic target markets, then client segments, through to and including our value culture.

What are the key topics for the LLB Group in 2016?

Roland Matt: From the end of March 2016, we are going to provide a novel, qualitatively unparalleled experience when it comes to innovative investment advice solutions. We will also be increasing our front-end distributive strength and engaging new client advisers.

Additionally, in 2016, we will be expanding the range of services that we offer to financial intermediaries, making pricing more flexible and intensifying communications. In Retail & Corporate Banking, we want to set ourselves apart in the private client business by offering innovative product packages. At the same time, private financial planning is a key area which we intend to develop and in which the LLB Group has unique, comprehensive and interlinked know-how.

We want to increase the attractiveness of the LLB Group as an employer through the “Employer Branding” project. All in all, we will drive the StepUp2020 strategy forward so as to grow profitably and to repeatedly inspire our clients through our innovations and excellence.