The LLB Group accompanies private persons, companies, small businesses and public institutions to finance their plans for the future. The majority of the loans in 2016, i.e. 86.4 percent (2015: 87.0 %), comprised credits secured by mortgages.
The LLB Group pursues a conservative credit risk policy in all divisions and penetrated markets. Integral parts of the credit risk policy include the individual and differentiated evaluation of loan applications, the conservative assessment of collateral values, the individual calculation of affordability as well as compliance with standard equity requirements. The differentiated control processes help us to reliably fulfil our performance mandate (see chapter “Responsibilities for society and the environment”) and to keep risks under control.
The LLB Group primarily extends mortgages with a focus on Liechtenstein and north-eastern Switzerland. Outside of these target markets, it provides mortgages in cases that involve an important client relationship or in cases in which such a relationship can be verifiably established within a reasonable period of time. For real estate financing, we observe the “Ordinance on Banks and Securities Firms” (FL-BankV), which governs the implementation of Art. 7a and Art. 21c. ff of the Liechtenstein Banking Act. For financing in Switzerland, we observe the minimum requirements for mortgage financing drawn up by the Swiss Bankers Association (SBA) and approved by the Swiss Financial Market Supervisory Authority (FINMA). We also apply the EU guidelines on assessing, evaluating and processing mortgage secured loans.
We developed a group-wide uniform methodology for determining the collateral value of our Lombard loans. Credits against non- diversified securities or single asset lending may only form an insignificant portion of a Lombard loan portfolio.
Independent Credit & Risk Management
Within the LLB Group, credit competences are assigned in relation to the current expertise of key employees and their experience according to different levels and credit types. The authority to grant credit has been given to Group Credit & Risk Management and the Credit Committees, with the exception of standard business transactions. Credit decisions are thus made independently of market pressures and market targets. In this way, we are able to avoid conflicts of interest and objectively and independently assess risk in individual cases.
Internal control system (ICS)
The LLB Group applies standards that are customary in the banking industry for the internal control system (ICS), a sub-system of corporate risk management. The ICS contributes to increasing risk transparency within the company as an integral part of our group-wide risk management by linking the relevant business processes with the concomitant risks and by monitoring them through effective control processes.