The Principality of Liechtenstein is the majority shareholder in LLB with 57.5 percent of the share capital. This ownership situation is unique in Liechtenstein. Sustainable business management is part of the performance mandate and the principles governing the corporate strategy of Liechtensteinische Landesbank. At the same time, social commitment has always been a significant part of our corporate identity. Our activities are in line with our statutory mandate: according to Art. 3 of the Law on the Liechtensteinische Landesbank (LLBG) of 21 October 1992 and under the investment strategy of the Government of the Principality of Liechtenstein of 22 November 2011, LLB is mandated with the social responsibility of promoting Liechtenstein’s economic development while at the same time still taking ethical and ecological factors into account.
Liechtenstein is among twelve countries worldwide with an AAA rating. On 27 January 2017, Standard & Poor’s (S & P) reconfirmed its best rating for the country’s creditworthiness. Liechtenstein has no national debt, instead it has large reserves thanks to the state’s strict budgetary discipline. A functioning banking sector and stable financial centre with strong international connections contribute substantially to the financial results of the state.
The financial services sector, accounting for around 24 percent of GDP, is the most important sector in the Liechtenstein economy after industry. The banks are particularly distinguished by their financial stability. Having a sufficiently high-quality equity base at its disposal is part of the LLB Group’s identity. Today it already meets the core capital ratio required from 2019 at the latest under Basel III regulations (see chapter “Finance and risk management”).
The LLB Group bases its business policy on market principles and pursues the objective of generating a reasonable profit. The Principality of Liechtenstein and its population participate in profits through regular distributions. The economic contribution – dividends, direct taxes and the compensation payment for the state guarantee – of the LLB Group amounted to CHF 38.4 million in 2016 (2015: CHF 31.7 million). LLB receives no financial support for its banks or Group companies in Liechtenstein, Switzerland and Austria from any government.
LLB’s clients benefit from additional security, for which LLB makes a yearly compensation payment to the Principality. In 2016, this amounted to CHF 1.2 million (2015: CHF 1.3 million). LLB is the only bank in Liechtenstein which carries a state guarantee for savings account deposits and medium-term notes (cash bonds). This is governed by the Law of 21 October 1992 on Liechtensteinische Landesbank (LLBG). According to Art. 5 of the LLBG, the Principality of Liechtenstein is liable for savings account deposits at the Landesbank and for medium-term notes (cash bonds) of the Landesbank, insofar as the bank’s own resources are not sufficient.