With a range of products and services, the LLB Group takes social responsibility for the future generations in its home markets of Liechtenstein and Switzerland. This applies to both private individuals and small and medium-sized enterprises (SMEs).
Risk-conscious growth in the mortgage lending business
The development of the real estate and mortgage market plays a key role in the economy. In Liechtenstein, LLB is the market leader in the mortgage lending business with a market share of around 50 percent. To achieve sustained, profitable growth, it focuses in Liechtenstein and Switzerland on the quality of the mortgage portfolio and risk-conscious growth carefully tuned to suit the region and the type of property (see chapter “Finance and risk management”). In 2016, mortgages accounted for 86.5 percent (2015: 87.2 %) of loans granted by the LLB Group, corresponding to CHF 10.0 billion (2015: (CHF 9.6 billion).
Private financial planning
LLB is the only bank in Liechtenstein to offer comprehensive private financial planning. Changing asset structures, the growing diversity and complexity of financial instruments, the globalisation of financial markets and changes in retirement planning are new aspects that we have to take account of. The need for professional and holistic private financial planning is growing. In 2016, LLB refined its service offering for all stages of life and business under the name “LLB Compass”. Bank Linth is launching its comprehensive advisory service in Switzerland in spring 2017.
LBB offers three separate advisory packages for corporate clients. In the case of owners of small and medium-sized enterprises (SMEs), private and business assets are often closely interlinked. LLB’s 360-degree financial planning covers all the important topics such as assets, financing, retirement planning, real estate, taxes and estates.
LLB Liechtenstein Pension Fund Foundation
At LLB, client orientation means nurturing stable, long-term relationships at the same time as being innovative and proactive. With the LLB Liechtenstein Pension Fund Foundation, we have been offering our clients a service that is extraordinary for a bank since 2005. With a market share of 40 percent, the LLB Liechtenstein Pension Fund Foundation is an essential pillar of the pension fund market in Liechtenstein.
It is also an important element in LLB’s integrated advisory and financial planning services for SMEs. Occupational retirement provision, financed by a capital funding system, is becoming increasingly important in an ageing society. The LLB Liechtenstein Pension Fund Foundation is represented on the Executive Board of the Liechtenstein Pension Scheme Association (LPKV) and has a decisive role in expanding the Liechtenstein pension fund market. To address the financing of pensions, a reform package for the Old-Age and Survivors’ Insurance (OASI) and occupational pension provision came into force in Liechtenstein on 1 January 2017.
The LLB Liechtenstein Pension Fund Foundation has established itself as a competence centre. As the youngest pension fund in the Principality, it ranks as the number two among the independent collective foundations. At the end of 2016, it had significantly increased pension fund capital under management to CHF 620 million (2015: CHF 501.9 million). It provided services to 420 (2015: 356) companies with 4,970 (2015: 4,510) active insured persons and had a liquidity ratio of 106 percent (2015: 105.5 %). The foundation has a very good structural ratio: for each pensioner there are 21 active insured contributors (2015: 27 active insured contributors).
According to Liechtenstein’s first Environmental, Social and Governance (ESG) Market Report of November 2016, LLB with its funds is the market leader in the Principality. The funds are managed by LLB Asset Management. We concentrate on the shares of companies that are audited on their ESG criteria and have a good sustainability rating. The focus is increasingly on the effect of ESG criteria on the risk and return profile of a company and hence on the investment portfolio of an investor.
Sustainable asset management
The Asset Management Business Area of the LLB Group has developed the “Sustainable asset management” service offering. When constructing a portfolio, certain sectors such as tobacco, alcohol, nuclear energy and armaments are excluded. Companies which do not comply with specific social or environmental standards as well as countries which are subject to sanctions are also excluded. We focus on traditional investment categories in order to ensure socially responsible investments.
Basically, the LLB Group’s investment policy excludes ethically unsuitable products or behaviour. Liechtensteinische Landesbank has no financial products itself which contain soft commodities. In the case of products from other providers, it is guided by the Dow Jones UBS Commodity Index, which consists of one third energy, one third non-ferrous and precious metals and one third soft commodities such as corn, soya, cocoa or rice. In the case of the LLB strategy funds, the proportion of investments in commodities amounts to 2 percent, whereby merely 0.66 percent consists of futures on soft commodities as a complement.