Liechtenstein is among eleven countries worldwide with an AAA rating. On 3 June 2019, 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 strict budgetary discipline. The stable financial and banking centre with strong international connections contributes substantially to the financial results of the state. Almost a quarter of Liechtenstein’s gross domestic product is generated by the financial sector. For the LLB Group, having a very good capital base is also part of its identity. We meet the core capital ratio of 13 per cent required under Basel III regulations since 2019 and have done so for many years (see chapter “Finance and risk management”).
The LLB Group bases its business policy on market conditions and strives to generate a reasonable profit, all the while respecting ethical and ecological principles. After all, the LLB Group plays an important role in Liechtenstein’s economy: its contribution – dividends, direct taxes and the compensation payment for the state guarantee – amounted to CHF 49.3 million in 2019 (2018: CHF 45.5 million). LLB receives no financial support for its banks or Group companies in Liechtenstein, Switzerland and Austria from any government.
As a bank of systemic importance, LLB is subject to particularly strict financial market regulation and high capital adequacy requirements. With the implementation of the Capital Requirements Directive (CRD IV) and the establishment of the Deposit Guarantee and Investor Compensation Foundation (EAS), Liechtenstein has a modern guarantee system, which guarantees an adequate equity base and protection of client deposits (see chapter “Regulatory framework and developments”). The state guarantee was revoked by mutual agreement of the Landtag (Parliament) and the Government on 1 July 2019.