13 Provisions

(unaudited)
(XLSX:) Download

in CHF thousands

 

Provisions for legal and litigation risks

 

Provisions for other business risks and restructuring

 

Total 2020

 

Total 2019

As at 1 January

 

5'255

 

9'651

 

14'907

 

30'661

Provisions applied

 

–499

 

–2'086

 

–2'585

 

–12'514

Increase in provisions recognised in the income statement

 

78

 

681

 

759

 

7'108

Decrease in provisions recognised in the income statement

 

–3'869

 

–276

 

–4'145

 

–10'251

Changes due to foreign exchange differences

 

0

 

–110

 

–109

 

–97

As at 30 June 2020 / 31 December 2019

 

966

 

7'860

 

8'826

 

14'907

Provisions for legal and litigation risks

In the following various legal proceedings as per 30 June 2020 are described, which could be of significance for the financial reporting. The LLB Group endeavours to disclose claims for compensation, the scale of legal proceedings and other information, so that it should be possible for the reader to be able to estimate whether a possible risk exists for the LLB Group.

Legal action was taken against LLB Verwaltung (Switzerland) AG, formerly Liechtensteinische Landesbank (Switzerland) Ltd., in respect of a matter which occurred in 2011. The High Court of Justice in London ruled at first instance that there had been misconduct on the part of a former employee and the former bank was jointly liable for his misconduct and the damage caused by him. The former bank was not liable for misconduct itself. The payments already made in connection with this case were recognised in general and administrative expenses in 2017. LLB Verwaltung (Switzerland) AG appealed against the first instance ruling. The Court of Appeal confirmed the main points of the ruling reached by the High Court of Justice. A provision totalling CHF 4.3 million was allocated as per 30 June 2019 for the additional costs incurred with the legal proceedings. In May 2020, a settlement was reached with the plaintiffs. As a result of this settlement, LLB Verwaltung (Switzerland) AG was able to release provisions totalling CHF 3.7 million as per 30 June 2020. It will assert its claims against the insurance company.

Provisions for other business risks and restructuring

LLB (Österreich) AG introduced the Avaloq banking software package on 1 January 2020. The service agreement for the use of the existing Tambas banking software with CPB Software (Austria) GmbH, Vienna, can only be terminated by either party from the end of the 2021 business year at the earliest. A provision amounting to CHF 2.8 million exists as per 30 June 2020 for the potentially payable but not-to-be-used service fees for the years 2020 and 2021. Management continues to regard this provision as being sufficient.

The provisions for restructuring relate to the LLB Group’s StepUp2020 strategy announced in October 2015. Restructuring provisions amounting to CHF 1.7 million were recognised per 30 June 2020 for costs relating to social plans for employees.