Letter to shareholders
Information checkedInformation unaudited Information geprüft Information ungeprüft We're shaping the future
For us, as the LLB Group, the prime objective is to establish banking with values – for you as shareholders, for our clients, our employees and, just as importantly, for society and the Principality of Liechtenstein. And to do so sustainably! Accordingly, it's not simply a question of keeping an eye on the here and now, but rather having our sights firmly set on tomorrow and the day after. Because the future is not just about accepting what happens and facing what confronts us, but rather it's about what we make of it. And over recent months we have worked hard and successfully to shape a positive future for you and for us.
Milestones of growth
How can we as a forward-looking company act? In answering this question we defined four core elements in our StepUp2020 strategy, which guide us going forward. One of these core elements is growth. And we can report solid growth for the first half year of 2021. An important yardstick of growth is our business volume. Here we exceeded the 100-billion benchmark for the first time. This represents a significant milestone in the 160-year history of the LLB Group. Currently, we can report a business volume of CHF 101.9 billion, or 9.7 per cent higher than the previous year.
It is particularly pleasing that the LLB Group can again report new money inflows in all three market divisions and booking centres. Our growth is therefore very broad based.
Loans to clients rose by 2.2 per cent to CHF 13.5 billion. Net new money inflows of CHF 2.7 billion coupled with good performance on the financial markets led to an increase in client assets under management. At CHF 88.3 billion, these were 10.9 per cent above the equivalent period in the previous year. This growth is also reflected in the net profit of the LLB Group which, at CHF 71.1 million (+18.2 %), was substantially above the previous year's value. Our fee and commission business benefitted in particular, posting a plus of 9 per cent. Once again we were able to improve the quality of earnings.
As expected, operating expenses increased to CHF 150.7 million (+5.3 %): In the previous year, one-time effects amounting to CHF 10 million had had a positive impact. Adjusted to consider these non-recurring effects, operating expenses were CHF 5.7 million lower than in the previous year. This was also attributable to strict cost and personnel management as well as the exploitation of synergies with business processes.
Expansion in Austria
Our primary focus is geared towards organic growth and therefore towards a profitable development based on our own efforts. In addition, however, we were able to conclude a referral deal in March 2021 with Credit Suisse. The aim of this deal is for us to take over private banking clients in Austria up to a level of one billion euros in client assets under management. This enables us to expand our client base in private banking and consolidate our position as the leading wealth management bank in Austria.
We also took a further step in this direction by opening a second business base in Austria for the first time. Starting in autumn, in addition to our headquarters in Vienna, we shall also have a business presence in Salzburg. The new branch office offers us an advantageous strategic and geographical location from which to achieve additional growth in western Austria and southern Germany.
Going forward sustainably
We are also committed to contributing to sustainable development outside and beyond the confines of the LLB. For us, it is clear that sustainability represents the future. Therefore, it is extremely important to us to integrate social and ecological aspects in our business dealings. To promote and advance this concept, the LLB Group appointed its own sustainability expert at the beginning of April.
Over recent months we have sharply expanded our range of sustainable investments for our clients. In addition to our already well-established range of sustainable asset management and advisory services, we are now offering a complete series of sustainable investment funds. A good example of this is our emerging markets bond fund in Austria. This is managed in accordance with our bank's own ESG concept and is a very attractive option both for institutional as well as private clients. The sustainable Liechtenstein gold fund launched by LLB in spring has already exceeded the 100-million USD mark. Further sustainable products are being planned or are about to be launched.
We attach great importance to supporting our employees through this development and enabling them to enhance their sustainability skills. For this purpose we offer them comprehensive training courses. So far 300 client advisers have already successfully completed the relevant training and professional education courses.
We are extremely pleased that both LLB AG and Bank Linth are represented in the recently launched sustainability index of the Swiss SIX stock exchange. This is further confirmation for us that we are on the right course.
Again in the first half year of 2021, the pandemic continued to confront us both personally and professionally with a heavy burden and major challenge. However, thanks to the experience gained in 2020, we have successfully met and mastered these obstacles. In the past eighteen months we have proven ourselves to be a resilient and reliable partner in times of crisis – for our clients, employees, shareholders, as well as for the economies of Liechtenstein and Switzerland.
Nevertheless, we hope, of course, that the corona situation will continue to ease and that we can soon return to normal. We look forward with pleasure to being able to greet our clients personally again and talking to them without the aid of bits and bytes.
A future based on stability
Reliability, which our stakeholders can depend on, is of immense value especially in times like these when we face the greatest health crisis in decades and when economic and geopolitical turbulence causes major uncertainty.
In spring this year, Moody's again confirmed our Aa2 rating. We are therefore among the most stable and secure banks in the world.
Security and stability create trust. We can offer both – thanks to our good financial position, our broadly based business model, our solid capital base and the stable political situation in the Principality of Liechtenstein, which is our majority shareholder.
A future based on trust
During the Annual General Meeting in May, you, our esteemed shareholders, once again demonstrated your trust in us. You approved all the proposals put forward by the Board of Directors and also approved its proposed election candidates. By an overwhelming majority, you approved the re-election of the two existing Board members, Thomas Russenberger and Richard Senti, for a further term of office of three years, as well as the re-election of Georg Wohlwend as Chairman of the Board. This clear demonstration of your trust in us strengthens our resolve and gives us the confidence to meet and master the coming challenges and decisions.
The operating environment continues to be challenging. On account of the numerous economic and geopolitical uncertainties it is difficult to make forecasts. In spite of this tense situation, the LLB Group continues to be confident as regards the full 2021 business year. Our business model is valid, the LLB Group is growing, and we have clearly demonstrated that we have the ability and the skills to meet and overcome difficult challenges. We are striving therefore, once again, to achieve a solid business result for the full year.
We also have confidence in the future for another reason, over recent months we have worked intensively on the successor strategy to StepUp2020. The process has been very open and constructive, and is almost complete. We are looking forward to presenting our new corporate strategy to you in the autumn.
We would like to thank our clients for their loyalty and trust, as well as our employees for their competence and commitment to our clients and our company. And, of course, you our esteemed shareholders, for supporting us in shaping the future – for which we are now well prepared.
- Gabriel Brenna
- Group CEO
- Georg Wohlwend
- Chairman of the Board of Directors