Consolidated interim management report (unaudited)
Information checkedInformation unaudited Information geprüft Information ungeprüft Consolidated interim management report
In the first half of 2022, the LLB Group earned a net profit of CHF 75.9 million, which is 6.8 per cent higher than in the same period of the previous year (first half of 2021: CHF 71.1 million).
The profit attributable to the shareholders of Liechtensteinische Landesbank AG amounted to CHF 74.1 million (first half of 2021: CHF 67.1 million). Undiluted earnings per share stood at CHF 2.42 (first half of 2021: CHF 2.20).
Operating income increased by 4.4 per cent to CHF 241.9 million in the first half of 2022 (first half of 2021: CHF 231.8 million).
In comparison with the previous year, interest income before expected credit losses decreased by 4.2 per cent or CHF 3.2 million to CHF 73.4 million (first half of 2021: CHF 76.6 million). Income from interest business with clients remained constant. This benefitted from specific, risk-conscious growth with mortgage loans and the broader implementation of negative interest rates which, in turn, enabled the persisting pressure on margins, as well as the extension of fixed-rate loans at lower conditions, to be compensated for. Other income from interest business was above the previous yearʼs level. This was attributable to higher interest rates. In contrast, the reporting date-related valuation of interest rate derivatives led to a negative contribution in net interest income.
Due to the uncertain economic conditions, risk provisions were increased by CHF 3.4 million net in the first half of 2022 (first half of 2021: CHF 0.9 million net release).
In comparison with the previous year, net fee and commission income climbed by CHF 4.1 million to CHF 112.7 million (first half of 2021: CHF 108.6 million). Portfolio-dependent revenues benefitted from higher average volumes, especially in investment fund business. At the same time, transaction-related revenues also increased.
Net trading income increased by 41.6 per cent in the first half of 2022 to CHF 53.2 million (first half of 2021: CHF 37.6 million). Foreign exchange business made a major contribution to this success, climbing by CHF 17.2 million to CHF 48.5 million (first half of 2021: CHF 31.4 million). Income from client trading also developed positively. In addition, thanks to higher USD interest rates, the treasury contribution was larger. The valuation gains on the reporting date with interest rate hedging instruments totalled CHF 3.7 million (first half of 2021: CHF 5.2 million).
Income from financial investments stood at minus CHF 0.8 million (first half of 2021: CHF 5.0 million). Developments on the financial markets led to book losses, measured on the reporting date, of minus CHF 6.5 million (first half of 2021: CHF 1.6 million). Revenues from dividends rose by CHF 2.3 million to CHF 5.7 million (first half of 2021: CHF 3.4 million).
Other income increased by CHF 3.7 million to CHF 6.8 million in comparison with the previous year (first half of 2021: CHF 3.1 million). This was mainly attributable to the sale of a value adjusted claim.
Operating income (in CHF millions)
At CHF 154.5 million, operating expenses in the first half of 2022 were 2.5 per cent higher than in the previous year (first half of 2021: CHF 150.7 million).
Personnel expenses rose by 2.4 per cent or CHF 2.2 million to CHF 96.2 million (first half of 2021: CHF 94.0 million).
At CHF 40.2 million, general and administrative expenses were 6.8 per cent up on the previous year (first half of 2021: CHF 37.6 million). The increase in both personnel and general expenses is in line with expectations and reflects the investments in the implementation of the ACT-26 strategy.
Depreciation and amortisation decreased by CHF 1.0 million to CHF 18.1 million (first half of 2021: CHF 19.1 million).
The Cost Income Ratio improved to 62.8 per cent (first half of 2021: 65.1 %).
In comparison with 31 December 2021, the consolidated balance sheet total increased by 4.0 per cent and amounted to CHF 26.1 billion as at 30 June 2022 (31.12.2021: CHF 25.1 billion).
Equity attributable to the shareholders of LLB stood at CHF 2.0 billion as at 30 June 2022 (31.12.2021: CHF 2.1 billion).The tier 1 ratio stood at 18.4 per cent (31.12.2021: 20.3 %). The return on equity attributable to the shareholders of LLB amounted to 7.2 per cent (first half of 2021: 6.6 %).
In the first half of 2022, the LLB Group posted a net new money inflow of CHF 2'509 million (first half of 2021: CHF 2'748 million). Thanks to intensive efforts and sales in the markets, positive new money inflows were attained in both market segments and all three booking centres.
In comparison with 31 December 2021, the business volume contracted by 6.9 per cent or CHF 7.3 billion to CHF 98.4 billion due to market-related factors (31.12.2021: CHF 105.7 billion).
On account of the negative market performance and currency effects, client assets under management decreased by 8.4 per cent to CHF 84.2 billion (31.12.2021: CHF 91.9 billion).
In comparison with 31 December 2021, loans to customers grew by 2.7 per cent to CHF 14.2 billion (31.12.2021: CHF 13.8 billion), whereby mortgage loans increased by 1.9 per cent to CHF 12.5 billion (31.12.2021: CHF 12.2 billion).
Business volume (in CHF billions)
The market environment is not only currently difficult, but will remain so. In the first few months of this year, however, the LLB Group was once again able to prove that it can cope well with challenging conditions. It is therefore confident that the positive development of the LLB Group will continue. For the full year 2022, it expects a solid result.