Letter to shareholders
Information unaudited Information ungeprüft LLB Group reports a successful business year
Dear shareholders, clients and colleagues
Dear ladies and gentlemen
“The secret of success lies in focusing one’s energy on building something new”, as the Greek philosopher Socrates expressed it 2000 years ago. And for us at LLB, development and transformation are important success factors. Accordingly, in 2023 we continued with the consistent realisation of our ACT-26 strategy, which stands for acceleration and transformation. With success.
Substantial increase in profit
In 2023, we once again increased our profitability. At CHF 164.7 million (2022: CHF 149.4 million), Group net profit was 10.2 per cent above the previous year’s figure. Our best result for more than 10 years. Among other factors, we benefitted from higher interest rates in the key currencies. Operating income grew by CHF 38.6 million or 7.7 per cent to CHF 541.8 million (2022: CHF 503.2 million). To ensure the successful implementation of our strategy, we are investing in new technologies and recruiting additional talented personnel. In the 2023 business year, we created around 100 new jobs. Consequently, operating expenses rose by 6.1 per cent to CHF 348.4 million (2022: CHF 328.2 million). With a Cost Income Ratio of 64.3 per cent, in spite of our extensive investments in the future, we were again below our strategic target value of 65.0 per cent (2022: 64.0 %). This reflects our constantly improving efficiency and our higher earnings.
In our lending business we made particular progress with loans to corporate clients. Loans to clients climbed to a new record of CHF 15.3 billion. Net new loans of CHF 954 million were granted, corresponding to a growth rate of 6.6 per cent (2022: 5.5 %). Net new money inflows amounted to CHF 1.4 billion and were therefore under the record value of the previous year (2022: CHF 3.6 billion). This development was largely attributable to the changed market environment, which favoured classical interest rate products over other asset classes such as real estate investment funds. In contrast, we posted pleasing growth in private banking, institutional banking and in business with corporate clients. Thanks to organic growth and positive market effects, the business volume expanded to CHF 102.2 billion, as in 2021, once again exceeding the100-billion francs mark (2022: CHF 98.4 billion).
Growth in Germany and Switzerland
At the beginning of 2024, we established our presence on the German market for the first time with three new business locations in Munich, Frankfurt and Düsseldorf. The locations offer first-class investment advisory services and asset management. Additionally, in Frankfurt, professional services for independent asset managers are provided. This will enable us in future to care for the steadily increasing number of German clients in place in Germany. Business operations have started with twenty employees, a team that will successively rise to forty. In Switzerland we are also investing in our growth ambitions. During the coming months, we shall open business locations in St. Gallen and Zurich. We aim to build on the foundations of LLB Schweiz to expand private banking and corporate client business, as well as developing new business with external asset managers. For this purpose, we shall strengthen our advisory team with around forty new professionals.
New, uniform brand
In autumn 2023, all our Group companies began to operate under the modern, strong “LLB” brand. Our ACT-26 corporate strategy and our dual positioning as the leading bank in Liechtenstein and in the adjacent region, and as a secure, sustainable, international private bank are reflected in this uniform corporate appearance on the market. We are convinced that operating under the new, uniform brand will enable us to implement our strategy and positioning even more successfully.
Digital transformation
Our corporate strategy focuses specifically on the digitalisation of our product offers and processes. Last year, we once more made good progress towards the realisation of this transformation. We enhanced our digital wiLLBe asset management app and subsequently gained around 13ʼ000 new clients during the following months. At the same time, we derived learning effects and synergies for the LLB Group as a whole. In addition, we completely revised our digital Mobile Banking programme and substantially expanded our digital mortgage lending offer. The introduction of the most widely used mobile payments services (Apple Pay, Google Pay, Samsung Pay as well as Twint in Switzerland) has enabled us to make digital payment transactions even more convenient for our clients.
On course for net zero emissions
In the report year, we reached important milestones on our way to achieving net zero emissions. When making our own investments, we no longer consider investments in fossil fuels and we will withdraw completely from this sector in 2025. We have formulated clear expectations in our guidelines for suppliers for them also to consider environmental and climate protection concerns, as well as sustainability aspects in their business activities. In the mobility concept that we developed in 2023, we encourage the environmentally conducive mobility of our employees. For example, we have increased our subsidies for the use of public transport and reduced the amount of air travel in daily business. Furthermore, sustainable solutions have already been implemented in our own range of investment funds and in discretionary asset management mandates.
Best employer in Switzerland and Liechtenstein
How does the saying go? Employees are a company’s greatest asset. That is exactly what we think at the LLB Group. We attach great importance to the satisfaction of our employees. For this reason, we regularly hold comprehensive staff surveys. In the report year, the result of the survey was extremely gratifying. In the most important categories “Commitment” and “Satisfaction”, we were even better than in the last survey carried out in 2020. Based on this survey result, we were ranked in first place at the Swiss Employer Awards 2023 in the category: companies with more than a thousand employees, placing us among the top employers in Switzerland and Liechtenstein.
Higher dividend for shareholders
For many years, our shareholders have benefitted from our long-term, attractive dividend policy. The Board of Directors proposes to the General Meeting of Shareholders on 1 April 2024 that the dividend be increased from CHF 2.50 to CHF 2.70. Based on the closing price of the LLB share on 31 December 2023, this corresponds to a dividend yield of 4.1 per cent.
New faces on the Board of Directors
In May 2023, two members of the Board of Directors stood down due to the legal term of office limitation regulations. As their successors, the General Meeting elected Nicole Brunhart and Christian Wiesendanger, who both possess extensive experience in banking business and a well developed network in the financial services industry. Over recent months, they have been able to employ their professional knowledge successfully in the Board of Directors. No new elections are required at the forthcoming General Meeting in April. Board Chairman Georg Wohlwend, Vice Chairman Richard Senti and Board member Thomas Russenberger are standing for re-election.
Outlook
In the coming years too, uncertainty will continue to be a part of our new reality. Nevertheless, we are still optimistic because rapidly adapting to changing basic conditions is one of our proven strengths. In 2024, the LLB Group will continue to focus on its strategic priorities and firmly pursue its ambitious growth and earnings targets. We expect to achieve a solid result for the 2024 business year.
A note of thanks
As the foundation of our success, we would like to thank our competent and highly motivated team of employees, as well as you, our clients and shareholders. A sincere note of thanks to all of you for your loyalty and trust.
Yours sincerely
- Gabriel Brenna
- Group CEO
- Georg Wohlwend
- Chairman of the Board of Directors