International Wealth Management

Information unaudited Information ungeprüft International Wealth Management

At the LLB Group, International Wealth Management means building on our reputation as a secure and sustainable, international private bank. We support wealthy private clients and professional clients in all financial matters. We convince them with our stability and security, superb advisory services, personal care and excellent investment performance.

At the LLB Group, we build on our strength as one of the most stable banks in the world. Accordingly, the International Wealth Management Market Division encompasses international private banking, private banking for Austria and our business activities with institutional clients.

International private bank

International private banking clients, as well as professional investors and financial intermediaries have exacting demands – rightly so. They expect asset management with sustainable investment performance, competent, long-term contact partners, who ensure stability in business collaboration, as well as professionalism and efficiency in the handling of their financial affairs. Fulfilling these client demands is our prime goal. For this reason, in the International Wealth Management Division we pursue the following six major objectives:

• Strengthening of our intermediary business in Liechtenstein, Switzerland, Austria and Germany;
• Expanding of our position as a leading wealth management bank in Austria;
• Further growth as a unique investment fund powerhouse in the German-speaking region;
• Successfully establishing ourselves as a powerhouse for external asset managers;
• Targeted expansion of our private banking business in the growth markets of Central and Eastern Europe, as well as the Middle East;
• Consistent, sustainable investments according to ESG guidelines.

Stability and security

As the longest established financial institution in Liechtenstein, we have a long tradition as a private bank. Wealthy private clients, companies and financial intermediaries count on this experience and financial stability. They know that LLB is one of most secure and best capitalised banks in the world. Since 2016, and every year since then, the rating agency Moody’s has assigned the Liechtensteinische Landesbank a deposits rating of Aa2 (see chapter Finance and risk management). This means we are in the top cohort of banks and rank well above the average of European financial institutions. Moreover, with the Principality of Liechtenstein as our majority shareholder, we have a very stable ownership structure. Liechtenstein is one of the very few countries in the world to be awarded an AAA rating by Standard & Poorʼs and thus the highest financial standing. The combination arising from the sovereign rating and our institutional rating creates a unique attribute, which underlines our excellent positioning as one of the most trustworthy banks in the world. On account the increased geopolitical uncertainties and tensions these values have become even more significant in recent years.

Strong local ties – International presence

Professional clients of the LLB Group can call on three booking centres. In the modern financial centres Liechtenstein, Switzerland and Austria we are represented by a bank in each country: Liechtensteinische Landesbank AG, LLB (Österreich) AG and LLB (Schweiz) AG. All maintain strong local ties while at the same time being internationally active. We care for our international clientele from our representative offices in Geneva, Zurich and Abu Dhabi, as well as from our branches in the DIFC in Dubai and Vaduz, and from our bank in Vienna.

Locations of the LLB Group

Three successful domestic markets

Our domestic markets, Liechtenstein, Switzerland and Austria are ideal locations for professional investors, who wish to invest their assets securely and would like efficient, personal advisory services. Liechtenstein is a specialised and, at the same time, an internationally networked financial centre. Operating from out of this centre, thanks to the EEA agreement and the customs treaty with Switzerland, the LLB Group has unrestricted access to two economic areas: the EU single market and to Switzerland. The latter being one of the key financial centres. Thanks to targeted sales and marketing efforts, we are expanding our position as a leading wealth management bank in our target markets.

Traditional cross-border markets

For us as a private bank, selected Western European markets traditionally play a key role. We benefit from our extensive experience as a wealth manager, from our high service quality and from our proven investment performance. Germany, Europe’s largest private banking market, in particular, is steadily increasing in importance for the LLB Group. Since we envisage further substantial development potential in Germany, we have sharply intensified our business activities in the country. Since January 2024, for the first time in the history of the LLB Group, we are represented by a branch office in Germany. In Switzerland too, we are resolutely pursuing our growth ambitions. In 2024, LLB (Schweiz) AG will open two further business locations in Zurich and St. Gallen.

Private Banking International

At the Private Banking International Business Area we focus on selected markets in Central and Eastern Europe (CEE), as well as in the Middle East. In addition to stability and security, we offer our clients close personal support in realising their financial goals. For this purpose, we employ regionally adapted business concepts.

In order to best fulfil our clients’ requirements, stay close to the market and actively manage risks, we recruit employees who possess a deep knowledge and clear understanding of the markets and who have close ties with the various regions.  We care for our clients in the CEE region from our headquarters in Vaduz, from Vienna and from our representative offices in Geneva and Zurich. Our clients in the United Arab Emirates (UAE) and the Middle East are looked after from our DIFC branch in Dubai and our representative office in Abu Dhabi.

Specialised on professional clients

Fiduciaries, asset managers, fund promoters, family offices, insurance companies, pension funds and public institutions – no matter how different their business models may be, they all have one thing in common: they want to manage and increase the capital entrusted to them in the best possible way. As their business partner, the LLB Group offers them ideal prerequisites for this purpose. Our highly specialised and experienced personnel ensure they receive professional advisory services and dialog on an equal footing. These are supplemented by modern, efficient processing platforms and digital interfaces. Our client advisers have all completed a certification program according to the standards of the Swiss Association for Quality (SAQ) and are regularly recertified (see chapter Employees).

Fund powerhouse

With four investment fund companies in our three domestic markets, we are among the most versatile fund vendors in Europe.  Around 700 managed funds testify to our powerful position as a fund service provider for professional clients, who wish to take advantage of the possibilities offered by investment fund structuring.

In line with the “one-stop shop” concept, the LLB Group offers a full range of products and services in its domestic markets. This provides us with the maximum flexibility to meet client wishes. We plan and set up made-to-measure investment funds for our clients. We also structure and administer them, as well as ensuring modern risk management.

At our business locations in Vaduz and Zurich, we complement our services by acting as a representative for foreign funds. In Liechtenstein and Austria, we take over the function of custodian bank / depositary. In 2023, we intensified our sales and marketing efforts for the fund powerhouse.

On account of the changed market environment, the funds volume administered by the LLB Group declined to CHF 38.7 billion. (2022: CHF 38.9 billion). The net new money outflow amounted to CHF 1.3 billion (2022: net new money inflow of CHF 1.8 billion). Here too, the decrease was largely attributable to market-related factors.  In view of the sharp rise in interest rates, for the first time in years, investments in interest-bearing asset classes were again attractive. Furthermore, direct investments in real estate lost a great deal of their appeal as an asset class, which resulted in a marked net outflow from our open public real estate funds.

Common fund platform

The LLB Group also intends to grow in the investment funds sector. The foundation for this is provided by a uniform, modern fund platform, which standardises, digitalises and automates our entire investment fund business.  This state-of-the-art solution is based on the XENTIS software, which we employ successfully in Switzerland and, since mid 2023, also in Austria. The platform is to be introduced in Liechtenstein and numerous features are to be added so that the entire project should be completed in 2026.

This new common fund platform will provide our clients with a premium quality IT application. The XENTIS system includes a broad scope of functions in relation to the direct entering of orders and, in addition, a set of key portfolio and risk reference figures, it also offers a range of reporting options. XENTIS enables us to manage funds using standardised processes, provides uniform data and price quotes, as well as a centralised IT operation, without any loss of flexibility in implementing individual solutions. As a result, the strategic goals of growth and efficiency are coupled with each other while costs and complexity are reduced.

“The new groupwide fund platform enables us to bring together three different systems at three different fund locations while retaining the advantages of the individual locations – a huge amount of added value, both for our clients and for us as service providers. XENTIS therefore represents a solid foundation for the fund powerhouse of the LLB Group.”

Private label funds

Private label fund solutions (known in Austria as “Special funds”), are an extremely important product in the offering of the LLB Group’s investment fund companies. External managers and institutional investors frequently utilise private label funds tailored to suit their specific requirements which, depending on their structure, can be distributed throughout the EU. Family offices and wealthy private clients are also increasingly showing interest in these made-to-measure fund solutions. These funds are structured according to Liechtenstein, Swiss or EU law, and enjoy the same investor protection as funds licensed for public distribution. They enable large volumes of assets to be efficiently managed and individually structured.

Liechtenstein and Switzerland

In Liechtenstein, LLB Fund Services AG is one of the leading fund vendors. Based on a holistic and needs-oriented advisory concept, both intermediaries and private clients receive all fund services from one source. Thanks to its unrestricted access to the EU and Switzerland, Liechtenstein offers ideal conditions for cross-border fund distribution.

Since April 2018, the LLB Group has also been actively represented in the Swiss investment funds market. Through LLB Swiss Investment AG, it offers clients tailor-made fund solutions according to Swiss law. This jurisdiction is ideal for large institutional investors or family office structures in order, for example, to set up funds with investments which are subject to withholding tax (including Swiss equities). In 2023, with its fund services business in Liechtenstein and Switzerland, the LLB Group experienced a net new money outflow of CHF 337.4 million (2022: net new money inflow of CHF 1.5 billion). On account of market-related factors, the book volume increased to CHF 23.4 billion (2022: CHF 22.8 billion).

Austria

In 2023, LLB Invest KAG administered around 300 funds, including public funds, large investor funds, special funds, multi-manager funds and alternative investment funds, and is therefore the top ranked investment company on the Austrian market. Its clients include over eighty domestic and international asset managers, banks and family offices, which appreciate the expertise of LLB Invest KAG.

LLB Immo KAG manages a large public fund as well as three products for institutional investors. The management invests directly in real estate, exclusively in Austria and Germany. It pays special attention to sustainability criteria in managing real estate funds. On account of the substantial rise in interest rates, 2023 was a challenging year for real estate investments. Large outflows from the LLB Semper Real Estate public fund forced LLB Immo KAG in October to temporarily suspend the redemption of units for the protection of investors.  Nevertheless, we are still convinced that real estate represents an important component in the long-term diversification of portfolios. This applies particularly to funds administered by LLB Immo KAG, whose products are managed with great expertise and are of very high quality.

In 2023, the Institutional Banking Austria business segment posted a net new money outflow of CHF -707.5 million (2022: net new money inflow of CHF 465.2 million). As at December 2023, the business volume stood at CHF 21.8 billion (31.12.2022: CHF 21.9 billion). At the end of 2023, a total of 363 funds (31.12.2022: 365) were managed or held in custody.

High level of service quality

Wealthy private clients and professional clients attach great importance to solid investment expertise, fair and transparent conditions, as well as individual and forward-looking investment solutions coupled with modern technologies. For us at the LLB Group, this is a part of our self-image. Furthermore, our clients can count on us as the bank partner to identify opportunities, open new perspectives and encourage the professional education and training of our employees. Moreover, they benefit from our networks and our knowledge in the areas of cross-border banking, compliance, risk management and sustainability.

Innovative wealth management

The LLB Group combines traditional wealth management with innovative, modern advisory models. Since 2016, we have been offering “LLB Inves”, a transparent, flexible, highly individual investment advisory and wealth management tool to individual and institutional clients. Clients decide themselves what scope of service they wish to receive. This versatile spectrum of services ranges from basic to expert solutions.

Our client advisers work closely with our investment specialists. Using continual monitoring and optimisation of portfolios, they ensure the security of investments and a performance in line with the selected strategy. They are supported in their work by the latest technology.

EAM powerhouse

Starting in 2024, our clients who are professional external asset managers will benefit from our newly created EAM powerhouse.

Thanks to closer collaboration in institutional business in the markets Liechtenstein, Switzerland, Austria and Germany, our clients will have smooth access to the three booking venues in Liechtenstein, Switzerland and Austria, coupled with the customary individual care and high quality from one source.  Together with our new digital onboarding concept for end clients (see paragraph Digital transformation) we can offer external asset managers an ideal complete package to enable them to enhance efficiency and quality for their clients.

In future, the interaction between the EAM powerhouse and the fund powerhouse will be intensified and expanded throughout the Group. As a result, both our clients and our market business locations with their client advisers will be able to benefit from the many synergies.

Digital transformation

In the report year, we made further good progress in the digital transformation of the LLB Group (see chapter Corporate Center), ensuring that we are not just faster and more efficient, but also focused even more closely on our clients. New digital tools enable us to better fulfil modern client needs.

With our Mobile and Online Banking our clients can conveniently and digitally transact numerous banking activities at any time and from anywhere. The use of technology ideally complements our personal advisory services and boosts their quality to a new level.

Innovative digital solutions are also the key to the close ties we have with professional investors. Thanks to upgraded digital channels, contacts with them are now more flexible, more individual and more convenient. We are constantly expanding our offering of digital services for the collaboration with intermediaries and independent asset managers. For example, in recent years we have extensively upgraded our “LLB FIX-Interface” and our “LLB Xpert Solutions” product ranges, thus reacting at an early stage to the changing requirements of our clients. Using the “LLB FIX-Interface”, external asset managers can boost their efficiency in their interaction with us.

During 2024, we will introduce a completely digital onboarding process for EMA end clients. This will enhance the effectiveness of work processes both at the external asset manager and at LLB, creating more time for what is really important: more productive time for caring for our mutual clients.

Group Business Compliance

In accordance with international regulations, combating money laundering, organised criminal activity and the financing of terrorism have a high priority in Liechtenstein (see chapter Finance and risk management). The regulatory requirements in this area are continually becoming stricter and will bind many resources in the next few years. For the Liechtenstein financial institutions the observance of the various sanctions represents an important part of their control and monitoring activity. Finally, because of the war in the Ukraine, the observance of sanctions has drawn even more attention. Regulatory provisions and the fact that they can be implemented at any time place great demands on our client advisers, intermediaries and, not least, on our clients. Several years ago, the LLB Group recognised that setting up a central hub for all the individual stakeholders was the correct way to meet and master these challenges. The Group Business Compliance Department was set up for this purpose. Experience gained over the last few years confirms that, thanks to the efforts of Group Business Compliance, duplication of work can be avoided and loss of resources reduced while safeguarding efficient collaboration. Our clients tell us that this service is much appreciated.

“At Group Business Compliance we are able to fulfil regulatory requirements at the highest professional level and ensure the best service quality for our clients at the same time.”

Fair and transparent pricing models

We believe in partner-like collaboration as the key to long-term client relationships. This includes fair and transparent pricing models. The LLB tariff structures are simple and clear, costs are visible at a glance (see chapter Environmental and social responsibility in banking). We employ performance-related fees with various asset management and investment advisory mandates, which are only payable if a positive return is achieved.

Networking and transfer of knowledge

Sound knowledge is vital for achieving success in financial matters. This is the only way that investors can make well balanced decisions, manage risk and attain long-term goals. We therefore provide wealthy clients with access to the expertise of our investment specialists and to our investment solutions. In addition, we support professional investors through networking and a transfer of knowledge.  For many years therefore the LLB Group has made available its “LLB Xpert Views” online platform to financial intermediaries to enable them to have an overview of current developments in the financial services industry. We encourage the personal exchange of views and experience several times a year in the form of exclusive round-table discussions.

Above all, our clients appreciate our high level of professional competence, our service quality and the personal collaboration.

Memberships

The LLB Group is a member of the most important professional associations and bodies. This ensures that we are closely networked and always well informed about which themes and issues will be significant in the future. Furthermore, these memberships offer us the possibility of actively participating in shaping the framework conditions, which determine our business model.

Business segment result

The segment result before taxes of the International Wealth Management Division amounted to CHF 122.6 million. In comparison with the equivalent period in the previous year, this represents an increase of 24.4 per cent. Operating income expanded by CHF 27.4 million to CHF 241.2 million. Income from interest differential business doubled to CHF 102.6 million. In the previous year, fee and commissions business benefitted from exceptionally high earnings from real estate transactions in Austria. On account of higher interest rate levels, this business field is declining leading to substantially lower earnings from real estate business in the business year under report. Moreover, average holdings of client assets under management decreased partly as a result interest rate driven outflows. The gross margin improved by 5.8 basis points. Operating expenses rose to CHF 118.6 million, partly due to the higher headcount in line with corporate strategy.

During the reporting period, the segment regrettably registered outflows of over CHF 299 million. On account of the changed situation with interest rates, which had a particularly adverse impact on real estate investment funds, outflows were experienced in investment fund business. In other areas, such as international private banking and institutional business in Liechtenstein, positive inflows were achieved. On account of the positive market performance, the business volume expanded by 1.4 per cent to CHF 66.1 billion.

Segment reporting

Performance figures

Additional information