Reports

Group Profit Rises At LGT, Asset Inflows Decelerate

Tom Burroughes Group Editor 28 August 2020

Group Profit Rises At LGT, Asset Inflows Decelerate

As a number of other bank results demonstrate, higher volatility has actually benefited the bottom line by lifting demand for advice and trading services.

Liechtenstein-based LGT, which operates in a number of regions including Asia, yesterday reported a 22.6 per cent year-on-year rise in group profit for the six months to the end of June, reaching SFr190.7 million ($209.9 million).

Higher market volatility and demand for more wealth advice has worked to LGT’s advantage. Income from services rose by 7 per cent to SFr572.3 million in the first half of 2020. Income from trading activities and other operating income also increased by 7 per cent, reaching SFr185.3 million, due to increased client currency transactions.

Personnel costs were unchanged at SFr482.3 million; business and office costs increased by 0.7 per cent, reaching SFr134.9 million. In the half-year period, there was SFr1.6 billion of net asset inflows, down from SFr5.8 billion a year before. “The slower growth rate compared with the previous periods is attributable to deleveraging, primarily by clients in the Middle East and Asia during the market turbulence towards the end of the first and at the beginning of the second quarter,” LGT said in a statement yesterday. 

Including negative market and currency effects, assets under management amounted to SFr218.7 billion at 30 June, from SFr227.9 billion as at the end of 2019.

LGT’s cost/income ratio narrowed to 68.6 per cent at the end of the half-year period from 74.1 per cent at the end of December 2019. The bank’s Tier 1 capital ratio – a standard measure of a lender’s financial buffer – was 21.4 per cent, widening from 19.9 per cent a year earlier. 

The bank, which carries an Aa2/A+ rating agency from Moody’s and Standard and Poor’s, respectively, employed a total of 3,758 people as at 30 June, up by 2.6 per cent from the end of December.

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