As well as improved inflows, the bank, like many of its global peers, was able to reverse its position on provisions for credit losses last year to a net release this year as the COVID-19 position improved.

The private banking group, Liechtensteinische Landesbank, yesterday reported SFr2.7 billion ($2.96 billion) of net new money in the first six months of 2021, more than double the amount (SFr1.0 billion) a year earlier, helping to lift client assets under management to SFr88.3 billion, rising from SFr79.7 billion a year before.

At SFr71.1 million, group net profit rose 18.2 per cent year-on-year, LLB said in a statement. Operating income rose by 10.2 per cent to SFr231.8 million (first half 2020: SFr210.4 million).

LLB said that its tier 1 ratio – a standard measure of banks’ capital strength – remained stable at 20.8 per cent. The cost/income was cut to 65.1 per cent.

The bank said future conditions remained challenging. 

“Our business model is valid, the LLB Group is growing and, as we have demonstrated in recent months, we have the ability to meet and master great challenges. Therefore, we are aiming to achieve another solid business result over the full financial year," group CEO Gabriel Brenna said.

Loans to clients posted a gain of 2.2 per cent to SFr13.5 billion in the first half year. Mortgage loans make up the largest proportion of loan volume. At SFr12.0 billion, up from SFr11.7 billion at the end of 2020, a record. 

The group is represented in Liechtenstein, Switzerland, Austria and the United Arab Emirates (Abu Dhabi and Dubai)

LLB said that the quality of earnings in client business improved, with progress in fee and commission business. Net fee and commission income increased by SFr9.2 million to SFr108.6 million. 

In spite of the pressure on margins, interest income from business with clients rose to SFr79.0 million (first half 2020: SFr77.6 million). LLB said that revenues from other interest business fell as a result of market factors. In total, net interest income at SFr76.6 million was down from SFr78.8 million a year earlier, affected by the negative interest rate environment.

Like many of its global peers, LLB was able to reverse its position on provisions for credit losses last year to a net release this year as the COVID-19 position improved. It allocated SFr13.8 million for credit losses a year ago. Provisions of SFr1.0 million were released in favour of the income statement in H1 2021.