Setting out its 2021-2026 strategy cycle, the group said it wants to achieve a profit of SFr100 million by the end of 2026, supported by growth of at least 4 per cent in new money for client assets under management per annum.

VP Bank, the Liechtenstein-based bank operating in a number of jurisdictions, yesterday said that its 2020 net income sank by 43.4 per cent year-on-year to SFr41.6 million ($44.7 million), mainly caused by a one-off valuation adjustment - reported in March last year - caused by an impaired loan.

The result pushed up the bank’s cost/income ratio to 69.3 per cent from 67.6 per cent a year earlier. 

Operating income fell by 2.7 per cent to SFr319 million, while income from commission business and services increased by 2.1 per cent on a year before, it said in a statement.

Personnel costs fell by 2.0 by per cent. Operating expenses, excluding valuation adjustments, fell by SFr1.4 million to SFr250.1 million.

Client assets under management rose by 1.4 per cent to reach SFr47.4 billion, helped by SFr1.4 billion of net new money, it said.

The bank’s Tier 1 capital ratio stood at 20.8 per cent.

The next cycle
This year, VP Bank said that it has started a new “strategy cycle” which runs to the end of 2026. The group wants to achieve a profit of SFr100 million by the end of 2026, supported by growth of at least 4 per cent in new money for client assets under management per annum; a profit margin higher than 15 basis points at the end of 2026, and a Tier 1 capital ratio of more than 20 per cent by the end of the cycle.

“Based on our DNA in intermediary services and private clients, our 2026 strategy is building on the opportunities we have thanks to key trends such as digitalisation, sustainability and growth in the Asia region,” Paul Arni, chief executive of VP Bank, said. 

As previously reported, VP Bank (Liechtenstein) agreed with Hywin Wealth Management Co (China) and its subsidiary Hywin Asset Management (Hong Kong) Limited to partner and build a cooperation platform through Hywin’s Hong Kong branch. The aim is to meet demand from wealthy Chinese for sophisticated offshore wealth management services. The cooperation is part of VP Bank’s Strategy 2026 and is strengthening VP Bank Group’s presence in Asia, VP Bank said.