VP Bank Half-year Results Reflect Broad-Based Growth

Paul Adams

29 August 2007

The Vaduz-based Verwaltungs-und Privat-Bank Bank Group has reported strong growth during the first half that has culminated in an “A” rating from Standard & Poor’s (A/stable/A-1). Operating income rose 20.8 per cent to SFr202.6 million (H1 2006: SFr167.7 million), net income grew by 32.2 per cent to SFr96.8 million (H1 2006: SFr73.2 million). Contributing to that result were the 11.1 per cent increase to SFr73.5 million in income from the interest-differential business, an 11.8 per cent rise to SFr90.2 million from the commission business and services, and a 10.7 per cent gain to SFr12.0 million in income from trading activities. Other, exceptional, income increased to SFr26.8 million due to the sale of financial investments. Client assets increased during the first half of 2007 by roughly 11 per cent from SFr35.5 billion (31.12.2006) to SFr39.6 billion. In terms of net new money, the first half was marked by the successful acquisition efforts of Trust Banking. Overall, the group attracted a total of SFr1.8 billion in net new money. All VP Bank Group locations contributed to this growth. SFr1.7 billion flowed in as the result of increases in market value, and custody assets also rose from SFr0.7 billion to SFr1.2 billion. Operating expenses rose 18 per cent compared to the similar period last year to a total of SFr87.1 million. This reflects the costs of expanding the bank’s market organisation, especially in Asia as well as the introduction of the new IT operating system. Nonetheless, the cost/income ratio declined from the 44.1 per cent reading recorded in the first half of 2006 to a current level of 43.0 per cent. Another step in the expansion of VP Bank’s international market presence subsequent to the establishment of the Hong Kong representative office was the April 2007 opening of the VP Wealth Management (Middle East) asset management company in Dubai. This unit will cater mainly to the needs of high net worth individuals in the Middle East, India and Pakistan. Preparatory work is also underway for the licensing and founding of a bank in Singapore, as well as similar work for establishing an asset management company in Hong Kong.