VP Bank reported a rise in operating income of 2.5 percent to 166.8 million Swiss francs in the first half of 2020. In addition, the Vaduz-based banking group posted a net new money inflow of 1 billion Swiss francs. In contrast, however, there was a decline in assets under management.

According to a press release issued by the VP Bank Group, the volume of client assets under management at the Vaduz-based banking group as at the reporting date of June 30, 2020, totaled 45.6 billion Swiss francs. In comparison with year-end 2019, this equates to a decline of 4.2 percent. A net new money inflow of 1 billion Swiss francs was, however, only able to partially offset a shortfall amounting to 2.9 billion Swiss francs, which the press release attributes to “the negative market performance caused by the coronavirus crisis”.
In terms of operating income, the VP Bank Group generated a total of 166.8 million Swiss francs in the first six months of 2020. This represents an increase of 4.1 million Swiss francs versus the first half of 2019. In the press release, the banking group states that this positive development can above all be attributed to growth in the commission business and services, as well as in trading activities. However, growth was also recorded for net interest income despite the “sustained period of low interest”.
In comparison with the same period of the prior year, group net income fell from 35.3 million to 14.4 million Swiss francs. The reason for this decline can be attributed to a pandemic-induced valuation adjustment to a single individual position in the amount of 20 million Swiss francs, which was previously communicated by VP Bank back in March. Nevertheless, the cost-income ratio improved from 68.6 percent in the previous year to a current value of 66.1 percent.
“We have worked efficiently and generated great operating results in an extraordinary market environment”, comments Paul H. Arni, CEO of the VP Bank Group, in the press release. He adds: “The one-off valuation adjustment is very unfortunate, but we managed to react to the challenging situation quickly and effectively and have successfully launched important preparatory work for our new strategy cycle”. The CEO additionally describes the Strategy 2025/26 as a “key pillar” in the press release. In this context, VP Bank “started work on the development of a future-oriented IT infrastructure” during the half-year period under review.

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