Double-digit earnings growth and a substantial increase in profit: LGT has done it again. Will this become a habit?
Growth comes expensive – a given in the times of banking with taxed assets only. But Liechtenstein's LGT Group seems to give a toss about this truth. After brisk growth in 2016, the bank has had an even better first half of 2017.
The private bank and asset manager owned by the princely family of Liechtenstein increased profit by 22 percent to 151.8 million Swiss francs in the first six months of the year, according to a statement today.
Whopping Increase in Net New Money
Net new money amounted to 9.6 billion francs and the bank received an additional 18.2 billion through acquisitions. The private-banking business acquired from ABN Amro in Asia and the Middle East has been part of the balance sheet since May 2017.
Assets under management rose 19 percent to 181 billion francs in total, compared with the end of 2016.
Higher Operating Costs
Thanks not least the recent acquisitions, LGT increased operating income 23 percent to 707.9 million francs from a year ago. Commission income and services contributed 458.8 million francs, an increase of 20 percent. The increase became possible thanks to the higher assets under management and brisker investment activities of clients.
Interest income rose 11 percent to 100.2 million francs, LGT said. Trading and other income increased 43 percent to 148.9 million, partially through one-off items.
The rapid growth of the bank also led to higher operating costs. Personnel costs for instance increased by a quarter. The cost-income-ratio improved nevertheless, from 74.2 percent at the end of 2016 to 73.1 percent six months later.
Further Growth Envisaged
Prince Max, the CEO of LGT, was adamant that the bank wouldn’t stop at what it had achieved, saying that it aimed to provide an attractive environment for customers and employees alike and achieve further sustainable growth.
