Liechtenstein’s LGT reported a drop in first-half profit as revenues from services decreased while costs rose following a hiring spree. The bank however expects its business to grow further, not least in Asia.
Net income at Vaduz-based LGT dropped to 155.6 million Swiss francs ($158.5 million) in first six months of 2019, down 11 percent from the same period a year ago.
Income from services declined 1 percent to 536.1 million francs, mainly due to lower client activity at the beginning of the year. Net interest income and credit losses were flat at 138.7 million. Overall, operating income increased 2 percent to 848.2 million francs.
Spending on Staff Soars
Operating expenses meanwhile increased 4 percent to 616.1 million francs in the first half, with spending on its staff up 8 percent or a total of 482.2 million. The headcount of LGT increased 4 percent due to the bank’s investment in the client business.
The investments in growth resulted in a net asset inflow that the bank deemed «strong», adding 5.8 billion, a 6 percent increase from the end of last year. Assets under management reached a total of 215 billion at the end of the reporting period, also helped by the positive development of the market.
Growth in Asia Targeted
The company expects further profitable growth going forward and it plans to invest «prudently» in its business. «In order to build out our strengths in a targeted manner, we are further investing in our market presence in Asia and in our investment competencies, with a particular focus on the expansion of our impact investing platform,» said Prince Max of Liechtenstein, the chief executive officer of LGT.
LGT in June announced it had agreed to buy a majority holding in India's Validus Wealth, a wealth manager based in Mumbai. It has a workforce of 150 in nine different Indian cities.
