VP Bank aims to further strengthen its business in Asia through internal and external growth after attracting new money from the region last year.
VP Bank Group had net income of 58 million Swiss francs in 2016, down from 64.1 million a year earlier, the company said in a statement today. Profit in 2015 was boosted by merger of VP Bank with Centrum Bank and a one-time effect created by IAS 19, the bank said.
The Vaduz-based institute was able to turn the tide in respect to net new money. It attracted a net 7 million francs, while it had lost 658 million in 2015: «Net new money showed a significant improvement in 2016,» the bank said in the statement, adding that «strong market development meant net new money inflows were particularly healthy in the Asian market.» Still, «outflows had to be recorded in Europe, against the backdrop of the regulatory environment and taxation.»
Strong Demand in Asia
Assets under management increased 2.8 percent to 35.8 billion francs. The main reason behind the increase was the rising share prices and the appreciation of the U.S. dollar, which in turn resulted in an increase of client assets under management in foreign currencies.
Having profited from strong demand in Asia, the bank now plans to further improve its organization in the region. It aims to expand its teams by hiring more banks.
VP Bank will also take any available market opportunity to «invest in growth through acquisitions», it said in the statement, adding: «VP Bank continues to have an extremely solid equity base, enabling the company to actively benefit from the transformation in the financial sector.» The Tier 1 core capital ratio is 27.1 percent (24.4 percent in 2015).
Healthy Interest Income
Operating income declined 11 percent to 273.2 million francs, VP Bank said, adding that if the one-time item of 50 million francs is deducted, operating income increased by 6.5 percent.
Net interest income rose 16 percent to 102.4 million francs. Income from commissions and services fell 6 percent to 118.8 million and income from trading added 5.5 percent to 44.5 million.
Operating expenses fell to 212.2 million from 246.4 million, mainly due to the one-time item over the course of the merger, VP said. In 2016, general and administrative expenses fell 14 percent to 51.7 million francs, a decrease which resulted from the merger and the associated temporary parallel operations.
Dividend Increase
The board of directors proposes to increase the dividend payment to 4.50 francs per registered share A from 4 francs a year earlier and 0.45 francs per registered share B from 0.4 francs for the financial year 2015.
