Liechtenstein-based VP Bank increased its first-half profit but saw its new money inflows dry up as clients adjusted their portfolios.
VP Bank said its profit increased 19 percent in the first half of the year to 25.5 million Swiss francs ($29 million), in a challenging market environment for banks, according to semi-annual results released Thursday.
With central banks exiting accommodative monetary policy stances and raising interest rates, VP Bank benefitted as its interest income rose nearly 30 percent to 72.1 million francs. At the same time, income from commission and services declined just over three percent to 69.8 million francs.
New Money Dries Up
After attracting over one billion francs in new money last year, VP reported that during the first half of the year, only 83.1 million of fresh money entered its coffers. One reason was «forced outflows» due to adjustments to client portfolios. That includes 300 million from clients in connection with Russia. Its annual target growth for net new money is 4 percent.
The positive financial market performance helped bump assets under management by 1.7 percent to 47.2 billion in the first half from 46.5 billion at the end of last year.
Yesterday, LGT, another Liechtenstein-based institution, attracted 15.8 billion francs in new money, while its assets under management grew 6 percent to a record 305.8 billion, exceeding 300 billion for the first time, as finews.com reported.
Operating Expenses Increase
Compared to the previous-year period, operating expenses increased 14 percent to 158.2 million due to depreciation and amortization on investments, credit provisions created against the backdrop of the current economic environment, and a general inflation-related increase in costs
Still, the bank managed to lower its cost/income ratio to 84 percent from 85.7 percent.
It confirmed the financial targets of its 2026 strategy for annual income growth of 4 to 6 percent and net new money growth of at least 4 percent.
