The Liechtenstein-based bank also reiterated its decision to close its Hong Kong office, although it said Asia remains an important region for its business.

Liechtenstein-headquartered VP Bank, which a few days ago said it had shut its Hong Kong office, today reported that its first-half 2024 profit was SFr11.5 million ($13.3 million), slumping 54.8 per cent on a year ago.

The group said it planned to undertake restructuring and other cost cuts of up to SFr12 million in the second half of 2024. 

Total operating income fell 13.6 per cent year-on-year to SFr162.6 million due to lower net interest income as clients moved assets from current account balances to higher-interest-bearing time deposits and securities. The commission and services business and net trading income remained at the same level as in the same period of the previous year.

The cost/income ratio stood at 91.5 per cent, VP Bank said in a statement.

The group logged SFr500 million of net new money at the end of June this year, which equates to an annualised growth rate of 2.2 per cent. The net new money inflow, without allowing for further forced outflows due to adjustments to the client portfolio, was SFr800 million; this corresponds to 3.6 per cent on an annualised level.

Client assets under management increased by 8.8 per cent to SFr50.4 billion at the end of June.

Operating expenses fell by 6.0 per cent to SFr148.8 million, as the group cut personnel costs, and as a result of lower depreciation and amortisation. 

VP Bank said its Tier 1 capital ratio – its capital shock absorber – was 26.1 per cent, and the liquidity coverage ratio was 309.5 per cent.

Priorities
VP Bank said its priority in coming months “will be to implement a comprehensive package of measures to increase efficiency and accelerate growth.” 

“This is to achieve a sustainable improvement in the cost/income ratio. In the second half of the year, restructuring costs and related costs in a broader sense totalling approximately SFr10-12 million will be incurred in this context,” it said. 

To achieve growth targets, VP Bank said its strengths must be exploited in an “even more targeted manner and the corresponding growth initiatives must be consistently focused on the core markets.” 

“In Liechtenstein, VP Bank already has a strong private client and commercial business with stable growth. The aim is to strengthen market leadership with respect to the fiduciary business,” it said. 

In its Zurich and Luxembourg businesses, VP Bank said it intended to expand and tighten its services. 

For Asia, which remains “important for the group,” the lender reiterated its move to close its Hong Kong office, while also growing the intermediaries and private banking presence in Asia and exploring new opportunities from the Singapore location. The bank did not elaborate in its results about the reasons for shutting the Hong Kong office.

In the British Virgin Islands, the aim is to defend market leadership in the prime real estate financing niche, it said.