The bank has reported a "highly successful" 2021 business year, with the largest organic growth in its history, including record levels of client assets under management.

Private banking group Liechtensteinische Landesbank has reported a net profit of SFr137.9 million ($148.8 million) in 2021, it said in a results statement on Tuesday.

The profit figure, which rose by 25 per cent from 2020, was helped by new money inflows of SFr7.2 billion (SFr3.3 billion in 2020) last year, which equates to a growth rate of 9.1 per cent. The firm said this rate was the “largest organic growth in its history.” New record levels were attained in client assets under management, at SFr91.9 billion. 

Operating income rose by 10.7 per cent to SFr476.4 million (SFr430.3 million in 2020), which the bank attributed to record business volume, higher earnings in client business and good asset management and investment.

As a result, the group board of directors proposed an increase in the dividend from SFr2.20 to SFr2.30 per share.

Central and Eastern Europe and the Middle East helped drive the growth, the bank said, with growth being especially strong in the domestic markets of Liechtenstein and Austria. A significant proportion of these inflows was attributable to investment fund business.

Operating expenses increased by SFr6.3 million to SFr313.0 million (SFr306.7 million in 2020). 

LLB said that its tier 1 ratio – a standard measure of a banks’ capital strength – of 20.3 per cent (2020 21.6 per cent) meant “security and stability” for the bank. LLB has made a public purchase offer to Bank Linth.

"In spite of many challenges, we succeeded in achieving a very good business result in 2021. The LLB Group has grown robustly. The developments in recent years, the trust of our clients, and our innovative power strengthen our resolve to continue our path to growth with the new ACT-26 strategy," Georg Wohlwend, chairman of the board of directors, said.

The bank said that the market environment remained challenging with inflation, geopolitical uncertainties and the continuing coronavirus pandemic all posing significant risks to economic development in the coming months. Nevertheless, the group CEO, Gabriel Brenna, is optimistic: "We are building on a solid foundation and, with ACT-26, we have a clear, forward-driving strategy, which is already being realised with great élan by our dedicated employees. We are, therefore, confident that we can maintain the dynamic progress of the last few years to create sustainable added value for our clients, employees and shareholders."

The group is represented in Liechtenstein, Switzerland, Austria and the United Arab Emirates (Abu Dhabi and Dubai).

LLB said that the quality of earnings in client business improved, with “good growth” in fee and commission business. Net fee and commission income improved by SFr34.5 million to SFr233.6 million. Portfolio-related earnings improved particularly well, with the group saying that it succeeded in improving the quality of its largest income driver.

"This extremely good result reflects our dynamic growth, the improved quality of our earnings and our strict cost management. Consequently, once again in 2021, we have proven that the LLB Group can grow organically, sustainably and profitably,” Brenna said.