LLB Expects Lower Interim Profit, But Operating Results "Positive"

Tom Burroughes

13 July 2018

, which recently completed an Austrian bank purchase, has announced it expects to report an interim net profit of about SFr46 million ($45.9 million), which would represent a 24 per cent drop from the same period in 2017.

The bank said net new money stood at SFr1.1 billion in the half-year period. Full figures are due to be unveiled on 23 August.

As reported here a few days ago, LLB, one of the main private banks headquartered in the tiny European state, has acquired Semper Constantia Privatbank, based in Austria, and has completed the integration of the LB(Swiss) Investment AG business. These are both cases of sector consolidation affecting European private banking.

“The development of the LLB Group's operating result continued to be very positive, with a higher level in the first half of 2018 than in the equivalent period of the previous year,” the bank said.

However, LLB added that persistent low interest rates (rates are actually negative in Switzerland) has caused headwinds.

“Because of the valuation of interest rate swaps on the balance sheet date, the persistently low interest rate environment resulted in lower income from trading. The development of the interest rate and equity markets also resulted in book losses for financial investments as of the balance sheet date,” it continued.

Operating income stood at SFr184 million (first half of 2017: SFr189.7 million). Operating expenses amounted to SFr128 million (first half of 2017: SFr116.0 million).

The business volume as of 30 June 2018 grew from SFr62.3 billion at the end of 2017 to SFr62.9 billion. Loans to customers grew from SFr12.1 billion to SFr12.4 billion in the first half of 2018, assets under management from SFr50.3 billion to SFr50.5 billion.