LGT, a Liechtenstein-based private bank, has reported a rise in profit despite the challenging market conditions caused by the Covid-19 pandemic.

Key H1 2020 metrics

The private bank’s group profit in the first six months of 2020 stood at CHF190.7m ($210.9m), a 23% surge from CHF155.6m a year ago.

At the end of 2019, the firm’s group profit was CHF308.1m.

Total operating income rose 6% to CHF900m from CHF848.2m, driven by cost management measures.

Income from services increased 7% to CHF572.3m from CHF536.1m.

This is said to be due to higher brokerage income amid market volatility and a larger asset base.

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An increase in client currency transactions resulted in a year-on-year rise of 7% in income from trading activities and other operating income to CHF185.3m.

Net interest income in H1 2020 was CHF142.4m, up 3% from CHF138.7m in H1 2019.

Total operating expenses remained almost stable at CHF617.2m.

This includes personnel expenses of CHF482.3m and business and office expenses of CHF134.9m.

These expenses were almost flat compared to the previous year.

AUM dips

Assets under management totalled CHF218.7bn, down 4% from CHF227.9bn as of 31 December 2019.

Net inflows in H1 2020 were CHF1.6bn, driven by Private Banking and Asset Management. The comparable figure in the prior year was CHF5.8bn.

The growth rate was said to be hit by deleveraging mainly by the Middle East and Asia clients during the market turmoil at the end of Q1 2020 and at the start of Q2 2020.

At the end of June 2020, LGT’s cost-income ratio and tier 1 capital ratio stood at 68.6% and 21.4%, respectively.

LGT to spin out private banking and other units

In a key development earlier this year, LGT unveiled plans to split its private banking, asset management and impact investing units into three stand-alone units in 2021.