VP Bank Group, a private bank headquartered in Liechtenstein, has reported a year-on-year decrease in profit in H1 2020, driven by a one-off valuation adjustment.
In March this year, the bank had said that the Covid-19 pandemic calls for a larger valuation adjustment to an individual position of around CHF20m.
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However, overall the performance was positive, with growth in operating income and expenses in check.
VP Bank Group CEO Paul Arni said: “We have worked efficiently and generated great operating results in an extraordinary market environment. The one-off valuation adjustment is very unfortunate, but we managed to react to the challenging situation quickly and effectively and have successfully launched important preparatory work for our new strategy cycle.
“We will use this as a basis to build on and advance the development and further transformation of VP Bank Group.”
Performance highlights
The group net income in the first six months of 2020 stood at CHF 14.4m ($15.9m). This is a 59% slump from last year’s figure of CHF35.3m.
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By GlobalDataOn the bright side, total operating income increased to CHF 166.8m from CHF 162.7m over the period.
Total net interest income increased 5% to CHF57.4m, while net income from commission business and services grew 7% to CHF71.5m.
Income from trading activities also rose, growing 11% to CHF32.5m from CHF29.3m.
Operating expenses soared 19% to CHF146.2m from CHF122.7m, mainly due to the valuation adjustment on a credit position.
Excluding valuation adjustments on credit risks, operating expenses would decrease by CHF0.9m compared to a year ago.
Personnel expenses dropped 1% year-on-year to CHF81.3m. General and administrative expenses of CHF29m in H1 2020 was 1% lower than a year ago.
The group’s client assets under management reached CHF45.6bn at the end of June 2020, down 4% from CHF47.6bn at the end of 2019.
Net inflows for H1 2020 were around CHF1bn.
Notably, VP Bank recently agreed to acquire the private banking business of Öhman Bank in Luxembourg.
Öhman Bank is the international private banking unit of Swedish financial group Öhman.
