Without pausing to revel in its strong earnings growth for its latest financial year, VP Bank already lays out growth plans for its 2025 strategy cycle.

VP Bank Group recorded a 34 percent rise in net earnings delivering group net income of 73.5 million Swiss francs due to strong operating performance and the positive development of financial markets.

The inflow of net new money developed positively for the third time in a row, coming in at 2.3 billion francs, the lender said in a statement on Tuesday. Client assets under management rose by 14.7 percent to 47.6 billion francs from the previous year.

Outlook For 2020

VP Bank Group highlighted that 2020 is a transitional year for the bank, as it marks the end of the current strategy cycle, as well as the significant slowdown in financial markets partly caused by the coronavirus.

«This will have an impact on our earnings performance on the client-side of our business as well as in respect of financial investments. Of the three defined financial targets, consequently, the profit target of 80 million francs will be particularly difficult to achieve,» said Paul H. Arni, CEO of VP Bank Group.

Next Five-Year Strategy Cycle

For the group, the 2025 strategy cycle begins at the start of the 2021 financial year, with the two pillars of intermediaries and private banking representing the foundation. The overriding objective of Strategy 2025 is to seize opportunities as they arise and to increase earnings to CHF 100 million, via its four strategic business units - Retail & Commercial Banking, Wealthy Individuals, Intermediaries, and Client Solutions. 

The group's medium-term financial goals are redefined in conjunction with the strategy, and controlled using the following parameters (KPI):

  • Growth: at least 4 percent net new money for assets under management per annum throughout the entire 2021-2025 cycle
  • Profitability: Profit margin higher than 15 basis points (in bps of assets under management) as at the end of 2025
  • Profitability: Cost to income ratio of 70 percent as at the end of 2025
  • Stability: Tier 1 ratio higher than 20 percent as at the end of 2025

Organizational Changes

Within the context of Strategy 2025, VP Bank announced organization changes such as renaming front-end unit «Client Business» to «Intermediaries & Private Banking», and «Investment Solutions» to «Client Solutions». 

«In the wake of this reorganization (for Client Business), all support functions at the international sites will be transferred to the respective group responsibility. For the coordination of international activities, a new "Local CEO Committee" will be created, comprising the local CEOs and the Head of Intermediaries & Private Banking under the leadership of the Group CEO.»

Changes At The Top

Fredy Vogt, the chairman of VP Bank, will step down from the role after eight years, but remain a member of the board. His deputy, Thomas Meier, will stand for election as chairman at the annual general meeting on April 24, as the bank transitions to next strategy cycle.

In addition, VP Bank has decided to transfer responsibility for these strategic initiatives to Chief Investment Officer Felix Brill, as part of the bank's positioning to be a provider of innovative investment solutions.

«As of 1 July 2020, Felix Brill and the "Group CIO & Sustainability" division will, therefore, move to the CEO unit and he will leave the Group Executive Management. Together with his team, he will develop new investment solutions for changing client needs and will comprehensively integrate sustainability aspects into the investment products and advisory offering,» said Arni.