VP Bank to Cut Dividends
The Liechtenstein-based private bank has not been able to fully wipe out a shortcoming from the Corona crash in its annual balance sheet and has to cut its dividend. Now it is setting itself a new target.
VP Bank on Tuesday reported a net profit of 41.6 million Swiss francs ($44.5 million) for 2020, 43 percent lower from a year earlier. The slump is largely attributable to the 20 million franc impairment charge taken last March in connection with a loan default on structured products.
Operating income declined 2.7 percent to 319 million francs, with income from the important commission and services business rising 2.1 percent.
Overall Stagnation
Against this backdrop, a dividend of 5.50 francs, as in the previous year, is not feasible. The board of directors will propose to the annual general meeting on April 30 a dividend of 4 francs per class A registered share and 40 centimes per class B registered share.
While the Liechtenstein-based institution managed to slightly reduce operating expenses, the cost/income ratio (CIR) deteriorated from 67.7 to 69.3 percent. Volumes stagnated overall, despite the hiring of new relationship managers: net new assets of 1.4 billion were offset by outflows in custody assets of around 300 million francs and market-related decreases of 700 million. Overall, assets under management thus increased by 1.4 percent to 47.4 billion francs.
Open Wealth Service Pioneer
VP Bank is sticking to its strategy for 2026. Among other things, the bank wants to achieve a profit of 100 million by then, as well as 4 percent net new money each year as a component of assets under management. The bank also wants to transform itself into an international «Open Wealth Service Pioneer» by then thanks to digitization.
In view of the annual general meeting, the bank is already proposing changes to the board of directors. Fredy Vogt, who served as chairman of the bank from 2012 to 2020, is leaving the board. Philipp Elkuch from Liechtenstein, who has been global head of digital strategy and transformation at the Swiss industrial company Sulzer since 2019, is set to join.
