Higher staffing costs and some specific investments meant that the international private banking and asset management group's profits dipped last year, while net income and AuM grew.

LGT, the Liechtenstein-based private bank, today reported a slight dip in its group 2019 profit, falling by 1.9 per cent year-on-year to SFr308.1 million ($325.5 million), with higher staffing costs and targeted investments slightly offsetting the 8.5 per cent rise in operating income.

Net asset inflows doubled year-on-year to SFR13.9 billion, corresponding with an organic growth rate of 7 per cent, the firm said in a statement. Total assets under management stood at SFr227.9 billion at the end of last year, up from SFr198.2 billion a year before. 

Total operating costs rose by 8.6 per cent to SFr1.346 billion; personnel costs rose by 15.2 per cent to SFr1.064 billion, and operating income rose by 8.5 per cent last year.

The bank’s cost/income ratio stood at 74.1 per cent at the end of 2019, little changed over the level in 2018. 

In terms of LGT Group’s financial strength, measured by its Tier 1 capital ratio, it was 19.9 per cent at end-2019, widening from 17.6 per cent. 

Costs
LGT said that the rise in operating costs last year was driven by higher business volumes and targeted investments and a rise in headcount.

Business and office expenses dropped by 11 per cent down to SFr281.9 million, due in particular to lease payments which are now being largely recognised under depreciation, amortization and provisions in line with the IFRS 16 accounting standard.