Liechtenstein-based VP Bank has just released its annual financial results for 2024.

VP Bank has posted a net profit of SFr18.5 million ($21 million) in 2024, a sharp fall of 58.2 per cent compared with the previous year.

Excluding the restructuring costs and one-off costs of SFr11.2 million, the result was 37.3 per cent lower than the previous year, the firm said in a statement. The tier 1 ratio was 25.9 per cent, and the liquidity coverage ratio was 165.3 per cent.

Client assets under management nevertheless rose by 9.5 per cent, while the new money inflow was 3.6 per cent, the firm added.

Adjusted for forced outflows and write-offs in the amount of SFr1.2 billion, VP Bank recorded a net new money inflow of SFr1.7 billion, which corresponds to growth of 3.6 per cent. Client assets under management increased by 9.5 per cent to SFr50.7 billion. The loan volume increased by 8.7 per cent from SFr5.5 billion at the end of 2023 to SFr5.9 billion. 

Operating income fell by 9.3 per cent to SFr330.5 million due to 23.5 per cent lower net interest income, although this effect slowed down in the second half of the year, the firm continued. Net interest income fell by 27.1 per cent in the first half of the year compared with the previous year, while the decline in the second half of the year was only 19.2 per cent compared with the previous year. Commission and service transactions remained at the level of the previous year, while trading activities fell by 4.6 per cent.

Operating expenses fell by 1.7 per cent to SFr308.3 million. This includes restructuring costs announced in the semi-annual report in the amount of SFr7.3 million and one-off expenses for the pension fund of SFr3.9 million. Leaving aside these one-off expenses, costs decreased by 5.2 per cent.

VP Bank said it is on track with its package of measures to increase efficiency and accelerate growth. The efficiency target was set at a minimum of SFr20 million, and the bank intends to achieve this target by the end of 2026. This should lead to a sustained improvement in the cost/income ratio, which stood at 93.3 per cent at the end of 2024.

Measures to increase efficiency
In 2024, the bank said it stepped up its efforts to align processes with clients. Redundancies in the organisation were resolved and the existing product and price landscape was simplified. The bank also decided to withdraw from Hong Kong for economic reasons. These changes saw headcount fall by 6.1 per cent to 945 full-time positions by the end of the year. In 2025, the bank will focus on the income side, while maintaining a high level of cost discipline. Targeted growth initiatives, complemented by recruiting client advisors, were also effected in the reporting period.

The bank also physically withdrew recently from Hong Kong to focus on its Singapore location.

“The measures to improve earnings and costs are beginning to take hold. In a challenging environment, however, we still have a lot to do to exploit our potential. VP Bank has a diversified business model in markets with good growth prospects,” Urs Monstein, group CEO of VP Bank, said. “With broad-based earnings, we aim to generate sustainable added value and grow profitably. VP Bank relies on personal service with client-oriented solutions, a very good investment performance, robust risk processes and above-average capitalisation.”

The board of directors also proposed that the annual general meeting of 25 April 2025 approve a dividend payout of SFr4.00 per registered share A and SFr0.40 per registered share B.

Changes on the board of directors
The board of directors also proposed the re-election of Mauro Pedrazzini as a member of the board of directors for a further term of office of three years.

Meanwhile, Ursula Lang has resigned after serving a nine-year term of office; she will not seek to renew her mandate. Beat Graf is stepping down from his role after an 11-year term of office. Both these resignations are effective as of 25 April 2025.

Subject to approval of the Financial Market Authority (FMA) Liechtenstein, the board of directors proposes Stephan Ochsner as successor of Beat Graf and representative of the “Stiftung Fürstl. Kommerzienrat Guido Feger” foundation and Barbara Ofner as successor of Ursula Lang for election to the board of directors.