VP Bank

VP Bank AG

File:Logo VP Bank.jpg
Company type	Aktiengesellschaft (AG)
Industry	Banking
Founded	1956
Headquarters	Vaduz, Liechtenstein
Key people	Fredy Vogt (chairman of the board) Alfred W. Moeckli (chief executive officer)
Total assets	CHF 11.8 billion (2016)
Number of employees	738.3 (FTE)
Website	www.vpbank.com

VP Bank AG is a Liechtenstein-based bank headquartered in Vaduz. It was founded in 1956 by Princely Councillor of Commerce Guido Feger and today is considered one of the largest banks in Liechtenstein.

In addition to its head office in Liechtenstein, VP Bank Group has subsidiary companies with banking licences in Switzerland, Luxembourg, the British Virgin Islands and Singapore, an asset management company in Hong Kong, as well as representative offices in Moscow and Hong Kong.

The bearer shares of VP Bank are listed on SIX Swiss Exchange in Zurich, Switzerland.

History

VP Bank headquarters in Vaduz

1956 through 1962: Founding and development

Until 1956, there were only two banks in Liechtenstein: the Liechtensteinische Landesbank as an institution governed by public law, and Bank in Liechtenstein AG, a private-law company. On 6 April 1956, Guido Feger founded Verwaltungs- und Privat-Bank – today's VP Bank – in the legal form of a Liechtenstein institution with start-up capital of 2 million Swiss francs. The founding was a logical extension of Guido Feger's Allgemeinen Treuunternehmens (ATU), at the time the largest and oldest trust company in Vaduz. In 1956, it employed 13 people in Liechtenstein and, on behalf of clients, four offices workers in foreign countries. Together, they catered to the needs of roughly 900 clients in matters pertaining to the fiduciary administration of real estate interests, securities portfolios and current accounts – mainly in the CHF realm and the United States – as well as patent rights, loans and fixed-term deposits.

Guido Feger was granted a concession for his bank only after a second attempt: he had already submitted an application on 15 July 1955 for approval to conduct all types of banking transactions. As Liechtenstein's Persons and Companies Act included a protective clause in favour of the Landesbank, the government at the time rejected the application by stating the following: "Inasmuch as the founding of a private bank would have a strong impact on the interests of the Liechtensteinische Landesbank and encroach upon the business field, the petition has been turned down."

In verbal negotiations, Feger thereafter promised "…to safeguard the Liechtenstein character of the bank both in terms of its corporate bodies and the employment of local residents." On 22 March 1956, he submitted a set of regulations specifying that the organisation and business activities of the proposed bank were not to compete with the Landesbank. In response, the government ultimately granted the concession on 4 April 1956, whereby those regulations were deemed an integral part of the approval. They were binding on Guido Feger as a person and dictated that the bank may accept no savings deposits, conduct no foreign currency exchange and not grant loans (including mortgage lending). Thus in the early years, the bank had to concentrate almost entirely on non-domestic activities. However, in building up its business, VP Bank was able to benefit from the relationships that ATU had already fostered since 1929 with banks, financial intermediaries and private clients in Switzerland and elsewhere abroad. Over the six years between 1956 and 1962, the net assets of VP Bank increased steadily from six million to 15 million Swiss francs.

1963 through 1969: Initial growth phase

After the founding and development years as well as its conversion into a joint-stock company, VP Bank's size and profitability grew significantly between 1963 and 1969. By 1969 its total assets stood at CHF 150 million, while revenues continued to rise during that period and client assets under management had increased from 19 million to 134 million Swiss francs. That growth was attributable to the fact that, since 1963, the bank was allowed to conduct all banking activities not subject to official rules and regulations. In December 1967, parliament abrogated the contingency of the banking concession on the founder and hence the related time limitation for VP Bank. In return, VP Bank committed to keeping at all times a minimum of 60 per cent of its voting rights and 51 per cent of its share capital legally and beneficially in the hands of Liechtenstein citizens.

1970 through 1979: Difficult years

The economic environment for VP Bank in the period between 1970 and 1979 was marked by currency, stock market and banking crises. Historically high inflation rates, a devaluation of the Swiss franc in 1971, the plummeting US dollar exchange rate, collapsing stock prices, scandals surrounding Cologne's Herstatt-Bank in 1974 and Switzerland's SKA in 1977, along with a recession in Liechtenstein that started in 1975 – the first in the post-WWII era for the Principality – all combined to make the 1970s indeed a turbulent decade. To defend against excessive capital inflows from abroad, the Swiss government in June 1972 prohibited the payment of interest on foreign CHF-denominated deposits and imposed a commission on them (negative interest rates of up to ten per cent quarterly, i.e. 40 per cent per year). Liechtenstein was declared a foreign country with regard to currency; however, upon Liechtenstein's adoption of the relevant Swiss provisions, the Federal Council once again granted the Principality domestic status for currency and foreign exchange purposes as of 1 August 1973. VP Bank increased its share capital twice by 15 million Swiss francs in 1974 and 1979. And finally, the bank was granted in 1975 a full concession to offer the entire range of banking products, including savings accounts and mortgages. During this consolidation phase, its total assets increased from 150 to 530 million Swiss francs and the workforce more than doubled from 41 to 86.

1980 through 2000: Renewed upswing

VP Bank counter hall in Vaduz

The bank, which had established a number of foreign subsidiary companies in the years after 1988, published its first consolidated financial statements for the 1995 business year. Over the two decades of this boom phase, its total assets increased from 530 million (end-1979) to 10.9 billion Swiss francs (end-2000), reported total net income rose from CHF 2.9 million to 197 million, and the workforce more than sextupled from 86 to 563. The main book turnover (single-sided) of the parent bank alone surged from 6.7 to 77.3 billion Swiss francs between 1980 and 1989. Business for VP Bank Group flourished in the second half of the 1990s: total Group assets grew from 6.3 billion (1995) to 10.9 billion Swiss francs (2000) and gross income (revenues less operating expenses) from CHF 94 million to 254 million, whereas the commission and services business overtook the interest-differential business in 1997 as the major pillar of the income statement. In the years between 1996 and 2000, there was also a doubling of client assets under management from CHF 15 billion (end-1995) to 31 billion. Consolidated net income increased from 48 million (1995) to 197 million (2000) Swiss francs. As the significance of VP Bank Group's foreign subsidiary companies grew, the proportion of investments attributable to them (assets held in non-CHF regions) increased as well, from 22 per cent (1996) to 40 per cent (2000) and ultimately to a high of 58.3 per cent at the end of 2005. As always, VP Bank placed those funds only with top-rated banks. The progressively internationalised bank redoubled its risk management efforts in the late 1990s and introduced an Asset and Liability Committee.

2001 through 2006: Crisis, restructuring and recovery

VP Bank Group's total assets declined in 2001 and 2002 by almost 20 per cent to CHF 8.9 billion. Consolidated net income also fell from 197 million Swiss francs in 2000 to 68 million (2001) and ultimately 38 million (2002). Despite the cost-saving measures introduced in early 2002, gross income (revenues less operating expenses at current prices) shrunk during this time frame from CHF 254 million to 36 million, with the lion's share of that decrease being attributable to securities-related income. Given the dismal financial market environment, the bank was forced to haircut the value of its proprietary securities holdings (including its own VP Bank shares) report a loss of 38 million (2001) and 75 million (2002) Swiss francs for this business segment. The collapse in 2002 was also attributable to a decrease in assets under management from CHF 29.6 billion (2001) to 25.2 billion (2002) as well as disadvantageous exchange rate trends. During 2002, the workforce was reduced from 563 to 549 employees. A recovery got underway in 2003, with gross income surging back to 139 million Swiss francs and consolidated net income to CHF 95 million, thereby putting the bank back on its successful pre-crisis course. By the end of 2006, total assets had returned to CHF 9.5 billion (2005: 8.2 billion), consolidated net income to 132 million (2005: 119 million), and assets under management rose to 35.5 billion Swiss francs (2005: 30.1 billion). Gross income of CHF 174 million now stood 30 per cent higher than two years earlier (2004: 134 million).

2007: Additional subsidiaries in Dubai and Hong Kong

In April, VP Bank opens a new office in Dubai and then in September an asset management company in Singapore.

2008: VP Bank receives banking licence in Singapore

In June, the MAS (Monetary Authority of Singapore) grants VP Bank Group a banking licence to do business in Singapore. Die VP Bank (Schweiz) AG in Zurich moved from the old stock exchange building to new premises at Bahnhofstrasse 3.

2009: CEO, Adolf E. Real leaves VP Bank / Liechtenstein is taken off the "grey list"

In 2009, Liechtenstein signs thirteen international agreements on cooperation in tax matters, which in turn led to its removal from the so-called "grey list" of the OECD. For Liechtenstein, the treaties with large countries such as the USA, Great Britain, Germany and France afforded the greatest positive effect in terms of credibility, reputational gains and legal certainty for clients. The Liechtenstein banks continued to demonstrate their financial strength and stability also in 2009 – compared to their European peers, they stood out for their high equity capital ratios and needed no state support during the financial crisis. In keeping with tradition, they perform no investment banking activities but instead focus on private banking and wealth management.

2010: Roger H. Hartmann named new CEO of VP Bank Group

On 4 February 2010, the board of directors of Verwaltungs- und Privat-Bank Aktiengesellschaft elects Roger H. Hartmann to become the future chief executive officer of VP Bank Group. He took over that post on 1 April 2010 from Fredy Vogt, who had led VP Bank during the past five months on an ad interim basis.

2011: Equipped for the future

Luxembourg becomes the final banking location of VP Bank Group to integrate the Avaloq banking software system. As a result, the products and services of the entire VP Bank Group can be efficiently and easily harmonised and adapted to client needs.

2012: Fredy Vogt becomes new chairman of the board of the VP Bank Group

As previously announced at the 2011 annual general meeting of shareholders, Hans Brunhart, after 18 years of membership on the board of directors and sixteen of which, as its chairman, decides not to stand for re-election. In 2012, Fredy Vogt succeeded him as member and chairman of the board of directors after having been with VP Bank in various functions ever since 1987.

2013: Alfred W. Moeckli becomes new CEO of VP Bank Group

The board of directors names Alfred W. Moeckli to become the new chief executive officer of VP Bank Group. He takes over this function as of 1 May 2013 from Siegbert Näscher, CFO, and Juerg W. Sturzenegger, COO, who co-headed the bank on an ad interim basis since mid-July 2012.

VP Bank initiates takeover of the private banking activities of HSBC Trinkaus & Burkhardt (International) SA as well as its private banking related fund business in Luxembourg.

2014-2015: VP Bank and Centrum Bank are merging Continuing its reliance on growth through acquisitions, VP Bank Group takes over Centrum Bank of Vaduz, Liechtenstein, in a merger. In January 2015 VP Bank's acquisition of all share of Centrum Bank has been executed. As of 7 January 2015, Centrum Bank is a subsidiary of VP Bank.

Milestones

• 1956  Founding of the parent bank in Vaduz
• 1974  Introduction of public and employee shares, the first publicly held company in Liechtenstein
• 1983  Listing on the Zurich Stock Exchange (today's SIX Swiss Exchange)
• 1988  Founding of subsidiary companies in Luxembourg and Zurich
• 1995  Founding of subsidiary company on the British Virgin Islands in a joint venture with Allgemeine Treuunternehmen (ATU)
• 2005  Opening of a representative office in Moscow
• 2006  50-year anniversary of VP Bank
• 2007  Opening of VP Wealth Management (Hong Kong) Ltd
• 2008  Opening of VP Bank (Singapore) Ltd
• 2009  Long-standing CEO, Adolf E. Real, leaves VP Bank Group
• 2010  Roger H. Hartmann becomes new CEO of VP Bank Group
• 2012  Fredy Vogt becomes chairman of the board of VP Bank Group
• 2013  Alfred W. Moeckli on 1 May 2013 takes over as new chief executive officer of VP Bank Group
• 2013  VP Bank and Centrum Bank are merging

Key figures

In 2017 [1], VP Bank Group earned a group net income of CHF 65.8 million. Client assets under management at VP Bank Group totalled CHF 40.4 billion at the end of 2017.

Overview key figures 2017

• Group net income: CHF 65.8 million
• Assets under management: CHF 40.4 billion
• Inflow of net new money: CHF 1,894 million
• Cost/income ratio: 64.2 percent
• Tier 1 ratio: 25.7 percent
• VP Bank registered shares A: 2017 stock price rise of 27.3 percent incl. dividend
• Dividend: proposed increase from CHF 4.50 to CHF 5.50

Organisation

Members of the board of directors:

• Fredy Vogt, chairman of the board of directors
• Lic. oec. Markus Thomas Hilti, vice charmain of the board of directors
• Dr. Christian Camenzind
• Prof. Dr. Teodora D. Cocca
• Dr. Beat Graf
• Michael Riesen
• Dr. Florian Marxer
• Lic.iur Ursula Lang
• Dr. Gabriela Maria Payer
• Dr. Thomas R. Meier

Members of group executive management

• Alfred W. Moeckli, chief executive officer
• Siegbert Näscher, chief financial officer
• Christoph Mauchle, head of client business
• Urs Monstein, chief operating officer
• Monika Vicandi, general counsel and chief risk officer
• Dr. Felix Brill, head of investment solutions

VP Fund Solutions

The investment fund business is a major focal point of VP Bank's commercial activities. VP Fund Solutions is VP Bank Group's centre of excellence for funds, comprising VP Fund Solutions (Liechtenstein) AG in Liechtenstein and VP Fund Solutions (Luxembourg) SA in Luxembourg.

External links

• Homepage VP Bank
• Homepage VP Fund Solutions

Substantiating documentation

• Lussy, Hanspeter: Idee und Geschichte der VP Bank, S.25-61
• Annual report 2017 [2]
• Semi annual report 2017 [3]