Liechtenstein-based VP Bank has reported a drop in profit for 2022, hit by market turmoil and rise in investments linked to open wealth strategy.
The private bank’s net income for the 12 months to 31 December 2022 stood at CHF40.2m, a 21% decrease compared with CHF50.6m in 2021.
All regions are said to have positively contributed to the net income, led by the Liechtenstein home market.
Financial market slowdown hit client assets under management, which dropped 9% to CHF46.4bn.
Total assets were CHF12.6bn at the end of December last year, a 4% decrease from CHF13.2bn in the prior year.
Also impacting performance was the 7% rise in operating expenses to CHF291.2m from CHF272.1m, driven in part by the processing of sanctions tied to Russian clients.
The rise in expenses was also due to VP Bank’s investment in Strategy 2026, which looks to position the bank as an international open wealth service provider for intermediaries and wealthy private clients.
Offsetting this was the 2% increase in total operating income to CHF336.4m from CHF329.9m.
Net interest income increased 10% to CHF121.5m and income from trading activities soared 31% to CHF65.5m.
This outweighed the 11% decline in income from commission business and services.
Net new money inflows wereCHF1.1bn, indicating a 2% growth.
The cost/income ratio was 82.5% in 2022, versus 86.6% a year ago, while tier 1 ratio fell to 21.7% from 22.4%.
Liquidity coverage ratio of 233% surpassed the regulatory requirement of 100%.
Amid geopolitical turmoil, the bank is revising its financial targets for 2026.
Nevertheless, it is keeping its dividend unchanged at CHF5 a share.
VP Bank Group CEO Paul H. Arni said: “Even in a challenging market environment, VP Bank has the financial strength and stability to invest for the long term in order to offer excellent solutions to its clients and growth and attractive returns to its shareholders.”