Annual Report 2014
LGT Bank Ltd., Vaduz
Contents
Organizational structure
4
The business year in comparison
5
Annual report
6
Balance sheet
7
Off-balance sheet transactions
8
Profit and loss account
9
Appropriation of net profit
10
Flow of funds statement
11
Appendix12
Remuneration report 17
Notes on the balance sheet
21
Notes on off-balance sheet transactions
35
Notes to the profit and loss account
37
Additional information
39
Report of the statutory auditor
42
International presence of LGT
44
Organizational structure as of April 2015
Board of Directors
Thomas Piske, Chairman
H.S.H. Prince Max von und zu Liechtenstein
Olivier de Perregaux
Jacques Engeli
Internal Audit
Daniel Hauser Executive Management Board
Norbert Biedermann, Chairman
Ivo Klein
Roland Schubert
Markus Werner
Statutory Auditor
PricewaterhouseCoopers AG, Zürich
4
Organizational structure as of April 2015
The business year in comparison
Balance sheet
2014
2013
Change
absolute
%
Balance sheet total
CHF m
30 692.7
25 130.8
5 561.9
22.1
Shareholders’ funds (after profit distribution)
CHF m
2 616.2
2 124.1
492.1
23.2
Client deposit
CHF m
16 795.1
14 809.7
1 985.4
13.4
Due from clients
CHF m
11 825.9
10 018.1
1 807.8
18.0
Profit and loss account
Net interest income
CHF m
111.8
113.2
-1.4
-1.2
Net commission and fee income
CHF m
229.9
218.2
11.7
5.3
Income from financial transactions
CHF m
65.8
62.0
3.8
6.1
Gross operating income
CHF m
438.7
423.4
15.3
3.6
Personnel expenses
CHF m
191.4
172.2
19.2
11.1
Operating expenses
CHF m
148.6
146.1
2.5
1.7
Result on ordinary business activity
CHF m
87.5
92.9
-5.4
-5.8
Taxes
CHF m
24.9
6.0
18.9
313.0
Profit for the year
CHF m
492.1
301.9
190.2
63.0
CHF m
61 268.1
55 816.8
5 451.3
9.8
771
713
58
8.1
Client assets under administration
Client assets under administration
Personnel (full-time equivalents)
Staff at year-end
The business year in comparison
5
Annual report
2014 was a successful year for LGT Bank Ltd., despite
integrated approach to the management and develop­
the difficult economic and regulatory environment. The
ment of the individual group companies. The LGT Annual
bank reported good strategic and operational progress,
Report contains more detailed information on the
and once again made a significant contribution to the
Group’s financial strength, expertise and development.
Group’s results.
Accolades for quality of advisory services and
Higher income on commissions and lower
HR management
interest income
Our investments in the quality of our advice and services
Continued low interest rates resulted in a slight
were recognized by a number of independent institu-
reduction in net interest income of 1.2 percent to
tions in 2014. We were awarded “Best Private Bank
CHF 111.8 million compared to the previous year.
in Liechtenstein” by the Financial Times publications
In contrast, income from the commission and services
Professional Wealth Management and The Banker.
business rose by 5.3 percent to CHF 229.9 million,
The Handelsblatt’s Elite Report gave us the highest
driven by favorable stock market developments and
“summa cum laude” rating for the twelfth consecutive
higher assets under management. Income from finan-
year. We are also proud to have been certified as
cial transactions was CHF 65.8 million, up 6.1 percent.
“Top Employer 2015” by the Top Employers Institute.
This is attributable to strong performance in the trading
The renowned institute was particularly impressed by
business which offset slightly weaker valuation gains
our HR management and personnel strategy.
of the high-grade bonds portfolio. On the expenditures
side, the increase in business and office expenses was
Outlook
limited to 1.7 percent, despite rising levels of regulation.
We have gotten off to a good start in the current year
Personnel expenses rose 11.1 percent to CHF 191.4 mil-
and are well-positioned to make further progress. We
lion, which is primarily attributable to staff recruiting
do not expect the lifting of the minimum Swiss franc
and performance-related compensation in accordance
exchange rate to have a material effect on the 2015
with the growth of the business. Income taxes increased
results. A significant challenge, however, will certainly
by 313.0 percent to CHF 24.9 million due to an amend-
be posed by the negative interest rates introduced at
ment to the tax law. While gross profit decreased by
the beginning of the year by the Swiss National bank.
6.1 percent, profit for the year rose 63 percent to
Our excellent strategic positioning comes as a result
CHF 492.1 million as a result of the full release of
of our international presence in key markets, our high
provisions for general banking risks.
level of investment know-how, as well as our parent
company’s strong capital base and stable ownership
LGT Bank Ltd. remains extremely well capitalized. At
structure. The further development of our investment
19.3 percent of risk-weighted positions, the bank’s
expertise in traditional and alternative asset classes has
tier 1 ratio as at year-end 2014 was 141 percent above
been one of our main priorities for many years. This
the 8 percent minimum required by law.
benefits us and our clients, particularly in the ongoing
challenging investment environment.
Assets under management increased by 9.8 percent to
CHF 61.3 billion. This rise is attributable to new asset
We aim to continue to stand side by side with our
inflows and performance-related increases.
clients as partners in every market environment, and
we thank them for the trust they place in us. We also
Ownership structure of LGT Bank Ltd.
thank our employees for their outstanding dedication
The shares of LGT Bank Ltd. are wholly owned by the
throughout the course of the reporting year.
LGT Group Foundation. No own shares were acquired
6
or taken as pledge, either directly or indirectly. LGT
Thomas Piske, Chairman of the Board of Directors
Bank Ltd. is part of LGT Group (LGT), a global private
Norbert Biedermann, Chairman of the Executive
banking and asset management group that takes an
Management Board
Annual report
Balance sheet
Assets (TCHF)
Appendix
Cash and cash equivalents
31.12.2014
8 301 781
31.12.2013
7 335 362
Change
absolute
%
966 419
13.2
Debt instruments of public authorities
and bills which are eligible for refinancing
at central banks
3, 22
25 623
22 931
2 692
11.7
Due from banks
16
5 792 510
3 958 869
1 833 641
46.3
Due from clients
1, 16
11 825 886
10 018 096
1 807 790
18.0
1, 16
2 929 830
2 587 115
342 715
13.2
2, 3, 4, 23, 38
2 516 272
2 283 836
232 436
10.2
2, 3, 4, 38
1 339
3 180
-1 841
-57.9
of which mortgage loans
Bonds and other fixed-interest
bearing securities
Equities and other non-fixedinterest securities
Participations
Shares in affiliated companies
5, 7, 8, 38
166
166
0
0.0
5, 6, 8, 21, 38
57 068
68 214
-11 146
-16.3
Intangible assets
9
23
50
-27
-54.0
Tangible assets
8
83 281
88 394
-5 113
-5.8
40
2 048 509
1 311 925
736 584
56.1
Other assets
Accrued income and prepaid expenses
Total assets
40 251
39 824
427
1.1
30 692 709
25 130 847
5 561 862
22.1
Liabilities (TCHF)
Due to banks
16
9 609 484
6 745 506
2 863 978
42.5
Due to clients
16, 24
15 278 901
13 564 448
1 714 453
12.6
Securitized liabilities
12, 25
1 515 953
1 244 745
271 208
21.8
41
1 519 692
775 584
744 108
95.9
78 165
70 248
7 917
11.3
13, 26, 36
74 045
81 602
-7 557
-9.3
39
220
470
-250
-53.2
Other liabilities
Accrued expenses and deferred income
Provisions
Subordinated liabilities
Provisions for general banking risks
13
0
429 500
-429 500
-100.0
Share capital
14
291 201
291 201
0
0.0
Revenue reserves
15
1 624 500
1 624 500
0
0.0
208 403
1 169
Profit carried forward
Profit for the year
Total liabilities
207 234 17 727.5
492 145
301 874
190 271
63.0
30 692 709
25 130 847
5 561 862
22.1
Important This document is a non-binding English translation of the authoritative German annual report.
Balance sheet
7
Off-balance sheet transactions
Off-balance sheet (TCHF)
Contingent liabilities
Appendix
31.12.2014
31.12.2013
Change
absolute
%
1, 27
3 659 732
3 771 924
-112 192
-3.0
1, 27
3 659 732
3 771 924
-112 192
-3.0
155 455
82 974
72 481
87.4
1
116 611
69 877
46 734
66.9
1
38 844
13 097
25 747
196.6
of which liabilities from guarantees and indemnity
agreements as well as from the furnishing of collateral
Credit risks
of which irrevocable commitments
of which commitments to subscribe additional
contributions for shares or other equity securities
Derivative financial instruments
Positive replacement values
30, 40
1 578 142
779 378
798 764
102.5
Negative replacement values
30, 41
1 418 090
703 373
714 717
101.6
Contract volume
30
99 526 910
86 497 170
13 029 740
15.1
Fiduciary transactions
29
194 462
305 239
-110 777
-36.3
Important This document is a non-binding English translation of the authoritative German annual report.
8
Off-balance sheet transactions
Profit and loss account
Profit and loss account (TCHF)
Appendix
2014
2013
Change
absolute
Interest earned
32, 33
%
178 635
182 303
-3 668
-2.0
Interest paid
-66 865
-69 152
2 287
-3.3
Net interest income
111 770
113 151
-1 381
-1.2
0
0
0
0.0
1 161
3 568
-2 407
-67.5
64
29
35
120.7
Equities and other non-fixed-interest securities
Participations
Shares in affiliated companies
Current income from securities
1 225
3 597
-2 372
-65.9
Commission income from lending business
5 405
6 123
-718
-11.7
276 817
264 652
12 165
4.6
Commission income from securities and investment business
Commission from other services
Income from commission business and services
15 860
16 651
-791
-4.8
298 082
287 426
10 656
3.7
Commission paid
-68 225
-69 224
999
-1.4
Net commission and fee income
229 857
218 202
11 655
5.3
65 805
62 018
3 787
6.1
61 337
53 904
7 433
13.8
Income from financial transactions
of which from trading
33
Other ordinary income
42
Gross operating income
30 027
26 405
3 622
13.7
438 684
423 373
15 311
3.6
Personnel expenses
34
-191 448
-172 244
-19 204
11.1
Operating expenses
35
-148 569
-146 056
-2 513
1.7
-340 017
-318 300
-21 717
6.8
98 667
105 073
-6 406
-6.1
Business expenses
Gross profit
Amortization of intangible assets and depreciation of
tangible assets
Other ordinary expenses
36, 43
-7 883
-8 347
464
-5.6
-1 704
-3 347
1 643
-49.1
-2 874
-864
-2 010
232.6
1 328
385
943
244.9
Value adjustments on receivables and funds allocated
to provisions for contingent liabilities and credit risks
Income from the release of value adjustments on
receivables and from provisions for credit risks
Amortization of participations, shares in affiliated
companies and securities held as non-current assets
0
0
0
0.0
87 534
92 900
-5 366
-5.8
Income tax
-24 889
-6 026
-18 863
313.0
Other taxes
0
0
0
0.0
Result on ordinary business activity
Income from the release of provisions for
general banking risks
429 500
215 000
214 500
99.8
Profit for the year
492 145
301 874
190 271
63.0
Important This document is a non-binding English translation of the authoritative German annual report.
Profit and loss account
9
Appropriation of net profit
Appropriation of net profit – proposal of the Board of Directors
2014
2013
to the general meeting of shareholders (CHF)
Profit for the year
492 145 459.30
301 873 658.13
Profit carried forward
208 402 704.21
1 169 306.08
Accumulated profit for the year
700 548 163.51
303 042 964.21
Allocation to legal reserves
0.00
0.00
Allocation to statutory reserves
0.00
0.00
Allocation to other reserves
0.00
0.00
Dividend on company capital
0.00
94 640 260.00
Other profit distribution
0.00
0.00
700 548 163.51
208 402 704.21
Profit distribution
Profit carried forward
Important This document is a non-binding English translation of the authoritative German annual report.
10
Appropriation of net profit
Flow of funds statement
Flow of funds statement (TCHF)
2014
2013
Source
Application
Source
Application
of funds
of funds
of funds
of funds
Flow of funds from operating result (internal financing)
Profit for the year
Depreciation of non-current assets
492 145
7 883
Value adjustments and provisions
8 347
437 057
Accrued income and prepaid expenses
Accrued expenses and deferred income
301 874
217 894
427
7 917
5 774
6 840
Other items
0
Previous-year dividend
94 640
Balance
24 179
64 064
29 329
Flow of funds from changes to non-current assets
Participations
Shares in affiliated companies
0
41 146
Securities and precious metals as non-current assets
Intangible assets
Properties
Other tangible assets
Balance
30 000
0
9 966
45
162
0
40
89
2 053
41
2 720
0
779
0
975
1
8 359
-13 498
Due to banks
7 673
8 752
Due to clients
2 740
2 924
0
Flow of funds from banking operations
Medium and long-term business (> 1 year)
Bonds
529 931
Medium-term notes
Other liabilities
15 708
7 919
67 212
15 861
60
10 105
Due from banks
46 171
Due from clients (excl. mortgage loans)
95 645
43 411
84 395
9 281
Mortgage loans
97 953
19 453
Other receivables
14 906
Short-term business (≤ 1 year)
Due to banks
2 856 305
103 199
Due to clients
1 711 713
892 493
425 902
128 090
Other liabilities
Due from banks
1 787 470
963 433
Due from clients
1 731 598
42 852
Trading positions in securities and precious metals
95 332
0
71 866
(excl. trading positions)
256 893
291 682
Other receivables
723 871
Securities and precious metals held as current assets
422
Liquid funds
Cash and cash equivalents
-966 419
Balance
15 820
Total
24 179
-1 755 745
-15 831
24 179
0
0
Important This document is a non-binding English translation of the authoritative German annual report.
Flow of funds statement
11
Appendix to the financial statement
Notes on business activity
General points
Money market business
LGT Bank Ltd. with its registered office in Vaduz
Within the scope of money market business, money
operates as a universal bank and securities trader. The
in the form of call money, time deposits and fiduciary
company has branch offices in Hong Kong and Vienna.
investments is deposited with the bank. Insofar as these
The bank maintains representative offices in Bahrain,
funds are not required for lending business, they are
Chur, Davos, Geneva, Lugano, Zurich and Montevideo.
placed with first-class banks, predominantly in Western
At 31 December 2014, LGT Bank Ltd. employed 771
Europe. These investments are being made in the form
persons on a full-time equivalent basis (713 in the pre-
of easily convertible money market paper (certificates
vious year). In 2014, the average headcount amounted
of deposit, Euro commercial papers). Despite its focus
to 739 persons (691).
on private banking, interest margin business represents
As a universal bank, LGT Bank is active in the fields of
an important earnings stream for the bank.
wealth management (commission business and services)
and trading, as well as in money market and lending
Trading business
business.
LGT Bank Ltd. operates trading transactions for clients
and for its own account in securities, foreign exchange
Wealth management
and precious metals. The bank trades for its own
LGT Bank Ltd. is one of the leading international names
account in accordance with conservative principles.
in traditional private banking. The bank offers a broad
Derivative instruments are used mostly for hedging
spectrum of p
­ roducts and services that enable clients
purposes.
to choose the best solution to suit their needs. Most
earnings from commission business and services stem,
Lending business
among other things, from wealth management. The
Most lending takes the form of Lombard loans and
commission business and services also represents the
mortgages on residential property. Mortgages are
bank’s main source of revenue.
granted primarily for financing properties in Liechtenstein and in Switzerland. Property financing in selected
other countries is offered as part of integrated wealth
management.
Statement regarding the correctness of the financial statements and the annual report
We confirm that the financial statements have been prepared in conformance with the prevailing accounting
policies and standards, and that to our knowledge they present a true and fair picture of the assets and liabilities,
as well as the financial, earnings and profitability position of the bank. The annual report contains all the required
information about the course of business, the results of operations and the position of the bank. It provides an
accurate picture of the actual situation, and outlines the most important risks and uncertainties.
12
Thomas Piske Olivier de Perregaux
Chairman of the Board of Directors
Member of the Board of Directors
Appendix to the financial statement
Accounting policies
Basic principles
Cash and cash equivalents, debt instruments of
The annual accounts are prepared in accordance with
public authorities and bills which are eligible for
the act and ordinance on banks and investment firms
refinancing at central banks, and claims on banks
(Banking Act, Bank Ordinance) and applicable provisions
Cash and cash equivalents and claims on banks are
of the Law on Persons and Companies (PGR).
reported in the balance sheet at par value. Registered
money market claims, rescriptions and treasury certifi-
Consolidation
cates are reported inclusive of amortized discounts.
LGT Bank Ltd. does not prepare consolidated accounts
because the parent company, the LGT Group Foundation,
Due from clients
is itself subject to the Banking Act and prepares annual
Non-impaired claims against clients are reported in the
accounts at Group level. The consolidated accounts are
balance sheet at nominal value. Impaired claims, i.e.
available for inspection at LGT Marketing & Communi­
claims where it appears unlikely that the debtor will be
cations at the offices of LGT Bank Ltd., Herrengasse 12,
able to meet his future obligations, are valued on an
FL-9490 Vaduz, and can be accessed on the internet
individual basis and the decrease in value is covered by
under www.lgt.com.
specific value adjustments. Loans are rated as impaired
at the latest if the contractual payments for capital
Recording and reporting of transactions
and/or interest have been outstanding for more than
All business transactions are recorded in the company‘s
90 days. Interest which has been outstan­ding for more
accounts on the date of the transaction, and are
than 90 days is regarded as overdue. Overdue interest
valued from this date for the calculation of earnings.
and interest which is in danger of not being received,
is no longer recovered but is instead allocated to value
Foreign currency conversions
adjustments.
Assets and liabilities denominated in foreign currencies
are converted at the rates applicable on the b
­ alance
The decrease in value is measured according to the dif-
sheet date. For income and expenditure, the rates
ference between the book value of the claim and the
applicable at the time of the transaction are used.
probable recoverable amount, taking account of the
Futures contracts are valued at residual maturity rates.
estimated net present value on the balance sheet date.
The net present value calculation is based on the current
The balance sheet and income statement positions of
interest rate of the claim and the expected dates of the
foreign operations are converted at the rates prevailing
future incoming payments. Specific value adjustments
on the balance sheet date.
are deducted directly from the corresponding claims.
Conversion rates
In addition to the specific value adjustments, the bank
31.12.2014
31.12.2013
makes portfolio value adjustments to cover any latent
1 EUR
1.2024
1.2252
default risks present on the balance sheet date. In this
1 USD
0.9936
0.8891
connection, equivalent claims not entitled to specific
1 GBP
1.5492
1.4724
value adjustments are grouped together (portfolios).
1 SGD
0.7498
0.7042
A calculation model is then applied to each portfolio to
1 HKD
0.1281
0.1147
determine the necessary portfolio value adjustments as
100 JPY
0.8288
0.8459
soon as a latent credit risk is signaled by predetermined
indicators. Portfolio value adjustments are offset against
the corresponding claims. Changes to the portfolio value
adjustments are entered in the profit and loss account.
Impaired claims are reclassified as performing if the out­
standing capital amounts and interest are again paid
within the specified period under contractual agreements.
Appendix to the financial statement
13
Trading positions comprising securities and
Derivatives
precious metals
The positive and negative replacement values of all
Trading positions are valued at the market value on the
derivative financial instruments are reported under the
balance sheet date. For positions which are not traded
positions other assets or other liabilities. The positive
on a recognized exchange or for which there is no
and negative replacement values are reported in the
representative market, valuation is carried out at the
balance sheet as gross figures and valued at fair value.
lower of cost or market.
If interest rate business positions are hedged with
derivatives, the difference between the fair value
Securities and precious metals held as current
valuation and the accrual method is reported in the
and non-current assets
compensation account.
Current assets are valued at the lower of cost or market.
Money market papers are measured at a­ mortized cost.
Repurchase and reverse repurchase transactions
Fixed-interest bearing securities assigned to non-current
(Repo transactions)
assets are reported in the b
­ alance sheet at the repay-
Repo transactions are used to refinance and fund money
ment amount. Premiums and discounts which have not
market transactions. They are entered in the balance
yet been amortized are reported as accrued items. Only
sheet as advances against collateral and cash contribu­
those debt instruments which are kept until maturity
tions or with pledging of securities held on own account.
are recorded as non-current assets.
Securities provided to serve as cover thus continue to be
posted in the corresponding b
­ alance sheet positions –
Precious metals held as current assets are valued at
securities received to serve as collateral are not reported
the market value on the balance sheet date. Precious
in the balance sheet. Interest resulting from the trans-
metals held as non-current assets are reported at cost
actions is posted as net interest income.
minus necessary value adjustments.
Securities lending and borrowing transactions
Shares in affiliated companies and participations
Securities lending is recorded at the value of cash
Shares in affiliated companies and participations are
deposits which have been received or made, including
valued at cost, taking into account necessary value
interest accrued.
adjustments.
Shares in infrastructure companies are also reported in
Securities which have been borrowed or accepted as
the balance sheet under participations. These items are
collateral are only recorded in the balance sheet if the
insignificant in capital and voting shares.
bank gains control of the contractual rights contained in
Subordinated loans to affiliated companies are reported
these securities. Securities lent or provided as collateral
at the nominal value.
are only taken off the balance sheet if the bank loses
the contractual rights associated with these securities.
Tangible assets
The market values of the securities which have been
Properties for the bank’s own use are valued at cost,
either borrowed or lent are monitored daily so that
including any appreciating investments, less depre­
additional collateral can be provided or requested
ciation over a fixed useful life (generally 50 years).
where necessary.
Any building work carried out in rented properties is
depreciated over the term of the rental agreement.
Fees arising from securities lending and repurchase
transactions, which have been received or paid, are
Other tangible assets such as machinery, furniture
and vehicles are depreciated over their useful life
(normally three to five years).
14
Appendix to the financial statement
entered as interest earned and interest paid.
Amounts due to banks and clients
Risk management
Amounts due to banks and clients are reported in the
The risk policy complies with internal requirements and
balance sheet at nominal values.
guidelines, Liechtenstein Banking Law, FMA communiqué no. 10/2009 “Risk-compatible capital adequacy
Securitized liabilities
requirements, risk management and control”, the risk
Securitized liabilities in the form of certificates and
management guidelines of the Swiss Bankers Associa-
medium-term notes are reported in the balance sheet
tion and the principles of the Basel Committee on
at repayment amount. Bonds are reported at amortized
Banking Supervision.
cost using the effective interest method.
The Board of Directors has overall responsibility for
Other liabilities
implementing risk policy. Whereas the functions of risk
Derivatives are reported at their fair value. The other
management are allocated to operational units, the
items (settlement accounts, coupons etc.) are reported
Executive Board is responsible for overall risk control.
at their nominal value or the value of the repayment
The independent Risk Controlling Department monitors
amount.
compliance with the issued provisions.
Subordinated debt
Market risks
Securitized subordinated debt is entered in the balance
The bank’s business activities mean that it is mainly
sheet at the value of the repayment amount. Non-securi­
exposed to risks associated with interest rate changes
tized subordinated debt is reported at the nominal value.
and share price and foreign currency fluctuations.
Whereas the Trading Committee is responsible for con­
Value adjustments and provisions
trolling risks resulting from trading activities, the Asset
In accordance with prudent accounting practice, spe-
and Liability Committee is responsible for controlling
cific value adjustments and provisions are made for all
the risks associated with changes in interest rates.
identifiable risks. To cover latent default risks, which,
These bodies restrict the risk positions by means of
as experience has shown, exist in a loan portfolio, port-
volume and sensitivity guideline limits. An analysis of
folio value provisions are also made based on a system­
the aggregate risks and the simulation of worst-case
atic approach. Value adjustments are offset directly
scenarios are carried out on a regular basis.
against the corresponding asset position. Provisions
are formed for uncertain liabilities and for threatened
Credit risks
losses which are likely or certain on the balance sheet
Lending activities are primarily carried out in the inter-
reporting date, but whose level or date of occurrence
bank market or in secured form in private client busi-
is uncertain. Provisions are reported under the same
ness. The bank pursues a conservative lending policy
name in the balance sheet.
where the same guidelines are applied for both mone­
tary loans and guarantee credits. By strict limitation of
Taxes
the default risks, the formation of cluster and country
Taxes accruing to the result for the period under review
risks is also countered. An internal rating procedure is
are recorded as expenses in the accounting period in
applied as an instrument for efficient risk management
which the corresponding profit has occurred.
and risk-adjusted calculation of conditions. Detailed
reporting ensures that the Executive Board is constantly
informed about developing risks.
Appendix to the financial statement
15
Operational risks
The operational risk is defined as the risk of loss resulting
from inadequate or failed internal processes, people and
systems or from external events. LGT has established
a Group-wide “Operational Risk Committee“ which
provides the Executive Board with support in the early
identification of these risks and in implementing appropriate measures. These tasks are based on the principles
stipulated in the “Sound Practices for the Management
and Supervision of Operational Risk” issued by the Basel
Committee on Banking Supervision. The set guidelines
ensure that risk management takes suitable care of all
risk categories.
Derivative financial instruments
Interest rate and currency swaps, forward rate agreements, futures and share options are regularly used to
manage the bank’s own risk positions. Within the frame­
work of client business, foreign currency and precious
metals options are used in addition to the aforesaid
instruments.
16
Appendix to the financial statement
Remuneration report
Remuneration principles
LGT is a family-run company built on the values of
The total amount of remuneration paid by the bank is
long-term commitment, stability and independence.
approved by the HRCC on the basis of a recommen-
LGT relies on the achievements, ideas and dedication
dation from the Board of Directors of the bank/CCB.
of its employees to meet the needs of its clients and
The remuneration of the Executive Board is decided in
implement its business strategy. An appropriate, sus-
accordance with the following process:
tainable and market-based remuneration model forms
a central part of the attractive and inspirational work-
Beneficiary
ing environment that LGT offers.
CEO of the bank
Recommended
Approved
by
by
Board of Directors
HRCC
The remuneration model of LGT and LGT Bank Ltd.
Norbert Biedermann
of the bank/CCB
(the bank) is based on the following principles:
Members of the
CEO of the bank Board of Directors
Executive Board
of the bank/CCB
n
The compensation model supports the implementation of LGT’s corporate values and objectives and
Roland Schubert
Ivo Klein
Markus Werner
takes the risk elements into consideration.
n
Excellent performance, outstanding dedication and
successes achieved with integrity will be rewarded.
n
The compensation model is focused on long-term
n
Success is evaluated on a long-term basis. Failure
business success.
on the part of employees in key positions can also
result in salary deductions.
LGT’s fundamental salary policy guidelines are developed and monitored by the “Human Resources Compensation Committee (HRCC)” 1 of the Foundation
Board. At bank level, the implementation of the guidelines is guaranteed by the “Compensation Committee
of the Bank (CCB)” 2.
The CCB evaluates the implementation of the guidelines and the growth, suitability and composition of
the overall compensation. It also determines whether
the remuneration is based on the remuneration principles. In addition, it ensures that the current national
regulatory requirements are met. It reports annually
to the HRCC and submits changes to the HRCC for
approval.
1
Dr. Rodolfo Bogni, Dr. Dominik Koechlin, Dr. Phillip Colebatch
2
H.S.H. Prince Max von und zu Liechtenstein, Thomas Piske
Remuneration report
17
Components of the remuneration
The compensation model for all employees of the
bank consists of a fixed basic salary, a variable remuner­
ation component and benefits. The following table
gives a summary of the individual components of the
remuneration.
Characteristics
Fixed
Element
Basic salary
Cash
Plan participants
Brief description
Purpose
Employees
Monthly market-based
Reflects abilities, skills and
of the bank
remuneration paid in 13 in-
responsibility
stallments in accordance
with the position and the
contract of employment
Variable
Cash incentive
Employees
Granted and paid annually.
Rewarding excellent
Bonus
of the bank
Amount of bonus depends
performance, outstanding
on business success and
dedication and successes
individual performance in the
achieved with integrity
business year in question
Options
Deferred incentive
Senior Mana-
Options on LGT dividend right
Reinforcing the long-term
LTIS 1
gement and
certificates granted annually.
links between the interests of
employees in
Three-year blocked period,
the employees, owners and
key positions
followed by exercise of the
clients. Possibility for plan par­
options within four years
ticipants to share in the value
created by the company
Benefits/
Employees
Pension, insurance, discounts
Fringe benefits
of the bank
on bank products, right to a
Benefits
Providing competitive benefits
sabbatical
1
Long Term Incentive Scheme
Basic salary
reflects the bank’s risk profile. In order to take account
The fixed monthly basic salary is paid in cash in 13
of exceptional developments, the final decision about
installments to compensate employees for performing
the total amount is made during the approval process
the tasks relating to their position, for their personal
at the discretion of the HRCC.
abilities and skills and for any management responsi­
bility that they have taken on. LGT regularly checks the
The variable remuneration can be paid directly as an
basic salaries against market benchmarking studies to
annual cash bonus or can take the form of options
ensure that they are compatible with the market and
as part of the Long Term Incentive Scheme (LTIS).
makes any necessary changes. LGT does not grant any
The relationship between the direct and the deferred
automatic salary increases.
remuneration (LTIS and cash incentive) is determined
on the basis of the employee’s risk profile. In the case
18
Variable remuneration
of members of the Executive Board and “risk takers”,
As a basic principle, the total variable remuneration is
the proportion of deferred remuneration is in line with
based on the business success of LGT and the bank and
the regulatory requirements.
Remuneration report
Parts of the variable remuneration can be subject to a
The long-term structure of the LTIS rewards loyalty
forfeiture clause. Where appropriate, claims to variable
to the company and, at the same time, encourages a
remuneration (the cash bonus) may be forfeited, for
conscious and cautious approach to opportunities and
example, in the case of extraordinary dismissal, serious
risks for the benefit of the entire company and the co-
breaches of the law and significant financial losses made
hesion of the Group. The LTIS allows plan participants
by the Group.
to take part in the development of the economic value
added, which is measured using a predefined formula.
Cash incentive (bonus)
The calculation is based on the operating profit, the
All bank employees can benefit from the cash incentive.
performance of the Princely Portfolio and the Group’s
The individual bonus amount is linked to performance
capital costs.
based on quantitative and qualitative criteria. The
quantitative criteria relate to performance at Group,
The LTIS options are granted annually and can be
bank, business sector and individual level, which is
exercised after a three-year blocked period up to and
measured against predefined target values. The quali-
including the seventh year (see chart).
tative criteria include risk behavior, compliance with
the code of conduct, specialist expertise, social skills,
Benefits/Fringe benefits
personality and management ability. These are assessed
Benefits are another component of the LGT compen-
on the basis of the skills in the employee qualification
sation model. These can take the form, for example,
system (BSC). This approach allows the bank to reward
of a pension, insurance, discounts on bank products
excellent performance, outstanding dedication and
and the right to a sabbatical. LGT works with different
successes achieved with integrity.
pension companies that make payments into insurance
products or funds under trusteeship.
Deferred incentive
(LTIS – Long Term Incentive Scheme)
In order to enable employees who have specifically
promoted the growth of the company by means of
their position, their knowledge or their abilities to participate in the company’s long-term success, LGT has
set up an internal Long Term Incentive Scheme (LTIS)
based on options. This reinforces the links between the
interests of the employees and those of the owners,
which is an important aspect of LGT’s philosophy.
Overview of the LGT remuneration structure
LTIS
Blocked period
Exercise period
Cash incentive
Basic salary
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Time
Remuneration report
19
Remuneration of the Executive Board
The remuneration paid to the Executive Board is checked
remuneration, which is made up of the cash incentive
regularly by the CCB to ensure that it is appropriate.
and the LTIS. The conditions governing the cash incen-
In order to reinforce the links between the interests of
tive and the LTIS apply, while the bonus amount can
the management and the owners and to ensure that
be adjusted on a discretionary basis.
the management focuses on long-term added value,
the members of the Executive Board receive variable
Regulatory requirements
The HRCC makes every effort to ensure that the remu-
is subjected to an independent internal investigation by
neration policy of LGT and the bank and its practical
the CCB regularly, i.e. annually or as events dictate, to
application meet national and international requirements.
ensure that it fulfills all the regulations.
For this purpose, the committee monitors developments
and changes in the legal regulations that are relevant
to LGT and the bank. The bank’s remuneration system
Remuneration of the Executive Board
Remuneration of the Executive Board 2014 (TCHF)
Direct
Deferred
Cash payment
Shares/sharelinked instruments
Entire EB 1
1
20
In 2014 there were four members of the Executive Board.
Remuneration report
Basic salary
Bonus
LTIS
1 296
1 321
706
Notes on the balance sheet
1
Overview of collateral (TCHF)
Mortgage-
Other
Without
backed
collateral
collateral
Total
6 780
7 857 549
1 031 727
8 896 056
2 497 427
0
0
2 497 427
Advances
Due from clients (excl. mortgage loans)
Mortgage loans
Residential properties
Office and business premises
240 365
0
0
240 365
Commercial and industrial premises
150 153
0
0
150 153
Other
Total
41 885
0
0
41 885
31.12.2014
2 936 610
7 857 549
1 031 727
11 825 886
31.12.2013
2 591 377
6 584 238
842 480
10 018 095
570
115 497
3 543 665
3 659 732
116 611
0
0
116 611
Off-balance sheet transactions
Contingent liabilities
Irrevocable commitments
Commitments to subscribe additional contributions for shares or other equity securities
Total
Impaired due amounts (TCHF)
2
0
0
38 844
38 844
31.12.2014
117 181
115 497
3 582 509
3 815 187
31.12.2013
70 199
127 263
3 657 436
3 854 898
Gross amount
Estimated realization
Net amount
Specific value
due
value of collateral
due
adjustments
31.12.2014
10 898
3 585
7 313
7 313
31.12.2013
11 356
3 804
7 552
7 552
Trading positions (TCHF)
Book value
Cost
Market value
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
46 983
68 748
47 464
69 299
46 983
68 748
46 983
68 748
47 464
69 299
46 983
68 748
0
0
0
0
0
0
435
25 207
431
25 542
435
25 207
1 339
3 180
1 323
3 318
1 339
3 180
0
0
0
0
0
0
Trading positions comprising
securities and precious metals
Debt instruments
listed (traded on a
recognized exchange)
unlisted
of which own bonds and
medium-term notes
Equity paper
of which own equity paper
Precious metals
436 092
507 818
436 092
507 818
436 092
507 818
Total
484 414
579 746
484 879
580 435
484 414
579 746
0
0
0
0
0
0
of which eligible as security
for central bank borrowings
Notes on the balance sheet
21
3
Securities and precious metals
held as current assets
Book value
Cost
Market value
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
2 494 912
2 238 019
2 493 423
2 325 101
2 505 784
2 243 271
(excl. trading positions) (TCHF)
Debt instruments
of which own bonds and
medium-term notes
Equity paper
0
0
0
0
0
0
0
0
0
0
0
0
of which qualified
participations (at least
10% of capital or votes)
Precious metals
Total
0
0
0
0
0
0
0
0
0
0
0
0
2 494 912
2 238 019
2 493 423
2 325 101
2 505 784
2 243 271
950 232
1 072 367
929 160
1 080 812
955 081
1 075 527
of which eligible as security
for central bank borrowings
4
Securities and precious metals
held as non-current assets
Book value
Cost
Market value
31.12.2014
31.12.2013
31.12.2014
31.12.2013
31.12.2014
31.12.2013
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(TCHF)
Debt instruments
of which own bonds and
medium-term notes
of which valued according
to the accrual method
of which valued at the lower
of cost or market
Equity paper
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
of which qualified
participations (at least
10% of capital or votes)
Precious metals
837
792
1 791
1 791
837
792
Total
837
792
1 791
1 791
837
792
0
0
0
0
0
0
of which eligible as security
for central bank borrowings
22
Notes on the balance sheet
5
Participations and shares in affiliated companies (TCHF)
31.12.2014
31.12.2013
0
0
Participations
with market value
without market value
166
166
Total
166
166
Shares in affiliated companies
with market value
6
0
0
without market value
37 068
17 067
Subordinated claims against affiliated companies
20 000
51 147
Total
57 068
68 214
Affiliated companies
Business
Share
% share
% share
Business
activity
capital
of votes
of capital
result TCHF
Grand Cayman
bank
USD 600 000
100
83
19 991
LGT Bank (Ireland) Ltd., Dublin
bank
USD 50 000 000
75
25
4 215
investment company
CHF 20 000 000
100
100
11 020
Banks and investment firms
LGT Bank (Cayman) Ltd.,
Other
LGT Investment Portfolio Ltd.,
Grand Cayman
The capital of LGT Bank (Cayman) Ltd. is divided into 500 000 ordinary shares and 100 000 participating shares. Both categories of share have a par value of
USD 1 per share. The participation comprises 100% of the ordinary shares, which have a preferential dividend.
At 31 December 2014, the shares in banks and investment firms shown under the shares in affiliated companies item amounted to TCHF 17 068 (57 068 in the
previous year).
7
Participations
The companies listed under participations serve only as infrastructure and are insignificant in terms of the share of capital and votes.
There are no shares in banks and investment firms under participations.
Notes on the balance sheet
23
8
Statement of changes in non-current assets (TCHF)
Cost
Accumulated
Book value
depreciation/
31.12.2013
write-ups
Total participations (minority holdings)
166
0
166
68 214
0
68 214
1 791
-999
792
70
-20
50
197 216
-111 590
85 626
Other properties
9 616
-8 436
1 180
Other tangible assets
3 206
-1 618
1 588
210 038
-121 644
Total shares in affiliated companies
Total securities and precious metals held as non-current assets
Total intangible assets
Properties
Bank premises
Total tangible assets
Fire insurance value of properties
88 394
202 299
Fire insurance value of other tangible assets
9
2 534
Intangible assets
At 31 December 2014, this item included capitalized software licenses amounting to TCHF 23 and at 31 December 2013
amounting to TCHF 50.
10
Pledged or assigned assets and assets subject to reservation of ownership (TCHF)
31.12.2014
31.12.2013
Book value of pledged or assigned (assigned as collateral) assets
466 763
364 435
Actual liabilities
170 429
52 975
1 108 770
444 979
250 548
88 910
borrowing transactions and transferred from repurchase transactions
158 727
26 649
of which capable of being resold or pledged without restrictions
158 727
26 649
2 125 203
1 888 878
602 988
786 920
Pledged or assigned assets and assets subject to reservation of ownership,
without securities lending or repurchase transactions
There are no assets subject to reservation of ownership.
Securities lending and repurchase transactions
Receivables from cash deposits in connection with securities borrowing and
reverse repurchase transactions
Liabilities from cash deposits in connection with securities lending and
repurchase transactions
Own securities lent or provided as collateral within the scope of securities lending,
Securities borrowed or accepted as collateral within the scope of securities lending,
borrowing transactions and reverse repurchase agreements which are capable of
being resold or further pledged without restrictions
of which resold or further pledged securities
24
Notes on the balance sheet
Investments
Disinvestments
Reclassifications
Write-ups
Depreciation
Book value
31.12.2014
0
0
0
0
0
166
30 000
-41 146
0
0
0
57 068
0
0
0
45
0
837
0
-1
0
0
-26
23
2 053
-89
0
0
-5 807
81 783
0
0
0
0
-1 180
0
779
0
0
0
-869
1 498
2 832
-89
0
0
-7 856
83 281
203 823
2 512
11
Liabilities in respect of own pension funds (TCHF)
Total liabilities
12
Outstanding bonds
at 31.12.2014
Interest Year of issue
rate %
Earliest
31.12.2014
31.12.2013
24 834
31 396
Currency
redemption date
Par value
TCHF
LGT GIM Index Certificates
0.0
up to 2004
28.02.2017
EUR
65 564
LGT GIM Index Certificates II
0.0
up to 2006
30.06.2019
EUR
143 174
LGT GIM Index Certificates II/2
0.0
2006
31.03.2016
EUR
31 896
LGT GIM Index Certificates III
0.0
up to 2008
31.07.2016
EUR
91 349
Crown Absolute Return Index Certificates
0.0
ongoing
30.11.2018
EUR
6 584
Crown Alternative SV Index Certificates
0.0
ongoing
30.06.2017
EUR
89 478
LGT GATS Index Certificates
0.0
ongoing
30.09.2019
EUR
43 699
LGT M-Smart Allocator Index Certificates
0.0
ongoing
31.08.2017
EUR
60 998
2% bond LGT Bank Ltd. 2012 – 2.7.2019
1.875% bond LGT Bank Ltd. 2013 – 8.2.2023
1.5% bond LGT Bank Ltd. 2014 – 10.5.2021
2.0
2012
02.07.2019
CHF
249 394
1.875
2013
08.02.2023
CHF
298 539
1.5
2014
10.05.2021
CHF
298 520
For product explanations see appendix 45 on page 41
Notes on the balance sheet
25
13
Value adjustments and provisions/
Status
provisions for general banking risks (TCHF)
Application
31.12.2013
Value adjustments for default risks
Specific value adjustments
Flat-rate specific value adjustments (incl. such adjustments for country risks)
Portfolio value adjustments
Provisions for contingent liabilities and credit risks
Provisions for other business risks
Provisions for taxes and deferred taxes
Other provisions
Total value adjustments and provisions
7 552
-627
0
0
6 984
0
368
0
2 054
0
77 719
-32 067
1 461
0
96 138
-32 694
-14 536
–
less:
Value adjustments
Total provisions as per the balance sheet
Provisions for general banking risks
81 602
–
429 500
–
See also Point 36
14
Share capital
31.12.2014
31.12.2013
Total
Number
Capital
Total
Number
Capital
nominal
of shares
entitled to
nominal
of shares
entitled to
(TCHF)
a dividend
value
Share capital
291 201
value
2 912 008
291 201
291 201
2 912 008
a dividend
291 201
Total
291 201
2 912 008
291 201
291 201
2 912 008
291 201
No authorized capital or contingent capital exists.
Major shareholders and groups of
shareholders linked by voting rights
with voting right
LGT Group Foundation
31.12.2014
31.12.2013
Nominal
%
Nominal
%
291 201
100.0
291 201
100.0
The economic beneficiary of LGT Group Foundation is the Prince of Liechtenstein Foundation in Vaduz. The main economic beneficiary of the Prince of
Liechtenstein Foundation is the reigning prince of Liechtenstein, H.S.H. Prince Hans-Adam II von und zu Liechtenstein.
26
Notes on the balance sheet
Recoveries, overdue interest,
New allocations out of
Releases to
Status
currency differences
P/L account
P/L account
31.12.2014
-232
1 587
-967
7 313
0
0
0
0
-40
1 287
0
8 231
15
-6
0
-362
0
209
0
-276
1 987
-34
71 136
-46 247
70 507
-4
94
0
1 551
-107
74 104
-47 852
89 589
–
–
–
-15 544
–
–
–
74 045
–
–
-429 500
0
Equity statement (TCHF)
Equity capital at the start of the business year
Share capital paid in
Capital reserves
Legal reserves
Total equity capital at the end of the
291 201
0
218 500
business year (prior to profit distribution)
Share capital paid in
Reserves for own shares
0
Capital reserves
Statutory reserves
0
Legal reserves
Other reserves
1 406 000
Provisions for general banking risks
429 500
Accumulated profit for the year
303 043
2 648 244
+/- capital increase/capital reduction
0
+
premium
0
-
Release of provisions for
general banking risks
291 201
0
218 500
Reserves for own shares
0
Statutory reserves
0
Other reserves
Provisions for general banking risks
Total equity capital at the start of the
business year (prior to profit distribution)
2 616 249
of which
Accumulated profit for the year
1 406 000
0
700 548
-429 500
-
dividend from the previous year’s profit
-94 640
+
annual profit for the business year
492 145
Total equity capital at the end of the
business year (prior to profit distribution)
2 616 249
Notes on the balance sheet
27
16
Maturity structure of assets, liabilities and provisions
On demand
Redeemable
8 301 781
–
–
–
Due from banks
1 680 360
–
Due from clients
13 768
996 943
2 254
91 913
484 414
–
2 469 289
–
(TCHF)
Assets
Cash and cash equivalents
Debt instruments of public authorities and bills which
are eligible for refinancing at central banks
of which mortgage loans
Trading positions comprising securities and precious metals
Securities and precious metals held as current assets
(excl. trading positions)
Securities and precious metals held as non-current assets
837
–
144 945
4 999
31.12.2014
13 095 394
1 001 942
31.12.2013
11 055 991
986 033
Other assets
Total assets
Liabilities and provisions
Due to banks
7 730 412
1 554
Due to clients
8 476 111
5 808 818
Savings accounts
Other liabilities to clients
Securitized liabilities
Issued bonds
of which medium-term notes
Other securitized liabilities
Provisions (excl. provisions for general banking risks)
Subordinated liabilities
Other liabilities
Total liabilities and provisions
–
727 342
8 476 111
5 081 476
–
–
–
–
–
–
–
–
74 045
–
–
–
170 524
6 240
31.12.2014
16 451 092
5 816 612
31.12.2013
12 611 851
5 035 176
Of the securities reported in the balance sheet under bonds and other fixed-interest bearing securities, instruments amounting to TCHF 1 116 583
(957 189 in the previous year) will become due in 2015. Issued bonds due in 2015 amount to TCHF 29 313 (280 117 in the previous year).
28
Notes on the balance sheet
Due within
Due between
Due between
Due after
3 months
3 to 12 months
12 months to
5 years
Immobilized
Total
5 years
–
–
–
–
–
8 301 781
25 623
–
–
–
–
25 623
1 892 502
1 566 488
505 823
147 337
–
5 792 510
8 571 077
705 240
1 198 483
340 375
–
11 825 886
1 574 298
238 021
700 391
322 953
–
2 929 830
–
–
–
–
–
484 414
–
–
–
–
–
2 469 289
–
–
–
–
–
837
1 025 749
393 018
83 622
57 403
82 633
1 792 369
11 514 951
2 664 746
1 787 928
545 115
82 633
30 692 709
9 099 955
1 774 810
1 668 081
459 170
86 807
25 130 847
1 648 013
208 898
3 607
17 000
–
9 609 484
850 706
134 394
8 872
–
–
15 278 901
–
–
–
–
–
727 342
850 706
134 394
8 872
–
–
14 551 559
6 925
22 388
840 910
645 730
–
1 515 953
6 925
22 388
840 910
645 730
–
1 515 953
6 925
22 388
58 775
48 670
–
136 758
–
–
–
–
–
0
–
–
–
–
–
74 045
–
60
160
–
–
220
915 324
395 206
88 401
22 162
–
1 597 857
3 420 968
760 946
941 950
684 892
0
28 076 460
2 955 995
852 316
409 451
617 814
0
22 482 603
Notes on the balance sheet
29
17.1 Claims on affiliated companies (TCHF)
31.12.2014
31.12.2013
Due from banks
1 557 011
1 168 068
Due from clients
5 406 576
5 044 401
569 200
540 500
44 305
67 038
7 007 892
6 279 507
31.12.2014
31.12.2013
Due to banks
8 560 062
5 811 182
Due to clients
534 430
469 353
1 212
1 459
0
0
of which due from qualified participants (LGT Group Foundation)
Bonds and other fixed-interest bearing securities
Total
17.2 Liabilities to affiliated companies (TCHF)
of which due to qualified participants (LGT Group Foundation)
Securitized liabilities
Subordinated liabilities
Total
17.3 Loans to governing bodies (TCHF)
Members of the Board of Directors
0
0
9 094 492
6 280 535
31.12.2014
31.12.2013
5 389
7 059
Members of the Executive Board
4 577
4 577
Total
9 966
11 636
17.4 Transactions with closely associated persons
Transactions with closely associated persons such as securities transactions, payment transactions, lending facilities and interest
on deposits were made under the same terms and conditions as applicable to third parties.
30
Notes on the balance sheet
18
Breakdown of balance sheet according to domicile (TCHF)
31.12.2014
31.12.2013
Domestic
Abroad
Domestic
Abroad
8 287 324
14 457
7 325 423
9 939
Assets
Cash and cash equivalents
Debt instruments of public authorities and bills
which are eligible for refinancing at central banks
0
25 623
0
22 931
2 422 236
3 370 274
1 460 769
2 498 100
Due from clients (excl. mortgage loans)
1 548 411
7 347 645
1 035 604
6 395 377
Mortgage loans
2 523 107
406 723
2 361 905
225 210
2 648
2 513 624
25 207
2 258 629
570
769
3 180
0
Due from banks
Bonds and other fixed-interest bearing securities
Equities and other non-fixed-interest securities
Participations
Shares in affiliated companies
Intangible assets
Tangible assets
Other assets
Accrued income and prepaid expenses
Total assets
66
100
66
100
20 000
37 068
50 000
18 214
0
23
0
50
77 514
5 767
82 019
6 375
1 185 347
863 162
770 287
541 638
12 560
27 691
12 632
27 192
16 079 783
14 612 926
13 127 092
12 003 755
Liabilities
Due to banks
7 792 278
1 817 206
4 815 758
1 929 748
Due to clients (excl. savings accounts)
6 353 032
8 198 527
5 630 701
7 169 680
Savings accounts
Securitized liabilities
Other liabilities
615 611
111 731
643 765
120 302
1 515 953
0
1 244 745
0
619 683
900 009
296 995
478 589
Accrued expenses and deferred income
44 401
33 764
41 825
28 423
Provisions
73 698
347
81 304
298
Subordinated liabilities
Provisions for general banking risks
220
0
470
0
0
0
429 500
0
Share capital
291 201
0
291 201
0
Legal reserves
218 500
0
218 500
0
Other reserves
1 406 000
0
1 406 000
0
208 403
0
1 169
0
Profit carried forward
Profit for the year
Total liabilities
492 145
0
301 874
0
19 631 125
11 061 584
15 403 807
9 727 040
Balance sheet items are broken down based on the client’s domicile, mortgage loans by the location of the property.
Notes on the balance sheet
31
19
Breakdown of assets according to
country/country group
31.12.2014
2 859 850
9.3
13 219 934
43.1
which are eligible for refinancing at central banks
4 851 589
15.8
Due from banks
Assets
Cash and cash equivalents
Liechtenstein
Europe excl. FL/CH
North America
Debt instruments of public authorities and bills
Due from clients (excl. mortgage loans)
718 421
2.3
6 176 309
20.1
112 689
0.4
Bonds and other fixed-interest bearing securities
25 230
0.1
Equities and other non-fixed-interest securities
2 284 435
7.4
Participations
444 252
1.5
Shares in affiliated companies
30 692 709
100.0
Caribbean
Latin America
Africa
Asia
Oceania
Total assets
Breakdown of balance sheet according to currencies (TCHF)
%
Country
Switzerland
20
TCHF
Mortgage loans
Intangible assets
Tangible assets
Other assets
Breakdown of assets according to
country/country group
31.12.2013
%
2 530 209
10.1
and forex options transactions
10 596 883
42.2
Total assets
3 905 581
15.5
476 631
1.9
5 408 720
21.5
133 747
0.5
Due to clients (excl. savings accounts)
Country
Liechtenstein
Switzerland
Europe excl. FL/CH
North America
Caribbean
Latin America
Africa
Asia
Oceania
Total assets
Accrued income and prepaid expenses
TCHF
Total assets
Delivery claims from forex spot, forex futures
Liabilities
Due to banks
26 333
0.1
Savings accounts
1 629 257
6.5
Securitized liabilities
423 486
1.7
Other liabilities
25 130 847
100.0
Accrued expenses and deferred income
Provisions
Subordinated liabilities
Provisions for general banking risks
Share capital
Legal reserves
Other reserves
Profit carried forward
Profit for the year
Total liabilities
Delivery liabilities from forex spot, forex futures
and forex options transactions
Total liabilities
Net position per currency
32
Notes on the balance sheet
CHF
EUR
USD
Other
Total
8 281 667
18 693
712
709
8 301 781
0
0
0
25 623
25 623
2 041 010
1 185 938
1 920 529
645 033
5 792 510
5 088 456
1 678 759
1 309 846
818 995
8 896 056
2 530 263
134 922
47 196
217 449
2 929 830
454 846
357 686
377 176
1 326 564
2 516 272
327
770
242
0
1 339
166
0
0
0
166
57 068
0
0
0
57 068
0
23
0
0
23
77 514
4 286
0
1 481
83 281
1 585 572
3 501
515
458 921
2 048 509
13 433
4 319
5 833
16 666
40 251
20 130 322
3 388 897
3 662 049
3 511 441
30 692 709
14 486 856
20 674 819
40 858 921
15 223 354
91 243 950
34 617 178
24 063 716
44 520 970
18 734 795
121 936 659
1 149 852
2 431 210
4 787 243
1 241 179
9 609 484
3 791 641
3 802 241
5 249 167
1 708 510
14 551 559
693 738
27 717
5 887
0
727 342
965 249
550 704
0
0
1 515 953
1 493 356
4 798
558
20 980
1 519 692
51 115
5 024
11 961
10 065
78 165
71 711
293
1 987
54
74 045
220
0
0
0
220
0
0
0
0
0
291 201
0
0
0
291 201
218 500
0
0
0
218 500
1 406 000
0
0
0
1 406 000
208 403
0
0
0
208 403
492 145
0
0
0
492 145
10 833 131
6 821 987
10 056 803
2 980 788
30 692 709
23 611 310
17 238 071
34 448 932
15 751 177
91 049 490
34 444 441
24 060 058
44 505 735
18 731 965
121 742 199
172 737
3 658
15 235
2 830
194 460
Notes on the balance sheet
33
21
Subordinated assets (TCHF)
31.12.2014
31.12.2013
0
5 902
Shares in affiliated companies
20 000
51 147
Total
20 000
57 049
31.12.2014
31.12.2013
25 623
22 931
Balance sheet items
Bonds and other fixed-interest bearing securities
22
Debt instruments of public authorities and bills which are eligible
for refinancing at central banks (TCHF)
Debt instruments of public authorities
Bills
Total
23
Bonds and other fixed-interest bearing securities (TCHF)
Money market paper
of which from public sector issuers
of which from other issuers
405 768
291 588
0
0
291 588
286 626
152 031
1 823 878
1 840 217
435
25 207
2 516 272
2 283 836
31.12.2014
31.12.2013
727 342
764 067
Other liabilities
14 551 559
12 800 381
Total
15 278 901
13 564 448
Securitized liabilities (TCHF)
31.12.2014
31.12.2013
1 515 953
1 244 745
136 758
151 559
0
0
1 515 953
1 244 745
31.12.2014
31.12.2013
0
0
70 507
77 719
of which own bonds
Total
Due to clients (TCHF)
Savings accounts
Issued bonds
of which medium-term notes
Other securitized liabilities
Total
Provisions (TCHF)
Provisions for pensions and similar liabilities
Tax provisions
Other provisions
Total
34
31.12.2013
1 992 248
of which from other issuers
26
31.12.2014
405 768
of which from public sector issuers
25
0
22 931
2 110 504
Bonds
24
0
25 623
Notes on the balance sheet
3 538
3 883
74 045
81 602
Notes on off-balance sheet transactions
27
Contingent liabilities (TCHF)
Credit guarantees and similar instruments
of which for affiliated companies
Performance guarantees and similar instruments
of which for affiliated companies
Irrevocable commitments and other contingent liabilities
of which for affiliated companies
Total
28
31.12.2014
31.12.2013
406 512
454 252
294 895
361 135
3 244 008
3 312 096
3 203 731
3 261 549
9 212
5 576
0
0
3 659 732
3 771 924
Commitment credits
Liabilities from deferred payments are reported in the balance sheet. There were no acceptance liabilities or other commitment
credits at 31 December 2014 and 31 December 2013.
29
Fiduciary transactions (TCHF)
Fiduciary investments at third-party banks
31.12.2014
31.12.2013
194 462
305 239
Fiduciary investments at affiliated banks and investment firms
0
0
Fiduciary loans and other financial transactions in a fiduciary capacity
0
0
of which with affiliated companies
Total
0
0
194 462
305 239
Notes on off-balance sheet transactions
35
30
Open derivative
financial instruments
(TCHF)
Trading instruments
Hedging instruments
positive
negative
Contract
positive
negative
Contract
replacement
replacement
volume
replacement
replacement
volume
values
values
values
values
Interest rate instruments
Forward contracts incl. FRAs
Swaps
Futures
0
0
0
0
0
0
808
701
250 399
7 322
41 890
1 784 103
0
0
0
0
0
0
Options (OTC)
0
0
0
0
0
0
Options (exchange-traded)
0
0
0
0
0
0
1 112 420
1 100 500
70 200 092
333 059
198 407
18 427 810
Forex/precious metals
Forward contracts
Swaps
0
0
0
0
0
0
Futures
0
0
0
0
0
0
99 706
51 765
7 421 313
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Options (OTC)
Options (exchange-traded)
Equity securities/indices
Forward contracts
Futures
Options (OTC)
Options (exchange-traded)
0
0
0
0
0
0
10 042
10 042
242 271
0
0
0
0
0
0
0
0
0
1 166
1 166
51 868
0
0
0
Credit derivatives
Credit default swaps
Total return swaps
0
0
0
0
0
0
First to default swaps
0
0
0
0
0
0
Other credit derivatives
0
0
0
0
0
0
Other
Forward contracts
Swaps
0
0
0
0
0
0
13 619
13 619
1 149 053
0
0
0
Futures
0
0
0
0
0
0
Options (OTC)
0
0
0
0
0
0
Options (exchange-traded)
0
0
0
0
0
0
Total before consideration of the netting contracts
31.12.2014
1 237 761
1 177 793
79 314 996
340 381
240 297
20 211 913
31.12.2013
580 224
547 018
69 126 382
199 154
156 355
17 370 788
Total after consideration of the netting contracts
36
positive
negative
replacement values
replacement values
31.12.2014
681 034
520 982
31.12.2013
430 682
354 677
Notes on off-balance sheet transactions
Notes to the profit and loss account
31
Offsetting of refinancing expenses with income from trading
The refinancing expenses arising from trading positions are not offset against income from trading activities because this business
activity does not have a significant influence on the bank’s business result.
32
Interest income from fixed-interest securities (TCHF)
Interest income from bonds
Interest income from money market paper
Total
33
Income from trading transactions (TCHF)
Reported in the P&L under
Interest income from fixed-interest securities
Interest income
9 962
2 457
55 870
41 566
2014
2013
1 396
1 154
Interest income from credit derivatives
Interest income
-98
33
Income from financial transactions
58 622
52 642
Securities trading
Income from financial transactions
1 277
-211
Structured products and other income
Income from financial transactions
1 438
1 473
62 635
55 091
2014
2013
138 648
130 900
20 320
18 613
Personnel expenses (TCHF)
Wages and salaries
Social security contributions, pensions and social assistance
of which for pensions
10 380
9 786
Other personnel expenses
9 475
7 537
168 443
157 050
23 005
15 194
191 448
172 244
3 323
2 476
Subtotal
Adjustment of liability for Long Term Incentive Scheme
Total
Emoluments to members of the Executive Board
35
2013
39 109
Trading in foreign exchange and precious metals
Total
34
2014
45 908
2014
2013
Occupancy expense
Operating expenses (TCHF)
15 689
15 593
Expenses for IT, machinery, furniture, vehicles and other equipment
55 453
53 483
Other business expenses
77 427
76 980
148 569
146 056
Total
Notes to the profit and loss account
37
36
Losses, extraordinary items, provisions
The losses reported under the item “Other ordinary expenses” were incurred mainly in connection with lending business and
settlements (see also Point 43).
No extraordinary items were recorded in the years 2014 and 2013.
The item provisions contains mainly tax provisions, provisions for projects, as well as provisions for other business risks (see also
Points 13 and 26).
37
Income and expenses broken down
according to office or branch (TCHF)
Interest earned
Interest paid
Current income from securities
Income from commission business and services
2013
Abroad
FL
Abroad
170 418
8 217
178 742
3 561
-64 407
-2 458
-66 998
-2 154
1 225
0
3 597
0
230 376
67 706
232 765
54 661
Commission paid
-58 572
-9 653
-61 641
-7 583
Income from financial transactions
59 811
5 994
58 404
3 614
Other ordinary income
17 411
12 616
17 232
9 173
-237 959
-102 058
-223 924
-94 376
-1 610
-94
-2 948
-399
Operating expenses
Other ordinary expenses
The break down is based on the domicile of the booking branch.
38
2014
FL
Notes to the profit and loss account
Additional information
38
Securities negotiable on the stock exchange (TCHF)
31.12.2014
Bonds and other fixed-interest bearing securities
of which listed securities
of which listed and treated as current assets
of which listed and treated as non-current assets
of which unlisted securities
Equities and non-fixed-interest securities
of which listed securities
of which listed and treated as current assets
of which listed and treated as non-current assets
of which unlisted securities
Participations
of which listed securities
2 516 272
2 283 836
2 012 515
1 884 960
2 012 515
1 884 960
0
0
503 757
398 876
1 339
3 180
1 339
3 180
1 339
3 180
0
0
0
0
166
166
0
0
of which unlisted securities
166
166
Shares in affiliated companies
37 068
17 067
0
0
37 068
17 067
Currency
TCHF
of which listed securities
of which unlisted securities
39
31.12.2013
Subordinated liabilities at 31.12.2014
Interest rate %
Maturity
Medium-term note
2.0625
2015
CHF
60
Medium-term note
2.3750
2016
CHF
40
Medium-term note
2.5625
2016
CHF
50
Medium-term note
2.9375
2016
CHF
50
Medium-term note
2.9375
2017
CHF
Total
20
220
Additional information
39
40
Other assets (TCHF)
31.12.2014
31.12.2013
1 578 142
779 378
23 023
6 628
436 929
508 610
10 415
17 309
2 048 509
1 311 925
31.12.2014
31.12.2013
1 418 090
703 373
105
105
LTIS liability
55 544
41 604
Clearing accounts
45 953
30 502
1 519 692
775 584
2014
2013
24 113
18 774
4 998
5 180
Positive replacement values of derivatives
Compensation account
Physical holdings of precious metals
Other assets
Total
41
Other liabilities (TCHF)
Negative replacement values of derivatives
Coupons
Total
42
Other ordinary income (TCHF)
Compensation from Group companies
Income from real estate
Income from the release of provisions
275
285
Remaining other income
641
2 166
30 027
26 405
Total
Compensation from the other Group companies forms the largest component of other ordinary income. This item comprises compensation for services, performed
centrally by the bank on behalf of the Group companies. Income from real estate contains the net amounts (rent payments less maintenance costs) from the
rental of bank-owned property to third parties and Group companies.
43
Other ordinary expenses (TCHF)
2014
2013
Losses from receivables and guarantees
743
670
Transaction losses
351
529
Remaining other expenses
610
2 148
1 704
3 347
31.12.2014
31.12.2013
Client assets in own-managed funds (investment undertakings)
14 980 857
15 362 485
Client assets under management
12 579 312
10 989 929
Other client assets under administration
33 707 923
29 464 337
Total client assets (including double counting)
61 268 092
55 816 751
8 050 634
9 490 098
Total
See also Point 36
44
Breakdown of client assets (TCHF)
Client assets
of which double counting
40
Additional information
45 Outstanding bonds
Product explanations for table 12 on page 25
The LGT GIM Index Certificates (EUR) are issued in the form of no-par-value promissory notes. These each relate to one of the
LGT Premium Strategy GIM (EUR) indices compiled and administered by LGT Capital Partners (FL) Ltd. These indices reflect the
value development of a global, diversified portfolio that invests in various asset classes, where exchange rate fluctuations of the
components included in the index are largely hedged against the Euro. Both traditional and alternative asset classes are included.
Both tranches of the Crown Absolute Return (EUR) Index Certificates are no-par-value. These each relate to one of the Crown
Absolute Return (EUR) indices calculated and administered by LGT Capital Partners Ltd. The two indices show the value development of a global, diversified portfolio that invests in alternative asset classes, where exchange rate fluctuations of the components
included in the index are largely hedged against the Euro.
The Crown Alternative SV (EUR) Index Certificates are no-par-value. They relate to the Crown Alternative SV (EUR) Index calculated
and administered by LGT Capital Partners Ltd. This index shows the value development of a global, diversified portfolio that invests
in various alternative asset classes, where exchange rate fluctuations of the components included in the index are largely hedged
against the Euro.
The LGT GATS Index Certificates are no-par-value and are made out to the bearer. They relate to the LGT Premium Strategy GATS
(EUR) Index compiled and administered by LGT Capital Partners (FL) Ltd. This index shows the value development of a global,
diversified portfolio that invests in various asset classes, where exchange rate fluctuations of the components included in the
index are largely hedged against the Euro.
The LGT M-Smart Allocator (EUR) Index Certificates are no-par-value. They relate to the LGT M-Smart Allocator (EUR) Index calcu­
lated and administered by LGT Capital Partners Ltd. This index shows the value development of a global, diversified portfolio that
invests in various asset classes, where exchange rate fluctuations of the components included in the index are largely hedged
against the Euro.
Additional information
41
Report of the statutory auditor
42
Report of the statutory auditor
International presence of LGT
Australia
Sydney
Austria
Salzburg
Vienna
BahrainManama
ChinaBeijing
Hong Kong
Hong Kong
IrelandDublin
JapanTokyo
Principality of LiechtensteinVaduz
SingaporeSingapore
SwitzerlandBasel
Berne
Chur
Davos
Geneva
Lugano
Pfäffikon
Zurich
United Arab Emirates
Dubai
United KingdomLondon
United States of America
New York
UruguayMontevideo
Media relations
Christof Buri
Phone +423 235 23 03
[email protected]
Legal services
Jacques Engeli
Dr. Urs Gähwiler
Phone +423 235 28 72
[email protected]
Dispatch
Daniela Schaefle
Phone +423 235 20 51
[email protected]
44
International presence of LGT
View of a Pleasure Garden Building in Vienna
In 1687, Prince Johann Adam Andreas I of Liechtenstein purchased a
large plot of land in what was then known as Lichtenthal (now Rossau)
from the noble Auersperg family with plans for a comprehensive
redevelopment. The Prince’s first choice for his project was the famous
Baroque architect Johann Bernhard Fischer von Erlach (1656–1723),
who came up with the overall idea for the site. He produced several
designs for the garden belvedere, which has unfortunately not been
preserved, as well as for the central palace. Fischer von Erlach also
created the basic outline for the extensive Baroque gardens. Ultimately,
it was Italian architect Domenico Martinelli (1650–1718) who built
the Garden Palace. The Prince had previously employed Martinelli in
Feldsberg (now Valtice) from 1691 onward and also enlisted him to
design and construct the Liechtenstein City Palace. Why Johann Adam
Andreas I went on to entrust Martinelli with the completion of this
project is unknown.
The illustrations in this brochure are details from
Johann Bernhard Fischer von Erlach (1656–1723)
“View of a Pleasure Garden Building in Vienna”
© LIECHTENSTEIN. The Princely Collections, Vaduz–Vienna
www.lgt.li
LGT is represented in more than 20 locations in Europe, Asia and the Middle East.
A complete address list can be seen at www.lgt.com
50025en 0515 4.5H BVD
LGT Bank Ltd.
Herrengasse 12
FL-9490 Vaduz
Phone +423 235 11 22
[email protected]
BIC BLFLLI2X, HR No.: 1122356-7, Reg. Office: 9490 Vaduz
VAT No. 50119, UID: CHE-260.887.880