LGT achieves significant increase in profit and very strong net asset inflows in 2021

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VADUZ, Liechtenstein, March 14, 2022 /PRNewswire/ — LGT, the international Private Banking and Asset Management group owned by the Princely Family of Liechtensteinincreased group profit by 21% to CHF 352.8 million in 2021 thanks to its higher asset base and strong investment performance. Assets under management increased by 19% to reach CHF 285.8 billion at the end of 2021, supported by net new assets of CHF 24.8 billion, reflecting a growth rate of over 10%. With its presence in key international markets, extensive investment expertise and strong focus on sustainable solutions, LGT is well positioned to continue delivering profitable growth in 2022.

LGT reported excellent results for the 2021 financial year. In an overall favorable market environment, client activity saw strong growth across all regions, underlining the quality and breadth of LGT’s investment offering. LGT across all major asset classes. Client interest in sustainable investments, one of LGT’s core competencies for many years, further increased in 2021. LGT also continued to selectively expand its international presence and in July finalized the acquisition of UBS’s wealth management business in Austriawhere LGT is now the leading private bank.

LGT Group’s total operating profit increased by 15% to reach CHF 2.13 billion in 2021 thanks to a strong increase in services revenues of 33% to CHF 1.58 billion. Portfolio management revenues, which increased significantly thanks to the increased asset base, as well as significantly higher brokerage activities and performance-related revenues all contributed to this result. On the other hand, the net interest income of CHF 204.5 million (-11%) continued to be impacted by the negative interest rate environment, and revenues from trading activities and other operating income from CHF 345.5 million (down 21%) reflects higher hedging costs and lower income from the bond portfolio.

Business and office expenses increased by 13% for CHF 302.4 million, as LGT continued to invest in business expansion and IT infrastructure. A 16% increase in payroll costs at CHF 1.30 billion reflects organic and acquisition-related staff growth as well as higher performance-based compensation. Overall, total operating expenses increased 15% year-on-year to CHF 1.60 billion.

The cost/income ratio remained stable at 75.2% at the end of 2021, compared to 75.0% at the end of 2021. December 31, 2020. The group profit was CHF 352.8 million for 2021, up 21% year-on-year. LGT is very well capitalized with a Tier 1 capital ratio of 22.1% at December 31, 2021 and has a high level of liquidity.

Record net asset inflows

LGT’s exceptionally strong net new asset generation over previous years continued into 2021, where net asset inflows reached a record high CHF 24.8 billion, corresponding to an organic growth rate of 10.3%. Private banking and asset management both contributed to this strong growth across all regions, with LGT Private Banking generating new asset inflows of CHF 13.9 billion and LGT Capital Partners CHF 11.0 billion. LGT Private Banking made an additional contribution CHF 4.5 billion client assets following the acquisition of UBS’s wealth management business in Austria.

Assets under management have been CHF 285.8 billion at the end of 2021, up 19% year-on-year, reflecting net new assets as well as positive market and investment performance. At the end of 2021, LGT Private Banking and LGT Capital Partners had assets under management of CHF 207.5 billion and CHF 78.3 billionrespectively.

Strategy and outlook

LGT entered 2022 with strong momentum and, thanks to its presence in key international markets and its extensive investment expertise, is well positioned to continue its profitable growth. LGT has a well-established business in the main European markets as well as in Asia and the Middle East, making it one of the few private banks able to offer its clients a global platform. This was further strengthened in November when LGT opened a new wealth management office in Tokyoand in December, when the bank announced that it would expand its private banking activities to Asia Pacific with the acquisition of Crestone Wealth Management, australia leading wealth manager for high net worth individuals. In Europe, the collaboration with LIQID, a digital asset manager in which LGT acquired a strategic minority stake in 2022, was successfully launched. In addition, LGT is exploring different options to re-establish a local private banking presence in Germany.

Proven investment expertise across all major asset classes remains a key driver of LGT’s business success with high-net and ultra-high-net-worth clients. Going forward, LGT will further leverage this expertise through technology and digital applications. LGT continues to focus on sustainable investments and expand its range of related solutions. It has offered in-house sustainable equity and bond funds since 2009 and sustainability-focused portfolio management mandates since 2019. In 2022, it will launch a new product offering in Europe which will provide advisory clients with a range of sustainable investment solutions. In the impact investment segment, LGT Private Banking successfully launched its first impact fund last year in cooperation with its sister company Lightrock.

The new management structures of the now independent group business units LGT Private Banking, LGT Capital Partners and Lightrock were successfully introduced in 2021. Lightrock was established in 2021 as a separate legal entity; for LGT Private Banking and LGT Capital Partners, this step is planned for 2022.

Talent development and employee satisfaction remain key priorities across all of LGT’s businesses. In 2021, LGT Private Banking was certified for the first time by the international consultancy and research institute Great Place to Work. In its list of “Best Workplaces in Europe“, LGT was the only financial institution to rank among the top 25 in the “Multinational” category in 2021.

HSH the Prince max of und zu LiechtensteinPresident of LGT, said: “The centenary of LGT has been a good year for us in all respects. Despite the current pandemic, we continued to serve our clients as a reliable partner and further expanded our investment offering, which had a very positive impact on our results. In addition, we have developed our international presence in various regions, from Europe and Japan for Australia. We have also set out a strong sustainability agenda and are committed to net-zero emissions by 2030, both in our operations and in our own investments. Finally, we have become more digital in 2021, while strengthening our customer relationships and our corporate culture. Our customer focus, clear strategy and agility will remain key to our continued success in 2022.”

LGT in a nutshell

LGT is a leading international private banking and asset management group, wholly owned by the princely family of Liechtenstein for over 90 years. Like a December 31, 2021LGT managed assets of CHF 285.8 billion ($313.7 billion) for high net worth individuals and institutional clients. LGT employs more than 4,100 people who work at more than 20 sites in Europe, Asiathe Americas and the Middle East. www.lgt.com

Key figures according to 31.12.2021

31.12.2021

31.12.2020

Switch
(in %)

Consolidated income statement (in millions of CHF)

Net interest income and credit losses

204.5

230.7

-11.4

Service revenue

1,582.2

1,185.2

33.5

Income from commercial activities and
Other exploitation products

345.5

437.2

-21.0

Total operating result

2,132.2

1 853.1

15.1

Personal expenses[1]

1,302.0

1,120.8

16.2

Professional and office expenses

302.4

268.6

12.6

Total operating expenses

1 604.4

1,389.4

15.5

Depreciation and amortization

124.6

131.2

-5.0

Taxation and minority interests

50.4

41.0

23.0

Group profit

352.8

291.5

21.0

Assets under management (in billions of CHF)

285.8

240.7

18.7

Net inflow of assets (in billions of CHF)

24.8

11.6

Growth of assets by acquisitions (in billions of CHF)[2]

4.5

Balance sheet total (in billions of CHF)

52.9

49.9

6.0

Group equity (in CHF million)

6,047

4,837

25.0

Reports (in %)

Cost/revenue ratio

75.2%

75.0%

Level 1 Ratio

22.1%

21.9%

Liquidity Ratio

168.1%

221.6%

Effective

4,114

3,838

7.2

Evaluation Moody’s/Standard & Poor’s for LGT Bank Ltd.

Aa2/A+

Aa2/A+

[1] Incl. an exceptional charge of CHF 59 million in 2020 due to the payment of the price supplement in connection with the finalization of the acquisition of LGT Vestra

[2] Acquisition of UBS’s wealth management business in Austria from July 31, 2021

Final audit: April 27, 2022

SOURCE LGT


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