LGT Group, the international private banking and asset management company, saw considerable progress in all areas of business and markets during the 2012 financial year. Thanks to strong net asset inflows of CHF 10.5 billion and a solid investment performance, assets under management grew 18% year-on-year to CHF 102.1 billion. Group profit increased to CHF 216 million in 2012, compared to CHF 70 million in 2011. With its tier 1 capital ratio increasing to 21.5% by the end of 2012, LGT Group is very well capitalized. The company has made a good start to the current year and remains confident about the further development of its business.
2012 was once again characterized by an unsettled economic climate and low interest rates for the whole financial services industry. In this challenging environment, LGT Group made considerable progress in the implementation of its strategy in all of its business areas and markets.
Supported by the larger asset base compared to the prior year, income from services increased by 15% in 2012, while net interest and similar income increased by 4%. Income from trading activities and other income was up by almost 150%, reflecting valuation adjustments on high quality bonds held in LGT’s securities portfolio to maintain liquidity, as well as hedging transactions. Overall, LGT achieved a total operating income of CHF 957 million, up 35% on the prior year.
Total operating expenses increased by 9% to CHF 615 million in the period under review, whereof personnel expenses rose by 12%. This increase was due to higher performance-related compensation resulting from the growth of the business, which was partially offset by the positive effects of a change to the LGT pension fund plan. Business and office expenses remained stable thanks to good cost management, although the company continued to selectively invest in the expansion of its business in 2012. The cost-income ratio improved to 64%, compared to 75% the prior year.
Depreciation, amortization and provisions were up by 80% to CHF 86 million in the year under review. This increase was primarily due to write-downs on goodwill.
LGT Group posted a group profit of CHF 216 million for the 2012 financial year. The group profit of CHF 70 million in 2011 included one-off costs of CHF 50 million associated with exiting the private banking business in Germany. In consideration of this special item in the prior year, profits increased by 80% in 2012.
LGT Group is very well capitalized and maintains a high level of liquidity. By December 31, 2012, its tier 1 capital ratio increased to 21.5%, compared to 17.5% at the end of 2011.
Higher asset base thanks to strong net new money inflows and solid investment performance
LGT Group attracted net new money inflows of CHF 10.5 billion in 2012, compared to CHF 8.6 billion in the prior year. These inflows in 2012 represented an excellent 12% growth on the assets managed at the end of 2011. Both the private banking business, with its platforms in Liechtenstein, Switzerland, Austria, Singapore and Hong Kong, and the institutional asset management business, recorded very good inflows.
On December 31, 2012, assets under management amounted to CHF 102.1 billion, up 18% on CHF 86.9 billion as at the end of the prior year. In addition to the strong net inflows, a solid investment performance in a good trading year contributed to this result.
LGT Group has made a good start to the current year, and remains confident about the further development of its business. However, it expects the economic environment to remain unpredictable, and markets to be characterized by volatility. The company also intends to continue investing in the expansion of its business.
H.S.H. Prince Max von und zu Liechtenstein, CEO LGT Group: "All areas of our business performed well in 2012 despite a challenging economic and regulatory environment. Our strong net new money growth shows that clients all over the world as well as highly qualified relationship managers view LGT as a very attractive platform. We want to build on this momentum and we will continue to invest in the growth of our private banking and asset management business. We will retain our focus on the long term, operating sustainably and maximizing the benefits for our clients."