Annual Report 2012 LGT Bank Ltd., Vaduz

Annual Report 2012
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
43
International presence and imprint
44
Organizational structure as of April 2013
4
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
Dr. Florian Dürselen*
Ivo Klein
Markus Werner
Roland Schubert**
Statutory Auditor
PricewaterhouseCoopers AG, Zürich
* until 31 March 2013
** since 1 April 2013
Organizational structure as of April 2013
The business year in comparison
Balance sheet
2012
2011
Change
absolute
%
Balance sheet total
CHF m
23 947.2
23 495.9
451.3
1.9
Shareholders’ funds (after profit distribution)
CHF m
1 916.9
1 836.0
80.9
4.4
Client deposit
CHF m
13 639.4
12 404.5
1 234.9
10.0
Due from clients
CHF m
10 089.5
8 265.4
1 824.0
22.1
Profit and loss account
Net interest income
CHF m
150.6
145.0
5.6
3.9
Net commission and fee income
CHF m
175.7
149.9
25.8
17.2
Income from financial transactions
CHF m
131.3
20.0
111.3
556.6
Gross operating income
CHF m
485.0
348.0
137.1
39.4
Personnel expenses
CHF m
170.7
98.7
72.0
72.9
Operating expenses
CHF m
145.4
120.2
25.2
21.0
Result on ordinary business activity
CHF m
154.8
102.4
52.3
51.1
Taxes
CHF m
9.8
10.6
-0.8
-7.2
Profit for the year
CHF m
144.9
91.8
53.1
57.8
CHF m
50 272.4
42 975.3
7 297.1
17.0
665
574
91
15.9
Client assets under administration
Client assets under administration
Personnel (full-time equivalents)
Staff at year-end
The business year in comparison
5
Annual report
The year 2012 was characterized by an economic climate
Ownership of LGT Bank Ltd.
that remained unsettled, by continued low interest
All shares of LGT Bank Ltd. are wholly owned by the
rates, and by further monetary easing on the part of
LGT Group Foundation. No own shares were acquired
the leading central banks. Despite the positive develop-
or taken as pledge, either directly or indirectly. LGT
ments on the stock markets, many investors remained
Bank Ltd. is part of LGT Group, a globally active private
anxious, which is why client activity only increased
banking and asset management group that manages
slightly. The regulatory environment was also demand-
and develops the individual Group companies in an
ing, especially the preparation and implementation
integrated manner. The annual report of LGT Group
phases in connection with the various agreements on
gives further information on the financial capacity,
final withholding tax. In view of these overall conditions,
expertise and development of LGT Group.
LGT Bank Ltd. (formerly LGT Bank in Liechtenstein Ltd.)
achieved a very pleasing result.
Close to our clients
LGT Bank Ltd. is part of a long-term-oriented, family-
Profit and loss account
owned company with a clear focus on asset manage­
Net interest income increased by 3.9 percent in the year
ment for private and institutional investors. Our pleasing
under review, while income from commission business
results in the year under review confirm the soundness
and services was up by 17.2 percent as a result of an
of our strategic positioning and the attractiveness of
adjustment in fee structure and a higher asset base than
our business model for demanding, security-conscious
in the prior year. Income from financial transactions
clients. Our proximity to our clients and our precise
rose by a striking CHF 111.3 million. This growth can be
knowledge of their goals and needs form the basis of
primarily explained by market-related gains in the value
our individual advisory services. Of central importance
of high-quality bonds held by LGT in its securities port-
is a close dialog between the client and his relationship
folio. Overall, gross operating income increased by CHF
manager. A deeper understanding of the needs and
137.1 million or 39.4 percent in the 2012 business year.
expectations of private investors has also been provided
for us by a highly regarded study that we commissioned
Operating expenses increased by 44.4 percent to CHF
from the Johannes Kepler University in Linz on the
97.1 million in the period under review. Personnel ex-
investment behavior of high net worth private clients
penses rose by 72.9 percent. This was due to higher
in Switzerland and Austria.
performance-related compensation resulting from the
growth of the business. Business and office expenses
Outlook
climbed by 21 percent.
We regard ourselves as being excellently positioned for
the future, thanks to our international base, our supe-
Besides higher income, reduced losses were also posted
rior investment expertise and the strong capital base
in the year under review. As a consequence of this,
of our parent company. We would like to express our
profit for the year increased by 57.8 percent to CHF
gratitude to our employees for their outstanding com-
144.9 million.
mitment in the year under review and we would like
to thank you, our clients, for the trust that you place
LGT Bank Ltd. remained extremely well capitalized at
in us. We look forward to remaining your Liechtenstein
the end of 2012. The bank’s equity capital ratio of 24.7
private bank for 2013.
percent at the end of 2012 exceeded the legally required
8 percent of risk-weighted exposure by 208 percent.
Client assets under administration rose by 17 percent
Thomas Piske
to CHF 50.3 billion. This increase was due to perfor-
Chairman of the Board of Directors
mance-related appreciations, to new money inflows
and to the transfer of client assets after the takeover
of LGT Bank (Austria) Ltd.
6
Annual report
Balance sheet
Assets (TCHF)
Appendix
Cash and cash equivalents
31.12.2012
5 579 617
31.12.2011
2 346 525
Change
absolute
%
3 233 092
137.8
Debt instruments of public authorities
and bills which are eligible for refinancing
at central banks
3, 22
23 603
206 108
-182 505
-88.5
Due from banks
16
4 824 349
7 357 129
-2 532 780
-34.4
Due from clients
1, 16
10 089 453
8 265 449
1 824 004
22.1
1, 16
2 387 441
2 237 641
149 800
6.7
2, 3, 4, 23, 38
1 986 212
3 043 190
-1 056 978
-34.7
2, 3, 4, 38
1 255
2 650
-1 395
-52.6
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
220
-54
-24.5
5, 6, 8, 21, 38
58 248
90 681
-32 433
-35.8
Intangible assets
9
30
0
30
0.0
Tangible assets
8
93 067
91 757
1 310
1.4
40
1 257 119
2 050 380
-793 261
-38.7
Other assets
Accrued income and prepaid expenses
Total assets
34 050
41 785
-7 735
-18.5
23 947 169
23 495 874
451 295
1.9
Liabilities (TCHF)
Due to banks
16
6 633 555
6 790 244
-156 689
-2.3
Due to clients
16, 24
12 669 031
11 619 419
1 049 612
9.0
Securitized liabilities
12, 25
969 404
784 028
185 376
23.6
41
900 920
1 642 047
-741 127
-45.1
63 408
44 324
19 084
43.1
13, 26, 36
84 496
86 260
-1 764
-2.0
Subordinated liabilities
39
920
1 005
-85
-8.5
Provisions for general banking risks
13
644 500
644 500
0
0.0
Share capital
14
291 201
291 201
0
0.0
Revenue reserves
15
1 544 500
1 500 500
44 000
2.9
298
502
-204
-40.6
Other liabilities
Accrued expenses and deferred income
Provisions
Profit carried forward
Profit for the year
Total liabilities
144 936
91 844
53 092
57.8
23 947 169
23 495 874
451 295
1.9
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
31.12.2012
31.12.2011
Change
absolute
%
1, 27
4 077 147
3 956 408
120 739
3.1
1, 27
4 077 147
3 956 408
120 739
3.1
52 076
57 298
-5 222
-9.1
1
47 164
51 810
-4 646
-9.0
1
4 912
5 488
-576
-10.5
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
765 328
1 453 594
-688 266
-47.3
Negative replacement values
30, 41
842 970
1 530 438
-687 468
-44.9
Contract volume
30
83 261 944
82 559 475
702 469
0.9
Fiduciary transactions
29
320 806
565 331
-244 525
-43.3
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
2012
2011
Change
absolute
Interest earned
32, 33
%
260 908
254 903
6 005
2.4
Interest paid
-110 331
-109 925
-406
0.4
Net interest income
150 577
144 978
5 599
3.9
0
0
0
0.0
755
657
98
14.9
29
29
0
0.0
Equities and other non-fixed-interest securities
Participations
Shares in affiliated companies
Current income from securities
Commission income from lending business
Commission income from securities and investment business
Commission from other services
Income from commission business and services
Commission paid
Net commission and fee income
Income from financial transactions
of which from trading
33
Other ordinary income
42
Gross operating income
784
686
98
14.3
6 416
5 947
469
7.9
212 304
182 883
29 421
16.1
15 375
10 095
5 280
52.3
234 095
198 925
35 170
17.7
-58 441
-49 067
-9 374
19.1
175 654
149 858
25 796
17.2
131 267
19 993
111 274
556.6
61 175
60 237
938
1.6
26 766
32 455
-5 689
-17.5
485 048
347 970
137 078
39.4
Personnel expenses
34
-170 655
-98 696
-71 959
72.9
Operating expenses
35
-145 353
-120 171
-25 182
21.0
Business expenses
-316 008
-218 867
-97 141
44.4
Gross profit
169 040
129 103
39 937
30.9
Amortization of intangible assets and depreciation of
tangible assets
Other ordinary expenses
36, 43
-7 752
-5 705
-2 047
35.9
-6 159
-19 834
13 675
-68.9
-1 027
-1 433
406
28.3
671
310
361
116.5
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
154 773
102 441
52 332
51.1
Income tax
-9 837
-10 597
760
-7.2
Other taxes
0
0
0
0.0
Result on ordinary business activity
Income from the release of provisions for
general banking risks
Profit for the year
0
0
0
0.0
144 936
91 844
53 092
57.8
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
2012
2011
144 935 835.66
91 844 177.80
297 646.42
501 600.62
145 233 482.08
92 345 778.42
Allocation to legal reserves
0.00
0.00
Allocation to statutory reserves
0.00
0.00
Allocation to other reserves
80 000 000.00
44 000 000.00
Dividend on company capital
64 064 176.00
48 048 132.00
0.00
0.00
1 169 306.08
297 646.42
to the general meeting of shareholders (CHF)
Profit for the year
Profit carried forward
Accumulated profit for the year
Profit distribution
Other 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)
2012
2011
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
144 936
7 752
Value adjustments and provisions
5 705
1 764
Accrued income and prepaid expenses
7 735
Accrued expenses and deferred income
19 084
Other items
Previous-year dividend
Balance
91 844
12 293
501
7 137
0
0
48 048
128 128
129 695
36 236
Flow of funds from changes to non-current assets
Participations
Shares in affiliated companies
Securities and precious metals as non-current assets
Intangible assets
Properties
Other tangible assets
Balance
54
0
0
0
32 433
0
1
0
0
13
0
36
0
30
0
0
1 034
9 220
0
3 111
0
876
0
1 359
23 382
4 505
Flow of funds from banking operations
Medium and long-term business (> 1 year)
Due to banks
Due to clients
Bonds
Medium-term notes
28
700
3 333
121
236 381
164 728
5 476
25 992
Other liabilities
12 205
Due from banks
75 255
110 460
Due from clients (excl. mortgage loans)
90 211
97 367
Mortgage loans
Other receivables
32 795
6 794
14 377
97 764
37 805
Short-term business (≤ 1 year)
Due to banks
Due to clients
156 661
1 048 912
Other liabilities
Due from banks
1 743 033
785 489
778 113
1 726 999
354 637
2 608 035
Due from clients
Trading positions in securities and precious metals
1 018 112
690 310
161 896
290 327
Securities and precious metals held as current assets
(excl. trading positions)
Other receivables
1 197 827
1 682 612
660 053
189 507
-3 233 092
-2 108 863
Liquid funds
Cash and cash equivalents
Balance
Total
-153 077
0
40 741
0
40 741
40 741
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 in Liechtenstein Ltd. has changed its name in
Within the scope of money market business, money
line with current linguistic usage. Since 3 January 2013
in the form of call money, time deposits and fiduciary
it has operated under the new name of LGT Bank Ltd.,
investments is deposited with the bank. Insofar as these
Vaduz.
funds are not required for lending business, they are
LGT Bank Ltd. with its registered office in Vaduz
placed with first-class banks, predominantly in Western
operates as a universal bank and securities trader. The
Europe. These investments are being made in the form
company has branch offices in Hong Kong and Vienna.
of easily convertible money market paper (certificates
The branch in Vienna resulted from the takeover of
of deposit, Euro commercial papers). Despite its focus
LGT Bank (Austria) Ltd. in the fall of 2012. The bank
on private banking, interest margin business represents
maintains representative offices in Bahrain, Chur, Davos,
an important earnings stream for the bank.
Geneva, Lugano, Zurich and Montevideo.
At 31 December 2012, LGT Bank Ltd. employed 665
Trading business
persons on a full-time equivalent basis (574 in the pre-
LGT Bank Ltd. operates trading transactions for clients
vious year). In 2012, the average headcount amounted
and for its own account in securities, foreign exchange
to 606 persons (486).
and precious metals. The bank trades for its own
As a universal bank, LGT Bank is active in the fields of
account in accordance with conservative principles.
wealth management (commission business and services)
Derivative instruments are used mostly for hedging
and trading, as well as in money market and lending
purposes.
business.
Lending business
Wealth management
Most lending takes the form of Lombard loans and
LGT Bank Ltd. is one of the leading international names
mortgages on residential property. Mortgages are
in traditional private banking. The bank offers a broad
granted primarily for financing properties in Liechten-
spectrum of p
­ roducts and services that enable clients
stein and in Switzerland. Property financing in selected
to choose the best solution to suit their needs. Most
other countries is offered as part of integrated wealth
earnings from commission business and services stem,
management.
among other things, from wealth management. The
commission business and services also represents the
bank’s main source of revenue.
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
31.12.2012
31.12.2011
makes portfolio value adjustments to cover any latent
1 EUR
1.2068
1.2151
default risks present on the balance sheet date. In this
1 USD
0.9148
0.9356
connection, equivalent claims not entitled to specific
1 GBP
1.4863
1.4545
value adjustments are grouped together (portfolios).
1 SGD
0.7488
0.7218
A calculation model is then applied to each portfolio to
1 HKD
0.1180
0.1205
determine the necessary portfolio value adjustments as
100 JPY
1.0570
1.2158
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 3 – 5 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. For value
and risk-adjusted calculation of conditions. Detailed
adjustments and provisions recognized and entered
reporting ensures that the Executive Board is constantly
against tax only, a provision for deferred taxes is made
informed about developing risks.
against the profit and loss account.
Provisions for general banking risks
Provisions for general banking risks are formed to hedge
against latent risks in the bank’s operating activities.
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 Group 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 Group (LGT) is a family-run company built on the
The total amount of remuneration paid by the bank is
values of long-term commitment, stability and inde-
approved by the HRCC on the basis of a recommen-
pendence. LGT relies on the achievements, ideas and
dation from the Board of Directors of the bank/CCB.
dedication of its employees to meet the needs of its
The remuneration of the Executive Board is decided in
clients and implement its business strategy. An appro-
accordance with the following process:
priate, sustainable and market-based remuneration
model forms a central part of the attractive and inspi-
Beneficiary
rational working 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
Dr. Florian Dürselen
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 Board of Trustees.
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 2012 (TCHF)
Direct
Deferred
Cash payment
Shares/sharelinked instruments
Entire EB 1
1
20
In 2012 there were four members of the Executive Board.
Remuneration report
Basic salary
Bonus
LTIS
940
852
32
Notes on the balance sheet
1
Overview of collateral (TCHF)
Mortgage-
Other
Without
backed
collateral
collateral
Total
6 348
6 659 346
1 036 318
7 702 012
1 910 010
0
0
1 910 010
Advances
Due from clients (excl. mortgage loans)
Mortgage loans
Residential properties
Office and business premises
212 720
0
0
212 720
Commercial and industrial premises
143 429
0
0
143 429
Other
Total
121 282
0
0
121 282
31.12.2012
2 393 789
6 659 346
1 036 318
10 089 453
31.12.2011
2 246 640
4 439 077
1 579 732
8 265 449
243
141 098
3 935 806
4 077 147
42 789
1 985
2 390
47 164
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
4 912
4 912
31.12.2012
43 032
143 083
3 943 108
4 129 223
31.12.2011
52 046
142 230
3 819 430
4 013 706
Gross amount
Estimated realization
Net amount
Specific value
due
value of collateral
due
adjustments
31.12.2012
11 040
3 691
7 349
7 349
31.12.2011
11 329
3 912
7 417
7 417
Trading positions (TCHF)
Book value
Cost
Market value
31.12.2012
31.12.2011
31.12.2012
31.12.2011
31.12.2012
31.12.2011
63 479
105 135
63 251
105 189
63 479
105 135
63 479
105 135
63 251
105 189
63 479
105 135
0
0
0
0
0
0
5 285
0
5 283
0
5 285
0
1 255
2 650
1 200
2 679
1 255
2 650
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
443 147
561 992
443 147
561 992
443 147
561 992
Total
507 881
669 777
507 598
669 860
507 881
669 777
0
170
0
170
0
170
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
31.12.2012
31.12.2011
31.12.2012
31.12.2011
31.12.2012
31.12.2011
1 946 336
3 144 163
1 969 450
3 197 195
1 959 896
3 147 342
(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
1 946 336
3 144 163
1 969 450
3 197 195
1 959 896
3 147 342
1 098 541
1 537 565
1 103 934
1 554 391
1 102 859
1 538 525
of which eligible as security
for central bank borrowings
4
Securities and precious metals
held as non-current assets
Book value
Cost
Market value
31.12.2012
31.12.2011
31.12.2012
31.12.2011
31.12.2012
31.12.2011
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
954
941
1 791
1 791
954
941
Total
954
941
1 791
1 791
954
941
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)
31.12.2012
31.12.2011
0
0
without market value
166
220
Total
166
220
Participations
with market value
Shares in affiliated companies
with market value
6
0
0
without market value
17 067
17 067
Subordinated claims against affiliated companies
41 181
73 614
Total
58 248
90 681
Affiliated companies
Business
Share
% share
% share
Business
activity
capital
of votes
of capital
result TCHF
Grand Cayman
bank
USD 600 000
100
83
8 572
LGT Bank (Ireland) Ltd., Dublin
bank
USD 50 000 000
75
25
3 936
Banks and investment firms
LGT Bank (Cayman) Ltd.,
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 2012, the shares in banks and investment firms shown under the shares in affiliated companies item amounted to TCHF 57 068 (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/
31.12.2011
write-ups
Total participations (minority holdings)
220
0
220
90 681
0
90 681
1 791
-850
941
0
0
0
187 288
-101 548
85 740
Other properties
11 616
-6 789
4 827
Other tangible assets
1 591
-401
1 190
200 495
-108 738
Total shares in affiliated companies
Total securities and precious metals held as non-current assets
Total intangible assets
Properties
Bank premises
Total tangible assets
91 757
Fire insurance value of properties
198 514
Fire insurance value of other tangible assets
9
21 079
Intangible assets
At 31 December 2012, this item included a capitalized software license amounting to TCHF 30.
At 31 December 2011, there were no capitalized intangible assets.
10
Pledged or assigned assets and assets subject to reservation of ownership (TCHF)
31.12.2012
31.12.2011
360 518
681 343
43 584
374 876
1 135 885
1 633 033
0
452 484
borrowing transactions and transferred from repurchase transactions
0
315 369
of which capable of being resold or pledged without restrictions
0
315 369
1 527 957
1 993 281
280 301
414 128
Pledged or assigned assets and assets subject to reservation of ownership,
without securities lending or repurchase transactions
Book value of pledged or assigned (assigned as collateral) assets
Actual liabilities
There are no assets subject to reservation of ownership.
Securities lending and repurchase transactions 1
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
1
Figures for the prior year have been adjusted on account of inaccurate values. The values given in the prior year’s annual report were as follows in TCHF:
line 1: 0, line 2: 0, line 3: 561 857, line 4: 561 857, line 5: unchanged and line 6: 310 976.
24
Notes on the balance sheet
Investments
Disinvestments
Reclassifications
Write-ups
Depreciation
Book value
31.12.2012
0
-54
0
0
0
166
0
-32 433
0
0
0
58 248
0
0
0
13
0
954
30
0
0
0
0
30
9 220
0
92
0
-6 227
88 825
0
-1 034
-92
0
-947
2 754
876
0
0
0
-578
1 488
10 096
-1 034
0
0
-7 752
93 067
200 066
2 344
11
Liabilities in respect of own pension funds (TCHF)
Total liabilities
12
Outstanding bonds
at 31.12.2012
Interest Year of issue
rate %
Earliest
31.12.2012
31.12.2011
16 121
21 384
Currency
redemption date
Par value
TCHF
LGT GIM Index Certificates
0.0
up to 2004
28.2.2012
EUR
61 704
LGT GIM Index Certificates II
0.0
up to 2006
30.6.2014
EUR
166 445
LGT GIM Index Certificates II/2
0.0
2006
31.3.2016
EUR
41 826
LGT GIM Index Certificates III
0.0
up to 2008
31.7.2016
EUR
105 420
LGT GIM Index Certificates IV
0.0
ongoing
31.3.2018
EUR
155
Crown Absolute Return Index Certificates
0.0
ongoing
30.11.2013
EUR
5 628
Crown Absolute Return Index Certificates II
0.0
ongoing
31.7.2014
EUR
1 486
Crown Alternative SV Index Certificates
0.0
ongoing
30.6.2017
EUR
57 606
LGT GATS Index Certificates
0.0
ongoing
30.9.2014
EUR
54 895
LGT M-Smart Allocator Index Certificates
0.0
ongoing
31.8.2017
EUR
57 415
LGT EX EQ EM IU Leaders Certificates
0.0
ongoing
31.12.2027
USD
1 797
LGT EX EQ GEM IU Index Certificates
0.0
ongoing
31.12.2027
USD
1 993
LGT EX FI EM IU Index Certificates
0.0
ongoing
31.12.2027
USD
11 029
LGT EX HF GIM IU Index Certificates
0.0
ongoing
31.12.2027
USD
14 614
LGT EX HF GATS IU Index Certificates
0.0
ongoing
31.12.2027
USD
8 034
2% bond LGT Bank Ltd. 2012 – 2.7.2019
2.0
2012
02.07.2019
CHF
249 138
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
31.12.2011
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
-52
0
0
6 620
0
402
0
4 151
-1 683
80 409
-8 847
1 298
-23
100 297
-10 605
-14 037
–
Provisions for other business risks
Provisions for taxes and deferred taxes
Other provisions
Total value adjustments and provisions
7 417
less:
Value adjustments
Total provisions as per the balance sheet
Provisions for general banking risks
86 260
–
644 500
–
See also Point 36
14
Share capital
31.12.2012
31.12.2011
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
31.12.2012
31.12.2011
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
31.12.2012
53
564
-633
7 349
0
0
0
0
-27
463
0
7 056
15
-2
0
-38
362
-46
521
-330
2 613
0
10 264
-1 712
80 114
-1
133
0
1 407
-23
11 945
-2 713
98 901
–
–
–
-14 405
–
–
–
84 496
–
0
0
644 500
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
Provisions for general banking risks
Accumulated profit for the year
1 282 000
644 500
92 346
Total equity capital at the start of the
business year (prior to profit distribution)
2 528 547
+/- capital increase/capital reduction
0
+
premium
0
-
Release of provisions for
general banking risks
0
-
dividend from the previous year’s profit
-48 048
+
annual profit for the business year
144 936
2 625 435
of which
291 201
0
218 500
Reserves for own shares
0
Statutory reserves
0
Other reserves
1 326 000
Provisions for general banking risks
644 500
Accumulated profit for the year
145 234
Total equity capital at the end of the
business year (prior to profit distribution)
2 625 435
Notes on the balance sheet
27
16
Maturity structure of assets, liabilities and provisions
On demand
Redeemable
5 579 617
–
0
0
Due from banks
1 283 036
0
Due from clients
20 987
1 183 475
3 702
137 537
507 881
–
1 922 733
–
954
0
46 767
0
(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
Other assets
Total assets
31.12.2012
9 361 975
1 183 475
31.12.2011
8 038 947
1 241 612
Liabilities and provisions
Due to banks
4 826 275
0
Due to clients
6 142 515
5 610 167
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
0
766 023
6 142 515
4 844 144
0
0
0
0
–
–
0
0
84 496
0
0
0
121 619
0
31.12.2012
11 174 905
5 610 167
31.12.2011
9 420 442
5 800 592
Of the securities reported in the balance sheet under bonds and other fixed-interest bearing securities, instruments amounting to TCHF 698 089
(1 209 710 in the previous year) will become due in 2013. Issued bonds due in 2013 amount to TCHF 36 345 (92 826 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
–
–
–
–
–
5 579 617
23 603
0
0
0
–
23 603
1 994 623
1 037 654
414 193
94 843
–
4 824 349
6 789 236
604 584
1 255 582
235 589
–
10 089 453
982 301
236 010
801 843
226 048
–
2 387 441
–
–
–
–
–
507 881
–
–
–
–
–
1 922 733
0
0
0
0
–
954
616 289
177 186
38 452
27 824
92 061
998 579
9 423 751
1 819 424
1 708 227
358 256
92 061
23 947 169
9 258 505
2 957 490
1 625 323
281 769
92 228
23 495 874
1 419 112
383 986
4 182
0
–
6 633 555
725 637
187 504
3 208
0
–
12 669 031
0
0
0
0
–
766 023
725 637
187 504
3 208
0
–
11 903 008
10 967
25 378
618 078
314 981
–
969 404
10 967
25 378
618 078
314 981
–
969 404
10 967
19 750
71 282
28 221
–
130 220
0
0
0
0
–
0
0
0
0
0
–
84 496
400
50
470
0
–
920
577 357
212 147
42 580
10 625
–
964 328
2 733 473
809 065
668 518
325 606
0
21 321 734
3 657 448
1 325 046
554 714
209 086
0
20 967 328
Notes on the balance sheet
29
17.1 Claims on affiliated companies (TCHF)
31.12.2012
31.12.2011
Due from banks
994 378
1 123 841
Due from clients
5 076 577
4 158 443
451 333
1 280 500
52 074
104 853
6 123 029
5 387 137
31.12.2012
31.12.2011
Due to banks
5 475 295
4 999 503
Due to clients
446 037
554 444
776
815
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)
0
0
5 921 332
5 553 947
31.12.2012
31.12.2011
Members of the Board of Directors
5 301
4 871
Members of the Executive Board
4 591
4 501
Total
9 892
9 372
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)
31.12.2012
31.12.2011
Domestic
Abroad
Domestic
Abroad
5 572 007
7 610
2 346 490
35
Assets
Cash and cash equivalents
Debt instruments of public authorities and bills
which are eligible for refinancing at central banks
0
23 603
0
206 108
1 841 275
2 983 074
2 014 598
5 342 531
Due from clients (excl. mortgage loans)
1 086 135
6 615 877
1 841 448
4 186 360
Mortgage loans
2 229 659
157 782
2 119 737
117 904
Bonds and other fixed-interest bearing securities
5 400
1 980 812
112
3 043 078
Equities and other non-fixed-interest securities
1 255
0
2 650
0
Due from banks
Participations
Shares in affiliated companies
Intangible assets
Tangible assets
Other assets
Accrued income and prepaid expenses
Total assets
66
100
66
154
40 000
18 248
70 000
20 681
0
30
0
0
86 308
6 759
90 485
1 272
671 263
585 856
1 240 648
809 732
12 077
21 973
13 129
28 656
11 545 445
12 401 724
9 739 363
13 756 511
Liabilities
Due to banks
4 368 232
2 265 323
4 294 859
2 495 385
Due to clients (excl. savings accounts)
5 664 248
6 238 760
5 688 415
5 233 630
Savings accounts
644 308
121 715
592 060
105 314
Securitized liabilities
969 404
0
784 028
0
Other liabilities
426 115
474 805
700 284
941 763
Accrued expenses and deferred income
39 106
24 302
33 059
11 265
Provisions
84 229
267
86 072
188
Subordinated liabilities
Provisions for general banking risks
920
0
1 005
0
644 500
0
644 500
0
Share capital
291 201
0
291 201
0
Legal reserves
218 500
0
218 500
0
Other reserves
1 326 000
0
1 282 000
0
298
0
502
0
Profit carried forward
Profit for the year
Total liabilities
144 936
0
91 844
0
14 821 997
9 125 172
14 708 329
8 787 545
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
31.12.2012
20
Breakdown of balance sheet according to currencies (TCHF)
TCHF
%
Liechtenstein
2 876 871
12.0
Debt instruments of public authorities and bills
Switzerland
8 668 574
36.2
which are eligible for refinancing at central banks
Europe excl. FL/CH
4 900 047
20.5
Due from banks
Country
Cash and cash equivalents
North America
Due from clients (excl. mortgage loans)
315 700
1.3
5 704 945
23.8
114 255
0.5
Bonds and other fixed-interest bearing securities
27 074
0.1
Equities and other non-fixed-interest securities
950 365
4.0
Participations
389 338
1.6
Shares in affiliated companies
23 947 169
100.0
Caribbean
Latin America
Africa
Asia
Oceania
Total assets
Assets
Mortgage loans
Intangible assets
Tangible assets
Other assets
Breakdown of assets according to
country/country group
31.12.2011
Accrued income and prepaid expenses
TCHF
%
Liechtenstein
3 823 051
16.3
and forex options transactions
Switzerland
5 916 312
25.2
Total assets
Europe excl. FL/CH
7 772 407
33.1
757 548
3.2
3 959 506
16.9
77 224
0.3
Due to clients (excl. savings accounts)
Country
North America
Caribbean
Latin America
Total assets
Delivery claims from forex spot, forex futures
Liabilities
Due to banks
19 259
0.1
Savings accounts
Asia
786 847
3.3
Securitized liabilities
Oceania
383 720
1.6
Other liabilities
23 495 874
100.0
Africa
Total assets
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
5 563 920
14 355
534
808
5 579 617
0
0
0
23 603
23 603
1 068 592
897 322
1 901 350
957 085
4 824 349
3 744 803
1 963 449
1 128 506
865 254
7 702 012
2 230 618
40 344
6 984
109 495
2 387 441
1 076 730
100 280
180 622
628 580
1 986 212
330
0
925
0
1 255
166
0
0
0
166
57 068
0
0
1 180
58 248
0
30
0
0
30
86 308
4 821
0
1 938
93 067
786 886
22 064
127
448 042
1 257 119
16 264
3 853
5 866
8 067
34 050
14 631 685
3 046 518
3 224 914
3 044 052
23 947 169
18 092 638
15 810 545
33 476 294
11 396 162
78 775 639
32 724 323
18 857 063
36 701 208
14 440 214
102 722 808
1 224 016
1 738 420
2 381 831
1 289 288
6 633 555
3 102 909
2 879 691
4 018 379
1 902 029
11 903 008
729 437
31 324
5 262
0
766 023
369 076
562 860
37 468
0
969 404
879 221
15 497
3 424
2 778
900 920
49 666
5 491
1 941
6 310
63 408
82 037
494
1 830
135
84 496
920
0
0
0
920
644 500
0
0
0
644 500
291 201
0
0
0
291 201
218 500
0
0
0
218 500
1 326 000
0
0
0
1 326 000
298
0
0
0
298
144 936
0
0
0
144 936
9 062 717
5 233 777
6 450 135
3 200 540
23 947 169
23 681 555
13 634 048
30 242 495
11 262 278
78 820 376
32 744 272
18 867 825
36 692 630
14 462 818
102 767 545
-19 949
-10 762
8 578
-22 604
-44 737
Notes on the balance sheet
33
21
Subordinated assets (TCHF)
31.12.2012
31.12.2011
5 709
25 683
Shares in affiliated companies
41 180
73 614
Total
46 889
99 297
31.12.2012
31.12.2011
23 603
206 108
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
129 719
410 781
0
0
410 781
88 486
48 527
1 768 007
2 583 882
5 285
0
1 986 212
3 043 190
31.12.2012
31.12.2011
766 023
697 374
Other liabilities
11 903 008
10 922 045
Total
12 669 031
11 619 419
Securitized liabilities (TCHF)
31.12.2012
31.12.2011
969 404
784 028
130 220
124 508
0
0
969 404
784 028
31.12.2012
31.12.2011
0
0
80 114
80 409
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
31.12.2011
2 632 409
of which from other issuers
26
31.12.2012
129 719
of which from public sector issuers
25
0
206 108
1 856 493
Bonds
24
0
23 603
Notes on the balance sheet
4 382
5 851
84 496
86 260
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
31.12.2012
31.12.2011
646 529
542 021
539 298
448 305
3 430 092
3 413 936
3 381 862
3 361 708
526
451
0
0
4 077 147
3 956 408
Commitment credits
Liabilities from deferred payments are reported in the balance sheet. There were no acceptance liabilities or other commitment
credits at 31 December 2012 and 31 December 2011.
29
Fiduciary transactions (TCHF)
Fiduciary investments at third-party banks
31.12.2012
31.12.2011
320 806
565 331
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
320 806
565 331
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
0
0
0
0
0
0
Swaps
0
0
0
17 621
50 616
2 008 322
Futures
0
0
0
0
0
0
19
19
1 539
0
0
0
0
0
0
0
0
0
617 318
650 151
66 890 693
89 399
101 228
10 574 940
Options (OTC)
Options (exchange-traded)
Forex/precious metals
Forward contracts
Swaps
0
0
0
0
0
0
Futures
0
0
0
0
0
0
38 053
38 038
3 267 054
0
0
0
0
0
0
0
0
0
123
123
1 765
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
461
461
52 935
0
0
0
0
0
0
0
0
0
832
832
68 705
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
1 502
1 502
395 991
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
31.12.2012
658 308
691 126
70 678 682
107 020
151 844
12 583 262
31.12.2011
1 432 532
1 473 564
80 139 190
21 062
56 874
2 420 285
At 31 December 2012 and 31 December 2011 there were no netting contracts.
36
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
Interest income from credit derivatives
Interest income
Trading in foreign exchange and precious metals
Income from financial transactions
Securities trading
Income from financial transactions
Total
34
Personnel expenses (TCHF)
Wages and salaries
Social security contributions, pensions and social assistance
of which for pensions
Other personnel expenses
Subtotal
Adjustment of liability for Long Term Incentive Scheme
2011
56 432
5 810
10 398
48 881
66 830
2012
2011
1 697
1 640
108
0
58 940
59 605
2 235
632
62 980
61 877
2012
2011
118 806
83 442
17 610
14 696
15 868
13 501
7 922
5 058
144 338
103 196
26 317
-4 500
170 655
98 696
Emoluments to members of the Executive Board
1 824
2 633
Operating expenses (TCHF)
2012
2011
Total
35
2012
43 071
Occupancy expense
15 988
9 714
Expenses for IT, machinery, furniture, vehicles and other equipment
49 521
45 052
Other business expenses
Total
79 844
65 405
145 353
120 171
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 guarantees provided for
­affiliated companies (see also Point 43).
No extraordinary items were recorded in the years 2012 and 2011.
The item provisions contains mainly tax provisions and provisions for contingent liabilities and credit risks, 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)
Abroad
2011
FL
Abroad
Interest earned
259 190
1 718
254 893
10
Interest paid
-108 451
-1 880
-109 893
-32
Current income from securities
Income from commission business and services
Commission paid
Income from financial transactions
Other ordinary income
Operating expenses
Other ordinary expenses
The break down is based on the domicile of the booking branch.
38
2012
FL
Notes to the profit and loss account
784
0
686
0
203 495
30 600
193 737
5 188
-56 233
-2 208
-49 064
-3
129 998
1 269
19 936
57
23 191
3 575
31 817
638
-246 752
-69 256
-199 963
-18 904
-6 513
-109
-19 646
-188
Additional information
38
Securities negotiable on the stock exchange (TCHF)
31.12.2012
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
1 986 212
3 043 190
1 604 392
2 312 484
1 604 392
2 312 484
0
0
381 820
730 706
1 255
2 650
1 255
1 170
1 255
1 170
0
0
0
1 480
166
220
0
0
of which unlisted securities
166
220
Shares in affiliated companies
17 067
17 067
0
0
17 067
17 067
Currency
TCHF
of which listed securities
of which unlisted securities
39
31.12.2011
Subordinated liabilities at 31.12.2012
Interest rate %
Maturity
Medium-term note
2.0625
2015
CHF
60
Medium-term note
2.3750
2014
CHF
30
Medium-term note
2.3750
2016
CHF
40
Medium-term note
2.4375
2014
CHF
50
Medium-term note
2.5625
2013
CHF
400
Medium-term note
2.5625
2014
CHF
120
Medium-term note
2.5625
2016
CHF
50
Medium-term note
2.6875
2013
CHF
30
Medium-term note
2.7500
2014
CHF
30
Medium-term note
2.8125
2013
CHF
20
Medium-term note
2.8125
2014
CHF
20
Medium-term note
2.9375
2016
CHF
50
Medium-term note
2.9375
2017
CHF
20
Total
920
Additional information
39
40
Other assets (TCHF)
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
31.12.2011
765 328
1 453 594
28 248
29 174
444 101
562 932
19 442
4 680
1 257 119
2 050 380
31.12.2012
31.12.2011
842 970
1 530 438
105
351
LTIS liability
30 551
4 513
Clearing accounts
27 294
106 745
900 920
1 642 047
2012
2011
19 962
21 822
5 130
3 906
Total
42
31.12.2012
Other ordinary income (TCHF)
Compensation from Group companies
Income from real estate
Income from the release of provisions
Remaining other income
Total
330
0
1 344
6 727
26 766
32 455
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)
Losses from receivables and guarantees
Transaction losses
2012
2011
4 334
18 393
579
781
Remaining other expenses
1 246
660
Total
6 159
19 834
31.12.2012
31.12.2011
Client assets in own-managed funds (investment undertakings)
14 386 810
13 098 285
Client assets under management
10 143 395
12 685 399
Other client assets under administration
25 742 147
17 191 601
Total client assets (including double counting)
50 272 352
42 975 285
7 612 413
6 326 527
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 Management 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 Management 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.
The LGT EX EQ EM IU Leaders (USD) Index Certificates are no-par-value. They relate to the LGT EX Equity Emerging Markets II (USD)
Index calculated and administered by LGT Capital Management Ltd. This index shows the value development of a diversified portfolio that invests globally.
The LGT EX EQ GEM IU (USD) Index Certificates are no-par-value. They relate to the LGT EX Equity Emerging Markets III (USD)
Index calculated and administered by LGT Capital Management Ltd. This index shows the value development of a diversified portfolio that invests globally.
The LGT EX FI EM IU (USD) Index Certificates are no-par-value. They relate to the LGT EX Fixed Income Emerging Markets II (USD)
Index calculated and administered by LGT Capital Management Ltd. This index shows the value development of a diversified portfolio that invests globally.
The LGT EX HF GIM IU (USD) Index Certificates are no-par-value. They relate to the LGT EX Hedge Funds GIM IU (USD) Index
calculated and administered by LGT Capital Partners Ltd. This index shows the value development of a diversified portfolio that
invests globally.
The LGT EX HF GATS IU (USD) Index Certificates are no-par-value. They relate to the LGT EX Hedge Funds GATS IU (USD) Index
­calculated and administered by LGT Capital Partners Ltd. This index shows the value development of a diversified portfolio that
invests globally.
Additional information
41
Report of the statutory auditor
Report of the statutory auditor
43
International presence of LGT Group and imprint
Media Relations
Christof Buri
Vienna
Phone +423 235 23 03
BahrainManama
[email protected]
ChinaBeijing
Germany
Frankfurt am Main
Legal Services
Jacques Engeli
Hong Kong
Hong Kong
Austria
Salzburg
Dr. Urs Gähwiler
IrelandDublin
Phone +423 235 28 72
JapanTokyo
[email protected]
LiechtensteinVaduz
Netherlands
Dispatch
Iris Dreier
SingaporeSingapore
Phone +423 235 20 51
SwitzerlandBasel
[email protected]
Rotterdam
Berne
Chur
Davos
Geneva
Lausanne
Lugano
Pfäffikon
Zurich
United Arab Emirates
Dubai
United KingdomLondon
United States of America
New York
UruguayMontevideo
44
International presence and imprint
Lilium candidum L.
The period from 1740 to 1840 saw a burst of development that proved
ground-breaking in the field of botanical illustrations. This period, which
also saw botany itself become established as an independent branch of
the natural sciences, is also regarded as the heyday of flower painting
in Vienna.
During his early career, Ferdinand Lukas Bauer (1760–1826) was active as
a plant painter for the Princes of Liechtenstein. He accompanied several
expeditions during which he made a pictorial record of foreign flora and
fauna. His brother Franz Andreas Bauer (1758–1840) also worked as a
flower painter for the Princely House of Liechtenstein as well as for the
famous Viennese court botanist Nikolaus von Jacquin.
Between 1776 and 1805, the so-called Codex Liechtenstein was created:
a fourteen-volume illuminated compendium of manuscripts in which
Ferdinand Lukas, Franz Andreas and their brother Joseph Anton Bauer
(1756–1831) and several other plant illustrators were involved. This work,
held today by the Princely Collections, is among the most beautiful plant
books that were made at the time. In the Codex’s more than 2 700 separate plant illustrations, the Bauer brothers created a synthesis of art and
science: faithful in detail, yet obeying the high aesthetic requirements of
art, they achieved the balancing act of uniting fidelity to nature on the
one hand with their own art of interpretation on the other.
© LIECHTENSTEIN. The Princely Collections, Vaduz–Vienna
The illustrations in this report are details from
Brothers Bauer, “Lilium candidum L.”, c. 1778
www.lgt.com
LGT Group 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 0513 5H GUT
LGT Bank Ltd.
Herrengasse 12
FL-9490 Vaduz
Phone +423 235 11 22
Fax +423 235 15 22
[email protected]