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LGT made good strategic and operational progress in the 2014 financial year. In a fragile economic and investment environment with continued low interest rates, total operating income rose by 13% to over CHF 1.0 billion, compared to the previous year. To this record result, net interest and similar income contributed with CHF 92.5 million (+16%), income from services with CHF 701.8 million (+8%) and income from trading activities and other operating income with CHF 215.5 million (+30%).
Total operating expenses rose by 11% in the period under review to CHF 761.0 million. Business and office expenses increased by 5% to CHF 165.5 million. Personnel expenses rose by 12% to CHF 595.5 million, which is primarily attributable to staff recruiting in 2013 and 2014 as well as performance-related compensation in accordance with the growth of the business. The cost-income ratio decreased by close to two percentage points to 75.4% compared to the 2013 financial year.
Depreciation, amortization and provisions declined by 3% to CHF 56.2 million. After taking into account a higher tax charge arising from changes to the tax law in Liechtenstein, group profit increased by 19% to CHF 165.0 million. LGT is very well capitalized and has a high level of liquidity. The tier 1 capital ratio was 18.4% as at 31 December 2014, compared to 21.3% at year-end 2013.
Rise in assets under management to CHF 128.8 billion
In 2014, LGT generated attractive net asset inflows of CHF 7.1 billion from the existing business, which corresponds to growth of 7%. All regions and both of the group’s business areas contributed with positive inflows to this development. Including CHF 7.3 billion in selected assets from the private banking portfolios acquired from HSBC Private Bank (Suisse), LGT’s assets under management rose by 20% to CHF 128.8 billion as at 31 December 2014.
LGT got off to a good start to 2015 and is confident that it is well-positioned to make further progress. From today’s perspective, LGT expects that the lifting of the minimum exchange rate for the Swiss franc will not have a material effect in the 2015 results due to currency hedging introduced in the past and applied consistently, and further growth measures.
H.S.H. Prince Max von und zu Liechtenstein, CEO LGT: "We achieved very good results for the 2014 financial year and significantly strengthened our strategic position. A particular highlight is the significant rise in assets under management, which was strongly backed by our investment expertise and our good performance. For many years the further development of our investment expertise in traditional and alternative asset classes has been one of our main priorities. This benefits us and our clients, particularly in the current difficult investment environment. We will further invest in the development of our business and continue to pursue our proven long-term strategy of international diversification – always with the aim to stand side by side with our clients as partners in every market environment."