«VP Bank can do better,» Chairman of the Board Stephan Zimmermann promised at the media conference in March 2025. At the time, profit had fallen by more than 57 percent to just 18 million francs, the executive management had waived bonuses, and the cost-cutting program had been intensified. Twelve months later, Zimmermann explained to analysts and media representatives how the bank managed to increase net profit from 18 million to 47 million francs. «Strong markets certainly helped, but our operational progress was key,» he said.

Lower Costs

The most striking development was on the cost side. Personnel expenses excluding variable compensation fell by almost 10 percent to 172,8 million francs. The number of full-time positions declined by 6,1 percent to 920.

According to Group CEO Urs Monstein, just over 30 positions were cut in Hong Kong and Singapore, with the remaining reductions at the headquarters in Vaduz and in Zurich. General and administrative expenses also declined significantly, partly due to lower fees paid to external service providers.

Higher Revenues Despite Lower Interest Income

On the revenue side, income increased despite another decline in net interest income. Total operating income rose by 2,1 percent to 337,3 million francs. Key contributions came from commission and service income, which grew by 3,3 percent to 141,6 million francs. Trading income increased by 13,2 percent to 34,9 million francs as a result of higher client activity.

In addition, the bank received 4.6 million francs as a repayment related to an old insurance case. «This is a one-off effect and cannot logically be budgeted,» Monstein said in response to a question.

Efficiency Program Completed

Higher revenues and lower costs logically led to an improved cost/income ratio, which improved by 10 percentage points to 83,2 percent. «The efficiency program has been completed, and we have saved significantly more than 20 million francs. The focus now is on continuing to grow profitably,» Monstein said.

In terms of net new money, the target of 4 percent annual growth remains in place. «Markets in Luxembourg and Singapore delivered significantly less than expected, while developments in Switzerland and Liechtenstein were particularly encouraging,» the CEO added. Overall, the bank reported net new money inflows of 1,2 billion francs, corresponding to growth of 2,3 percent. 

Significant Dollar Exposure

The bank is also placing greater emphasis on the «quality» rather than the growth of its mortgage portfolio. Lending volume remained stable at 5,9 billion francs. «Lower-yielding loans were reduced, while funds were reallocated to more profitable lending relationships,» explained the new Chief Financial Officer Roland Kläy. He also highlighted the bank’s robust refinancing structure, noting that more than 81 percent of the balance sheet is funded by client deposits.

According to Kläy, around one third of all client assets are invested in US dollar. «Compared with the beginning of the year, the dollar exchange rate was around 13 percent lower, which alone had an impact of about 5 percent on assets under management.» On average, market performance amounted to 3.5 percent. As a result, client assets under management increased by 5,8 percent to 53,7 billion francs.

Dividend Unchanged, Bonuses Return

Despite the significantly higher profit, the dividend will remain unchanged at 4 francs per share. With 46,6 percent of the voting rights, the «Fürstlicher Kommerzienrat Guido Feger» foundation remains the largest shareholder. Together with the «U.M.M. Hilti Foundation» and the «Marxer Foundation for Banking and Corporate Values in Vaduz,» it holds a majority.

«A year ago, we distributed significantly more than the profit generated as dividends. Now we are at just over 50 percent, which is in line with our targets,» Chairman Zimmermann said when asked about the payout.

For the executive management, the profit increase has more direct consequences. After waiving bonuses for 2024, the annual report now shows an allocation totalling 2,14 million francs for 2025, in addition to base salaries amounting to 3,07 million francs.