Development of target criteria

We measure our success in terms of the following key financial performance indicators:

Growth

2005–2009, Net new money inflow in percent

Development of target criteria – Growth (bar chart)

KPI: Net new money inflow
Objective: net new money inflow must amount to at least
3 percent per year.

Review

Thanks to intensified sales and market penetration measures, we succeeded in acquiring net new money inflows from 2005 to 2007, particularly in Eastern Europe and in the Middle East.

The last two years were marked by the financial and economic crises as well as the tax discussion. Consequently, the acquisition of new client money was more difficult. Moreover, changed basic business conditions led to asset outflows in the International Market Business Division.

2009 business result

Thanks to our strong position in Liechtenstein and Switzerland, we achieved gratifying net new money inflows in the Domestic Market Business Division.

The ongoing discussions about bank client confidentiality and taxation policies led to a net new money outflow in the International Market Business Division.

Cost efficiency

2005–2009, Cost/income ratio in percent

Development of target criteria – Cost efficiency (bar chart)

KPI: Cost/income ratio
Objective: in industry comparison, the cost/income ratio must
attain a top position.

Review

The first-time consolidation of Bank Linth led to a rise in the cost/income ratio in 2007. Moreover, the financial and economic crises had an unfavourable impact on the revenues of the LLB Group in the last two years. A banking industry comparison shows however that the LLB Group has operated efficiently.


2009 business result

Since costs rose only marginally in relation to earnings, the cost / income ratio fell below the previous year's level.

Capital efficiency

2005–2009, Return on equity in percent

Development of target criteria – Capital efficiency (Return on equity) (bar chart)

KPI: Return on equity
Objective: return on equity must be above 15 percent.

Review

Thanks to our growth activities, we consistently increased our capital efficiency until 2007. However, the financial and economic crises caused a decline in revenues and therefore to a lower ratio. Nevertheless, the return on equity is still higher than the LLB Groups' capital costs.

2009 business result

The return on equity rose year on year to nearly 11 percent. The good result from financial investments offset the weaker operative result.

Capital efficiency

2005–2009, Tier 1 ratio in percent

Development of target criteria – Capital efficiency (Tier 1 ratio) (bar chart)

KPI: Tier 1 ratio
Objective: the tier 1 ratio must amount to 12 percent.

Review

The tier 1 ratio increased slightly compared with 2008. As a result of intensified business activities and repurchases of shares, it is within the target range.

2009 business result

At 13.7 percent, the tier 1 ratio is well above the value stipulated by law. On a percentage basis, the capital base increased more strongly than the risk-weighted assets.