HSBC private bank deal boosts inflows at Liechtenstein’s LGT
(Reuters) – Net profits at LGT, Liechtenstein’s biggest bank, rose more than 18 percent last year, the bank reported on Monday, after it attracted fresh funds and acquired a large portfolio of accounts from HSBC’s private bank.
The Vaduz-based lender, owned by the principality’s royal family, said last year it was buying from HSBC $12.5 billion of private banking assets that the British bank wanted to offload to reduce the size of its wealth management arm.
HSBC’s Swiss private bank has been at the center of a media storm after client data and other documents were leaked last month which suggested the unit might have helped wealthy clients dodge taxes in a period up to 2007. HSBC has admitted past compliance failures but has said the business has since been overhauled.
LGT was one of the first major banks to be caught up in an international clampdown on tax evasion, suffering a client exodus in 2008 and 2009 after it featured in a U.S. Senate report on tax evasion.
Since then the principality, wedged between Switzerland and Austria, has taken steps to dispel its image as a tax haven and reposition itself as a legitimate financial center and LGT has seen positive net inflows of assets for the past five years.
LGT said on Monday its net profit rose last year to 165 million Swiss francs ($169 million) from 139.2 million francs in 2013, with revenue rising nearly 13 percent to 1.01 billion francs.
Gross assets under management rose by 20 percent last year to 128.8 billion francs. Valuation gains boosted the total by 7.1 billion francs while net asset inflows added another 7.1 billion francs. The bank then took in another 7.3 billion francs of inflows at the beginning of December from the private banking portfolios acquired from HSBC’s Swiss bank.
