Liechtenstein banks recorded impressive results alongside high Tier 1 capital ratios and net new money inflows in 2020. In so doing, the banks successfully ended a year dominated by the coronavirus pandemic and low interest rate environment. The banking sector is also well positioned for the future.
The Liechtenstein banking sector posted “astonishingly good results” in the crisis year 2020, the Liechtenstein Bankers Association (LBA) writes in a press release. Its assessment is based on the business results posted by the country’s three largest banks, namely LGT, LLB and VP Bank, as well as Neue Bank. The LBA describes these financial institutions as being characterized by good results in addition to high Tier 1 capital ratios and net new money inflows.
All four banks defied a year dominated by the coronavirus pandemic and low interest rate environment to maintain Tier 1 capital ratios in excess of 20 percent, the LBA states. This was far from a given, and serves to underline “the fact that all of these banks have resilient business models and were able to adapt quickly to the new situation”.
Furthermore, the LBA indicates that all four banks recorded net new money inflows and posted either stable levels of assets under management or slight increases for this item in the reporting year. The LBA rates this as a sign of the continuing appeal of Liechtenstein as a center of asset management services.
For the coming year, the LBA believes that the banking sector is well positioned despite forecasts tinged with uncertainty. “We are convinced that our banking sector will continue to be competitive in any environment”, the LBA writes in the press release. From the LBA’s perspective, the banking sector has laid a “strategic foundation” and now boasts crisis-tested business models. Moreover, the LBA explains that the banks strengthened their commitment to sustainability last year, with the banking sector set to make targeted investments in both digitalization and sustainability over the next few years.
