28 Provisions
| Download |
in CHF thousands |
Provisions for legal and litigation risks |
Provisions for other business risks and restructuring |
Total 2019 |
Total 2018 |
||||
|---|---|---|---|---|---|---|---|---|
As at 1 January |
21'917 |
8'534 |
30'451 |
30'903 |
||||
Additions from changes to scope of consolidation |
|
|
|
154 |
||||
Provisions applied |
–11'937 |
–577 |
–12'514 |
–2'703 |
||||
Increase in provisions recognised in the income statement |
4'640 |
2'467 |
7'108 |
5'244 |
||||
Decrease in provisions recognised in the income statement |
–9'365 |
–886 |
–10'251 |
–3'146 |
||||
Changes due to foreign exchange differences |
|
–97 |
–97 |
0 |
||||
As at 31 December |
5'255 |
9'441 |
14'697 |
30'451 |
| Download |
in CHF thousands |
31.12.2019 |
31.12.2018 |
+/− % |
|||
|---|---|---|---|---|---|---|
Short-term provisions |
14'697 |
30'451 |
–51.7 |
|||
Long-term provisions |
0 |
0 |
|
|||
Total |
14'697 |
30'451 |
–51.7 |
Provisions for legal and litigation risks
As at 31 December 2019, the LLB Group was involved in various litigation and proceedings, which could have an impact on its financial reporting. The LLB Group endeavours to disclose the claims for damages, the scope of legal proceedings and other relevant information in order for the reader to be able to estimate the possible risk for the LLB Group.
During the second half of 2019, LLB Verwaltung (Switzerland) AG reached a settlement with the US authorities concerning the US business of the former Liechtensteinische Landesbank (Switzerland) AG. It undertook to make a payment of USD 10.7 million. The payment was made in 2019 and was covered by provisions. As a result of the conclusion of the proceedings, the LLB Group was able to write back the remaining provisions amounting to CHF 9.4 million to the income statement.
Legal action was taken against LLB Verwaltung (Switzerland) AG, formerly Liechtensteinische Landesbank (Switzerland) AG, with respect to an issue that occurred in 2011. The High Court of Justice in London ruled at first instance that there had been misconduct on the part of a former employee and the former bank was jointly liable for his misconduct and the damage caused by him. The former bank was not liable for misconduct itself. The payments already made in connection with this case were recognised in general and administrative expenses in 2017. LLB Verwaltung (Switzerland) AG appealed against the first instance ruling. The Court of Appeal confirmed the main points of the ruling reached by the High Court of Justice. A provision totalling CHF 4.3 million was allocated as per 31 December 2019 for the additional costs incurred with the legal proceedings. LLB Verwaltung (Switzerland) AG has decided not to take any further legal steps. It will assert its claims against the insurance company.
Provisions for other business risks and restructuring measures
LLB (Österreich) AG will introduce the Avaloq banking software package from 1 January 2020. The service agreement for the use of the existing Tambas banking software with CPB Software (Austria) GmbH, Vienna, can only be terminated by either party from the end of 2021 at the earliest. A provision amounting to CHF 3.8 million exists for the potentially payable but not-to-be-used service fees for the years 2020 and 2021. Management continues to regard this provision as being sufficient.
The provisions for restructuring measures relate to the StepUp2020 strategy of the LLB Group announced in October 2015. For the costs of social plans for employees, provisions for restructuring measures amounting to CHF 2.1 million were allocated as per 31 December 2019.