Capital management

The LLB Group has in place sound, comprehensive and effective processes to assess and maintain on an ongoing basis adequate equity capital. The internal capital adequacy assessment process (ICAAP) is a key risk management instrument for the LLB Group. The ICAAP is documented in the internal regulations and guidelines and is reviewed and revised annually on the basis of overall bank stress tests.

Solid equity base

A good equity base not only protects its reputation, but is also part of the financial management and credibility of a bank. Having a sufficiently high-quality equity base at its disposal is part of the LLB Group’s identity. The LLB Group’s financial strength shall remain, as far as possible, unaffected by fluctuations in the capital markets.

LLB is considered to be of systemic importance to the Liechtenstein economy and subject to a regulatory minimum capital adequacy ratio of 13 per cent. We are targeting a Tier 1 ratio of over 14 per cent as a strategic objective. As at the end of 2019, the LLB Group had CHF 2.1 billion in equity capital (31.12.2018: CHF 2.0 billion). At 19.6 per cent (31.12.2018: 19.0 %), LLB’s Tier 1 ratio is well above the regulatory requirement.

The LLB Group continues to enjoy a high level of financial stability and security on account of its solid equity base, which consists entirely of hard core capital. The comfortable capital situation gives it leeway to make acquisitions.

Rating confirms financial strength

In December 2019, rating agency Moody’s again confirmed a deposit rating of Aa2 for Liechtensteinische Landesbank. This makes it, according to Moody’s, one of the highest-rated banks in the world. The rating underlines LLB’s stability and financial strength and is proof of our prudent finance and risk management. LLB is among the top range of Liechtenstein and Swiss banks and ranks well above the average of European financial institutions.

Rating (graphic)