VP Bank Insight - Editorial

VP Bank Group and its business environment

2009 was yet another year that was impacted by the numerous challenges stemming from the global economic crisis. The Principality of Liechtenstein and VP Bank have risen to these new challenges – as witnessed by VP Bank Group’s positive 2009 financial results.

After having gotten off to a weak start, the financial markets staged a recovery in the spring of last year and showed increasing signs of stabilization over the course of the second half. The global economic conditions also began to improve, however uncertainties continued to shape the financial industry – on one hand due to the enormous indebtedness of many countries and, on the other, as a result of the pressure for an intensified exchange of tax-related information in the crossborder asset management area.

Generally the same tendencies can be observed in all of the international financial centers: international standards and agreements are progressively superseding domestic law. The goal of certain countries to have access to all tax-related information on each individual who is taxable in their sovereign territory led to a broad international consensus that crossborder access to tax data on the basis of the OECD standard should be enabled.

Liechtenstein has reaffirmed its willingness to adopt this standard not only by issuing the Liechtenstein Declaration of March 12, 2009, but meanwhile by also signing various agreements on the exchange of information in tax-related matters as well as a number of double taxation treaties. As a result, Liechtenstein has now been on the OECD’s “white list” since November 11, 2209.

For the first time, an agreement with Great Britain has been reached that exemplifies the Principality’s goal of negotiating bilateral agreements with individual nations, the terms of which are applicable also retroactively and – in conjunction with tax-amnesty arrangements – should ultimately lead to Liechtenstein banks’ managing only after-tax assets of individuals from those countries.

The government’s policy of cooperation within clearly defined parameters, which was introduced already in 2008, has created more legal certainty for the Liechtenstein financial center – an indispensable element for maintaining client trust in the years ahead. Thanks to Liechtenstein’s straightforward positioning on this controversial topic that for years has been the subject of heated debate, the banks and financial intermediaries operating in the Principality now enjoy new and promising prospects.

In the case of VP Bank, those prospects are enhanced by the strategy that was introduced already ten years ago with the aim of expanding the Group’s onshore banking business at selected locations while developing further its offshore banking activities in line with the new conditions. Today, we are well positioned in the markets of relevance to us and have taken the changed business circumstances into account in our overall corporate strategy, even as we remain true to VP Bank Group’s fundamental strategic orientation.

Our core business is and will remain international private banking. For that reason, we will continue to expand our private banking activities in defined markets. Simultaneously, we will pursue the further development of business relationships with highly demanding asset managers and fiduciaries while also catering to the needs of commercial, credit and retail customers in Liechtenstein and the neighboring region.

On February 3, 2010, the Board of Directors named Roger H. Hartmann as the Bank’s new CEO. Roger Hartmann has gained many years of management experience in international private banking. Of particular note are his accomplishments in Luxembourg and Asia, where he managed demanding change processes and dealt with the regulatory peculiarities of various jurisdictions that today are of central importance in the banking business. We are convinced that Roger Hartmann will foster the further development of VP Bank Group with great determination.