Will Paul Arni become VP Bank’s 100 million man?

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The strategy of Liechtenstein’s VP Bank is running out. The question now is how the institute intends to position itself for the next half decade. finews.ch spoke to the new CEO Paul Arni.

For the past five years, VP Bank has set three strategic goals: CHF 50 billion in client assets under management, CHF 80 million in net profit and a cost / income ratio of less than 70 percent.

According to its annual report, the bank almost certainly misses at least one of these three goals. With 47.6 billion in client assets under management and a cost / income ratio of 67.6 percent, the former is within reach, while the institute has already mastered the latter.

At least when it comes to net income, the bank is unsure whether it can break the 80 million mark (previously 73.5 million) this year, as it warned at Tuesday’s annual press conference. This is due to the “persistently demanding market environment and the difficult to predict developments on the financial markets”.

Net new money continues to be a goal

As of next year, the new goals, the new CEO, will come Paul Arni and the new Chairman of the Board Thomas Meyer are committed: net new money growth of 4 percent per year over the 2021–2025 cycle, more than 15 basis points profit margin, a cost / income ratio of less than 70 percent, and an additional tier 1 capital ratio of more than 20 percent. All of this is expected to result in a consolidated profit of at least CHF 100 million in 2025.

VP Bank continues to focus on growth thanks to new customers. In contrast, the major bank UBS, for example, decided this year to throw the same goal overboard.

In his first strategy cycle as CEO, Arni wants to adhere to three simple guiding principles, which he has divided into dynamic-looking categories:

1. Profitable growth – «Evolve»

Measures in this area are aimed at the strategic and targeted further development of the operating business in the core segments, whereby segment focus, target markets, product offering and price models are defined and developed for and by the individual locations.

This also includes sustainable investment solutions, the simplification of pricing models and new digital solutions to further personalize advice. VP Bank hopes to generate additional income of CHF 30 million by 2025.

2. Efficiency and cost discipline – “Scale”

Process optimization through standardization and automation as well as the flexibility of the operative platform are carried out here. This also includes considerations regarding the in or outsourcing of services.

Through these steps and above all through the use of synergies, the maximum cost increase is to be CHF 15 million by 2025.

3. New sources of income – “Move”

The Move division deals with the digitization of assets, the development of private market solutions and the expansion of VP Bank’s wealth management platform. In combination with other new business areas, additional income of another CHF 25 million is to be generated by 2025.

After its first annual press conference finews.ch spoke to the new CEO of VP Bank, Paul Arni.

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