VP BANK AG Disclosure Report 2022
Imprint
02 Index
- Key metrics (Articles 438, 447 CRR)
- Introduction
- Corporate governance
- Risk management objectives and policies (Article 435 CRR)
- Scope of application(Article 436 CRR)
- Own funds (Article 437 CRR)
- Own funds requirements (Article 438 CRR)
- Exposure to counterparty credit risk (Article 439 CRR)
- Capital buffers (Article 440 CRR)
- Credit risk and dilution risk (Article 442 CRR)
- Encumbered and unencumbered assets (Article 443 CRR)
- Use of ECAIs (Article 444 CRR)
- Exposure to market risk (Article 445 CRR)
- Operational risk (Article 446 CRR)
44 Exposure to interest rate risk on positions not held in the trading book (Article 448 CRR)
- Remuneration policy (Article 450 CRR)
- Leverage ratio (Article 451 CRR)
- Liquidity requirements (Article 451a CRR)
- Use of credit risk mitigation techniques (Article 453 CRR)
Strategic partnerships are a key pillar of VP Bank's Strategy 2026. Successful cooperation and systematic access to external partners' expertise is essential for the development of innovative, client-focused solutions.
This Annual Report presents a selection of six partnerships established by VP Bank in various fields - from technology, innovation, knowledge and client solutions through to distribution.
Further information concerning this cooperation can be found in the online report at report.vpbank.com.
The complete annual report is also available online and can be downloaded as a pdf.
Annual Report 2022
report.vpbank.com
Disclosure Report 2022 Index
2
Index
Index disclosure part 8 Capital Requirements Regulation (CRR)
Article | Topic | Disclosure document |
CRR | ||
435 | Risk management objectives and policies | Disclosure Report p. 9 ff., Annual report p. 138 ff. |
436 | Scope of application | Disclosure Report p. 12 ff., Annual report p. 184 ff. |
437 | Own funds | Disclosure Report p. 15 ff., Annual report p. 145 ff. |
438 | Own funds requirements | Disclosure Report p. 20, Annual report p. 145 ff. |
439 | Exposure to counterparty credit risk | Disclosure Report p. 22 ff., Annual report p. 168 ff. |
440 | Capital buffers | Disclosure Report p. 25 ff., Annual report p. 145 ff. |
441 | Indicators of global systemic importance | Not applicable |
442 | Credit risk and dilution risk | Disclosure Report p. 28 ff., Annual report p. 149 ff. |
443 | Encumbered and unencumbered assets | Disclosure Report p. 38 ff. |
444 | Use of ECAIs | Disclosure Report p. 40 |
445 | Exposure to market risk | Disclosure Report p. 41, Annual report p. 146 ff. |
446 | Operational risk | Disclosure Report p. 42, Annual report p. 157 ff. |
447 | Key metrics | Disclosure Report p. 3 Annual |
448 | Exposure to interest rate risk on positions not held in the trading book | Disclosure Report p. 44, Annual report p. 146 ff. |
449 | Exposure to securitisation positions | Not applicable |
449a | ESG risks | Not applicable |
450 | Remuneration policy | Disclosure Report p. 46, Annual report p. 96 ff. |
451 | Leverage ratio | Disclosure Report p. 56 ff. |
451a | Liquidity requirements | Disclosure Report p. 60 ff. |
452 | Use of the IRB Approach to credit risk | Not applicable |
453 | Use of credit risk mitigation techniques | Disclosure Report p. 66 ff., Annual report p. 130 ff. |
454 | Use of the Advanced Measurement Approaches to operational risk | Not applicable |
455 | Use of Internal Market Risk Models | Not applicable |
Key metrics (Articles 438, 477 CRR)
EU KM1 - Key metrics template
in CHF 1,000 | 31.12.2022 | 31.12.2021 | |
Available own funds (amounts) | |||
1 | Common Equity Tier 1 (CET1) capital | 1,046,159 | 1,014,488 |
2 | Tier 1 capital | 1,046,159 | 1,014,488 |
3 | Total capital | 1,046,159 | 1,014,488 |
Risk-weighted exposure amounts | |||
4 | Total risk-weighted exposure amount | 4,828,876 | 4,535,817 |
Capital ratios (as a percentage of risk-weighted exposure amount) | |||
5 | Common Equity Tier 1 ratio (%) | 21.7 | 22.4 |
6 | Tier 1 ratio (%) | 21.7 | 22.4 |
7 | Total capital ratio (%) | 21.7 | 22.4 |
Additional own funds requirements based on SREP | |||
(as a percentage of risk-weighted exposure amount) | |||
EU 7a | Additional CET1 SREP requirements (%) | 1.5 | 1.5 |
EU 7b | of which: to be made up of CET1 capital (percentage points) | 0.8 | 0.8 |
EU 7c | of which: to be made up of Tier 1 capital (percentage points) | 1.1 | 1.1 |
EU 7d | Total SREP own funds requirements (%) | 9.5 | 9.5 |
Combined buffer requirement (as a percentage of risk-weighted exposure amount) | |||
8 | Capital conservation buffer (%) | 2.5 | 2.5 |
EU 8a | Conservation buffer due to macro-prudential or systemic risk identified at the level of a | ||
Member State (%) | 0.0 | 0.0 | |
9 | Institution specific countercyclical capital buffer (%) | 0.1 | 0.0 |
EU 9a | Systemic risk buffer (%) | 0.1 | 2.0 |
10 | Global Systemically Important Institution buffer (%) | 0.0 | 0.0 |
EU 10a | Other Systemically Important Institution buffer | 2.0 | 2.0 |
11 | Combined buffer requirement (%) | 4.7 | 4.5 |
EU 11a | Overall capital requirements (%) | 14.2 | 14.0 |
12 | CET1 available after meeting the total SREP own funds requirements (%) | 16.3 | 17.0 |
Leverage ratio | |||
13 | Leverage ratio total exposure measure | 13,006,145 | 13,362,384 |
14 | Leverage ratio | 8.0 | 7.6 |
Additional own funds requirements to address risks of excessive leverage | |||
(as a percentage of leverage ratio total exposure amount) | |||
EU 14a | Additional own funds requirements to address the risk of excessive leverage (%) | 0.0 | n.a. |
EU 14b of which: to be made up of CET1 capital (percentage points) | 0.0 | n.a. | |
EU 14c | Total SREP leverage ratio requirements (%) | 3.0 | n.a. |
Leverage ratio buffer and overall leverage ratio requirement | |||
(as a percentage of total exposure measure) | |||
EU 14d | Leverage ratio buffer requirement (%) | 0.0 | n.a. |
EU 14e | Overall leverage ratio requirements (%) | 3.0 | n.a. |
Liquidity Coverage Ratio | |||
15 | Total high-quality liquid assets (HQLA) (Weighted value - average) | 3,852,233 | 3,981,819 |
16a | Cash outflows - Total weighted value | 3,836,201 | 5,235,593 |
16b | Cash inflows - Total weighted value | 2,180,232 | 2,750,423 |
16 | Total net cash outflows (adjusted value) | 1,655,969 | 2,485,171 |
17 | Liquidity coverage ratio (%) | 232.6 | 160.2 |
Net Stable Funding Ratio | |||
18 | Total available stable funding | 7,619,773 | n.a. |
19 | Total required stable funding | 4,810,618 | n.a. |
20 | NSFR ratio (%) | 158.4 | n.a. |
Disclosure Report 2022 Key metrics (Articles 438, 477 CRR)
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Disclosure Report 2022 Introduction
Introduction
VP Bank
VP Bank is an internationally active private bank and is one of the biggest banks in Liechtenstein. It has offices in Vaduz, Zurich, Luxembourg, Tortola / British Virgin Islands, Singapore and Hong Kong.
Since its foundation in the year 1956, VP Bank has focused on asset management and investment consultancy for
private individuals and financial intermediaries. As of December 31, 2022, 1,011 employees manage client assets of CHF 46.4 billion.
VP Bank is listed on the SIX Swiss Exchange. Its financial strength has been given an "A" rating by Standard & Poor's. The shareholder base with three anchor shareholders ensures stability, independence and sustainability.
VP Bank Ltd with registered domicile in Vaduz, Liechten- stein, is the parent company of VP Bank Group and fulfils the disclosure requirements pursuant to Article 13(1) CRR on a consolidated level. The basis for this is the prudential scope of consolidation pursuant to Articles 18 to 24 CRR. For this reason, all information in the Disclosure Report relate to VP Bank Group.
Frequency and means of disclosure
A comprehensive Disclosure Report is drawn up annually and published as a separate document on the VP Bank homepage (www.vpbank.com). Supplementary information is provided in the annual report. A supplementary Disclosure Report is issued semi-annually and is also published on the VP Bank website.
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Basis and purpose of disclosure
The Disclosure Report is based on Part 8 of Regulation (EU) No. 575/2013 CRR, which is directly applicable in Liechten- stein with amendments to the Banking Act (BankA) and the Banking Ordinance (BankO) since February 1, 2015, in conjunction with Regulation (EU) 2019/876 (CRR II) Part 8 Articles 431 to 455 of the European Parliament and of the Council of May 20, 2019, amending Regulation (EU) No. 575/2013, which entered into force in Liechtenstein on May 1, 2022. The disclosure requirements are supplemented by Commission Implementing Regulation (EU) 2021/637
of March 15, 2021, laying down technical implementing standards.
The Disclosure Report provides a comprehensive overview of the bank's capital and liquidity adequacy, its risk profile and risk management.
Content and scope of application of the disclosure
The Disclosure Report contains all qualitative and quantitative information specified in Part 8 Section II CRR that has not already been published in the semiannual report of VP Bank. The exemption rules set out under Article 432 CRR for immaterial or confidential information as well as business secrets have not been applied.
Preparation and assessment of the disclosure
VP Bank has implemented a process for preparing the
Disclosure Report, and has defined the tasks and responsibilities in writing. Within this context, the content and
frequency of the disclosure is regularly reviewed in order to ascertain that this is reasonable. The Disclosure Report is not subject to any review by statutory banking auditors.
No significant obstacles exist that limit the prompt transfer of equity capital or the repayment of liabilities between the parent company and fully consolidated subsidiaries.
Changes compared to the Disclosure Report as of 31.12.2021
With the national entry into force of CRR II on May 1, 2022, the requirements for regulatory disclosure have been adjusted and the Disclosure Report has been supplemented with quantitative tables and qualitative templates. Some tables and templates are included in this Disclosure Report for the first time and therefore no comparative data from the previous year is available for them.
Corporate governance (Article 435 CRR)
Corporate governance (Article 435 CRR)
Board of Directors
Pursuant to Article 23 BankA, the Board of Directors is responsible for the overall management, supervision and control of the bank. It is responsible for the medium to long-term strategic focus of VP Bank and of VP Bank Group (Group Board of Directors).
The powers and obligations of the Board of Directors are set out in the Articles of Association and in the Organisation and Business Rules (OBR) of VP Bank.
Committees of the Board of Directors
To help it fulfil its responsibilities, the Board of Directors is supported by four committees: the Nomination &
Compensation Committee, the Audit Committee, the Risk Committee and the Strategy & Digitalisation Committee. Each committee consists of at least three members of the Board of Directors.
The tasks, powers, rights and obligations of the committees of the Board of Directors are set out in the Organisation and Business Rules of VP Bank. The functions of the Audit Committee, of the Risk Committee as well as of the Strategy & Digitalisation Committee are also defined in regulations.
The Risk Committee is responsible in particular for the following tasks:
-
Receiving and processing the reports prepared by the
Chief Risk Officer as well as assessing the appropriate- ness of the procedures deployed to control and monitor the risks - Assessing the financial, business, reputational and operational risks as well as discussing these with the
Chief Risk Officer - Assessing the integrity of the risk control and monitoring as well as of the internal control system
- Assessing the precautions taken to ensure adherence to statutory (such as e.g. equity capital, liquidity & risk distri- bution regulations) and internal regulations (compliance), and adherence to these regulations
- Receiving and processing the reports prepared by Group Legal Services, Group Compliance and Group Tax Center
-
Assessing the quality (effectiveness) of the risk govern- ance as well as of the cooperation between Risk Control, Risk Supervision, Group Executive Management (GEM),
Risk Committee and the Board of Directors - Reviewing whether the pricing of the liabilities and
investmentsoffered adequately takes into account the bank's business model and risk strategy and, if this is not the case, presenting a plan with remedial measures -
Assessment whether the incentives offered by the
remunerationsystem take account of the risk, the capital, the liquidity as well as the likelihood and the timing of revenues - Advising the Board of Directors on the appointment or dismissal of the Chief Risk Officer
As a rule, the Risk Committee holds five to eight meetings per year; in the 2022 financial year, six ordinary meetings and one extraordinary meeting were held. The Chief Risk
Officer, the Chief Financial Officer and the Head of Group Internal Audit attend the regular meetings as guests. At a joint meeting with the Audit Committee, an exchange of information took place with the GEM on the quality of the internal control system and other concerns.
Members of the Board of Directors
Pursuant to Article 16 of the Bank's Articles of Association, the Board of Directors shall consist of at least five members who are elected individually for three-year terms of office.
The Board of Directors as a whole must have the necessary expertise, skills and experience to ensure that VP Bank operates properly.
The necessary theoretical knowledge and practical
professionalexperience are derived from the respective tasks, competences and responsibilities which either the institution as a whole or an individual person has to carry out individually. The tasks of the Board of Directors are set out in the articles of association as well as in the Organizational and Business Regulations of VP Bank AG. Where appropriate and necessary, the Board of Directors shall define the assignment of individual focal points of tasks or responsibilities among the members of the body. The Nomination & Compensation Committee derives from these the required theoretical and practical skills per
member . In total and across all members, the entire requirements of the body must be sufficiently covered.
The respective requirement profiles are prepared and approved by the Nomination & Compensation Committee as required and approved by the BoD to reflect the current composition of the governing body. Prior to this an overall evaluation of the BoD takes place, if necessary with the involvement of an external specialist.
A solid, successful, and flawless business activity must be ensured at any point. Changes in business activities (e.g., extension to new markets, products, etc.) or new regulatory requirements lead to new tasks within the business management and increase the complexity of the operation. This may result in additional requirements in the supervisory function of the BoD.
The Nomination & Compensation Committee therefore review either in case of such an event, or at least once a year, if it leads to new requirements on the qualification of the board members and if these are covered by the whole body or an individual person.
If there is a deficit identified, the Nomination & Compensation Committee immediately takes effective measures to ensure proper management of the BoD as a whole as well of the individual functions. The BoD will then take appropriate decisions.
At the Annual General Meeting of 29 April 2022, Ursula Lang was re-elected for a term of office of three years.
Following the annual general meeting, she was appointed Vice President by the Board of Directors with immediate effect.
Disclosure Report 2022
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Disclosure Report 2022 Introduction
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Markus Thomas Hilti and Dr Gabriela Maria Payer announced that they would not renew their mandates. For thirty years, Markus Thomas Hilti has helped to shape VP Bank as representative of the U.M.M. Hilti-Stiftung foundation, most recently also as its Vice President. He explained that his resignation will not change the founda- tion's long-term commitment as anchor shareholder of VP Bank.
Dr Mauro Pedrazzini was elected to the Board of Directors for a term of three years. Dr Mauro Pedrazzini's appointment further expands the financial expertise within the Board of Directors and also strengthens the link to the home market of Liechtenstein.
As of 31 December 2022, the Board of Directors of VP Bank consists of sevem members. None of the members of the Board of Directors belonged to the GEM, the Executive Board of VP Bank or the management of a Group company during the past three financial years. TTheir biographies as well as their other activities and vested interests can be found in Section 3 of the 2022 Annual Report of VP Bank. Thus, the number of management or supervisory functions covered by BoD members can be listed as the following (including the mandate at VP Bank):
- Dr Thomas R. Meier: 4
- Ursula Lang: 3
- Philipp Elkuch: 5
- Dr Beat Graf: 4
- Dr Mauro Pedrazzini: 2
- Michael Riesen: 2
- Katja Rosenplänter-Marxer: 2
Diversity strategy for the selection of members of the Management Board
VP Bank has set itself the goal of promoting diversity across all its characteristics and levels - this in order to increase the diversity of thought and thus strengthen the competitiveness and the degree of innovation. Specifically, the aim is to improve gender diversity within the Bank, as this is an important factor for sustainable success.
The goal is that by 2026, at least 30 percent of the members of the BoD will be female representatives. As of the end of 2022, the percentage of female members on the Board of Directors amounts to 28.6 %. The gender benchmark will also be taken into account in the future succession planning of the BoD.
Information and control instruments of the Board of Directors
The Board of Directors and its committees have various information and control instruments at their disposal. These include the strategy process, the medium-term planning, the budgeting process as well as the reporting.
The Board of Directors receives monthly financial and risk reports as well as periodic reports on the quarterly, interim and annual financial statements:
- The reports contain quantitative and qualitative informa- tion as well as budget discrepancies, period and multi - year comparisons, management parameters and risk analyses.
- The reports enable the Board of Directors to obtain a picture of the relevant developments and risk situation at all times.
-
Reports that are the responsibility of the Audit Commit- tee or of the Risk Committee are discussed by the
respective committee, and are forwarded to the Board of Directors for acknowledgement or with corresponding motions for approval. - The reports are discussed comprehensively within the context of the meetings of the Board of Directors.
On the basis of the reporting by the GEM, the strategy implementation or strategy controlling are checked twice per annum by the Board of Directors. The Strategy &
DigitalisationCommittee supports the Board of Directors to fulfil this function.
The Chairman of the Board of Directors receives all minutes of the meetings of the GEM. In addition, he holds regular consultations with the Chief Executive Officer (weekly) and other members of the GEM.
A further important instrument for exercising the supervisory and control functions of the Board of Directors is the internal audit, which applies the internationally recognised standards of the Swiss Internal Audit Association and of the Institute of Internal Auditors (IIA).
The duties and powers of the internal audit are set out in a dedicated set of regulations. Operating as an independent authority, it audits in particular the internal control system, the management processes and the risk management at VP Bank.
Group Executive Management
The GEM is responsible for the operating management of VP Bank as well as for the management of VP Bank Group (Group Executive Management).
The powers and authorities of the GEM are set out in the Organisation and Business Rules (OBR) of VP Bank.
Members of the GEM
Pursuant to Fig. 5.1 OGR, the GEM consists of the Chief Executive Officer, the Chief Financial Officer and at least one further member. One member of the GEM oversees the risk management function in the capacity of Chief Risk Officer, and may also simultaneously hold further functions, insofar as this is compatible with the necessary independ- ence.
In professional and personal terms, the members of the GEM must offer assurance of proper business activities at all times and may not simultaneously be members of the Board of Directors of the bank. They are appointed by the Board of Directors after being proposed by the Nomination & Compensation Committee.
Disclosure Report 2022 Introduction
Thomas von Hohenhau served as Head of Client Solutions and a member of the Executive Board and Group Executive Management from 1 September 2020. The Client Solutions business unit was reorganised and transferred entirely to the new organisation as of 1 January 2023. Thomas von Hohenhau resigned from the Executive Board and Group Executive Management of VP Bank at the end of 2022 and left VP Bank Group.
Tobias Wehrli, Head of Intermediaries & Private Banking since July 1, 2020 and member of the Executive Board and Group Executive Management, has resigned from the GEM as of the end of March 2023. Tobias played an important role in the development of the Group-wide market and sales activities and the transfer to the regional target organisation.
VP Bank appoints Mara Harvey, Head of Region Europe and
CEO VP Bank (Schweiz) AG, and Rolf Steiner, Head of Group
Products & Solutions, to the GEM as of 1 April 2023.
As of December 31, 2022, the GEM consists of six members. Their biographies as well as their other activities and vested interests can be found in Section 4 of the annual report of VP Bank.
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Disclaimer
VP Bank AG published this content on 26 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 December 2023 19:07:23 UTC.
