Outstanding first half-year for Bank Frick
31. Aug. 2016
Liechtenstein-based Bank Frick & Co. AG increases income in the first six months of 2016 by 11.6% compared with the prior period, to CHF 2.2 million. Income from normal business activities of CHF 9.6 million is driven by one-off income from the Payment Services strategic business unit. Of this amount, CHF 7.1 million has been allocated to provisions. The Bank’s own equity capable of being offset now amounts to CHF 85.6 million (+9.7%).
Balzers (LI) – Family-run Bank Frick ends the first six months having clearly exceeded its own targets. “Our strategic initiatives aimed at new client acquisition, at focusing on our newly orientated business fields and at reducing costs are delivering results,” says CEO Edi Wögerer.
Earnings from commission and service operations were CHF 8.7 million (-22.3%). Earnings from the credit (CHF 0.7 million) and the securities and investment (CHF 4.1 million) businesses grew considerably (+29%). Income from the remaining service business declined, however, to CHF 3.8 million (-49%). This decrease is primarily due to the consolidation of non-strategic business. As a result, Bank Frick was able to reduce commission expenses to CHF 4.8 million (-20%).
High one-off earnings from strategic business
Income from trading operations amounted to CHF 1.6 million (+57.6%) in the first six months. The key factor behind this increase is the higher volume of currency transactions arising from exchange-rate fluctuations between a variety of currency pairings.
Bank Frick reported one-off earnings of CHF 8.6 million in the first half of 2016. These extraordinary items are mainly the result of the sale of the Bank’s own shares in Visa Europe to Visa Inc. Bank Frick had received shares in Visa Europe when it entered the acquiring banking business.
Only Liechtenstein bank with licences for Visa and MasterCard
The credit card acquiring business continues to be part of Bank Frick’s payment services strategy, which is being vigorously pursued. Bank Frick is the only bank in Liechtenstein with acquiring licences from Visa and MasterCard.
In April 2016, Bank Frick entered into a comprehensive cooperation agreement with Net1 UEPS Technologies, Inc. A South African company, Net1 is listed on the Nasdaq exchange and provides innovative payment systems on an international scale. Net1 is expanding its presence in Europe. As part of the cooperation agreement, Net1 acquired all shares in Masterpayment AG, and this made an important contribution to the positive extraordinary items. Bank Frick is Net1’s strategic banking partner and exclusive payment processor in Europe.
Significant new business is expected in the second half
“Net1’s plans for European expansion mean that we can expect substantial volumes of new business in the areas of payment processing and acquiring,” says Edi Wögerer.
General administrative expenses rose over the reporting period to CHF 8.4 million (+42%). Bank Frick makes long-term investments in qualified employees, who are responsible for implementing the growth strategy in the areas of institutional clients and payment services (staff costs: CHF 4.9 million). Staff numbers are being increased as a result of continually growing regulatory requirements. Operating expenditure stood at CHF 3.5 million.
“Income excluding extraordinary items would be CHF 2.4 million”
A part of the expenditure in the first half of 2016 is caused by the establishment of the Net1 cooperation, the sale of Masterpayment AG and various activities related to the sale of our Visa shares, and should therefore be considered as one-off expenditure.
“If we were to exclude all the positive and negative extraordinary items from the first-half result, net income would be around CHF 2.4 million,” explains Edi Wögerer. “We are looking with a high degree of confidence towards the second half of the year and our expected result. We have a strengthened capital base, and the investments made in the business are already bearing fruit.”
Half-yearly results 2016