Strategy takes hold, with a steady increase in net income
Despite challenging circumstances, Bank Frick generated a net profit of some CHF 4.4 million. The years-long trend of continuously increasing income was confirmed in all business areas, and the growth in expenses has flattened out. Thanks to the successful strategic orientation of the entrepreneurial Bank, net income has doubled to some CHF 40.0 million in just five years.
Bank Frick’s growth strategy has proven to be a success. As a year filled with challenges, 2020 could be concluded with a net profit of CHF 4.4 million, “although we acted with great prudence in the initial pandemic year and set aside appropriate provisions along the way”, says Mario Frick, Chairman of the Board of Directors at Bank Frick. “The long-term income trend is a particularly welcome development. We succeeded in nearly doubling the bank’s net income between 2016 and 2020, increasing it from CHF 20.0 million to around CHF 40.0 million”, Frick says. This was accompanied by an increase in bank expenditure of just CHF 10.0 million to CHF 28.5 million in the same period.
Income results in detail
Net income from commission and service transactions rose to CHF 21.6 million (2019: CHF 12.6 million).
Trading activities trended favourably, growing by CHF 1.7 million to CHF 6.4 million.
The difficult interest rate environment could also be felt at Bank Frick. Interest income amounted to CHF 15.7 million, which was somewhat lower than in the previous period (CHF 18.9 million). The key interest rate cut instituted by the US Federal Reserve alone led to a drop in income that amounted to some CHF 2.0 million less than budgeted.
Total assets increased by 37% in the reporting year and amounted to CHF 1.5 billion as of 31 December 2020. The increase largely resulted from higher deposits from clients in the crypto broker and exchange business.
Client assets under management amounted to CHF 3.3 billion as of 31 December 2020, corresponding to an increase of 20% compared to the previous period (2019: CHF 2.7 billion). Bank Frick was thus able to impressively confirm the trend in rising client assets in the commenced financial year.
Bank Frick bridges the gap between traditional finance and blockchain-based assets
“We aim to become a recognised provider of modular digital banking services for intermediaries as well as professional clients. Our success in recent years proves that we are on the right track”, says Bank Frick CEO Edi Wögerer. As an asset class, crypto assets are becoming more popular every day – and the demand for appropriate banking services in the areas of trading and custody is increasing at the same time. “In order to meet this demand, we built a very advanced infrastructure in recent years, offering our clients the greatest possible convenience without compromising on security”, Wögerer continues.
The Bank has ensured that its solutions meet its clients’ quality requirements by keeping a close eye on the market. “We are working every day on additional opportunities to link the traditional financial world with assets related to blockchain as well as other technologies”, Wögerer says.
Rapid growth and more clients make it necessary to adjust our strategy
To continue on this path to success and to be well positioned for the future, the Bank adapted its vision, mission and guiding principles at the beginning of 2021. “This was necessary because we grew very quickly in recent years, with a significant increase in the number of our clients. It is vital for us to focus even more on the client experience”, Wögerer explains.
The Bank has also carefully considered how it can further expand and enhance its services. “One finding from this analysis was that we need to reposition our client contact departments”, Wögerer says. With these changes, Bank Frick is setting the organisational stage for continuing to develop new business models and products that are highly competitive in the international context.
“We want to remain a significant banking partner for blockchain companies in Europe as well as further expand our position in this area. We want to be the bank for financial intermediaries in Liechtenstein and further consolidate our standing among independent custodian banks. And with all our strategic progress, we will remain flexible in order to be able to respond to new market opportunities – in a manner fitting for a bank that thinks in an entrepreneurial manner”, Wögerer emphasises.
Outlook for the current financial year
“The coronavirus pandemic has made it extremely difficult to anticipate how the global economy and, as such, Bank Frick’s business performance will develop as time goes on”, Wögerer says. “We are proceeding on the assumption that defaults on SME financing loans may still occur. We therefore budgeted very conservatively for 2021 and set aside provisions. On this basis, we expect a profit of CHF 3.1 million for the year.”
A family-owned Bank: an asset that inspires confidence
As of 4 February 2021, Bank Frick is once again fully owned by the Frick family and the Kuno Frick Family Foundation. “We have learned that being a family-run bank is an important factor for inspiring confidence. With this as a starting point, our business is characterised by long-term security as well as clear responsibilities, all of which bolsters trust in the Bank on the part of employees, clients and the various partners”, Frick says.
About Bank Frick
Bank Frick specialises in banking for professional clients. The Liechtenstein bank provides a fully integrated offering of classic banking and blockchain banking services. Its clients include fintechs, asset managers, payment service providers, family offices, fund promoters, pension funds and fiduciaries.
Bank Frick has been family-run since its foundation as a licensed universal bank in 1998, and it adopts an entrepreneurial approach. The Bank is 100 per cent controlled by the Kuno Frick Family Foundation. The Bank employs over 140 members of staff at its Balzers office and operates a branch in London, UK.
Bank Frick is one of Europe’s pioneers of the regulated blockchain banking sector. Its offering covers trading and custody of crypto assets, as well as token sales. The Bank also develops tailored crypto-structuring solutions for intermediaries.
In addition to its highly regarded basic services, Bank Frick’s classic banking offerings cover services for funds and issues, focusing on formulating European (AIF, UCITS) and national fund solutions. In the capital market sector, Bank Frick develops tailored financial products for intermediaries and supports them along the whole issue process, acting also as a custodian bank.
Bank Frick is the only Liechtenstein bank with acquiring licences from Visa and MasterCard, and it can process card payments globally for payment service providers and their online merchants.
In 2019, Bank Frick took over the fintech company Tradico AG, which specialises in finance for goods purchasing for SMEs, and acquired a majority stake in the fintech company 21.finance AG, which operates area2Invest, a digital investment platform for classic and tokenised financial products.