Two of Liechtenstein's major banks on Thursday reported profits in the first half of the year, even as money continued to flow out of their wealth management divisions, according to dpa. LGT Group, owned by the Alpine principality, reported profit of 94 million Swiss francs (87.87 million dollars), down 24 per cent compared to the same period last year. Nonetheless, the figures showed a marked improvement over the final months of 2008. Clients continued to pull money out of the bank, with outflows reaching 1.6 billion francs in the first half. Tier 1 capital ratio, a measure of top-grade financing on hand, stood at 17.7 per cent of the bank's overall assets. The bank reported 79 billion in assets under management, up slightly from the previous half. The increase was attributed to intake from its onshore business. Meanwhile, Liechtensteinische Landesbank AG (LLB), listed on the Zurich exchange, but mainly owned by the principality, said profits were up 8.1 percent to 95.3 million francs, compared to the same period last year. LLB's tier 1 ratio stood at 13.4 percent. Client assets under management rose by 3.3 percent to 47.6 billion francs, LLB reported, saying this was a result of having earned money on the markets. Net new money outflow, nonetheless amounted to 304 million, as investors pulled out cash. "As expected, the after-effects of the tax debate and the sale of the trust business led to asset outflows in Liechtenstein," LGT said in a statement. Liechtenstein, like other financial centres with banking secrecy laws and offshore business, has been under pressure to become more transparent as part of a international push against tax evasion. The tiny principality, whose economy relies heavily on its banking sector, is in the process of negotiating and signing new double taxation agreements that would allow for an easier exchange of information between countries. Both banks said that, given the global economic downturn, the results were satisfactory. But LLB said it would be "too ambitious" to expect it to reach its medium-term goals this year. Earlier this week, Liechtenstein's VP Bank reported first half net outflows of 1 billion Swiss francs, and a 34 percent decline in profits, which reached 26.9 million francs. Adolf Real, chief executive officer, said he was stepping down from his role at the bank.
