LGT Bank AG

The stable outlook reflects our view that LGT's revenue streams over the coming 12-24 months will be broadly stable despite the current asset-price volatility. Moreover, the stable outlook captures our assumption that LGT maintains its robust compliance and governance framework as well as its franchise strength. We could take a negative rating action on LGT if a plunge in asset prices triggered a strong reduction in the value of the Princely Portfolio and AUM, weakening LGT's earnings capacity and risk-adjusted capitalization. While it is a more remote prospect, we could also consider a downgrade if lower earnings retention or larger acquisitions prevented the bank from maintaining strong capitalization, or if the ongoing reorganization has unexpected negative implications for the business.

...S&P Global Ratings expects LGT Bank (LGT) will maintain its good performance despite reducing effects of higher interest margins from 2024. The bank's results should be stable albeit at more moderate levels compared to strong 2023 results. In the first half of 2024, LGT reported a group profit of Swiss franc (CHF) 174.6 million. This represents a drop of 22% year on year because of the normalized interest rate environment and further expansion-driven investments in personnel and digitalization. During the same period, assets under management were up by 13% and...

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