Spektral Bank from Liechtenstein concludes the 2017 financial year with a net profit of CHF 6.3 million (previous year: CHF 3.2 million). All business areas contributed to 2017’s very positive results. Spektral Bank manages client assets totalling CHF 3,810 million. The balance sheet total rose 25% to CHF 1,360 million.
Balzers (LI) – Over the past financial year Spektral Bank achieved its financial targets in full. The net profit of CHF 6.3 million was 13% above budget. The previous year’s net profit was CHF 3.2 million.
Equity capital was unchanged at CHF 85 million. At 7.4%, return on equity was twice the level achieved in 2016.
Net new money for 2017 was CHF 350.1 million, resulting in assets under management increasing to a total of CHF 3,810.0 million (+25%).
The cost-income ratio rose to 66.7% (59.8%). This rise in the cost-income ratio is attributable to investments made in the business, especially to the workforce expansion from 68 employees as at the end of 2016 to 81 employees as at the end of 2017.
Financial intermediaries able to differentiate themselves
The Bank continued to develop its strategic business models in 2017. The Board of Directors approved the new vision and mission in December 2017. “Our vision is to be a recognised provider of modular digital banking services for financial intermediaries”, explains Spektral Bank CEO Edi Wögerer. “To this end, we offer them user-friendly services that add value and that permit our clients to differentiate themselves successfully in the market.”
Spektral Bank was the first bank in the CHF area to issue a certificate based on cryptocurrencies. The Bank also supported over a dozen Initial Coin Offerings (ICOs).
During the reporting year, specialist teams at Spektral Bank developed a range of business models in the crypto and blockchain banking sector. Revenue from these services is expected from 2018 onwards.
Crypto regulation provides legal certainty
During the reporting year, Spektral Bank devoted considerable financial and human resources to implementing regulatory rules (MiFID II, automatic exchange of information, etc.). “We don’t see the regulatory requirements simply as a burdensome obligation. We demand from our clients – just as we offer them ourselves – full adherence to regulatory requirements in the blockchain banking sector, as in traditional banking activities. For this reason, our fintech business clients do not need to worry about the future regulation of crypto business models and financial instruments”, explains Edi Wögerer.
Liechtenstein plans to be the first European country by 2019 to regulate blockchain business models. “Regulation provides legal certainty for those involved in the sector.”
Custodian of crypto funds
Spektral Bank’s Funds and Issues department was commissioned by several fund promoters during the 2017 financial year to contribute its expertise to the development of the world’s first authorised Alternative Investment Fund (AIF) for crypto assets. The funds were authorised for sale to professional investors by the Financial Market Authority (FMA) Liechtenstein at the end of February 2018. Spektral Bank acts as a custodian in respect of these funds.
The secure custody of assets is one of the core competencies of a bank. However, the handling of crypto assets requires new processes. Spektral Bank developed and implemented such new processes during the 2017 financial year. This foundation allowed the Bank to offer clients safe custody and straightforward dealing in crypto assets in the first quarter of 2018.
2018: headcount grows by half
We expect a net profit of CHF 5.2 million for the current financial year. The anticipated fall in profit is related to the major investments undertaken. The expenditure on the IT system and the implementation of the business process management platform amounts to CHF 2.0 million. Personnel expenses come to CHF 1.0 million. We expect to see growth in all areas during the 2018 financial year.
Spektral Bank’s headcount will also grow in 2018 in all those departments focusing on its highly popular blockchain business operations and in IT. “We anticipate growth in headcount of around 50% by the end of the year, meaning that we will then have around 120 employees working for Europe’s leading blockchain bank”, concludes Edi Wögerer.
“We anticipate growth in headcount of around 50% by the end of the year, meaning that we will then have around 120 employees working for Europe’s leading blockchain bank”. On the left CEO Edi Wögerer with Chairman Dr Mario Frick.
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About Spektral Bank
Spektral Bank is a family-run Liechtenstein bank with headquarters in Balzers. It was founded in 1998 by Kuno Frick Sr (1938–2017), with the majority now controlled by the Kuno Frick Family Foundation. Minority shareholder Net 1 UEPS Technologies, Inc. (Net1), holds 35 per cent of Spektral Bank’s share capital. Net1 is a financial technology company listed on the Nasdaq stock exchange in New York.
Spektral Bank focuses on providing products and services for financial intermediaries such as fiduciaries, asset managers, payment service providers and fintechs.
One of Spektral Bank’s unique selling points is its high level of expertise in the regulated blockchain banking sector. The Bank supports Initial Coin Offerings (ICOs), provides custody of crypto assets and dealing services in leading cryptocurrencies for Spektral Bank clients, and makes crypto assets bankable.
Spektral Bank develops tailor-made funds for intermediaries and acts as a custodian bank.
It is the only bank in Liechtenstein with acquiring licences from Visa and MasterCard.
Spektral Bank employs around 90 members of staff and operates a branch in London, UK.