Principles underlying financial statement reporting and notes

The unaudited interim financial statements were drawn up in accordance with the International Financial Reporting Standards applicable in the European Union (EU IFRS, IAS 34) and with Liechtenstein law. The semi-annual financial statements are prepared applying the same accounting and valuation principles as were applied for the 2024 annual financial statements.

Changes to the presentation

Starting in 2025, all forward components from foreign currency contracts are reported in net interest income. Previously, foreign currency contracts were also reported in income from trading activities. VP Bank Group’s net interest income is now reported in its entirety in a single income statement item instead of being distributed across two income statement items. This provides more reliable and relevant information on business transactions for the users of the annual and semi-annual financial statements. The reclassification of the above foreign currency contracts resulted in an increase of CHF 23.4 million in other interest income in the prior-year period in 2024. Income from trading activities decreased by the same amount in the prior-year period in 2024. For the full 2024 financial year, the reclassification amounted to CHF 50.5 million. The amount recognised in net interest income in the first half of 2025 is CHF 27.5 million. The corresponding accounting principles can be found in the Annual Report 2024 on page 116. The reclassification has no impact on Group net income or earnings per share.

New and revised International Financial Reporting Standards

Since 1 January 2025, the following new and revised standards and interpretations have taken effect and have no material impact on the consolidated financial statements of VP Bank Group:

IAS 21: Lack of convertibility

There are currently no new or amended IFRS or interpretations that have a material impact on VP Bank Group. The introduction of IFRS 18 will result in changes to the presentation, the aggregation of results and the disclosures in the notes. It will be implemented on 1 January 2027. We will conduct a detailed analysis of IFRS 18 in the second half of 2025.

Post-balance-sheet-date events

On 2 July 2025, VP Bank Group announced in a press release its strategic 40 per cent stake in Embla Fund Management AG, Vaduz. This move further expands its position in the fund business. The stake will be reported under companies consolidated using the equity method in the Annual Report 2025.

The Board of Directors reviewed and approved the semi-annual report and authorised it for publication in its meeting of 19 August 2025.

Litigation

As part of its ordinary banking activities, VP Bank Group is involved in various legal proceedings. The legal and regulatory environment in which VP Bank Group operates involves significant litigation, compliance, reputational and other risks in connection with legal disputes and regulatory proceedings. The impact of these proceedings on the financial strength and/or profitability of VP Bank Group is dependent on the status of the proceedings and their outcome. VP Bank Group employs the relevant processes, reports and committees to monitor and manage these risks. It also establishes provisions for ongoing and threatened proceedings if the probability that such proceedings will entail a financial loss is judged to be greater than the probability of this not being the case. In isolated cases in which the amount cannot be reliably estimated, for instance because of the early stage or the complexity of the proceedings or other factors, no provision is established, but contingent liabilities may be created. The risks described below are not necessarily the only ones to which VP Bank Group is exposed. Additional risks which are presently unknown or risks and proceedings which are currently considered insignificant may equally impact the future course of business, operating results and the outlook of VP Bank Group.

In the case before the High Court of Justice in London, the court served a civil suit on VP Bank (Switzerland) Ltd at the beginning of 2020. VP Bank Ltd is also named as a defendant and was notified of the action in March 2020. The main defendant is a former governing body of a foreign pension fund. The latter is said to have acted unlawfully in its role by accepting distribution remunerations for investment funds. The action names more than 40 defendants, among them various other banks and individuals that processed payments or paid distribution remunerations. VP Bank Ltd and VP Bank (Switzerland) Ltd are accused of a violation of due diligence obligations. They are also accused of involvement in the processing of questionable third-party fees and commissions of at least USD 46 million, meaning they would have to assume non-contractual collective liability for the damages incurred. VP Bank Group is disputing the accusations and the place of jurisdiction. Two defendant banks in Switzerland have successfully challenged the UK jurisdiction.

VP Bank Group considers the risk of outflow of funds to be small in the above case, which is why no provision has been formed.

Significant foreign exchange rates

The following exchange rates were used for the most important currencies: