LGT Group

Foundation and early years

The founding of the bank happened during an economic shift in Europe. The Austrian currency was legal tender in Liechtenstein, but after the collapse of the Austro-Hungarian Empire, its currency plummeted. The Swiss franc was introduced in 1919, and became legal tender in Liechtenstein in 1924 (plans for a national currency were dropped). The Bank of Liechtenstein Aktiengesellschaft (short: BIL; renamed LGT Group in 1996) was founded in 1920 on the initiative of the Princely House of Liechtenstein together with industrialists and financiers from the former Austro-Hungarian Empire, who were seeking new financial structures after the collapse of the monarchy. The Anglo-Austrian Bank received the concession to establish the bank from the Liechtenstein government on 30 August 1920, and was the majority stakeholder. Count Karl Trauttmanssdorf was its first chairman. The establishment of the bank played an important role in the development of Liechtenstein as a centre for international holding structures. In May 1921, BIL launched its operations with 10 employees based in ground-floor offices inside the main government building. In 1930, the Princely House of Liechtenstein acquired more than 90% of the shares in the bank. In 1933, the bank moved into the newly constructed town hall in Vaduz, and in 1960 it relocated to its own new building in Vaduz.

The bank survived World War II thanks to prudent business practices. Until the 1960s, the bank’s main focus was to support and provide financing for the expansion of Liechtenstein’s economy and business sector. BIL did so primarily through the provision of financial services and loans. Over time, however, the commercial opportunities available to it in the local economy became too narrow, leading it to grow its operations to become an international commercial bank. Following this transformation, BIL began to expand into various segments of the banking industry, with a particular focus on activities pertaining to mortgages, stock markets and foreign exchange.

In 1964, conventional data processing based on the punch card system was introduced, which was replaced by electronic data processing as early as 1969. In the early 1970s, screens were used at workstations for the first time.

In 1970, the bank's share capital was taken over by the recently established Prince of Liechtenstein Foundation.

Expansion

During the 1980s, BIL opened representative offices in Europe, the US and Asia, including in London, which was its first foreign business base, and in Hong Kong in 1986.

In 1986, BIL went public and in 1989, acquired GT Management PLC in London. In 1990, BIL GT Group AG was founded and H.S.H. Prince Philipp became Chairman of the Board of Directors. Six years later, BIL GT Group was renamed Liechtenstein Global Trust and BIL became LGT Bank in Liechtenstein AG. In 1998, the GT Asset Management division was sold and the bank went private. From the late 1990s onwards, LGT focused on private banking and asset management.

In the years that followed, LGT expanded its onshore business in its core European markets as well as in international growth markets, including through a foreign branch in Singapore. A representative office was also opened in Frankfurt. In 2003, LGT acquired Schweizerische Treuhandgesellschaft STG from Swiss Life, opened LGT Bank Deutschland & Co. OHG and was granted a banking license in Singapore. Over the next four years, it launched LGT Bank Switzerland and opened LGT Bank Österreich. In 2006, H.S.H. Prince Maximilian von und zu Liechtenstein became CEO and Chairman of the LGT Group Foundation in 2021.

LGT Venture Philanthropy, an independent charitable foundation, was founded in 2007, on the initiative of LGT CEO H.S.H. Prince Maximilian von und zu Liechtenstein. In 2009, LGT sold its trust and fiduciary division (LGT Treuhand) to First Advisory Group and acquired the Swiss operation of Dresdner Bank.

LGT offers a range of services in the areas of private banking and asset management. Its main clients include family wealth holders and corporate clients.

In addition to traditional investment services, LGT’s offering for private investors also includes supplementary services such as wealth planning, real estate financing, impact investments and philanthropy advisory. LGT also offers investments that consider sustainability criteria.

For institutional investors, LGT offers asset management services, investment funds and investment mandates. Through LGT Capital Partners, more than 700 institutional clients in over 40 countries are served.

Controversy

Several hundred clients of LGT Treuhand, a former subsidiary of LGT Group, came under scrutiny by German tax investigators in February 2008, based on information contained on a CD that had been acquired by the German intelligence service, the Bundesnachrichtendienst. According to government sources, the case involved a four-digit number of suspects who were alleged to have evaded taxes amounting to millions. A spokesperson for the then Federal Minister of Finance, Peer Steinbrück, stated that investigations were being conducted against "very, very many well-known and less well-known 'high achievers' for tax evasion involving Liechtenstein". The information was also forwarded to many other European countries as well as to Australia, leading to successful investigations there as well. The German Ministry of Finance advised those affected to make a voluntary disclosure, as provided for under German criminal law. The public prosecutor’s office in Bochum confirmed that several hundred criminal proceedings were pending with the authority. According to Handelsblatt, large quantities of documents from LGT Treuhand had been transmitted.

The bank confirmed in a press release that a "data theft" had taken place at the subsidiary in 2002. On its website, it described the course of events and referred to the suspected perpetrator, the Liechtenstein national Heinrich Kieber, who had already been wanted previously.

On 16 December 2010, the criminal proceedings against LGT Group and LGT Treuhand were discontinued in return for a payment of around €46 million. This did not constitute an admission of guilt. Reuters described the discontinuation of the proceedings as a form of indulgence payment.