lgt bank agmoody's investors service financial institutions key indicators exhibit 2 lgt bank...

FINANCIAL INSTITUTIONS

CREDIT OPINION16 December 2019

Update

RATINGS

LGT Bank AGDomicile Liechtenstein

Long Term CRR Aa1

Type LT Counterparty RiskRating - Dom Curr

Outlook Not Assigned

Long Term Debt Aa3

Type Senior Unsecured -Dom Curr

Outlook Stable

Long Term Deposit Aa2

Type LT Bank Deposits - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Bernhard Held, CFA +49.69.70730.973VP-Sr Credit [email protected]

Mark C Jenkinson +44.20.7772.5432Associate [email protected]

Alexander Hendricks,CFA

+49.69.70730.779

Associate Managing [email protected]

LGT Bank AGUpdate to credit analysis

SummaryWe assign Aa2(stable)/P-1 deposit ratings and a Aa3(stable) senior unsecured debt rating toLGT Bank AG's (LGT Bank). We further assign Aa1/P-1 Counterparty Risk Rating, as well as ana2 Baseline Credit Assessment (BCA) and Adjusted BCA and (P)A3 junior senior unsecuredratings to the bank's €3 billion medium-term notes program.

LGT Bank's ratings reflect (1) the bank's a2 BCA and Adjusted BCA; (2) the results of ourAdvanced Loss Given Failure (LGF) analysis, which takes into account the severity of lossfaced by the different debt classes in resolution, and which results in two notches of ratinguplift for LGT Bank's deposit ratings and one notch of rating uplift for its senior unsecureddebt and issuer ratings; and (3) our assumption of a moderate probability of governmentsupport from the Principality of Liechtenstein being made available to LGT Bank in case ofneed, which results in one notch of additional rating uplift.

LGT Bank's a2 BCA reflects its sound financial profile, in particular its (1) strong capital;(2) good liquidity, displaying sizeable cash holdings; and (3) low lending risks. However,LGT Bank's BCA is constrained by (1) its moderate profitability at bank level, as well as (2)corporate governance considerations, arising from the overlap of the Princely House ofLiechtenstein's ownership with top management functions.

Exhibit 1

Rating Scorecard LGT Bank AG - Key Financial Ratios

0.3%

20.3%

0.3%

34.8%

49.3%

0%

10%

20%

30%

40%

50%

0%

5%

10%

15%

20%

25%

Asset Risk:Problem Loans/

Gross Loans

Capital:Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible BankingAssets

Liquid Resources:Liquid Banking

Assets/TangibleBanking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

LGT Bank AG (BCA: a2) Median a2-rated banks

So

lve

ncy F

acto

rs

Liq

uid

ity F

acto

rs

Source: Moody's Financial Metrics

http://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1207306

https://www.moodys.com/credit-ratings/LGT-Bank-AG-credit-rating-413900

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

Credit strengths

» Global private banking franchise with unique selling proposition and sound asset quality

» Recurring acquisitions are well covered by LGT's ample capital cushion

» Sizeable liquid resources and very low balance-sheet risks

Credit challenges

» LGT Bank's business model is sensitive to market risks, mainly because of its embeddedness into LGT Group's wealth and assetmanagement business

» LGT Bank is exposed to typical risks applicable to private banks, such as reputational, legal and operational risks

» Potential conflicting business interests between LGT Bank and the Princely House of Liechtenstein, its sole owner

Outlook

» LGT's stable outlook reflects our expectation of continued stable development in its key financial factors over the next 12-18months.

» The stable outlook also captures our expectation that no transformational acquisitions will be announced during the outlook periodand that the bank will maintain its strong capital levels.

Factors that could lead to an upgrade

» LGT Bank's ratings, in the first place its senior unsecured debt rating, could be upgraded if the BCA is upgraded or if LGT Bankannounces and executes future issuance plans driven by regulatory requirements that would meaningfully raise the volume ofsubordinated and equal-ranking liabilities above our current expectations.

» LGT Bank's BCA could be upgraded if the bank benefitted from a combination of (1) further sustained significant growth of assetsunder the group's management through net new money inflows, such that it results in overall improved solvency; (2) a materialand sustained increase in the bank's profitability; (3) significantly lower reputational and litigation risks, and (4) materially highercapitalisation.

» An upgrade of LGT Bank's BCA may also be triggered by a strengthening of its corporate governance, thereby materially decreasingthe direct influence of LGT Bank's family owners over risk taking and business strategies.

Factors that could lead to a downgrade

» A downgrade of LGT Bank's ratings could be triggered following (1) a downgrade of the bank's BCA; and/or (2) an increase in theexpected loss severity, for example because of a reduction of loss-absorbing instruments, resulting in fewer notches of rating upliftfrom our Advanced LGF analysis.

» A downgrade of LGT Bank's BCA could result from (1) a reduced capitalisation, including if resulting from additional acquisitions,(2) increasing asset risks, for example due to unexpected litigation charges in connection with typical private banking and wealthmanagement risks, or (3) a weaker profitability.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 16 December 2019 LGT Bank AG: Update to credit analysis


Key indicators

Exhibit 2

LGT Bank AG (Unconsolidated Financials) [1]

12-182 12-172 12-162 12-152 12-143 CAGR/Avg.4

Total Assets (CHF Billion) 34.6 32.8 30.0 29.1 30.7 3.05

Total Assets (USD Billion) 35.1 33.6 29.5 29.1 30.9 3.25

Tangible Common Equity (CHF Billion) 3.0 2.8 2.9 2.7 2.6 3.55

Tangible Common Equity (USD Billion) 3.0 2.9 2.8 2.7 2.6 3.75

Problem Loans / Gross Loans (%) 0.3 0.2 0.3 0.1 0.1 0.26

Tangible Common Equity / Risk Weighted Assets (%) 20.3 19.3 22.6 22.9 19.6 20.97

Problem Loans / (Tangible Common Equity + Loan Loss Reserve) (%) 1.7 1.1 1.3 0.7 0.4 1.16

Net Interest Margin (%) 0.7 0.7 0.6 0.4 0.4 0.56

PPI / Average RWA (%) 0.9 0.9 1.2 1.0 0.7 1.07

Net Income / Tangible Assets (%) 0.3 0.3 0.4 0.4 0.2 0.36

Cost / Income Ratio (%) 80.6 80.6 75.0 75.7 79.9 78.46

Market Funds / Tangible Banking Assets (%) 34.8 34.1 35.8 38.7 40.4 36.76

Liquid Banking Assets / Tangible Banking Assets (%) 49.3 43.6 50.8 52.9 54.2 50.26

Gross Loans / Due to Customers (%) 84.1 93.6 82.6 83.3 76.8 84.16

[1]All figures and ratios are adjusted using Moody's standard adjustments. [2]Basel III - fully-loaded or transitional phase-in; LOCAL GAAP. [3]Basel II; LOCAL GAAP. [4]May include roundingdifferences due to scale of reported amounts. [5]Compound Annual Growth Rate (%) based on time period presented for the latest accounting regime. [6]Simple average of periodspresented for the latest accounting regime. [7]Simple average of Basel III periods presented.Source: Moody's Investors Service; Company Filings

ProfileLGT Bank is a privately owned universal bank in Liechtenstein that operates as a subsidiary of LGT Group Ltd., which is ultimately fullyowned by the Prince of Liechtenstein Foundation, whose beneficiary is the reigning Prince of Liechtenstein, H.S.H. Prince Hans-Adam IIvon und zu Liechtenstein.

LGT Bank was established in 1920 as Bank in Liechtenstein AG and in 1930, the Princely House of Liechtenstein acquired a majoritystake. Following various structural changes, the entity was renamed LGT Bank in January 2013. As of 30 June 2019, LGT Group reportedconsolidated assets of CHF46.9 billion (2018: CHF43.4 billion) and assets under management (AUM) of CHF215.0 billion (CHF198.2billion). This compares to CHF34.6 billion of total assets and CHF86.5 billion of AUM at LGT Bank, as of end-2018.

Detailed credit considerationsEnlarged private banking franchise with unique selling proposition and low on-balance-sheet lending risksOur aa3 Asset Risk score assigned to LGT Bank captures the bank's very limited on-balance-sheet risks, marked by the near absence ofproblem loans, and moderate business risks. However, we apply a downward adjustment to LGT Bank's initial1 aa1 score to reflect thebank's susceptibility to reputational and legal (litigation) risks, as applicable to any private bank.

LGT Bank's well-established global private banking franchise is complemented by asset management activities and builds on the bank'sand LGT Group's proven strength in traditional and alternative asset management. Between year-end 2012 and June 2019, LGT Groupdoubled its assets under management as shown in exhibit 3, foremost through net money inflow which accounted for around 60% ofthis growth and through acquisitions, including the successful integration of ABN AMRO Bank N.V.'s (A1 stable/A1 stable, baa1)2 privatebanking business in Asia and the Middle East and asset managers like LGT Vestra LLP, an UK asset manager, as well as European CapitalFund Management, a private debt manager, which have helped to significantly enlarge LGT Bank's franchise. In light of the recovery ofglobal markets year-to-date and the performance of LGT Group, we also expect LGT Bank to have expanded its asset base from thetemporarily reduced year-end 2018 levels.


https://www.moodys.com/credit-ratings/ABN-AMRO-Bank-NV-credit-rating-821735916


Exhibit 3

LGT Group's AUM growth is driven by net new money and recent acquisitionsDevelopment of Assets under Management (incl. double counting) 2014 - HY 2019

104.5

57.5

34.018.9 215.0

0

50

100

150

200

250

Dec 2013 Net NewMoney

Net Acquisitions Market Performance& FX Impact

June 2019

Source: Company reports

LGT Bank's asset quality metrics continue to display very low risk and high loan quality, comparing favorably with those of banksglobally. Following strong growth mainly as a result of its acquisitions, LGT Bank optimised its loan book in 2018, which declined toCHF16.1 billion as a result (down from CHF17.2 billion in December 2017). At end-2018, CHF3.5 billion of loans related to residential,office, or commercial properties, while the remainder represents Lombard lending. The bulk of mortgage loans are concentrated in thebank's main operating environments, i.e. Liechtenstein and Switzerland, and display conservative lending and valuation criteria with arobust track record.

LGT Group's flagship product, the 'Princely Portfolio', allows clients to replicate the investment strategies of the Princely House ofLiechtenstein, a unique offering amongst private banks in Switzerland and Liechtenstein.

Strong capitalisation has returned to pre-acquisition levelsThe aa2 Capital score assigned to LGT Bank reflects both the strong level and quality of capital, as well as its sound leverage ratio. Ourassessment also takes into account that around one third of the group's regulatory Common Equity Tier 1 (CET1) capital is derived fromthe value of the 'Princely Portfolio' and is thus subject to capital market volatility.

As of year-end 2018, LGT Bank's Tangible Common Equity (TCE) ratio, our key metric for assessing capitalisation, improved to 20.3%,up one percentage point from year-end 2017. The December 2018 TCE leverage ratio of 8.7% (December 2017: 8.6%) underscoresthe high quality of LGT Bank's capital. For purposes of regulatory reporting, the bank calculates its risk-weighted assets under theconservative standardised approach.

Exhibit 4

LGT Bank's capitalisation is strong

22.9% 22.6%

19.3%20.3%

22.0% 21.6%

18.5%19.1%

13.0%

9.4% 9.5%8.6% 8.7%

0%

5%

10%

15%

20%

25%

2015 2016 2017 2018 Total capital requirement

TCE ratio CET1 ratio TCE leverage




In the first half of 2019 LGT Group's regulatory total capital ratio increased to 20.3% from 17.6% as of year-end. Going forward, webelieve the group will maintain total capital ratios significantly above the regulatory minimum requirement of 13% (total capital ratio)even in case of future acquisitive growth.

Sizeable liquidity is a credit strengthLGT Bank's assigned Liquid Resources score is aa3, in line with its initial score. LGT benefits from significant unencumbered liquiditybuffers even after adjustment for intra-group assets.

In 2018, LGT Bank reduced the amount of outstanding net customer loans by more than CHF1 billion to CHF16.1 billion, following theprior year's strong acquisition-related increase by 29% to CHF17.2 billion. At the same time, LGT Bank grew its cash position, securitiesportfolio and intra-bank claims, as shown in Exhibit 5, all of which we consider liquid assets.

Exhibit 5

LGT Bank benefits from its strong liquidity positionAsset breakdown % total assets (LHS), Liquid Resources % Tangible Banking Assets (RHS)

29% 27%

13%20%

14% 16%

16% 19%

29% 19%

17%18%

40% 39% 42%44%

52% 46%

0%

15%

30%

45%

60%

75%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017 2018

Other assets Goodwill and other intangible assets Securities and investments

Derivative assets Loans Due from banks

Cash and balances with central banks Liquid Resources Ratio


As a result of LGT Bank's strong liquidity cushion, the bank has maintained a comfortable distance to the 100% regulatory requirementfor the Liquidity Coverage Ratio (LCR), with high quality liquid assets of CHF9.8 billion as of year-end 2018 (2017: CHF7.5 billion) andan LCR constantly in excess of 160% over the past year.

Low dependence on market funds reflects the strong influence of client deposits on the balance sheet structureWe have positively adjusted LGT Bank's assigned Funding Structure score to a2 from ba1, reflecting pass-through intragroup liabilitiesat bank level, which we do not consider as market funding.

LGT Bank benefits from low market funding reliance, which mainly arises from liabilities to banks and CHF2.0 billion of seniorunsecured bonds, after the near-term maturity of a CHF250 million senior unsecured instrument in 2019. The bank's balance sheet sizeis to a large extent driven by its sizeable deposit balances, which do not show large single-investor concentrations and which foremostconsist of uninvested client funds that investors typically shift between deposit and investment accounts held with LGT Bank.



Exhibit 6

LGT Bank displays a low dependence on market fundsLiability breakdown % total assets (LHS), Market Funds % Tangible Banking Assets (RHS)

27% 31% 30% 27% 25% 26%

54%50% 50% 53% 56% 55%

0%

10%

20%

30%

40%

50%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017 2018

Equity Other liabilities Provisions Debt issued Derivative liabs

FV & Trading Liabilities Due to customers Due to banks Funding Structure Ratio


In 2019, LGT Bank incorporated the junior senior unsecured debt class into its €3 billion medium-term notes issuance program, inaddition to the senior unsecured debt class. The bank still expects the authorities' final guidance on its minimum requirements forown funds and eligible liabilities (MREL), which we expect to trigger some new issuance needs at the contractually subordinated juniorsenior unsecured level going forward.

As of year-end 2018, CHF7.6 billion of LGT Bank's CHF9.0 billion of liabilities to banks consisted of intragroup funding obtained fromLGT Group companies, which we expect to be available independent from the external market funding environment.

Stable profitability as the bank offsets lower margins through cost savingsLGT Bank's assigned Profitability score is ba2, which is in line with its initial score. We expect that LGT Bank will realise sufficient costsavings going forward to offset the combined impact of rising regulatory costs and net interest margin and average fee declines.

In preparation for additional asset and staff growth, LGT Group has launched a program to increase operational efficiency acrossits global locations. Following significant infrastructure investments in the past years, LGT Bank now shares a new core banking ITsystem with all but one of the group's private banking booking platforms, which will serve as a basis to further execute the cost savingsinitiatives. In terms of further growth initiatives, we understand these would comprise a mix of organic growth and further bolt-onacquisitions to strengthen the existing private banking booking centers. In asset management, LGT Bank aims to further broaden itsproduct offering and global client reach, including through an expanded presence in the sustainability segment.

For the first six months of 2019 LGT Group reported a 13% year-over-year decrease in pre-tax profit at CHF171.6 million, down due tonegative operating leverage resulting from a +4% increased headcount resulting from the group's ongoing investments in the clientbusiness.

The group's operating income increased by 2% to CHF848.2 million, benefitting from valuation gains on its financial securities whichmitigated the impact of lower client activity during the first half of the year as well as lower recurring revenues as a result of the lowerinvested asset base at the end of 20183.

Net interest income and credit losses remained stable at CHF138.7 million. Income from services (CHF536.1 million) and incomefrom trading and other operating income (CHF173.4 million) dropped and rose -1% and 16%, respectively, as result of the lower clientactivity and valuation gains on securities. Additionally, an accounting change resulted in certain transactions now being recognisedunder trading activities instead of services.

In 2018, LGT Bank reported net income of CHF182.4 million (2017: CHF106.8 million), contributing around 60% to the group's profit.The bank's net profit included a CHF77.6 million one-off gain from sales of investments. 2018 financials included full-year cost andrevenue contributions of the ABN AMRO private banking business in Hong Kong, the closure of which was announced on 30 April 2017.Driven by higher business volume and somewhat higher US dollar interest rates, LGT Bank's net interest income rose to CHF223 million



in 2018 (+11%), up from CHF200 million in 2017, while net commission income rose to CHF323 million (+9%) from CHF297millionduring the same timeframe. This exceeded the 6% growth in business expenses to CHF517 million.

Exhibit 7

LGT Bank has maintained its profitability stable amid business growth and IT platform investment

113 112 123 168 200 223

218 230 270266

297 32392 97114

156139 133

-330 -350 -381 -442 -512 -5460 -2 -5

-11-4

-15

78

-800

-600

-400

-200

0

200

400

600

800

2013 2014 2015 2016 2017 2018

CH

F m

illio

n

Net interest income Net fees and commissions income Trading and other income Operating expenses

Risk provisions Extraordinary income and expenses Pre-tax profit

Source: Company reports, Moody's Financial Metrics, Moody's Investors Service estimates

Environmental, social and governance (ESG) considerationsEnvironmental considerations

LGT Bank's exposure to Environmental risks is low, consistent with our general assessment for the global banking sector4. See ourEnvironmental risk heat maps for further information.

Social considerations

LGT Bank's exposure to Social risks is moderate, consistent with our general assessment for banks and wealth managers5. See our Socialrisks heat maps for further information. However, we consider a higher degree of reputational, legal (litigation) and operational risks forLGT Bank, which is reflected in our assigned Asset Risk score.

We positively recognise LGT Group's commitment as an investor and investment advisor striving to ensure that capital is investedsustainably from both an environmental and social perspective. We acknowledge LGT Capital Partner's, the group's asset managementsubsidiary, representation on the United Nations sponsored Principles of Responsible Investment (PRI) board.

Corporate governance considerations lead to qualitative adjustmentFor LGT and wealth managers in general, we consider a high degree of reputational, legal (litigation) and operational risks, which isreflected in our Asset Risk score. Corporate governance remains a key credit consideration and requires ongoing monitoring6.

In addition, corporate governance considerations, arising from LGT Bank's family ownership and family involvement in keymanagement positions, are considered an important qualitative factor that constrain the bank's ratings.

LGT Bank is indirectly but fully owned by the Prince of Liechtenstein Foundation. While this setup provides stability to the bank andthe group, and thus far we have not identified or expect cases of material divergence, we caution that conflicting business interestsbetween LGT Bank and the Princely House of Liechtenstein may have negative effects on the bank's credit profile, most notably onprofitability and/or capital. Our assessment of these risks results in an assigned a2 BCA, which is positioned one notch below LGTBank's a1 Financial Profile.

Support and structural considerationsAffiliate supportBased on our assessment of LGT Group's credit profile, i.e. LGT Bank's parent institution and 100%-owner, we believe that i) the group'sactivities do not provide meaningful business diversifications in addition to LGT Bank's private banking franchise; and ii) the group'sability to provide additional support capacity, in case of need, is limited. As a result, LGT Bank does not receive any affiliate supportuplift from its parent institution.


https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1135665




Advanced LGF analysisWith the transposition of the European Bank Recovery and Resolution Directive (BRRD) into national law, Liechtenstein has introducedan operational resolution regime. We therefore apply our Advanced LGF analysis to LGT Bank, considering the risks faced by thedifferent debt and deposit classes across the liability structure at failure. We assume residual tangible common equity of 3% and post-failure losses of 8% of tangible banking assets, a 25% run-off in junior wholesale deposits and a 5% run-off in preferred deposits, andassign a 25% probability to deposits being preferred to senior unsecured debt. These ratios are in line with our standard assumptionsfor EU banks.

For deposits, our Advanced LGF analysis indicates a very low loss-given-failure, leading to two notches of rating uplift from the bank’sa2 Adjusted BCA, prior to government support.

For issuer and senior unsecured debt ratings, our Advanced LGF analysis indicates a low loss-given-failure, leading to one notch ofrating uplift from LGT Bank’s a2 Adjusted BCA, prior to government support.

For junior senior unsecured debt, our LGF analysis indicates a high loss-given-failure, leading us to assign a (P)A3 rating to LGT Bank'sjunior senior unsecured MTN program, one notch below the a2 Adjusted BCA.

Government support considerationsWe assign one notch of rating uplift to LGT Bank's long-term deposit and senior unsecured debt ratings resulting from the support ofthe Principality of Liechtenstein. This reflects our assumption of such support to be forthcoming in the event of a stress scenario, takinginto account LGT Bank's importance to the domestic deposit-taking market and sizeable national market shares.

We consider LGT Bank a domestic systemically important financial institution. This assessment takes into account the bank's strongfranchise in private wealth management and resulting key role in the country's important financial service industry, the full (yetindirect) ownership by the Princely family and the sovereign's financial capacity to provide support to LGT Bank.

We further recognise the importance of wealth management activities for the Liechtenstein economy and the detrimental impact thatmajor financial problems, which we do not expect, at one of the countries' larger banks and asset managers could have for the overallperception of the country, and subsequently for similar businesses, their employees and fiscal revenues.

Counterparty Risk RatingsCounterparty Risk Ratings (CRRs) are opinions of the ability of entities to honour the uncollateralised portion of non-debt counterpartyfinancial liabilities (CRR liabilities) and also reflect the expected financial losses in the event such liabilities are not honoured. CRR aredistinct from ratings assigned to senior unsecured debt instruments and from issuer ratings because they reflect that, in a resolution,CRR liabilities might benefit from preferential treatment compared with senior unsecured debt. Examples of CRR liabilities include theuncollateralised portion of payables arising from derivatives transactions and the uncollateralised portion of liabilities under sale andrepurchase agreements.

LGT Bank's CRRs are positioned at Aa1/P-1.

The CRRs, prior to government support, are positioned three notches above the bank's a2 Adjusted BCA, reflecting the extremely lowloss-given-failure from the high volume of instruments that are subordinated to CRR liabilities.

LGT Bank's CRRs benefit from one notch of rating uplift based on government support, in line with our assumptions on deposits andsenior unsecured debt.

Counterparty Risk (CR) AssessmentThe CR Assessment is an opinion of how counterparty obligations are likely to be treated if a bank fails and are distinct from debt anddeposit ratings in that they (1) consider only the risk of default rather than both the likelihood of default and the expected financial losssuffered in the event of default, and (2) apply to counterparty obligations and contractual commitments rather than debt or depositinstruments. The CR Assessment is an opinion of the counterparty risk related to a bank's covered bonds, contractual performanceobligations (servicing), derivatives (for example, swaps), letters of credit, guarantees and liquidity facilities.



LGT Bank's CR Assessment is positioned at Aa1(cr)/P-1(cr).

The CR Assessment, prior to government support, is positioned three notches above the Adjusted BCA of a2, based on the bufferagainst default provided to the senior obligations represented by the CR Assessment by more subordinated instruments, includingjunior deposits and senior unsecured debt.

LGT Bank's CRRs benefit from one notch of rating uplift based on government support, in line with our assumptions on deposits andsenior unsecured debt.

Methodology and scorecardMethodologyThe principal methodology we used in rating LGT Bank was our Banks methodology, published in November 2019.

About Moody's Bank ScorecardOur scorecard is designed to capture, express and explain in summary form our Rating Committee's judgment. When read inconjunction with our research, a fulsome presentation of our judgment is expressed. As a result, the output of our scorecardmay materially differ from that suggested by raw data alone (though it has been calibrated to avoid the frequent need for strongdivergence). The scorecard output and the individual scores are discussed in rating committees and may be adjusted up or down toreflect conditions specific to each rated entity.




Rating methodology and scorecard factors

Exhibit 8

LGT Bank AG

Macro FactorsWeighted Macro Profile Strong + 100%

Factor HistoricRatio

InitialScore

ExpectedTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 0.3% aa1 ←→ aa3 Operational risk Market risk

CapitalTangible Common Equity / Risk Weighted Assets(Basel III - transitional phase-in)

20.3% aa1 ←→ aa2 Risk-weightedcapitalisation

Expected trend

ProfitabilityNet Income / Tangible Assets 0.3% ba2 ←→ ba2 Return on assets Expected trend

Combined Solvency Score aa3 a1LiquidityFunding StructureMarket Funds / Tangible Banking Assets 34.8% ba1 ←→ a2 Extent of market

funding relianceMarket funding quality

Liquid ResourcesLiquid Banking Assets / Tangible Banking Assets 49.3% aa3 ←→ aa3 Asset encumbrance Stock of liquid assets

Combined Liquidity Score baa1 a1Financial Profile a1Qualitative Adjustments Adjustment

Business Diversification 0Opacity and Complexity 0Corporate Behavior -1

Total Qualitative Adjustments -1Sovereign or Affiliate constraint -BCA Scorecard-indicated Outcome - Range a1 - a3Assigned BCA a2Affiliate Support notching 0Adjusted BCA a2

Balance Sheet in-scope(CHF Million)

% in-scope at-failure(CHF Million)

% at-failure

Other liabilities 12,192 35.4% 14,377 41.7%Deposits 18,967 55.1% 17,033 49.4%

Preferred deposits 14,036 40.7% 13,334 38.7%Junior deposits 4,931 14.3% 3,699 10.7%Senior unsecured bank debt 2,257 6.6% 2,007 5.8%Equity 1,033 3.0% 1,033 3.0%Total Tangible Banking Assets 34,450 100.0% 34,450 100.0%



De Jure waterfall De Facto waterfall NotchingDebt ClassInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De Jure De FactoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

AdditionalNotching

PreliminaryRating

Assessment

Counterparty Risk Rating 19.6% 19.6% 19.6% 19.6% 3 3 3 3 0 aa2Counterparty Risk Assessment 19.6% 19.6% 19.6% 19.6% 3 3 3 3 0 aa2 (cr)Deposits 19.6% 3.0% 19.6% 8.8% 2 3 2 2 0 aa3Senior unsecured bank debt 19.6% 3.0% 8.8% 3.0% 2 0 1 1 0 a1Junior senior unsecured bank debt 3.0% 3.0% 3.0% 3.0% -1 -1 -1 -1 0 a3

Instrument Class Loss GivenFailure notching

Additionalnotching

Preliminary RatingAssessment

GovernmentSupport notching

Local CurrencyRating

ForeignCurrency

RatingCounterparty Risk Rating 3 0 aa2 - Aa1Counterparty Risk Assessment 3 0 aa2 (cr) - Aa1(cr)Deposits 2 0 aa3 - Aa2 Aa2Senior unsecured bank debt 1 0 a1 - Aa3 (P)Aa3Junior senior unsecured bank debt -1 0 a3 - A3 (P)A3[1]Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information.Source: Moody’s Investors Service

Ratings

Exhibit 9

Category Moody's RatingLGT BANK AG

Outlook StableCounterparty Risk Rating -Dom Curr Aa1/P-1Bank Deposits Aa2/P-1Baseline Credit Assessment a2Adjusted Baseline Credit Assessment a2Counterparty Risk Assessment Aa1(cr)/P-1(cr)Issuer Rating Aa3Senior Unsecured -Dom Curr Aa3Junior Senior Unsecured -Dom Curr A3Junior Senior Unsecured MTN (P)A3

Source: Moody's Investors Service



Endnotes1 This is referred to as the 'Macro-Adjusted Score' in our Bank Scorecard.

2 The ratings shown are ABN AMRO Bank’s deposit rating and outlook, its senior unsecured debt rating and outlook, and its baseline credit assessment.

3 Includes the negative impact of December equity market declines on AuM, mainly because related fees are booked with a one-month of up to a one-quarter lag

4 Environmental risks can be defined as environmental hazards encompassing the impacts of air pollution, soil/water pollution, water shortages and naturaland man-made hazards (physical risks). Additionally, regulatory or policy risks, like the impact of carbon regulation or other regulatory restrictions,including the related transition risks like policy, legal, technology and market shifts, that could impair the evaluation of assets are an important factor. Inour Environmental risk heatmap, we scored 84 sectors according to their overall exposure to environmental risks

5 The most relevant social risks for banks arise from the way they interact with their customers. Social risks are particularly high in the area of data securityand customer privacy which is partly mitigated by sizeable technology investments and banks’ long track record of handling sensitive client data. Finesand reputational damage due to product misselling or other types of misconduct is a further social risk. Societal trends are also relevant in a number ofareas, such as shifting customer preferences towards digital banking services increasing information technology cost, aging population concerns in severalcountries impacting demand for financial services or socially driven policy agendas that may translate into regulation that affects banks’ revenue base.

6 Corporate governance is a well-established key driver for banks and related risks are typically included in our evaluation of the banks' financial profile.Further factors like specific corporate behaviour, key person risk, insider and related-party risk, strategy and management risk factors and dividend policymay be captured in individual adjustments to the BCA. Governance is highly relevant for LGT, as it is to all players in the banking and wealth managementindustry. Corporate governance weaknesses can lead to a deterioration in a company’s credit quality, while governance strengths can benefit its creditprofile. Governance risks are largely internal rather than externally driven.



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