As a low-tax microstate situated in the Alps between Austria and Switzerland, Liechtenstein’s financial services sector focuses on low-risk lending to wealthy customers, which helps maintain high asset quality and limit credit losses. Many private banks focused on wealth management services are located in the principality.
Despite the Covid-19 pandemic, leading banks’ holdings of Tier 1 capital rose during 2020. LGT Group, the largest bank in the country by both assets and Tier 1 capital, saw its holdings of Tier 1 jump 20.5% year-on-year to reach $5bn in 2020 from $4.1bn in 2019, according to The Banker Database. The bank, which is owned by the royal family, also saw its holdings of Tier 1 capital rise 18.8% between 2018 and 2019.