The Swiss bank called the first-half results “respectable,” with asset and wealth management driving earnings.
In the first six months of 2019 earnings announced on Thursday, Vontobel reported a 1 per cent dip in profits at SFr131.1 million ($132.2 million). The Swiss private bank said that investments were paying off and performance was respectable during the first half given a continued difficult operating environment.
Its asset management business was a key engine delivering a pre-tax profit of SFr86 million, with the Swiss lender also posting strong results from its combined wealth/asset management business, which logged a pre-tax profit of SFr71.4 million, up by 27 per cent for the six months.
New net new monies in asset management grew by 9.6 per cent to SFr186 billion ($189 billion), exceeding a growth target of 4 to 6 per cent. The bank recorded strong inflows primarily through its fixed income business, from London-based subsidiary TwentyFour Asset Management and Vescore, as well as gains from sustainable and thematic investing.
The Zurich-based lender said that its integration of the Notenstein La Roche private bank acquisition in May was largely complete, as was the purchase of the US-based private clients portfolio from Lombard Odier.
Its asset management and wealth management businesses combined accounted for around 85 per cent of the pre-tax profit generated by the divisions. “Sustained growth, as well as the good earnings quality, confirm the merits of Vontobel‘s strategy of clearly positioning itself as a high-conviction asset manager," the group said.
The cost-income ratio stood at 75.8 per cent for the half-year and returns on equity at 14.3 per cent. Vontobel said that it has set a target to bring down the cost-income ratio to below 72 per cent and return on equity above 14 per cent by 2020.
Advised client assets grew to SFr212.9 billion for the period, up from SFr192.6 billion at the end of 2018. Net new monies totalled SFr5.3 billion, largely driven by “good investment solutions” offered by asset and wealth management.