Market Woes Dent Vontobel's AuM; Says Capital Base Strong

Tom Burroughes Group Editor London 31 March 2020

Market Woes Dent Vontobel's AuM; Says Capital Base Strong

The Swiss firm held its AGM yesterday, moving ahead with a bigger stake in an asset management specialist, and guiding shareholders on its capital strength.

Swiss wealth management house Vontobel assured clients and investors of its financial health yesterday, announcing that it intends to retain half of the profits made last year to bolster its capital strength. It reported a dent to its assets under management as of 24 March. 

The Zurich-listed firm held its annual meeting yesterday remotely - rather than in person - because such gatherings are restricted during the COVID-19 pandemic. 

Shareholders approved a 7 per cent rise in dividend to SFr2.25 per share which, when a 35 per cent withholding tax is taken into account, translates into a pay-out ratio of 50 per cent, it said in a statement.

The boardroom directors standing for re-election – Bruno Basler, Dr Maja Baumann, Dr Elisabeth Bourqui, David Cole, Stefan Loacker, Dr Frank Schnewlin, Clara C Streit and Björn Wettergren – were each confirmed in office for a further term by a large majority, Vontobel said in a statement. 

Herbert J Scheidt was re-elected as chairman for another year, also by a large majority. The members of the nomination and compensation committees – Bruno Basler, Dr Elisabeth Bourqui, Clara C Streit and Björn Wettergren – were confirmed in office.

As previously announced, Vontobel is going to boost its majority stake in TwentyFour Asset Management, which is based in London and New York, to 80 per cent from 60 per cent in 2021. This firm specialises in the area of fixed income investments. The acquisition of the remaining participation will be financed from Vontobel’s own funds.

As of 24 March, advised client assets totalled SFr194 billion, a fall of 8 per cent compared with the average advised client assets of SFr212 billion in 2019. The stock market turmoil also overshadowed the positive overall trend in terms of net new money, the firm said. Even so, Vontobel’s report said that the annualised net inflow of SFr5.2 billion exceeded the 4-6 per cent target range. 

Vontobel said it has a “comfortable” capital position with a Common Equity Tier 1 ratio of 13.5 per cent and a Tier 1 capital ratio of 19.9 per cent. Both ratios are above the Swiss regulatory minimum requirements of 7.8 per cent for the CET1 capital ratio and 12 per cent for the Tier 1 capital ratio.

The pandemic has hit Vontobel along with other firms. “As a result of the pandemic, we are experiencing a higher level of uncertainty among clients. This sentiment, combined with increasing caution on the part of investors, is likely to continue over the course of the year,” Staub said. 

In addition, known factors such as geopolitical tensions and low interest rates remain a source of uncertainty. “Irrespective of the market crisis and the difficult operating conditions due to the corona pandemic, we remain committed to our successful strategy as a focused and globally active investment manager. We will continue to make targetted investments in growth – and consequently in employees and technologies – while systematically managing costs. Our new set-up and the new way of working related to it will help us to develop investment opportunities that are tailored to the individual needs of our clients, even in difficult market conditions,” Staub added.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes