Print this article

Vontobel Holds Steady, Shrugs Off Swiss Franc Impact With Solid Earnings

Tom Burroughes

10 August 2011

Like many of its Swiss peers, Vontobel Group, the private bank, said the rise in the Swiss franc hit earnings in the first half of 2011, reducing its net profit slightly to SFr78.1 million (around $127 million) from SFr78.8 million a year ago.

The first-half results included a SFr25 million cut in operating income caused by the Swiss franc’s movements, suggesting a strong underlying result for the bank once the forex effect is removed, Vontobel said in a statement today.

Zurich-headquartered Vontobel acquired SFr3.4 billion of new money in the first half of 2011, compared to SFr3.0 billion a year ago. This corresponds to annualised growth of 8.7 per cent; total assets under management stood at SFr129.2 billion.

The Swiss bank said it had an above-average BIS Tier 1 capital ratio of 24.9 per cent.

“Against this challenging backdrop, our net profit of SFr78.1 million for the first six months of 2011 can be described as a solid result. Vontobel anticipated the changes in the operating environment in good time and has adopted a sustainable business model, thus positioning itself for the future. Our pleasing inflow of new money is a reflection of the effectiveness of this approach," said Dr Zeno Staub, chief executive of the Vontobel Group.

Results were driven by “significant contributions from all three business units”, it said. In private banking, new assets were acquired primarily in German-speaking Europe, as well as in Central and Eastern Europe.

Vontobel said it intends to reach a cost/income ratio of less than 75 per cent and generate a “sustainable return on equity of over 10 per cent”. Based on total operating income and operating expenses, the bank had a cost/income ratio of more than 80 per cent at the end of June.