Autumn media discussion in the French-speaking region of Switzerland: Zeno Staub comments on the performance of the business over the last nine months

 

Vontobel reports stable client assets in the third quarter of 2013 –continued increase in profitability in Private Banking – sustained earning power in Asset Management – Investment Banking confirms technology leadership in platform business for structured products

 

At the autumn media discussion that will be held today in the French-speaking region of Switzerland, the Vontobel CEO Zeno Staub will comment on the performance of the business over the last nine months:

 

- As of 30 September 2013, a total of CHF 160.4 billion of client assets were entrusted to Vontobel on a Group-wide basis. Despite strong market and foreign exchange volatility, Vontobel's asset base thus remained at the high level reported at the end of June 2013.

- The Asset Management business unit displayed sustained strong earning power – gross margin unchanged at 52 basis points.

 

- The measures initiated in Private Banking to enhance profitability are proving effective – gradual expansion of the business with US clients.

 

- Technology leadership in the platform business for structured products – potential of multi-issuer platform deritrade® attracts renowned third-party issuers.

 

- Continued growth of the business with external asset managers (EAMs) – asset base exceeds CHF 6 billion.

 

The recent debate surrounding the US budget and deficit – combined with very volatile developments in the emerging markets – impacted the financial markets and stock market volumes in the third quarter. This, in turn, affected income levels at Vontobel during the period under review. "We experienced a slowdown in the inflow of new money, as we had anticipated. At the same time, the systematic implementation of our previously defined business strategy proved to be the right course of action. I am convinced that we are thus creating sustained added value for our clients and shareholders," states the Vontobel CEO Zeno Staub with regard to the first nine months of the financial year.

 

Positive trend in Private Banking continues – expansion of US private clients business

The advances in profitability recorded in the Private Banking business unit in the first half of 2013 continued during the third quarter. The decision to focus the business on clearly selected client segments in core markets is bearing fruit in terms of both costs and income. Vontobel will build on these foundations in order to make targeted investments in the organic growth of the business. It will do so based on the knowledge that the current net inflow of new money is being influenced by the transformation of the finance industry and of the business unit. In this context, Vontobel is also gradually expanding its business with US private clients. Vontobel Swiss Wealth Advisors (VSWA), which was established by Vontobel in 2010 especially for this purpose, opened new offices in Dallas and Geneva in recent weeks as part of the expansion process.

 

Slowdown in net inflow of new money in Asset Management as anticipated

The new money acquired by Asset Management in the first half of 2013 totalled CHF 7.2 bn –reaching a record level. In view of the level of capacity utilization in its most successful product line – Global Emerging Markets – Vontobel had already indicated in the first half of the year that a slowdown in the inflow of new money was to be expected – as now witnessed in the third quarter. However, the Quality Growth product line based in New York reported USD 44 bn of client assets at the end of September 2013, representing a slight increase in the asset base compared to the end of June 2013. Another highlight was the development of the Fixed Income and Multi Asset Class boutiques domiciled in Zurich following Vontobel's systematic investments in their expansion. Viewed overall, the pleasing income and profit trends in Asset Management therefore continued. At the same time, the business unit was able to maintain its healthy gross margin of 52 basis points.

 

Challenges in the structured products business – Investment Banking confirms technology leadership in platform business

The structured products business is still confronted with low volumes – especially in the Swiss market. This was particularly the case in the third quarter. Vontobel has an excellent positioning as an issuer and is continuing to move ahead with its international growth plans and to strengthen its technology leadership in the platform business. It is therefore systematically and successfully investing in its multi-issuer platform deritrade® to drive its expansion and increase its market penetration. More than 4,000 users worldwide already take advantage of this proven multi-issuer platform to create value for their clients. This considerable market potential has also impressed other renowned companies in the structured products business. For example, Morgan Stanley recently became the latest major player in the sector – after SociétéGénerale – to start using deritrade®.

 

EAM business continues on its growth path

Positive developments can also be reported in the business with external asset managers (EAMs). Vontobel's EAM Desk is experiencing continued and significant growth, with the volume of assets under management in this area now totalling over CHF 6 billion. Against this backdrop, the range of services available to this important client segment is continuously being optimized. External asset managers expect their partner banks to provide efficient support – especially in the areas of product information, research and administration. Vontobel is therefore combining all the relevant data on a central Internet-based platform that is available exclusively to EAMs.

 

Implementation of cross-border focus on track

As a result of the focusing of the cross-border business that is currently underway and the subsequent discontinuation of local private banking activities in Austria, Italy and Dubai, further costs of around CHF 8 mn will be incurred in the second half of 2013 – as previously announced – and will be booked in the Corporate Center. This will mark the completion of Vontobel's measures to adapt its geographical footprint in Private Banking. A further negative impact relates to the continued low interest rate environment, which limited treasury income in the Corporate Center.

 

Contacts

Media Relations:	Reto Giudicetti	+41 (0)58 283 61 63
Investor Relations:	Susanne Borer	+41 (0)58 283 73 29

 

Key dates

2013 results:	7 February 2014
General Meeting of Shareholders 2014:	1 April 2014