Press release concerning Vontobel’s 2013 results

 

Vontobel attracts record inflow of new money of CHF 9.1 billion – significant rise in profit in Asset Management (+37%) and Private Banking (+56%) – implementation of cross-border strategy on track – increased dividend of CHF 1.30 confirms sustained profitability

 

- In the financial year 2013, Vontobel generated a net profit of CHF 122.3 million, in line with the previous year. This represents a very respectable result – especially since it was impacted by significant one-off costs of CHF 20.7 million relating to the adjustment of the cross-border business model, the tax agreement with the UK and the measures concerning the bank’s participation in the US Program.

 

- The record net inflow of new money of CHF 9.1 billion – reflecting broad-based inflows across the Group – confirms Vontobel’s competitiveness, which is largely driven by its proven expertise in the areas of investment and risk, as well as its rigorous client focus. In addition to Asset Management, Private Banking and the EAM business also made significant contributions to growth. Total client assets amounted to CHF 163.1 billion as of 31 December 2013, corresponding to an increase of 9%.

 

- With Asset Management and Private Banking accounting for 74% of profit, Vontobel has highlighted its strong market position as a successful active asset manager.

 

- The multi issuer platform deritrade® has established its technological leadership as a marketplace for structured products.

 

- Consolidated shareholders’ equity increased by a further 5% to CHF 1.63 billion as of the end of 2013. Vontobel’s capital position remains strong with a BIS tier 1 capital ratio of 25.5%.

 

- The Board of Directors proposes an 8% increase in the dividend to CHF 1.30 to the General Meeting of Shareholders of Vontobel Holding AG.

While the economic recovery in developed nations took shape – albeit to different degrees – in 2013, the emerging markets in Asia, in particular, saw their previously very strong growth rates weaken. As a result, the equity indices in these regions experienced some setbacks, while equity markets in Europe, the US and Japan reached new highs. At the same time, the finance industry is coming under sustained regulatory pressure – compelling financial institutions to develop viable business models for the future. “We are convinced that the systematic implementation of our business strategy represents the right way forward for Vontobel. The challenge we face is to strike the right balance between implementing growth initiatives and exercising cost discipline – both of which we achieved successfully in 2013,” said Vontobel CEO Zeno Staub.

 

Strong income growth due to significant increase in asset base

Assets under management increased by an impressive 17% on average year-on-year. Reflecting this significantly higher asset base – combined with an improved margin and market share gains – net commission income rose by CHF 101.2 mn to CHF 596.3 mn (+20%). This compares to a volume-driven decline of 5% in trading income – which is mainly influenced by the issuing, hedging and market making of structured products – to CHF 198.9 mn. The net result was a 10% increase in operating income. Operating expense rose by 11% in 2013 – almost at the same rate as income – to CHF 695.9 mn. This item includes one-off costs of CHF 20.7 mn in connection with the implementation of cross-border activities in Private Banking, as well as the tax agreement with the UK and the bank’s participation in the US Program. The adjusted cost/income ratio rose marginally from 78% to 79%.

 

Record inflow of new money

With a net inflow of new money totalling CHF 9.1 bn, Vontobel achieved a new record in the financial year 2013. The growth in new money corresponds to 9.2% of the asset base. It should be noted in particular that all business units – especially Asset Management – attracted substantial new money. The major proportion of the inflow originated once again from Asset Management’s institutional clients who invest globally. In addition to the successful Quality Growth boutique in New York, the boutiques domiciled in Zurich also attracted higher inflows of new money. Private Banking also significantly strengthened its performance in the area of asset gathering. The same applies to the EAM Desk within Investment Banking that serves external asset managers: it once again achieved growth of over 30%. Benefiting from positive performance effects, Vontobel therefore grew its assets under management across the Group by 11% to almost CHF 110 bn. This continued pleasing performance demonstrates the high level of trust that clients place in Vontobel’s proven investment and advisory expertise.

 

Market leadership in the platform business with structured products

Vontobel has been investing in its own future-oriented multi issuer platform deritrade® in order to address client needs relating to price transparency, flexibility and process efficiency. In doing so, it is not only anticipating future developments in the derivatives business but is also taking account of regulatory requirements, as prescribed in the new Markets in Financial Instruments Directive (MiFID II), which will soon enter into effect throughout Europe. Overall, income and profit in Investment Banking declined, reflecting the subdued demand for structured products among investors in Switzerland. Vontobel was, nevertheless, able to further expand its strong market position in Switzerland, where it ranks third, as well as in Germany, where it now ranks seventh.

 

Increased dividend confirms capital strength and profitability

The Board of Directors proposes an 8% increase in the dividend to CHF 1.30 to the General Meeting of Shareholders of 1 April 2014. “This proposal underscores the Board of Directors’ confidence in Vontobel’s sustained profitability and our forward-looking strategy,” stated Herbert J. Scheidt, Chairman of the Board of Directors, who also highlighted Vontobel’s very strong capital position. “We can see today that we were right to consistently focus our business practices on value-based principles, given that we have no fines or provisions relating to misconduct impacting our balance sheet.”

 

Outlook for 2014

At present, there are signs of an increasing convergence or ‘synchronization’ of growth in the world’s different economic regions. Although attention is no longer fully focused on the sovereign debt problem, the regulatory pressure on the finance industry is likely to persist – especially in Switzerland. Vontobel anticipated these developments and is on the right track; its strategic direction is proving effective. In Private Banking, it is using its enhanced profitability to achieve targeted growth. It intends to further underpin these efforts through the selective hiring of experienced relationship managers. In Asset Management, Vontobel is continuing to focus on the quality of investment performance and on the diversification of product lines within the framework of its multi-boutique concept. In Investment Banking, Vontobel is planning to roll out deritrade® internationally and to further expand the EAM Desk.

 

The detailed documents relating to the 2013 results (presentation, press release, Annual Report) are available online here.

 

Contacts

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

 

Key dates

General Meeting of Shareholders:	1 April 2014
First-half results 2014:	30 July 2014
Ex-dividend date:	3 April 2014
Record date:	7 April 2014
Dividend payment date:	8 April 2014

 

Presentation of Vontobel’s 2013 results

 

Results presentation for the media and analysts in German

Date and time:	7 February, 9.00 a.m. (CET)
Location:	Vontobel head office, Gotthardstrasse 43, Zurich
Speakers:	Dr. Zeno Staub, CEO of Vontobel Dr. Martin Sieg, CFO of Vontobel

 

Telephone conference for analysts in English

Date and time:	7 February, 2.00 p.m. (CET)
Speakers:	Dr. Zeno Staub, CEO of Vontobel Dr. Martin Sieg, CFO of Vontobel

 

Please call one of the following telephone numbers to listen to the presentation and to take part in the question and answer session:

+41 (0)58 310 50 00	Continental Europe
+44 (0)203 059 58 62	UK
+1 (1)631 570 56 13	US

 

Please dial in 10 minutes before the start of the presentation and ask for ‘Vontobel results 2013’.