Vontobel Group records impressive inflow of new money and achieves solid profitability
The financial markets remained extremely volatile in the first half of 2011. "Against this challenging backdrop, our net profit of CHF 78.1 mn 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," stated Dr Zeno Staub, CEO of the Vontobel Group.
Increased business volumes – negative foreign exchange impacts – stable cost base
The Vontobel Group produced operating income of CHF 417.2 mn in the first six months of 2011. The positive effects of the increase in business volumes were partly offset by a CHF 25 mn reduction in income due to foreign exchange impacts. Vontobel experienced very low levels of client activity but recorded a 3% rise in the average asset base as well as higher income from Brokerage. Trading income, which is mainly driven by the structured products business, totalled CHF 151.0 mn and was thus 6% higher than the strong result in the first half of 2010. At CHF 327.3 mn, the cost base remained in line with the previous year.
Impressive inflow of new money confirms high level of client trust
With CHF 3.4 bn of net new money – compared to CHF 3.0 bn in the first half of 2010 – the Vontobel Group exceeded the level of inflows recorded in the period prior to the financial crisis. This pleasing result reflects significant contributions from all three business units. In Private Banking, new assets were acquired primarily in German-speaking Europe, as well as in Central and Eastern Europe. Asset Management recorded excellent inflows in the area of emerging market strategies in particular. In total, the Vontobel Group currently holds CHF 129.2 bn of client assets. At CHF 78.7 bn, assets under management were virtually unchanged from 31 December 2010.
Strong capital position – even in view of stricter regulations
The stricter capital requirements prescribed by the Swiss Financial Market Supervisory Authority FINMA entered into force on 1 July 2011. The Vontobel Group is now subject to a minimum capital requirement – defined as eligible capital as a percentage of risk-weighted positions – of 12%. With a FINMA total capital ratio of 20.1% and a BIS tier 1 capital ratio of 24.9%, the Vontobel Group is in a very comfortable position to pursue its growth path by expanding its business organically and through acquisitions. It already meets the stricter capital requirements that apply under Basel III. Shareholders’ equity totalled CHF 1.5 bn as of 30 June 2011 and was thus unchanged from 31 December 2010. The Group generated a pleasing return on equity of 10.2%.
Clear strategy forms the basis for mid-term Group targets
"The Vontobel Group's independence – underpinned by our stable family shareholder base – and our strong capital position will remain the cornerstones of our business strategy in the future. Our approach also centres on our specific expertise in the areas of advisory, investing and product development. This strategy, which focuses on financial solidity and continuity, is proving effective – especially in periods of turmoil and against the backdrop of ongoing crises," stated Herbert J. Scheidt, Chairman of the Board of Directors. The Group wants to grow its income to over CHF 1 bn and to hold client assets of over CHF 175 bn by 2014. In terms of operating efficiency, Vontobel aims to achieve a cost/income ratio of less than 75%. At the same time, it wants to generate a sustainable return on equity of over 10%.
The debt crisis remains a source of major uncertainty that is eroding the confidence of investors. Vontobel therefore anticipates that the coming months will prove challenging for its business. This is demonstrated by the exceptional volatility in the global equity and foreign exchange markets in recent days. This led to extreme fluctuations in the value of client portfolios and portfolios of pledged securities, which may be reflected in the income statement in the second half of 2011. However, Vontobel's high level of financial solidity combined with its integrated business model provide it with an excellent long-term basis to meet its ambitious targets for 2014.