Vontobel reports full year 2023 net profit of CHF 214.7 million, 18.7 percent CET1
Published on 08.02.2024
- Profit before tax CHF 262.7 million supported by strong momentum in Wealth Management.
- Assets under management stable at CHF 206.8 billion, supported by inflows from private clients and market performance.
- Strong capital position with CET1 of 18.7 percent offers strategic flexibility and allows for consistent returns to shareholders. The Board of Directors proposes an unchanged dividend of CHF 3.00 per share at its 2024 Annual General Meeting.
- Taking additional efficiency measures to reduce annual costs by CHF 100 million while investing in long-term growth initiatives.
- Acquisition of a significant minority stake in Ancala marks a milestone in delivering on the firm’s strategy to enter private markets. Clients will benefit from attractive investment opportunities with strong long-term growth potential in the private infrastructure market.
- Driving client centricity, Vontobel is organizing its distribution along two client segments: Private Clients and Institutional Clients. Both will benefit from all its institutional-caliber investment products and services.
Vontobel delivered solid full-year 2023 results in a challenging market environment, particularly for active asset managers. Profit before tax was CHF 262.7 million, down 2 percent year-on-year (YoY). Operating income was CHF 1,305 million, up 2 percent driven by stronger revenues in Wealth Management. Cost/income ratio was at 79.5 percent, up 1.1 percentage points, due to additional investment in the firm’s Wealth Management business. CET1 ratio was at 18.7 percent, up 2.0 percentage points. Net profit attributable to shareholders was CHF 214.7 million, down 7 percent YoY.
Co-CEO Christel Rendu de Lint says: “In 2023, Vontobel achieved a solid set of results against a mixed market backdrop, which caused clients to remain on the sidelines. We begin 2024 with a clear understanding of the way forward and a fully aligned leadership team. We are focused on achieving our long-term financial goals and continuing to deliver for our clients, employees and shareholders.”
Co-CEO Georg Schubiger says: “Throughout the year, we remained close to our clients, guiding them with advice and execution amidst market uncertainties. We remain focused on ensuring the best possible interaction with our clients by further sharpening and accelerating our organization. This includes the firm-wide integration of Digital Investing and redefining our distribution strategy towards two client segments: private clients and institutional clients.”
Business performance by Client Unit
Operating income in Wealth Management rose by 16 percent to CHF 746.9 million in 2023. Asset Management contributed CHF 384.1 million. Digital Investing posted an operating income of CHF 154.3 million on slightly lower client transactional activity.
Assets under management and net new money results in line with negative industry flows
The firm’s assets under management increased by 1 percent to CHF 206.8 billion, mainly driven by the market recovery in the fourth quarter. Vontobel posted net new money of -1.4 bn1.
While the market environment in 2023 was more positive than the year before, continued uncertainty about further rate hikes by central banks, combined with sticky inflation, meant that many clients still retained a cautious approach. As a result, industry flow trends remained negative but moderately recovered over the course of the year.
Flows in Asset Management were not immune to these developments. Despite an improvement compared to 2022, total assets under management fell by 4 percent to CHF 103.3 billion.
In Wealth Management, Vontobel recorded positive net new money of CHF 5.3 billion1 reflecting strong client momentum. Total assets under management increased to CHF 97.4 billion, up 5 percent YoY.
Taking additional measures to reduce annual costs while investing in long-term growth initiatives
The cost/income ratio was 79.5 percent, up 1.1 percentage points YoY, driven by investments in growth initiatives in Wealth Management and above the firm’s target of 72 percent. Given the persistent uncertainty in the markets and high cost/income ratio, Vontobel is pursuing an additional initiative to reduce overall costs by CHF 100 million. Vontobel continues to take a balanced view on key investments that support long-term growth but will also aim to take measures to structurally reduce costs over the coming years.
Solid capital base, strong balance sheet
Vontobel has a strong capital position and a highly capital accretive business model. The firm’s capital base remains well above its target of a 12 percent CET1 ratio and a 16 percent total capital ratio. At the end of 2023, the CET1 capital ratio was 18.7 percent. The Tier 1 capital ratio amounted to 23.8 percent.
On September 29, 2023, Vontobel successfully placed new Additional Tier 1 bonds (AT1 bonds) with a total nominal value of USD 400 million. The outstanding AT1 bond from 2018 was repaid at the end of October 2023. The placement of the new AT1 bonds demonstrates the strength of Vontobel’s balance sheet and confidence in the firm as a long-term partner.
The next step towards One Vontobel
In 2020, Vontobel already took its first decisive steps to transform into an investment-led, client-centric firm.
Committed to the One Vontobel principle, the firm is taking this vision even further by organizing its three Client Units - Asset Management, Wealth Management and Digital Investing - into two client segments: Private Clients and Institutional Clients. Both benefit from institutional-caliber investment products and services. With this step, Vontobel becomes even more efficient and focused on serving its clients.
While it is Vontobel’s foremost priority to always maintain a robust capital position to execute its long-term strategy, the firm remains committed to attractive shareholder returns. Consequently, the Board of Directors will propose an unchanged dividend of CHF 3.00 per share at the Annual General Meeting on April 9, 2024.
1 Adjusted for outflows related to the firm’s strategic decisions to focus on a strict set of developed markets.
At Vontobel, we actively shape the future. We create and pursue opportunities with determination. We master what we do – and we only do what we master. This is how we get our clients ahead. As a globally active investment manager with Swiss roots, we specialize in wealth management, active asset management and investment solutions. We harness the power of technology to deliver a high-quality, individual client experience and to deploy our investment expertise across multiple platforms and ecosystems. We empower our employees to take ownership of their work and bring opportunities to life. We do so based on the conviction that successful investing begins with the assumption of personal responsibility. We continuously scrutinize our achievements as we strive to exceed the expectations of our clients. The registered shares of the Vontobel Holding AG are listed on the SIX Swiss Exchange. The Vontobel families' close ties to the company guarantee our entrepreneurial independence. We consider the resulting freedom as an obligation to also assume our social responsibility. As of December 31, 2023, Vontobel held CHF 264.9 billion of total client assets. Around the world and in our home market, we serve our clients from 27 locations.
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