Bank Vontobel attracted more assets in the third quarter and as asset management remained highly profitable, CEO Xeno Staub forecast a solid financial result for the full year 2016.
Assets under management at Zurich-based Vontobel increased to 143.7 billion Swiss francs by the end of the third quarter, boosted by net new money received across the asset and wealth management divisions, the bank said in a statement today.
With this increase, the company was to reverse the trend from the first half, for which it had reported a decline to 140.1 billion in the summer. The outflow then however was mainly attributable to the departure of Rajiv Jain, the star fund manager. Today, Vontobel didn't provide any figures apart from assets under management.
Vescore to Provide Further Boost
Quality Growth, the division where Jain used to work, had another drop in assets in the third quarter, and managed a total of 36.4 billion at the end of September, down from 37 billion three months earlier.
Despite this drop, asset management as a whole managed to increase the money it works with and now has a total of 93.1 billion under management. The acquisition of Raiffeisen's Vescore unit wasn't yet included in the third-quarter figures and will provide a further boost later on.
Acquisitions Part of Strategy
Apart from the acquisition of Vescore, Vontobel also cooperates more closely with Raiffeisen and has already been able to reap the benefits. The asset management received 300 million francs in assets in the first nine months of the year directly attributable to the cooperation with Raiffeisen.
Vontobel said it was committed to achieving organic growth. But acquisitions also remained a part of the strategy, where attractive opportunities presented themselves.
Pleasing Performance by Wealth Management
The acquisition of Vescore may yet hurt profitability at asset management because it still isn't profitable. Vontobel expects the unit to return a profit by 2018 at the latest. The bank is likely to include the costs incurred through the transaction and integration of Vescore in the full-year results 2016.
Vontobel was also positive about the result at wealth management, where net new money growth was within the target range of 3 to 5 percent in the first nine months of the year. The bank had not least a «very pleasing performance» in its home market of Switzerland, which it attributed to the investment in new relationship managers.
Challenging Operating Environment
In financial products, markets remained weak, which the bank was able to compensate for by a higher market share and the entry into new markets.
«All indicators point to us producing another very solid financial result for 2016 despite the adverse environment and the change within the team in the U.S. – a result that signals our strong power to grow,» said Xeno Staub, the CEO of Vontobel, according to the statement.
