The Swiss bank is feeling the market ructions induced by the pandemic. It is holding to a wide-ranging reorganization of its structure – and expanding.
Vontobel had been on track to fulfil its 2020 targets when the coronavirus pandemic broke out, CEO Zeno Staub told the Swiss bank's shareholders on Monday. «We were very satisfied with the new business generated with our existing and new clients as well as the development of profitability,» he noted.
The outbreak, the drop in oil prices, and other market swings have changed all that: «The record fall in prices on all markets and the renewed strengthening of the Swiss franc led to a lower valuation of assets under management,» said Staub, who in May begins his tenth year at the helm of the family-controlled wealth manager.
Lower Assets
Managed assets stood at 194 billion Swiss francs ($203 billion) as of last week, which is eight percent lower than the 212 billion franc average last year. The volatility in financial markets have dampened Vontobel's intake of fresh money, Staub said.
Thus far this year, the bank won 5.2 billion francs in new money. «As a result of the pandemic, we are experiencing a higher level of uncertainty among clients. This sentiment, combined with increasing caution on the part of investors, is likely to continue over the course of the year,» Staub cautioned.
Dividend Lift
The Zurich-based lender said it will continue on its plan to restructure itself as an investment house, a move flagged in December. On Monday, Vontobel shareholders confirmed the bank's proposal for a seven percent lift in annual payout to 2.25 francs per share for 2019.
Vontobel is also bulking up: it said it will boost its share of London-based fixed income boutique Twentyfour to 80 percent by next year, from currently 60 percent. The bank said it will finance this from its own funds.
