The Geneva wealth manager's profit surged by nearly two-thirds on the year. Partner Patrick Odier told finews.com that the Swiss bank's closeness to clients and investment acumen paid off.
Lombard Odier's profit surged more than 65 percent on the year to 119 million Swiss francs ($131 million) in the first six months, it said in a statement on Thursday. The last time the private wealth boutique's profits were at that level was 2018, when it benefited from a major real estate disposal.
The bank displayed strength during the onset of the coronavirus crisis: revenue spiked 16 percent to 674 million francs on the bank of more client activity. Since the bank, like rival LGT which also reported bumper results on Thursday, kept a lid on costs, profits surged.
Client Trust
Patrick Odier, the bank's senior managing partner, was cautious in an interview with finews.com. «The first half of 2020 was marked with a high degree of complexity, high volatility, and high risks,» he said. The Swiss banker, who hands over to Hubert Keller in 16 months, credited Lombard Odier with specific characteristics and performance during the crisis.
«The continuing solidity of the bank and investments in our advisory expertise paid off: clients trusted us during the Covid-19 crisis,» he noted. «Instead of simply respond to market turmoil, they allowed themselves to be led by us.» He highlighted an increasing shift to sustainability within portfolios, as well as focusing on alternative investments.
Crash Hits Assets
Odier also credited the bank's technology strategy for some of its first-half success: Lombard Odier has in recent years made its proprietary system accessible to clients via a «cockpit» of macroeconomic data – most recently health statistics, Odier said.
Nevertheless, the privately-held wealth manager didn't escape the corona crisis unscathed: assets edged three percent lower to 290 billion francs, due to drops in financial market values. It won 6 billion francs in net new money, which corresponds to a rate of two percent growth on its existing assets. Two-thirds came from private clients, and the remainder from institutions.
Zurich Growth
He said Zurich, where ex-Credit-Suisse-Banker Andreas Arni took over in December after Dominique Wohnlich defected for Goldman Sachs, was responsible for «a large part» of the fresh money. «This confirms that we should continue to investment in strategically expanding,» Odier said.
The 65-year-old said Lombard Odier doesn't see a need to tweak its strategy, which is based on specialized advice for the wealthy with a focus on sustainability, alongside a technology arm which it continues to invest in. The bank appears likely to boost its offerings in newer areas like crypto, after inking a partnership for custody of digital assets with Taurus, a Genevan start-up.
Cautiously Optimistic
Custody for cryptocurrencies is emerging as the gateway for traditional private banks to build up a digital asset portfolio. Odier was reticent on the subject: «Blockchain and digital assets play an increasing role in revolutionizing numerous aspects of banking services for our clients. That's why we decided in favor of Taurus, whose founders stand out for their expertise. The investment allows us to be at the forefront of technological developments in this area,» he said.
Odier was cautiously optimistic about the wealth manager's chances for posting record profits in the back end of 2020 as well. He noted that client activity in July and August had eased off levels last seen in the rough-and-tumble months of March and April.
