The CEO of Swiss private bank Vontobel sees environmental, social and governance issues becoming an integral part of the investment process in five years.
Vontobel CEO Zeno Staub Tuesday said he counted new products such as environmental, social and governance bond and equity funds among the successes of the first half of the year.
Staub told a call on the Zurich-based private bank’s first half results that «in five years you won’t have to ask about the sustainability of investments. ESG will become mainstream and an integral part of any investment process.»
«Almost all Vontobel funds take ESG criteria into account and by 2022 we will actively incorporate this into all operational and investment decisions,» he said.
He added that things looked somewhat different with impact investing.
Client Confidence
Staub also said he would include the acquisition of the remaining 40 percent in London-based fixed-income investment boutique as one of the successes over the period.
«Our growth and earnings in the first six months have shown that we have been able to boost clients’ confidence in what we do,» he said, adding that. strong net new inflows, the record high value of assets under management and the strong growth in earnings from both institutional and private clients were all evidence of this.
Staub said Vontobel had made strategic progress in the areas of global banks, ultra-high net worth individuals and ESG.
Dampening Factors
The growth in net new money was 6.6 billion Swiss francs ($7.2 billion), well above expectations. However in each of the previous two quarters it had been 7.4 billion francs.
Staub cited the coronavirus pandemic and low interest rates as dampening factors. Private and institutional investors’ decisions and preferences had diverged considerably.
In the first half of 2020 asset management had had a sharp inflow of new money but in the second half it had been wealth management.
Right Product Range
To do well in asset management, banks had to be able to offer a range of alternative products. «Many banks are reducing the number of companies they do business with; and as a one-trick pony, you might not make the cut any more. In product development, we rely on specialized boutiques to create the relevant products.»
«In asset management, all our competitors have labored under the same difficult conditions during the pandemic,» Staub said.
Vontobel had worked hard to win new customers and the wide range of products had helped, he said, adding that it could do even better on this now there were fewer pandemic-related restrictions.
Cyclical Business
The good result as well as the higher capital and lower debt ratios meant Vontobel would have more leeway. Staub said he wanted to strengthen the bank’s foothold in Asia and invest in technology. The company had been able to increase its market share in Asia significantly, he said, adding that it would be an interesting growth market in the coming years.
Looking ahead, Staub was cautiously optimistic «We are seeing growing demand for professional advice,» he said. Digitization and automation would offer the potential to broaden the range of products available.
However, Staub was anxious to manage expectations. «We haven’t forgotten that we work in a cyclical business,» he said.
