In the past six months, Lombard Odier has invested heavily in staff and offerings. Senior Managing Partner Hubert Keller tells finews.com when the Credit Suisse bankers who recently joined the Geneva-based private bank will start to pay off.
Operationally, the business of Lombard Odier in the past half year looks unspectacular. As the Geneva-based private bank reported on Thursday, net profit remained at the previous year's level of 135 million francs, with a slightly higher operating income of 704 million francs.
Future Basis for Returns
Private banking (wealth management) and fund business (asset management) volumes were also stable, with assets under management up 4 percent. The larger part of the increase to 198 billion Swiss francs ($225.1 billion) compared with last December was attributable to stock market performance. At the end of June, the Group's total client assets amounted to 308 billion francs.
The cost base was higher in the first half of the year, Hubert Keller commented on the results to finews.com, and was reflected in the profit, the institution's senior managing partner said. Unlike its competitors, Lombard Odier takes a very long-term view when it comes to investments, he said, to build a foundation for future returns, explained the «primus inter pares» of the Geneva-based institution.
Coup with Serge Fehr
In recent months, Lombard Odier's hiring of former Credit Suisse bankers made headlines, and the signing of a former Credit Suisse Switzerland manager, Serge Fehr, is seen as a coup.
The group plans on hiring between 30 and 50 client advisors in wealth management annually, Keller added, and expects to reach the upper end of the target range this year. The share of recruited former Credit Suisse bankers will account for less than half of new hires. «We've hired Credit Suisse talent in the past,» Keller says and it's a brand that the industry has been happy to draw on.
Pooling Expertise
Typically it takes up to a year and a half before the new relationship managers can transfer their clients' assets to Lombard Odier.
Lombard Odier is increasing its staff in Asset Management, with a focus on a joint venture Holistiq, which specializes in sustainable investments. According to Keller, Holistiq will run as a separate division of Lombard Odier Investment Managers (LOIM), with all sustainability expertise combined on the platform in the future. Holistiq employs 110 sustainability experts. In total, the bank has nearly 2,800 employees worldwide.
«Let's not get carried away»
The fact that asset growth in sustainable financial products in the Swiss financial markets has experienced a damper and that «sustainability» has come under political fire, particularly in the US, doesn't faze Keller. «Sustainability, as we understand it, stands for better returns. As long as we deliver on that promise, we have the customers behind us,» says Keller.
Lombard Odier is well-positioned in companies that stand to benefit greatly from the transformation to a climate-friendly economy thanks to their business model and not mere pledges. «We're not going to be sidetracked,» Keller says.
