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July 28, 2020

Vontobel increases pre-tax profit in H1 2020 despite pandemic

By Patrick Brusnahan

Swizerland-based Vontobel has recorded a 4% rise to pre-tax profit year-on-year (YOY), rising from CHF149.6m ($162m) to CHF156.1m in H1 2020.

However, profit after tax dropped 1% YOY from CHF131.1m to CHF129.2m.

This was attributed to a 46% increase in tax expense YOY and not being able to benefit from deferred tax assets.

In H1 2020, more than 80% of Vontobel business was generated through advisory and wealth and asset management services. The asset management arm recorded a 4% increase in operating income while wealth management saw income increase by 2% to CHF215.5m from CHF210.8m.

Wealth management also underwent a period of expansion with locations such as Zurich, Basel, Chur, Geneva and Hamburg boosted. Furthermore, the bank established a new advisory office in Milan.

Vontobel has CHF32.3bn of sustainable assets under management (AuM) as of June 30 2020. Since 2013, it has grown this base by 36% each year. In H1 2020, it attract CHF2.8bn in net new money.

“2020 has so far been an extraordinary year. Our unlimited client focus and our collaborative way of working, which are also reflected in our new organisational set-up, were of key importance in enabling us to successfully navigate the challenging first six months of the year,” stated Zeno Staub, CEO of Vontobel.

“During the market crisis, our clients were able to place their trust in our stable investment processes, which have proved effective over many years, and in the broad expertise of our around 300 investment specialists around the world. This is also demonstrated by the numerous awards received by Vontobel in recent months. Especially in markets that are not moving in the same direction, the long-term client benefits of active investment management – which makes targeted use of opportunities rather than investing in the average, like with passively managed products – are clearly visible,” he added.

Vontobel targets after H1 2020

“Despite the difficult environment, we remain confident about the future development of Vontobel. With our business model as a pure-play investment manager, we are well positioned if a recession occurs. We don’t engage in business with corporate clients and we adopt a very conservative approach to financing for private clients. Against this backdrop, we don’t see any need for valuation adjustments. We are focusing on recurring income from our client business with stable margins. We remain committed to our targets for the current year and we want to continue to deliver growth in this challenging market environment, as demonstrated by the ambitious targets that we will now pursue in the period up to 2022.

“Vontobel wants to continue to grow by 4–6% annually in the future. To achieve this, we will invest further in new opportunities and smartly manage our costs. Finally, the record-low interest rates that will continue to confront investors around the world for the foreseeable future show that investing is the new form of saving. We view these developments as confirmation of the validity of our strategy as an active investment manager,” stated Zeno Staub.

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