Zurich-based private bank Vontobel posted a rise in profits in the first half of the year, driven by high net inflows, with demand from digital customers playing a prominent role.
Swiss private bank Vontobel’s assets under management grew 11 percent from the end of 2020 to hit a record high of 274.5 billion Swiss francs ($299.2 billion) as of June 30, the company said in a results statement Tuesday.
Net new money growth of an annualized 6.0 percent or 6.6 billion francs also contributed to this, which was at the upper end of the ambitious target corridor of 4-6 percent in the first half. Even though this was almost twice analysts’ expectations of 3.1 billion francs, it was still less than the 7.4 billion francs posted in each of the previous two half years.
Economies of scale
The cost-income ratio fell to 69.6 from 74.7 percent a year earlier due to consistently high investment in modern technology and processes, enabling economies of scale in all areas.
Digital Demand Surges
In particular, there was extraordinary demand from digital investing clients for structured products as well as an increase in institutional and private assets under management. Revenues from digital investors grew 86 percent on the year to 165.5 million francs.
Revenues, Profit Grow
Asset management revenues rose 17 percent to 290.5 million francs, platforms and services revenues increased 32 percent to 96.9 million francs, and wealth management revenues were up 9 percent at 235.0 million francs. There was also demand for crypto products.
New customers were acquired in Switzerland, Germany and Hong Kong in particular, the bank said.
All this led to a 48-percent rise on the year in first-half net profit to 191.8 million francs.
«The result underlines Vontobel’s good strategic positioning as a highly specialized, digitally competent, internationally active investment house for institutional and wealthy private clients… We firmly believe that, as an investment house, we are ideally positioned in an environment where investing is the new saving», CEO Zeno Staub said in the statement.
Looking ahead, the management was cautiously optimistic. However, there might not be a linear continuation of the first-half results — depending on market developments, Staub added in the statement.