Swiss private bank Lombard Odier has seen a fall in net profits for the first half of 2016. However offerings including fintech services are generating strong revenue for the bank. Asia also remains a key growth hope.
The Lombard Odier Group has reported its results for the first half of 2016. Total client assets stood at 223 billion francs, of which assets under management were 156 billion francs.
Consolidated net profit amounted to 61 million francs, which is down 13 percent against the same half in 2015.
Client Assets Broadly Flat
The changes in the values of the dollar and the pound sterling vs the Swiss franc led to a decrease in total client assets since the end of 2015, which was offset to a large extent by the positive contributions of net new money and market performance.
As a result, total client assets stood at 223 billion francs at the end of June 2016. Of this, client assets in the private clients business amounted to 112 billion francs, while asset management clients invested 48 billion francs with Lombard Odier Investment Managers and technology & banking services clients entrusted the Group with an additional 63 billion francs.
Muted Market Conditions Hurt Earnings
The Group’s consolidated operating income decreased by 7 percent from the first half of 2015 to 509 million francs, reflecting the reduced level of client activity in securities transactions and foreign exchange trading. Excluding variations in performance fees, consolidated operating income was broadly flat, down 1 percent.
As a result of the top-line developments, and despite reductions in the cost base, the operating cost/income ratio increased to 83 percent, compared to 80 percent in the first half of 2015. It reflects continued investments in each of the Group’s key business lines: development of investment advisory services in private clients; enhanced investment solutions in asset management; increased IT developments in the area of technology services to allow the bank to constantly improve the services it provides to its clients.
Cooperation in Asia
Asia remains a growth story for Lombard Odier through its offices in Singapore, Hong Kong and Tokyo. The bank has also been penetrating markets such as Thailand, South Korea, Japan, China and more recently in the Philippines as finews.asia reported, by developing suitable financial products to serve the growing list of High Net Worth Individuals (HNWI's) through affiliations with local partners.
«Lombard Odier continued to deliver solid performance throughout a volatile period, the financial performance of the Group is in line with our expectations. It reflects both subdued market conditions and continued investments to maintain a first class client experience. We remain focused on our strategy to build a Group which is increasingly international and diversified between private, asset management and infrastructure clients. The Group’s strong financial strength enables us to continue investing in all our three businesses,» said Patrick Odier, Senior Managing Partner.
