Lombard Odier's profit dropped 13 percent last year. The Swiss private bank splashed out in a bid to tap future growth at a time when investors are skittish about investing their cash holdings.

Geneva-based private bank Lombard Odier said net income dropped to 124.5 million Swiss francs last year, down 13 percent from a year earlier.

Profits slid as clients stayed on the sidelines instead of investing, creating a hole where the private bank would normally have booked fees and commissions from client transactions.

Full-year revenue at Lombard Odier dropped 3 percent to 1.04 billion. The bank's results resembled those of larger hometown rival Pictet, which reported a 7 percent drop in profit last month. 

Assets Slip

«Challenging market conditions resulted in subdued client activity and hence lower earnings,» Lombard Odier said in a statement.

The bank's assets rose by 10 billion francs to 233 billion, bolstered by 5.2 billion in net new money. Lombard Odier made no mention of whether it won the fresh funds in asset management, private banking, or a unit with back- and middle-office services that it offers to rivals.

Client assets slipped by 1 billion on the year to 159 billion, meaning market swings on existing assets or the strong Swiss franc ate away at the favorable net new money won by the bank. Total assets of 233 billion francs include those held in custody for other banks, while the smaller number refers to funds managed directly by Lombard Odier.

High Spending

This stood out against high spending: the bank's cost-income ratio spiked to 83 percent, from 80 percent in the prior year. The spending reflects long-term plans like ramping up on strategic technology investments, Lombard Odier said.

The company, which recently named SEB CEO Annika Falkengren as a partner in a bid to rejuvenate its aging top ranks following a family rift, also continued to hire bankers and portfolio managers for its private bank, senior managing partner Patrick Odier said.

The bank told finews.com last month that it has expanded so strongly in Singapore that it will need larger office space. Lombard Odier was hit by a Swiss probe into Uzbek corruption linked to the Karimova family last month.