Bank Vontobel's profits slid in the first half, as growth from its traditionally fast-growing asset management arm sputtered and overall costs climbed.
The Zurich-based bank's first-half profit fell 4 percent to 101.5 million Swiss francs, Vontobel said in a statement on Thursday. The Swiss bank's profit was collapsed more than 50 percent on the six months immediately preceding.
Vontobel termed the result «solid,» highlighting one-time factors hitting the results such as a 7 million franc dividend from a stake in Helvetia falling away and 4.6 million francs to integrate asset manager Vescore. The bank also invested considerably in growth markets, in technology, staffing and marketing.
Cost Ratio Slipped
The bank's spending rose by 8 percent to 395 million francs, which resulted in a worsening of its cost-income ratio to 76.1 percent. Part of the reason? Vontobel's headcount climbed to 1,643 staff – 150 more than at year-end.
Vontobel's asset management unit was the decisive factor weighing on Vontobel's results. Normally a reliable driver of profits, the Axel Schwarzer-led unit's profit slid nearly 20 percent to 69.5 million.
New 2020 Target
By contrast, investment banking's profits surged nearly 70 percent to 62.8 million. Vontobel's smallest unit, private banking, recorded a modest 2 percent rise in pre-tax profit.
Managed assets rose 6 percent to 146.5 million francs, but the bank posted inflows of just 300 million francs in the six months. The bank said it will disclose new targets for 2020 at an August 31 investor day.
