Vontobel, the Zurich-based private bank released ambitious targets through 2020 at an investor day. Where does Asia figure in the Swiss bank's plans?
Bank Vontobel has defined five major growth targets that it aims to meet by 2020, targets that the bank presented at its investor day on Thursday.
The bank wants to outgrow the market in all core activities by 2020, with top-line growth and net new money growth of 4 to 6 percent (so far 3 to 5 percent).
Cost-Income Ratio Below 75%
For return on equity the bank set itself a new target of 12 percent – so far it aimed for 10 percent plus. The cost-income ratio needs to be below 75 percent.
The bank will distribute more than 50 percent of the profit that it doesn’t need for organic growth or mergers and acquisitions to its shareholders.
«Ready for Next Phase»
«As global wealth continues to grow in a multipolar and increasingly uncertain world, this is creating opportunities for wealth and asset managers that address major industry trends such as the transformation of business through digital innovation and the shift from products to solutions based on specific client needs,» Zeno Staub, the CEO of Vontobel, said in the statement. «We have already delivered growth across all our business lines in the last few years but we are now aiming higher. We have sharpened our value proposition and defined ambitious new goals based on our business model and core competencies and we are ready to embark on the next phase of growth.»
Following are the targets the company has defined for its divisions:
Wealth Management
Vontobel’s private banking unit aspires to be Switzerland’s leading wealth manager and deliver services to its clients tailored to their specific needs. It targets organic net new money growth of more than 10 percent in Switzerland, North America and selected emerging markets. Overall, the private-banking business needs to growth 4 to 6 percent. A gross margin of more than 65 basis points and a cost-income ratio of less than 75 percent will ensure profitable growth, the company said.
Asset Management
More than half of Vontobel’s funds – a total of 37 – have a 4 or 5 star rating, providing customers with excellent products across all its boutiques, the company.
It aims for net new money growth of 4 to 6 percent, i.e. faster than market growth. The bank also wants asset management to retain its gross margin of more than 40 basis points and a cost-income ratio of less than 65 percent.
Financial Products
The financial products business will generate future growth through an expansion in new markets in the Asia-Pacific region, for instance in Hong Kong. It will also expand the offering in Europe. The division aspires to become a global leader for investment and leverage products.
For 2020, the division has received a target of operating income above 300 million Swiss francs and a cost-income ratio of less than 65 percent.
Acquisitions
The management of Vontobel will aspire to maintain a «comfortable capital position» in order to «complement organic growth with value-creating acquisitions,» in other words, Vontobel remains on the market to snap up rivals should opportunities arise.
