Vontobel is adapting its business model to make it fit for future demands. In 2019, the Swiss-based bank did well enough within its existing banking structure.
Net income at Vontobel increased 14 percent to 265.1 million Swiss francs ($271.6 million) in 2019, the company said in a statement on Wednesday. Adjusted for one-off exceptional items such as integration costs related to Notenstein La Roche, profit amounted to 258.9 million, an increase of 4 percent compared with the year-earlier adjusted result.
They delivered what it called a «good result» despite a challenging operating environment, with low-interest rates, geopolitical uncertainties, low transaction volumes, and strong competition.
Strong Growth in Asset Management
The bank reported net new money of 11.7 billion francs, an increase of 6.9 percent, which is in excess of its target range. Assets under management added 17 percent to 226.1 billion francs, Vontobel added.
Vontobel’s asset management is the strongest business of the bank and once again helped the company achieve its targets. In that division, assets under management rose 17 percent, with net new money of 11 billion francs.
Restructuring Plans
Private banking by contrast – what Vontobel calls the combined wealth management – had net new money of half a billion francs last year, an increase of 0.8 percent year-on-year. Still, the business managed to keep the margin stable and increased its pretax profit by 21 percent to 147.4 million francs. The financial products unit was busy defending its market share. Its pretax amounted to 47.2 million francs.
In December, Vontobel Chief Executive Zeno Staub had announced his restructuring plans for the bank. Vontobel in the future will be a so-called pure-play investment manager, a technology-driven provider of investment-advice and –solutions.
Setting Vontobel Apart
The demand from customers will direct the company’s offering, according to those plans. The bank will cease to work along with the current divisions and group its activities in accordance with client demand.
«As a pure-play investment manager, we want to swiftly and actively seize the opportunities for growth resulting from the increasing demand for professional solutions across all client groups and from changes in client behavior,» the CEO said. «With our focused approach, we want to continue to set Vontobel apart from our competitors in future.»
Dividend Increase Proposed
Staub today retained the current set of growth targets and said he will present new capital market targets in July. The bank proposes to increase its dividend by 7 percent to 2.25 francs per share.
