The Zurich-based investment house qualifies its 2023 performance as «solid» in a challenging market environment for active asset managers – but shareholders won't see any change to their dividends.

Vontobel reported that pre-tax profit fell 2 percent to 262.7 million francs in 2023, an announcement sent by the institution on Thursday indicated. It characterized the market environment last year as being «particularly» challenging for active asset managers.

That development was contrasted by an improvement in operating income (also 2 percent), which came on the back of stronger revenues in its wealth management business.

Cost Cuts

However, the wealth management business also required increased investment last year, driving up the group's cost-income ratio.

As a result, Vontobel indicated that it intends to start a program that reduces the firm's annual costs by 100 million francs. It also said it would realign distribution into two segments – private clients and institutional clients.

Higher AuM

Overall, assets under management increased marginally to 206.8 million at the end of last year, up 1 percent from a year earlier. That was the result of mixed developments in its main businesses.

The level of AuM in the asset management business fell by 4 percent while they were up 4 percent in wealth management.

Net New Money

The inflows of net new money saw a similar development. Group-wide, the outflow was 3.5 billion francs (on an adjusted basis related to a strategic decision to focus on certain developed markets the outflow was 1.4 billion), reflecting declines in the asset management business and only partly offset by a 5.3 billion franc inflow in wealth management.

The investment manager attributed the difficulties in its performance last year to the market environment, with the uncertainty prompted by central bank rate hikes keeping clients on the back burner, although that effect subsided towards the end of the year.

Unchanged Dividend

It characterized its capital position as «strong», exemplified by its reported CET1 ratio of 18.7 percent. Accordingly, that gave Vontobel the leeway to remain flexible strategically while also prompting the board of directors to recommend an unchanged dividend of 3 francs a share to shareholders.

Evidence of that was its purchase of a significant minority stake in London-based private infrastructure manager Ancala, a step it also announced on Thursday.