Swiss investment house Vontobel has tentatively managed to move out of a difficult situation in the first half of 2024. However, this is not yet a sure sign that great times are immediately ahead.

After challenging years and with new leadership, Zurich-based investment house Vontobel has managed to set certain recovery milestones in the first half of 2024. However, it would be premature to project the recent achievements linearly into the future.

Vontobel has succeeded in largely stopping outflows in the institutional client business, refocusing on the importance of traditional wealth management for wealthy private clients and families, and improving the cost/income ratio. Nonetheless, the investment house is still lagging behind some of its target objectives.

Still Below Many Targets

The targeted range for net new money is between 4 percent and 6 percent; currently, it stands at 2.2 percent. The company aims for a return on equity above 14 percent; currently, this figure is 12.3 percent. Additionally, the cost/income ratio is still far from the desired level: the target is below 72 percent, while it currently stands at 76.1 percent.

The aim here is not to criticize Vontobel, but to recognize that the financial institution still has a long way to go to shine as it did in earlier times. The past years, previous management, and many personnel changes have taken their toll. Vontobel now needs to write a new chapter in its corporate history – and save even more, as was revealed in a media call on Friday.

Struggling and Competing

This will not be easy, as the Swiss wealth management sector is currently more diverse than ever. Some institutions (EFG International) are thriving, others (Julius Baer) need to reinvent themselves, and others still are under pressure (LGT or Lombard Odier) to deliver results after taking on many former Credit Suisse advisors.

Finally, numerous smaller private banks are struggling to stay afloat and would prefer to merge with a larger competitor. These aging private bankers could thus capitalize on their years of work and consolidate their institutions smoothly. This is something to watch.

Make Vontobel Great Again

And there, in the middle of it all, stands Vontobel. Currently, there is little to suggest a financial commitment to this company. Significantly, Vontobel's stock price did not make any significant jumps on Friday morning but rather languished indifferently.

Vontobel's positioning currently lacks differentiation compared to other houses, which are either on a successful course or in urgent need of reorganization. Both are perspectives that make an investment more attractive than in an institution like Vontobel, whose destination is still rather unclear. Now, the two co-CEOs, Christel Rendu de Lint and Georg Schubiger, are challenged. With double strength or united forces, they fundamentally have the prerequisites «to make Vontobel great again.»