Vontobel delivered a good result for the financial year 2018 and grew its market share in its Swiss home market as well as its international target markets.
Additional growth momentum was achieved through targeted, value- creating acquisitions. As a result of the Notenstein La Roche Privatbank AG transaction and the acquisition of the US-based private clients portfolio of Lombard Odier, Vontobel now has a broader basis for future growth.
With net profit of CHF 232.2m, Vontobel exceeded the previous year's result by 11%. Adjusted for Notenstein La Roche integration costs, net profit totaled CHF 249.2m, corresponding to an increase of 14%. Despite the strong stock market correction in the fourth quarter of 2018, advised client assets reached CHF 192.6bn, thus exceeding the figure for the previous year (CHF 186.6bn).
The net inflow of new money at Group level was CHF 5.0bn (CHF 5.9bn), reflecting renewed contributions across all businesses. Adjusted for Notenstein La Roche integration costs, the cost/income ratio was 74.7% in 2018. The return on equity was 13.0% (13.1%). Vontobel is therefore well on track towards achieving the increased profitability targets for 2020 defined following the acquisition of Notenstein La Roche: Vontobel now wants to achieve a cost/income ratio of less than 72% (previous target: 75%) and a return on equity of more than 14% (12%) by 2020.
Vontobel continues to have a solid capital position that significantly exceeds regulatory minimum requirements, even after the acquisition of Notenstein La Roche. The BIS common equity tier 1 ratio (CET1 ratio) was 12.3% and the Tier 1 capital ratio was 18.9% at the end of 2018.
Based on the good financial result for 2018, the Board of Directors will once again propose a dividend of CHF 2.10 per share to the next General Meeting of Shareholders. Vontobel is thus offering its shareholders an attractive dividend. Based on the year- end closing price, the dividend yield is 4.2%.
Success of Asset Management's diversification strategy
The Asset Management division was once again Vontobel's main earnings driver in 2018. Its pre-tax profit totaled CHF 180.3m (CHF 162.8m). This result was driven by the successful diversification strategy that it has pursued consistently for a number of years. The continued international expansion of the business also had a positive effect, and the global sales network was selectively expanded during 2018. This included the expansion of sales channels for funds in Germany and in Vontobel's Swiss home market.
The strengthening of Asset Management's sales network and the high quality of its products are reflected by the net new moneygrowth rate of 3.0%. In the low-margin Private Labelling Service, a consolidation measure relating to one client resulted in an outflow of CHF 1.4bn. Excluding this impact, the net new asset growth rate was 4.2% and was thus within the target range of 4-6%. Strong inflows were generated in particular by the fixed income boutiques, including TwentyFour Asset Management, as well as by Vescore and Sustainable & Thematic Investing. Advised client assets totaled CHF 117.5bn at the end of 2018 (CHF 121.3bn).
Following a phase of very strong growth over several years, Vontobel Asset Management has set itself the goal of achieving further organic growth within its ambitious target range, even in challenging markets. It will focus in particular on the high-margin business. Asset Management will make targeted investments in digitalization, focusing on those areas where new technologies can drive further improvements in products and enhance the client experience. In addition, the sales network will be further expanded, especially in the US and Japan.