Vontobel asset management arm hit by emerging markets rout
ZURICH Feb 7 (Reuters) - The sharp sell-off in emerging markets has hit growth in Vontobel's asset management business, causing the Swiss bank to miss annual profit expectations and making its targets for this year a stretch, it said on Friday.
Shares in the group dropped as much as 4.2 percent on news its private bank and its asset management arm, home to emerging markets specialist Rajiv Jain, attracted just 900 million Swiss francs ($1 billion) of new funds in the second half of last year.
That marked a sharp slowdown from the first half, with full-year inflows coming in at 9.1 billion francs.
"The hefty net new money slowdown in asset management doesn't bode well for future growth," analysts at UBS said.
The emerging markets sell-off is hitting funds managed by some of the biggest names on Wall Street, including BlackRock, Brevan Howard and T. Rowe Price.
Vontobel Chief Executive Zeno Staub said the bank would not be able to buck the sell-off, but was looking to diversify its funds to cushion the impact.
Its full-year profit fell 1 percent to 122.3 million francs, well below the 139 million francs average estimated by 5 analysts in a Reuters poll.
The result made the group's targets for 2014 look ambitious, Vontobel said. These targets include more than 1 billion francs in revenue, more than 175 billion in client assets and a return on equity (ROE) of more than 10 percent.
Asset management and private banking form part of Vontobel's strategy to lessen its reliance on investment banking, where it is a major issuer of structured products in Switzerland but where regulation is getting tougher after the financial crisis.
The Zurich-based firm repeated its willingness to acquire other private banks in Switzerland, or bolster its asset management division through deals. Its financial chief said the bank, which bought Commerzbank's Swiss arm in 2009, could spend up to 600 million francs on deals.
Vontobel said its full-year revenue stood at 849 million francs, with client assets at 163 billion, and ROE at 8.9 percent. It will pay investors a dividend of 1.30 francs per share, up slightly from 1.20 francs the year before.
At 1245 GMT, Vontobel shares were down 2.9 percent at 33.65 francs.
($1 = 0.8994 Swiss francs) (Reporting by Katharina Bart and Oliver Hirt; Editing by Mark Potter)
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