* Lombard Odier H1 net profit 62.5 mln Sfr
* Bank had H1 outflows due to money-market fund withdrawals
* Capital ratio 23.8 pct, nearly double Swiss requirement
* Geneva rival Miraubaud posts 17.5 mln Sfr profit
(Adds management comment)
By Katharina Bart and Joshua Franklin
ZURICH, Aug 28 Lombard Odier on Thursday became
the second Swiss private bank this week to break with more than
two centuries of tradition and publish results for the first
The figures showed the famously discrete Geneva bank to be
more strongly capitalised than its cross-town rival Pictet &
Cie, but less than half as big in terms of its 156 billion Swiss
francs ($170.6 billion) in assets under management.
This confirms Lombard Odier, still run in part by
descendents of its founding family, as the fifth largest private
bank in Switzerland by assets, after UBS and Credit
Suisse, Pictet, and Julius Baer.
Lombard Odier and Pictet are not making the disclosure by
choice. Both cases are the result of these partially
family-controlled banks becoming limited partnerships,
abandoning a structure where partners assumed unlimited personal
liability in the event of a crisis.
A tax probe by U.S. prosecutors has also dragged both banks
into the spotlight: Lombard Odier came forward in December under
a scheme brokered by the Swiss and U.S. governments for Swiss
banks which have helped wealthy Americans evade taxes.
Meanwhile, Pictet is among roughly a dozen Swiss firms which
are under criminal investigation for allegedly helping wealthy
Americans evade taxes.
Patrick Odier, one of Lombard Odier's eight managing
partners, said the bank had set aside a provision for the U.S.
investigation, but did not disclose details.
The bank held 23.8 percent in core capital, which is almost
twice as much as the level required by the Swiss financial
This reinforces a perception of Geneva's private banks as
solidly capitalised and risk-averse.
"Our strong capitalisation is one of the foundations of our
clients trust and we want to make sure that this objective of
being one of the best capitalised banks in the world is
continued in the future," Odier said.
SLIGHT H1 OUTFLOWS
But both Lombard Odier and Pictet are increasingly moving
beyond their roots of managing the wealthy's finances.
Lombard Odier has expanded asset management activities to
complement its core business of private banking with hires such
as BlackRock Inc.'s Nancy Everett, a U.S. fund expert,
and Ruud Hendriks, a former European sales chief for Goldman
Sachs' asset management arm.
Lombard Odier's asset management business manages 47.8
billion francs, compared with the 114.7 billion it looks after
for wealthy clients. A third division which offers technology to
other banks manages 48.5 billion francs.
Lombard Odier said it posted "slight" outflows for the first
six months, because withdrawals from low-yielding money-market
funds in asset management outstripped the fresh funds that the
wealthy client arm had attracted.
It is not required to publish its net fresh funds, but said
it would do so for the full year.
The bank's net profit in the first six months of the year
was 62.5 million Swiss francs (68.31 million US dollar). The
bank did not provide year-ago comparison figures and is not
Lombard Odier's expansion of its private banking business
has meant taking on higher credit risk as clients, particularly
in expanding markets such as Asia, seek loans and credit.
But Lombard Odier partner Frederic Rochat said the bank's
credit book was limited and fully backed by securities held by
Mirabaud, a smaller Geneva rival which converted to a
limited partnership from January, also reported results on
Thursday, unveiling a profit of 17.5 million francs.
In its half-year results on Tuesday, Pictet posted net
profit of 202.9 million francs. The bank held 319 billion francs
in assets under management, while it had 21.7 percent in core
(1 US dollar = 0.9143 Swiss franc)
(1 US dollar = 0.9150 Swiss franc)
(Reporting by Katharina Bart and Joshua Franklin.; Editing by
Mark Potter, Pravin Char and Jane Merriman)