* No net new money in first-half of 2014
* H1 net profit 73.5 mln sfr vs forecast of 70.8 mln sfr
* To complete share buy-back from Raiffeisen in late-August (Adds detail, investor comment, updates share price)
By Joshua Franklin
ZURICH, July 30 Swiss bank Vontobel Holding has scrapped its revenue target after failing to attract any net new funds from clients in the first half of 2014, blaming investors' concerns over emerging markets earlier in the year.
Jitters about slower growth in China, reduced support from U.S. monetary policy and tensions over Ukraine led many investors earlier this year to pull out of emerging markets, an area where Vontobel is a major player with its star fund manager running one of the world's largest emerging-market funds.
These outflows meant net new money at Vontobel for the first half of the year was zero, as modest gains at its private bank were cancelled out by outflows at its asset management arm.
Vontobel Chief Executive Zeno Staub said on Wednesday that fund withdrawals from the emerging market sell-off were confined to the first three months of the year, and voiced optimism that the bank would post inflows in the second half.
Zurich-based Vontobel also said it would now focus on profitability, effectively ditching a revenue target of more than 1 billion Swiss francs ($1.10 billion) this year.
"Top-line (revenue) is quite heavily effected also by market circumstances that are not under the control of the management," CEO Staub said in a media call. "So we want to focus more on profitability and bottom-line measures."
The bank's first-half net profit was 73.5 million francs. This topped expectations in an analyst poll conducted by Reuters, which averaged 70.8 million francs.
Vontobel left most of its medium-term goals to 2017 more or less the same, but added it was now targeting a payout ratio to shareholders of over 50 percent of profits if its business performs as planned, copying similar pledges from Switzerland's two largest banks, UBS and Credit Suisse.
However, given the bank's average dividend yield over the past five years stood at nearly 64 percent, according to Thomson Reuters data, one analyst thought the family-controlled bank's targets did not seem very ambitious.
Vontobel's capital edged up to 26.1 percent of risk-weighted positions in the first half of the year, further above minimums under Basel III international rules that do not come into effect until 2019.
One fund manager said the bank's large capital holdings made it less attractive to some investors.
"Vontobel is clearly over capitalised, which pressures returns on our invested capital as shareholders," said Thomas Braun, a Zurich-based fund manager at Braun von Wyss & Mueller who owns a stake in Vontobel.
At 1220 GMT Vontobel shares were down 1.1 percent, lagging the broader European sector, which was up 0.8 percent.
Vontobel also said the cost of buying back 12.5 percent of its shares from Swiss retail bank Raiffeisen - a deal that was announced last month - would be around 270 million francs. Chief Financial Officer Martin Sieg told reporters this transaction would close in late-August.
Despite this outlay, CEO Staub said the bank has substantial firepower for acquisitions and could tap the market for hybrid capital if needed.
Vontobel has been hesitant about going back into the M&A market since it bought Commerzbank's Swiss arm in 2009.
Staub also confirmed the bank sees itself among firms that have not committed U.S. tax-related offences, under a U.S. programme aimed at settling allegations of tax evasion.
($1 = 0.9068 Swiss Francs) (Additional reporting by Oliver Hirt and Katharina Bart; Editing by Mark Potter)