February 12, 2020 / 7:14 AM / 6 days ago

Sustainable investments help Vontobel outpace money growth goals

FILE PHOTO: The logo of Swiss bank Vontobel is seen at an office building in Zurich July 30, 2014. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Swiss private bank and asset manager Vontobel (VONN.S) on Wednesday posted a 14% rise in full-year net profit, as an influx of sustainably invested money helped push the group above its net new money goals.

Sustainable investments helped the group increase overall assets by 17%, with money invested under sustainability criteria growing at twice the rate of other assets to 30.7 billion Swiss francs ($31.46 billion).

Fresh client inflows of 11.7 billion francs boosted total assets under management to 226.1 billion francs. Led by fixed income products including sustainable equities, net new money grew 6.9%, above Vontobel’s 4-6% target range.

The Zurich-based money manager in December announced an exit from its brokerage business, with Chief Executive Zeno Staub saying the bank wanted to sit on the same side of the table as its clients, offering advice rather than executing transactions.

On a call with analysts on Wednesday, Staub noted the group had seen a good start to 2020, with continued strong inflows of fresh client money and good revenue growth based on the higher level of assets Vontobel now manages.

Confirming its 2020 targets, the bank noted new goals to be presented in July would reflect the challenging environment under which financial firms currently operate.

“We recognize that since defining our targets, the operating environment has not become any easier and we expect economic conditions and the geopolitical climate to remain difficult in 2020,” Staub said. “In the future, we will also pursue our strategy of investing in growth – and thus also in employees and technology – while managing our costs.”

The board of directors said it would propose a 7% dividend increase to 2.25 francs per share.

Reporting by Brenna Hughes Neghaiwi, editing by Riham Alkousaa

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