ZURICH (Reuters) - Swiss private bank and asset manager Vontobel (VONN.S) posted a 1% net profit decline in the first half of the year and confirmed its targets as assets under management rose to 186 billion Swiss francs ($188.85 billion).
Vontobel said on Thursday that its Asset Management division was once again the main earnings driver in a market environment that remains highly competitive. At 9.6%, its net new money growth exceeded the 4-6% target range.
“We are committed to our ambitious 2020 targets, although we expect the environment to remain challenging in the second half of the year,” the Zurich-based bank said, pointing to its target of achieving a cost/income ratio of less than of less than 72% and a return on equity of more than 14% by 2020.
“There are no signs of a change in operating conditions. The coming months will also be characterized by low interest rates, geopolitical uncertainty, a slowing economy and global pressure on margins,” it added.
As wealth managers were hit last year by risk-averse clients putting the brakes on trading and by challenging markets, Vontobel raised mid-term targets and posted a double-digit profit rise, with chief executive Zeno Staub saying the group was in a good position to win market share.
In April this year, however, the bank pointed to a more subdued start to 2019, adding the environment was expected to remain challenging and put pressure on margins.
The bank last July raised its 2020 profit targets on optimism that its 700 million franc acquisition of private banking rival Notenstein La Roche would boost results, even as larger peers warned tepid client trading could continue weighing on profitability.
Vontobel said on Thursday Notenstein’s integration was at an advanced stage and would be completed this year.
Reporting by Brenna Hughes Neghaiwi in Zurich and Thomas Seythal in Berlin; Editing by Michelle Martin