August 31, 2017 / 7:17 AM / a year ago

UPDATE 1-Vontobel aims to quicken growth in new 2020 targets

* Vontobel raises growth, profitability goals for 2020

* Bank also has up to 500 million Swiss francs for M&A

* Shares up 1.2 percent in early trading (Recasts, adds detail, analyst, CEO comments, market reaction)

By Joshua Franklin

ZURICH, Aug 31 (Reuters) - Vontobel on Thursday outlined higher asset-gathering and profitability goals as part of its new targets for 2020, adding it had enough capital to spend up to 500 million Swiss francs ($518.6 million) on acquisitions.

Zurich-based Vontobel, majority-owned by the Vontobel families, has grown through a three-pillar strategy focusing on private banking, asset management and investment banking.

Having achieved its three-year plan to 2017, Vontobel upped its 2020 targets for net new money growth to between 4 and 6 percent, compared to 3-5 percent previously, as well as its return on equity goal to more than 12 percent from over 10 percent.

“We are well positioned to increase our growth and profitability targets by 20 percent,” Chief Executive Zeno Staub said on a call with journalists.

Targets for capital and cost/income ratios were unchanged.

It also aims to pay shareholders more than 50 percent of profits not used for growth and mergers and acquisitions (M&A).

On M&A, Staub said the bank was open to doing deals but the targets did not depend on major purchases.

“We always want to be so successful organically that we don’t need to make acquisitions,” Staub said.

In the last three years, Vontobel has made four relatively small acquisitions in asset management and private banking.

Its 4-6 percent net new money target, viewed as an indicator of future earnings in money management, takes Vontobel in line with the target set by larger rival Julius Baer and ahead of the goal by UBS, the world’s biggest private bank, for its wealth management division outside North America.

Baader Helvea analyst Tomasz Grzelak, who rates Vontobel’s stock “hold”, described Vontobel’s new group targets as “slightly more ambitious” but said that the divisional targets were now more conservative.

Vontobel pared its target for gross margin on assets under management at its private banking and asset management units.

Shares were up 1.2 percent in early trading.

$1 = 0.9641 Swiss francs Additional reprting by Oliver Hirt; editing by Brenna Hughes Neghaiwi and Michael Shields

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below