Like other financial institutions, Vontobel was also affected by the poor stock market performance in the first half of 2022. Undaunted, CEO Zeno Staub is searching out acquisitions.

Vontobel, a company usually spoiled by success, is currently having to digest some rather heavy fare these days. The investment firm saw a decline in virtually every benchmark figure during the first half of 2022, as reported Thursday. This is not a problem specific to Vontobel the firm has done many things right. It is rather an indication of the overall generally negative financial market developments during the first half of the year.

In this respect, the past few months led to a demystification of Swiss banking. Virtually all financial institutions suffered losses in their half-year results, and it remains to be seen whether the worst is already over. For its part, Vontobel benefited from having a relatively well-balanced business model.

Institutional Investors Reduce Risks

This can be seen in the sharp decline in the asset management unit which was mitigated by the stable, only slightly lower performance of wealth management. While institutional clients in Asset Management significantly reduced their exposures and hardly made any new investments, private clients tended to remain loyal to the firm. Evidence for this is the net new money inflows to the unit, amounting to around 3 billion Swiss francs during the first half of the year.

Still, the digital business results were sobering, with operating income plummeting to 120.9 million francs, compared to an impressive 165.5 million in the same period last year. The result shows that customers, particularly in the affluent segment, are adopting a decidedly wait-and-see approach and shying away from new investments. For the investment app «Volt by Vontobel», launched last May, the timing is unfortunate.

An Extremely Rare Situation

Vontobel CEO Zeno Staub told the media on Thursday that he does not expect the situation to ease in the near term. One of the things that give him cause for concern is history, explaining that «in the past five decades, there have only been four occasions on the international capital markets when prices on both the equity markets and the bond markets have collapsed.»

Regardless of the current environment, however, he said he was confident of achieving the 2022 medium-term targets over one cycle, «although we expect unabated price pressure and difficult markets in the near future,» he added.

Staub plans to focus on large established markets, including Switzerland, Germany, Italy, and the UK. In the US, Vontobel has grand ambitions following its acquisition of UBS's unit for US clients and qualified Canadian investors last December. The integration of UBS Swiss Financial Advisers (SFA) into Vontobel Swiss Wealth Advisors (VSWA) is expected to be completed in the third quarter.

Acquisition in Europe

Where there is turmoil, there is also an opportunity, and Staub sees a bright side to the current situation. As he told finews.com, there are currently favorable opportunities to acquire teams of client advisors from other banks as well as take over entire firms.

Since having acquired Notenstein Privatbank, Swiss-based firms are not on Vontobel's takeover radar, but rather those in its core foreign markets of Germany, Italy, and the UK. «Of course, we don't buy at any price, and we also make sure that any acquisition is value-generating,» Staub says. The intent is unmistakable.

November Investor Day

In addition, Staub, like other private banks, wants to expand its capacity in the «private markets» sphere, especially since traditional financial market returns are likely to be lower for the foreseeable further. And so, private market investments beckon.

How Staub's plans will develop will become clear on November 10  when Vontobel will hold an investor day to provide information on its updated medium-term targets and new priorities up to 2024, and its business performance in the first nine months of 2022.