February 12, 2019 / 7:48 AM / 6 days ago

UPDATE 1-Vontobel seeks more market share despite challenges ahead

(Adds comment, details)

By Brenna Hughes Neghaiwi

ZURICH, Feb 12 (Reuters) - Swiss private bank and asset manager Vontobel posted a 14 percent rise in adjusted full-year net profit and confirmed increased 2020 targets despite a challenging environment it expects this year.

"In a nutshell: Vontobel is on course," Chief Executive Zeno Staub told journalists on a call on Tuesday, saying that recent acquisitions and a focused strategy set the bank up to capture further market share.

Vontobel in 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 warn that tepid client trading -- which hit wealth managers hard in the second half of 2018 -- could continue weighing on profitability.

The bank hopes to achieve return on equity of 14 percent, up from a previous 12 percent target, and a cost-income ratio of less than 72 percent, compared to previously 75 percent, in 2020.

Factoring out the Notenstein La Roche acquisition, the bank's wealth management businesses took is 3.3 billion Swiss francs in fresh client money, a 6.1 percent growth rate that was ahead of its 4-6 percent target range.

"Yes, we were hit by Q4 like everybody else, but our business model showed the expected resilience," Staub said. "I will not try to guide anything on net new money flows in 2019. Structurally, we're in a good position to win relative market share."

Following a flight into safe-haven asset classes in November and December by investors spooked by geopolitical uncertainty, the bank saw quite a fast recovery in customers' risk appetites in January, Staub said.

Shares were indicated down 2.4 percent in pre-market trading.

Zurich-based Vontobel said 2018 net profit under IFRS reporting standards rose 11 percent to 232.2 million Swiss francs. It proposed an unchanged dividend of 2.10 francs per share. ($1 = 1.0044 Swiss francs) (Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)

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