FY2019: Vontobel defends market share despite ‘fierce’ competition

Vontobel has reported a net profit of CHF265.1m (US$271.5m) for full year 2019, an increase of 14% compared to the prior year.

In 2019, the Vontobel Financial Products business – one of the leading providers of investment and leverage products – managed to defend its market share on the exchanges despite ‘increasingly fierce’ competition.

Measured in terms of exchange-traded volumes in the target segment, it reported a market share of 32% in Switzerland, relatively stable over time, while in Europe, its overall market share increased slightly to 12.5% (FY 2018: 11% on a comparable basis), representing a new record level.

During the year, the group introduced its first leverage products in Denmark whilst expanding its product offering in Hong Kong where it reached a market share of 1.5%.

In 2019, clients around the world traded a total of CHF31.4 billion of Vontobel products, of which CHF9.7 billion was traded in Asia.

Deritrade, the multi-issuer platform that enables banks and asset managers to compare, create, purchase and manage structured products from different issuers for their clients, grew its turnover at a time of declining stock market volumes. In the year under review, a total of CHF9.2 billion of products was purchased on the platform – an increase of more than 50% compared to the previous year.

Vontobel launched approximately 195,000 structured products in 2019, making it the number two issuer – globally – behind Commerzbank only, according to SRP data. The structures, which include flow and leverage certificates, were issued across 11 different jurisdictions, including Austria, Denmark, Germany, Hong Kong SAR, Finland, Sweden, Switzerland and The Netherlands.

Non-flow products were restricted predominately to Switzerland. Vontobel issued more than 16,500 structured products in its home market, almost 75% of which were linked to a ‘worst of’ basket of shares. The share of Roche, a Swiss multinational healthcare company, was the preferred underlying of the Swiss investor, seen in 2,050 products, followed by Nestle (1,895) and Novartis (1,880) while the S&P 500 (522) was the index that was the most in demand.

Advised client assets totalled CHF226.1 billion at the end of 2019, significantly higher than in the prior year (CHF192.6 billion). As of December 31 2019, the volume of structured products and debt instruments outstanding – excluding leverage products – which are included in the advised client assets, stood at CHF10.7 billion, an increase of more than 35% (FY2018: CHF7.9 billion).

Between 2002 and the end of 2019, Vontobel has seen almost a five-fold increase in advised client assets and today, 59% of advised client assets consist of the assets of clients domiciled outside its Swiss home market – primarily in target markets comprising Emerging Markets, Germany, the US, the UK and Italy. Clients domiciled in Switzerland accounted for CHF92.2 billion of advised client assets.

‘[In 2019], the entire industry was affected by low interest rates, geopolitical uncertainty, markets with low transaction volumes, and strong competition,’ said Zeno Staub (pictured), chief executive officer, adding that Vontobel remained on course and achieved a ‘good result’ in a ‘still challenging operating environment’.

Click the link to view the Vontobel results, presentation and annual report.