Vontobel: record level of advised client assets, healthy demand for leverage products

Vontobel has reported a ‘strong’ net inflow of new money in the first nine months of 2020, resulting in an annualised growth of nine percent – exceeding its target range of four to six percent.

Overall, clients entrusted the bank led by chief executive officer Zeno Staub (pictured) with CHF12.9 billion (US$14.1 billion) of new money in the first nine months of the year, boosted by the business with institutional clients in asset management, which generated 10% growth in net new money (annualised).

The continued growth in net new money and the good performance of Vontobel investment solutions, which improved continuously following the sharp fall in markets in the spring, resulted in a new record level of advised client assets of CHF230 billion (compared to CHF217.1 billion during the same period of 2019).

With markets remaining volatile, individual investors are making ‘intensive use’ of its structured products expertise through their usual bank or via digital channels, according to Vontobel. As a result, the demand for leverage products in the first nine months of the year far exceeded the level of the prior-year period, which is confirmed by SRP’s own figures.

By issuance, and excluding open-ended turbo certificates, Vontobel is the fourth biggest provider of structured products in Europe during the first three months of 2020, with 149,921 products issued in the period (compared to 128,024 during the same period of last year), according to SRP data.

However, when including open-ended turbos, the company launched 334,163 products between 1 January and 30 September 2020, up 21% from the prior year period.

The bulk of the products in the first three months of 2020, at 295,251, were issued in Germany, while the company also showed a strong performance in its domestic market Switzerland (18,095 products) and in the Netherlands (18,722).

Eighty-six percent of the issuance was linked to equities, with the Dax – seen in 47,505 products – the most popular equity underlying, followed by Alphabet (23,436) and Nasdaq 100 (12,442).

Commodities (29,893 products) were also in demand, especially gold (9,605), silver (5,188) and oil (6,286), with the latter split between WTI crude oil (3,249) and Brent (3,037), while there were also structures linked to FX rates (11,898) and interest rates (3,214).

Overall, Vontobel generated a pre-tax profit for the first nine months of 2020 that exceeded the figure for the same period last year. The return on equity for the first nine months of 2020 was close to the 14% target for the full year 2020.

For the remainder of 2020 and beyond, the company expects that Covid-19 and its economic consequences, as well as political uncertainty and the low interest rate environment, will further impact the financial markets.