The Swiss investment company’s results were impacted by clients worldwide staying on the side-lines rather than reinvesting or making new investments in various asset classes during 2022.

Vontobel has posted a profit after tax of CHF230m (US$249m) for 2022, a decrease of 40% compared to record year 2021 (CHF348m).

Advised client assets, which include structured products, totalled CHF226.6 billion – down 16% year-on-year (YoY).

As of 31 December 2022, the outstanding volume of structured products issued was CHF7.7 billion (end-2021: CHF8.1 billion).

2022 was a challenging year for a pure play buy-side investment firm, according to Zeno Staub (pictured), chief executive officer, speaking at the company’s full-year 2022 press conference on 8 February.

The SRP database registered 21,754 publicly offered structured products issued by Vontobel in 2022 (excluding leverage products) – up 22% by issuance YoY (2021: 17,910). Of these, 19,510 products were targeted at investors in Switzerland, where the outstanding volume at the end of 2022 stood at CHF5.5 billion (2021: CHF5.7 billion).

The Swiss products were mainly reverse convertibles – often with a knockout feature – linked to a worst-of basket. Roche (1,318 products), Novartis (1,190) and Nestle (1,178) were the preferred shares of the Swiss investor, while the S&P 500 (1,118), Eurostoxx 50 (1,023) and the local Swiss Market Index (1,021) were also frequently used.

In Germany (outstanding volume end-2022 CHF2.2 billion), the company launched 2,142 products during 2022 – again almost exclusively reverse convertibles. The Eurostoxx 50 was the most featured underlying (164 products), while the shares of Mercedes Benz (95), Siemens (81), and Volkswagen (62) were also in demand.

In 2022, the demand for leverage products among private clients in the digital investing business normalised again from the extremely high level seen in 2021. Vontobel generated operating income of CHF185.7m in this area, down 41% YoY but in line with the level recorded in 2020 (CHF 183.5m).

New money

Net new money was negative overall at -2.1%. However, strong net new money was achieved in wealth management which achieved growth of 5.6%. In wealth management, clients entrusted a total of CHF5.4 billion of new money to Vontobel (2021: 6.9%, CHF 5.6 billion).

In asset management, clients worldwide stayed on the side-lines rather than reinvesting or making new investments in various asset classes. This trend mainly impacted active asset managers such as Vontobel and as a result outflows of -7.4% or CHF10.6 billion were recorded in 2022 (2021: 1.4%, CHF 1.9 billion).

After a record year in 2021, assets under management (AuM) declined by 16% to CHF204.4 billion (end of 2021: CHF243.7 billion), due primarily to the market environment, which saw stock markets and bond markets simultaneously experiencing a sharp fall in prices, something that has happened ‘only four times over the last five decades’, Vontobel stated in its annual report.

Some 62% of AuM was linked to multi-assets, with fixed income and equity making up 19% and 18%, respectively.

Trading income

After reaching an exceptionally high level in 2021, Vontobel’s trading income normalised again to CHF338.4m, a decrease of 31% YoY. Compared to 2020, however, trading income grew by nine percent.

The issuing, hedging and market making of structured products and warrants contributed CHF299.9m to trading income, down 32% YoY. Income from FX and precious metals trading declined by 26% CHF38.4m.

Vontobel generated operating income of CHF1.3 billion in 2022, down 16% compared to the prior year (CHF 1,535.6 million). Some 65% of its operating income was generated from the commission business, of which 90% comprised recurring income. Compared to the prior year, which saw very strong trading income, the proportion of commission income increased from 63 to 65%, while net interest income after credit losses increased to eight percent of operating income (2021: four percent).

Market volatility had a significant impact on Vontobel’s volume of AuM. As a result, net fee and commission income decreased to CHF833.8m, down 14% YoY. The reduction in AuM of an average of seven percent led to lower advisory and management fees of CHF868.3m, compared to CHF999.2m in 2021, while custody fees declined by 10% to CHF208.6m. Brokerage fees – also part of net fee and commission income – fell by 17% to CHF 80.7m compared to the prior year.

As of 31 December 2022, Vontobel held 6,388 treasury shares to secure options and structured products (2021: 7,460)

Click the link to read the full Vontobel 2022 results, presentation and annual report.