Vontobel drops issuance in H1

Vontobel reported the volume for outstanding structured products and debt instruments stood at CHF9.8 billion as of 30 June 2020, an eight percent decrease compared to 31 December 2019, and also down from CHF10.3 billion at end-June 2019.

For its structured products, in geographical terms, Vontobel focuses on Switzerland, Germany and the Asian markets of Hong Kong and Singapore. In all these focus markets, Vontobel partners with its institutional clients. More than 100 banks, 500 external asset managers (EAMs) and 5,500 users execute transactions via deritrade, the company’s multi-issuer platform for structured products.

In the year to date, more than 26,700 structured products have been issued via platforms for Vontobel clients, who invested over CHF6 billion.

Due to a reluctance to invest among international financial intermediaries, which had a negative impact on structured product volumes in the second quarter of 2020, operating income within the platforms & services client unit declined by five percent to CHF73.4m compared to the prior-year period.

The increased client demand for warrants during the corona crisis was reflected by a four percent rise in operating income to CHF89.2m compared to the prior-year period (CHF85.7m)

Vontobel issued 9,454 structured products (excluding flow and leverage certificates) in Europe during the first half of 2020, a 33% decrease compared to the prior year period, according to SRP data. Despite the drop in issuance, the company remained the number one structured product provider in Europe, followed at some distance by JP Morgan (3,381 products) and Leonteq (3,229).

The vast majority of products were targeted at investors in Switzerland, where it issued 8,705 certificates (1H 2019: 13,721) that were denominated in 20 different currencies, with CHF (3,932 products), euro (1,946) and USD (2,293) the most popular.

Most products were tied to equities, with the share basket the preferred option for the Swiss investor (4,905 products ) followed by structures tied to a single share (2,125) – including Wirecard, Swiss Re and Logitech International – and FX rates (1,107).

In Germany, the company issued 632 products in the semester (1H 2019: 261) while in Italy 117 products were launched between January and July 2020.

Outside of Europe, Vontobel issued 1,357 structured products in Hong Kong SAR, mainly warrants and callable bull bear certificates (CBBCs).

In the first half of 2020, more than 80% of its business was generated through the provision of advisory and wealth and asset management services.

Advised client assets were down significantly at the end of March compared to the level at the start of the year due to the market collapse resulting from the corona crisis but they recovered during the remainder of the first half of 2020.

In Switzerland and Singapore, Vontobel serves EAMs directly. In addition to structured products and custody and execution solutions, it provides investment advisory services to EAMs. The gross margin reached 56 basis points. At CHF 0.4 billion or 4.8% on an annualised basis, growth in net new money was within the target range of four to six percent in the first half of 2020.

‘2020 has so far been an extraordinary year,’ said CEO Zeno Staub (pictured), commenting on the results. ‘The fallout from the pandemic will continue to impact on markets and its business in the second half of the year and beyond. Low interest rates and geopolitical challenges will continue to affect the operating environment in the future.’

Click the link to read the full Vontobel half-year 2020 results, presentation and report.