Hiring spree yet to pay off for Vontobel
A recruitment drive at Vontobel, the mid-sized Swiss bank, has yet to be reflected in a surge of new clients as the bank reported first half profits down 31% on the same period last year.
Inflows of new money to Vontobel's private bank were Swf1.5bn for the first six months, slightly below analysts' expectations.
Pre-tax profits at the the private bank was Swf31.9m, down 28% on the first half last year. The group's net profit of Swf115.3m was down 31%.
Vontobel's private bank has increased its adviser headcount by 30% in the past 18 months, according to analysts at Keefe, Bruyette & Woods. They said in a research note that the relatively disappointing inflows were "surprising" given the hiring spree, although others analysts viewed the inflows as positive.
KBW also highlighted the decline in gross margin during the first six months, down five basis points compared to the second half of last year at 87bp. They pointed out that this was a worse performance than other listed Swiss banks.
The bulk of Vontobel's revenues come from investment banking, where it has particular expertise in derivatives and structured products. However, revenues from trading slumped 42% to Swf135.5m.
Chief executive Herbert Scheidt earlier this year created an independent wealth management company for Swiss and international clients in an effort to further diversifiy away from investment banking.
He said in a statement: "The sentiment and activities of all market participants were impacted by the continuing financial crisis. The general mood of uncertainty which prevailed and the profound loss of trust in the entire finance industry were all too evident."
Last month Vontobel hired Martin Sieg Castagnola to replace Axel May as chief financial officer by the beginning of next year.
Vontobel is the only listed Swiss private bank with majority family ownership
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