Vontobel's Deritrade notional volume up by 267% YOY

Vontobel successfully moved ahead with the growth and international diversification of its business in 2015 in a challenging operating environment.

Despite the strong Swiss franc, negative interest rates, high levels of volatility in the equity markets and uncertainty in the emerging markets, Vontobel's net profit increased by 34% compared to the previous year to CHF180.1m (€163.5m), according to the Swiss bank's 2015 results.

The bank's asset management and financial products delivered a significant increase in profit with the pre-tax profit growing by 28% to CHF139m in asset management and by 27% to CHF62m in financial products. According to the bank, operating income in wealth management remained stable although at CHF61m, pre-tax profit was 18% lower than the previous year.

Growth in the wealth and asset management division was boosted by developments in Vontobel's Swiss home market which grew by 9%. Fixed income activities within asset management, which contributed with CHF3.8bn to the net inflow of new money, also had a positive impact. The bank's financial products business "secured a strong position" as a provider of exchange-traded structured products and derivatives, with a market share of 7.1% with more than 4 out of 10 trades were in Switzerland were Vontobel products. Vontobel's financial products business continued its pan-European expansion in the area of structured products with its market debut in the Swedish market at the start of 2015, and Finland with a range of turbo warrants and bull & bear certificates. The bank reported that at present, more than 30 banks and over 300 asset managers use Deritrade MIP which recorded a notional volume of CHF2.2bn of products issued on the platform in 2015- an increase of 267% compared to the previous year. The platform also recorded over 4,000 users, 5,000 simulations per week, and 70% of primary market products.

The bank said organic growth continued to be supported by innovations in 2015 on its Deritrade MIP open platform for structured products and "the successful development" of Deritrade SmartGuide, a new decision-making tool for investments in structured products based on smart and crowd data. In addition, Vontobel also tapped into the mobile banking solutions segment with a new mobile private banking app for Swiss private banks.

Going forward Vontobel said it will continue to focus on its financial products business, wealth management and private banking activities. At the end of January 2016, advised clients assets were 3.5% higher than the average figure for 2015. In private banking, the bank expects further growth to be supported "through an even more intensive client focus and the further expansion of teams of client advisors, as well as through targeted investments in the advisory and investment processes, including in technology and in digitalization in general". Vontobel Asset Management will continue to diversify its business through its boutiques, placing a particular emphasis on the further expansion of its fixed income boutique while its financial products business will continue its international growth strategy, with the further expansion of Deritrade MIP in the Asia Pacific region.

SRP data shows that the Swiss bank sold over US$6.9bn in structured products across jurisdictions and had a 3% global market share excluding non-retail, leverage and flow products.

Vontobel expects to leverage its technology proposition in Asia and strengthten Deritrade MIP in the region and unveiled that seven distributors with total reachable assets of US$130bn have already officially expressed an interest; that the onboarding of three leading issuers is underway; and that discussions with four other major issuers in the region are ongoing. The bank is also looking to provide advisory in the region as well as listing warrants on exchange.

According to the Swiss bank, the continuation of the cooperation between Raiffeisen and Vontobel beyond June 2017 will also have a positive impact in the medium term. On February 9, 2016, the two banks agreed that Vontobel will continue to act as a partner to Raiffeisen and its subsidiaries in certain areas of asset management and the securities business after the current cooperation agreement expires mid-2017. Earlier, in January 2015, Switzerland's court of arbitration ruled that Vontobel remained the competency centre for Raiffeisen's investment banking until mid-2017 and clarified the role of the product and asset management units of Notenstein Privatbank, a subsidiary of the Raiffeisen Group.

Including acquisitions, the inflow of client assets was CHF16.1bn with wealth management and asset management contributing to the positive growth in new money in 2015. Despite adverse currency effects of around CHF2bn, advised client assets reached a new record level of CHF147.8bn, an increase of 8% compared to the previous year. Almost 40% of advised client assets stem from Vontobel's Swiss home market, followed by the US (19%), emerging markets (18%), the UK (8%), Germany (6%) and Italy (5%).

Vontobel's return on equity was 12.4% in 2015, exceeding its 10% target by 2.4 percentage points, and its common equity tier 1 capital ratio (CET1 ratio) stood at 17.9%.

Click in the link to read Vontobel's 2015 annual results.

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Vontobel's Deritrade notional volume up by 267% YOY