The Swiss bank has reported 'robust net profit' and remains the only investment bank in international expansion mode in the structured products market.

Vontobel remained on track in 2017 and posted significant growth across all businesses in Switzerland and in its target markets. Adjusted net profit, excluding acquisition costs and a one-off tax impact due to the US tax reform, totaled CHF217.9m (€188.6m), exceeding the adjusted net profit for the previous year by 12%.

This result was driven by 'strong growth, which was achieved while making significant investments in new markets, talent, technology and the Vontobel brand', according to the bank's 2017 results. Advised client assets reached a new record level of CHF186.6bn (CHF155.3bn).

Financial products

The bank's Financial Products business drove the international expansion of the bank's investment and leverage products business with entry debuts in France's Euronext certificates market and the Netherlands in the first half of 2017 which was followed by its launch in Hong Kong in the second half of the year. Vontobel also entered into a strategic agreement in Q1 2017 with Bank of Singapore through which clients of the Singaporean private bank can now book their assets in Switzerland and use Vontobel as custodian.

The Swiss bank reported its business in Asia was already generating a positive profit contribution only two months after entering the world's largest market for leverage products. Vontobel reported a 10.4% market share in Europe's investment and leverage products market, and 27.0% in its Swiss home market, 'measured in terms of the exchange-traded volume in the target segment'.

The bank has confirmed plans to expand its position in various markets by leveraging its 'state-of-the-art digital ecosystem' to rapidly enter new markets and serve new target groups. In 2016, Vontobel became the first provider to initiate the transition from a supplier's market to a buyer's market for structured products in Germany with the launch of mein-zertifikat.de.

This was followed in 2017 by the launch of the 'Investment Scout app', which allows private investors in Switzerland to select a structured product tailored to their individual preferences and have it issued immediately via their smartphone for the first time. Shortly after Vontobel became the first provider to launch a tracker certificate on bitcoin for Swiss and German investors in 2016, and the world's first short mini future on bitcoin on the market in November 2017. Vontobel wants to continue pursuing this path and will use new opportunities for growth and strengthen its cost leadership through digitization and increased economies of scale. Elsewhere, Vontobel joined the Swiss Dots platform for over-the-counter (OTC) structured products, adding some 10,000 leverage products to the platform's existing range.

Switzerland remains Vontobel's most important market, accounting for 40% of advised client assets, as well as the bank's main production center.

Most recently, Vontobel Investment Banking boosted its presence in the Asia-Pacific region with the appointment of Long Lee as head financial products Asia in a move to establish its presence in the Apac market and push for further growth.

Asset and wealth management

Asset Management remains Vontobel's strongest earnings driver, posting the most profitable six-month period ever in the second half of 2017. For the full year 2017, pre-tax profit totaled CHF162.8m. Vontobel has capitalised on the performance of its fixed income and quantitative investments - businesses that traditionally generate lower margins than equities. In total, asset management grew its assets under management to CHF110.3bn, an increase of 20% compared to the previous year.

The bank's wealth management and the external asset managers (EAM) business, which are grouped within Combined Wealth Management (CWM), delivered a pre-tax profit of CHF83.5m, a 34% growth. Vontobel attracted CHF2.6bn of net new money in higher-margin products in wealth management such as portfolio management mandates and advisory mandates while outflows were recorded in lower-margin products such as securities trading and custody.

Vontobel expects the market environment to remain challenging in 2018 and anticipates that margins will remain under pressure. The Swiss bank also expects the US tax reform will have a positive impact, with a reduction in its tax rate of 2-3 percentage points, if all other factors remain unchanged.

The Swiss bank was the most active European issuer - with 11,472 products in 2017 - and topped the sales volume ranking with €8.9bn volume sold during the course of the year, according to SRP data. Vontobel reported that its financial products business has secured a leading position with a market share of 25% in its home market and of over 10% in Europe (measured in terms of the exchange-traded volumes).

'We master what we do and we only do what we master,' said Zeno Staub (pictured), CEO of Vontobel. 'We are securing a competitive advantage in an environment characterized by ever fiercer competition and in which products are becoming increasingly interchangeable. In 2018, we will continue to invest in our relationship with existing and new clients - thus investing in growth.'

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