Switzerland's Vontobel spins off asset management subsidiary

Swiss bank Vontobel is spinning off its asset management business into a separate legal entity to increase its international competitiveness.

It pointed out that the independence of asset managers was assigned “high importance” in most asset management markets and a “key selection criterion” applied by international consultants and clients.

Asset management is one of the major contributors to Vontobel’s bottom line and has been growing in importance for the bank in recent years.

As of the end of 2013, profits from this segment of the business stood at CHF103.3m (€84.3m), a 37% year-on-year increase, while overall group net profit amounted to CHF122.3m.

Net new money from institutional clients slowed a bit last year from CHF8bn in 2012 to CHF7.2bn, yet overall assets under management continued grow to CHF109.6bn, an increase of 11% year on year.

In the first half of 2014, however, Vontobel saw an “anticipated” slowdown in net new money, with inflows and outflows also from institutional investors balancing themselves out.

In its half-year report, it said: “Some global investors have reduced their allocation to the emerging markets – the impact of which was felt in the asset management industry.”

With the realignment of the business model, the bank said Vontobel Asset Management’s “efficient and modern” organisational structure would “take account of global competition”.

The new division will operate under the name Vontobel Asset Management AG, pending the approval of the Swiss regulator and Bank Vontobel shareholders.