Vontobel Targets Swiss Deals After First-Half Profit Surges

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Vontobel Holding AG, a Swiss bank and asset manager, said it will focus on acquiring private banking assets in Switzerland after reporting a 33 percent increase in profit.

“Within private banking the primary target remains Switzerland because there we have one of the biggest economies of scale,” Vontobel Chief Executive Officer Zeno Staub told reporters on a conference call on Monday.

Vontobel is among Swiss banks looking to buy smaller competitors struggling under a crackdown on undeclared offshore accounts and narrowing margins. Julius Baer Group Ltd, the country’s third-largest wealth manager, reiterated last week that it is interested in buying assets including Swiss firms.

Vontobel could have more than 500 million Swiss francs ($523 million) to spend, Chief Financial Officer Martin Sieg Castagnola said on the same call.

Net income at the Zurich-based firm increased to 97.4 million Swiss francs compared with 73.5 million francs a year earlier. The result beat an average estimate of 87 million francs by four analysts surveyed by Bloomberg.

Vontobel, majority-owned by a shareholder pool including the founding family of the same name, completed the purchase of a 60 percent stake in TwentyFour Asset Management LLP, a fixed income asset manager based in London, at the end of April.

Targets would be wealth managers with as much as 20 billion Swiss francs under management, Staub said.

“It’s a good strategy for Vontobel to make acquisitions in asset management or private banking,” said Jonas Floriani, a London-based analyst with Keefe, Bruyette & Woods. “We already saw some of the benefits of M&A in the first half of the year, helping to offset the difficult business environment caused by foreign exchange movements.”

Vontobel’s pretax profit from asset management jumped 54 percent to 67.9 million francs. Inflows of net new money at the company climbed to 6.4 billion francs.

Vontobel declined 1.5 percent to 49.7 francs at 11 a.m. in Zurich, paring gains this year to 33 percent and valuing the company at 2.8 billion francs. The Bloomberg Europe 500 Banks & Financial Services Index dropped 1.3 percent on Monday.

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