Vontobel Says First-Half Profit Drops 3%, Begins Buyback

Vontobel Holding AG, the Swiss asset and wealth manager that’s trying to expand its structured products business, said first-half profit fell 3 percent.

Net income dropped to 73.5 million Swiss francs ($81 million) from 76.1 million francs a year earlier, the Zurich-based bank said in an e-mailed statement today.

“We achieved a solid operating result across all business areas in the first six months of the financial year,” Chief Executive Officer Zeno Staub said in the statement.

Vontobel slipped 0.3 percent to 32.85 francs at 9:16 a.m. in Zurich, extending declines this year to 11 percent.

Vontobel, majority owned by a shareholder pool including the founding family of the same name, told investors in April that first-half performance may lag behind last year’s after a “challenging” first quarter.

The bank said today it is “cautious” about the second half of the year. The company plans to generate a return on equity of at least 10 percent and a cost-to-income ratio of less than 75 percent by 2017, according to the statement.

Vontobel said last month it will buy back a 12.5 percent stake owned by Swiss Raiffeisen amid legal wrangling related to a cooperation agreement. Vontobel has been at loggerheads with St. Gallen, Switzerland-based Raiffeisen since 2012 over the interpretation of the agreement that allowed Vontobel to tap Raiffeisen’s client network in exchange for the use of its information technology platform.

Vontobel said it began repurchasing 8.125 million shares at a price rounded to 33.20 francs a share on July 29 and expects to complete the process within a month.

Client managed assets expanded to 112.8 billion francs at the end of June from 109.6 billion francs six months earlier, according to the company’s half-year financial report.

Vontobel had no net new money in the first half of the year after outflows in its asset management business offset inflows from private banking and investment banking.

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