Annual Reports 2011 V ontob el Group - Vontobel Holding AG

Investment Banking
36 Vontobel Group, Annual Reports 2011
After an encouraging start to the year, volumes on the Swiss equity and derivatives markets
declined sharply from the third quarter onwards – a trend that was accompanied by
high levels of market volatility. During the same period, the escalating debt crisis in Europe
led to significantly higher risk premiums. These factors impacted the financial results
of Vontobel Investment Banking. Operating income decreased by 14% to CHF
285.6 mn in 2011. Financial Products accounted for around 74% of the business unit's
operating income, while Brokerage and the business with external asset managers contributed
11% and 9%, respectively. Operating expense fell by 12% to CHF 190.5 mn.
This resulted in a cost/income ratio of 66.6%, compared to 65.0% in the previous year.
Pre-tax profit declined by 18% to CHF 95.1 mn. The volume of assets under management
was almost in line with the previous year's level. In view of the subdued demand –
particularly in the second half of 2011 – the volume of structured products outstanding
fell by 17% to CHF 7.7 bn compared to the previous year.
Structured products have been an established asset class in Switzerland for several years
and now form an integral part of the portfolios of private and institutional investors.
With a market share on Scoach Switzerland of 19%, Vontobel Financial Products is one
of the top three providers of listed structured products and derivatives. During the year,
Vontobel saw the increasing migration of volumes from the conventional exchange to its
own innovative deritrade® platform. The long-running success of Vontobel Financial
Products is attributable to its continuous market presence – even in difficult periods –
and the high-quality information it provides for investors. A recent review conducted by
the Swiss Financial Market Supervisory Authority FINMA to assess the transparency of
sales documentation for structured products and the ease with which it can be understood
found that Vontobel's prospectuses are fully compliant with regulatory requirements.
The new structured products with reference bonds issued by Vontobel generated
a high level of demand. Vontobel Financial Products achieved continued success in the
German market, where it is one of the top 10 providers. In the next phase after launching
its sales platform in Dubai in spring 2012, Vontobel Financial Products is planning to
establish a presence in Singapore in order to target the Asian market. Vontobel Brokerage
was once again named the “Leading Brokerage Firm in Switzerland” by the
renowned ranking agency Extel Thomson. In Transaction Banking, Vontobel succeeded
in acquiring an internationally active Swiss private banking group as a client for exclusive
market-side securities settlement during the year under review.
Vontobel Investment Banking focuses on products and services that complement Vontobel's
wealth and asset management offering – particularly for institutional clients and
business partners (B2B4C). Prudent risk management is of critical importance in this
context. Vontobel Financial Products is one of the leading issuers of derivatives and
structured products in Switzerland and Germany. In addition to the Brokerage division,
which has received a number of international awards, Vontobel is active in the field of
Corporate Finance and offers comprehensive services to external asset managers. Securities
and foreign exchange trading, as well as the securities services provided in the
area of Transaction Banking, complete the broad range of offerings for clients. Investment
Banking has operations in Zurich, Geneva, Cologne, Frankfurt, Munich, Dubai,
London and New York.