Press release concerning the Vontobel Group's first-half 2012 results

Vontobel reports renewed strong inflow of new money – doubling of pre-tax profit in Asset Management – international expansion of derivatives business

- The Vontobel Group once again recorded an extremely strong net inflow of new money in the amount of CHF 5.3 billion in the first half of the financial year 2012, corresponding to an annualized growth rate of 12.9%.

- As of 30 June 2012, 90% of client assets – which total CHF 139.4 billion (+6%) – were already concentrated in its defined focus markets. Private Banking and Asset Management jointly accounted for over 50% of the Group's pre-tax profit.

- Difficult financial markets and the resulting low levels of client activity impacted performance. Net profit for the first six months of 2012 decreased by 15% compared to the same period of 2011 to CHF 66.6 million. However, it was 87% higher than the figure for the second half of 2011.

- The Group's Asset Management business doubled its pre-tax profit to almost CHF 34.7 million compared to the first half of 2011.

- The launch of distribution activities in Singapore, Hong Kong and Dubai signals the further international expansion of the Financial Products business.

Difficult markets and low stock market volumes affected the development of earnings at the Vontobel Group in the first six months of 2012. For example, the volume of Swiss equities traded in the period ending 30 June 2012 was around 30% lower than in the first half of 2011. The continued climate of political uncertainty relating to the Eurozone debt crisis had a significant impact on investor conduct and consequently also on the transaction-based business. However, Vontobel was able to maintain the same level of commission income as in the first half of 2011 thanks to the growth in client assets. Overall, it reported a slight reduction in operating income ( 6%) and a 15% decline in net profit versus the same period of 2011. The return on equity was 8.8%.

Renewed strong growth in new money and balanced earnings mix
The renewed extremely strong net inflow of new money in the amount of CHF 5.3 billion, the doubling of pre-tax profit in Asset Management and the growth initiatives in the international derivatives business with the new distribution platforms in Singapore and Dubai demonstrate the Vontobel Group's potential. The integrated business model with its three pillars – Private Banking, Asset Management and Investment Banking – is proving effective, even in difficult periods. "The fact that our company was able to generate more than half of its pre-tax profit in Private Banking and Asset Management is especially worth highlighting," stated Dr. Zeno Staub, CEO of the Vontobel Group, as he commented on the results. "Moreover, more than 90% of our client assets are already concentrated in our defined focus markets," he added. In total, the Vontobel Group currently holds CHF 139.4 billion of client assets.
 
Conservative risk policy – active balance sheet management
The debt situation in peripheral European countries remains tense. The Vontobel Group therefore continued to reduce its positions in bonds issued by these countries during the period under review. As of 30 June 2012, its net exposure to sovereign borrowers in these states was around CHF 90 million. Its positions in financials and corporates from the relevant regions were at a similar level.

Solid capital position even under stricter regulations
Shareholders’ equity totalled CHF 1.5 billion as of 30 June 2012 and was thus unchanged from 31 December 2011. The BIS tier 1 capital ratio was high at 24.8%. Under the Basel III rules that apply from 2013, the BIS tier 1 capital ratio would be approximately 22.8%. "The Vontobel Group is thus in a comfortable position to pursue its growth path via organic growth and acquisitions," stated Herbert J. Scheidt, Chairman of the Board of Directors of the Vontobel Group. Vontobel has around CHF 600 million of capital at its disposal to finance an M&A transaction.

Outlook
The specific challenges facing the Swiss banking sector in the form of the low interest rate environment and tax situation will accelerate the process of structural change in the area of wealth management, thus impacting the performance and profitability of the entire industry. Vontobel is responding to this by clearly focusing its business activities and pursuing a growth strategy. In Switzerland, the Group wants to consolidate its strong market position while, at the same time, adapting its international private clients business to the new industry reality. This includes the increased utilization of its state-of-the-art booking platform. The systematic implementation of the integrated business model, the international expansion of the derivatives business and the further expansion of Asset Management are the main drivers of its growth. This strategy is complemented by the targeted focusing of Vontobel's business activities. The Vontobel Group remains committed to its mid-term targets: by 2014, it wants to report operating income of CHF 1 billion, client assets of CHF 175 billion and a sustainable return on equity of over 10%. It also aims to achieve a cost/income ratio of less than 75%.

Detailed documentation about the first-half 2012 results (presentation, press release, half year report) is available electronically at: www.vontobel.com/ir

Vontobel Group
The Vontobel Group is a globally-oriented Swiss private bank. The bank was first established in Zurich in 1924. Vontobel specializes in wealth management for private clients and asset management for institutional investors, as well as in investment banking. As of 30 June 2012, the Group held approximately CHF 140 bn of assets. Around 1,500 employees worldwide provide first rate, customized services for clients with an international focus. The registered shares of Vontobel Holding AG are listed on the SIX Swiss Exchange. The Vontobel families and the Vontobel Foundation hold the majority of shares and votes in the company. www.vontobel.com

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