The Lombard Odier Group reports results for H1 2017
Client assets grew across all three of the group’s business lines: private clients, asset management, and technology for banking.
Net new money flows were positive and market performance lifted assets, as global protectionist threats and European political risks diminished, resulting in a “risk-on” investment environment.
As a result, total client assets stood at CHF 242 billion at end-June 2017, up from CHF 233 billion at end-December 2016.
Within this, client assets in the private client business amounted to CHF 125 billion, while asset management clients invested CHF 46 billion with Lombard Odier Investment Managers and technology for banking clients entrusted the Group with an additional CHF 71 billion.
Growth in operating income and earnings
Operating income for the first half of 2017 was CHF 536 million, five per cent higher than the previous year, due to asset growth and increased client activity.
The group’s largest business, private clients, saw net new money growth across all regions, reflecting the strength of our global franchise, new commercial initiatives and our differentiated offering.
Asset management saw the successful launch of a number of cutting-edge impact investing solutions and the acquisition of a UK-focussed alternative investment management team, while the group’s technology for banking business finalised a major client integration.
As a result of positive top-line developments and continued cost management, balanced with ongoing investments across all three business lines, the operating cost/income ratio stood at 82 per cent. This reflects significant investments in bankers, investment capabilities and technology. Consolidated net profit grew by 13 per cent from the first half of 2016, to reach CHF 69 million.
“This positive start to the year is the result of focussed effort across all three of our business lines. The Group’s financial performance reflects the constant improvement in our offering and client servicing, our investments in technology and digital solutions, and our strategy to serve an international and demanding client base, across a diversified set of activities in private clients, asset management and technology for banking. We are also very proud to have been named ‘Western Europe’s Best Bank for Wealth Management’ at the prestigious Euromoney Awards for Excellence 2017. We will continue investing for growth, as we look ahead to our 222nd anniversary in 2018, and the strategic move of our headquarters to a new single site in Bellevue, Geneva,” said Patrick Odier, Senior Managing Partner.
Solid balance sheet and capitalisation
The group’s balance sheet remains strong, highly liquid and conservatively invested, totalling CHF 16.6 billion. The Group has no external debt and is one of the best capitalised banks globally, with a fully-loaded Basel III CET1 ratio of 28.7 per cent as at end-June 2017.