Half-year results 2017

Results overview

  • Group operating profit surges 73% to CHF 11.7 mn
  • Group profit after tax of CHF 9.8 mn including restructuring charges
  • Client assets increased 12% to CHF 11.8 bn
  • Net new money of CHF 574 mn, of which CHF 325 mn from new private clients
  • Asset Management generates CHF 13.7 mn in operating profit due to stronger business platform
  • Bank am Bellevue nearly reached the breakeven point despite restructuring
  • Strengthening Executive Board and Board of Directors

Diversification of expertise broadens Bellevue Group's strategic base

During the first half of 2017 Bellevue Group focused its profile as an innovative investment management boutique. Its focus on asset and wealth management services is generating a steady payback. The positive market trends since the beginning of the year, fanned by a moderate global economic upturn, persisting low interest rates and relatively firm oil prices and the generous flow of liquidity from major central banks, provided the Group's good operating performance in the first half an additional boost. Financial markets around the world were buoyed by this general environment and the key healthcare sector, biotechnology stocks in particular, staged a recovery. 

Bellevue Group focused on asset and wealth management business

With the restructuring of Bank am Bellevue and the ensuing discontinuation of the brokerage and corporate finance business in the first half of 2017, Bellevue Group is now firmly focused on asset management and wealth management. The bank has largely concluded its realignment due to constructive collaboration between all parties involved. Non-recurring restructuring expenses of CHF 5.5 mn (gross) were charged to the first-half accounts. Bank am Bellevue’s strategic focus is on wealth management going forward. Bellevue Investment Partners, a unit of Bank am Bellevue, provides classic portfolio management services, comprehensive asset structuring and consolidation solutions and family office services for entrepreneurial private clients. Bank am Bellevue still offers custody, trading execution and market-making services. 

Client assets at new record high – substantial inflow of net new money

Bellevue Group's diverse investment expertise, enlarged product range and greater presence in key mar-kets have made the firm even more attractive to clients in its domestic and international markets.  Client assets at Bellevue Group rose by 12% to a new record high of CHF 11.8 bn during the first half. About CHF 8.6 bn of this sum was related to the Asset Management segment and CHF 3.2 bn (incl. custody assets of CHF 1.4 bn) to Bank am Bellevue. This positive growth is attributed to market developments and investment performance (CHF 653 mn) and to a significant increase in net new money of CHF 574 mn, which corresponds to an annualized net new money growth rate of 10.9%. That rate is within the targeted annual organic asset growth of 5% to 10%.

Asset Management (including StarCapital) and Bank am Bellevue contributed almost equally to the newly acquired client assets. Led by the BB Global Macro Fund, which continues to attract substantial amounts of new money from clients in and outside Switzerland, new money growth was broad-based and under-pinned by the broad range of available investment products. There was also strong demand for Bellevue's healthcare and entrepreneur equity strategies, and for StarCapital’s fixed-income and multi-asset investment solutions. BB Healthcare Trust, an investment trust listed in London in December 2016, wit-nessed sustained inflows as well. Although Bellevue Investment Partners was still preoccupied with the establishment of its wealth management services during its initial months of operation, clients already entrusted the team with assets of CHF about 325 mn.

Increase in assets under management fueled by profit growth – earnings sustainability improves further

A slight pick-up in economic activity, the general trends on financial markets and the increase in assets under management contributed to Bellevue Group’s growing profits during the first half of 2017.Supported by a sharp rise of the income from commissions and fees, the main source of Group income, operating profit increased significantly by 50% to CHF 46.8 mn. Recurring revenues as a percent of total revenues rose year-on-year and now stands at 78%, a level that is likely to be sustained going forward. As for transaction-driven income, the trading operations, which have been retained, showed a promising trend. Income from the Brokerage and Corporate Finance units, which contributed around CHF 5 mn to the bank's revenues thanks to the successful conclusion of the final capital market transactions, will be absent in future reporting periods, though.

Gross restructuring charges of CHF 5.5 mn (offset by CHF 1.5 mn in past service cost including effects of curtailment and loss from non-routine pension plan settlements) at the bank and the increase in personnel expenses at Asset Management, which reflects the acquisition of StarCapital and performance-based compensation, stand out on the cost side. Total operating income at Bellevue Group amounted to CHF 11.7 mn, a substantial increase of 73% compared to the previous year. Profit after tax amounted to CHF 9.8 mn, which is almost three times the figure reported for the prior-year period. After the completion of its restructuring, Bellevue Group’s work force ended up at 93 at the end of June 2017 (full-time equivalents, end 2016: 111). 

Outlook

Bellevue Group has steadily realigned its operations over the past three years to address the new reality in the financial industry. It now operates as a pure-play asset and wealth manager. Bank am Bellevue's wealth management and investment advisory services for entrepreneurial private clients were successfully launched and business is gaining momentum. Nevertheless, more time will be needed for the bank to produce the envisioned results under the new strategy. The set goals will be pursued through both organic growth and selective acquisitions. In Asset Management, Bellevue Group will introduce new client groups to the potential offered by the enlargement of its investment and product expertise and thereby attract more client assets.

Contact Media / Investor Relations

Daniel Koller, CFO
Phone +41 44 267 67 00
ir(at)bellevue.ch