Bellevue Group AG /
Bellevue Group reports higher profits - quantum leap in Asset Management
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- Group net profit up 6% to CHF 6.9 million
- First-half operating profit from Asset Management sharply higher at CHF 4.4 million
- Bank delivers an operating profit of CHF 2.6 million despite lower brokerage commissions
- Client assets at Asset Management up 10% to CHF 2.9 billion thanks to solid investment performance
Financial markets profited from a generally positive environment in the first half of 2014. The world economy showed moderate growth and major central banks maintained a generous supply of liquidity. In view of the considerable uncertainties, many investors are still sitting on the sidelines. Advancing stock markets have not convinced the broader investment community either - many investors regard the advances with skepticism. A general uptrend in business activity of Bellevue Group as a financial boutique specializing in stock investments has not transpired so far.
Higher Group profit despite divergent results at divisional level
Amid this general environment Bellevue Group was nevertheless able to grow its fee and commission income - the Group's most important source of income - by 16% to CHF 22.8 million (previous year: CHF 19.6 million). Its Asset Management unit fueled the growth, having earned 40% more in fees and commissions, whereas its Bank am Bellevue subsidiary reported an 8% decline in commissions. Bank am Bellevue continued to be challenged by the low market participation of institutional investors. Dividend income from the shareholdings in SIX Group was CHF 2.3 million lower than in 2013, which further diminished reported income for Bank am Bellevue in the period under review. Group-wide expenses rose by 7% y-o-y to CHF 20.7 million (previous year: CHF 19.4 million). This reflects the previously announced investment in the Group's biotech investment competencies intended to maintain and extend its leadership as an asset manager in this sector. Consolidated net profit rose 6% to CHF 6.9 million (previous year: CHF 6.5 million). Excluding the extraordinary dividend payment from SIX in 2013, bottom-line profit was sharply higher compared to the first half of last year.
"The first-half results show that we have been successful in realigning our asset management operations but the bank has felt the effects of sweeping structural and regulatory change in its brokerage business. General developments at the Group during the first six months of 2014 were in line with our short-term expectations but fell short of our ambitions. A sustained increase in recurring income is now a top priority," says Urs Baumann, CEO of Bellevue Group.
Bellevue Asset Management: Sustainable profit growth
The focusing of Asset Management products on actively managed equity funds in the healthcare segment and regional niches is paying off. That decision and the revised fee model for BB Biotech AG marked a quantum leap forward for Asset Management. Bellevue Asset Management generated a significantly higher operating profit of CHF 4.4 million (previous year: CHF 1.9 million) in the first half. Assets under management rose by approximately 10% to CHF 2.9 billion, most of which was performance driven. Despite increasing volatility, BB Biotech AG delivered another double-digit return of 16.6% (in CHF) and handily beat its benchmark with an excess performance of more than 3%. The BB Entrepreneur Europe Small equity fund also achieved a stellar return of 15.1% (in EUR) for an outperformance of 9% versus its benchmark. Bellevue Asset Management attracted upwards of
CHF 100 million in new money. This inflow was almost entirely offset by redemptions and the withdrawal of seed capital.
Bank am Bellevue: Still profitable despite subdued brokerage activities
Bank am Bellevue was increasingly challenged by the downturn in brokerage activity during the course of the first half. Its Corporate Finance department performed well, thanks in particular to its participation in the successful initial public offering of SFS Group, a Swiss manufacturing company. Weaker business at the Brokerage division and substantially lower interest income led to a 21% decline in gross operating income. Operating expenses were reduced by 4% and the bank's resulting operating profit amounted to CHF 2.6 million (previous year: CHF 4.9 million), which is about 48% lower than in the first half of last year.
Growing recurring income remains a key goal
Bellevue Group is widely recognized as a financial boutique with original equity and capital market expertise. The Group's investment recommendations and active equity strategies are valued by private and institutional investors alike. Half-year results for fiscal 2014 reflect the company's success in realigning Asset Management to ensure sustainable operating results going forward and indicate that growth opportunities in this business are intact. Measures taken at Bank am Bellevue should produce the anticipated effects in the second half of the year and further reduce costs. In view of the changing operating environment, further optimization of both business units is being explored on an ongoing basis and market opportunities are being examined as they arise.
The key objective of Bellevue Group is to grow its sources of recurring income and thereby ensure sustainable corporate development. With its advisory business and the launch of two investment funds, Bank am Bellevue has already taken two important steps in this direction and established a basis for new, organic growth opportunities. External avenues of growth and potential partnerships are also being explored. The company's strong balance sheet provides the necessary entrepreneurial freedom to execute this strategy.
The full version of the half-year report 2014 is available at www.bellevue.ch.
Annual report 2014 February 23, 2015
Annual general meeting 2015 March 16, 2015
Media / Investor Relations: Daniel Koller, CFO
Telephone +41 44 267 67 00, Fax +41 44 267 67 01, firstname.lastname@example.org
Bellevue Group is an independent Swiss financial boutique listed on the SIX Swiss Exchange. Established in 1993, the company and its approximately 80 employees are specialists in the fields of Brokerage, Corporate Finance and Asset Management. Bellevue Group includes the two subsidiaries Bank am Bellevue and Bellevue Asset Management. The bank boasts superb knowledge of the Swiss stock and bond market and offers independent research opinions and recommendations as well as viable solutions for capital market transactions. Bellevue Asset Management is focused on selected active equity investment strategies in growing markets, in healthcare industries as well as in other special themes such as entrepreneur-led companies.
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Source: Bellevue Group AG via Globenewswire