Vontobel Holding AG · SIX:VONN
Vontobel — ZKB Investor Event (October 2014)
38 slides from Vontobel's conference presentation, Oct 29, 2014
Slide 1: Performance creates trust
Vontobel Martin Sieg Castagnola, CFO ZKB Investor Event Steinfels, 29 October 2014 Performance creates trust
Slide 2: Caution regarding forward-looking statements
Slide 2 Caution regarding forward-looking statements This document may contain projections or other forward-looking statements related to the Vontobel Group that are subject to known and unknown risks, uncertainties and other important factors. These projections and forward- looking statements refle
Slide 3: First half of 2014 at a glance
Slide 3 First half of 2014 at a glance Key figures Group net Tier 1 Client assets ROE (normalized) Net new profit capital ratio money CHF 73.5 m 26.1% CHF 172.7 bn 13.3% Balanced Operating 21.0% after 12.5% Up by 6% vs. end performance share buyback of 2013 up 12%
Slide 4: First half of 2014 at a glance
Slide 4 First half of 2014 at a glance Key achievements Solid operational performance, despite dilution by net spread adjustments Balanced net new money development in a challenging environment Private Banking: transition to growth on the basis of solid results Financial Products: confirmed as #2 in
Slide 5: Consistent growth in client assets in core markets
Slide 5 Consistent growth in client assets in core markets CHF bn 160 +8% 173 AuM by geography 139 +15% 7 4 Others 7 UK 7 45 49 IT 6% DE 3% 42 4% 6% 43% CH 108 113 90 EM 16% 22% 1H12 1H13 1H14 AuM Structured products US Custody Others 102 25 23 95 22 86 17 14 11 8 9 9 4 5 5 4 3 n.a. 1H12 1H13 1H14 1
Slide 6: Balanced contribution from all three business units
Slide 6 Balanced contribution from all three business units Pre-tax segment profits (CHF m) PB AM IB CC -5% IFRS Adjusted 57 +46% 46 -14% 50 31% -3% 44 42 34 36 30 29 29 31 15 -20 -29 -37 1H13 2H13 1H14 1H13 2H13 1H14 1H13 2H13 1H14 1H13 2H13 1H14 Balanced profit streams from our business units unde
Slide 7: Private Banking: Basis set for strong future organic growth
Slide 7 Private Banking Basis set for strong future organic growth Year-over-year net development of RMs Indicative payoff chart of a new Relationship Manager (RM) US DE +16% Profitability +14% CH +22% Y2 Y3 Y4 Y... +24% Y1 Emerging Markets We improved our client reach by adding distribution Non-cor
Slide 8: Broad range of regulatory initiatives
Slide 8 Broad range of regulatory initiatives QI regime US Program FATCA Automatic Exchange of Information («AIA») Financial Transaction Tax (France, Italy, others) Corp. Tax Reform III Switzerland FIDLEG/ FINIG Cross border requirements 2012 2013 2014 2015 2016 2017
Slide 9: Ahead of the curve and fully fledged on regulatory issues
Slide 9 Ahead of the curve and fully fledged on regulatory issues Status quo MIFID II Consultation process pending On track FATCA (processes, documents etc.) FIDLEG/FINIG/FINFRAG Consultation process pending Our outstanding BASEL III Completed modern platform allows us to adapt to regulatory changes
Slide 10: Details on US Program
Slide 10 Details on US Program Category 1 Category 2 Category 3 Category 4 Banks under Banks which are not Banks which are not Banks which are not investigation for having being formally under investigation and being formally violated applicable U.S. investigated by U.S. do not have committed invest
Slide 11: Private Banking: Impact on business model
Slide 11 Private Banking Impact on business model Continuing pressure on revenues, e.g. driven by shift from smaller accounts with higher Revenues/ margins to larger accounts with lower margins, margins low yields, low trading activity and AuM outflows Increasing costs for implementation of new Cost
Slide 12: Asset Management: Focus on clearly defined investment strategies
Slide 12 Asset Management Focus on clearly defined investment strategies AuM1, CHF bn Performance of the Quality Growth product line2 Focus on high-quality companies with favourable YTD1 2013 3 y. p.a. Quality growth prospects at sensible prices Growth 40.8 Emerging Markets Equity 10.0% -5.5% 5.0% S
Slide 13: Asset Management: Strong product line-up established
Slide 13 Asset Management Strong product line-up established – beyond EM equities Global Equities Corporate Bond YTD 2013 3y p.a. YTD 2013 3y p.a. 160 160 5.4% 15.7% 12.7% 5.7% 4.7% 9.3% 100 100 6.2% 22.8% 10.3% 4.9% 2.7% 6.9% 40 40 19-06-08 30-06-14 13-07-07 30-06-14 VF – Global Equity I MSCI All C
Slide 14: Investment Banking: Strong Swiss market position leveraged internationally
Slide 14 Investment Banking Strong Swiss market position leveraged internationally CHF m Switzerland 7,000 45% 40% Rank #2 6,000 35% 5,000 Market share 20% 30% 4,000 Vontobel Ø trade size CHF 17.4 k 25% 3,000 Market Ø trade size CHF 35.2 k 20% 2,000 15% Products outstanding > 12,400 1,000 10% ,0 5%
Slide 15: deritrade MIP will shape the future of structured products
Slide 15 Investment Banking deritrade® MIP will shape the future of structured products Unique added value to clients at point- of-sale Outstanding line-up of high-quality issuers … more to come Global offering Leading technology Fully compliant with upcoming regulation We are witnessing strong inte
Slide 16: Prudent capital management delivers strong basis for further development
Slide 16 Prudent capital management delivers strong basis for further development of business CHF m Development of IFRS equity BIS tier 1 capital ratio (Basel III fully applied) 1,626 1,620 25.5% 26.1% Targets -84 74 1,348 1,387 4 ≥ 16% Total capital ≥ 12% Core capital 424 425 2013 Dividend Other Pr
Slide 17: Raiffeisen stake buyback with immediate positive effects
Slide 17 Raiffeisen stake buyback with immediate positive effects and opportunities for further capital optimization ROE Buyback of 12.5% 12.5% stake completed +2pp 38.2% (27 August 2014) 33.5% Raiffeisen Switzerland Price per share circa Free float CHF 33.2 (entire stake CHF 269.7 m) Total capital
Slide 18: Growth initiatives envisaged for second half of the year
Slide 18 Growth initiatives envisaged for second half of the year Key initiatives Strive for organic growth in Private Banking by winning market share and retaining market talent Quality Growth Boutique to reap benefits of broad interest in Global product Continue build-out and market leverage for o
Slide 19: Additional dividend target to underpin long-term commitment to shareholders
Slide 19 Additional dividend target to underpin our strong long-term commitment to shareholders Turning potential into performance, % 1 ROE1 2 Cost/income 3 Total capital ratio 80.8 79.4 13.3 >12 <75 75 11.4 25.5 26.1 >16 CET1 >12 2013 1H14 Target 2013 1H14 Target 2013 1H14 Target 2017 2017 2017 4 P
Slide 20: The Vontobel Group
Slide 20 Private Banking Investment Banking Asset Management = LX) aa © = Z © = Performance creates trust
Slide 21: Positioned to succeed: cutting-edge quality in capabilities, people and processes
Slide 21 Positioned to succeed: cutting-edge quality in capabilities, people and processes We pursue a business strategy that is focused on the achievement of long-term success. This strategy is founded on three pillars We protect and build the wealth of our clients by providing responsible and forw
Slide 22: Client centricity is at the core of our endeavours
Slide 22 Client centricity is at the core of our endeavours Service & Shareholder Profitable Product x Productivity = Value Clients Excellence Growth We are recognized as the most trusted global investment adviser by our clients The majority of our clients recommend us to their peers Our clients can
Slide 23: Solid set of figures in line with strong 1H13
Slide 23 Solid set of figures in line with strong 1H13 CHF m, 6 months ending 30-06-14 30-06-13 31-12-13 Group net profit1 IFRS 73.5 76.1 46.2 Basic earnings per share (CHF) IFRS 1.16 1.19 0.73 ROE (%, annualized) IFRS 9.0 9.7 5.7 ROE (%, normalized; based on 16% CET ratio) 13.3 14.5 8.3 BIS tier 1
Slide 24: Operating performance up 12% on a like-for-like basis
Slide 24 Operating performance up 12% on a like-for-like basis CHF m, net of tax 1H13 +12% 1H14 14.3 76.1 0.7 11.9 0.0 3.3 73.5 7.4 91.1 81.3 Net profit Spread One-offs Forex effect 1H13 1H14 Spread One-offs Forex effect Net profit IFRS 1H13 effect adjusted adjusted effect IFRS 1H14
Slide 25: 70% share of stable fees and commission income
Slide 25 70% share of stable fees and commission income underpins a record high quality by sector comparison CHF m Development of operating income Comments ∆ to 1H13 Increased share of fee and 450 commission income to nearly 437 Total -3% 3 70% (Ø AuM growth: 4%) 399 5 Other income 55% 117 3 102 Tra
Slide 26: Continued stringent cost management bearing fruit
Slide 26 Continued stringent cost management bearing fruit CHF m Development of operating expense Comments ∆ to 1H13 Slightly lower personnel expense 361 29 334 349 -4% (-1%) and general expense (-7%) Total 30 despite increased assets under 28 Depreciation 6% management base (Ø +4%) and 89 83 89 Gen
Slide 27: High quality book of business
Slide 27 High quality book of business Assets by client Home Other Focus markets Total domicile as of market markets 30-06-14, CHF bn 1 Emerging Switzerland Germany Italy UK US Markets2 Total client 102.1 8.6 4.9 3.8 24.6 21.9 6.8 172.7 assets Full presence Onshore Cross-border Cross-border ‘Onshore
Slide 28: Well-diversified asset base across products and asset classes
Slide 28 Well-diversified asset base across products and asset classes CHF bn, 30-06-14 AuM by asset class as of 31-12-12 Group AuM 2% AuM by asset class Comments Private Banking & Investment Banking Others Alternatives 112.8 Liquidity/ Private clients still hold 109.6 3%7% 22% money market 22% of t
Slide 29: Balanced net new money flows despite Emerging Markets reallocation in Q1
Slide 29 Balanced net new money flows despite significant Emerging Markets reallocation in Q1 CHF bn Development of AuM Net new money 8.2 ∆ 0.1 31-12-13 109.6 0.6 0.7 Net new money 0.0 0% 0.9 7.4 0.6 0.7 0.2 0.2 Performance 5.3 5% 0.7 0.3 -0.6 -0.4 -0.1 -0.3 -1.0 FX 0.2 0% 0.0 Other 1.9 -2% 1H13 2H1
Slide 30: Conservative, highly liquid balance sheet with low leverage
Slide 30 Conservative, highly liquid balance sheet with low leverage Balance sheet as of 30-06-14 CHF 19.8 bn CHF 19.8 bn 1.7 Liquidity and banks Liquidity Cash at SNB, with first- 6.6 class counterparties and on and banks a collateralized basis Clients continue to hold large liquidity positions 8.5
Slide 31: Low capital requirements for all business units
Slide 31 Low capital requirements for all business units Allocation of regulatory capital according to BIS standards (as of 30-06-14, CHF m) Other 195.0 Operational risk 518.1 Market risk 38.7 93.1 Credit risk 116.9 127.1 101.5 153.9 94.5 68.4 3.6 52.0 205.9 52.0 32.8 41.8 25.9 29.7 38.9 7.7 102.2 -
Slide 32: High quality of bond portfolio maintained
Slide 32 High quality of bond portfolio maintained – 69% of exposure in AAA and AA counterparties As of 30-06-14 Counterparty exposure by rating Counterparty exposure by sector BBB Other Corporates 2% (non-financials) Financials 3% AAA 17% 32% 26% 39% A 44% 37% AA Government/ public sector bodies Th
Slide 33: Asset Management: ANZ cooperation started well
Slide 33 Asset Management ANZ cooperation started well Scope Profile ANZ Consult Private Banking Asset discretionary mandates regarding Largest bank in NZ Allocation global asset allocation #4 largest bank in AU Investment ‘VT inside’: VT‘s research and know- Consultancy how are embedded into the AN
Slide 34: Investment Banking: External Asset Manager platform with consistent growth
Slide 34 Investment Banking External Asset Manager platform with consistent growth AuM, CHF bn 7.3 6.8 5.2 Breakdown of IB operating income 3.7 3.7 3.3 3% Financial Products 1% 2.5 11% External Asset Managers Share of 17% Brokerage IB 7% 6% 9% 9% 10% 14% 67% business Transaction Banking Corporate Fi
Slide 35: Investment Banking: Unfavourable valuation effects of CHF -14 m in 1H14
Slide 35 Investment Banking Unfavourable valuation effects of CHF -14 m in 1H14 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 BPS 400 CHF m 300 200 194 102 111 112 100 70 34 38 59 20 12 17 10 10 12 6 2 0 0 7 7 0 -9 -6 -2 -6 -2 -14 -29 -32 -24 -28 -16 -12 -78 -59 -65 -87 -90 -136 -
Slide 36: Investment Banking: FP distribution strategy geared towards high-growth areas
Slide 36 Investment Banking FP distribution strategy geared towards high-growth areas Derivatives market Exchange (SIX Structured Products, Börse Frankfurt, Euwax) Primary market Secondary market fixing / issuance listing expiry Private placements / OTC Market description Vontobel on the exchange ma
Slide 37: Strong commitment of the Vontobel family
Slide 37 Strong commitment of the Vontobel family Shareholder structure as of 27-08-14 11.5% Vontobel families (shareholder pooling agreement) 12.5% Vontrust family holding 40.0% (shareholder pooling agreement) Publicly held 33.2% Shares in the pooling agreement Unlocked shares of 15.1% Vontobel Fou
Slide 38: Caution regarding forward-looking statements
Slide 38 Caution regarding forward-looking statements This document is for information purposes only and does not constitute an offer to subscribe for shares of the Vontobel Fund, a fund incorporated under Luxembourg law. Certain sub-funds of this SICAV are authorized or registered for public distri