Efg International Ag · SIX:EFGN
Efg International — H1 2017 Earnings Presentation
40 slides from Efg International's earnings presentation, Jul 26, 2017
Slide 1: Half-year results presentation 2017
EFG International Half-year results presentation 2017 Zurich, 26 July 2017
Slide 2: Important Legal Disclaimer
EFG International E rG Important Legal Disclaimer This document has been prepared by EFG International AG (“EFG”) solely for use by you for general information only and does not contain and is not to be taken as containing any securities advice, recommendation, offer or invitation to subscribe for,
Slide 3: Agenda
EFG International Agenda Introduction Financial performance Priorities, conclusion Q&A Joachim H. Straehle, CEO EFG International Giorgio Pradelli, Deputy CEO & CFO EFG International Joachim H. Straehle All Half-year results presentation 2017 rG Page3
Slide 4: Introduction
ErG Introduction Half-year results presentation 2017 Page 4
Slide 5: 1H 2017 business highlights
— ErG 1H 2017 business highlights On track to establish a top-tier Swiss private bank BSI integration almost completed as per plan: * Legal and operational integration of BS! completed in all locations at an accelerated pace « Swiss IT migration, as last step, on track to be completed by the end of
Slide 6: 1H 2017 results highlights
— ErG 1H 2017 results highlights + First-half 2017 results reflect strong progress in BSI integration process + Solid underlying profitability and return to positive underlying NNA in the first half 2017 - EFG as one of the largest private banks in Switzerland with CHF 138.4 bn in AuM Scal ae care -
Slide 7: Financial performance
ErG Financial performance Half-year resu {ts presentation 2017 Page7
Slide 8: Financials summary
EFG International Financials summary Underlying net profit*, CHF m IFRS net profit, CHF m Operating income, CHF m Underlying operating income*, CHF m Underlying revenue margin*, in bps Revenue-generating AUuM, CHF bn Net new assets, CHF bn AuM attrition, CHF bn Underlying NNA (excl. AuM attrition),
Slide 9: Underlying operating income (I)
EFG International E rG Underlying operating income (I) Resilient revenue margin in line with target Underlying operating income in line with 2H 2016 Evolution in underlying operating income Underlying RoAUM (in CHF m) (in bps) BSI Jul - Oct 2016 1H 2017 underlying operating income includes mark-to-m
Slide 10: Underlying operating income (II)
EFG International E rG Underlying operating income (II) Positive impact by USD interest rate increase Underlying operating income Underlying net commissions Underlying netinterestincome Underlying net other income (in CHF m) (in CHF m) (in CHF m) (in CHF m) BSI Jul - Oct 2016 Half-year results prese
Slide 11: Underlying operating expenses
EFG International ErG Underlying operating expenses 7% year-on-year decline in underlying operating expenses reflects the advanced BSI integration process Underlying operating expenses (in CHF m) 564.2 YoY ee 530.70 27 ___A19,5 9925 3912 1H16 2H16 1H17 Underlying personnel expenses (in CHF m) Fs @o0
Slide 12: Underlying net profit vs. IFRS net profit
EFG International ErG Underlying net profit vs. IFRS net profit Solid underlying profitability at CHF 74.5 m Overview of non-underlying impacts (in CHF m) 4.8 3.9 |__| (0.4) 32.7 19.2 IFRS net profit Life insurance Integration BSlintangible Exceptional Other 1H17 costs amortisation legal costs Half-
Slide 13: Update on cost synergies from BSI transaction
EFG International E rG Update on cost synergies from BSI transaction On track to achieve targeted cost synergies Cumulative targeted cost synergies (pre-tax) (in CHF m) 2017 additional synergies of CHF 20 m are driven by personnel expenses (net reduction of over 200 FTEs already in 1H 2017 excluding
Slide 14: Update on integration costs
EFG International E rG Update on integration costs CHF 97.8 m have been incurred since the beginning of the integration Phasing of integration costs (pre-tax) Breakdown of integration costs (pre-tax) (in CHF m) (in CHF m) lm Equity/BS P&L 47 38 15 427 15 (10.0 45 32.7 55.1 90 35.8 2016 1H 2017 1H 20
Slide 15: Growth and productivity drivers CROs
— ErG Growth and productivity drivers 671 CROs, 44 new CROs hired during 1H 2017 Number of CROs AuM per CRO (in CHF m) v =) 22 697 191 4 180 174 2h 2013 2014 2015 2016 1H17 Excl. CROs hired in 1H16 2H16 1H17 1H17 > Average number of CROs Net reduction of 26 CROs in 1H17, mainly + Average AuM per CRO
Slide 16: CRO performance
EFG International ErG CRO performance Newly hired CROs turn profitable within 12-24 months Performance of new CROs Number of New CROs + 84% of CROs hired in 66 2015 and retained are profitable * Two thirds of new CROs 4 hired in 2015 did succeed, in line with recent experience 43 2 [" 1 “| + More th
Slide 17: Revenue-generating AuM development
EFG International E rG Revenue-generating AuM development Positive underlying NNA for 1H 2017 and strong positive market performance. Revenue- generating AuM impacted by ongoing attrition and negative currency movements Revenue-generating AuM evolution (in CHF bn) Underlying NNA in 2Q17 at CHF 1.8 b
Slide 18: Evolution of quarterly NNA / AuM attrition
EFG International ErG Evolution of quarterly NNA / AuM attrition Underlying NNA positive in 1H 2017, deceleration of AuM attrition Underlying NNA evolution (in CHF bn) 1.8 (1.3) (1.3) Nov-Dec 2016 1017 2017 Underlying NNA in 2Q17 at CHF 1.8 bn, return to positive performance; underlying NNA for 1H17
Slide 19: AuM attrition drivers
EFG International AuM attrition drivers AuM attrition driven by de-risking of business in line with accelerated pace of BSI integration 1H 2017 AuM attrition analysis (in CHF bn) 2017 m1a7 04 Milan branch Ls} Exit countries & | CRO departures Voluntary 1H17 attrition client relationships disclosures
Slide 20: Update on AuM attrition estimates
EFG International ErG Update on AuM attrition estimates AuM attrition expected to be terminated by year-end 2017, reflecting front-loading of integration effort Estimated AuM attrition (cumulative) (in CHF bn) Actual attrition m Milan branch 10.6 3.4 Nov-Dec 2016 Nov 2016-Jun 2017 Originally expecte
Slide 21: AuM and NNA by business region
EFG International AuM and NNA by business region Significant underlying NNA growth in Asia, deceleration of AuM attrition in most regions during 2017 Central Switzerland, Ticino & Italy Romandie & Continental Europe Asia Latin America UK Investment Solutions (Net) Investment Solutions Other 1H 2017
Slide 22: Balance sheet
EFG International E rG Balance sheet Strong and highly liquid balance sheet Total assets: Total liabilities & equity: CHF 42.0 bn CHF 42.0 bn DUSHOIDanKS 16 + Loan-deposit ratio at 50% Cash & banks 1B. + Liquidity coverage ratio (LCR) at 211% Available 5.0 . . Treasury bills 17 for sale ° Demets ma
Slide 23: Capital position (I)
EFG International Capital position (I) Strong capital ratios, CET 1 ratio at 17.7%, Total Capital ratio at 22.8% Total Capital Ratios* (in %) 7.7 31 Dec 2016 30 June 2017 =Common Equity “Additional Tier1 =Tier 2 * Swiss GAAP fully applied Breakdown of RWAs* (in %) 1 23 11.8 24 2h 31 Dec 2016 30 June
Slide 24: Capital position (II)
— ErG Capital position (II) Underlying organic capital generation of 80 bps, issuance of Tier 2 note added 320 bps, purchase price adjustment for BS! decreased total capital by 120 bps Evolution of Total Capital ratio* (in %) Underlying capital BSI acquisition/integration generation related impact J
Slide 25: Priorities, conclusion
ErG Priorities, conclusion Half-year resu {ts presentation 2017 Page 25
Slide 26: Overview integration timeline
EFG International ErG Overview integration timeline Legal integration of all BSI’s entities worldwide completed at an accelerated pace; Swiss IT migration planned for 4017 Q2 2017 v BSI SA (Switzerland) BSi | Q4 2016 Vv Q1 2017 VW Q2 2017 Vs 3 2017 Q4 2017 BSI BSI SA BSI oe Swiss IT BB closure Singa
Slide 27: Swiss IT migration well on track
EFG International E rG Swiss IT migration well on track + Migration plan in place, incorporating the lessons learned from the international IT migrations + Capacities and functionalities established on a global scale to accommodate all relevant BSI products and processes on EFG platform + Rollout of
Slide 28: Confirming medium-term operational targets
EFG International E rG Confirming medium-term operational targets Medium-term targets for the combined business, which will apply after completion of BSI integration + Continually growing revenue-generating AuM with a targeted annualised growth rate of between 3% to 6%! Net new assets Cost-income ra
Slide 29: Conclusion
EFG International E rG Conclusion Capitalise on combined scale, solidity and global footprint to enhance position as top- tier Swiss private bank Strong focus on organic growth and retaining and regaining assets to offset already slowing AuM attrition Focus on realisation of cost synergies for incre
Slide 30: Half-year results presentation 2017 Page 30
Half-year results presentation 2017 Page 30
Slide 31: Appendix
ErG Appendix Half-year results presentation 2017 Page 31
Slide 32: Income statement (IFRS)
EFG International E rG Income statement (IFRS) 2H 2016 (in CHF million) 1H 2016 (restated) 1H 2017 Net interest income 102.3 94.6 154.3 Net banking fee & commission income 1747 2207 315.1 Net other income 64.7 65.0 139.5 Operating income 341.7 380.3 608.9 Personnel expenses (217.0) (249.5) (356.0) O
Slide 33: Balance sheet (IFRS)
“_ ErG Balance sheet (IFRS) (in CHF million) Restated Dec 2016 Jun 2017 Cash and balances with central banks 8,888 9,161 Treasury bills and other eligible bills 1,946 1,744 Due from other banks 2,924 3,983 Loans and advances to customers 18,878 18,227 Derivative financial instruments. 831 674 Financ
Slide 34: Evolution of revenue-generating AuM
EFG International Evolution of revenue-generating AuM Underlying NNA (excl. AuM attrition) at CHF 0.5 bn; underlying RoAUM at 88 bps Revenue-generating AuM (in CHF bn) Average revenue-generating AuM (in CHF bn) Underlying NNA vs. AUM attrition (in CHF bn) 144.5 1H16 2H16 1H17 EFG BSI Jul - Oct 2016
Slide 35: Breakdown of AuM
EFG International Breakdown of AuM rG Cash & deposits 24% Bonds 26% Equities 23% Structured products 3% Loans 13% Funds 4% Other 8% Total 100% 24% 24% 24% 3% 13% 3% 8% 100% 33.6 32.9 FBS 4.3 18.3 43 11.5 138.4 USD 47% EUR 26% GBP 10% CHF 1% Other 6% Total 100% Half-year results presentation 2017 45%
Slide 36: Segmental analysis 1H 2017
EFG International Segmental analysis 1H 2017 Sista ghee Ticino & Italy Segment revenues 150.4 Segment expenses (120.3) Pre-provision profit 30.2 IFRS net profit 36.6 AuMs (in CHF bn) 36.0 NNAs (in CHF bn) (27) CROs 188 Employees (FTEs) 337 Romandie & Continental Europe 139.7 (125.1) 14.6 4.9 38.1 (1
Slide 37: Final purchase price at CHF m
EFG International Final purchase price at CHF 971 m (in CHF m) i...) 86.2 m EFG shares issued to BTG as consideration at CHF 5.27 AT1 issued to BTG QD Cash post c. CHF 217 m purchase price adjustments estimated at \ closing ) BSI estimated TBV at closing P/TBV of 0.76x BSI final TBV at closing P/TBV
Slide 38: Life insurance policies portfolio
EFG International E rG Life insurance policies portfolio Impact of life insurance portfolio on current financials Portfolio “Held to Maturity’* Carrying value USD 854 m / CHF 810 m (acquisition cost, premium paid, accrued interest) Fair value of USD 538 m / CHF 516 m, reducing gap to USD 307 m / CHF
Slide 39: Update on life insurance portfolios
EFG International E rG Update on life insurance portfolios The carrying value of the HTM portfolio is fully recoverable + Legal cases against Transamerica, AXA and Lincoln filed, strong legal claim. Transamerica's motion to dismiss EFG's claim was recently denied and the case will now proceed to the
Slide 40: Contacts
EFG International E rG Contacts Investors Media Investor Relations Marketing & Communications Jens Brueckner Daniela Haesler Head of Investor Relations Head of Marketing & Communications Phone +41 44 226 1799 Phone +41 44 226 1804 jens.brueckner@efginternational.com daniela.haesler@efginternational.