Efg International Ag · SIX:EFGN
Efg International — FY2017 Earnings Presentation
49 slides from Efg International's earnings presentation, Feb 28, 2018
Slide 1: Full-year results presentation 2017
EFG International Full-year results presentation 2017 Zurich, 28 February 2018
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 E rG Agenda * Highlights Giorgio Pradelli, CEO EFG International * Financial performance Dimitris Politis, CFO EFG International * Strategic priorities & outlook Giorgio Pradelli ° Q&A All Full-year results presentation 2017 Page3
Slide 4: Highlights
ErG Highlights Full-year results presentation 2017 Page 4
Slide 5: 2017: A transformational year
EFG International E rG 2017: A transformational year Business highlights * Considerably strengthened market position through increased size and scale Snecessiull » Launched renewed EFG brand and consecutively rolled it out across all regions completion of integration process * Completed six legal in
Slide 6: One of the largest Swiss private banks
EFG International E rG One of the largest Swiss private banks — Well positioned to build further momentum 2017 results reflect BSI integration process + EFG one of the top 10 Swiss private banks * Closing of UBI acquisition in November 2017 further strengthened European presence AuM CHF 142 billion
Slide 7: Financial performance
ErG Financial performance Full-year results presentation 2017 Page7
Slide 8: FY 2017 financial results into perspective
EFG International ErG FY 2017 financial results into perspective Improved underlying profitability in 2017 in a transformational year Business development Cost evolution & delivery of synergies Profitability Capital & liquidity position / dividend Legacy issues * Underlying NNA of CHF 2.3 bn - Under
Slide 9: Financials summary
EFG International Financials summary Underlying net profit*, CHF m IFRS net profit, CHF m Underlying operating income*, CHF m Underlying revenue margin*, in bps Operating income, CHF m Revenue-generating AuM, CHF bn Underlying NNA (excl. AuM attrition), CHF bn Underlying NNA growth (excl. AuM attrit
Slide 10: Results highlights (I)
EFG International Results highlights (1) Underlying NNA showing positive trend Underlying NNA evolution (in CHF bn) Nov-Dec 1Q17 2017 3Q17 4Q17 2016 Revenue margin holding up Underlying RoAUM (in bps) 2015 2016 2017* > RoAuM on AuM excl. loans * AuMreclassification had a positive impact of Full-year
Slide 11: Results highlights (II)
EFG International Results highlights (II) Expenses decrease as synergies are realised Underlying operating expenses (in CHF m) 2017 2015 Exceeded targeted pre-tax cost synergies for the year + Migration to a single IT platform will unleash further cost synergies, enhancing underlying profitability F
Slide 12: Revenue-generating AuM development
EFG International ErG Revenue-generating AuM development Positive underlying NNA of CHF 2.3 bn, growth rate of 1.6%. Strong positive market performance and positive FX impact Revenue-generating AuM evolution (in CHF bn) — N 1 ~*~ _ — Dec 16 Reclassifications FX Market — Acquisition/ AuM Underlying D
Slide 13: Evolution of quarterly NNA & AuM attrition
o_o ErG Evolution of quarterly NNA & AuM attrition Continued positive underlying NNA since 2Q17 Underlying NNA evolution AuM attrition evolution (in CHF bn) (in CHF bn) a yt CHF 3.6 bn, 3.6% annualised growth Nov-Dec 1Q17 2017 3Q17 4Q17 Nov-Dec 1Q17 2Q17 3Q17 4Q17 2016 2016 Underlying NNA in 2017 at
Slide 14: AuM attrition drivers and expected evolution in 2018
EFG International ErG AuM attrition drivers and expected evolution in 2018 FY17 AuM attrition in line with communicated estimate; additional attrition in 2018 driven by EFG’s decision to exit certain client relationships and to further improve risk profile of client portfolio 2017 AuM attrition anal
Slide 15: AuM and NNA by business region
EFG International AuM and NNA by business region Substantial underlying NNA growth in Asia, declining AuM attrition in all business regions Central Switzerland, Ticino & Italy Romandie & Continental Europe Asia Latin America UK Investment Solutions/Funds Investment Solutions Other 2017 AuMs CHF 142.
Slide 16: Growth and productivity drivers - CRO performance
EFG International ErG Growth and productivity drivers —- CRO performance 644 CROs, 58 new CROs hired during 2017 Number of CROs C) GD @&) G 1H16 2H16 aH 2H17 > Average number of CROs Performance of new CROs 2015 Hires* 2016 Hires** 2017 Hires*** = New CROs hired in the period —_* From 01 Jan 2015 to
Slide 17: Underlying operating income (I)
EFG International E rG Underlying operating income (I) Underlying operating income at CHF 1,202.3 m Underlying operating income (in CHF m) Stable income composition, no change in risk appetite 12023 Underlying net interest income: Positively affected by USD interest rate increases Negatively affecte
Slide 18: Underlying operating income (II)
EFG International E rG Underlying operating income (II) Consistent revenue generation from private banking Private banking revenues* (in CHF m) OH @ + Solid and consistent revenue generation from private banking Slow 3Q17 private banking revenues — a seasonal effect + All regions posting positive tr
Slide 19: Underlying operating expenses
EFG International E rG Underlying operating expenses Underlying operating expenses reflect the BSI integration and continued cost reduction efforts Underlying operating expenses (in CHF m) 83.8% 85.9% Cost reduction delivery continues, with 2H17 underlying operating expenses down 2% vs. 1H17 Underly
Slide 20: Delivery on planned cost reduction
EFG International ErG Delivery on planned cost reduction 2017 underlying expenses down 18% vs. 2015 EFG & BSI combined operating expenses; FTEs down by 16% Evolution of underlying operating expenses (in CHF m) 1,254.4 —Ce%»)—, | 1,094.9 " 1,033.2 pd 156.1 382i 5481 A=41 2015* 2016* 2017 © Cash-varia
Slide 21: 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 of CHF 240 m Cumulative targeted cost synergies (pre-tax) (in CHF m) Delivered cost synergies of CHF 108 m for 2017, exceeding targeted pre-tax cost synergies for the year CHF 180 m expec
Slide 22: 2017 - a transformational year
EFG International E rG 2017 - a transformational year In 2017, the consolidated balance sheet and income statement were affected by several one-off items The key one-off items affecting the 2017 financial performance are: @ Completion of BSI integration @ The accelerated realisation of synergies and
Slide 23: Completed integration process
EFG International 2017 — a transformational year: ErG © Completed integration process + Legal integration completed at accelerated pace just over a year after the closing of the acquisition + Successfully completed six legal integrations and nine IT migrations Q2 2017 BSI SA (Switzerland) BSi | Q1 2
Slide 24: Update on integration costs
EFG International 2017 - a transformational year: Er © Update on integration costs CHF 195.9 m of integration costs have been incurred since the beginning of the integration; increase in 2H17 due to the IT and data migration Evolution of integration costs (pre-tax) Phasing of integration costs (pre-
Slide 25: Early adoption of IFRS 9
EFG International y= 2017 — a transformational year: ErG © Early adoption of IFRS 9 The key elements of the IFRS 9 accounting standard that affect EFG are I. The reclassification of certain assets from held-to-maturity (HTM) to fair-value * The majority of the impact (CHF 338 m) stems from the recla
Slide 26: Resolution of certain legacy positions
EFG International y= 2017 — a transformational year: ErG © Resolution of certain legacy positions EFG materially reduced its overall insurance portfolio exposure by partially exiting a portion of its life insurance portfolio which was hedged through derivative structures Disposed of the physical lif
Slide 27: Underlying net profit vs. IFRS net profit
— ErG Underlying net profit vs. IFRS net profit Underlying profitability at CHF 165.0 m Overview of non-underlying impacts (in CHE m) 2H17 integration costs of CHF 101.4 m*, 15.8 mainly driven by IT 144 Unwinding of partially hedged life insurance exposure had an impact of CHF 30.1 m Exceptional leg
Slide 28: Balance sheet
EFG International Balance sheet Strong and highly liquid balance sheet Total assets: Total liabilities & equity: CHF 41.6 bn CHF 41.6 bn Fair value through OCI 52 —> Financial assets at fair value through 22 P&L — Full-year results presentation 2017 ErG Loan-deposit ratio at 52% Liquidity coverage r
Slide 29: Capital position (I)
EFG International Capital position (I) Strong capital ratios, CET 1 ratio at 17.7%, Total Capital ratio at 21.5%; RWAs decreased by 12% year-on year Total Capital Ratios* Breakdown of RWAs* (in %) (in CHF bn) 20.0 on 18.2 77 87 72 31 Dec 2016 31 Dec 2017 31 Dec 2016 31 Dec 2017 Common Equity mAdditi
Slide 30: Capital position (II)
— ErG Capital position (II) FY17 underlying organic capital generation of 160 bps, capital measures had a net positive effect of 150 bps, purchase price adjustment for BSI and integration costs decreased capital by 260 bps Evolution of Total Capital ratio* (in %) Underlying capital BSI acquisition/i
Slide 31: Strategic priorities & outlook
ErG Strategic priorities & outlook Full-year results presentation 2017 Page 31
Slide 32: Executing on our 2016-2019 plan
— ErG Executing on our 2016-2019 plan Well positioned to deliver against strategic targets Closing BSI acquisition a Agreement on Announcement Integration BSI Integration final purchase Completion of BSI acquisition Singapore BSI Hong Kong price of BSI CEO change BSI integration a a es February 2016
Slide 33: Strategic priorities
EFG International E rG Strategic priorities Continue to deliver against the 2016-2019 plan Strategic priorities Operational priorities Grow - Increase NNAs and AuM Client service delivery model: * Leverage client solutions * Continue to enhance international Realise synergy potentials platform Organ
Slide 34: Entrepreneurial thinking. Private banking.
EFG International E =G Entrepreneurial thinking. Private banking. Clear-cut geographic presence Strong client focus Client solutions Market-specific services & Entrepreneurial approach Extensive range of investment, : >P with CRO client partnership : , advice with local know-how as key differentiato
Slide 35: Core regions
Switzerland & Europe (incl. CEE) UK Asia Latin America Core regions 2017 AuM 2016 AuM EFG standalone
Slide 36: Pure play private bank with clear strategic focus
EFG International E =G Pure play private bank with clear strategic focus Focus on clients Strategic client focus Entrepreneurial approach with CRO model as key differentiator: * We build our business around people « We are where our clients are + Empowerment to serve clients by EFG International’s H
Slide 37: Extensive range of investment, wealth and credit solutions
EFG International E rG Extensive range of investment, wealth and credit solutions * Private banking is our core business - we offer our clients market-specific advice with local know-how and have global units that are focused on investment solutions and global markets access * International provider
Slide 38: Confirming 2016-2019 targets
_ ErG Confirming 2016-2019 targets Operational targets for the combined business to be achieved in 2019 Continually growing revenue-generating Assets under Management with targeted annualised growth rate of between 3% to 6%! Net new assets Cost-income ratio Targeting a cost-income ratio of below 70%
Slide 39: Full-year results presentation 2017 Page 39
Full-year results presentation 2017 Page 39
Slide 40: Appendix
ErG Appendix Full-year results presentation 2017 Page 40
Slide 41: Income statement (IFRS)
EFG International Income statement (IFRS) (in CHF million) Net interest income Net banking fee & commission income Net other income Operating income Personnel expenses Other operating expenses Amortisation of tangible fixed assets & software Amortisation of acquisition related intangibles Total oper
Slide 42: Balance sheet (IFRS)
EFG International Balance sheet (IFRS) (in CHF million) Cash and balances with central banks Treasury bills and other eligible bills Due from other banks Loans and advances to customers Derivative financial instruments. Financial asset at fair value through P&L Fair value through other comprehensive
Slide 43: Update on Life Insurance Policies (I)
EFG International E rG Update on Life Insurance Policies (1) Adoption of IFRS 9 classifies all LIPs at fair value * EFGI early adopts IFRS 9 from 1 January 2017. As a consequence, all life insurance policies are aggregated in one portfolio and classified at Fair Value Through Profit & Loss (FVTPL) *
Slide 44: Update on Life Insurance Policies (II)
EFG International E rG Update on Life Insurance Policies (II) Restructuring and exposure reduction in the synthetic portfolio In 2017, EFGI materially decreased its exposure to Life Insurance policies by partially unwinding a derivatives transactions involving hedged physical policies Hedged physica
Slide 45: Overview ECL
EFG International Overview ECL Exposure ECL ErG Mortgage Lombard Other Total 6,790 10,997 1,135 18,922 Full-year results presentation 2017 8 147 24 179 0.12% 1.34% 2.1% 0.95% 6,601 11,666 877 19,144 11 161 20 192 0.17% 1.38% 2.28% 1.00% Page 45
Slide 46: 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% 25% 18% 2% 14% 13% 4% 100% 33.4 35.6 26.2 3.4 19.2 18.9 5.0 142.0 47% cuR 26% GBP 10% CHF 1% Other 6% Total 100% Full-year results presentation 2017 43%
Slide 47: Segmental analysis 2017
EFG International Segmental analysis 2017 Performance summary eel in CHF m) Ticino & Italy Segment revenues 290.3 Segment expenses (249.5) Pre-provision profit 40.8 IFRS net profit 55.3 AuMs (in CHF bn) 36.2 Underlying NNA (in CHF bn) (0.1) CROs 164 Employees (FTEs) 326 Romandie & Continental Latin
Slide 48: Segmental analysis 2016
EFG International Segmental analysis 2016 Performance summary in CHE m) Switzerland Segment revenues 142.7 Segment expenses (116.6) Pre-provision profit 26.1 IFRS net profit (61.3) AuMs (in CHF bn) 15.5 NNA (in CHF bn) 0.0 CROs 60 Employees (FTEs) 314 entre Americas UK 118.8 101.2 157.0 (90.4) (82.5
Slide 49: 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.