Vp Bank Ag Class A · SIX:VPBN
Vp Bank Ag Class A — FY2020 Earnings Presentation
49 slides from Vp Bank Ag Class A's earnings presentation, Mar 9, 2021
Slide 1: Applied coronavirus safety measures
Applied coronavirus safety measures (based on the applicable regulations of the Liechtenstein government): • Compliance with the upper limit of 10 persons at events • Minimum distance of 1.5 metres • Masks are required indoors in spaces where more than one person is present; speakers are not include
Slide 2: Media and analyst conference
VP Bank Group · 9 March 2021 Media and analyst conference 2
Slide 3: Programme
Programme Part I: The 2020 financial year at a glance Part II: A deep dive into Strategy 2026 Welcome Strategy 2026 Dr Thomas R. Meier, Chairman of the Board of Paul Arni, Chief Executive Officer Directors Intermediaries & Private Banking VP Bank Group 2020 annual results Tobias Wehrli, Head of Inte
Slide 4: Greater risks ...
Greater risks ... … are only rarely rewarded with better prospects. 4
Slide 5: Sustainable dividend in the target range
Sustainable dividend in the target range Dividends (in CHF) Payout ratio Dividend yield 5.50 5.50 5.50 64% 1 4.2% 4.1% 61% 3.9% 1 4.50 3.5% 3.6% 1 51% 4.00 47% 45% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 1 Subject to the approval of the general meeting of sharehold
Slide 6: Re-election to the Board of Directors
Re-election to the Board of Directors The Board of Directors proposes the re-election of Dr Thomas R. Meier for a term of office of three years. 6
Slide 7: Not standing for re-election
Not standing for re-election Fredy Vogt is not standing for re- election. We wish to express our thanks for the enormous services rendered for the benefit of VP Bank and wish him all the best for the future. 7
Slide 8: Election of new members to the Board of Directors
Election of new members to the Board of Directors The Board of Directors proposes the election of Philipp Elkuch for a term of office of three years. 8
Slide 9: Data points to the right direction.
Data points to the right direction. Human foresight shows the way. 9
Slide 10: 2020 review: interest rates fall further – stock markets recover
2020 review: interest rates fall further – stock markets recover Ten-year capital market yields continued to be low Equity markets made up for previous losses 2.0% 130 1.5% 120 110 1.0% 100 0.5% 90 0.0% 80 -0.5% 70 -1.0% 60 Jan.Feb Jan Feb.Mrz Mar.Apr Apr.Mai MayJun Jun. Jul Jul. Aug. Sept.Okt Aug S
Slide 11: 2020: a financial year shaped by the COVID-19 pandemic
2020: a financial year shaped by the COVID-19 pandemic Group net Tier 1 ratio income 20.8% CHF 41.6 million 20.1% in 2019 CHF 73.5 million in 2019 Very good equity base Net income Impacted by the Net new money before valuation valuation adjustment of inflow Stable one individual position Rating: adj
Slide 12: Costs reduced, low interest rates causing strain
Costs reduced, low interest rates causing strain • Reduced Group net income due to lower USD interest rates and one-off valuation adjustments • Increased commission and service fee income with a lower cost base Profit before valuation adjustments in CHF million Income statement in CHF million 6.7 73
Slide 13: Solid operating income in challenging market conditions
Solid operating income in challenging market conditions Operating income (in CHF million) • Commission income up CHF 2.8 million or 2.1% 327.8 319.0 • Higher transaction-based earnings due to high 290.8 volumes in Q1 2020 14.5 8.8 0.6 61.0 56.6 • Slightly lower recurring income 55.0 137.2 140.0 Reve
Slide 14: Optimised cost structure
Optimised cost structure Operating expenses (in CHF million) • Personnel expenses down CHF 3.3 million or –2.0% 269.5 • Time-delayed hiring 232.3 244.8 19.8 25.1 29.3 28.8 • General and administrative expenses up CHF 2.6 million or 4.6% 62.9 56.3 58.8 • Includes one-off costs of CHF 3.8 million for
Slide 15: A robust and healthy foundation
A robust and healthy foundation Balance sheet as of 31 December 2020 (in CHF billion) 0.2 Due to banks • Solid balance sheet Cash and cash equivalents 2.6 • High level of liquid assets • Reduction in client loans of 7.6% Due from banks 1.8 • Amounts due from banks up 143% 11.6 Client deposits • Stab
Slide 16: Capital adequacy requirements well exceeded
Capital adequacy requirements well exceeded 31.12.2018 31.12.2019 31.12.2020 Risk-weighted assets in CHF billion 4.5 4.8 4.7 Core capital (CET 1) in CHF million 942.8 973.2 972.8 Tier 1 ratio (CET 1 ratio) 20.9% 20.1% 20.8% Liquidity coverage ratio (LCR) 142.6% 213.1% 179.4% Leverage ratio 7.3% 7.1%
Slide 17: Client assets under management increased
Client assets under management increased Client assets under management (in CHF billion) • Net new money inflow CHF 1.4 billion • Increase in client assets under management of 1.4% Other assets under management • Client assets including custody assets at CHF 54.9 billion or up 0.6% Assets with asset
Slide 18: Segment reporting reflects new organisation
Segment reporting reflects new organisation Segment overview as of 31 December 2020 Intermediaries & Corporate Client Solutions Group Private Banking Center Business volume in CHF1 42.1 billion 11.5 billion – 53.7 billion Client assets under management in 36.0 billion 11.5 billion – 47.4 billion CHF
Slide 19: Security and robustness
Security and robustness A secure and stable bank • High level of liquid assets • Solid equity and a strong tier 1 ratio • Excellent “A” rating from Standard & Poor’s Challenging market environment, stable operating result • Robust earnings, strain due to USD interest rates • Cost basis further optim
Slide 20: New trends emerge all the time.
New trends emerge all the time. Turning them into investment opportunities is the real trick. 20
Slide 21: Valuation adjustment puts net income under pressure
Valuation adjustment puts net income under pressure Strategy 2020 – strengthening the business model Strategy 2020 was built on three pillars Client assets • Net new money grew by 4.2% on average over the last five years Growth Focus Culture As of 31 December 2020 Target 47.4 billion 50 billion • St
Slide 22: Crucial foundations laid for Strategy 2026
Crucial foundations laid for Strategy 2026 IT strategy for the Sustainability future initiated strategy launched Digitisation successfully Location accelerated strategies honed Group Executive Management strengthened 22
Slide 23: Opportunities don’t just come about.
Opportunities don’t just come about. They require the right analysis at the right time. 23
Slide 24: VP Bank becomes an international open wealth service pioneer
VP Bank becomes an international open wealth service pioneer 24
Slide 25: Strategy 2026 addresses opportunities
Strategy 2026 addresses opportunities Target Key measures • Establishing sustainability through Investing for Change Strategic further development • Gearing locations towards local market needs of the operational business at • Expansion and development of the business in Asia the existing locations
Slide 26: You decide how sustainable your lifestyle is.
You decide how sustainable your lifestyle is. But what about your investment strategy? 26
Slide 27: Constant further development in the Intermediaries & Private Banking business
Constant further development in the Intermediaries & Private Banking business Boosting personal Building up Focused and digital client Investing for positioning interaction Change of locations 27
Slide 28: 360-degree client portfolio – RM Cockpit
360-degree client portfolio – RM Cockpit Comprehensively digitised Significant workplace increase in efficiency in client management More time for advising clients Needs-based 360- degree view of the client 28
Slide 29: Inspiring clients with new digital channels
Inspiring clients with new digital channels 25 digital client events More than 500 online advisory 12 webinars consultations hosted by experts 29
Slide 30: Actively shaping change – Investing for Change
Actively shaping change – Investing for Change 2020 2021 Proprietary Expansion of the range of Systematic integration of Services for Sustainability Score topics sustainability aspects into transitioning to developed (e.g. Green City Basket) the advisory process sustainability, ESG data and training
Slide 31: Clear positioning of locations with specific offer
Clear positioning of locations with specific offer VP Bank Luxembourg VP Bank Switzerland VP Bank Liechtenstein VP Wealth Management VP Bank British Virgin Islands Hong Kong VP Bank Singapore 31
Slide 32: Access to wealthy clients in China thanks to partnership with Hywin
Access to wealthy clients in China thanks to partnership with Hywin • Business with external asset managers has always been • Founded in Shanghai in 2006, Hywin Wealth is one of part of the core business, parallel to private banking. China’s leading asset managers, with 148 branch offices and more t
Slide 33: Seizing opportunities and actively driving change at all locations
Seizing opportunities and actively driving change at all locations Client Sustainability Locations proximity Intensifying cooperation Systematic advancement of More proximity to the client with clients and the topic of sustainability with location strategies close simultaneous heightening of with th
Slide 34: VP Bank simplifies access to exclusive private market investments
VP Bank simplifies access to exclusive private market investments. 34
Slide 35: Simplified access to exclusive private market investments
Simplified access to exclusive private market investments Systematic access to the asset class Strengthening Private Markets by offering exclusive VP Bank’s position are a growing collective and direct as an international and increasingly private equity and private open wealth service popular asset
Slide 36: Private markets have been characterised by strong demand
Private markets have been characterised by strong demand Almost 50% growth in three years VP Bank is uniquely positioned to play a major role Strong DNA as a “trusted partner” for intermediaries More than 60 years of experience and an excellent reputation The right size and mindset Small enough to b
Slide 37: Client Solutions’ mission
Client Solutions’ mission Accelerate VP Bank’s DNA as a comprehensive international open wealth service pioneer and become a trusted “curator for private market investments” Client Solutions aims to significantly increase the share of wallet of its ~600 intermediaries and attract new B2B2C clients a
Slide 38: ORBIT strategy – a platform embedded in a broad community
ORBIT strategy – a platform embedded in a broad community • Modular, open architecture access and structuring platform for private market investment products • Embedded in a broad community of partners • Connection to ORBIT at each stage of the value chain • Origination and distribution of investmen
Slide 39: ORBIT approach – enabling access to innovative products and services
ORBIT approach – enabling access to innovative products and services The platform enables access to innovative products and services. It ensures convenience for investors, partners and the community. The ORBIT platform includes: • Access to an innovative product shelf • Access to a tailored service
Slide 40: Client value of Client Solutions
Client value of Client Solutions Access to exclusive, high-quality Full flexibility through modular private market opportunities set-up and different structuring solutions Access to free relevant content, contacts Full free optionality through pay-per- and community demand and forgoing booking at VP
Slide 41: Business case – a strong contribution to the 2026 profit targets
Business case – a strong contribution to the 2026 profit targets Client Solutions will contribute strongly to the 2026 profit targets by applying modern modular pricing to increase our profit margins significantly. VP Bank revenue / profit plan 2026 (in CHF mn) Possible pricing components (illustrat
Slide 42: Timeline – key focus and milestones
Timeline – key focus and milestones 42
Slide 43: VP Bank – the curator for private markets
VP Bank – the curator for private markets What? How? Why? We address the attractive We provide clients and We build on our experience and growing market for partners with a holistic and strength in rendering private market solutions by gateway to the private services to professional offering investm
Slide 44: Opportunities don’t just come about.
Opportunities don’t just come about. They require the right analysis at the right time. 44
Slide 45: Financial targets 2026: Increase in Group net income to CHF 100 million
Financial targets 2026: Increase in Group net income to CHF 100 million. Growth Profitability Stability Net new money Profit- Cost / Tier 1 (in % of AuM) margin income ratio (in bp of AuM) ratio2 > 4% p.a.1 > 15 bp 70% > 20% 1 Over the 2021–2026 cycle. 45 2 Operating expenses / operating income.
Slide 46: We bring about stability, innovation and profitable growth through targeted measures
We bring about stability, innovation and profitable growth through targeted measures Evolve Move Scale • Intensification of cooperation • Opening access to investments • IT strategy as a foundation for with clients and simultaneous in alternative assets and further development of the strengthening o
Slide 47: Outlook for 2021 – clear milestones despite difficulty in making forecasts
Outlook for 2021 – clear milestones despite difficulty in making forecasts First half of 2021 Second half of 2021 > 100 million > 100 million • Sourcing partner for IT • Systematic access to infrastructure selected private market • Start of the WM service investments through provider transformation
Slide 48: Question and answer session
Question and answer session 48
Slide 49: Disclaimer
Disclaimer Although the utmost care has been taken in producing this document, we cannot warrant that the information it contains is complete, up-to-date or correct. The contents of this document are provided solely for information purposes and should not be construed as an offer, an invitation to m