Slide 1: Full-year results presentation 2012
Full-year results presentation 2012 Zurich, 27 February 2013 Practitioners of the craft of private banking 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by EFG International AG 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 or purchase or redemption of any securities
Slide 3: Introduction, Financial performance, Current status and outlook
1.0 Introduction John Williamson, CEO Financial 2.0 performance Current status, 3.0 outlook 3
Slide 4: Financials summary
Financials summary vs. 2011 IFRS net profit CHF 111.0 m NM IFRS net profit attributable to ordinary shareholders CHF 102.9 m NM Underlying IFRS net profit* CHF 142.5* m 71% Operating income CHF 824.6 m 8% Revenue margin 105 bps Up from 94 bps Net new assets – continuing businesses CHF 3.0 bn Up from
Slide 5: Successful implementation of business review
Successful implementation of business review Capital level and composition transformed: • Both BIS Total Capital and CET1 enhanced. • Already exceeded top end of target range; and at top end with Basel III fully phased-in. Traditional focus on private banking restored: • Non-private banking business
Slide 6: Business performance much improved
Business performance much improved • Return to profit and significant improvement in underlying business performance. • CRO hiring improved in H2 vs H1. • Strong progress in relation to Investment Solutions. • Most business (except Switzerland) performing well. • NNA much better than 2011; and H2 up
Slide 7: Financial performance
1.0 Introduction Financial Giorgio Pradelli, CFO 2.0 performance Current status, 3.0 outlook 7
Slide 8: 2012 Highlights (I)
2012 Highlights (I) Return on AuM resilient, 2H 2012 remains well above medium-term aspiration Revenue-generating AuM Net new assets* RoAuM (in CHF bn) (in CHF bn) (in bps) Other income Commission Net interest +4% +3% +5% 84 bps 93 bps 92 bps 93 bps 78.4 78.7 105 104 105 3.0 94 14 14 14 2.7 12 1.8 6
Slide 9: 2012 Highlights (II)
2012 Highlights (II) Operating leverage drives improved profitability Operating income Operating expenses (in CHF m) (in CHF m) Increase in operating income + 8% driven by positive development in 824.6 713.7 UK, Americas and EFG FP 698.6 + 7% -8% 763.2 622.8 658.3 55 Decline in operating expense
Slide 10: 2012 Highlights (III)
2012 Highlights (III) Capital ratios and composition have improved significantly BIS total capital ratio (in %) Year-end total capital of 18.1% exceeds the upper end of target range (14-16%) 18.1 15.1 15.9 Total capital is now Basel III compliant 1.0 12.9 ** 0.9 Includes already anticipated or
Slide 11: Underlying net profit versus reported IFRS profit
Underlying net profit versus reported IFRS profit Business on track to deliver on medium-term objectives (in CHF m) Summary Business review impact (in CHF m) 20.1 142.5 Disposals 3.3 132.4 Closure costs for businesses exited (14.9) 11.4 Net operating losses of businesses 111.0 being exited (18.8) 10
Slide 12: Operating income
Operating income Total operating income up by 8% year-on-year Operating income Net interest income Net commissions Net other income (in CHF m) (in CHF m) (in CHF m) (in CHF m) 824.6 224.9 491.7 108.0 763.2 698.6 211.7 224.1 453.9 345.6 97.6 128.9 654.8 208.9 79.3 366.6 409.1 415.5 347.0 351.6 30.5 1
Slide 13: Operating expenses
Operating expenses Total operating expenses down by 8% year-on-year, CIR at 79.2% Personnel expenses Other operating expenses (in CHF m) Cost-income ratio (in %) (in CHF m) 92.9% 78.8% 79.2% 78.5% 459.3 467.0 254.4 91.6 79.5 79.2 79.0 191.3 2011 2012 2011 2012 2011 2012 1H12 2H12 * CIR = Ratio of IF
Slide 14: Detailed analysis of headcount & personnel expenses
Detailed analysis of headcount & personnel expenses Underlying private banking and asset management personnel expenses are down 10% in the wake of headcount reductions Headcount (year-end) Breakdown personnel expenses (in CHF m) 467.0 2,547 -11% 459.3 4.2 2,357 36.4 41.2 2,313 2,260 2,260 18.5 2,099
Slide 15: Capital position (I)
Capital position (I) Transformed in terms of quantity and quality Measures executed over last 12 months - BdP exchange announced Nov 2011: increased common equity by CHF 110 m - Sale of treasury shares May 2012: increased common equity by CHF 76 m - IPO of EFG Financial Products in Oct 2012 by CHF
Slide 16: Capital position (II)
Capital position (II) Already exceeded upper end of the target range for BIS capital BIS total capital ratio Breakdown of RWAs (in %) (in CHF bn) Increased total balance sheet by approx. 12%; 18.1 6.0 RWAs increased by 5.6 15.1 15.9 0.6 approx. 11% 1.0 12.9 0.6 ** 0.9 1.4 1.4 XX Credit risk incr
Slide 17: AuM development
AuM development Return to positive net new asset generation (CHF bn) CHF 2.6 bn NNA for continuing businesses excl. EFG FP, 1.6 (0.9) annualized growth rate of 4% (0.6) 3.0 78.7 (2.8) 2H12 annualized growth rate at 78.4 lower end of target range 75.7 Approx. CHF 2.2 bn of AuM still expected to
Slide 18: AuM and NNA by business region
AuM and NNA by business region All regions (except Europe) in target range Dec 2012 AuMs 2012 NNA continuing CHF 78.7 bn as % of RoAuM operations CHF 3.0 bn NNA growth total AuM (in bps) (in %) Switzerland 15.3 19% 93 (0.8) -5% 14.7 19% 75 0.4 2% Rest of Europe 10.6 * 0.8 8% Asia 14.4 18% 78 0.8 6%
Slide 19: Balance sheet
Balance sheet Strong liquidity with Deposit/Loan Ratio of 189% Total assets: CHF 23.6 bn Total liabilities & equity: CHF 23.6 bn Cash & banks 4.8 Due to banks 0.9 Increase in client loans by Deposits 16.1 CHF 0.9 bn (+ 9%); increase in deposits by Treasury bills 0.8 CHF 1.7 bn (+ 12%) Derivatives
Slide 20: Life insurance policies portfolios
Life insurance policies portfolios Impact of life insurance portfolio on current financials Portfolio “Held to Maturity”* - Carrying value CHF 682 million (acquisition cost, premium paid, accrued interest); with actual yield of 4.7% Net revenues in 2012 on life portfolios of CHF 38 million Por
Slide 21: Overview of sovereign and bank exposure
Overview of sovereign and bank exposure GIIPS exposure significantly reduced from CHF 392.9 m to CHF 138.1 m (in CHF m) 31 December 2012 31 December 2011 Bank Bank Country Sovereign Bank bonds placements & Sovereign Bank bonds placements & other other Italy 12.5 - 1.2 12.1 0.1 1.8 Portugal - 20.0 -
Slide 22: Current status, outlook
1.0 Introduction Financial 2.0 performance Current status, 3.0 John Williamson, CEO outlook 22
Slide 23: Resetting of business complete
Resetting of business complete Unprofitable / marginal Asia / Middle East Americas private banking - Manila closed. - Closed New York and BA. locations addressed. - Exited Canada, Bull Wealth - Indian business sold. Management being sold. - Dubai & Abu Dhabi closed. Continental Europe (inc. Switzerl
Slide 24: Focus on private banking restored
Focus on private banking restored • Loyal clients and CROs. • Business approach – remain convinced as to qualitative benefits of model. Still competitively differentiated. • Scale – a good size: strong network; full range of services; scalable operational platform. Yet intimacy of relationship-orien
Slide 25: Most private banking businesses performing well
Most private banking businesses performing well Three of four regional PB businesses delivered strong performances in 2012 UK Increased pre-tax profit contribution by more than 50%. Asia Americas NNA growth towards top end of Increased profit contribution EFGI’s target range. up more than 50%. Stron
Slide 26: Strong emphasis on CRO productivity, more active hiring
Strong emphasis on CRO productivity, more active hiring • Total CROs: 477 at end-2012 (from 567 end-2011). • Total CROs excl. EFG FP: 414 (from 508 at end-2011; 531 in October 2011; 440 at mid-2012). • Additional reduction in CROs in H2 2012 reflected final round of rationalisation, notably in Asia
Slide 27: Solid progress re investment solutions
Solid progress re investment solutions Integral part of private banking • Main focus supporting CROs and PB clients - internally positioned as Investment Solutions. • Developing niche positions with select external segments. Benefits apparent • Helping to broaden & deepen client relationships. • Str
Slide 28: Intent on keeping things relatively simple
Intent on keeping things relatively simple A new equilibrium • More focused; less complex. • France, Sweden, Gibraltar took longer to close than envisaged. + Cost savings from business review These costs will be eliminated in full for 2013. • But delivered on target of net P&L benefit CHF 35 m – par
Slide 29: Clear focus on delivering controlled profitable growth
Clear focus on delivering controlled profitable growth Potential for revenue upside across number of business drivers: • Return to CRO hiring mode in all PB businesses. Clear focus on high quality individuals and teams. • More systematic approach in markets where traction and scope for significant g
Slide 30: Changes to organisation and leadership
Changes to organisation and leadership To reinforce focus on delivering controlled EFGI / EFG Bank executive profitable growth, changes effective 1 April 2013: comittees to comprise: • John Williamson (CEO); • Executive committees of EFGI and EFG Bank • Giorgio Pradelli (CFO); to be aligned. Individ
Slide 31: Committed to delivering medium-term objectives
Committed to delivering medium-term objectives Stand to benefit from market / FX tailwinds, but not assumed. 2013 started encouragingly. Remain committed to medium-term objectives: • Net new assets in the range 5-10% per annum. • Reduced cost-income ratio - to below 75% by 2014. • Gross margin to re
Slide 32: Practitioners of the craft of private banking
Practitioners of the craft of private banking www.efginternational.com 32
Slide 33: Appendix
4.0 Appendix 33
Slide 34: Consolidated income statement (IFRS)
Consolidated income statement (IFRS) (in CHF million) 2011 2012 Net interest income 211.7 224.9 Net banking fee & commission income 453.9 491.7 Net other income 97.6 108.0 Operating income 763.2 824.6 Personnel expenses (459.3) (467.0) Other operating expenses (213.5) (164.2) Amortisation of tangibl
Slide 35: Consolidated income statement (IFRS)
Consolidated income statement (IFRS) (in CHF million) 1H 2011 2H 2011 1H 2012 2H 2012 Net interest income 122.6 89.1 116.8 108.1 Net banking fee & commission income 242.9 211.0 236.7 255.0 Net other income 30.5 67.1 55.6 52.4 Operating income 396.0 367.2 409.1 415.5 Personnel expenses (227.3) (232.0
Slide 36: Consolidated balance sheet (IFRS)
Consolidated balance sheet (IFRS) (in CHF million) Dec 2011 Dec 2012 Cash and balances with central banks 1,079 1,364 Treasury bills and other eligible bills 824 817 Due from other banks 2,207 3,393 Derivative financial instruments 537 563 Financial instruments 6,264 6,113 Loans and advances to cust
Slide 37: Breakdown of Assets under Management
Breakdown of Assets under Management 31.12.12 By category 31.12.11 31.12.12 (in CHF bn) Cash & Deposits 25% 25% 19.4 Bonds 19% 20% 16.1 Equities 23% 23% 17.9 Structured products 9% 8% 6.2 Loans 13% 14% 10.9 Hedge Funds / Funds of HFs 6% 5% 4.4 Other 5% 5% 3.8 Total 100.0% 100.0% 78.7 31.12.12 By cur
Slide 38: Segmental analysis – 2012
Segmental analysis – 2012 Performance Asset Corporate summary Switzerland Rest of EU Asia Americas UK EFG FP Eliminations*** Total Management center (in CHF m) Segment revenues 155.9 122.8 109.2 113.0 154.1 72.7 125.5 21.9 (50.5) 824.6 Segment expenses (123.8) (100.4) (73.3) (77.4) (107.8) (30.4) (9
Slide 39: Segmental analysis – 2011
Segmental analysis – 2011 Performance Asset Corporate summary Switzerland Rest of EU Asia Americas UK EFG FP Eliminations* Total Management center (in CHF m) Segment revenues 173.8 134.4 103.3 77.2 132.6 53.8 108.9 20.9 (41.7) 763.2 Segment expenses (165.5) (122.5) (81.5) (69.5) (93.6) (28.0) (85.2)
Slide 40: Contacts
Contacts Media Investors Strategy, Marketing & Communications EFG International Investor Relations Keith Gapp, Head of Strategy and Marketing Jens Brueckner, Head of Investor Relations Telephone: +41 44 226 1217 Telephone: +41 44 226 1799 E-mail: keith.gapp@efginternational.com E-mail: jens.brueckne