Vontobel Holding Ag · SIX:VONN
Vontobel — FY2008 Earnings Presentation
40 slides from Vontobel's earnings presentation, Feb 19, 2009
Slide 1: Presentation of 2008 financial results
Presentation of 2008 financial results
Slide 2: Presentation of 2008 financial results
Presentation of 2008 financial results Herbert J. Scheidt, Chief Executive Officer Dr. Martin Sieg Castagnola, Chief Financial Officer 19 February 2009 Page 2
Slide 3: Overview
Overview Key figures Vontobel Group Business units - Private Banking - Investment Banking - Asset Management - Corporate Center Summary and outlook Page 3
Slide 4: Vontobel remains on course during 2008 crisis
Vontobel remains on course during 2008 crisis Severe financial crisis causes extreme turmoil Vontobel Group achieved a satisfactory performance in a difficult market environment Solidity and stability take priority over profit maximization Sustained client satisfaction instead of a 'quick profit' In
Slide 5: The financial crisis and its consequences
The financial crisis and its consequences Implications for business management: Strengthening of risk controls and risk management Risk/return ratio examined individually Greater focus on risk than on optimization of returns Impact on Vontobel's 2008 financial result: Lower asset base Reduced issuin
Slide 6: Key figures
Key figures Financial year ending1 31-12-08 31-12-07 Change Net profit before minorities (in CHF mns) 113.0 268.3 -58% Basic earnings per share (in CHF) 1.78 4.14 -57% Dividend (CHF) 1.20 2.00 -40% Payout ratio (%) 67% 48% +19 PP Total assets (in CHF bns) 98.5 125.7 -22% - Assets under management 62
Slide 7: Overview
Overview Key figures Vontobel Group Business units - Private Banking - Investment Banking - Asset Management - Corporate Center Summary and outlook Page 7
Slide 8: 2008 crisis impacts results
2008 crisis impacts results Growth contribution +2.9 % +7.8 % +8.1 % +4.9 % from NNM Net in CHF bns 5.8 4.5 3.9 new Sustained inflow 1.4 of new money money 2005 2006 2007 2008 % 21.6 19.2 16.2 ROE -11.1 PP Lower 8.1 profitability 2005 2006 2007 2008 % 80.6 Cost/ 65.2 63.9 67.0 +13.6 PP Reduced incom
Slide 9: Sustained inflows of new money
Sustained inflows of new money Net inflow of new money Growth in AuM in CHF bns in CHF bns in % 5.8 31.12. 79.5 2007 4.5 Net new 3.9 4.9 3.1 3.9 money 1.1 Market-driven change -17.3 -21.8 3.4 1.4 FX -3.7 -4.6 2.7 2.8 1.0 1.1 31.12. 62.4 -21.5 0.4 2008 2005 2006 2007 2008 Private clients Institutiona
Slide 10: Reduced volumes – focused growth initiatives – increased cost discipline
Reduced volumes – focused growth initiatives – increased cost discipline Total operating income (in CHF mns) Net profit after 991.0 minorities1 (in CHF mns) 840.2 -24% 756.0 624.4 263.7 256.1 183.2 -57% 2005 2006 2007 2008 Operating expense1 (in CHF mns) 112.8 667.6 618.7 538.7 -7% 410.4 2005 2006 2
Slide 11: Operating income impacted by decline in volumes and lower asset base
Operating income impacted by decline in volumes and lower asset base Development of income positions Comments -24% ∆ to 2007 in CHF mns Abs. % 991.0 Lower AuM and 2.9 decline in trading 840.2 activities reduce 5.1 commission income 369.0 756.0 26.6 Other income +23.7 nm Trading income 624.4 318.3 Tr
Slide 12: Increased cost discipline – continued investments in markets and infrastructure
Increased cost discipline – continued investments in markets and infrastructure Development of operating expense Comments in CHF mns ∆ to 2007 Reduction in Abs. % -7% personnel expense due to 667.6 lower bonus 41.8 618.7 Depreciation, payments 538.7 62.4 valuation +20.6 +49% adjustments Headcount 32
Slide 13: Solid capital base and conservative risk policy
Solid capital base and conservative risk policy Key figures: balance sheet and risk in CHF mns 31-12-08 31-12-07 Change Shareholders' equity excl. minority 1,370 1,421 -4% interests1 Total assets1 15,532 17,992 -14% BIS tier 1 ratio (%)2 18.4 21.4 -3.0 PP Value at Risk: market risks3 6.64 8.44 -21%
Slide 14: Overview
Overview Key figures Vontobel Group Business units - Private Banking - Investment Banking - Asset Management - Corporate Center Summary and outlook Page 14
Slide 15: Profitable across all business units
Profitable across all business units Pre-tax segment profit (in CHF mns) Breakdown of profit 73.8 83.1 Segment results 2008 ∆ (in CHF mns) 65.8 07/08 -39% 51.0 PB 51.0 -32.1 2005 2006 2007 2008 78.1 -103.3 194.6 181.4 116.1 -57% IB 78.1 76.3 -10.0 2005 2006 2007 2008 Corporate Center -68.1 -40.7 86.
Slide 16: Sustained inflow of new money in Private Banking reflects strong client trust
Sustained inflow of new money in Private Banking reflects strong client trust Key figures: Private Banking 31-12-08 31-12-07 Change Operating income (in CHF mns) 236.0 261.8 -10% Pre-tax segment profit 51.0 83.1 -39% (in CHF mns) Cost/income ratio1 (%) 76.9 67.8 +9.1 PP Assets under management 23.0
Slide 17: Private Banking: strengthening of core markets
Private Banking: strengthening of core markets Highlights Development of net new money Pleasing net inflows of new in CHF bns 1.2 1.2 money in Switzerland and 1.1 1.0 international business Germany as future second domestic market – application for full banking 1H 2007 2H 2007 1H 2008 2H 2008 licenc
Slide 18: Investment Banking successfully maintained position in turbulent market environment
Investment Banking successfully maintained position in turbulent market environment Key figures: Investment Banking 31-12-08 31-12-07 Change Operating income (in CHF mns) 303.5 445.9 -32% Pre-tax segment profit 78.1 181.4 -57% (in CHF mns) Cost/income ratio1 (%) 73.0 59.3 +13.7 PP Structured product
Slide 19: Investment Banking: strong market presence in very challenging environment
Investment Banking: strong market presence in very challenging environment Highlights in CHF Development of income Development of income impacted by mns 446 changes in the valuation of the bond 378 portfolio 256 304 Maintained top 3 position in SIX-listed structured products 2005 2006 2007 2008 Lowe
Slide 20: Effects of the credit crisis on assets and liabilities
Effects of the credit crisis on assets and liabilities 'Operating Valuation effects 2008 result: activities' (P&L) positive Lower AuM in Assets _ Profitable across all PB and AM + business units Liabilities Volumes im IB Capital strength + Balance _ = maintained; BIS tier 1 ratio of 18.4% Topic: 4th
Slide 21: Development of spreads
Development of spreads 800 OAS European AA-rated financials OAS European A-rated financials 700 600 500 400 300 200 100 0 12/06 03/07 06/07 09/07 12/07 03/08 06/08 09/08 12/08 Source: Bloomberg Page 21
Slide 22: Recording of structured products in balance sheet
Graphic representation: Recording of structured products in balance sheet in CHF mns Assets 31/12/07 Liabilities Assets 31/12/08 Liabilities … … … … Synthetic Synthetic Options Options options options Bond component of Bonds structured products Bond component of Bonds structured products (mark to ma
Slide 23: Effects of the credit crisis on assets and liabilities
Effects of the credit crisis on assets and liabilities 'Operating Valuation effects 2008 results: activities' (P&L) IFRS accounts Assets CHF -311 mn Liabilities CHF 215 mn CHF 209 mn + Balance CHF -96 mn = CHF 113 mn Page 23
Slide 24: High quality of bond portfolio
High quality of bond portfolio Comments Assets … … State or 80% of bond Other (1%) explicit guarantee portfolio has a Options A rating of at least 19% AA or a state 35% guarantee Bonds AA 37% 8,562 mn 8% AAA Page 24
Slide 25: Asset Management successfully positioned as a multi-boutique provider
Asset Management successfully positioned as a multi-boutique provider Key figures: Asset Management 31-12-08 31-12-07 Change Operating income (in CHF mns) 237.1 260.0 -9% Pre-tax segment profit 76.3 86.3 -12% (in CHF mns) Cost/income ratio1 (%) 66.7 66.5 0.2 PP Assets under management (in CHF bns) 3
Slide 26: Asset Management performs well in mandates business
Asset Management performs well in mandates business Highlights AuM by asset class 100% Investor preference for Money market Bonds conservative forms of investment Other Balanced Sustained inflows of new money in mandates business Equities Hedge funds Crisis-driven outflows from investment funds and
Slide 27: Corporate Center result reflects IT changeover to Avaloq
Corporate Center result reflects IT changeover to Avaloq – decline in value of financial assets Key figures: Corporate Center 31-12-08 31-12-07 Change Operating income (in CHF mns) (20.6) 23.3 nm Pre-tax segment result (68.1) (27.4) nm (in CHF mns) Operating expense (in CHF mns) 47.5 50.7 -6% - of w
Slide 28: Overview
Overview Key figures Vontobel Group Business units - Private Banking - Investment Banking - Asset Management - Corporate Center Summary and outlook Page 28
Slide 29: Summary of 2008 performance
Summary of 2008 performance Satisfactory financial result in difficult market environment Above-average capital base maintained Sustained positive inflow of new money Risk management proves effective Page 29
Slide 30: Continuity in business development
Continuity in business development Continued commitment to strategic direction based on core competencies in wealth and asset management and investment banking Prudent pursuit of growth initiatives Further improvement in efficiency of structures and processes Realization of benefits of infrastructur
Slide 31: Changed environment requires efficiency-enhancing measures
Changed environment requires efficiency-enhancing measures Target: Reduce cost base by at least CHF 40-50 mn Measures include: Integration of Bank Vontobel Geneva IT consolidation following Avaloq rollout Standardization of securities execution and settlement Outsourcing of fund administration opera
Slide 32: Peter Fanconi, new Head of Private Banking
Peter Fanconi, new Head of Private Banking 1993: Degree in Law (lic.iur.), University of Zurich 1997: Founding of MAP Group AG, Zurich as Managing Partner 2002: (Acquisition of MAP Group AG by PWC AG Schweiz) Partner and Head of Business Development Switzerland, responsible for Corporate Finance and
Slide 33: Outlook / priorities for 2009
Outlook / priorities for 2009 Difficult market conditions will persist Crisis will lead to fundamental changes in global financial system Vontobel's traditional strengths are new success factors Solidity and stability Long-term profitability and sustainability Fair partnership with clients Page 33
Slide 34: Presentation of 2008 financial results
Presentation of 2008 financial results
Slide 35: Appendix
VONTOBEL Appendix Page 35
Slide 36: Sustained high level of capital expenditure
Sustained high level of capital expenditure Development of depreciation rate in CHF mns Capital expenditure Depreciation Depreciation rate1 9% 5% 6% 6% 93.9 85.4 51.0 53.8 53.2 38.6 30.9 21.1 2005 2006 2007 2008 1 Depreciation as % of operating expense (excl. provisions) Page 36
Slide 37: Solid equity position
Solid equity position Shareholders' equity BIS tier 1 capital Market capitalization Ratio Payout ratio 24.4% 22.9% 21.4% 18.4% 56% 50% 48% 67% in CHF mns in CHF mns in CHF mns 1,421 3,457 1,341 1,370 3,364 1,135 1,023 1,287 974 2,589 1,387 256 264 1,199 503 183 396 423 335 113 2005 2006 2007 2008 20
Slide 38: Regulatory capital
Regulatory capital 1 Allocation of regulatory capital according to BIS standard 2007 2008 in CHF mns 572.2 538.8 328.4 231.8 110.0 126.5 86.3 94.2 65.6 68.2 Private Investment Asset Management Corporate Total Banking Banking Center 1 The allocation of the capital required according to the BIS standa
Slide 39: Stable majority of votes and capital
Stable majority of votes and capital Vontobel families 11.5% (shareholder pooling agreement) Publicly held 32.1% Shareholders in Vontrust family holding 12.5% the pooling (shareholder pooling agreement) agreement: 40.0% Unlocked shares Vontobel Foundation and of the main Pellegrinus Holding sharehol
Slide 40: Fair value measurement for liabilities (IAS 39)
Fair value measurement for liabilities (IAS 39)1 The fair value measurement of a liability must reflect its credit risk Credit risk is defined as the premium over the basic interest rate for credit risk The reporting entity should consider the effect of its credit risk on the fair value of the liabi