Vp Bank Ag Class A · SIX:VPBN
Vp Bank Ag Class A — FY2019 Earnings Presentation
50 slides from Vp Bank Ag Class A's earnings presentation, Mar 10, 2020
Slide 1: Media and Analyst Conference
VP Bank Group · 10 March 2020 Media and Analyst Conference 1
Slide 2: Programme
Programme Welcoming address Fredy Vogt, Chairman of the Board of Directors 2019 VP Bank Group annual results Siegbert Näscher, Chief Financial Officer Status quo strategy implementation 2019 Paul H. Arni, Chief Executive Officer Presentation of Strategy 2025 Fredy Vogt and Paul H. Arni Questions and
Slide 3: 2019 annual results
2019 annual results Significantly higher Impressive rise in group net income client assets under Strong growth in management net new money Sound equity capital 3
Slide 4: AGM 2020 motions of the Board of directors
AGM 2020 motions of the Board of directors • Unchanged dividend of CHF 5.50 proposed • Share buyback programme • Purchase of up to 10 percent of our own shares • Reappointment elections • Dr iur. Beat Graf • Michael Riesen • Prof. Dr Teodoro D. Cocca is not standing for re-election • 9 year Board me
Slide 5: Additional appointment to the Board of Directors
Additional appointment to the Board of Directors • Katja Rosenplänter-Marxer • Representative of the "Marxer Stiftung für Bank- und Unternehmenswerte" foundation • Lawyer admitted to the bar in Germany • Experience in the intermediary business, which is important for VP Bank • Membership of the foun
Slide 6: Change to the chairmanship of the Board of Directors
Change to the chairmanship of the Board of Directors – Dr Thomas R. Meier to succeed Fredy Vogt • Dr Thomas R. Meier • Election by the Board of Directors following the Annual General Meeting of 24 April 2020 • Member of the Board of Directors since 2018 • Deputy Chairman of the Board of Directors fo
Slide 7: 2019 annual results
2019 annual results Siegbert Näscher · Chief Financial Officer This presentation has been prepared with the greatest possible care. All data has been checked. Rounding, typesetting or printing errors cannot, however, be excluded. 7
Slide 8: Review 2019: Interest rates fall – equity markets rise
Review 2019: Interest rates fall – equity markets rise 10-Year capital market returns: Focus on interest rate cuts Equity markets: Made up for lost ground 3.5% 135% 3.0% 130% 2.5% 125% 2.0% 120% 1.5% 115% 1.0% 110% 0.5% 105% 0.0% 100% -0.5% 95% -1.0% -1.5% 90% Dec 18 Feb 19 Apr 19 Jun 19 Aug 19 Oct
Slide 9: VP Bank share price performance in comparison
VP Bank share price performance in comparison 300 250 VP Bank 200 LLB 150 Vontobel 100 Julius Bär EFG 50 0 01.2016 01.2017 01.2018 01.2019 01.2020 9
Slide 10: Strong growth – positive financial market momentum
Strong growth – positive financial market momentum Net group Tier 1 ratio income 20.2% CHF 73.5 million 20.9% in 2018 CHF 54.7 million in 2018 Continued strong Comfortable capital net inflow of new provisioning Growth Strong commission money initiatives and Extremely and trading income good operatin
Slide 11: Strong rise in earnings, 34% higher
Strong rise in earnings, 34% higher Group net income (CHF million) Income statement (CHF million) 2017 2018 2019 Operating income 300.1 290.8 327.8 Operating expenses -229.7 -232.3 -244.8 Taxes -4.6 -3.8 -9.4 Net group income 65.8 54.7 73.5 One-off effects 0.81 0.0 0.0 Adjusted group net income 66.6
Slide 12: Operative income figures show gains
Operative income figures show gains Operating income (CHF million) • Interest income CHF 4.1 million or 3.7% higher 327.8 • Interest income from customer loans significantly 300.1 increased, but also higher interest expenses 290.8 14.6 21.5 0.7 61.0 • Interest income from the treasury edged lower 50
Slide 13: Higher personnel expenses – reversal of valuation adjustments
Higher personnel expenses – reversal of valuation adjustments Operating expenses (CHF million) • Personnel expenses CHF 7.7 million or 4.9% higher 229.7 232.3 244.8 • Higher average workforce 13.3 25.1 29.3 • General & administrative expenses CHF 6.6 million or - 10.5% lower 23.5 63.0 56.3 • Rise in
Slide 14: Rise in total assets through organic and acquisition-driven growth
Rise in total assets through organic and acquisition-driven growth Balance sheet as at 31 December 2019 (CHF billion) 0.4 Bank liabilities • Sound assets Liquid assets 2.9 • High liquidity position • 9.7% rise in client lending, Bank receivables 0.7 above all Lombard loans • Stable refinancing 11.3
Slide 15: Equity capital requirements comfortably exceeded
Equity capital requirements comfortably exceeded 31 December 2017 31 December 2018 31 December 2019 Risk-weighted assets in CHF billion 3.8 4.5 4.8 Core capital (CET 1) in CHF million 976.6 942.8 979.0 Tier 1 ratio (CET 1 ratio) 25.7% 20.9% 20.2% Liquidity coverage ratio (LCR) 161% 143% 213% Leverag
Slide 16: Client assets rise thanks to new money and market performance
Client assets rise thanks to new money and market performance Client assets under management (CHF billion) • Client assets under management increase by 14.7% • Net inflow of client assets total CHF 3.2 billion or 7.7% • Positive market performance 16
Slide 17: International activities as engine of growth
International activities as engine of growth Net new money incl. acquisitions (CHF billion) • Strong inflow during the first half of the year – both 3.2 3.2 organic as well as through acquisitions 1.0 B) • Good inflows thanks to recruitment of new client 1.4 A) advisors 1.9 • Good net inflow from ex
Slide 18: Geographical diversification continues apace
Geographical diversification continues apace Segment overview as at 31 December 2019 Client Business Client Business Corporate Group Liechtenstein International Center Business volumes in CHF1 31.1 billion 23.3 billion – 54.4 billion Client assets under management in CHF 26.9 billion 20.7 billion -
Slide 19: Long-term dividend within target range
Long-term dividend within target range Dividend (in CHF) Payout ratio Dividend yield 1 5.50 5.50 5.50 4.1% 61% 3.9% 1 3.5% 51% 45% 1 2017 2018 2019 2017 2018 2019 2017 2018 2019 1 Subject to approval by Annual General Meeting 19
Slide 20: Summary
Summary Growth in line with strategy • Front-office recruitment initiative • Strong net inflows of new money Robust operating performance • Higher revenues (interest, commission and trade) Two positive factors of influence • Very good result from financial assets and reversal of valuation adjustment
Slide 21: Status quo strategy implementation 2020
Status quo strategy implementation 2020 Paul H. Arni, Chief Executive Officer 21
Slide 22: Growth thanks to recruitment campaign and acquisition
Growth thanks to recruitment campaign and acquisition Relationship managers (FTE), net new money (CHF million) 2016-2019 75 • Strong growth in net new money in the year 2019 • RM hiring initiative has 50 48 6* been successfully completed 3,297 • To be continued within 25 1,790 48 24 the context of t
Slide 23: Integration of the Nordics target market is exceeding expectations
Integration of the “Nordics” target market is exceeding expectations Acquisition of Carnegie funds and the private banking division of Catella Bank as basis Growth in the Nordics teams in Zurich and Luxembourg Large proportion of the service and product Development of range has been implemented Nord
Slide 24: Strong growth of VP Bank in Asia
Strong growth of VP Bank in Asia Target markets: Singapore Thailand Malaysia Hong Kong Indonesia • Additional evaluation of opportunities in China in collaboration with Hywin Wealth • Awards from WealthBriefingAsia 24
Slide 25: Medium-term goals 2020 on track – profit is a challenge
Medium-term goals 2020 on track – profit is a challenge Client assets under Group net income Cost/income ratio management CHF 80 million BELOW 70% CHF 50 billion • Assuming a positive market • Difficult to achieve without • Target achieved in 2019 environment within grasp acquisition • Remain on cou
Slide 26: Outlook 2020: A transitional year in many respects
Outlook 2020: A transitional year in many respects Influenced by Influenced by weakening market Loss of one-off effects At the operating level: Stable business expected Influenced by Earnings from initiated Pressure on margins measures expected only from 2021 Preparing for Strategy 2025 26
Slide 27: Strategy 2025 Seize opportunities.
Strategy 2025 Seize opportunities. Fredy Vogt, Chairman of the Board of Directors and Paul H. Arni, Chief Executive Officer 27
Slide 28: Successful Strategy 2020 – starting point for Strategy 2025
Successful Strategy 2020 – starting point for Strategy 2025 Strategy 2020 – strengthening the business model Strategy 2020 building on three pillars Client assets • Within grasp, assuming a positive market environment As at 31 December 2019 Objective 47.6 billion 50 billion Cost/income ratio Growth
Slide 29: Building on healthy and strong foundations
Building on healthy and strong foundations Close client Established digital Proven business services for relationships and model with focus on intermediaries and Strong operating satisfied clients private banking, private clients performance, intermediaries and financial strength fund solutions Our
Slide 30: Sustainability principles have characterised VP Bank since its foundation
Sustainability principles have characterised VP Bank since its foundation Holistic integration 3 • Evaluation of sustainability criteria throughout the entire range of services and at the consultancy level Focus on sustainable investment topics and products 2 • Consideration of sustainability in por
Slide 31: VP Bank serves clients, employees and society
VP Bank serves clients, employees and society 31
Slide 32: Seize opportunities.
Seize opportunities. 32
Slide 33: Financial sector is getting more challenging and also offers opportunities
Financial sector is getting more challenging and also offers opportunities • Demography: In 2050, 30% of the population will be aged over 60 in 55 countries Society • Need for individualisation: Bespoke • Asset growth: Increase of 5.7% p.a. over the Clients and holistic solutions next five years • N
Slide 34: Ten basic assumptions for Strategy 2025
Ten basic assumptions for Strategy 2025 Industry Clients Technology 1 Clear positioning is increasingly 5 Trust-worthy partnership and 8 New technologies will shake up important in a fragmented market individual consultancy are existing processes (e.g. blockchain) elementary 2 New asset classes offe
Slide 35: The positioning of VP Bank – what we offer for whom
The positioning of VP Bank – what we offer for whom We develop bespoke financial solutions for intermediaries and private clients thanks to specialist expertise and excellent networks. To do this, we build on our long-standing experience and strengths in the support of discerning clients. 35
Slide 36: Established business fields and targeted geographic presence
Established business fields and targeted geographic presence Business Markets Markets fields Europe Asia Retail & • Liechtenstein Commercial Banking Wealthy • Liechtenstein • Singapore Individuals • Switzerland • Hong Kong • Germany • Indonesia • Luxembourg • Malaysia • Russia • Thailand • Ukraine •
Slide 37: Positioning
Individual solutions for professional financial services providers and private clients Claim Seize opportunities. Positioning VP Bank builds on its long-standing experience and strengths in the support of professional financial services providers. Based on this specialised knowledge and excellent ne
Slide 38: Strategic focuses for 2025: Growth – efficiency – new income
Strategic focuses for 2025: Growth – efficiency – new income Strategic further development Optimisation and scaling of Opening up new business of the operating business at the interbank processes and opportunities existing sites structures Targeted growth Efficiency and cost discipline Higher revenu
Slide 39: Strategic measures with short-term, medium-term and long-term perspectives
Strategic measures with short-term, medium-term and long-term perspectives Prepare Transform Disrupt • Efficiency improvements in front • Concentration on target markets & growth • Implementation of data-based Additional functions & growth through new client with new client relationship managers con
Slide 40: Opportunity evolve: Integration of sustainability in the entire product range
Opportunity evolve: Integration of sustainability in the entire product range Benefits for clients • High transparency in relation to ESG Impact • Added value not just for investors with investing sustainability focus Satellite • Improved risk/return ratio products In-house • Topic-based investment
Slide 41: Opportunity scale: Simplified client processes for client onboarding & KYC
Chance scale: Simplified client processes for client onboarding & KYC Opening relationship Managing relationship Closing relationship • Reduction number of forms that • Extended self-service opportunities • Faster settlement need to be submitted and number of • Greater focus on client consultancy Be
Slide 42: Opportunity move: New investment opportunities based on VP Fund Solutions
Opportunity move: New investment opportunities based on existing expertise of VP Fund Solutions Benefits for clients Concept Investment and co-investment platform • New investment opportunities with low correlation “Match making” of investors • International networking Purpose with investment opport
Slide 43: Opportunity move: Digitalisation of assets
Opportunity move: Digitalisation of assets Funds & SPVs Bonds & equities Special assets • Tokenisation of fund units and • Tokenisation of bonds and • Tokenisation of real estate, their custody equities valuables and intellectual • Issue of classic portfolio • Tokenised equities and bonds as propert
Slide 44: Financial goals 2025: Raising group net income to CHF 100 million
Financial goals 2025: Raising group net income to CHF 100 million Growth Profitability Stability Net new money Profit Cost/ Tier 1 (in % AuM) margin income ratio (in bp AuM) ratio2) > 4% p.a.1) > 15 bp 70% > 20% 1) Over the cycle 2021-2025 44 2) Operating expenses / operating income
Slide 45: Already initiated evolve, scale and move measures 2020
Already initiated evolve, scale and move measures 2020 Evolve Scale Move • Integration of ESG criteria with • Preparatory work for • New Private Investment additional in-house compliance suite has been Partners team began its work sustainability rating in all completed; goal: at VP Bank on 1 March i
Slide 46: Next steps: Organisational adjustments to implement Strategy 2025
Next steps: Organisational adjustments to implement Strategy 2025 Structure follows strategy… … with the following consequences • Concentrating the front-related business unit on • Local CEOs to be included in the International CEO client support and market development Committee • Integrating the Gr
Slide 47: Summary: Achieving the goal through three-fold measures
Summary: Achieving the goal through three-fold measures • Targeted growth in the existing business • With an added value service for intermediaries Evolve Seize • By opening up new business fields opportunities. Move • Thanks to effective strengths • … and scaling the operating model and sourcing st
Slide 48: Questions
Questions 48
Slide 49: Invitation to lunch
Invitation to lunch 49
Slide 50: 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