Efg International Ag · SIX:EFGN

Efg International — H1 2019 Earnings Presentation

38 slides from Efg International's earnings presentation, Jul 24, 2019

  1. Slide 1: Half-year 2019 results presentation

    EFG International Half-year 2019 results presentation 24 July 2019 Zurich Half-year 2019 results presentation 24 July 2019 Page 1

  2. Slide 2: Important Legal Disclaimer

    EFG International 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, purch

  3. Slide 3: Key highlights

    Key highlights Giorgio Pradelli, Chief Executive Officer Half-year 2019 results presentation 24 July 2019 Page 3

  4. Slide 4: Executing strategy and investing in growth

    EFG International Executing strategy and investing in growth AuM CHF 147.6 bn  Significantly increased AuM to CHF 147.6 billion  Net new asset rebound in second quarter Delivering Net new assets CHF 0.3 bn  Positive inflows from UK and Continental Europe profitable growth  Deleveraging outflows

  5. Slide 5: Driving business initiatives and CRO hiring

    EFG International Driving business initiatives and CRO hiring  Considerable progress on CRO hiring: 94 hired, signed or approved in 1H19 CRO growth  EFG growth story resonates well; strong hiring pipeline  Enhancing management of CRO performance CRO  Increasing average portfolio size per CRO pro

  6. Slide 6: Financial performance

    Financial performance Dimitris Politis, Chief Financial Officer Half-year 2019 results presentation 24 July 2019 Page 6

  7. Slide 7: Presentation of financial performance

    EFG International Presentation of financial performance Changes from previous reporting periods:  Following the completion of the BSI integration, EFG has discontinued reporting “AuM attrition”, “underlying NNA” and “BSI integration costs”. Going forward, the only items excluded from underlying per

  8. Slide 8: 1H 2019 financial results in perspective

    EFG International 1H 2019 financial results in perspective Executing on 2022 strategic plan  AuM at CHF 147.6 bn, following the Shaw and Partners acquisition  NNA at CHF 0.3 bn (annualised growth: 0.5%) reflect stabilisation in Switzerland and strong performance in the UK. NNA impacted by CHF 0.8

  9. Slide 9: Financials summary

    EFG International Financials summary 1H19 2H18 1H18 Revenue-generating AuM, CHF bn 147.6 131.2 142.7 Net new assets, CHF bn 0.3 (4.1) 2.0 Net new asset growth (annualized) 0.5% -5.7% 2.8% Operating income, CHF mn 555.8 575.2 570.4 Operating expense, CHF mn 503.6 532.3 532.0 Operating profit, CHF mn

  10. Slide 10: Results highlights

    EFG International Results highlights NNA with annualised growth of 0.5% Delivering on cost synergies NNA evolution Cumulative targeted cost synergies (pre-tax) (in CHF bn) (in CHF mn) 3,366 3,153 3,095* FTEs Net new money (excl. 1.1 deleveraging) 2.0 0.3 210 207 180 187 Targeted cost synergies (4.1)

  11. Slide 11: Underlying profitability

    EFG International Underlying profitability Underlying profitability of CHF 75.6 mn, up 21% vs. 2H18 Reconciliation of underlying net profit (in CHF mn)  Challenging revenue environment, partly compensated by improving RoTE contribution from Global Markets and [13.1]% strong Treasury performance 10.

  12. Slide 12: Revenue-generating AuM development

    EFG International Revenue-generating AuM development Net new assets of CHF 0.3 bn at annual growth rate of 0.5%; AuM at CHF 147.6 bn Revenue-generating AuM evolution +12.4% (in CHF bn) 11.6 147.6 6.2 0.3 (1.8) 131.2 131.2 Dec 18 NNA Market FX Acquisitions Jun 19 Half-year 2019 results presentation 2

  13. Slide 13: Evolution and drivers of NNA

    EFG International Evolution and drivers of NNA Investor update growth targets Update on execution for 1H19 (in CHF bn) Existing CROs (in CHF bn) 0.7 +4-6% p.a.1 0 -1.0 Shaw and Partners 11 NNM Loans New CROs4 (in CHF bn) 131 0.3 0.2 NNM Loans Business initiatives (in CHF bn) 2018 NNA NNA NNA from Ma

  14. Slide 14: Business development by region

    EFG International Business development by region Very strong NNA from the UK, positive NNA in Continental Europe. Switzerland & Italy stabilising 1H19 Revenue-generating AuMs as % of RoAuM* 1H19 NNA Annualised growth 1H19 Net New Money CHF 147.6 bn total AuM (in bps) CHF 0.3 bn (in %) CHF 1.1 bn Swi

  15. Slide 15: Evolution of mandates penetration

    EFG International Evolution of mandates penetration Mandate penetration of 47%* (advisory, discretionary mandates & funds) Evolution of advisory, discretionary mandates & funds (in %, excl. loans)  Increasing penetration of advisory, discretionary mandates and funds driven by: >60% ― Solid performa

  16. Slide 16: CRO performance

    EFG International CRO performance Strong CRO hiring momentum Number of CROs +56 CROs approved /  Strong CRO hiring activity: YTD 94 CROs have been hired, signed signed or approved 671 617 737  Ongoing performance management efforts driving CRO 150 Shaw and Partners reduction over the course of the

  17. Slide 17: Underlying operating income

    EFG International Underlying operating income Underlying operating income of CHF 575.9 mn, up 3% vs. 2H18 Underlying operating income (in CHF mn)  Underlying RoAuM (excl. loans) at 96 bps 140.8 86 138.7 82 138.6 83 vs. 94 bps in 2H18 and 99 bps in 1H18 bn bps bn bps bn bps  Deleveraging and intere

  18. Slide 18: Underlying operating expenses

    EFG International Underlying operating expenses Underlying operating expenses at CHF 492.0 mn, up 1.7% vs. 2H18 Underlying operating expenses (in CHF mn)  Operating expenses are flat, excluding the 79.7% 86.1% 85.2% contribution of Shaw and Partners (two months and acquisition costs) 3,195* 3,219 3

  19. Slide 19: Update on cost synergies from BSI transaction

    EFG International Update on cost synergies from BSI transaction Delivery of additional CHF 20 mn of cost synergies in 1H19, on track for 2019 target Cumulative targeted cost synergies (pre-tax) Underlying operating expenses (in CHF mn) (in CHF mn) 240 240 CHF 20 mn cost 207 improvement 210 20 482.6

  20. Slide 20: Balance sheet

    EFG International Balance sheet Strong and highly liquid Balance sheet Total assets: Total liabilities & equity: CHF 41.2 bn CHF 41.2 bn Due to banks 0.5 ~50% of Balance sheet in liquid Cash & banks 12.6 assets  Loan-deposit ratio of 50%*  Liquidity coverage ratio (LCR) Treasury bills 1.0 Fair val

  21. Slide 21: Capital position (I)

    EFG International Capital position (I) Strong capital position: CET1 ratio of 17.0%, Total capital ratio at 21.0% Total Capital Ratios* Breakdown of RWAs*  Capital ratios include the full impact (in %) (in CHF bn) from the acquisition of Shaw and Partners (approx. 40 bps) 21.6 21.0  RWAs slightly

  22. Slide 22: Capital position (II)

    EFG International Capital position (II) Substantial available CET1 capital allows for expansion Evolution of CET1 Capital ratio* (in %) Underlying net capital generation Total Capital 21.6 Total Capital Ratio* 21.0 Ratio* 0.2 0.5 CET1 Capital 17.6 -0.4 -0.1 -0.4 CET1 Capital Ratio* 17.0 -0.4 17.0 Ra

  23. Slide 23: Strategic priorities & outlook

    Strategic priorities & outlook Giorgio Pradelli, Chief Executive Officer Half-year 2019 results presentation 24 July 2019 Page 23

  24. Slide 24: 2022 strategic plan

    EFG International 2022 strategic plan Financial targets 2022  Financial targets 2022: Significant profitable growth 4-6% NNA growth and effective capital deployment average1 Revenue  EFG’s business model is distinctive in the current 85 bps margin private banking environment Cost-income 72-75%  O

  25. Slide 25: Strategic priorities going forward

    EFG International Strategic priorities going forward Further drive CRO growth & productivity Return Switzerland back to growth Execute on selected regional initiatives Leverage Investment Solutions Enhance operational efficiency Half-year 2019 results presentation 24 July 2019 Page 25

  26. Slide 26: EFG International Half-year 2019 results presentation 24 July 2019

    EFG International Half-year 2019 results presentation 24 July 2019 Page 26

  27. Slide 27: Appendix

    Appendix Half-year 2019 results presentation 24 July 2019 Page 27

  28. Slide 28: Income statement (IFRS)

    EFG International Income statement (IFRS) (in CHF million) 1H18 2H18 1H19 Net interest income 177.7 183.6 169.3 Net banking fee & commission income 295.1 269.5 274.7 Net other income 97.6 122.1 111.8 Operating income 570.4 575.2 555.8 Personnel expenses (355.4) (352.9) (357.8) Other operating expens

  29. Slide 29: Underlying income statement

    EFG International Underlying income statement (in CHF million) 1H18 2H18 1H19 Net interest income 183.5 189.2 174.7 Net banking fee & commission income 295.1 269.5 274.7 Net other income 126.0 101.8 126.5 Operating income 604.6 560.5 575.9 Personnel expenses (348.1) (342.7) (357.8) Other operating e

  30. Slide 30: Reconciliation of Underlying results to IFRS results 1H19

    EFG International Reconciliation of Underlying results to IFRS results 1H19 Acquisition Exceptional legal Underlying results (in CHF million) Life insurance related intangible costs and IFRS results 1H19 1H19 amortisation provisions Net interest income 174.7 (7.1) 1.7 169.3 Net banking fee & commiss

  31. Slide 31: Balance sheet (IFRS)

    EFG International Balance sheet (IFRS) (in CHF million) Dec 2018 Jun 2019 Cash and balances with central banks 7,142 9,308 Treasury bills and other eligible bills 1,199 961 Due from other banks 3,206 3,252 Derivative financial instruments 1,220 891 Financial asset at fair value through P&L 2,041 2,1

  32. Slide 32: Breakdown of AuM

    EFG International Breakdown of AuM 30.06.19 By category 31.12.18 30.06.19 (in CHF bn) Cash & deposits 25% 23% 34.6 Bonds 25% 23% 34.3 Equities 21% 28% 41.8 Structured products 3% 3% 4.4 Loans 14% 13% 18.9 Hedge funds 3% 2% 3.0 Other 10% 7% 10.6 Total 100% 100% 147.6 30.06.19 By currency 31.12.18 30.

  33. Slide 33: Segmental analysis 1H19

    EFG International Segmental analysis 1H19 Global Performance summary Switzerland, Continental Investment Corporate Americas UK Asia Pacific Markets & Eliminations Total (in CHF m) & Italy Europe Solutions Overheads Treasury Segment revenues 148.8 88.1 57.0 75.0 64.4 53.3 89.3 (20.1) - 555.8 Segment

  34. Slide 34: Segmental analysis 1H18

    EFG International Segmental analysis 1H18 Global Performance summary Switzerland, Continental Investment Corporate Americas UK Asia Pacific Markets & Eliminations Total (in CHF m) & Italy Europe Solutions Overheads Treasury Segment revenues 155.4 101.8 62.4 68.3 76.9 49.4 86.0 (29.8) - 570.4 Segment

  35. Slide 35: Segmental analysis 2H18

    EFG International Segmental analysis 2H18 Global Performance summary Switzerland, Continental Investment Corporate Americas UK Asia Pacific Markets & Eliminations Total (in CHF m) & Italy Europe Solutions Overheads Treasury Segment revenues 155.1 97.1 58.8 79.4 64.7 49.9 49.4 20.8 - 575.2 Segment ex

  36. Slide 36: Update on Life Insurance Exposures

    EFG International Update on Life Insurance Exposures Life Insurance related portfolios  Legacy exposures acquired more than 10 years ago  Outright portfolio carried at fair value (marked-to-model, Level 3) for IFRS accounts – small size of portfolio introduces substantial P&L volatility. For regul

  37. Slide 37: Update on Life Insurance Exposures (II)

    EFG International Update on Life Insurance Exposures (II) Direct holding of life insurance policies  Death benefit: CHF 1,389 mn  Non-underlying Carrying value: CHF 603 mn  P&L impact: CHF (27.3) mn for 140 insureds (2018: 145) of an  Outright portfolio 1H19 premium: CHF 58.1 mn average age of 9

  38. Slide 38: Contacts

    EFG International 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.com E

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