Vontobel Holding AG · SIX:VONN
Vontobel — Investor Day (March 2015)
79 slides from Vontobel's investor day presentation, Mar 11, 2015
Slide 1: Investor Day 2015: Vontobel's strategy and medium-term targets
Investor Day 2015 Vontobel’s strategy and medium-term targets Group Executive Management 11 March 2015 Performance creates trust
Slide 2: Cautionary statement regarding forward-looking statements
Page 2 Cautionary statement regarding forward-looking statements This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties and other important factors. These projections and forward-looking statements refl
Slide 3: Programme
Page 3 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 4: Global wealth expected to grow across the globe and Vontobel has built up exposure
Page 4 Global wealth expected to grow across the globe and Vontobel has built up exposure to regions with highest growth rate Vontobel’s advised client Growth of private wealth/pension assets (CHF tn) assets by client domicile 8.9 15.6 3.3 14.8 17.2 10.7 100% = CHF 137 bn 59.1 39.9 43.5 50.3 4.5 (31
Slide 5: Vontobel is a focused boutique with an outstanding offering for specific client needs
Page 5 Vontobel is a focused boutique with an outstanding offering for specific client needs at a solid margin Wealth management Active asset management Financial products Strong growth of HNWI population Industry AuM grew by 6% p.a. over Almost stable volume in and HNWI wealth since 2008 last 10 ye
Slide 6: Vontobel has a clearly defined long-term strategy
Page 6 Vontobel has a clearly defined long-term strategy … We protect and build the wealth of our clients by providing responsible We defined focus markets based on and forward-looking advice, active client needs and Vontobel’s core asset management and tailor-made capabilities: Switzerland, Emergin
Slide 7: Implemented along strategic priorities
Page 7 … implemented along strategic priorities Service & product excellence Productivity Profitable growth We aim to be recognized as the Based on client needs and Profitable growth to be achieved most trusted global investment Vontobel’s core capabilities we through: advisor by our clients defined
Slide 8: Vontobel reaffirms its targets for 2017
Page 8 Vontobel reaffirms its targets for 2017 Return on equity (in %) Cost/income ratio (in %) Outlook Investment in profitable growth > 10 < 75 80.8 80.3 across Wealth & Asset Management 8.7 7.6 and Financial Products expected to increase return on equity and to reduce cost/income ratio given oper
Slide 9: Vontobel is exploring potential M&A opportunities to boost profitability
Page 9 Vontobel is exploring potential M&A opportunities to boost profitability Asset Management Private Banking Increase diversification across boutiques Leverage cross-border platform through additional AuM Complement scale and skills of existing boutiques Gain market share in home and focus marke
Slide 10: Questions and Answers
Page 10 Questions and Answers
Slide 11: Programme
Page 11 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 12: Asset Management delivers on strategic priorities of Vontobel
Page 12 Asset Management delivers on strategic priorities of Vontobel Service & product excellence Productivity Profitable growth Almost 90 awards since 2011 – from Market coverage of home and focus Expand New York based Quality Lipper, Morningstar and other markets as defined by Vontobel Growth bou
Slide 13: Impressive growth in Asset Management since 2011
Page 13 Impressive growth in Asset Management since 2011 … Growth of advised client assets (CHF bn) Strong NNM contribution (CHF bn, %) 15.4%1 17.7%1 12.5%1 6.9%1 88 8.2 7.7 CHF 5.6 bn of 69 5 6.3 NNM in 2H14; 61 +86% 47 4.6 corresponds to 83 annualized growth rate of 16.1%1 2011 2012 2013 2014 2011
Slide 14: Potential for future growth, underpinned by a diversified book of business
Page 14 … with potential for future growth, underpinned by a diversified book of business Quality Growth: Leverage Fixed Income: 20% growth in First class global investor base position for other strategies 2014 with institutional focus 8% 10.7 4% 8.9 20% 29% 36% 62% 92% 13% 18% 38% Switzerland North
Slide 15: Outstanding investment performance of Fixed Income boutique
Page 15 Outstanding investment performance of Fixed Income boutique led to impressive asset growth Development of Fixed Income fund asset volume (CHF mn) 2,500 2,000 1,500 1,000 500 Jan 12 Mrz 12 Mrz 14 Mai 12 Sep 12 Jan 13 Mrz 13 Mai 13 Sep 13 Jan 14 Mai 14 Sep 14 Nov 11 Nov 12 Nov 13 Nov 14 Jul 12
Slide 16: What sets Vontobel Asset Management apart?
Page 16 What sets Vontobel Asset Management apart? 1 We believe in active management to exploit market trends and inefficiencies for the benefit of our clients 2 We pursue investment approaches to protect and grow our clients’ assets, through a robust portfolio construction and the awareness of risk
Slide 17: Focus on clearly defined investment strategies
Page 17 Focus on clearly defined investment strategies Quality Growth Equities Assets1 Global Thematic Investing Assets1 (CHF bn) (CHF bn) Focus on high-quality companies with Strategies cover energy and resources favourable growth prospects at sensible “Global leader” concept prices 47.5 Sustainabl
Slide 18: Strong performance culture is confirmed by the market
Page 18 Strong performance culture is confirmed by the market Since 2011, our investment funds and our investment competences in various asset classes received almost 90 awards 90 Global Equities: UK Pension Awards 2013, European Pension Awards 2012, Pension and Investment Provider Awards (PIPA) 201
Slide 19: Asset Management sales set-up reaches all relevant global client segments
Page 19 Asset Management sales set-up reaches all relevant global client segments worldwide Vontobel Asset Management’s global sales Canada Major European South Korea US markets U.A.E. Japan Kuwait China Qatar Bahrain Taiwan Saudi Arabia Hong Kong Oman Thailand Colombia Singapore Peru Australia Chil
Slide 20: Asset Management wants to continue growing while maintaining return on assets over 50 bps
Page 20 Asset Management wants to continue growing while maintaining a return on assets of over 50 bps NNM growth1 (in %) Outlook 12.5 Run a Diversified, Institutional focus and Global book of 6.9 3-5 boutiques – Asset Management’s “DIG” strategy as a driver of growth Position Asset Management with
Slide 21: Questions and Answers
Page 21 Questions and Answers
Slide 22: Programme
Page 22 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 23: Private Banking delivers on Vontobel's strategic priorities
Page 23 Private Banking delivers on Vontobel’s strategic priorities Service & product excellence Productivity Profitable growth Named ‘Best Private Bank in Improved bottom line through Higher level of profitability used to Switzerland 2014’ by Swiss business realignment of business model and invest
Slide 24: Realignment of business model in 2013 almost doubled pre-tax profit
Page 24 Realignment of business model in 2013 almost doubled pre-tax profit – enabling Private Banking to invest in future growth Pre-tax profit (CHF mn) Realignment of Investment in business model growth 59.4 57.1 30.6 -2.3 28.8 +98% 2012 2013 2014 Clients advisors (FTEs) 170 165 -15 20 13% 150 201
Slide 25: Private Banking is focused on growth from 2014
Page 25 Private Banking is focused on growth from 2014 Active management of organic growth Success in attracting top talent Improvement of recruitment process and tracking of Enhanced positioning of Private Banking in the market for business cases of client advisors talent Sharpened hiring profiles
Slide 26: Accelerated recruitment of client advisors in home and focus markets
Page 26 Accelerated recruitment of client advisors in home and focus markets of Emerging Markets, Germany and Switzerland +3 United +10 Kingdom Germany Munich +5 Switzerland Dallas Cologne Hong Kong +2 Italy Austria UAE US China (Hong Kong) +15 Emerging Markets Opening of new location Withdrawal fro
Slide 27: Private Banking embraces opportunities arising from industry trends
Page 27 Private Banking embraces opportunities arising from industry trends Current industry trends Vontobel’s proactive approach 1 Challenging investment environment As a market pioneer, Vontobel introduced new advisory mandates in 2011 and further developed its investment solutions and product off
Slide 28: Further sharpening of Vontobel product offering since 2011
Page 28 Further sharpening of Vontobel product offering since 2011 2011/2012 2013 2014 2015 Investment advisory Outcome-driven Discretionary Client-based mandates investments mandate mandate solutions As a market pioneer, Introduction of new Streamlined number of Introduction of holistic Vontobel in
Slide 29: Mobile private banking (1/2)
Page 29 Vontobel is among the first private banks in Switzerland to complement its advisory services with mobile private banking (1/2) …enabling different portfolio Mobile access to your portfolio… views and analysis…
Slide 30: Mobile private banking (2/2)
Page 30 Vontobel is among the first private banks in Switzerland to complement its advisory services with mobile private banking (2/2) … combined with our equity research, …and secure instant messaging investments ideas… with your client advisor
Slide 31: The app is the start of our digital journey
Page 31 The app is the start of our digital journey – leading the Private Bank to the future 2017 2016 New business models 2015 Advice, collaboration, More to come … efficiency Launch and experience Investment advisory Trading Online collaboration Tablet app, 1st release Multi-user functionality Dev
Slide 32: Clients expected to have regularized by end-2015 at the latest
Page 32 Clients expected to have regularized by end-2015 at the latest – negative impact on NNM to decrease significantly in 2016 US Program FATCA Automatic Exchange of Information (AEI) Financial Transaction Tax (France, Italy, others) Corp. Tax Reform III Switzerland FIDLEG/ FINIG Cross-border req
Slide 33: Private Banking with ambitious targets for 2017
Page 33 Private Banking with ambitious targets for 2017 NNM growth (in %) Outlook 4.9 3-5 Continuous improvement of advisory and investment 3.5 processes Leverage investment competence from Asset Management and Investment Banking for Private Banking clients 2013 2014 Target 2017 Enhance Mobile Priva
Slide 34: Questions and Answers
Page 34 Questions and Answers
Slide 35: Programme
Page 35 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 36: Vontobel Investment Banking is delivering tailor-made investment solutions
Page 36 Vontobel Investment Banking is delivering tailor-made investment solutions Vontobel core capabilities 1 Protect and build wealth Financial Products External Asset Managers 2 Actively manage assets Brokerage 3 Deliver tailor-made investment solutions Corporate Finance What sets Vontobel Inves
Slide 37: Investment Banking delivers on strategic priorities (1/3)
Page 37 Investment Banking delivers on Vontobel’s strategic priorities (1/3) Service & product excellence Achievements Product and technology leadership in business with structured products and warrants Proven pricing and service competence Leading multi-issuer offering State-of-the-art EAM platform
Slide 38: Investment Banking delivers on strategic priorities (2/3)
Page 38 Investment Banking delivers on Vontobel’s strategic priorities (2/3) Productivity Achievements in 2014 Growth initiatives in home and Average cost target markets per product Scale up existing capabilities and < 500 CHF technology Active cost management Equity research reports Vontobel produc
Slide 39: Investment Banking delivers on strategic priorities (3/3)
Page 39 Investment Banking delivers on Vontobel’s strategic priorities (3/3) Profitable growth Achievements in 2014 Leverage technology leadership Financial Products Switzerland Financial Products Germany Deliver leverage products +2.0 pp +0.4 pp internationally 39.5 40.9 5.3 5.6 4.4 4.8 Protect mar
Slide 40: Vontobel's derivatives factory with well-balanced business model
Page 40 Vontobel’s derivatives factory with well-balanced business model Capital markets Derivatives factory Distribution Risk Risk management - Exchanges B2B4C - OTC - Interbank markets B2B Asset classes open deritrade® - Fixed income deritrade© SIP - Credit B2C - Equities - Commodities Leverage St
Slide 41: Strong market position in Switzerland and increasing market share in Germany
Page 41 Strong market position in Switzerland and increasing market share in Germany Market share in Switzerland in listed products 2014 (2013) No. of trades Turnover No. of products issued 1. Vontobel 40.9% (39.5%) 1. UBS 34.7% (37.0%) 1. Vontobel 46.4% (46.1%) 2. UBS 19.3% (19.7%) 2. Vontobel 20.7
Slide 42: Cost leadership as a prerequisite for profitable growth
Page 42 Cost leadership as a prerequisite for profitable growth Development of costs and number of products issued (indexed to 100) Cost per unit (CHF)1 2,713 2,622 7,733 -94% 1,789 92% CAGR 4,289 893 10% CAGR 1,286 232 660 129 149 153 163 158 466 467 100 2009 2010 2011 2012 2013 2014 2009 2010 2011
Slide 43: Technology platform allows entry into new leverage product markets in Europe
Page 43 Technology platform allows us to enter new leverage product markets in Europe with low costs and risk Leverage products in Europe Growth potential in Europe Markets Volume in 2013 2014 Market Market 2017 EUR mn share VT share VT (E) (volume) (trades) 2014 2014 Switzerland 11,628 10,876 20.7%
Slide 44: deritrade MIP is setting a new standard
Page 44 deritrade® Multi Issuer Platform is setting a new standard, driving rapid growth in demand from issuers and distributors Business model Cornerstones Standard New Issuers Cost reduction Issuer low cost Increased market reach distribution market reach Bank/ deritrade® MIP Cost reduction distri
Slide 45: Compelling and disruptive, high volume business model
Page 45 Compelling and disruptive, high volume business model Standard business model Leveraging revenue growth Vontobel issuer External issuers Vontobel deritrade® MIP + platform fees Distributors Distributors High entry barriers – natural network effects – significant cost reductions for all parti
Slide 46: MIP business build-up
Page 46 Business is profitable in Switzerland and ready to grow in APAC Franchise build-up Strategy Switzerland - Business set-up completed Today - Service and platform operational - Growing offering (issuers, products, services) - Rapidly growing distribution franchise MIP business build-up APAC -
Slide 47: Switzerland – growing a new franchise
Page 47 Switzerland – growing a new franchise Issuers Distributors 1. Deutsche Bank Banks (10 out of 24) Cooperations 2. Morgan Stanley Vontobel Private Banking LGT Raiffeisen 3. Société Générale Berenberg Neuenburger KB UBS Wealth Management 4. UBS Centrum Rothschild Bank (go live Q2/2015) 5. Vonto
Slide 48: APAC - developing offering and distribution franchise
Page 48 APAC - developing offering and distribution franchise Key value proposition Strategy & status Price discovery is already automated in APAC, MIP will reduce Structured products are a buyers market, MIP is addressing the existing costs and complexity overriding need for lower costs on the dist
Slide 49: Live demo of technology leadership
Page 49 Live demo of technology leadership
Slide 50: Compelling offering for External Asset Managers is driving growth
Page 50 Compelling offering for External Asset Managers is driving growth Offering for External Asset Managers Platforms Markets Products & Services e-banking services Switzerland Investment advisory Basel Funds Content platform Content platform Zurich Research COPP Structured products Direct market
Slide 51: External Asset Manager platform with consistent growth
Page 51 External Asset Manager platform with consistent growth and increasing profit contribution due to operating leverage EAM business: direct revenues Advised client assets and number of EAMs 7.6 6.8 42.0 5.2 33.1 24.7 3.7 3.7 22.6 23.1 3.3 243 287 303 16.7 149 173 125 2009 2010 2011 2012 2013 20
Slide 52: Vontobel is growing across all markets of Switzerland
Page 52 Vontobel is growing across all markets of Switzerland Market Regional AuM1 (CHF mn) Potential Measures German-speaking Switzerland Focus on acquisition of new 6,050 6,546 – estimated size of market: EAMs 4,743 3,429 3,524 3,721 CHF 300 bn Increase share of wallet with Zurich VT market share:
Slide 53: US market has become important part of Vontobel's book of business
Page 53 US market has become important part of Vontobel’s book of business and has significant growth potential Market AuM (CHF mn) / description Potential Measures Limited potential due to Build up local franchise in resolution of regulatory issues New York 1,446 1,460 by other Swiss banks Leverage
Slide 54: Investment Banking with considerable return on allocated capital
Page 54 Investment Banking with considerable return on allocated capital Pre-tax ROAC1 (in %) Outlook 27 35 > 25 Protect market share in Switzerland Leverage technology leadership by expanding leverage products into European countries 2013 2014 Target Continue rollout of deritrade® MIP among financi
Slide 55: Questions and Answers
Page 55 Questions and Answers
Slide 56: Programme
Page 56 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 57: Operations mission statement
Page 57 Operations mission statement Operations is responsible for running and upgrading the Group-wide infrastructure – including IT, Facility Management as well as IT Security and Physical Security Asset Private Financial Management Banking / Products External Asset Managers Operations IT, Corpora
Slide 58: Operations delivers on Vontobel's strategic priorities
Page 58 Operations delivers on Vontobel’s strategic priorities Service & product excellence Productivity Profitable growth State-of-the-art infrastructure and Straight-through-processing rate > Scalability applications 99% Flexibility Business alignment management is Transparent cost and requirement
Slide 59: Run-the-bank costs were reduced by CHF 20 mn
Page 59 Run-the-bank costs were reduced by CHF 20 mn through systematic implementation of efficiency improvements Run-the-bank (IT costs without depreciation; CHF mn) Comments Active cost management led to lower run-the-bank costs 53.2 -9% p.a. of -9% p.a. from 2008 to 2014 47.0 Target run-the-bank
Slide 60: Lower investment in IT will lead to sharp decline in IT depreciation
Page 60 Lower investment in IT will lead to a sharp decline in IT depreciation of CHF 15-20 mn in 2020 IT depreciation (CHF mn) Comments The business requirements will 15-20 lead to investments of 45.0 CHF 20-25 mn per year as from 41.6 41.2 41.8 38-40 2015 – this low number is 38.2 possible given o
Slide 61: Measures and initiatives to manage run-the-bank IT costs
Page 61 Measures and initiatives to manage run-the-bank IT costs Transparent service catalogue based on market prices Virtualization Platform Downsizing consolidation Cloud computing Insourcing of external resources Professional procurement management
Slide 62: Overview of the IT system landscape
Page 62 Overview of the IT system landscape Web Internet Intranet Extranet applications Front CRM Execution Portfolio management Trading applications platform platform platform platform Middleware Securities centre Core applications avaloq (VVZ) Output Archive Accounting & risk Accounting Risk Legal
Slide 63: The entire IT platform has been completely renewed over the last 10 years
Page 63 The entire IT platform has been completely renewed over the last 10 years and is now state-of-the-art and at the beginning of lifecycle Front office applications (flexible, dynamic and capital-light) Portfolio Trading Generic management order tax engine system management MIFID- compliant Mob
Slide 64: Managing the digital change on three different levels
Page 64 Managing the digital change on three different levels Digitalize existing business models Digitalization of client interface (multi-channel access for information, transactions, collaboration, etc.) Digitalize business support processes Cost management requires fully digitalized processes: a
Slide 65: Key messages
Page 65 Key messages Vontobel has a flexible and highly performing infrastructure, which is still at the beginning of its lifecycle. Initial investments will be written off completely by 2019 The run-the-bank cost base has been significantly reduced since 2008; change-the-bank costs have stabilized
Slide 66: Questions and Answers
Page 66 Questions and Answers
Slide 67: Programme
Page 67 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 68: Shareholder oriented capital management confirmed by share buyback
Page 68 Shareholder oriented capital management confirmed by share buyback – capital position remains solid with CET1 ratio of 21.3% Development of capital (CHF mn) BIS CET1 capital and ratios (CHF mn) 25.5% 21.3% 1,626 1,348 -84 1,117 Target ratios 1,412 -270 ≥ 16% total capital 4 135 ≥ 12% CET1 ca
Slide 69: CHF 600 mn available for M&A from excess capital and hybrid instruments
Page 69 CHF 600 mn available for M&A from excess capital and potential hybrid instruments – without diluting existing shareholders Vontobel with excess capital … and potential for hybrid Strategic flexibility of of CHF 300 mn… capital of CHF 300 mn new shareholder structure Vontobel with CET1 capita
Slide 70: Cancellation of 12.5% of own shares will increase free float
Page 70 Cancellation of 12.5% of own shares will increase free float by 4.6pp – ROE and EPS appreciation will be fully reflected in 2015 Financial indicators1 Shareholder structure Comments Return on equity (ROE) Cancellation of 12.5% of own shares 33.0% 37.6% will be proposed to the General +1pp Me
Slide 71: Operating income increased three times faster than risk-weighted assets
Page 71 Operating income increased three times faster than risk-weighted assets, reflecting Vontobel’s capital-light business model Increase in risk weighted assets due to Average RoE of 11.4% and average growth and regulatory changes dividend of CHF 1.40/share since 2003 21.6% +5.4% 19.2% 15.5% 16.
Slide 72: Management and employee incentives closely aligned with shareholder interests
Page 72 Management and employee incentives closely aligned with shareholder interests Structure of long-term Number of performance shares Unique incentive incentive plan increases with RoE and BIS ratio structure in market 50% of bonus is allocated as Long-term incentive plan has bonus shares for al
Slide 73: Active management of capital expenditure will lead to CIR improvement
Page 73 Active management of capital expenditure will lead to CIR improvement of 2.5-3.0 pp by 20202 Development of capital expenditure (CHF mn) Comments includes avaloq 93.9 Significant investments in IT (renewal of front 85.4 office systems and avaloq) completed 55.3 58.7 Major investments office
Slide 74: Advised client assets at end-January above 2014 average
Page 74 Advised client assets at end-January above 2014 average – Vontobel’s commitment to growth is unchanged Income and Advised client assets cost structure (2014) Comments +3% USD up by 0.5% (31-01-2015) compared to 2014 average 128.5 884.4 124.3 EUR down by -14.4% (31-01-2015) 7.1 5.9 8% compare
Slide 75: Questions and Answers
Page 75 Questions and Answers
Slide 76: Programme
Page 76 Programme 1.30 pm Welcome and strategy update | Zeno Staub 2.10 pm Asset Management | Axel Schwarzer 2.50 pm Private Banking | Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking | Roger Studer 4.40 pm Operations | Felix Lenhard 5.10 pm Capital Management | Martin Sieg Castagnola
Slide 77: Vontobel represents an attractive value proposition for investors
Page 77 Vontobel represents an attractive value proposition for investors … with strong A growth case … financial discipline … … and potential for M&A Wealth & Asset Management industry Capital-light business model as a Potential to boost profitability is growing globally Wealth & Asset Manager thro
Slide 78: Questions and Answers
Page 78 Questions and Answers
Slide 79: The Vontobel Group
Private Banking Investment Banking Asset Management = LX) aa © = Z © = Performance creates trust