Slide 1: Half year results presentation 2011
Half year results presentation 2011 Zurich, 27 July 2011 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 any securities regarding EFG Int
Slide 3: Introduction, Performance, Current status, outlook
1.0 Introduction John Williamson, CEO 2.0 Performance Current status, 3.0 outlook 3
Slide 4: A word of introduction
A word of introduction • John Williamson - appointed as CEO, effective 27 June 2011. • Previously CEO of UK and Channel Islands subsidiary, one of most significant contributors to overall EFGI performance. • Before this, variety of senior positions during 16 years at Coutts, including Group Chief Op
Slide 5: Current actions
Current actions • Business review now underway. • Steps to reposition EFGI for disciplined, profitable growth. • Based on core business of private banking and heightened focus on shareholder value. • To communicate mid-October. 5
Slide 6: Financials summary
Financials summary vs. 1H 2010 Core net profit CHF 72.6 m 18% IFRS net profit CHF 55.9 m NM IFRS net profit attributable to CHF 47.5 m NM ordinary shareholders Net new assets CHF 2.7 bn +6.4% annualised Revenue-generating AUM CHF 80.0 bn 9% CROs 660 down 5 BIS tier 1/ total capital ratio 14.4% / 14.
Slide 7: Introduction, Performance, Current status, outlook
1.0 Introduction 2.0 Performance Jean-Christophe Pernollet, CFO Current status, 3.0 outlook 7
Slide 8: Reconciliation IFRS to core profit
Reconciliation IFRS to core profit 1H 2011 Core 1H 2011 (in CHF million) IFRS Adjustments Core Profit Net interest income 122.6 122.6 Net banking fee & commission income 242.9 242.9 Net other income 30.5 30.5 Operating income 396.0 396.0 Operating expenses (335.4) (318.7) Stock-option / restricted s
Slide 9: Key performance indicators
Key performance indicators Resilience in times of challenging conditions Average revenue- Private Client generating AUM net new assets RoAUM Core operating income Core net profit (in CHF bn) (in CHF bn) (in bps) (in CHF m) (in CHF m) 88.9 10.5 88.4 407.1 +7% +10% 396.0 1.0 83.8 47.6 395.0 25.4 +15%
Slide 10: Return on AUM
Return on AUM Revenue margin improved year-on-year Return on AUM (in bps) 107 107 92 95 95 95 7 92 7 56 59 29 29 1H09 2H09 1H10 2H10 1H11 1H10 1H11 Interest Commission Other income • Sustained margin despite challenging market environment since March and relative client risk aversion 10
Slide 11: Core operating income
Core operating income Double-digit revenue growth on constant currency basis Core net interest Core net commissions Core other income (in CHF m) (in CHF m) (in CHF m) - 3% - 3% 249.3 FX impact 242.9 MBAM 29.2 30.8 30.5 1.0 127.0 MBAM 11.0 +10% 241.9 FX 3.6 FX 122.6 209.1 impact impact 14.9 XXX 27.2
Slide 12: Operating expenses
Operating expenses Slight reduction in total expenses, helped by FX movements Personnel expenses (in CHF m) Other operating expenses (in CHF m) Cost-income ratio* (in %) 228.8 227.3 92.2 FX FX 89.2 impact 15.3 6.9 +6.5% impact 81.5 82.8 213.5 85.3 Total expenses -1.4% 1H10 1H11 1H10 1H11 1H10 1H11 *
Slide 13: AuM development
AuM development Solid performance even if below own standards (CHF bn) • Annualised net new asset growth of 6.4% • Negative market performance & FX impact Total NNA: CHF 2.7 bn (5.3) 0.5 2.2 (2.2) 84.8 80.0 Dec 10 FX Market Client loans NNA Jun 11 13
Slide 14: AuM and NNA by business region
AuM and NNA by business region Solid performance across all regions, with exception of Europe, mostly affected in Sweden by DSAM restructuring 1H 11 AuMs 1H 11 NNA CHF 80.0 bn CHF 2.7 bn Europe ex. UK 35.9 (0.6) Asia 13.1 0.9 Americas 11.4 0.7 UK 15.2 0.7 Asset 4.4 1.0 Management 14
Slide 15: Continued strong & liquid balance sheet
Continued strong & liquid balance sheet Total assets: CHF 21.0 bn Total liabilities & equity: CHF 21.0 bn Generally AA rated banks Cash & banks 2.8 Due to banks 0.8 Deposits 14.0 Sovereign / AAA Treasury bills 2.0 Derivatives 0.3 Available 4.0 for sale - Sovereign; - EU Quasi-Sovereign AAA/AA; Finan
Slide 16: Strong funding position
Strong funding position (in CHF m) Dec 31, 2010 Jun 30, 2011 Due to clients 14,904 13,965* Structured product issuances 2,863 3,462 Gross funding from clients 17,767 17,427 Loans and advances to clients (8,958) (8,846) Net excess funding from clients 8,809 8,581 Deposit/Loan Ratio 197% * Decrease pr
Slide 17: Comfortable capital position
Comfortable capital position Evolution of BIS capital position Breakdown of RWAs (in CHF bn) 14.0% 14.4% Total Capital Ratio Tier 1 Ratio 5.5 5.5 13.9% 14.4% 0.5 0.5 XX 1.4 1.4 14.0% 14.4% XX 3.6 3.6 Dec 10 Jun 11 Market / Settlement / Non- Dec 10 Jun 11 counterparty related Operational risk Evoluti
Slide 18: Introduction, Performance, Current status, outlook
1.0 Introduction 2.0 Performance Current status, 3.0 John Williamson, CEO outlook 18
Slide 19: A strong core business
A strong core business Private banking business has many strengths • Loyal clients. NNA generation in excess of 6% annualised. • Continuity of – and strong appeal to - quality private bankers. • A flexible, entrepreneurial business model. Still differentiated vs competition. • International diversif
Slide 20: Good performances from most PB businesses
Good performances from most PB businesses UK – strong double-digit growth in profits. Continental Europe – solid performances from most businesses, but overall result below expectations. Business review will focus closely on this region. Americas – revenues and profits up by over 20%. Asia – revenue
Slide 21: Continued NNA growth
Continued NNA growth Growth in net new assets (%) Solid performance given challenging H1. Remain in front rank 19% of private banks 17% internationally. 13% 11% Lower growth relative to EFGI standards. H1 growth 6.4% below expectations. 2007 2008 2009 2010 2011 annualised 21
Slide 22: Greater focus on CRO productivity
Greater focus on CRO productivity • Number of CROs: 660. Down 5 year-on-year and down 15 compared to end-2010. • Continued strong retention of key personnel. • Recognition business paid price for aggressive growth (226 CROs at time of IPO to 660 end-June 2011). • Continue to recruit CROs where stron
Slide 23: Good progress at EFG Asset Management
Good progress at EFG Asset Management EFG Asset Management • Encouraging progress supporting CROs. • Managed accounts up circa 20%. Funds by more than 70%. • Overall revenue contribution up close to 40% y-on-y. • Projecting strong growth in revenues for full year. EFG Financial Products • Continued
Slide 24: Fundamental issue: core strengths overshadowed
Fundamental issue: core strengths overshadowed Factors: • Speed and diversity of growth post-IPO. • Unsuccessful investments outside core private banking business. • Compounded by challenging market conditions. Being addressed through business review. 24
Slide 25: High level objectives
High level objectives About delivering disciplined, profitable growth: • Focus on profitability and shareholder value, capitalising on strong revenue base. • Strong focus on individual business unit performance. • Preserve and capitalise on strengths, while addressing issues re rapid growth / changi
Slide 26: Business review underway
Business review underway However, can make number of points at this stage: • Clear focus on private banking, where business has real competitive strengths. • Asset management an integral part of private banking, serving CROs and clients. EFG AM and EFG FP will continue organic development of certain
Slide 27: Outlook
Outlook • As previously announced, expect 2011 core net profit in range CHF 140m - 160m (IFRS net profit: CHF 110m – 130m). • Reporting to be simplified. For 2012, will report IFRS net profit only. No longer report core net profit. • Other targets / metrics to be assessed as part of business review.
Slide 28: Practitioners of the craft of private banking
Practitioners of the craft of private banking www.efginternational.com 28
Slide 29: Appendix
4.0 Appendix 29
Slide 30: Consolidated income statement (IFRS)
Consolidated income statement (IFRS) (in CHF million) 1H 2009 2H 2009 1H 2010 2H 2010 1H 2011 Net interest income 153.8 109.5 127.0 123.5 122.6 Net banking fee & commission income 204.3 293.3 249.3 247.0 242.9 Net other income/(loss)* 54.0 44.2 (468.6) 47.3 30.5 Operating income/(loss) 412.1 447.0 (
Slide 31: Consolidated balance sheet (IFRS)
Consolidated balance sheet (IFRS) (in CHF million) Dec 2010 Jun 2011 Cash and balances with central banks 712 447 Treasury bills and other eligible bills 2,038 2,023 Due from other banks 2,227 2,355 Derivative financial instruments 354 291 Financial instruments 5,710 5,957 Loans and advances to cust
Slide 32: Breakdown of Assets under Management
Breakdown of Assets under Management 30.06.11 By category 31.12.10 30.06.11 (in CHF bn) Cash & Deposits 23.3% 23.4% 18.7 Bonds 17.4% 17.7% 14.2 Equities 27.1% 24.9% 20.0 Structured products 9.3% 10.4% 8.3 Loans 11.0% 11.5% 9.2 Hedge Funds / Funds of HFs 8.3% 7.8% 6.2 Other 3.6% 4.3% 3.4 Total 100.0%
Slide 33: Details on goodwill & intangibles position as of June 2011
Details on goodwill & intangibles position as of June 2011 (in CHF m) 31 Dec 2010 30 Jun 2011 Specialist Product Businesses Total Goodwill & Total intangible assets MBAM* 13.6 12.1 DSAM 76.7 70.5 Private Banking Businesses Total Goodwill & Total intangible assets A&G 77.5 72.9 PRS Group 81.5 71.6 BE
Slide 34: Life insurance policies portfolio: Overview
Life insurance policies portfolio: Overview* • Diversified portfolio of 263 life insurance policies issued by US life insurance companies; booked in HTM** • 67% males and 33% females • Average age of lives insured: 82.7 years • Average life expectation: 7.3 years, i.e. 90 years • Total death benefit
Slide 35: Segmental breakdown – 1H 2011
Segmental breakdown – 1H 2011 Performance summary Europe excl. Asset Asia Americas UK (in CHF m) UK Management Segment revenues 178.1 53.4 37.1 68.2 76.5 Segment expenses (144.6) (43.9) (34.3) (49.2) (56.9) Profit before tax 33.5 9.5 2.8 19.0 19.6 AUMs (in CHF bn) 35.9 13.1 11.4 15.2 4.4 NNAs (in CH
Slide 36: Segmental breakdown – 1H 2010
Segmental breakdown – 1H 2010 Performance summary Europe Asset Asia Americas UK (in CHF m) excl. UK Management Segment revenues 192.0 50.6 38.1 61.9 (433.1) Segment expenses (313.5) (39.9) (32.6) (49.0) (290.3) Profit before tax (121.5) 10.7 5.5 12.9 723.4 AUMs (in CHF bn) 40.0 12.7 14.1 16.1 4.6 Em
Slide 37: Segmental breakdown – 2H 2010
Segmental breakdown – 2H 2010 Performance summary Europe Asset Asia Americas UK (in CHF m) excl. UK Management Segment revenues 188.1 49.3 33.5 56.2 93.8 Segment expenses (166.2) (40.9) (35.0) (47.3) (60.7) Profit before tax 21.9 8.4 (1.5) 8.9 33.1 AUMs (in CHF bn) 38.5 14.2 12.8 15.5 3.9 Employees
Slide 38: Contacts
Contacts Media Investors Strategic Marketing & Communications EFG International Investor Relations Keith Gapp, Head of SMC Jens Brueckner, Head of IR Telephone: +41 44 226 1217 Telephone: +41 44 226 1799 E-mail: keith.gapp@efginternational.com E-mail: jens.brueckner@efginternational.com EFG Internat