Banque Cantonale Vaudoise · SIX:BCVN
Banque Cantonale Vaudoise — H1 2005 Earnings Presentation
32 slides from Banque Cantonale Vaudoise's earnings presentation, Sep 29, 2005
Slide 1: BCV Group – H1 2005 figures and strategy going forward
BCV Group – H1 2005 figures and strategy going forward Investor meetings, London, 29.09.2005 v03(S)-28.09.05-WBL
Slide 2: Key figures, H1 2005 financials, strategy
1. Key figures 2. Latest financial figures: H1 2005 3. BCV strategy going forward 2
Slide 3: Key P&L figures
Key P&L figures CHF mn (rounded) H1 2003 H1 2004 H1 2005 Change Total revenue 479 470 507 +8% Gross profit 193 193 228 +18% Net profit 58 198 248 +25% (before minority interests ) 3 Source: BCV, non audited figures
Slide 4: Key balance sheet figures (as of 30.06.05)
Key balance sheet figures (as of 30.06.05) (in CHF bn rounded) 30.06.04 31.12.04 30.06.05 Var % n Total assets • 32.8 bn 32.3bn 33.7bn 4.3% n Deposits • 17.1 bn 17.3 bn 17.9 bn 3.5% n Loans • 22.7 bn 22.1 bn 21.7 bn - 1.8% n Equity • 2.7 bn 2.9 bn 3.1bn 6.9% n AUM • 61.3 bn 64.1 bn 68.9 bn 7.5% n Fu
Slide 5: Significant improvement in key ratios
Significant improvement in key ratios 31.12.02 31.12.03 31.12.04 30.06.05 impaired loans / 15% 13% 10% 8% Quality and credit exposure structure of Client deposits / balance loans to clients 68% 74% 78% 83% sheet Net interest margin 1.25% 1.23% 1.29% 1.38% Equity ratio SCFB* 76% 156% 185% 177% Equity
Slide 6: Main figures, latest financials, strategy
1. Main figures 2. Latest financials: H1 2005 3. BCV strategy going forward 6
Slide 7: Excellent first half results
Excellent first half results Change YoY Rise in revenues CHF 507 mn +8% Gross profits clearly improved CHF 228 mn +18% Strong increase in net profit CHF 248 mn +25% 7
Slide 8: Main trends in core businesses
Main trends in core businesses CHF (rounded) Slight increase in mortgage +110 mn +0.7% loans* Decrease in commercial loans* -130 mn -2% Strong rise in AuM’s +4.8 bn +7.5% Savings and client deposits up +670 mn +4% Higher volumes of structured products +295 mn +65% * Excl. impaired loans (as defined
Slide 9: Profit and loss: H1 2005
Profit and loss: H1 2005 CHF mn (rounded) H1 2004 H1 2005 Change Different factors Total revenue 470 507 +37 +8% contribute to the increase in revenue Operational costs Continued cost -277 -278 +1.5 +0.6% control Gross profit 193 228 +35 +18% Depreciations -43 -43 Strategic realignment Value adj., p
Slide 10: Revenues increase by 8%
Revenues increase by 8% CHF mn (rounded) 507 470 Trading Others Improved structure Commissions +12 and management of +6 -2 the balance sheet Interests +22 Increased volume Interest 227 in healthy mortgage revenue 205 business Stable margins Commis- Favorable markets sions 151 157 Asset inflows Sligh
Slide 11: Continued improvement of the net interest margin
Continued improvement of the net interest margin Quarterly trend in the net interest margin •Management of BS • Structure of BS Impact of strat. realigmnent • Pricing 1.38% 1.39% 1.34% 1.35% 1.30% 1.28% 1.26% 1.21% 1.22% 1.20% Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q
Slide 12: Rigorous cost control (+ 0.6%)
Rigorous cost control (+ 0.6%) Trend in operational expenses, CHF mn (rounded) 286 277 278 Increase partially due to Other 96.8 strategic projects (+4.6%) operational 91.3 95.5 costs Continued cost control of Personnel 189.6 185.3 182.7 personnel costs (-1.4%) H1 2003 H1 2004 H1 2005 12 Source: BCV,
Slide 13: Trend in Group workforce
Trend in Group workforce Full time equivalents 2 679 2 483 2 423 Affiliates 663 2 372 620 593 Last effects from strat. 560 realignment (Asia, France) Parent 2 016 Continued bank 1 863 productivity increase 1 830 1812 at the Parent bank 31.12.02 31.12.03 31.12.04 30.06.05 13
Slide 14: Significant increase in gross profit (+ 18%)
Significant increase in gross profit (+ 18%) Group BCV, CHF mn (rounded) +18% • Continued and progressive increase in Group operational results • Reflects both the 228 efforts to develop core 193 196 193 206 businesses, the rigorous cost control and the management of the balance sheet H1 2003 H2 200
Slide 15: Extraordinary gains from recoveries on provisions
Extraordinary gains from recoveries on provisions Breakdown of extraordinary gains for H1 2005, in CHF mn (rounded) ESTIMATE +21.2 79.4 +1.2 80.6 +25.0 +36.4 -3.2 Low level of Releases from Releases Partial release Total releases of Others, Extraordinary new real estate from other from the lump prov
Slide 16: Trends in the balance sheet: assets
Trends in the balance sheet: assets Assets, CHF mn (rounded) Change 33.7 +4% 32.3 Cash and due to 6.3 +34% Liquidity and client inflows 4.7 banks Reduction in impaired loans Loans and (-280 mn) 6.4 6.0 -6% advances to Lower commercial credit customers demand (-130 mn) Mortgages New mortgage volumes
Slide 17: Impaired credit volumes were halved since 2002
Impaired credit volumes were halved since 2002 Trend in impaired loans, CHF mn (rounded) 1 Parent bank 4.4 Ratio “impaired loans/ credit exposure" 3.7 2.7 -0.4 2.3 of which CHF 2.0 bn Non Performing Loans according to <1.0 SFBC rules 15% 13% 10% 8.2% 3-4% 31.12.02 31.12.03 31.12.04 Reduction of 30.0
Slide 18: Trends in the balance sheet: liabilities
Trends in the balance sheet: liabilities Liabilities, CHF mn (rounded) Change 33.7 +4% 32.3 1.8 +54% Banks 1.2 Savings 8.9 8.9 +0% Other deposits significant inflow of passive 8.4 9.0 +7% funds, liquidity from corporates and institutionals Redemption of lt. borrowings Borrowings 7.2 6.9 -4% without
Slide 19: Strong increase in AuM's
Strong increase in AuM’s CHF mn (rounded) 68.9 64.1 4.6 60.2 4.0 1.5 3.0 2.1 54.8 1.5 Banque Piguet 2.2 Other affiliates 2.3 Inflow of net new money Parent bank, CHF 1’300 55.7 58.0 62.8 mn Gérifonds 50.3 31.12.02 31.12.03 31.12.04 30.06.05 19 Source: BCV, non audited figures
Slide 20: Outlook for H2 2005
Outlook for H2 2005 • Confirming our guidance of an improvement in full year gross profit • Expecting net profit for year-end to be in line with last year’s results 20
Slide 21: BCV strategy going forward
1. Main figures 2. Latest financials: H1 2005 3. BCV strategy going forward 21
Slide 22: BCV is entering the second phase of its strategy
BCV is entering the second phase of its strategy 2005 2006 2007 2008 Profitability of core Products businesses Quality of service Growth 22
Slide 23: Main strategic directions
Main strategic directions • Focus on growth improvements on core business (after strategic realignment) • Improve profitability of core businesses • Continue reduction of impaired loans • Pursue the in-depth transformation of processes • Buyback of PC’s in a steady and continuous way • Improve the c
Slide 24: The drivers of growth and profitability and their change over time
The drivers of growth and profitability and their change over time 2005 2005 2006 2006 2007 2007 2008 2008 Profitability Profitability of of core core Products Products Profitability businesses businesses of core business Quality of service Quality of service Growth Growth Mainly inward looking init
Slide 25: Financial targets
Financial targets Target Q1 2005 2004 ROE % 11-12 % 12.4% C/I 60-63% 64% 67% Net interest margin • 1.50% 1.38% 1.29% 25
Slide 26: CroisSens program: main findings of diagnostics
CroisSens program: main findings of diagnostics Scope of the project : • covers around 30% of current revenue streams • targets onshore individual client base only Diagnostics Action Goal / Impact revealed undertaken • Increase the long term growth pattern in key segments • Growth potential • Launch
Slide 27: CroisSens program: Five key levers to strengthen BCV's market position
CroisSens program: Five key levers to strengthen BCV’s market position Specific and differentiated • Improve our value proposition for key segments, 1 value propositions for each e.g., affluent clients with a better adapted offer customer segment (proximity, service level, etc.) Increase the commerc
Slide 28: Clear focus of divisional entities
Clear focus of divisional entities BCV Affected businesses Transfer of micro-sized companies Wealth Corporate Retail management Banking Division Division Division Transfer of affluent clients Customer Individual with assets Affluent (>CHF 150’000) All SME’s < CHF 150’000 Private Banking Selected lar
Slide 29: CroisSens program: Network revamp
CroisSens program: Network revamp Organization Split into 9 regions Division Rationale: - Geography Wealth Division Retail Division Corp. Banking management - Wealth distribution - Growth potential - Customer proximity 3 head team by region (9 regions) Regional head Regional head Regional head Priva
Slide 30: CroisSens Program: A program to break the trend with affluent customers
CroisSens Program: A program to break the trend with affluent customers Growth • Stabilize market BCV growth position by 2007 • Strengthen the Market growth strong long term market position 2006 2007 2010 30
Slide 31: CroisSens program: Impact on BCV's financials
CroisSens program: Impact on BCV's financials Revenues An increase of revenues due to additional volumes (deposits, AuM, mortgages) Cost/income A momentary but marginal pressure on the C/I to be quickly reversed An investment of CHF 50 mn over the next Cash flow 2-3 years Payback period in 3 years w
Slide 32: Optimising BCV's value proposition for shareholders
Optimising BCV’s value proposition for shareholders • Aiming for long term moderate but steady top line growth • Improving recurrent gross profit growth in core businesses • Aiming for credit rating improvements • Optimising equity requirements in order to meet ROE targets over the long term • Imple
Banque Cantonale Vaudoise — H1 2005 Earnings Presentation on 6ix