Banque Cantonale Vaudoise · SIX:BCVN
Banque Cantonale Vaudoise — Non-Deal Roadshow (May 2006)
34 slides from Banque Cantonale Vaudoise's roadshow presentation, May 4, 2006
Slide 1: BCV Group - Background and strategy
BCV Group - Background and strategy Zurich, 04 May 2006 1
Slide 2: 1. Introduction to BCV
1. Introduction to BCV 2. BCV history and strategic repositioning 3. Strategy going forward 2
Slide 3: Legal structure and capital
Legal structure and capital (as of 31.12.2005) n By-laws • Public limited company without state guarantee • Main shareholder: Canton of Vaud with 67.3% of the group’s registered share capital and 100% share of the participation certificates • The cantonal bank status requires a minimal 33% sharehold
Slide 4: BCV has four main business areas
BCV has four main business areas BCV GROUP Retail banking Wealth management Corporate banking Trading • Retail clients • Private banking • SMEs • Own trading (on/offshore) • Corporates • Customer • Institutional AM • Micro companies* transactions • Fund management (1-5 employees) • All trading produ
Slide 5: Main affiliates within the BCV Group
Main affiliates within the BCV Group Banque Piguet & Cie SA Private Banking A&G SA (Madrid) Private Banking Unicible IT Services PARENT COMPANY Sogirom Real estate company Gérifonds SA GEP SA Fund management Real estate funds
Slide 6: Key data (as of 31.12.2005)
Key data (as of 31.12.2005) (in CHF rounded) 31.12.2005 31.12.2004 Var % n Total assets 34.9 bn 32.3 bn + 8.0% n Equity 3.2 2.9 bn +10.6% n AUM 71.7 bn 64.1 bn +12.0% n Full time 2349 2423 - 3.1% equivalents n Revenue 1037.7 mn 944.1 mn +9.9% n Net profit* 454.2 mn 334.9 mn +35.6% Source: BCV annual
Slide 7: BCV, the fourth largest universal Swiss bank
BCV, the fourth largest universal Swiss bank As of 31.12.2005 Total assets (CHF bn) Type Crédit Suisse 227 • Universal UBS 204 • Universal Group of Raiffeisen banks 108 • Regional Cantonal Bank of Zurich 86 • Universal BCV 35 • Universal Migros Bank 28 • Cooperative Cantonal Bank of Bern 21 • Region
Slide 8: BCV: 5th largest capitalisation (free float) among Swiss banks
BCV: 5th largest capitalisation (free float) among Swiss banks Ranking in The first 10 banks in CHF bn % of free the SPI float 3 UBS 144,28 90% 5 CS 86,87 90% 12 Julius Bär 10,56 95% 41 Valiant Bank 2,19 100% 56 BCV 1,23 33% 58 Sarasin 1,22 66% 59 SGKB 1,20 45% 60 Vontobel 1,13 34% 61 VP Bank 1,08 7
Slide 9: Organisational chart
Organisational chart Executive board Board of Directors Corporate Intern. Audit Chairman secretary Olivier Steimer CEO Alexandre Zeller Corporate Human secretary resources Finance & Corporate Wealth Retail Trading Business Risks Banking management Banking O. Cavaleri support P. Kiener J.F. Schwarz C
Slide 10: Consolidated balance sheet
Consolidated balance sheet (as of 31.12.05)* (rounded) – BCV Group CHF 34.9 bn CHF 34.9 bn 6.0% Due to Banks Cash and due to banks 16.0% 25.2% Savings Commercial loans 16.6% 26.1% Other deposits Mortgage loans 45.6% 19.2% Lt. Borrowings Provisions and Own assets 10.6% 14.3% other liabilities Other a
Slide 11: Key figures by business areas
Key figures by business areas (in CHF mn, rounded) – 2005 Group Corporate Retail Wealth Trading Banking Banking management Revenue 226.2 266.1 293.0 58.7 Gross profit 152.7 156.5 175.0 29.6 ROE* 8.6% 13.4% 59.0% 10.6% Cost/ 0.46 0.69 0.59 0.61 Income Source: annual report 2005 *Based on net profit c
Slide 12: 2. BCV history and strategic repositioning
1. Introduction to BCV 2. BCV history and strategic repositioning 3. Strategy going forward 12
Slide 13: Several phases in BCV's development
Several phases in BCV’s development 1996-2000 2001/2002 2003-2005 2006 - onwards Integration of regional banks The turnaround The growth phase and expansion The crisis 1993 2001 2003 Takeover of BCV: 1st BCV: A new BVCred by BCV recapitalisation of strategy BCV CHF 600 mn P&L loss CHF 381 2002 1996
Slide 14: BCV from 1996 to 2000: expanding in new business areas
BCV from 1996 to 2000: expanding in new business areas Retail Banking Corporate Private Banking Banking - Trade finance - Acquisitions of Private - Oil/shipping financing Banks in Switzerland - Private Equity - International development (Italy, - German-speaking Trading France, Spain, Asia) Switzerl
Slide 15: BCV between 2001-2002
BCV between 2001- 2002 Diversification inadequate and complex structure Inadequate Difficult financial governance rules situation and sub-optimal 2001 – 2002 organisation Crisis at BCV and structural problems Processes and High level of functions often impaired loans costly and inefficient Reputatio
Slide 16: Situation in 2002: financial data
Situation in 2002: financial data Sizeable and recurring net 2001: CHF -381 mn losses 2002: CHF -1’200 mn Extremely high level of CHF 4.36 bn impaired loans (15% of total loans) Operational inefficiencies Ratio cost/income: 75% Sub-optimal balance sheet Net interest margin : 1.25% structure Tier 1:
Slide 17: Turnaround strategy
Turnaround strategy Get "fit" Embark on profitable and lasting growth Revitalise core businesses Focus and simplify Aim for operational excellence Improve management rigour Improve profitability and reduce risk profile Promote a unique and strong BCV culture 17
Slide 18: Successful first phase
Successful first phase 2003 2004 2005 2006 First phase: • Strategic realignment mission • Financial situation accomplished • Governance/organisation Growth • Capital structure Operational excellence Quality of service and execution Products Gaining trust 18
Slide 19: We kept our word
We kept our word • Financial turnaround skilfully mastered ü • Strategic realignment on core businesses on schedule ü • Significant reduction of impaired loans ü • Reorganisation of the Bank now completed ü • Greater transparency in the exchange of information with the State of Vaud ü • Simplified c
Slide 20: Improving gross and net profit
Improving gross and net profit CHF mn (rounded) 486 Net profit (loss) Gross profit (loss) 457 • Underlying business over the last 5 years has been very 474 399 resilient 389 330 • Over the past 3 years 320 337 gross profit is constantly improving • Losses in 2001 and 160 157 2002 were not operationa
Slide 21: Significant improvement in key ratios
Significant improvement in key ratios 2002 2003 2004 2005 Impaired loans / Quality and 15% 13% 10% 7% credit exposure balance Client deposits / sheet 68% 74% 78% 83% Loans to clients structure Net interest margin 1.25% 1.23% 1.29% 1.40% Equity ratio SFBC 76% 156% 185% 195% Equity Tier 1 ratio (BRI)
Slide 22: Strategic realignment finalised
Strategic realignment finalised 2003 2004 • Sale of Banque Galland þ • Exit of oil trade finance þ (CHF 1.1 bn ) • Closure of Zurich office þ • Management buy-out of þ • Successful exit of ship þ financing (CHF 0.9 bn) Dimension Corp. Finance • Reduction of loans outside • Closure of Greek office þ
Slide 23: Volumes of impaired loans have been significantly reduced but levels remain too high
Volumes of impaired loans have been significantly reduced but levels remain too high Trends in impaired loans, CHF bn (rounded)1 Parent bank 4.4 Ratio "impaired loans/ credit exposure 3.7 2.7 0.8 1.9 0.2 Of which Non <0.8 Performing according 1.7 to SFBC rules 15% 13% 10% 7% <3% 2002 2003 2004 Reduc
Slide 24: Corporate governance and organisation modernised
Corporate governance and organisation modernised • New board, downsized from 21 to 7 members • Corporate governance modernised Governance • In-depth review of organisation rules • Relations clarified with the State of Vaud • New executive team • Recruitment of key managers and specialised personnel
Slide 25: 3. Strategy going forward
1. Introduction to BCV 2. BCV history and strategic repositioning 3. Strategy going forward 25
Slide 26: BCV has entered the second phase of its strategy
BCV has entered the second phase of its strategy 2004 2005 2006 2007 2008 First phase Successful turnaround: Strategic realignment ü Financial situation ü Second phase Governance and organisation ü Growth and profitability in core businesses Capital structure ü CroisSens growth project Products Oper
Slide 27: Main strategic objectives
Main strategic objectives • Strengthen business growth and profitability of core businesses • Further reduce the impaired loan portfolio • Pursue the in-depth review and overhaul of management and business processes • Plan additional buybacks of the participation certificates 27
Slide 28: 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 1 value propositions for segments, e.g., affluent clients with a better each customer segment adapted offer (proximity, service level, etc.) Increase the commerc
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: 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 31: The goal and impact of "CroisSens"
The goal and impact of "CroisSens" Goal Impact Stabilize market position by 2007 Growth Strengthen the strong long term market position BCV growth Increase revenues due to additional volumes (deposits, AuM, mortgages) resulting in a lower C/I in the future Market growth Despite costs associated to C
Slide 32: CroisSens: operational implementation on schedule
CroisSens: operational implementation on schedule Client proximity Successful migration of client portfolio's within the CroisSens reorganisation between core businesses 2 call centres (one for general inquiries and one for the corporate client base) Increased client contacts and new client oriented
Slide 33: CroisSens: next steps
CroisSens: next steps BCV Brand • Launch of the new brand and its April – June corporate repositioning 2006 Retail • Network revamp from mid-2006 until Fall 2006 network 2007 Training • Behavioural based sales training for the April – Dec. front 2006 Progress • Individual analysis of sales targets S
Slide 34: Other selective sources of growth
Other selective sources of growth Trade finance • Market fundamentals in selected segments (softs and metals) remain positive • Opportunities to increase BCV's risk exposure within the limits of the Group's current risk profile Institutional asset management • Excellent fund results based on consist
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