Julius Baer Gruppe AG · SIX:BAER
Julius Baer Gruppe — Julius Baer Group — H1 2012 Earnings Presentation
40 slides from Julius Baer Gruppe's earnings presentation, Jul 23, 2012
Slide 1: H1 2012 Results and Review
H1 2012 Results and Review Presentation for Investors, Analysts & Media Zurich, 23 July 2012 Left: Sol IV, 2010; by Swiss artist Conrad Jon Godly, oil on cotton, 120x100 cm; part of the Julius Baer Art Collection
Slide 2: Cautionary Statement On Forward-Looking Information
Cautionary Statement On Forward-Looking Information FORWARD-LOOKING STATEMENTS THIS PRESENTATION BY JULIUS BAER GROUP LTD. (“THE COMPANY”) INCLUDES FORWARD-LOOKING STATEMENTS THAT REFLECT THE COMPANY'S INTENTIONS, BELIEFS OR CURRENT EXPECTATIONS AND PROJECTIONS ABOUT THE COMPANY'S FUTURE RESULTS OF
Slide 3: Programme and Content
Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results H1 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J. Collardi, CEO Q&A Session Appendix
Slide 4: H1 2012: Profitability Largely Defended Thanks to Cost Containment
H1 2012: Profitability Largely Defended Thanks to Cost Containment Benefit of AuM growth offset by lower client activity AuM increased to CHF 179 bn, a record-high level Asset growth Net new money CHF 5.5bn, 6.4% annualised, ahead of medium-term target momentum Continued business expansion in
Slide 5: Programme and Content
Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results H1 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J. Collardi, CEO Q&A Session Appendix
Slide 6: Scope of Presentation of Financials
Scope of Presentation of Financials Financial results are presented as usual on the adjusted basis Excluding integration and restructuring expenses and the amortisation of intangible assets related to previous acquisitions or divestitures Last year’s (H1 2011) figures: Included one-off payment
Slide 7: Current Market Environment
Current Market Environment Currency movements: Slightly positive impact on average AuM Monthly Averages of Key Currency Exchange Rates GBP CHF / EUR USD GBP SGD USD SGD Breakdown of AuM 33% H1 2010 1.4210 1.0820 1.6430 0.7750 by Currency CAD H2 2010 1.3170 0.9910 1.5540 0.7510 CHF 30.6.2012 HKD H1 2
Slide 8: Development of Assets under Management
Development of Assets under Management Strong net new money inflows and positive market performance Development of Assets under Management CHF bn Assets under management CHF 179bn, 3 1 179 up 5% from year-end 2011 5 170 Net new money CHF +5.5bn 166 Market performance CHF +2.5bn Currency impa
Slide 9: Net New Money at 6.4%
Net New Money at 6.4%1... …above the targeted medium-term range NNM of CHF 5.5bn, at 6.4%1 above Net New Money in CHF bn and %1 targeted range of 4-6% p.a. 4% 7% 6% 6% 6% Strong contributions from growth 5.5 5.3 5.5 4.9 markets 3.3 Also strong inflows from domestic business in Germany Modest
Slide 10: Operating Income Declined by 4% to CHF 863m
Operating Income Declined by 4% to CHF 863m … … but increased by 1% vs. H2 2011 Net fees/commissions -5% to CHF 471m vs. CHF m H1 11 Reduced level of client activity, low 898 855 863 -4% transaction volumes 18 86 10 52 -39% 183 Net interest income1 +2% to CHF 323m 316 323 +2% Mainly due to i
Slide 11: Gross Margin
Gross Margin1 Interest & trading income adjusted for dividends on trading portfolios2 2010 2011 H1 2012 105bps 105bps 98bps Net fee/commission income 53bps 107 105 104 Reflecting persistent lower level of 103 2 98 client activity 1 1 21 Mainly caused by lower transaction- 26 21 23 16 based rev
Slide 12: Operating Expenses Declined by 11% to CHF 597m
Operating Expenses1 Declined by 11% to CHF 597m Excluding one-off Germany payment, operating expenses declined by 1%* Personnel expenses -2% to CHF 404m CHF m vs. Lower performance-related payments H1 11 667 Reduction of staff base 30 612 597 -11% 65 36 +7% 32 General expenses2 -29% to CHF 1
Slide 13: Adjusted Net Profit CHF 221m
Adjusted Net Profit CHF 221m Higher mainly because H1 2011 impacted by one-off Germany payment* CHF m H1 2011 H2 2011 H1 2012 Change H1 12/H1 11 Operating income 898 855 863 -4% Net interest income 316 216 323 +2% Net fee and commission income 496 446 471 -5% Net trading income 86 183 52 -39% Other
Slide 14: Reconciliation to Adjusted and Underlying Net Profit
Reconciliation from Published Consolidated Financial Statement H1 2012* to Adjusted and Underlying Net Profit CHF m H1 2011 H2 2011 H1 2012 Change Change H1 12/H1 11 H1 12/H2 11 Profit after tax per consolidated Financial Statements 147.4 110.8 175.7 +19% +59% Amortisation of intangible assets relat
Slide 15: Solid Balance Sheet – Low Risk Profile
Solid Balance Sheet – Low Risk Profile Loan-to-deposit ratio of 0.48 (end of 2011: 0.47) Total Assets CHF 54.2bn Total Liabilities & Equity CHF bn (CHF 52.9bn) CHF bn 4.7 (5.7) Due to banks Due from banks 8.9 (10.0) (incl. open trading volumes (Open trading positions; repo) and Group debt) Loans 18.
Slide 16: Balance Sheet – Financial Investments AFS
Balance Sheet – Financial Investments AFS CHF m 30.06.2011 31.12.2011 30.06.2012 in Change vs. % 31.12.2011 Money market instruments 6'043 3'421 2'510 19% -27% Debt instruments 8'310 8'672 10'646 80% +23% Government and agency bonds 2'259 1'733 1'921 15% +11% Financial institution bonds 3'824 4'430
Slide 17: 23.6% BIS Total Capital Ratio – Low Leverage
23.6% BIS Total Capital Ratio – Low Leverage Absolute % Change CHF m 30.06.2011 31.12.2011 30.06.2012 Change Basel 2.5 Basel 2.5 Basel 2.5 Risk-weighted positions Credit risk 8'774 8'717 8'676 -41 -0% Non-counterparty-related risk 540 530 535 +5 +1% Market risk 1'145 672 853 +181 +27% Operational ri
Slide 18: Pro-forma Basel III Impact (Fully Phased-in)
Pro-forma Basel III Impact (Fully Phased-in) Basel III Basel 2.5 CHF m fully phased-in absolute % change June 2012 June 2012 change Risk-w eighted assets 12'935 13'231 296 2.3% Common equity tier 1 (CET1) 2'541 2'374 -167 -6.6% Tier 1 capital 2'766 2'599 -167 -6.0% Total capital 3'056 2'882 -174 -5.
Slide 19: Capital Management: Balancing Return of Capital and Reinvestment Opportunities
Capital Management: Balancing Return of Capital and Reinvestment Opportunities Committed to previously announced share buyback … Share buyback could be launched if excess capital is not used for potential acquisition opportunities Maximum value CHF 500m, to be executed flexibly over the next t
Slide 20: Programme and Content
Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results H1 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J. Collardi, CEO Q&A Session Appendix
Slide 21: Delivering on Growth and Quality in a Testing Environment
Delivering on Growth and Quality in a Testing Environment Double digit % net new money pace in our Growth Markets Asset Significantly strengthened team covering Middle East - and opened Tel Aviv office growth Increased penetration of Russia & CEE market momentum Highly successful first year
Slide 22: Net Inflows Driven by Size and Quality of RM Base
Net Inflows Driven by Size and Quality of RM Base Julius Baer attractive for top private banking talents Relationship Managers (RMs) Julius Baer highly attractive for top PB talents 801 794 795 Independence / pure private bank Client-centric approach 752 First-class range of products and ser
Slide 23: Switzerland & Europe
Switzerland & Europe Continuing to adapt to evolving environment First year of dedicated single ‘Region Switzerland’ Swiss-domiciled clients: ~25% of Group AuM Good business momentum and continued inflows Broadened CH-specific product platform Started review of EAM business strategy Europe:
Slide 24: Growth Markets: Sustainable International Diversification
Growth Markets: Sustainable International Diversification Represent well over a third of Group AuM* Currently well over 1/3 of Group AuM stems from clients resident in one of the growth markets Russia/CEE/CIS Could grow to over 50% by 2015 (based on current growth trends) Latin America Focus a
Slide 25: Asia: Profitably Serving the World’s Largest HNWI Segment
Asia: Profitably Serving the World’s Largest HNWI Segment Bank of China partnership additional milestone in Asia strategy Asia-Pacific HNWI1 segment now the world’s largest2 ‘‘We believe the number of HNWIs in Asia3 will grow from 1.16m today to 2.82m in 2015’’ (source: Julius Baer Wealth Report A
Slide 26: Latin America: Historical Presence Supports Growth
Latin America: Historical Presence Supports Growth Local Brazilian partnership off to excellent start Latin America world’s fastest growing HNWI region In 2011, HNWI population in Latin America grew by 5.4%, the highest regional growth rate worldwide1 Julius Baer’s historical focus and presence
Slide 27: Middle East/E.Mediterranean/Israel & Russia/CEE/CIS
Middle East/E.Mediterranean/Israel & Russia/CEE/CIS Increasingly significant markets for Julius Baer Middle East/Eastern Mediterranean/Israel Increasingly promising region for Julius Baer Added senior Middle East front team Strengthened management Middle East and Israel Tel Aviv office opene
Slide 28: Investing in Products, Services and Research
Investing in Products, Services and Research Ongoing innovation Modified investment approach Continued inflows into discretionary and investment advisory mandates Multi-asset class solutions Single-asset class solutions (mostly fixed income) New investment approach for multi-asset class mand
Slide 29: Continuing to Invest in Growth While Protecting Profitability
Continuing to Invest in Growth While Protecting Profitability Active cost management remains of paramount importance Asset base Net new money – size/quality of RM base Selectively consider acquisitions and partnerships Investing in growth Revenues Lower levels of client activity could be the ‘
Slide 30: Medium-Term Targets Remain Unchanged
Medium-Term Targets Remain Unchanged Challenging, but based on current outlook not unrealistic 4-6% Net New 6.4% Organic growth, supported by Money1 selected hiring of RMs H1 2012 Medium term 70.4% 62-66% Cost/Income Ratio2 Continued focus on cost discipline H1 2012 Medium term >35bps Pre-Tax
Slide 31: Programme and Content
Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results H1 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J. Collardi, CEO Q&A Session Appendix
Slide 32: Programme and Content
Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results H1 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J. Collardi, CEO Q&A Session Appendix
Slide 33: Strong Capital Base
Strong Capital Base CHF m December June Change 2011 2012 Equity at the beginning of the period 4'484 4'310 -4% Julius Baer Group Ltd. dividend -124 -196 +58% Net profit (IFRS) 258 176 -32% Capital reduction - -352 - Change in treasury shares -280 191 - Other components of equity -27 76 - Financial i
Slide 34: AuM Breakdown By Asset Class and By Currency
AuM Breakdown By Asset Class and By Currency Asset mix 30.06.2011 31.12.2011 30.06.2012 Equities 25% 25% 24% Bonds 23% 23% 24% 1 Investment Funds 21% 19% 19% Money Market Instruments 8% 8% 8% Client Deposits 15% 18% 18% Structured Products 6% 5% 5% 2 Other 2% 2% 2% Total 100% 100% 100% Currency mix
Slide 35: Adjusted Net Profit CHF 221m
Adjusted Net Profit CHF 221m Higher mainly because H1 2011 impacted by one-off Germany payment CHF m H1 2011 H2 2011 H1 2012 Change Change H1 2012 H1 12/H1 11 H1 12/H2 11 in % 1 Net interest income 316 216 323 +2% +49% 37% Net fee and commission income 496 446 471 -5% +6% 55% 1 Net trading income 86
Slide 36: Adjusted vs. Underlying Net Profit
Adjusted vs. Underlying Net Profit Excluding the one-off Germany payment in 2011 CHF m H1 2011 H2 2011 H1 2012 Change Change H1 2012 H1 12/H1 11 H1 12/H2 11 in % 1 Net interest income 316 216 323 +2% +49% 37% Net fee and commission income 496 446 471 -5% +6% 55% 1 Net trading income 86 183 52 -39% -
Slide 37: Development of Selected Asset Class Indices
Development of Selected Asset Class Indices Since start of 2012 +20% +15% +10% +5% +0% -5% -10% -15% Feb-12 Mar-12 May-12 Jan-12 Jun-12 Jul-12 Apr-12 S&P 500 Index DJ EURO STOXX 50 MSCI AC World Local JPMorgan Government Bond Index Emerging Markets HFRX Global Hedge Fund Index MSCI Emerging Markets
Slide 38: Development of Key Currencies vs. Swiss Franc
Development of Key Currencies vs. Swiss Franc Since start of 2012 +10% +5% +0% -5% -10% Jul-12 Feb-12 Mar-12 May-12 Apr-12 Jan-12 Jun-12 EUR USD GBP SGD Source: Bloomberg 38
Slide 39: Global Footprint
Global Footprint More than 40 offices worldwide, with more than 3,600 staff Booking centres Offices of Brazilian partner GPS Other locations 39
Slide 40: Julius Baer
Julius Bar