Julius Baer Gruppe AG · SIX:BAER

Julius Baer Gruppe — Julius Baer Group — FY2016 Earnings Presentation

34 slides from Julius Baer Gruppe's earnings presentation, Feb 1, 2017

  1. Slide 1: FY 2016 Results and Business Update

    FY 2016 RESULTS AND BUSINESS UPDATE Presentation for Investors, Analysts & Media Zurich, 1 February 2017

  2. Slide 2: Content: Introduction

    CONTENT Introduction Boris F.J. Collardi, CEO 2

  3. Slide 3: Strong Asset Increase and Major Growth Investments

    STRONG ASSET INCREASE AND MAJOR GROWTH INVESTMENTS • Assets under management up 12% to record CHF 336 billion • Net new money accelerated over the period to 4% • Asset growth drives increase of revenues by 6% • Significant investments in organic growth: short-term cost/income ratio impact, but subst

  4. Slide 4: Excellently Positioned for Changing Environment

    EXCELLENTLY POSITIONED FOR CHANGING ENVIRONMENT Substantial investments into: 1. Our global client franchise with extensive local presence  Added large number of experienced RMs, attracted by our unique pure private banking positioning 2. Our state-of-the-art global products & services platform  A

  5. Slide 5: Content: Financial Results FY 2016

    CONTENT Financial Results FY 2016* Dieter A. Enkelmann, CFO *Financial Results are presented on adjusted basis. See “Scope of Presentation of Financials” in the Appendix 5

  6. Slide 6: Markets Impacted by Significant Events

    MARKETS IMPACTED BY SIGNIFICANT EVENTS Clients’ stock market activities did not improve until Q4 Index Development of FTSE ALL-WORLD INDEX, rebased1,2 110 Brexit • H1: Significant negative events 105 Oil hits $27 suppressed clients’ stock market 100 activity 95 • Q4: Improvement in volumes and Trump

  7. Slide 7: AuM Increase by +12% to Record High

    AUM INCREASE BY +12% TO RECORD HIGH Driven by organic growth, market performance and acquisitions Development of Assets under Management CHF bn +12% +12.7 +0.7 336.2 +11.2 299.7 +11.9 • Net acquisition consisting of CHF +8.6bn 290.6 13% Other 2% Kairos and CHF +2.6bn Commerzbank 3% 4% SGD Internatio

  8. Slide 8: Net New Money Accelerated into Target Range

    NET NEW MONEY ACCELERATED INTO TARGET RANGE Strong inflows from Asia, Middle East and Western Europe Net New Money in CHF bn and %1 • NNM: CHF 11.9bn (4.0% annualised) 5.9% 3.8% 4.5% 3.9% 3.7% 4.1% • After modest start, NNM gradually 7.5 accelerated during the year 6.5 6.4 • Continued solid net infl

  9. Slide 9: Operating Income +6% to CHF 2.9bn

    OPERATING INCOME +6% TO CHF 2.9bn Supported by significant increase in net interest income CHF m vs. 2015 Net commission/fee income +3% to CHF 1,565m 2,852 +6% • 4% increase in asset-based income more than 2,694 compensated for 6% lower brokerage commissions, 2,547 78 +215% following lower year-on-y

  10. Slide 10: Gross Margin Declined on Lower Client Activity

    GROSS MARGIN1,2 DECLINED ON LOWER CLIENT ACTIVITY Contribution from net commission & fee income improved in H2 2014 2015 2016 94bps 94bps 91bps 99 95 93 95 88 88 2 1 1 2 4 2 2 14 15 24 20 1 1 16 20 17 16 14 22 21 21 18 20 21 22 22 22 57 56 56 53 55 50 49 50 51 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016

  11. Slide 11: Operating Expenses -16% to CHF 2.0bn

    OPERATING EXPENSES1 -16% TO CHF 2.0bn Excluding 2015 US provision: +8%, reflecting major investment in RM recruitment CHF m vs. 2015 2,385 -16% Personnel expenses +9% to CHF 1,318m • Excl. H1 pension fund credit benefit4: +14% to 521 CHF 1,381m, of which 4% linked to acquisitions • Remaining 10% ref

  12. Slide 12: Adjusted Net Profit Up 1% to CHF 706m

    ADJUSTED NET PROFIT UP 1% TO CHF 706m When excluding US provision from 2015 results CHF m 2014 2015 2016 Change 2016/2015 Operating income 2,547 2,694 2,852 +6% Adjusted operating expenses 1,840 2,385 2,005 -16% Adjusted profit before taxes 706 309 848 +174% Adjusted pre-tax margin (bps) 25.9 10.7 2

  13. Slide 13: Solid Balance Sheet – Low Risk Profile

    SOLID BALANCE SHEET – LOW RISK PROFILE High liquidity – Loan-to-deposit ratio 0.57 CHF bn Liabilities Assets CHF 96.2bn & Equity (CHF 84.1bn)* Due from banks 11.4 (6.9) 10.1 (4.7) Due to banks Loan-to- deposit ratio 0.57 (0.56) Loans (incl. lombard lending and 38.4 (36.4) mortgages to private client

  14. Slide 14: Capital Ratios Well Above Regulatory Requirements

    CAPITAL RATIOS WELL ABOVE REGULATORY REQUIREMENTS In H2 2016 all capital ratios improved, despite CISAL acquisition impact 31.12.2015 30.06.2016 31.12.2016 31.12.2015 30.06.2016 31.12.2016 3 3 3 Basel III Basel III Basel III BIS approach / CHF m Basel III Basel III Basel III phase-in phase-in phase-

  15. Slide 15: On Track to Meet Medium-Term Targets

    ON TRACK TO MEET MEDIUM-TERM TARGETS Medium-term 2016 targets (adjusted results1) (adjusted results1) Cost/income 68.9% 64-68% Ratio1,2 Pre-tax 27.1 bps >30bps margin1,3 Net new 4.0% 4-6% money4 5 • Expecting to reach cost/income ratio target in 2018 1 Excluding amortisation of intangible assets, in

  16. Slide 16: Content: Business Update

    CONTENT Business Update Boris F.J. Collardi, CEO 16

  17. Slide 17: Excellently Positioned to Create Value in a New Geopolitical and Macro Environment

    EXCELLENTLY POSITIONED TO CREATE VALUE IN A NEW GEOPOLITICAL AND MACRO ENVIRONMENT • Volatile outlook driven by geopolitical shift Entering a new  Role US / China / Europe geopolitical and macro environment  Regulatory pendulum  GDP growth, interest rates & currencies development • New regional f

  18. Slide 18: Large Number of Experienced RMs Hired in 2016

    LARGE NUMBER OF EXPERIENCED RMs HIRED IN 2016 Attracted by our unique pure Private Banking positioning Relationship Managers Accelerated RM hiring in 2016 • Further capitalising on consolidation in CAGR +11% 1664 1’383 Wealth Management industry 3911 -422 62 3 • 2016 initiative successfully complete

  19. Slide 19: State-of-the-Art Products & Services Platform

    STATE-OF-THE-ART PRODUCTS & SERVICES PLATFORM ‘Your Wealth’ roll-out well on track WEALTH PLANNING Preserving and growing Your Wealth Holistic, in-depth advice by experts and solutions at every stage of a client’s life cycle WEALTH MANAGEMENT WEALTH FINANCING Advise Manage Lombard lending Supervisio

  20. Slide 20: Strong Foundation for Further Value Creation

    STRONG FOUNDATION FOR FURTHER VALUE CREATION Continuous investments into profitable growth, client experience and efficiency Established global franchise driving growth by leveraging existing RM population and untapped asset pools of new hires Enhancing client experience through improved market set-

  21. Slide 21: Content: Appendix

    CONTENT Appendix Julius Bar 21

  22. Slide 22: 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 amortisation of intangible assets related to acquisitions or divestments, as well as taxes on those respective items • In order to ensure a meanin

  23. Slide 23: Reconciliation Consolidated Financial Statement

    RECONCILIATION CONSOLIDATED FINANCIAL STATEMENT 1 IFRS to adjusted / adjusted (excluding US provision) net profits CHF m 2014 2015 2016 Change 2016/2015 IFRS net profit attributable to shareholders of Julius Baer Group Ltd. 366.2 121.2 619.4 +411% Non-controlling interests 1.2 1.4 2.7 +101% Profit a

  24. Slide 24: Adjusted Financial Performance – Annually, Including 2015 US Provision

    ADJUSTED FINANCIAL PERFORMANCE Annually – Including 2015 US provision CHF m 2014 2015 2016 Change 2016 2016/2015 in % 1 Net interest and dividend income 648 711 877 +23% 31% Net commission and fee income 1,518 1,522 1,565 +3% 55% 1 Net trading income 328 436 332 -24% 12% Other ordinary results 53 25

  25. Slide 25: Adjusted Financial Performance – Annually, Excluding 2015 US Provision

    ADJUSTED FINANCIAL PERFORMANCE Annually – Excluding 2015 US provision CHF m 2014 2015 2016 Change 2016 2016/2015 in % 1 Net interest and dividend income 648 711 877 +23% 31% Net commission and fee income 1,518 1,522 1,565 +3% 55% 1 Net trading income 328 436 332 -24% 12% Other ordinary results 53 25

  26. Slide 26: Adjusted Financial Performance – Half-yearly, Including H2 15 US Provision

    ADJUSTED FINANCIAL PERFORMANCE Half-yearly – Including H2 2015 US provision CHF m H2 2015 H1 2016 H2 2016 Change Change H2 2016 H2 16/H2 15 H2 16/H1 16 in % 1 Net interest and dividend income 327 510 367 +12% -28% 26% Net commission and fee income 730 739 826 +13% +12% 58% 1 Net trading income 219 1

  27. Slide 27: Adjusted Financial Performance – Half-yearly, Excluding H2 15 US Provision

    ADJUSTED FINANCIAL PERFORMANCE Half-yearly – Excluding H2 2015 US provision CHF m H2 2015 H1 2016 H2 2016 Change Change H2 2016 H2 16/H2 15 H2 16/H1 16 in % 1 Net interest and dividend income 327 510 367 +12% -28% 26% Net commission and fee income 730 739 826 +13% +12% 58% 1 Net trading income 219 1

  28. Slide 28: Capital Development – Basel III Phase-in

    CAPITAL DEVELOPMENT Basel III phase-in CHF m 31.12.2015 31.12.2016 Change 30.06.2016 31.12.2016 Change Basel III Basel III last 12 Basel III Basel III last 6 phase-in phase-in months phase-in phase-in months Equity at the beginning of the period 5,338 4,942 -7% 4,942 5,172 +5% Julius Baer Group Ltd.

  29. Slide 29: Capital Development – Basel III Fully Applied

    CAPITAL DEVELOPMENT Basel III fully applied CHF m 31.12.2015 31.12.2016 Change 30.06.2016 31.12.2016 Change Basel III Basel III last 12 Basel III Basel III last 6 fully applied fully applied months fully applied fully applied months Equity at the beginning of the period 5,338 4,942 -7% 4,942 5,172 +

  30. Slide 30: Balance Sheet – Financial Investments AFS

    BALANCE SHEET – FINANCIAL INVESTMENTS AFS CHF m 31.12.2014 31.12.2015 31.12.2016 in Change vs. % 31.12.2015 Money market instruments 2,312 2,298 3,785 21% +65% Debt instruments 12,204 14,177 14,316 78% +1% Government and agency bonds 1,571 3,560 3,477 19% -2% Financial institution bonds 7,056 6,187

  31. Slide 31: Breakdown of AuM

    BREAKDOWN OF AUM Asset mix 31.12.2014 31.12.2015 31.12.2016 Equities 26% 27% 27% Bonds (including Convertible Bonds) 19% 19% 19% 1 Investment Funds 24% 23% 24% Money Market Instruments 4% 4% 6% Client Deposits 21% 21% 17% Structured Products 5% 5% 5% 2 Other 1% 1% 2% Total 100% 100% 100% Currency mi

  32. Slide 32: Julius Baer: Pure-Play Private Banking Group

    JULIUS BAER: PURE-PLAY PRIVATE BANKING GROUP Well positioned for further growth KREUZLINGEN BASLE ZURICH ST. GALLEN • World’s largest pure private ZUG LUCERNE banking Group DUBLIN KIEL BERNE HAMBURG AMSTERDAM LONDON DUESSELDORF LAUSANNE ST. MORITZ • Premium brand in global wealth LUXEMBOURG FRANKFUR

  33. Slide 33: Cautionary Statement on Forward-Looking Information

    CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION General which these forward-looking statements are based, except as required by This presentation by Julius Baer Group Ltd. (“the Company”) does not constitute applicable law or regulation. an invitation or offer to acquire, purchase or subscribe f

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Julius Baer Group — FY2016 Earnings Presentation on 6ix