Vontobel Holding Ag · SIX:VONN
Vontobel — H1 2015 Earnings Presentation
47 slides from Vontobel's earnings presentation, Jul 27, 2015
Slide 1: Vontobel half-year results 2015
Vontobel half-year results 2015 Zeno Staub, CEO Martin Sieg Castagnola, CFO 27 July 2015 Performance creates trust
Slide 2: Cautionary statement regarding forward-looking statements
27 July 2015 Cautionary statement regarding forward-looking statements This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties and other important factors. These projections and forward-looking statement
Slide 3: Overview
27 July 2015 Overview Highlights Half-year results 2015 Strategy update Outlook Slide 3
Slide 4: Key figures: earnings per share growth of 52%
27 July 2015 Growth in earnings per share of 52% driven by strong revenues, operating leverage and active capital management Key figures Net new money 10.3%1 Advised client assets +15%2 CHF 6.4 bn CHF 142.2 bn Cost/income ratio -3.7 pp2 Group net profit +33%2 Earnings per share +52%2 75.7% CHF 97.8
Slide 5: Commitment to excellence, talent and a clear focus drive the business forward
27 July 2015 Vontobel’s commitment to excellence, talent and a clear focus are driving the business forward Clients continue to endorse our services and products - Strong net new money growth of 10.3%1 in first half of the year - Strong market position in Switzerland, growing market share in Germany
Slide 6: Overview
27 July 2015 Overview Highlights Half-year results 2015 Strategy update Outlook Slide 6
Slide 7: Additional transparency on wealth management activities
27 July 2015 Vontobel provides additional transparency on its wealth management activities Financial disclosure Comments Organisational set-up/ Vontobel’s Wealth Management activities consist of Private Core activities Banking (PB) and the business with External Asset IFRS reporting Managers (EAMs)
Slide 8: Advised client assets up from end-2014, reaching a new record high
27 July 2015 Advised client assets up from end-2014, reaching a new record high – proportion of assets from focus markets increased further to 95% Advised client assets (CHF bn) Advised client assets by client domicile Others +15% Italy 142 5% Switzerland 137 Germany 4% 7 6 124 6% 115 117 7 7 5 7 7
Slide 9: Significant position across all focus markets
27 July 2015 Significant position across all focus markets – assets in the UK almost trebled Switzerland (CHF bn) Emerging Markets (CHF bn) US (CHF bn) 56 25 28 54 51 +11% 22 25 23 +21% +52% 17 1H13 1H14 1H15 1H13 1H14 1H15 1H13 1H14 1H15 Germany (CHF bn) Italy (CHF bn) UK (CHF bn) 8.8 8.6 5.9 11.2
Slide 10: Net new money growth of 10.3% annualized
27 July 2015 Impressive net new money growth of 10.3% on an annualized basis with greater diversification – strong negative impact from FX headwinds Net new money (CHF bn) Development of AuM (CHF bn) 2011 2012 2013 2014 1H15 1 10.4% 1 10.5% 1 9.2% 1 5.7% 10.3% 1 ∆ in % 8.6 9.1 31-12-14 123.8 1.9 2.6
Slide 11: Strong demand for deritrade MIP and entry into Nordics
27 July 2015 Strong demand for deritrade® MIP in Switzerland and successful entry into rapidly growing Nordics market Switzerland Germany Listed products1 (turnover on exchange; CHF bn) Listed products1 (turnover on exchange; EUR bn) +7% +45% 17.4 29.0 Rank1 #2 Rank1 #7 14.6 12.2 Market share Market
Slide 12: Operating income grew by 16%
27 July 2015 Operating income grew by 16% – higher asset base led to increase in fee and commission income Development of operating income (CHF mn) Comments Operating income resilient to FX headwinds and negative interest rates 507.6 ∆ to 1H14 absolute % 69.4% of operating income comprised fee and 3
Slide 13: Operating expense rose at a slower rate than operating income
27 July 2015 Operating expense rose at a slower rate than operating income due to operating leverage Development of operating expense (CHF mn) Comments Operating leverage led to lower growth of operating expense compared to operating income ∆ to 1H14 absolute % 384.5 Higher personnel expense due to
Slide 14: Group net profit up 33%, EPS up 52%
27 July 2015 Operating leverage led to significant increase in Group net profit of 33% – earnings per share grew by 52% due to active capital management Development of key figures Comments 30-06-14 30-06-15 ∆ Profit before taxes grew much faster than operating income due to Operating income (CHF mn)
Slide 15: Wealth Management resilient to FX headwinds and negative rates
27 July 2015 Wealth Management very resilient to FX headwinds and negative interest rates – other core activities achieve impressive growth Pre-tax profit of core activities and the Corporate Center (IFRS, CHF mn) Wealth Management1 Asset Management Financial Products2 Corporate Center +54% 68 +41%
Slide 16: Acquisition of majority stake in TwentyFour Asset Management completed
27 July 2015 Acquisition of a majority stake in rapidly growing TwentyFour Asset Management boutique successfully completed Required capital Valuation Purchase price allocation Vontobel acquired a majority stake of The purchase consideration was A fair value of GBP 14.2 mn1 was 60% in TwentyFour Ass
Slide 17: Capital position remains strong and exceeds regulatory requirements
27 July 2015 Capital position remains strong and significantly exceeds regulatory requirements – without tapping into AT1 or T2 Shareholder’s equity1 (CHF mn) BIS CET1 capital and ratios2 (CHF mn) 21.3% 19.2% 1,412 1,117 -26 1,396 -87 97 984 Target ratios ≥ 16% total capital ≥ 12% CET1 capital 419 4
Slide 18: Overview
27 July 2015 Overview Highlights Half-year results 2015 Strategy update Outlook Slide 18
Slide 19: Focused business model meets individual client needs
27 July 2015 With our focused business model, we provide a first-class offering to meet individual client needs while generating a solid margin Wealth management Active asset management Financial products Strong growth of HNWI population Industry AuM grew by 6% p.a. over Strongly increasing demand i
Slide 20: Vontobel is delivering on its strategy
27 July 2015 Vontobel is delivering on its strategy Core capabilities Strategic priority: service and product excellence Vontobel’s core capabilities Service leader Named ‘Best Private Bank in Switzerland’ in 2015 by Swiss are: business magazine BILANZ for the second consecutive year Protecting and
Slide 21: Wealth Management net new money growth of 5.7%
27 July 2015 Wealth Management activities generated significant net new money growth of 5.7% in first half 2015 Vontobel’s Wealth Management activities with private clients Advised client assets (CHF bn) Net new money (CHF bn) Comments 7.1%1 4.8%1 5.7%1 Growth of advised client assets slowed 39.6 1.
Slide 22: Private Banking: higher assets per client advisor and good performance
27 July 2015 Private Banking’s service and product excellence results in higher assets per client advisor and good investment performance Good investment performance Private Banking: Higher assets per client advisor and technology innovation +7% AuM per client advisor increased Our mandate solutions
Slide 23: Asset Management's diversified, institutional-focused boutique strategy
27 July 2015 Asset Management’s strategy to run a diversified, institutional-focused and global book of boutiques produces impressive growth Growing revenues and stable margin (CHF mn/bp) Diversified book of business 220 Strong inflow of net new money of CHF 5.2 bn in first half 176 175 2015 is dive
Slide 24: TwentyFour strengthens footprint in the UK
27 July 2015 Acquisition of a majority stake in TwentyFour strengthens footprint in the UK and increases assets in the Fixed Income boutique Stronger position in UK focus market (CHF bn) TwentyFour as a growth driver 0.2 11.2 TwentyFour is growing rapidly and is expected to achieve annual growth of
Slide 25: Financial Products leverages technology and cost structure
27 July 2015 Financial Products leverages technology and cost structure to gain market share in Europe and to expand deritrade® MIP Technology leadership Leverage products in Europe Flexible technology platform enables Vontobel Volume in Volume VT market Volume in to rapidly enter new markets and to
Slide 26: Dedicated strategy for Asia Pacific to double business volume by 2020
27 July 2015 Vontobel launches dedicated strategy for Asia Pacific to at least double business volume in the region by 2020 Wealth management Asset management Financial products Focus on niche offering based on ability to Take market development to next level: Leverage technology leadership in Asia:
Slide 27: Disciplined M&A approach expands search to Asia
27 July 2015 Vontobel continues to pursue disciplined M&A approach and expands search for potential opportunities to Asia Active participation in industry consolidation to accelerate profitable growth Current capital structure provides substantial resources for both bolt-on and larger acquisitions M
Slide 28: Overview
27 July 2015 Overview Highlights Half-year results 2015 Strategy update Outlook Slide 28
Slide 29: Outlook: Vontobel to continue on its growth path
27 July 2015 Outlook: Vontobel to continue on its growth path A growing industry in a First half of the year is Growth initiatives challenging environment seasonally stronger to be continued Continued expansion of global Group net profit (CHF mn) Wealth Management: Pursue growth wealth based on mark
Slide 30: 2017 targets within reach
27 July 2015 The successful implementation of our growth strategy combined with operating leverage brings our targets for 2017 within reach Return on equity (in %1) Cost/income ratio (in %) Total capital ratio (in %) Payout ratio (in %) < 75 26.1 13.6 78.5 79.4 25.4 67.7 69.2 75.7 > 10 > 50 19.22 >
Slide 31: Thank you for your attention
27 July 2015 Thank you for your attention. Slide 31
Slide 32: Appendix
27 July 2015 Appendix Slide 32
Slide 33: Advised client assets growth of over 100% since 2008
27 July 2015 Growth in advised client assets of over 100% since 2008 – confirming Vontobel’s successful focus on core capabilities Advised client assets (CHF bn) Vontobel’s business model Vontobel’s core capabilities are to protect and build wealth, to manage assets actively and to deliver tailor- +
Slide 34: Almost 95% of advised client assets from home and focus markets
27 July 2015 Almost 95% of advised client assets stem from home and focus markets Advised client assets by client domicile as of 30-06-15 (CHF bn) Home Markets Focus markets Other markets market Emerging Country Switzerland1 Germany Italy UK US Total Markets2 Total advised client 56.4 8.2 5.9 11.2 2
Slide 35: Advised client assets growth of 23% since 1H13
27 July 2015 Advised client assets: growth of 23% since 1H13 with good diversification across asset classes Advised client assets (CHF bn) Advised client assets by asset class (as of 30-06-15) Wealth Management Asset Management +23% 2% 7%5% 21% 3% 142.2 18% 7% 20% 124.0 115.3 9% 58% 11% 28% 22% 19%
Slide 36: Strong performance culture confirmed by the market
27 July 2015 Strong performance culture is confirmed by the market Since 2011, our investment boutiques have received 112 awards across a wide range of asset classes 112 Slide 36
Slide 37: Derivatives factory with well-balanced business model
27 July 2015 Vontobel’s derivatives factory with well-balanced business model – leverage products and structured products Capital markets Derivatives factory Distribution Risk Risk management - Exchanges B2C - OTC - Interbank markets Asset classes open - Fixed income deritrade© - Credit - Equities -
Slide 38: Strong position in Swiss home market, growing share in Germany
27 July 2015 Strong position in Swiss home market and growing market share in Germany – impressive entry into rapidly growing Nordics market Switzerland (CHF mn) 7,000 45% Rank1 #2 6,000 40% 35% 5,000 Market share 30% 4,000 25% Turnover 17.8% 3,000 20% 2,000 15% # of trades 43.6% 1,000 10% ,0 5% Dec
Slide 39: deritrade Multi Issuer Platform setting a new standard
27 July 2015 deritrade® Multi Issuer Platform is setting a new standard, driving rapid growth in demand from issuers and distributors Business model Cornerstones Standard New Issuers Issuer low costs, Cost reduction distribution, Increased market reach market reach Bank/ deritrade® MIP distributors
Slide 40: Technology leadership enables the multi-issuer platform
27 July 2015 Technology leadership enables next-generation solution – the multi-issuer platform Multi-issuer platform represents ground-breaking technology for structured products Market Multi-issuer potential platform Single issuer platforms Life cycle development Manual 1995 2000 2005 2010 2013 de
Slide 41: All segments with ambitious targets for 2017
27 July 2015 All segments with ambitious targets for 2017 Asset Management Private Banking Investment Banking NNM growth1 (in %, annualized) NNM growth (in %, annualized) Pre-tax ROAC3 (in %, annualized) 12.5 13.0 53 > 25 6.9 3-5 4.9 3-5 35 3.5 4.4 27 2013 2014 1H15 Target 2013 2014 1H15 Target 2013
Slide 42: Active management of capital expenditure to improve cost/income ratio
27 July 2015 Active management of capital expenditure will lead to additional CIR improvement of 2.0-2.5 pp by 20212 Development of capital expenditure (CHF mn) includes avaloq 93.9 85.4 Significant investments in IT (renewal of front office systems and avaloq) completed – initial investments in ava
Slide 43: Conservative balance sheet ratios
27 July 2015 Conservative balance sheet ratios – reflecting high level of client deposits and business with structured products Balance sheet as of 30 June 2015 (CHF bn) 17.3 17.3 0.3 Due to banks Cash; accounts with SNB, Liquidity/ 6.7 first-class counterparties and due from banks on a collateraliz
Slide 44: High quality of bond portfolio maintained
27 July 2015 High quality of bond portfolio maintained Counterparty exposure by rating (as of 30-06-15) Counterparty exposure by sector (as of 30-06-15) 1% 7% 24% 22% 38% 35% 33% 40% AAA AA A Government/public sector bodies BBB Financials Other Corporates (non-financials) The purpose of the actively
Slide 45: Allocation of regulatory capital to segments
27 July 2015 Less than one-third of regulatory capital required under BIS rules is allocated to Investment Banking Allocation of regulatory capital as 30 June 2015 (CHF mn) 608.1 204.3 198.1 173.5 36.5 134.2 124.2 143.4 65.7 96.1 0.0 118.8 4.0 182.6 63.8 33.3 50.4 35.2 29.2 28.3 103.2 10.5 -11.0 Cre
Slide 46: Vontobel represents an attractive value proposition for investors
27 July 2015 Vontobel represents an attractive value proposition for investors …with strong A growth case… financial discipline… …and potential for M&A Wealth and asset management Capital-light business model as a Potential to boost profitability industry is growing globally wealth and asset manager
Slide 47: Strong commitment of Vontobel family
27 July 2015 Strong commitment of Vontobel family Shareholder structure as of 30 June 20151 45.8% Shares in the pooling agreement 13.1% Vontobel families Publicly 14.3% Vontrust family holding held 38.8% Vontobel Foundation and 17.2% Pellegrinus Holding Non-locked shares of 15.4% the main shareholde