Julius Baer Gruppe Ag · SIX:BAER

Julius Baer Gruppe — Julius Baer Group — FY2012 Earnings Presentation

42 slides from Julius Baer Gruppe's earnings presentation, Feb 4, 2013

  1. Slide 1: FY 2012 Results and Review

    FY 2012 Results and Review Presentation for Investors, Analysts & Media Zurich, 4 February 2013 Left: Excerpt from Japanese Grotto, 2005; by Swiss artists Gerda Steiner and Joerg Lenzlinger, photo print on photo paper, 42 x 56 cm; part of the Julius Baer Art Collection; www.museum.juliusbaer.com

  2. 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

  3. Slide 3: Programme and Content

    Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results FY 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J.Collardi, CEO Q&A Session Appendices

  4. Slide 4: Strong Asset Growth

    Strong Asset Growth Crossing above CHF 200 billion AuM mark after IWM1 principal closing2 ƒ In 2012, AuM increased to CHF 189bn, a record-high level Asset ƒ Net new money CHF 10bn, near top of target range growth ƒ Growth in all regions – majority from growth markets Reduced risk ƒ Investment climat

  5. Slide 5: Programme and Content

    New picture Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results FY 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J.Collardi, CEO Q&A Session Appendices

  6. Slide 6: Scope of Presentation of Financials

    Scope of Presentation of Financials Financial results are presented as usual on the adjusted basis ƒ Excluding integration and restructuring expenses and the amortisation of intangible assets related to previous acquisitions or divestitures as well as, in 2011, the impact of the cost reduction plan

  7. Slide 7: Assets under Management Up 11% to Record High

    Assets under Management Up 11% to Record High Strong net new money inflows and positive market performance CHF bn Development of Assets under Management 11 189 -1 189 ƒ Assets under management CHF 189bn, up 11% from year-end 2011 10 1 -1 ƒ Net new money CHF + 9.7bn 170 170 ƒ Market performance CHF +

  8. Slide 8: Net New Money of CHF 9.7bn ...

    Net New Money of CHF 9.7bn ... … at 5.7%1 near top end of targeted medium-term range of 4–6% p.a. Net New Money in CHF bn and %1 ƒ All regions contributed positively, 3% 5% 6% 6% majority of inflows from growth markets and domestic business in Germany ƒ (Western) European cross-border business: posi

  9. Slide 9: Operating Income Declined by 1% to CHF 1,737m

    Operating Income Declined by 1% to CHF 1,737m Low FX volatility impacting trading income vs. ƒ Net commission & fee income CHF m FY 11 +4% to CHF 980m ƒ Positive impact of higher average AuM -1% tempered by relative decline in client transaction volumes -36% ƒ Net interest & dividend income1 +5% +5%

  10. Slide 10: Gross Margin Down 9bps on Lower Client Activity

    Gross Margin1 Down 9bps on Lower Client Activity Interest & trading income adjusted for dividends on trading portfolios2 FY 2010: FY 2011 FY 2012 105bps 105bps 96bps ƒ Net commission & fee income 54bps (FY) ƒ Y-o-y decline in client activity … 2 1 ƒ … modestly improving in H2 1 23 22 15 ƒ Net intere

  11. Slide 11: Operating Expenses Declined by 5% to CHF 1,216m

    Operating Expenses1 Declined by 5% to CHF 1,216m Excluding 2011 Germany payment: flat development vs. CHF m FY 11 ƒ Personnel expenses stable at CHF 788m 1'279 ƒ Lower performance-related accruals 1'192 1'216 66 -5% ƒ Increase of staff base by 2% to 3’721 56 65 79 +19% 345 360 349 ƒ General expenses

  12. Slide 12: Adjusted Net Profit CHF 433m

    Adjusted Net Profit CHF 433m Higher mainly due to effect of one-off Germany payment in 2011 CHF m 2010 2011 2012 Change 2012/2011 Operating income 1'794 1'753 1'737 -1% Net interest and dividend income 455 533 559 +5% Net commission and fee income 980 942 980 +4% Net trading income 332 269 173 -36%

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

    Solid Group Balance Sheet – Low Risk Profile Loan-to-deposit ratio of 0.51 Total Assets CHF 54.9bn Total Liabilities & Equity (CHF bn) (CHF 52.9bn) (CHF bn) (5.7) Due to banks Due from banks (10.0) (Incl. open trading volumes (Open trading positions; repo) and Group debt) Loans (16.4) (Incl. lombard

  14. Slide 14: BIS Total Capital Ratio 31.6% (Ahead of IWM Closing)

    BIS Total Capital Ratio 31.6% (Ahead of IWM Closing) Absolute % Change 31.12.2010 31.12.2011 31.12.2012 BIS approach / CHF m Change Basel 2 Basel 2.5 Basel 2.5 Risk-weighted positions Credit risk 8'116 8'717 7'886 -830 -10% Non-counterparty-related risk 534 530 542 +12 +2% Market risk 514 672 1'098

  15. Slide 15: Expected 2013 Isolated Capital Impact of IWM Transaction

    Expected 2013 Isolated Capital Impact of IWM Transaction 1 ƒ At CHF 72bn AuM acquired: Goodwill CHF ~860m ƒ 2013: Targeting ~80% of IWM AuM – Goodwill impact CHF ~690m 1 Æ expected goodwill impact CHF ~690m – Transaction related costs CHF ~140m 2 ƒ 2013 expected transaction, + Shares issued to BofA

  16. Slide 16: IWM: FAs and AuM Transfer in Three Waves

    IWM: FAs and AuM Transfer in Three Waves Merrill Lynch Legal Entity Sale Business Transfer Bank (Suisse) (11 Locations) (10 Locations) ƒ ƒ Luxembourg ƒ UK ƒ Hong Kong ƒ Singapore Wave 1 ƒ Monaco ƒ Uruguay ƒ UK (Advisory) ƒ Chile ƒ Lebanon ƒ Panama ƒ Bahrain ƒ Panama (Brokerage) Wave 2 ƒ Spain ƒ Isra

  17. Slide 17: IWM: Economics Transferred in Two Stages

    IWM: Economics Transferred in Two Stages Transfer of FAs and advised AuM drives the timing of transfer of economics 1) 1 Transfer of client advisory relationships1 (FAs/clients) FA joins Julius Baer + Revenues Revenues & costs follow, AuM – Associated direct costs remains booked on BofAML platforms2

  18. Slide 18: IWM: Integration Steps and Expected Impact 2013

    IWM: Integration Steps and Expected Impact 2013 Depending on timing and speed of the four main integration steps … 1. Transfer of client advisory relationships (FAs1/clients) in three waves 2. Transfer of custody relationships to Julius Baer platform (Technical migration in several waves, starting i

  19. Slide 19: Targeted Development and Impact of IWM Integration

    Targeted Development and Impact of IWM Integration Of total AuM expected to be acquired, ~80% estimated to be reported by end 2013 Targets for acquired IWM AuM 2013 2014 2015 AuM reported (year-end), of CHF 57–72bn1 80% 100% 100% AuM reported & booked (year-end), of CHF 57–72bn1 70% 100% 100% Market

  20. Slide 20: Confirming Post-Integration Targets

    Confirming Post-Integration Targets Targets Julius Baer stand-alone IWM, integrated Combined entity4 Julius Baer (current mid-term (first year post (first years post FY 2012 targets) integration) integration) Cost/Income 71%5 62-66% ~70% 65-70% Ratio1 Pre-Tax Profit 29bps5 >35bps ~25bps 30-35bps Mar

  21. Slide 21: Programme and Content

    Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results FY 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J.Collardi, CEO Q&A Session Appendices

  22. Slide 22: Switzerland: Strong Commitment to Home Market

    Switzerland: Strong Commitment to Home Market ƒ Good business momentum and inflows ƒ Role as consolidator continued Kreuzlingen Basel Zurich St. Gallen ƒ Acquisition of Bank of China (Suisse) S.A. Zug in 2012 as part of the strategic partnership with Lucerne BoC Berne ƒ Acquisition of Merrill Lynch

  23. Slide 23: Well Positioned in Changing European Environment

    Well Positioned in Changing European Environment Expanding local presence in key markets Europe: resilient franchise ƒ Adjusting to changing regulatory environment Dublin Kiel Hamburg Germany: growing domestic business London Amsterdam ƒ Leveraging Frankfurt as European booking Duesseldorf platform

  24. Slide 24: Central & Eastern Europe and Middle East

    Central & Eastern Europe and Middle East Excellent progress in 2012 Russia/CEE/CIS: continued solid inflows European Private Bank of the year (outside of Russia) ƒ Growing Russia/CEE desks in Zurich, Geneva, Vienna, Monaco, Singapore Middle East/E. Mediterranean: strong growth Moscow ƒ Significantly

  25. Slide 25: Asia: Continued Profitable Growth

    Asia: Continued Profitable Growth Key steps forward in strategic expansion ƒ Partnership with Bank of China launched in July ƒ 60% stake in TFM Asset Management in 2013, Japan Tokyo Shanghai New Delhi Hong Kong Calcutta Mumbai Chennai Best Boutique Private Bank in Asia Bangalore by The Asset and by

  26. Slide 26: Latin America

    Latin America Further progress on stand-alone basis as well as via partnerships Nassau Latin America: capitalising on accelerating wealth creation Panama ƒ Brazilian partner GPS developed strongly ƒ further double digit % asset growth ƒ In addition, acquisition of Bawm Investments Lima Rio de (incre

  27. Slide 27: IWM: Principal Closing Achieved

    IWM: Principal Closing Achieved Preparation for client migration fully on track ƒ Principal Closing achieved on 1 February ƒ Merrill Lynch Bank (Suisse) (MLBS) acquired1 ¾ AuM CHF 11 bn ¾ Taking Julius Baer AuM above CHF 200bn for first time1 ƒ Very positive responses from FAs in all regions ƒ Globa

  28. Slide 28: IWM: Major Leap in Julius Baer’s Growth Strategy

    IWM: Major Leap in Julius Baer’s Growth Strategy ƒ Compelling strategic rationale ƒ Adds substantial scale to existing locations, and presence in key new locations ƒ Increases exposure to growth markets approaching 50% AuM1 ƒ Further strengthens Julius Baer’s unique value proposition to its sophisti

  29. Slide 29: Programme and Content

    Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results FY 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J.Collardi, CEO Q&A Session Appendices

  30. Slide 30: Programme and Content

    Programme and Content Introduction Boris F.J. Collardi, CEO Financial Results FY 2012 Dieter A. Enkelmann, CFO Business Update Boris F.J.Collardi, CEO Q&A Session Appendices

  31. Slide 31: Pro Forma Basel III Impacts (Fully Phased-In)

    Pro Forma Basel III Impacts (Fully Phased-In) Basel III Basel 2.5 fully phased-in CHF m absolute % change Decem ber 2012 Decem ber 2012 change Risk-w eighted assets 12'451 12'770 319 2.6% Common equity tier 1 (CET1) 3'175 3'000 -175 -5.5% Tier 1 capital 3'645 3'470 -175 -4.8% Total capital 3'940 3'7

  32. Slide 32: Reconciliation to Adjusted and Underlying Net Profit

    Reconciliation from Published Consolidated Financial Statements 20121 to Adjusted and Underlying Net Profit CHF m 2010 2011 2012 Change 2012/2011 Profit after tax per consolidated Financial Statements 352.8 258.1 297.9 +15% Amortisation of intangible assets related to the UBS transaction 74.0 74.0 7

  33. Slide 33: Adjusted Consolidated Income Statement – Half-Yearly

    Adjusted Consolidated Income Statement – Half-Yearly CHF m H2 2011 H1 2012 H2 2012 Change Change H2 2012 H2 12/H2 11 H2 12/H1 12 in % 1 Net interest and dividend income 216 323 236 +9% -27% 27% Net commission and fee income 446 471 510 +14% +8% 58% 1 Net trading income 183 52 121 -34% +131% 14% Othe

  34. Slide 34: Adjusted / Underlying Consolidated Income 2010-2012

    Adjusted / Underlying Consolidated Income 2010-2012 CHF m 2010 2011 2012 Change 2012 2012/2011 in % 1 Net interest and dividend income 455 533 559 +5% 32% Net commission and fee income 980 942 980 +4% 56% 1 Net trading income 332 269 173 -36% 10% Other ordinary results 26 9 26 +172% 1% Operating inc

  35. Slide 35: Strong Capital Base

    Strong Capital Base 2012 capital development (Basel 2.5) CHF m December December Change 2011 2012 Equity at the beginning of the year 4'484 4'310 -4% Julius Baer Group Ltd. dividend -124 -196 +58% Net profit (IFRS) 258 297 +15% Capital reduction - -352 - Capital increase - 471 - Change in treasury s

  36. Slide 36: Balance Sheet – Financial Investments AFS

    Balance Sheet – Financial Investments AFS CHF m 31.12.2010 31.12.2011 31.12.2012 in Change vs. % 31.12.2011 Money market instruments 5'993 3'421 635 5% -81% Debt instruments 7'745 8'672 11'051 94% +27% Government and agency bonds 2'518 1'733 1'775 15% +2% Financial institution bonds 3'369 4'430 5'20

  37. Slide 37: Breakdown of Julius Baer Group AuM

    Breakdown of Julius Baer Group AuM Asset mix 31.12.2010 31.12.2011 31.12.2012 Equities 26% 25% 25% Bonds (including Convertible Bonds) 22% 23% 23% 1 Investment Funds 20% 19% 20% Money Market Instruments 9% 8% 7% Client Deposits 15% 18% 18% Structured Products 6% 5% 5% 2 Other 2% 2% 2% Total 100% 100

  38. Slide 38: IWM: Acceleration of Julius Baer’s Growth Markets Strategy

    IWM: Acceleration of Julius Baer’s Growth Markets Strategy Exposure to growth markets expected to approach ~50% ƒ Expanded international network: more than 50 locations in nearly 30 countries, of which 8 new countries from IWM ƒ Significant exposure to growth markets post-transaction, approaching ~5

  39. Slide 39: IWM: Integration Timeline

    IWM: Integration Timeline Project timeline (simplified – for illustrative purposes) Targeted Local Closings Principal Integration Closing completed ƒ Wave 1: Switzerland1 UK 1 Feb 2013 Q4 2014 Hong Kong Singapore Uruguay Monaco Local regulatory approvals Luxembourg Chile FA and client consent ƒ Wave

  40. Slide 40: On Normalised Basis, IWM Business to be Acquired is Profitable

    On Normalised Basis, IWM Business to be Acquired is Profitable Bridge from audited to normalised IWM financials Normalisation Adjustments to IWM Carve-out Financials1 USDm 2010 2011 H1 20122 Total revenues 851 812 752 ƒ Normalisation adjustments to Revenue adjustments -26 -24 -23 annualised H1 2012

  41. Slide 41: Targeted IWM Cost Base

    Targeted IWM Cost Base Targeting ~70% cost/income ratio in first full year after integration IWM Cost/income Ratio Key metrics required to deliver targeted CIR of ~70% in first full year post integration: ƒ CHF 57–72bn1 AuM is expected to be transferred ƒ Targeted cost base adjustments: ƒ Restructur

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Julius Baer Group — FY2012 Earnings Presentation on 6ix