Julius Baer Gruppe AG · SIX:BAER
Julius Baer Gruppe — Julius Baer Holding — Enskilda Asset Management conference, New York 1999
28 slides from Julius Baer Gruppe's conference presentation, Nov 5, 1999
Slide 1: Julius Baer Holding
Julius Baer Holding Presentation by Jan A. Bielinski Senior Vice President Corporate Communications and Investor Relations Julius Baer Holding Ltd. New York, November 5, 1999
Slide 2: Content
Content - History and key figures - The Baer family - Analysis of assets under management - Core businesses: - Private banking - Institutional asset management - Mutual funds - Institutional brokerage/sales - Revenues, cost, profit - Special topics - Outlook
Slide 3: History
History 1890 Bank Julius Baer founded 1940 New York 1968 London 1970 First mutual fund launched 1980 Going public 1986 Geneva 1990 Frankfurt 1995 Assets under management: CHF 50 bn 1996 New Group structure (business lines) 1997 Paris 1999 Assets under management: CHF 100 bn (1st quarter)
Slide 4: Key figures
Key figures 1997 1998 99H1 Assets under mgmt (CHF bn) 80.6 93.8 106.6 of which mutual funds 10.5 14.7 18.5 Return on equity 15.6% 22.1% 20.6% BIS ratio 20.6% 19.3% 13.8% Pre-tax profit (CHF mn) 290 370 209 Net profit (CHF mn) 202 302 142 Market capitalization (CHF bn) 3.2 5.2 4.9 Number of staff 1,6
Slide 5: The Baer family: a decisive role in management
The Baer family: a decisive role in management ... Chairman Board Thomas Baer* Marc Baer** CEO Rudolf E. Baer* Private Inst. Mutual Trading Resources Banking Asset Funds Brokerage Mgmt Walter Knaben- hans Raymond Leo Peter Baer** Schrutt Spinnler FX Trading Paul Erni Mike Baer** * 3rd generation **
Slide 6: ... and in ownership
.... and in ownership Bearer shares by region Family owns majority of (registered shares are not listed) company through votes North Other 3% America 53.5% 46.5% Votes 29% Switzerland Rest of 51% Europe Capital 18.7% 81.3% 17% 0% 50% 100% Listed on the Swiss and Family (incl. staff) Public Frankfurt
Slide 7: Core business of Julius Baer
Core business of Julius Baer Asset Management Brokerage/Trading Private Banking Institutional Brokerage Inst. Asset Management Forex Trading Mutual Funds Securities Trading Complementary businesses: custodian service, margin lending
Slide 8: Core services from a client point of view
Core services from a client point of view Portfolio Management Investment Advice Private clients Inst. clients Private clients Inst. clients Discretionary Discretionary Advisory Institutional mandates mandates mandates Brokerage
Slide 9: Assets under management: CAGR 15% (10 years)
Assets under management: CAGR 15% (10 years) CHF bn Increase of new money 120 in 99H1: CHF >5 bn 107 Expected long-term 100 94 growth rate: ~15% p.a. 81 80 64 60 49 45 46 40 30 33 27 26 20 0 89 90 91 92 93 94 95 96 97 98 6.99 Global custody of CHF 26.6 bn (6.99) not included
Slide 10: Analysis of client portfolios (70% private clients)
Analysis of client portfolios (70% private clients) Asset mix Gross fee margins* 60 51 52 50 47 44 42 42 96 50 26 15 9 40 97 46 31 12 11 30 98 43 35 12 10 20 6.99 43 36 11 10 10 0% 50% 100% 0 94 95 96 97 98 6.99 Bonds Equities * Management fees in % of average Money market assets under management Th
Slide 11: Private Banking: concentration on Europe
Private Banking: concentration on Europe Largest centers Rep. office type units Other units Montreal London Hong Kong More Swiss cities Zurich Guernsey Lucerne San Francisco Geneva Vienna New York Los Angeles Lausanne Lugano Palm Beach Monaco
Slide 12: Service and relationship: the key factors
Service and relationship: the key factors Principal reasons to select your bank now and in 5 years time: Domicile of private clients 1998 Rank now Rank Rank in 5 years (Bank Julius Baer, ZRH) Pers. relationship 1 Service quality Image 2 Pers. relationship Other 5% Service quality 3 Investm. performa
Slide 13: Institutional asset management: focus on Europe
Institutional asset management: focus on Europe 45 Institutional assets Business development 39 40 under mgmt (CHF bn) Asset management centers 35 31 30 25 25 19 20 15 14 London 15 London 10 Funds Frankfurt 5 1/3 Frankfurt 0 Vienna 94 95 96 97 98 6.99 Geneva Zurich Los Angeles Zurich New York Milan
Slide 14: Pension funds performance and funds awards
Pension funds performance and funds awards Pension funds performance Mutual funds (selected awards 1998) Swiss pension funds Micropal 10 years (1989-1998, p.a.) Switzerland: Best stock funds Baer BVG mandates 9.2% manager over 5 years BVG index 8.1% Offshore: German Stock Fund (5 years), Europe Bond
Slide 15: Continuous strong growth in mutual funds
Continuous strong growth in mutual funds CHF bn 20 New money (CHF bn): 18.5 CAGR 89-98: 18 6% Partner business JB clients 3.2 2.9 28% + 2 3 16 2.2 14.7 2 Long-term: 14 0.9 20%+ 1 12 0 10.5 10 96 97 98 6.99 8 6.9 5.4 6 4.8 5.0 4 3.1 1.6 2.0 2 1.4 0 89 90 91 92 93 94 95 96 97 98 6.99
Slide 16: Mutual funds business with partners
Mutual funds business with partners Business volume 5.0 4.8 CHF bn CHF 11.7 bn (6.99) 4.0 3.3 Switzerland 3.0 41 (41)% Italy 29 (30)% 2.0 1.8 1.1 Austria 1.0 Other 13 (15)% 0.2 0.1 8 (7)% 0.0 Germany 9 (7)% SWI ITA GER in ( ) 12.98 96 97 98 6.99
Slide 17: Julius Baer's fund factory: 70 funds, 90 staff
Julius Baer‘s fund "factory": 70 funds, 90 staff Research & product development Fund management Custody & administration Success factors for partner business Marketing & distribution l Decent performance l Service (sales support) / l Relationship / friendship
Slide 18: Cooperation with partners: four basic models
Cooperation with partners: four basic models Julius Baer funds Private label funds (2/3 of partner volume) (1/3 of partner volume) 1. Partners sell one or several 4. Baer establishes and, in some Julius Baer funds to their clients cases, manages private label 2. Partners use a range of Julius funds
Slide 19: Inst. brokerage: focus on continental Europe
Inst. brokerage: focus on continental Europe Research/Sales Sales only Envisaged Scandinavia* New York London Amsterdam* Frankfurt Paris* Zurich Milan* Spain* * Backoffice outsourced
Slide 20: European brokerage: creating value
European brokerage: creating value Strong research focus No risk capital required l Independent research of l No proprietary trading highest quality l No market making l Country research (local l No underwriting habits, laws, accounting standards l No corporate finance / etc.) capital markets activi
Slide 21: Revenues doubled since 1995
Revenues doubled since 1995 Total revenues Other income 3 (3)% (99H1: +4%) Prop. 1200 Interest 1040 trading income 1000 5 (10)% 846 13 (14)% Asset 800 598 management 524 557 577 Inst. brokerage fees and 600 20 (13)% commissions 400 47 (47)% 200 Client-related 0 trading 12 (13)% 1 1 95 96 97 98 H H 9
Slide 22: Total cost growth to slow down
Total cost growth to slow down CHF mn 900 CAGR 94-98 CAGR after 1999 800 17% 700 631 current planning guidelines: 600 521 ≤10% 500 401 400 349 due to 333 lower increase of 300 personnel 200 and 100 general expenses 0 94 95 96 97 98 99
Slide 23: Profit before and after taxes (one-off tax effect)
Profit before and after taxes (one-off tax effect) CHF mn 400 370 +28% Tax rate 1997 : 29% 1998 : 16% 290 302 +49% 300 1999+ : 28-30% 257 +27% 202 without 200 168 one-off 145 131 tax effect 128 101 113 of CHF 100 45 mn 0 94 95 96 97 98 Pre-tax profit Net profit
Slide 24: Special topics
Special topics l Share buy-back programs l Y2K program complete - Capital reduction in order to (contingency planning) reduce overcapitalization (5%) - 1998: 38050 bearer shares l First-time segmental bought back reporting for 1999 - 1999 (UBS): Repurchase of the registered shares held by l Backoffi
Slide 25: 12 countries, 17 cities, but only 3 own backoffices
12 countries, 17 cities, but only 3 own backoffices Cost efficiency through centralized backoffice and IT services New York l l l l l l l Frankfurt l l l l l l l ll l Y2K: CHF ~35 mn Zurich
Slide 26: Julius Baer's Internet strategy
Julius Baer's Internet strategy On-line Interactive Account On-line information information information transactions Various options in discussion Step-by-step development Private Banking Inst. Asset Mgmt Mutual Funds Brokerage Corp. Information
Slide 27: Long-term perspectives
Long-term perspectives l Asset gathering remains a growth business l Asset growth at Julius Baer of ~15% on average expected through organic growth l Further expansion of brokerage business l Staff and cost growth should slow down l Julius Baer well positioned in a growing market
Slide 28: Contact
Contact Jan A. Bielinski Senior Vice President Corporate Communications and Investor Relations Julius Baer Holding Ltd. Tel. +41 (1) 228 55 01 Fax + 41 (1) 201 51 20 [email protected] www.juliusbaer.com
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