Full-year results 2013

Transcription

1 Full-year results Page

2 Cautionary statement regarding forwardlooking statements This presentation by AG ( the Bank ) includes forward-looking statements that reflect the Bank s intentions, beliefs or current expectations and projections about the Bank s future results of operations, financial condition, liquidity, performance, prospects, strategies, opportunities and the industries in which it operates. Forward-looking statements involve matters that are not historical facts. The Bank has tried to identify those forward-looking statements by using the words may", will", would", should", expect", intend", estimate", anticipate", project", believe", seek", plan", predict", continue" and similar expressions. Such statements are made on the basis of assumptions and expectations which, although the Bank believes them to be reasonable at this time, may prove to be erroneous. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the Bank s actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions; legislative, fiscal and regulatory developments; general economic conditions in Switzerland, the European Union and elsewhere; and the Bank s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. In view of these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. The Bank, its directors, officers and employees expressly disclaim any obligation or undertaking to release any update of or revisions to any forwards-looking statements in this presentation and these materials and any change in the Bank s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable laws or regulations. This presentation contains financial information which has been reviewed but not yet formally audited. This information is presented for illustrative purposes only and, because of its nature, may not give a true picture of the financial position or results of operations of the Bank. Furthermore, it is not indicative of the financial position or results of operations of the Bank for any future date or period. By attending this presentation or by accepting any copy of the materials presented, you agree to be bound by the foregoing limitations. Page

3 Highlights 03 Environment Interest rates remain at historically low levels and foreseen to stay anchored through 04 Swiss economy grew around.0%... Consumer loan market slightly down Stable competitive and regulatory environment Financials Net income of CHF 3.9mn... earnings per share of CHF 4.43 Stable net financing receivables base... Credit cards receivables increased by 9% Net interest margin at 7%... Cost/Income at 50% including one-off IPO charges, 44% on adjusted basis Return on average equity of 4.% % using December 03 shareholder s equity level Operational Rebranding campaign to completed... CHF 0.4mn spent in Q4 03 Further diversified funding sources with inaugural CHF 50mn.5% senior bond in November 03 Achieved historically low delinquencies 30+% at.8% and NPL% at 0.4% in December 03 Capital allocation Strong liquidity position with CHF 49mn cash and solid Tier capital ratio of 9.7% as of December 03 Proposed 03 cash dividend of CHF.85 per share, to be paid out of reserves from capital contribitions and free of Swiss witholding tax Includes full-year net income adjusted for expected dividend distribution Proposal of the Board of Directors to the Annual General Meeting on 3 May 04 Page 3

4 Operating environment Swiss GDP growth (real) Interest rates 3.0%.0%.0% 0.0% % -.0% Sources: SECO, Credit Suisse Swiss unemployment rate 4.0% 3.5% 3.0%.5% 0.5% 0.4% 0.3% 3yr mid Swap 0.% 0.% 3m Libor 0.0% Source: Bloomberg Comments Economy expected to grow at.8%-.0% in 04 Continued low Swiss unemployment level Short term interest rates anchored by SNB Long term interest rates more volatile.0% Sources: SECO, Credit Suisse Page 4

5 Product line update Personal Loans Auto Credit Cards Cembra online presence New car registration in Switzerland Credit card transaction volume (Swiss cards) 77'30 50'89 56'305 5'580 Spent per transaction (CHF) Volume (bn CHF) Slightly decreasing personal loan market in Switzerland Online applications increased by more than 0% in 03 vs 5 branches performing well offering a personalized service H H H3 H3 Source: auto-schweiz After a strong new car registrations decreased by 6.% in 03 Auto captives continue low rate campaigns Cembra offering best in class service and holding market share Cembra s growth rate continuously outperforms market growth number of credit cards up 7% to Renewed Migros and Conforama agreements, first year TCS Source: SNB Launched Migros Cumulus- MasterCard with NFC-technology in September 03 first major retailer using new technology Page 5

6 Rebranding update Brand Launch Campaign TV, Billboards, Print, Online Marketing & Printed Material Brochures, Letter, Business Cards Online Media Website, Social Media, Google, Signage & Branches Rebranding ongoing until April 4! On track! Rebranding & New Bankcard New Cembra Bankcard in April 4 / Partner Cards ongoing On track! Page 6

7 Balance sheet Assets - US GAAP (in CHF mn) Cash and equivalents Net financing receivables Personal loans ,993, ,0,90 Comments Cash increase driven by year-end funding increase and seasonal loans repayments Auto loans and leases Credit cards Other assets Total Assets, ,590, ,439 Stable receivables portfolio. Personal loans affected by revolving product run-off & seasonal loans repayment. Continuous market pressure on Auto offset by strong growth in cards Liabilities (in CHF mn) 3rd party funding Deposits Long-term debt Due to Affiliates - GE funding 3,960,660, ,680,80 400,504 3 Significant growth in deposits driven by Institutional deposits up 53% Bank loans, ABS & first issuance of CHF 50mn Senior Unsecured Bond driving Long Term debt offset by reduction in GE funding Other liabilities 3 74 Total liabilities Shareholders equity Total liabilities and equity 4 3, ,590 3,358,08 4,439 4 Equity down due to CHF (470)mn dividend pre IPO partially offset by current year net income (CHF 3.9mn), tax goodwill (CHF 36.mn) and pension OCI impact (CHF 0.7mn) Risk-weighted assets 3,596 3,68 Ratio analysis 3rd party funding / total funding 8% 53% Tier capital ratio 9.7% 6.6% Includes full-year net income adjusted for expected dividend distribution Page 7

8 GECC funding Deposits Long term debt Funding Diversified, local funding sources Existing funding programs (in CHF mn) Standalone YE 53% 8% Overall cost of funding GECC funding Senior unsecured ABS Bank loans Institutional deposits Retail term deposits and saving accounts LCR NSFR Undrawn credit lines.%.7% 3,84 ' , % n/a 96mn 3, % >00% 300mn ABS Bank loans Senior unsecured Institutional term deposits Retail term deposits and saving accounts GE Capital First public Auto ABS issued in CHF in CHF 00 million 3yr 0.783% * Second public Auto ABS issued in CHF in 03 CHF 00 million 3yr 0.576% * CHF 00 million credit with a syndicate of local Swiss banks (0-04) * CHF 450 million bank loan facility with 3 banks signed in October 03: all-in rate of.8% CHF 50 million senior unsecured bond issued in November 03: * Diversified portfolio across sectors & maturities Book of 00+ investors 40,000+ account customers Fixed term offerings of 8 years Saving accounts are on demand deposits CHF 500 million term facility for 5 years fully drawn CHF 500 million revolving facility for 5 year of which CHF 00 million drawn as of Dec. 3 WA rate 0.83% All-in rate.63% Based on the revised NSFR framework published by the Basel Committee on Banking Supervision in January 04 Page 8 * Additional charges apply related to fees and debt issuance costs

9 P&L Income statement - US GAAP (in CHF mn) Interest income Interest expense Net interest income Insurance Credit card fees other Commission and fee income (6.) (70.0) Comments Interest income down due to Loans volume & Auto lease prices, partially offset by Cards growth Change in funding mix driving Interest expense Lower insurance profit share vs Consistent growth in Credit Cards with fees up % Revolving loan product run-off impacting other fees Total income Provisions for losses Operating expense Income before taxes Taxes Net income Basic earnings per share (EPS) (7.0) (78.9) 68.6 (35.7) (.3) (64.4) 69.0 (35.9) Portfolio of loss certificates sold (CHF 33.mn pretax gain) in H 3, partially offset by lower recoveries (CHF.0mn pre-tax) in H 3 03 One-offs items in operating expense: CHF 7.3mn share issuance tax CHF 5.6mn transaction related costs CHF 0.4mn rebranding campaign Key ratios Net interest income / financing receivables Loss provision / financing receivables Cost/income Effective tax rate Return on average equity (ROE) % 0.% 50%.% 4.% 6.9% 0.5% 46%.% 3.% 5 6 Cost/income ratio driven by one-off costs, would have been 44% on an adjusted basis Return on average equity impacted by equity reduction following 470mn dividend paid in % RoE based on December 03 equity Return on average assets (ROA).9% 3.% Page 9

10 Interest income by product lines Average financing receivables (in CHF mn) 03 Interest income (in CHF mn) 03 Personal loans,99,966 Personal loans Auto loans and leasing,684,740 Auto loans and leasing Credit cards Credit cards Total financing receivables 4,07 4,075 Total interest income Change in personal loans interest income Change in auto loan/leasing interest income Change in credit cards interest income Avg. rate:.4%.3% 5.8% 5.5% 6.9% 7.% 5 (5 ) (3) 8 0 (7) () interest income Rates Volumes other 03 interest income interest income Rates Volumes other 03 interest income interest income Rates Volumes other 03 interest income Average receivables calculated on a quarterly basis Other includes deferred income and other interest Page 0

11 Provisions for losses Provision for losses (in CHF mn) Personal loans Loss rate Adjusted loss rate 30+ days past due Non-performing loans (NPL) 3 Comments % 0.7%.0% 0.5% 0.% 0.7%.8% 0.4% Overall stable loss performance y-o-y at 0.7% on an adjusted basis Sale of loss certificates in 3 will affect recovery flow going forward Stable portfolio quality paired with diligent Collections processes drive strong delinquency performance in % Jan Dec 03 ¹ Loss rate is defined as the ratio of provisions for losses on financing receivables to average financing.0% 0.6% 0.5% 0.5% receivables (net of deferred income and before allowance for losses) Adjusted for CHF.mn recoveries because of debt sale (CHF 33.mn pre-tax gain in H 3, CHF.0mn 0.0% estimated recovery impact in H 3) and CHF 4.7mn change of reserve methodology in Jan Dec 03 Dec 3 3 Non-performing loans (NPL) ratio is defined as the ratio of non-accrual financing receivables (at periodend) divided by the interest bearing assets Page 4.0% 3.0%.0%.0% Auto 4.0% 3.0%.0%.0%.% 0.9%.0% 0.% 0.% 0.% 0.0% Jan Dec 03 Dec 3 Cards 4.0% 3.0%.0%.8% 0.7%.3% 30+ days past due 3.0%.8% 0.7% 0.6% Non-performing loans (NPL) Dec 3.%.0%

12 Operating expense Income statement (in million CHF) 03 Comments Compensation and benefits GE Capital assessements / TSA Professional services C&B lower due to lower workforce and non repeat of CHF.3mn restructuring charge in Nov partially offset by inflation Marketing Collection fees GE Capital assessment & royalties reduced to CHF 7.8mn in 03. TSA costs CHF.mn for 03 Postage and stationery Rental expenses under operating leases Professional services included CHF 4.mn of transaction related costs and CHF 0.4mn rebranding costs Depreciations and amortization Marketing included CHF 7.6mn of rebranding costs Other Total operating expenses Postage & Stationery included CHF.4mn of rebranding costs for terms & conditions, brochures, and other items Cost/income ratio Cost/income ratio adjusted for one-off s 50% 44% 46% 46% 6 Other included one-off share issuance costs of CHF 7.3mn and CHF.5mn of transaction related costs Full-time equivalent employees (FTE) Transational Service Agreement (TSA) from November 03 Adjusted for CHF 3.3mn IPO-related costs in Opex in 03 and CHF.3mn restructuring charge in November Page

13 Capital adequacy / Dividend Tier capital walk 34 Earnings per share and dividend proposal (470) (86) 36 (4) DPS EPS Net income Dividend payments Net income 03 Dividend proposal Tax goodwill amort. benefit DTA 03 Per share data Basic earnings per share (EPS) Capital (in CHF mn) 03 Dividend per share (DPS) 4/ Risk-weighted assets (RWA) 3,68 3,596 Payout ratio - 64% Tier capital Number of shares 30,000,000 Tier capital ratio 6.6% 9.7% Derived from the Bank s statutory consolidated financial statements which were prepared in accordance with Swiss GAAP Includes full-year net income adjusted for expected dividend distribution 3 Based on weighted-average numbers of common shares outstanding 4 Proposal of the Board of Directors to the AGM on 3 May 04 5 To be paid out of reserves from capital contributions of the Head Office Page 3 Treasury shares Shares outstanding Weighted-average numbers of shares outstanding 39,5 9,960,785 9,993,464

14 Outlook / Guidance Medium-term targets 03 Comments / Outlook Asset growth Net customer loan growth to be moderate and in line with Swiss GDP growth Profitability RoE target of at least 5% Capitalisation Target consolidated Tier capital ratio of minimum 8% flat 4.% 9.7% Interest income Low interest rate environment expected to continue to impact interest income IT transition Project launched and on track to be executed over the next 4 months Loan losses Losses expected around.0% of financing receivables due to sale of loss certificates in 03 as guided previously Dividend payout Target payout ratio between 60% and 70% of consolidated net profit 64% Guidance 04 Earnings per share EPS in the range of CHF % based on year-end 3 equity Page 4

15 Appendix Page

16 Full balance sheet details Assets (in CHF mn) - US GAAP Cash and cash equivalents Net financing receivables, net Property, plant and equipment, net Intangible assets, net Other assets Deferred income taxes Total Assets Liabilities and Equity (in CHF mn) Deposits Accrued expenses and other payables Due to affiliates Long-term debt Other liabilities Total liabilities Common shares Additional paid in capital Treasury shares Retained earnings Accumulated other comprehensive loss Total shareholders equity Total liabilities and shareholder s equity , ,589.6, , , (.0) 33.8 (0.3) , , ,439.3, , , (3.0),08.3 4,439.3 Page 6

17 Cost of funding drivers Funding balance at year-end (in CHF mn) - US GAAP Deposits Bank loans ABS Senior unsecured GE funding Interest expense (in CHF mn) Deposits Bank loans ABS Senior unsecured GE funding 03, , , Page 7

18 Equity walk Shareholder s equity - US GAAP (470) 36 () ' Dividend payments Net income 03 Tax goodwill amort. benefit Treasury shares OCI movement 03 Page 8