St.Galler Kantonalbank Half Year Results June 30, August 15, 2013

Transcription

1 1 St.Galler Kantonalbank Half Year Results June 30, 2013 August 15, 2013

2 2 Agenda Results June 30, 2013 Strategy adjustment Growth in Private Banking Outlook

3 3 Overview: Successful operating activities Increase of operating income by 1.1% than the previous year Commission income has compensated net interest income Administrative expenses slightly reduced (-0.6%) Gross profit 3.4% above the previous year Special Effects: Strategy adjustment 7.0 million UK withholding tax 4.2 million Net profit 11.2% below the previous year (Reason: special effects)

4 4 Rise in interest rates at the long end Market performance 2013 indexed June 30, 2012 Interest rates 2013 Exchange rates SMI Euro Stoxx % 0.8% CHF LIBOR Libor 3M CHF Swap 5Y 5 Y EUR USD % 0.4% % Jun 12 Sep 12 Dec Dez 12 Mar Mrz 13 Jun % Jun 12 Sep 12 Dec Dez 12 Mar Mrz 13 Jun Jun 12 Sep 12 Dec Dez 12 Mrz Mar 13 Jun 13 Moderate positive economic outlook for the Swiss economy GDP growth 1.4% Unemployment rate 3.3% Inflation -0.1% Estimation seco June 11, 2013

5 5 Gross profit increased CHF million 2011_HY r 2012_HY r 2013_HY Operating income % % 248 Administrative expenses % % -138 Gross profit % % 110 Depreciation % % -15 Valuation adjustments, provisions and losses % Operating profit % % 90 Extraordinary amounts, net % Profit before taxes % % 83 Taxes % % -18 Group net profit % % 65

6 6 CHF million Higher operating income Σ 242 Σ 246 Σ % +1.1% _HY 2012_HY 2013_HY Other income Trading income Net fee and commission income Net interest income Operating income: +1.1% Interest income: -1.0% Higher volumes in the balance sheet business Yield curve situation presses on interest margin Lower costs for interest hedging despite higher volume Net fee and commission income: +2.7% Positive stock market performance in the first half year Investors slightly more active Trading income: +13.1% Recovery of currency trading (esp. EUR / CHF)

7 7 Overview interest income Actual comparison (June 30, 2012 June 30, 2013) Material volume effects* Material price effects Due from banks Loans to clients -670 million million Due to banks Client funds Debts/ loans -480 million +845 million +470 million Loans to clients -0.22% Financial investments -0.19% Due to banks -0.26% Client funds +0.09% Debts/ loans +0.41% Assets: +9.2 million Liabilities: -5.7 million Assets: million Liabilities: million Total +3.5 million Total million Balance sheet Interest hedging costs Interest income compared to last year -7.1 million +5.5 million -1.6 million *based on average volumes

8 8 CHF million Administrative expenses decreased by 0.6% Σ 141 Σ 139 Σ % -0.6% % 59.0% 57.9% Personnel expenses due to growth initiatives higher (+3.3%) Other operating expenses further reduced (-6.8%) Cost / income ratio parent company 49.5% _HY 2012_HY 2013_HY Personnel expenses Other operating expenses cost/income-ratio

9 9 CHF million Net New Loans: Moderate growth in retail clients Retail clients +192 million +1.7% Commercial clients +185 million +2.9% Others -52 million -2.5% 23'000 22' % 18.4% 0.4% 0.1% '600 22' '947 22'200 22'360 22'000 Dec 31, 2012 Loans to customers Retail and Commercial Banking PB parent company Hyposwiss / SGKB Deutschland FX-Influence, Charges, Interest Rates Jun 30, 2013 Loans to customers NNL Group CHF +565 million / +5.1% All %-numbers relate to the change in the corresponding prior year market segment amounts

10 10 CHF million Quality of credit: Indicators remain very positive % % 0.7% % % * % * % 88.7% * 0.6% _YE 2012_YE 2013_HY 0.5% * Impaired loans Estimated proceeds from liquidation Impaired loans, net Provisions for credit risk (Individual provisions) Non performing loans Provisions for credit risk in % of total loans to clients (right scale) Individual provisions for credit risk in % of impaired loans, net

11 11 CHF million NNM: Market performance compensating outflows 38'500 Retail clients +190 million +1.9% Commercial clients -267 million -7.3% Other +15 million +4.6% 38' % % % '500 38'158 38'122 37'000 Institutional clients -178 million -2.8% Individuals +59 million +0.7% 36'500 Dec 31, 2012 Managed Assets Retail and Commercial Banking PB parent company Hyposwiss / SGKB Deutschland Market performance incl. interests and dividends (incl. consolid.) Jun 30, 2013 Managed Assets NNM Group CHF -237 million / -1.2% = RCB+ PB SGKB + Hyposwiss + SGKB Deutschland + consolidation effect (+84 Mio.) All %-numbers relate to the change in the corresponding prior year market segment amounts

12 12 CHF billion bp Fee and commission income: AuM margin increased Asset allocation of managed assets Total 38.1 billion 3% 22% 21% 30% 29% Obligationen - bonds Obligationen bonds % 14% 16% 3% 2% 12% 14% AuM-margin* Strukturierte Produkte - structured products Strukturierte Produkte - structured products Spargelder - saving deposits Spargelder - saving deposits Übrige Assets - other assets Übrige Assets - other assets Bonds Shares Structured products Funds (incl. funds accounts) Saving deposits Fiduciary deposits Aktien - shares Aktien - shares Fondsanteile (inkl. Fondskonti) - funds Fondsanteile (inkl. Fondskonti) - funds Treuhandanlagen - fiduciary deposits Treuhandanlagen - fiduciary deposits AuM AuM margin HY Other due to clients on sight and term deposits, third party assets with other banks Asset Allocation: AuM at the previous year's level Continued high liquidity holding AuM Margin*: 72bp higher (+4 Bppa) Positive stock markets Slightly decreased investor caution Increased trading activity *AuM margin = Net fee and commission income / Ø AuM as of June 30, 2013

13 13 CHF million Quality of balance sheet: Strong equity base 2'500 2'000 1'500 1' % 14.7% 15.5% 12.3% 12.6% (150%) (150%) 2'002 2'100 2' % 543 (150%) 58 (155%) capital surplus 1'015 million 500 1'110 1'144 1' HY eligible capital required capital minimal FINMA-requirement surplus over minimal FINMA-requirement / anti-cyclical buffer total capital ratio (tier 2) plus 1.00% anti-cyclical buffer on residential properties core capital ratio (tier 1) * Calculations according to Basel III

14 14 Agenda Results June 30, 2013 Strategy adjustment Growth in Private Banking Outlook

15 15 Financial industry in transition Regulation Interest rates Currencies Costs Margins Volumes Economic cycle Cross border wealth management

16 16 Focusing, simplifying and reducing risk Private Banking Focus on the domestic market Eastern Switzerland, and the additional growth markets of Germany and German-speaking Switzerland Corporate Center and Service Center Bundling of tasks in St. Gallen and elimination of duplicate functions Group structure Simplifying by reducing three subsidiary banks to one subsidiary bank

17 17 Private and business customers Private Banking Focus on a few business segments and markets Domestic market Eastern Switzerland Complementary growth Nachhaltige German-speaking Switzerland Wertsteigerung Germany - Wealthy private clients - EAM - Institutional investors - Corporate clients 1. Growth: primary organic 2. Productivity: operational excellence as a strategic task - Business clients - Private clients 3. Risk: Quality over quantity Continuous expansion of market share through superior market performance Geographic growth close to the core

18 18 Estimation of financial impact CHF million r 2013 r 2014 Managed assets CHF billion Group net profit CHF million Core capital ratio (Tier1) 13.9% (+0.2%) 14.2% (+0.4%)

19 19 Timetable of implementation Hyposwiss Geneva, Team CEE und LATAM Signing Client approach Permission Migration project Closing Clients are transferred into the system of the buyer and are leaving the bank End Q Time Remaining Hyposwiss Zurich Signing Integration project Business transfer to SGKB Liquidation of Hyposwiss Zurich Private Banking; Investment Center and Target: various teams will be transferred to SGKB Timing open Time

20 20 Conclusion: Strengthening of core competencies The overall objective Sustainable value increase Value drivers Productivity Growth Risk Core competencies Operational Excellence Customer advice and service Investment management Risk management Simplification of group structure Reducing complexity of the business model Elimination of duplicate functions Clear client focus Clear market focus Bundling human and financial resources Concentration on a few core markets Optimizing risk profile

21 21 SGKB Group: Mid-term financial targets Net New Loans in % total loans to client 3% Net New Money in % managed assets* Cost/Income-Ratio Return on Equity (RoE) before taxes 4% (previously 5%) 50% (previously 55%) 10% Managed assets = AuM, client funds and fund assets minus double counting

22 22 Agenda Results June 30, 2013 Strategy adjustment Growth in Private Banking Outlook

23 23 Growth in Private Banking Private Banking License Client advisors meet our own high ambitions Investment Advisory Process Active support with focus on individual risk management Services Clients choose the appropriate type of support

24 24 Licensing client advisors Yesterday Investment advice Today Risk Management Asset Management Provisions Inheritance etc. We have increased the standards to our client advisors. Private Banking Licence

25 25 external internal Licensing client advisors Education Licensing Basis Extension Professional Personality and social skills Expertise Apprenticeship Advice and sales Bachelor Eidg. Diplom CAS DAS MAS PB Licence Every 3 years Employee development Ex: Assistant - Bachelor of Business Administration, Senior Client Advisor - MAS Financial Consulting

26 26 Licensing client advisors PB Licence Independent observers External and internal experts Actor in clients role Interview I Needs Exam Case study Investment proposal Presentation Interview II Advice Requirements depending on profession Individual preparation and development plan Integrated training concept

27 27 Structured investment advisory process Yesterday Positive long-term market development "Buy-and-hold" investment style No systematic risk monitoring Today Volatile markets Asset allocation determines investment performance Systematic monitoring of risks required We determine with our clients their personal investment strategy and accompany them actively and aware of the risks. Structured investment advisory process

28 28 Structured investment advisory process Reporting SMS alert for strategy breaches, bulk risks and depositions title FIDLEG conform determination of the investor profile Research with title recommendations FINFOXinvestment proposal Backtesting Stresstests Customized investment strategy Service packages COMFORT CONSULT COMPACT

29 29 New portfolio of services Yesterday Limited availability of information Today Digitalization of society Fast pace of information Flood of information requires filtering relevant findings We let the customer choose the type of support and professionalize its depot management. CONSULT offers all benefits of active investment advice

30 30 New portfolio of services Advice Asset management COMPACT Basic services personal advice investment profile standard strategy investment proposal Monitoring strategy and bulks CONSULT Active asset management Individual strategy Monitoring recommendations & title Statement of assets + Tax statement Transparency report Basic services COMFORT Comprehensive asset management Asset management Performance report Active asset management Basic services Active portfolio management

31 31 Growth in Private Banking Private Banking License Client advisors meet our own high ambitions Investment Advisory Process Active support with focus on individual risk management Services Clients choose the appropriate type of support

32 32 Agenda Results June 30, 2013 Strategy adjustment Growth in Private Banking Outlook

33 33 Outlook 2013 Half year results: on the operational side, SGKB is doing well Given unchanged economic environment: Operating result at the previous year's level Special factors strategy adjustment and share in compensation due to CH-UK tax treaty to the extent of 11.2 million lead to a lower net profit in 2013

34 34 Share SGKB: Development of share price Par value reduction Jul 23, 2007 CHF Vol Volumen Trading SGKN volume (in 1000) (in 1000) % +52.5% -40.9% SGKB SPI SPI Banks as of August 12, 2013

35 35 Disclaimer Caution regarding forward-looking statements This communication contains statements that constitute «forward-looking statements», including, but not limited to, statements relating to the implementation of strategic initiatives, such as the expansion in Private Banking, and other statements relating to our future business development and economic performance. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macro-economic, governmental and regulatory trends, (2) movements in local and international securities markets, currency exchange rates and interest rates, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or creditworthiness of our customers, obligors and counterparties and developments in the markets in which they operate, (6) federal and local legislative developments, (7) management changes and changes to our Business Group structure. St.Galler Kantonalbank is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

36 36 Contact St.Galler Kantonalbank St. Leonhardstrasse St. Gallen Investor Relations: Dr. Cornelia Gut-Villa Tel. +41 (0)