Investor Day Performance creates trust. Vontobel s strategy and medium-term targets. Group Executive Management.

Transcription

1 Investor Day 2015 Vontobel s strategy and medium-term targets Group Executive Management Performance creates trust 11 March 2015

2 Page 2 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 statements reflect management s current views and estimates. They involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the projections and forward-looking statements. Potential risks and uncertainties include in particular factors such as general economic conditions, foreign exchange, share price and interest rate fluctuations as well as legal and regulatory developments.

3 Page 3 Programme 1.30 pm Welcome and strategy update Zeno Staub 2.10 pm Asset Management Axel Schwarzer 2.50 pm Private Banking Georg Schubiger 3.30 pm Coffee break 4.00 pm Investment Banking Roger Studer 4.40 pm Operations Felix Lenhard 5.10 pm Capital Management Martin Sieg Castagnola 5.40 pm Round-up and Q&A 6.10 pm Drinks and appetizers 7.00 pm Dinner with Management

4 Page 4 Global wealth expected to grow across the globe and Vontobel has built up exposure to regions with highest growth rate Growth of private wealth/pension assets (CHF tn) Vontobel s advised client assets by client domicile E North America E Latin America E Eastern Europe E Japan E Western Europe E Asia-Pacific (ex Japan) E Middle East and Africa 100% = CHF 137 bn ( ) Switzerland 42% Others UK 6% Italy 3%4% Germany 6% 20% US 19% Emerging Markets Average annual change (%) E Global 1 Private financial wealth includes cash and deposits, money market funds, and listed securities held either directly or indirectly through managed investments or life and pension assets, and other onshore and offshore assets. It excludes investor s own businesses, any real estate, and luxury goods. Source: BCG Global Wealth Market-Sizing Database, 2014

5 Page 5 Vontobel is a focused boutique with an outstanding offering for specific client needs at a solid margin Wealth management Strong growth of HNWI population and HNWI wealth since 2008 Vontobel is servicing this market with prime services from Private Banking and the EAM Desk s B2B offering Global HNWI growth (in % p.a.) Active asset management Industry AuM grew by 6% p.a. over last 10 years Vontobel s growth exceeded market average due to its focused multiboutique approach and outstanding performance quality Actively managed assets globally (USD tn) Financial products Almost stable volume in Switzerland, increased demand globally Vontobel is well positioned with its technology leadership and innovation capabilities Structured products/total assets (in %) % p.a pp pp USD 1mn-5mn Next door millionaires USD 5mn-30mn Mid-tier millionaires HNWI population HNWI wealth Assets under management Switzerland Globally Source: BCG Global Asset Management Survey 2014, SNB Monthly Statistical Bulletin February 2015, World Wealth Report 2014 / Capgemini and RBC Wealth Management 1 Year-end for Swiss market and end of 1st quarter for global market

6 Page 6 Vontobel has a clearly defined long-term strategy We protect and build the wealth of our clients by providing responsible and forward-looking advice, active asset management and tailor-made solutions We defined focus markets based on client needs and Vontobel s core capabilities: Switzerland, Emerging Markets, US, Germany, Italy and UK We deliver Swiss quality by leveraging our Swiss Investment and Booking hub globally based on cutting-edge digital banking

7 Page 7 implemented along strategic priorities Service & product excellence We aim to be recognized as the most trusted global investment advisor by our clients The majority of our clients would recommend us to their peers We deliver first-class investment performance Our clients can access our investment content and services any time and anywhere Our advisory and investment solutions shape the thinking of the industry Productivity Based on client needs and Vontobel s core capabilities we defined focus markets: Switzerland, Emerging Markets, US, Germany, Italy and UK Alignment of market development across business units to reduce time to market and to realize synergies Leveraging of cross-border platform in Switzerland Continued cost discipline Profitable growth Profitable growth to be achieved through: - organic growth as a result of services & product excellence and productivity - mergers and acquisitions Vontobel is emerging as one of the established winners of the structural changes in the marketplace 90

8 Page 8 Vontobel reaffirms its targets for 2017 Return on equity (in %) Cost/income ratio (in %) Outlook Total capital ratio (in %) > 10 < Target Payout ratio (in %) Target 2017 > > 50 Investment in profitable growth across Wealth & Asset Management and Financial Products expected to increase return on equity and to reduce cost/income ratio given operating leverage Cost discipline will help to improve operating efficiency Total capital ratio to remain well above regulatory requirements of 12%, even after potential M&A transaction Payout ratio to remain above 50%, given Vontobel s capital-light business model Target CET1 target of >12% 2 According to the proposal to the General Meeting of Shareholders Target 2017

9 Page 9 Vontobel is exploring potential M&A opportunities to boost profitability Asset Management Increase diversification across boutiques Complement scale and skills of existing boutiques Leverage AM s global distribution network and increase volume of AuM in home and focus markets Private Banking Leverage cross-border platform through additional AuM Gain market share in home and focus markets Volume of AuM Markets Volume of AuM Markets CHF 5-25 bn Switzerland, Germany, UK and US CHF 1-25 bn Key priority Switzerland, as a second option Germany Boutiques Client segments Transaction structures Quality Multi-Asset-Class and Fixed Income Focus on institutional clients From asset deal to share deal High asset quality, good cultural fit, operational feasibility

10 Questions and Answers Page 10

12 Page 12 Asset Management delivers on strategic priorities of Vontobel Service & product excellence Almost 90 awards since 2011 from Lipper, Morningstar and other renowned institutions 75% of Asset Management s AuM outperformed benchmark in 2014 Thought-leader in Outcome-Driven Investments (odi) and Research- Driven Strategies (RDS) Increase number of investment strategies and products that meet institutional standards and consultant requirements to boost client demand Productivity Market coverage of home and focus markets as defined by Vontobel Consolidation of investment platform and realization of synergies across boutiques in Zurich Continued cost discipline across all boutiques Profitable growth Expand New York based Quality Growth boutique into other US client segments and accelerate growth of global product Grow boutiques based in Switzerland by adding meaningful NNM to Fixed Income and Multi Asset Class boutiques Prepare Global Thematic and Alternative boutiques for next phase of growth Double the size of the Asian business by

13 Page 13 Impressive growth in Asset Management since 2011 Growth of advised client assets (CHF bn) Strong NNM contribution (CHF bn, %) % 15.4% % % 1 6.9% CHF 5.6 bn of NNM in 2H14; corresponds to annualized growth rate of 16.1% Assets under management Other advised client assets Net new money Growing margin and revenues (CHF mn/bp) Increased profit before taxes (CHF mn, %) % % Operating Income Performance fees Gross margin (on AuM) Profit before taxes Cost/income ratio 1 Growth in AuM attributable to NNM, adjusted for assets that are managed on behalf of other segments

14 Page 14 with potential for future growth, underpinned by a diversified book of business Quality Growth: Leverage position for other strategies Fixed Income: 20% growth in 2014 First class global investor base with institutional focus 62% 8% % 29% 4% 36% 92% 13% 18% 38% Switzerland Europe (ex CH) Asia Pacific North America Other NNM of Quality Growth / Global Equities NNM of Quality Growth / EM and other Fixed Income, advised client assets (CHF bn) 32% NNM in 2014 mainly from Global and Global ex US Emerging Markets products stable, while market suffered outflows Diversify client base within US domestic market Impressive performance of Corporate Mid Yield over 1, 3 and 5 years: 6 th / 9 th / 3 rd percentile Emerging Market strategy with outstanding ranking (8 th percentile) in Morningstar peer group Institutional Wholesale 68%

15 Page 15 Outstanding investment performance of Fixed Income boutique led to impressive asset growth Development of Fixed Income fund asset volume (CHF mn) 2,500 2,000 1,500 1, Nov 11 Jan 12 Mrz 12 Mai 12 Jul 12 Sep 12 Nov 12 Jan 13 Mrz 13 Mai 13 Jul 13 Sep 13 Nov 13 Jan 14 Mrz 14 Mai 14 Jul 14 Sep 14 Nov 14 Vontobel Fund - EUR Corporate Bond Mid Yield Vontobel Fund - High Yield Bond Vontobel Fund - Emerging Markets Debt

16 Page 16 What sets Vontobel Asset Management apart? We believe in active management to exploit market trends and inefficiencies for the benefit of our clients We pursue investment approaches to protect and grow our clients assets, through a robust portfolio construction and the awareness of risks We are convinced that our specialization in clearly defined investment strategies creates added value for our clients We rely on clear responsibilities, conviction and small, flexible teams and see this as the prerequisite for a strong performance culture We believe that our client and support units must have in-depth product knowledge in order to understand our clients needs

17 Page 17 Focus on clearly defined investment strategies Quality Growth Equities Focus on high-quality companies with favourable growth prospects at sensible prices Six regional strategies Focus on Global/Emerging Market Equities Multi Asset Class Investing Assets 1 (CHF bn) 47.5 Global Thematic Investing Strategies cover energy and resources Global leader concept Sustainable strategies integrate ESG criteria Swiss Dividend Yield and Small/Mid Cap strategies Assets 1 (CHF bn) 4.4 Outcome Driven Investment (odi) products with robust portfolio construction and risk process Actively managed and broadly diversified Balanced and MAC products with global focus Fixed Income 18.9 Alternatives Actively-managed commodity strategies Hedge fund advisory Research-driven multi and single risk premium strategies 3.4 Active fixed income managed to create value also in challenging market environments Global investment solutions with a special focus on corporate and EM bonds Advised client assets by end-2014

18 Page 18 Strong performance culture is confirmed by the market Since 2011, our investment funds and our investment competences in various asset classes received almost 90 awards 90 Global Equities: UK Pension Awards 2013, European Pension Awards 2012, Pension and Investment Provider Awards (PIPA) Emerging Markets Equities: AsianInvestor Fixed Income: Feri EuroRating 2011, ESG: ESG Leaders Awards 2012

19 Page 19 Asset Management sales set-up reaches all relevant global client segments worldwide Vontobel Asset Management s global sales Canada US Major European markets Saudi Arabia Kuwait U.A.E. Qatar Bahrain Oman South Korea Japan China Taiwan Hong Kong Thailand Colombia Singapore Peru Chile Australia New Zealand Fly-in coverage Local presence

20 Page 20 Asset Management wants to continue growing while maintaining a return on assets of over 50 bps NNM growth 1 (in %) Target Cost 2 /income ratio (in %) Return on assets (in bps) Target 2017 < 70 > 50 Outlook Run a Diversified, Institutional focus and Global book of boutiques Asset Management s DIG strategy as a driver of growth Position Asset Management with growth potential through all market cycles Increase diversification across boutiques by: - expanding New York based Quality Growth boutique into other US client segments and accelerating growth of global product - growing boutiques based in Switzerland by adding meaningful NNM to Fixed Income and Multi Asset Class boutiques to diversify AM book of business - preparing Global Thematic and Alternative boutiques for next phase of growth Double the size of the Asian business by Adjusted for assets that are managed on behalf of other segments 2 Operating expense excl. value adjustments, provisions and losses Target 2017

23 Page 23 Private Banking delivers on Vontobel s strategic priorities Service & product excellence Named Best Private Bank in Switzerland 2014 by Swiss business magazine BILANZ Rated excellent in Germany by investor magazine uro in a mystery shopping test Productivity Improved bottom line through realignment of business model and adjustment of footprint in 2013 Consequent leverage of cross-border platform Active management of costs and pool of clients advisors 98% Profitable growth Higher level of profitability used to invest in growth starting in 2014, fully absorbed by current operations Significant investments in growth region Emerging Markets in 2014 to compensate for small footprint of Private Banking in the past Investments in growth RoA stable at ~75 bps through active management of revenues Launch of innovative mobile private banking solutions pp % Cost/income ratio (%) Pre-tax profit (CHF mn) Advised client assets (CHF bn) 2014

24 Page 24 Realignment of business model in 2013 almost doubled pre-tax profit enabling Private Banking to invest in future growth Pre-tax profit (CHF mn) 28.8 Realignment of business model Investment in growth % Clients advisors (FTEs) % 2012 Net decrease 2013 Net increase 2014

25 Page 25 Private Banking is focused on growth from 2014 Active management of organic growth Improvement of recruitment process and tracking of business cases of client advisors Sharpened hiring profiles and selection criteria for client advisors Enhancement of training and development for client advisors Gross decrease 35 Gross increase Success in attracting top talent Enhanced positioning of Private Banking in the market for talent Vontobel is an employer of choice for client advisors: - Attractive product and service offering - Access to outstanding investment consulting - Access to industry-leading product factories - No litigation/us issue (category 3 bank) - Entrepreneurial environment - Stable shareholder structure and strategy Acquisition of new teams in Hong Kong, Munich and Zurich and additional recruitment of individual high performing client advisors across focus markets Expansion of US-based business by building up presence in Geneva and Dallas Client advisors (in FTE)

26 Page 26 Accelerated recruitment of client advisors in home and focus markets of Emerging Markets, Germany and Switzerland +3 United Kingdom +10 Germany Munich +5 Switzerland Dallas Cologne Hong Kong +2 US Italy Austria UAE China (Hong Kong) Opening of new location +15 Emerging Markets Withdrawal from unprofitable onshore locations Recruitment of new client advisors (in 2014; gross number of hires) Plans to recruit further client advisors for home and focus markets planned Significant recruitment possible if attractive opportunities arise Continued active management of pool of client advisors

27 Page 27 Private Banking embraces opportunities arising from industry trends Current industry trends Vontobel s proactive approach Challenging investment environment Knowledge dissemination Digitalization As a market pioneer, Vontobel introduced new advisory mandates in 2011 and further developed its investment solutions and product offering Vontobel is embracing digitalization and is among the first private banks in Switzerland to complement its advisory services with mobile private banking Globalization and evolution of Emerging Markets Re-regulation of the finance industry Multi-polar world Vontobel with proven global investment competence and Private Banking has access to outstanding investment expertise in Asset Management Vontobel operates state-of-the-art compliance processes and preparations for Automatic Exchange of Information to be completed by end-2015 at the latest Vontobel s Swiss booking hub proves successful in an environment of economic challenges and political tensions

28 Page 28 Further sharpening of Vontobel product offering since / Investment advisory mandates Outcome-driven investments Discretionary mandate Client-based mandate solutions As a market pioneer, Vontobel introduced new Investment advisory mandates with three different service levels Structured and systemsupported advisory and portfolio monitoring process CHF 9.0 bn 1 Introduction of new investment style Potential loss is limited based on a defined risk budget CHF 7.4 bn 1 Streamlined number of strategies, model portfolios and investment instructions Launch of single asset class mandates (Equity CHF, Equity EUR, Global Bonds) Pricing structure redesigned Introduction of holistic mandates integrating delegated (discretionary) and nondelegated (investment advisory) modules Pension mandates Introduction of pension solutions for Swiss clients in cooperation with independent foundations 1 As of

29 Page 29 Vontobel is among the first private banks in Switzerland to complement its advisory services with mobile private banking (1/2) Mobile access to your portfolio enabling different portfolio views and analysis

30 Page 30 Vontobel is among the first private banks in Switzerland to complement its advisory services with mobile private banking (2/2) combined with our equity research, investments ideas and secure instant messaging with your client advisor

31 Page 31 The app is the start of our digital journey leading the Private Bank to the future New business models 2015 Launch and experience Trading Advice, collaboration, efficiency Investment advisory More to come Online collaboration Tablet app, 1st release Device diversity Multi-user functionality Workflow and processes

32 Page 32 Clients expected to have regularized by end-2015 at the latest negative impact on NNM to decrease significantly in 2016 US Program FATCA Automatic Exchange of Information (AEI) Financial Transaction Tax (France, Italy, others) Cross-border requirements FIDLEG/ FINIG Corp. Tax Reform III Switzerland

33 Page 33 Private Banking with ambitious targets for 2017 NNM growth (in %) Cost/income ratio (in %) 76.0 Target Target 2017 Return on assets (in %) 3-5 < 75 Outlook Continuous improvement of advisory and investment processes Leverage investment competence from Asset Management and Investment Banking for Private Banking clients Enhance Mobile Private Banking services by extending offering for tablets to smartphones and desktops Pursue selective acquisition of teams and recruitment of senior client advisors Complete preparation for Automatic Exchange of Information by end-2015 at the latest Maintain gross margin at ~75 bps through active management of revenues Target 2017

36 Page 36 Vontobel Investment Banking is delivering tailor-made investment solutions Vontobel core capabilities Protect and build wealth Actively manage assets Deliver tailor-made investment solutions Financial Products External Asset Managers Brokerage Corporate Finance What sets Vontobel Investment Banking apart? Partner for financial intermediaries Focus on client-driven business Risk manager, not risk taker Significant growth options: - Leverage/Structured Products - Multi issuer platform - Leverage Products: geographical expansion - External Asset Managers - Increasing market share and geographical expansion

37 Page 37 Investment Banking delivers on Vontobel s strategic priorities (1/3) Service & product excellence Achievements Product and technology leadership in business with structured products and warrants Proven pricing and service competence Leading multi-issuer offering State-of-the-art EAM platform First-class equity and credit research

38 Page 38 Investment Banking delivers on Vontobel s strategic priorities (2/3) Productivity Achievements in 2014 Growth initiatives in home and target markets Average cost per product Scale up existing capabilities and technology < 500 CHF Active cost management Vontobel products issued Equity research reports updated daily pp 72.6 > 200 k Swiss equity research reports > 1,000 Quotes in own products per day > 400 > 250 mn Volume of securities in 2014 Securities trades in Cost/income ratio (%) > 190,000,000,000 CHF > 5,000,000

39 Page 39 Investment Banking delivers on Vontobel s strategic priorities (3/3) Profitable growth Leverage technology leadership Deliver leverage products internationally Protect market share in Switzerland Drive growth of deritrade MIP in Switzerland and internationally Increase market share with External Asset Managers by leveraging proximity to clients, technology and relationship managers Achievements in 2014 Financial Products Switzerland +2.0 pp Market share volume, in % Market share trades, in % Multi Issuer Platform Financial Products Germany pp Market share volume, in % Market share trades, in % % External Asset Managers Source: Technolab, DDV/EUWAX, NGM, eusipa.org; Vontobel estimates Number of issuers Number of distributing banks Advised client assets, in CHF bn

40 Page 40 Vontobel s derivatives factory with well-balanced business model Capital markets Derivatives factory Distribution Risk - Exchanges - OTC - Interbank markets Asset classes - Fixed income - Credit - Equities - Commodities - FX - Alternative investments open deritrade Risk management Leverage Products Structured Products deritrade SIP B2B4C B2B B2C 3rd party wrapper / notes offering discontinued deritrade MIP 3rd party issuer

41 Page 41 Strong market position in Switzerland and increasing market share in Germany Market share in Switzerland in listed products 2014 (2013) No. of trades Turnover No. of products issued 1. Vontobel 40.9% (39.5%) 2. UBS 19.3% (19.7%) 3. ZKB 16.5% (15.5%) 4. Julius Bär 5.7% (6.7%) 5. Commerzbank 5.2% (4.2%) 6. Credit Suisse 3.1% (4.4%) 7. Leonteq 2.0% (1.5%) 8. Deutsche Bank 1.5% (1.3%) 9. Notenstein 1.1% (new) 10. Safra Sarasin 0.5% (0.6%) 1. UBS 34.7% (37.0%) 2. Vontobel 3. ZKB 20.7% (18.7%) 16.9% (18.0%) 4. Julius Bär 7.4% (7.1%) 5. Credit Suisse 5.3% (5.6%) 6. Leonteq 3.4% (2.9%) 7. Notenstein 8. Deutsche Bank 2.3% (new) 2.2% (1.6%) 9. Commerzbank 1.7% (1.5%) 10. Safra Sarasin 1.2% (1.1%) Market share in Germany in listed products 2014 (2013) No. of trades 1. Deutsche Bank 27.7% (22.2%) 2. Commerzbank 3. Citigroup 20.1% (20.0%) 9.8% (9.2%) 4. DZ Bank 7.8% (7.5%) 5. BNP Paribas 7.4% (7.5%) 6. UBS Investment Bank 6.3% (6.4%) 7. Vontobel 5.6% (5.3%) 8. HSBC 5.2% (4.6%) Turnover 1. Deutsche Bank 27.5% (23.2%) 2. Commerzbank 3. DZ Bank 19.6% (13.8%) 7.7% (6.4%) 4. BNP Paribas 7.4% (6.0%) 5. UBS Investment Bank 5.4% (5.5%) 6. Citigroup 5.2% (6.6%) 7. HSBC 5.1% (4.2%) 8. Vontobel 4.8% (4.4%) Source: SIX Structured Products Exchange, Technolab, EUWAX, DDV (data do not include OTC trading of listed products) 1. Vontobel 46.4% (46.1%) 2. UBS 3. ZKB 21.2% (20.0%) 12.7% (15.7%) 4. Julius Bär 5.4% (4.7%) 5. Leonteq 4.1% (4.5%) 6. Notenstein 2.5% (1.0%) 7. Credit Suisse 2.4% (2.3%) 8. Royal Bank of Scotland 9. Commerzbank 10. HSBC 2.3% (1.5%) 0.6% (0.5%) 0.5% (0.5%) No. of products issued 1. Commerzbank 13.6% (14.1%) 2. Deutsche Bank 3. BNP Paribas 13.0% (13.1%) 12.1% (10.5%) 4. Citigroup 11.6% (11.7%) 5. Vontobel 10.2% (10.5%) 6. UBS 10.0% (11.5%) 7. DZ Bank 7.4% (7.5%) 8. Hypovereinsbank 6.3% (4.8%)

42 Page 42 Cost leadership as a prerequisite for profitable growth Development of costs and number of products issued (indexed to 100) Cost per unit (CHF) 1 2,713 2,622 7,733 1,789 92% -94% CAGR 4, % 100 CAGR , Total operating expenses Number of products issued Low average product costs as a driver of expansion Well-balanced business model with leverage and investment products allows unit cost leadership Marginal costs per product close to zero, allowing development of new business models and to entry into new markets Low production costs are a prerequisite for a multi-issuer offering 1 Calculated as total operating expenses (full cost approach including depreciation and amortization) from segment Financial Products divided by number of products issued

43 Page 43 Technology platform allows us to enter new leverage product markets in Europe with low costs and risk Leverage products in Europe Growth potential in Europe Markets Volume in EUR mn Market share VT (volume) 2014 Market share VT (trades) (E) Switzerland 11,628 10, % 40.9% Germany 1 17,069 21, % 5.6% Nordics 5,542 6, % 2 3.0% 2 Italy 12,278 20, % 0.0% Netherlands 8,050 8, % 0.0% France 6,024 6, % 0.0% Vontobel market presence Potential new markets for Vontobel Leverage Products 1 Including Austria 2 Launched 12 January 2015; figures beginning of 2015 Source: eusipa.org, ngm.se, Vontobel estimates

44 Page 44 deritrade Multi Issuer Platform is setting a new standard, driving rapid growth in demand from issuers and distributors Business model Cornerstones Standard New Issuer Issuers low cost distribution market reach Cost reduction Increased market reach Bank/ distributors Product specialist deritrade MIP deritrade MIP connecting issuer and distributors, harmonized offering, price transparency, technology and support Cost reduction Best execution Scalability Client advisors Client advisors multi-issuer offering, best execution, fully automated trade processing low distribution costs Regulatory requirements addressed End-clients structured products End-clients tailored structured product Investment suitability Maximize clients return Vontobel deritrade MIP is redefining the market for structured products

45 Page 45 Compelling and disruptive, high volume business model Standard business model Leveraging revenue growth Vontobel issuer External issuers Vontobel deritrade MIP + platform fees Distributors Distributors High entry barriers natural network effects significant cost reductions for all participants

46 Page 46 Business is profitable in Switzerland and ready to grow in APAC Franchise build-up Strategy MIP business build-up Today Switzerland - Business set-up completed - Service and platform operational - Growing offering (issuers, products, services) - Rapidly growing distribution franchise APAC - Business set-up completed - Service and platform close to operation - Building up offering (2 new APAC issuers signed MoU 1 ) - Building up distribution franchise (5 distributors signed LoI 2 ) Switzerland APAC Germany Memorandum of Understanding 2 Letter of Intent Germany - Service and platform to be completed - Offering will result in paradigm shift - Actively working on dominant distribution strategy with suitable partners

47 Page 47 Switzerland growing a new franchise Issuers Distributors 1. Deutsche Bank 2. Morgan Stanley 3. Société Générale 4. UBS 5. Vontobel 6. ZKB 7. Undisclosed name Banks (10 out of 24) Vontobel Private Banking Berenberg Centrum Frankfurter Bankgesellschaft Hypo Lenzburg LGT Neuenburger KB Rothschild Bank Schwyzer KB Zuger KB Cooperations Raiffeisen UBS Wealth Management (go live Q2/2015) External Asset Managers >300 External Asset Managers Vontobel estimates Onboarding issuers Finishing offering Platform development derivative.com Notional issued per month (CHF mn; left axis) Starting distribution Number of banks (right axis) Summary: Number of banks: 24 of which cooperations 2 External Asset Managers: >300 Market potential: Addressable AuM 1 : >CHF 1,000 bn Annual issues 1 : CHF 35 bn Annual secondary volume 1 : CHF 20 bn

48 Page 48 APAC - developing offering and distribution franchise Key value proposition Price discovery is already automated in APAC, MIP will reduce existing costs and complexity Technology and knowhow-driven handling of trades will reduce current high cost for distributors MIP will bring the product offering to the point of sale via a purpose-built user interface, further reducing costs MIP will introduce a new level of front to back automation, resulting in a paradigm shift Paradigm shift area Strategy & status Structured products are a buyers market, MIP is addressing the overriding need for lower costs on the distribution side Leveraging of Swiss platform, adjusted for APAC-specific needs. Technology already operational Building the offering (issuers & APAC products) - Vontobel issuer live - Issuer 2 (undisclosed name), signed MoU 1, work underway - Issuer 3 (undisclosed name), signed MoU 1, work underway - Ongoing discussions with 5 more issuers Building the distribution franchise - Distributor 1 (undisclosed name), signed LoI 2 - Distributor 2 (undisclosed name), signed LoI 2 - Distributor 3 (undisclosed name), signed LoI 2 - Distributor 4 (undisclosed name), signed LoI 2 - Distributor 5 (undisclosed name), signed LoI 2 - Ongoing discussions with 8 more distributors Pre-trade decision support Price discovery Transaction Product lifecycle Expiration and redemption Comprehensive decision support Pre-trade pricing simulations Real-time price offers from issuers Price competition Full automated trade execution Online product data and reporting Automated corporate actions Expiration and repayment notifications 1 Memorandum of Understanding 2 Letter of Intent

49 Live demo of technology leadership Page 49

50 Page 50 Compelling offering for External Asset Managers is driving growth Offering for External Asset Managers Platforms Markets Products & Services e-banking services Content platform COPP Direct market access Switzerland Geneva Basel Zurich Investment advisory Funds Content platform Research Structured products Global execution Multi-issuer platform Asset allocation advisory Consolidation Regulatory advisory Global execution Regulatory platform United States

51 Page 51 External Asset Manager platform with consistent growth and increasing profit contribution due to operating leverage EAM business: direct revenues Advised client assets and number of EAMs EAM direct revenues (CHF mn) Advised client assets (CHF bn) Number of EAMs Investments in platforms, service offering and relationship managers resulted in substantial growth in assets under management Profit contribution increased even more rapidly due to operating leverage of business model Unique offering for US clients helped to drive growth

52 Page 52 Vontobel is growing across all markets of Switzerland Market Regional AuM 1 (CHF mn) Potential Measures Zurich 3,429 3,524 3,721 4,743 6,050 6,546 German-speaking Switzerland estimated size of market: CHF 300 bn VT market share: ~ 2.3% Focus on acquisition of new EAMs Increase share of wallet with existing EAMs Basel Geneva French-speaking Switzerland estimated size of market: CHF 170 bn VT market share: ~ 0.5% Rigorous market development with disciplined sales management process to capture existing potential Growing market share, increasing share of wallet and leveraging platform as main objectives in Switzerland Source: Regulierungskostenanalyse zum Finanzinstitutsgesetz (FINIG), 28 February 2014; Vontobel estimates 1 Including US clients managed by EAMs based in Switzerland

53 Page 53 US market has become important part of Vontobel s book of business and has significant growth potential Market AuM (CHF mn) / description Potential Measures US clients with Swiss EAMs ,052 1,446 1,460 Limited potential due to resolution of regulatory issues by other Swiss banks Build up local franchise in New York Leverage cross-divisional client relationships from AM and PB Focus on acquisition of new RIAs Strengthen local presence by hiring additional specialists US clients with US RIAs Proven setup with Vontobel Securities as broker/dealer for SEC registered IA (RIAs) in Switzerland Broker/dealer setup leveraged to New York to build up a local presence since January 2015 Expanding Vontobel s EAM offering from Switzerland to the US Market size for RIAs: CHF 2,000 bn 1 Significant demand for offshore booking centre by US clients Broker/dealer set-up allows servicing of US persons around the world Market development, building up local presence and acquiring new clients to monetize investments in prior years are main priorities! 1 Vontobel estimates

54 Page 54 Investment Banking with considerable return on allocated capital Pre-tax ROAC 1 (in %) Cost 2 /income ratio (in %) EAM NNM (in %) 72.6 > 25 Target 2017 < Target 2017 Outlook Protect market share in Switzerland Leverage technology leadership by expanding leverage products into European countries Continue rollout of deritrade MIP among financial intermediaries - Ongoing distribution in Switzerland - Build up offering and distribution franchise in APAC Continue sustainable growth with External Asset Managers - Increase market share in Switzerland - International rollout of offering for US clients Pre-tax return on allocated capital (according to BIS III, 8%) 2 Operating expense excl. value adjustments, provisions and losses Target 2017

57 Page 57 Operations mission statement Operations is responsible for running and upgrading the Group-wide infrastructure including IT, Facility Management as well as IT Security and Physical Security Asset Management Private Banking / External Asset Managers Financial Products Operations IT, Corporate Real Estate, Security

58 Page 58 Operations delivers on Vontobel s strategic priorities Service & product excellence State-of-the-art infrastructure and applications Business alignment management is key Digitalization is addressed as a strategic initiative Productivity Straight-through-processing rate > 99% Transparent cost and requirement management Centralized production/ decentralized distribution cross-border model Profitable growth Scalability Flexibility Standardization/industrialization

59 Page 59 Run-the-bank costs were reduced by CHF 20 mn through systematic implementation of efficiency improvements Run-the-bank (IT costs without depreciation; CHF mn) Comments % p.a Active cost management led to lower run-the-bank costs of -9% p.a. from 2008 to 2014 Target run-the-bank costs of CHF mn p.a. are planned, CHF 20 mn less than in Change-the-bank (IT project portfolio CHF mn) 2014 Target as from 2015 Comments Core application was replaced with avaloq in 2007/2008 and is now at beginning of lifecycle Total investments of CHF 180 mn from 2009 to 2013, primarily in front office systems Current state-of-the-art platform allows for a lower level of investment from Target as from 2015

60 Page 60 Lower investment in IT will lead to a sharp decline in IT depreciation of CHF mn in 2020 IT depreciation (CHF mn) Comments The business requirements will lead to investments of CHF mn per year as from 2015 this low number is possible given our state-of-the-art platform The depreciation of initial investments in the avaloq corebanking-platform will be completely written-off in Target 2017 Target 2020

61 Page 61 Measures and initiatives to manage run-the-bank IT costs Transparent service catalogue based on market prices Platform consolidation Virtualization Downsizing Cloud computing Insourcing of external resources Professional procurement management

62 Page 62 Overview of the IT system landscape Web applications Internet Intranet Extranet Front applications CRM platform Execution platform Portfolio management platform Trading platform Middleware Core applications avaloq Securities centre (VVZ) Output Archive Accounting & risk applications Accounting Risk Legal Rep

63 Page 63 The entire IT platform has been completely renewed over the last 10 years and is now state-of-the-art and at the beginning of lifecycle Front office applications (flexible, dynamic and capital-light) Compliance engine Portfolio management system CRM suite for client advisors Vontobel e-banking Trading order management Active advisory Generic tax engine MIFIDcompliant smart order routing Mobile Private Banking (tablet app) Middle- Ware Automated archiving system Core banking platform (avaloq) Renewal of securities centre Modern financial accounting & controlling based on SAP Highly automated output management system Core and back office applications (long lifecycle and capital intensive)

64 Page 64 Managing the digital change on three different levels Digitalize existing business models Digitalization of client interface (multi-channel access for information, transactions, collaboration, etc.) Digitalize business support processes Cost management requires fully digitalized processes: account opening, credit applications, compliance issues Embrace new business opportunities Launch new business models based on existing core competencies combined with state-of-the-art technology

65 Page 65 Key messages Vontobel has a flexible and highly performing infrastructure, which is still at the beginning of its lifecycle. Initial investments will be written off completely by 2019 The run-the-bank cost base has been significantly reduced since 2008; change-the-bank costs have stabilized at a reasonable level The digital change is being addressed at an overall strategic level; going live of the 1st release of Vontobel Mobile Private Banking (multi-channel-platform) represents first important milestone

68 Page 68 Shareholder oriented capital management confirmed by share buyback capital position remains solid with CET1 ratio of 21.3% Development of capital (CHF mn) BIS CET1 capital and ratios (CHF mn) 25.5% 21.3% 1, ,412 1,348 1,117 Target ratios 16% total capital 12% CET1 capital Dividend Share buyback (12.5%) 2014 profit Other effects BIS capital BIS capital requirements Vontobel comfortably meets the 12% total capital ratio prescribed by FINMA 1 BIS tier 1 capital ratio under Basel III (fully applied)

69 Page 69 CHF 600 mn available for M&A from excess capital and potential hybrid instruments without diluting existing shareholders Vontobel with excess capital of CHF 300 mn Vontobel with CET1 capital ratio of 21.3% at end-2014 Excess capital based on Vontobel s target total capital ratio of 16% amounts to almost CHF 300 mn , and potential for hybrid capital of CHF 300 mn Potential for additional Tier 1 & 2 capital estimated at 25-30% of CET1 Based on CET1 capital at end-2014 this implies potential for capital of CHF mn 1, ,400-1,450 Strategic flexibility of new shareholder structure Major shareholders hold 62.4% of share capital after cancellation of own shares (12.5%) Vontobel could use own shares as acquisition currency Capital requirement (FINMA/ 12%) Available capital ( ) Capital requirement (Vontobel/ target 2017) Current capital structure (CET1) / Capital (CHF mn) / Capital (CHF mn) Additional Tier 1 & Tier 2 Potential capital structure

70 Page 70 Cancellation of 12.5% of own shares will increase free float by 4.6pp ROE and EPS appreciation will be fully reflected in 2015 Financial indicators 1 Shareholder structure Comments Return on equity (ROE) +1pp 33.0% 12.5% 37.6% Cancellation of 12.5% of own shares will be proposed to the General Meeting of Shareholders on 28 April 2015 Earnings per share (EPS) +8.5% 54.5% 62.4% Effect of capital reduction will be fully reflected in 2015 figures IFRS capital After cancellation Free float will increase by 4.6pp to 37.6% 7.5 months 4.5 months 12 months Major shareholders Treasury shares proposed for cancellation Free float 1 Impact on 2015 financial indicators, assuming same profit in 2015 as 2014

71 Page 71 Operating income increased three times faster than risk-weighted assets, reflecting Vontobel s capital-light business model Increase in risk weighted assets due to growth and regulatory changes Average RoE of 11.4% and average dividend of CHF 1.40/share since % +5.4% % 21.6% 19.2% , ,019 5,294 5, % 8.5% % 9.8% 8.7% % 8.3% 7.5% 7.6% Operating income (CHF mn) Risk weighted assets (CHF mn) Return on Equity (in %) Dividend (in CHF)

72 Page 72 Management and employee incentives closely aligned with shareholder interests Structure of long-term incentive plan Number of performance shares increases with RoE and BIS ratio Unique incentive structure in market 50% of bonus is allocated as bonus shares for all members of the Group Executive Management 1 Bonus shares are blocked for 3 years After 3 years, performance shares are allocated based on average RoE and BIS capital ratio of the last 3 years All bonus shares and performance shares are purchased in the market there is no dilution of existing shareholders 1 Max. 33% for other employees Examples Ø RoE < 4% 0% performance shares Ø RoE = 5% 25% performance shares Ø RoE = 10% / BIS ratio of 20-25% 100% performance shares Ø RoE = 17% BIS ratio of 15-20% 178% performance shares Long-term incentive plan has the following impact on behaviour: - RoE: Incentive to deliver high group net profit and to return excess capital to shareholders - BIZ ratio: Incentive to invest in capital-light growth initiatives and businesses Group Executive Management has strong incentive to invest in initiatives and M&A that create long-term value

73 Page 73 Active management of capital expenditure will lead to CIR improvement of pp by Development of capital expenditure (CHF mn) includes avaloq Development of depreciation & amortization (CHF mn) Based on current planning 2 Based on operating income in Target as from Target Target Comments Significant investments in IT (renewal of front office systems and avaloq) completed Major investments office buildings completed Significant reduction in capital expenditure planned in coming years Depreciation & amortization to decline to CHF mn in 2017 and CHF mn in 2020 initial investments in avaloq in 2007/08 will be fully depreciated by end of 2018 Depreciation & amortization include the amortization of intangibles from former acquisitions. They will decrease from CHF 8.4 mn in 2014 and 2015 to - CHF 2.7 mn from 2016 to CHF 1.9 mn in CHF 0.0 mn as of 2020 The impact on CIR 2 is expected to be pp in 2017 and pp in 2020

74 Page 74 Advised client assets at end-january above 2014 average Vontobel s commitment to growth is unchanged Advised client assets Income and cost structure (2014) Comments Average % Assets under management Other advised client assets Structured products outstanding CHF USD EUR Other 1 70% (share of operating expense in CHF) - 43% (share of operating income in CHF) % 14% 35% 43% Operating income % 70% Operating expense 3% 7% USD up by 0.5% ( ) compared to 2014 average EUR down by -14.4% ( ) compared to 2014 average Net currency mismatch of 27% 1 in 2014 Asset base at end-january was above 2014 average since negative effects of currency movements were largely offset by asset growth in 2H14 No credit losses in relation to discontinuation of minimum exchange rate by SNB Vontobel s earnings strength remains solid and commitment to growth is unchanged Disciplined cost management will be continued

77 Page 77 Vontobel represents an attractive value proposition for investors A growth case Wealth & Asset Management industry is growing globally Vontobel has a clear strategy and is committed to capturing growth opportunities Vontobel is a niche player with potential for further growth given its multi-boutique approach to actively managing assets, its distinctive offering for HNWIs and its technology leadership in delivering tailored investment solutions Vontobel has a strong and growing footprint in home and focus markets with strong financial discipline Capital-light business model as a Wealth & Asset Manager Solid capital base with CET1 ratio of 21.3% Strong family shareholder base; major shareholder committed to long-term profitable growth Attractive dividend yield despite investments in profitable growth (4.7% in 2014) Stability of business model demonstrated by 12.5% share buyback in 2014 no dilution during financial crisis and yearly dividend kept up, adding up to more than CHF 1 bn since 2004 and potential for M&A Potential to boost profitability through M&A M&A deals will be considered, if consistent with Vontobel s strategy and creating value for shareholders Excess capital is available to finance M&A (target total capital ratio of >16% for 2017) Major shareholders hold 62.4% of share capital after cancellation of treasury shares (12.5%), which provides increased financial flexibility Additional non-dilutive capital could be raised by issuing hybrid instruments if necessary

79 The Vontobel Group Page 79