Vontobel Financial Products. Performance creates trust. Mainfirst - Structured products in the negative interest rate environment

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1 Vontobel Financial Products Mainfirst - Structured products in the negative interest rate environment Roger Studer, Head of IB Performance creates trust 3 June 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 Vontobel is a focused boutique with an outstanding offering for specific client needs at a solid margin Wealth management 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 Increased profitability despite significant investments Active asset management Almost 90 awards since 2011 from Lipper, Morningstar and other renowned institutions 75% of Asset Management s AuM outperformed benchmark in 2014 (USD tn) Financial products Vontobel is well positioned with its technology leadership and innovation capabilities Growth initiatives in home and target markets Leading multi-issuer offering Highly scalable platform Actively for future managed growth assets glob % -7.1 pp % p.a Vontobel products issued > 200 k Quotes in own products per day > 250 mn Cost/income ratio (%) Pre-tax profit (CHF mn) Assets under management 2013 Average cost per product < 500 CHF Source: BCG Global Asset Management Survey 2014

4 Page 4 Vontobel s derivatives factory with well-balanced business model - leveraged products & investment products 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 B2C 3rd party wrapper / notes offering discontinued deritrade SIP deritrade MIP B2B B2B4C 3rd party issuer

5 Page 5 Growing leverage product markets: technology platform allows us to enter new markets quickly and at low marginal costs Leverage products in Europe Growth and strong potential for Vontobel Markets Volume in EUR mn D Market share VT (volume) 2015 Market share VT (trades) (E) Switzerland 1 10,876 11,097 +2% 35.8% 47.6% Germany 1 21,904 34, % 7.0% 6.3% Nordics 1 3 6,698 9, % 14.1% % 2 Italy 1 20,619 26, % 0.0% 0.0% Netherlands 2 9,116 10, % 0.0% 0.0% France 2 4,990 6, % 0.0% 0.0% Total 74,203 98, % 7.5% Vontobel market presence Potential new markets for Vontobel Leverage Products 1 Annualized figures based on Jan-April 2015 figures for Switzerland, Germany, Nordics, Italy 2 Annualized figures based on Jan-March 2015 figures for Netherlands and France 3 Launched 12 January 2015 Source: Technolab, DDV, eusipa.org, ngm.se, Borsaitaliana.it, Euronext.com, Vontobel estimates

6 Page 6 Growing investment product markets: technology platform allows us to participate in growth Investment products in Europe Growth and strong potential for Vontobel Markets Volume in EUR mn D Market share VT (volume) Market share VT (trades) (E) Switzerland 11,880 15, % 13.6% 20.7% Germany 22,348 28, % 4.2% 4.3% Austria 0,463 0, % n.a. n.a. Total 34,691 43, % 7.4% Vontobel market presence 1 Annualized figures based on Jan-April 2015 figures for Switzerland, Germany, Austria Source: Technolab, DDV, eusipa.org, WienerBorse.at, Vontobel estimates

7 Page 7 Low interest rate environment: investors need solutions to manage duration and credit risk Market conditions Highs of stock markets (SMI/DAX/SPX) «Substantial» interest rate change risk Customer s needs Optimisation Return Risk Lack of opportunities Solutions Intelligent risk transfer (asset class) Duration management as (portfolio) Credit risk management (portfolio)

8 Page 8 Low interest rate environment has positive impact on products relative attractiveness and issuer margin 2014: 20.70% YtD 1 : 23.33% VT Market Share - overall Total 2014 Ann Market Mia CHF Mia CHF LEVERAGED PRODUCTS 2014: 27.4% YtD 1 : 34.9% Total 2014 Ann Market Mia CHF Mia CHF y Product yield Product yield CH Govt Bonds 5 Year Note Generic Bid Yield t Relative attractiveness Issuer Margin Expected return PARTICIPATION YIELD ENHANCEMENT 2014: 26.14% YtD 1 : 23.77% 2014: 6.09% YtD 1 : 6.12% Total 2014 Ann Market Mia CHF Mia CHF Total 2014 Ann Market Mia CHF Mia CHF y CH Govt Bonds 5 Year Note Generic Bid Yield y Product yield CH Govt Bonds 5 Year Note Generic Bid Yield t Product yield t CAPITAL PROTECTION WITH REF. DEBTOR AND COSI 2014: 79.59% YtD 1 : 89.38% 2014: 10.40% YtD 1 : 8.78% Total 2014 Ann Market Mia CHF Mia CHF Market with ref. Debtor Mia CHF Mia CHF y Product yield CH Govt Bonds 5 Year Note Generic Bid Yield t 1 Based on Jan-Mai 2015 figures Source: technolab.ch per risk

9 Page 9 Product innovations in a low interest rate environment Product Innovation Product description Strategic Certificates p/l t Strategic Certificates Strategic Certificates on a Reference Portfolio are financial instruments that securitize a basket of underlyings (the Reference Portfolio) based on an investment strategy defined by an External Investment Manager. The asset allocation process is managed at the discretion of the Investment Manager. Auto- / Issuer Callable (Multi) Defender VONTI p/l t Auto- / Issuer Callable (Multi) Defender VONTI Investors benefit from guaranteed coupon payments. Furthermore, the callable feature facilitates engineering structures with relatively higher coupons and simultaneously lower barriers compared to traditional (Multi) Defender VONTI Multi VONTI with low strikes p/l t Multi VONTI with low strikes Investors benefit from guaranteed coupon payments. Furthermore, a low entry level and hence, a discount in case the final fixing of the worst-off underlying is below its corresponding strike level applies. This discount in combination with the paid coupons constitute a large safety buffer as they can compensate possible losses of underlying prices. Floored Floater with reference debtor and COSI p/l t Floored Floater with reference debtor and COSI With these instruments an investor can earn attractive minimum coupons and benefit from increasing short term interest rates. The 100% capital protection depends on the solvency of the reference debtor only, therefore allowing an investor for debtor risk diversification. Due to the variable coupons the duration is lower compared to a normal bond s duration.

10 Page 10 Platform innovation: technology leadership enables next-generation solution the multi-issuer platform Multi-issuer platform represents ground-breaking technology for structured products Life cycle development Market potential Manual Single issuer platforms Multi-issuer platform deritrade leads KPI Manual Single issuer platforms Multi-issuer platform # issuers/platforms ~20 ~6 Unique VT offering Production costs High Lower Significantly lower Tailored offering YES YES YES Scalability NO YES YES Price competition NO NO YES Credit risk management NO NO YES Regulatory requirements NO NO YES

11 Page 11 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

12 Page 12 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 28 Banks (10 out of 28) Vontobel PB Berenberg Centrum Frankfurter Bankgesellschaft Hypo Lenzburg LGT Neuenburger KB Rothschild Bank Schwyzer KB Zuger KB Cooperations Raiffeisen UBS Wealth Management External Asset Managers >300 External Asset Managers Onboarding issuers Finishing offering Platform development derivative.com Starting distribution Summary: Number of banks: 28 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 1 Vontobel estimates

13 Live demo of technology leadership Page 13

14 Questions and Answers Page 14

15 Page 15 Vontobel Financial Products has built strong market position in Europe and is market leader in Switzerland (1/2) Market share in Switzerland in listed products YTD April 2015 (2014) No. of trades Turnover No. of products issued 1. Vontobel 42.6% (40.9%) 2. UBS 18.5% (19.3%) 3. ZKB 15.8% (16.5%) 4. Julius Bär 6.7% (5.7%) 5. Commerzbank 6.0% (5.2%) 6. Credit Suisse 2.1% (3.1%) 7. Leonteq 1.9% (2.0%) 8. Notenstein 1.2% (1.1%) 9. Banque Vaudoise 0.8% (0.7%) 10. Safra Sarasin 0.5% (0.5%) 1. UBS 36.5% (34.7%) 2. Vontobel 3. ZKB 23.0% (20.7%) 14.4% (16.9%) 4. Julius Bär 8.5% (7.4%) 5. Credit Suisse 3.3% (5.3%) 6. Leonteq 3.2% (3.4%) 7. Notenstein 8. Commerzbank 9. Banque Vaudoise 3.0% (2.3%) 2.0% (1.7%) 1.7% (1.2%) 10. Bank Safra 1.2% (1.2%) Market share in Germany in listed products YTD April 2015 (2014) No. of trades 1. Commerzbank 2. Deutsche Bank 22.0% (20.1%) 20.5% (27.7%) 3. Citigroup 9.6% (9.8%) 4. DZ Bank 8.9% (7.8%) 5. BNP Paribas 7.1% (7.4%) 6. UBS Investment Bank 6.3% (6.3%) 7. Vontobel 5.9% (5.6%) 8. HSBC 4.9% (5.2%) Turnover 1. Deutsche Bank 26.8% (27.5%) 2. Commerzbank 3. DZ Bank 20.2% (19.6%) 9.3% (7.7%) 4. BNP Paribas 7.0% (7.4%) 5. Vontobel 5.7% (4.8%) 6. HSBC 5.5% (5.1%) 7. UBS Investment Bank 5.3% (5.4%) 8. Citigroup 5.3% (5.2%) Source: SIX Structured Products Exchange, Technolab, EUWAX, DDV (data do not include OTC trading of listed products) 1. Vontobel 39.1% (46.4%) 2. UBS 3. ZKB 23.2% (21.2%) 10.0% (12.7%) 4. Julius Bär 5.8% (5.4%) 5. Leonteq 5.2% (4.1%) 6. Royal Bank of Scotland 3.4% (2.3%) 7. Credit Suisse 3.4% (2.4%) 8. Notenstein 3.3% (2.5%) 9. Commerzbank 2.0% (0.6%) 10. HSBC 0.9% (0.5%) No. of products issued 1. Commerzbank 14.5% (13.6%) 2. UBS 11.4% (10.0%) 3. Deutsche Bank 4. Citigroup 11.3% (13.0%) 11.1% (11.6%) 5. BNP Paribas 10.5% (12.1%) 6. DZ Bank 8.7% (7.4%) 7. Hypovereinsbank 7.9% (6.3%) 8. Vontobel 6.7% (10.2%)

16 Page 16 Vontobel Financial Products has built strong market position in Europe and is market leader in Switzerland (2/2) Market share in Sweden in listed products YTD April 2015 (2014) No. of trades Turnover No. of products issued 1. Société Générale 63.4% (69.5%) 2. Commerzbank 3. Vontobel 15.9% (14.7%) 15.2% (0.0%) 4. BNP Paribas 4.4% (12.9%) 5. Öhmann Capital 1.1% (2.2%) 1. Société Générale 62.8% (61.9%) 2. Commerzbank 15.4% (15.4%) 3. Vontobel 14.1% (0.0%) 4. BNP Paribas 5.3% (18.1%) 5. Öhmann Capital 2.4% (3.6%) 1. Commerzbank 2. Société Générale 40.5% (36.3%) 25.3% (24.7%) 3. BNP Paribas 22.2% (26.4%) 4. Vontobel 5.6% (0.0%) 5. Royal Bank of Scotland 4.2% (7.6%) 6. Öhmann Capital 2.1% (5.0%) Source: NGM.SE

17 The Vontobel Group Page 17