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Transcript of Swiss Equities Conference - Credit Suisse · Jakarta Cape Town Johannesburg Athens Mumbai Lisbon...
Swiss Equities Conference
Credit Suisse: Private Banking update
New YorkSeptember 28, 2006
Walter Berchtold, CEO Private Banking
Swiss Equities ConferenceSlide 2
Disclaimer
Cautionary statement regarding forwardCautionary statement regarding forwardCautionary statement regarding forwardCautionary statement regarding forward----looking informationlooking informationlooking informationlooking information
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve inherent risks and uncertainties, andwe might not be able to achieve the predictions, forecasts, projections and other outcomes we describe or imply in forward-looking statements.
A number of important factors could cause results to differ materially from the plans, objectives, expectations, estimates and intentions we express in these forward-looking statements, including those we identify in"Risk Factors" in our Annual Report on Form 20-F for the fiscal yearended December 31, 2005 filed with the US Securities and Exchange Commission, and in other public filings and press releases.
We do not intend to update these forward-looking statements except as may be required by applicable laws.
Swiss Equities ConferenceSlide 3
Credit Suisse: Key facts & Figures as of 30 June 2006
� Global financial services company with presence in Europe, Middle East, Africa, Americas, and Asia
� 44,100 employees1)
� Registered shares are listed in Switzerland and as American Depositary Shares in New York
� CHF 7.5 bn pre-tax income
� CHF 1,371 bn AuM
� 25.4% Return on Equity
1) Banking businesses only
Swiss Equities ConferenceSlide 4
Credit Suisse Strategy
� Three Divisions focusingon client coverage andbest product delivery
� Shared services providing high-quality cost-effective services to divisions, whileensuring independent controls
� Four Regions to coordinate client coverage, market strategies and resources: "one face to the market"
� A common culture basedon client focus
Switzerland
EMEA
Asia Pacific
Americas
Inve
stm
ent B
ankin
g
Priva
te B
ankin
g
Asset M
anag
em
ent
Share
d S
erv
ices
Divisions
Regions
Implementation of a fully integrated banking businessfully integrated banking businessfully integrated banking businessfully integrated banking business
Swiss Equities ConferenceSlide 5
Private Banking: Key Facts and Figures as of 30 June 2006
1) Excluding Shared Services headcount allocation of approx. 6,000 FTEs
� 2.5 million clients
– ~630,000 WM
– ~1,900,000 CRB
� 15,000 employees1)
� Global franchise
� CHF 6.0 bn net revenue
� CHF 2.4 bn pre-tax income
� CHF 859 bn AuM
� CHF 165 bn loans
Swiss Equities ConferenceSlide 6
Pretax Income (in CHF m)
1) Annualized
Private Banking: Financial Performance
Net New Assets (in CHF bn)
5.8%7.5%
Pretax Income (in CHF m) Return on ERC (in %)
2,005
2,582 2,661
1,742 31.4
42.8
31.0
34.841.9
48.51)
678
1,1351,305
689
WealthManagement
Corporate &
Retail Banking
2003 2004 2005 H106 2004 2005 H106
8.9%1)
2003 2004 2005 H106 2004 2005 H106
Swiss Equities ConferenceSlide 7
Wealth Management vs Brokerage: More Comprehensive Business Model; Higher Margins
� Gross margin 100-120 bps
� Cost-income 50-70%
� Compensation: Salary plus bonus
Wealth management Wealth management Wealth management Wealth management
� Comprehensive advisory, e.g. financial planning
� Discretionary mandates / fiduciary services
� Broad range of investment products, e.g. third party
� Wealth-related services, e.g. tax & inheritance consulting, trusts
� Broad range of lending products
BrokerageBrokerageBrokerageBrokerage
� Securities investments (advice, execution)
� Selected proprietary investment products
� Equity research
� Custody services
� Selective lending
� Gross margin 50-70 bps
� Cost-income 80-95%
� Compensation: Commission -based
Market Characteristics
Swiss Equities ConferenceSlide 8
CS is a Leading Global Player in Wealth Management
121
203
224
246
260
353
355
466
659
982UBS
Credit Suisse
Citigroup
Merrill Lynch
HSBC
Deutsche Bank
JP Morgan
BNP Paribas
ABN Amro
Julius Baer
Global AuM of competitors 2005 (CHF bn), excl. brokerage business
Source: CS estimates
Swiss Equities ConferenceSlide 9
Increasing Global Wealth Management Franchise
Service locations
Los Angeles
MiamiNassau
San Francisco
Dallas
ChicagoBoston
AtlantaNew York
Mexico
Caracas
Bogotá
Lima
SantiagoBuenos Aires
Montevideo
São PauloRio de Janeiro
Moscow
Cairo
Istanbul
Dubai
St. Petersburg
Abu Dhabi
Beijing
Shanghai
TaipeiGuangzhouHong Kong
Bangkok
Singapore
Jakarta
Cape Town
Johannesburg
Athens
Mumbai
Lisbon
Madrid
ParisZurich
ViennaFrankfurt
London
Guernsey
Gibraltar
Milan
Luxembourg
BeirutDoha
Baltimore
Monaco
Sydney1)
1) as of Nov 1, 2006; Status: 12 September, 2006
� Switzerland: 75 service locations
� Germany: 14 service locations
� Italy: 32 service locations
� France: 3 service locations
� Spain: 3 service locations
Melbourne1)
Swiss Equities ConferenceSlide 10
� Premium brand
� 2nd largest wealth manager worldwide
� Switzerland as reliable profit anchor
� Leadership in products and innovation
� Leading client value propositions
� Platform for bank-wide collaboration established
� Need for further building of long-term growth platforms
� Ongoing pressure on traditional offshore centres
� Continuously increasing complexity of client demands
� Margin pressure on plain-vanilla products
� Rising costs of doing business, e.g. products, compliance, IT
� Fierce war for talents
Our Strengths Industry Challenges to Be Met
Private Banking: Where Do We Stand?
Market Opportunities
� Highly profitable industry
� Strong growth – especially onshore and in emerging markets
� Large cross-selling potential
Swiss Equities ConferenceSlide 11
Private Banking: Our Strategy
Further extend
our leading client value proposition
Aggressively grow
international franchise
onshore and offshore
Gain market share in our Swiss home
market
Leverage opportunities
from integrating the banking businesses
Continuously improve
productivityand financial performance
Execute with best people
Swiss Equities ConferenceSlide 12
Markets: Asia-Pacific
� Explore opportunities in China; build Shanghai branch and explore JV opportunities
� Leverage Singapore and Hong Kong hubs, upgrade IT platform
� Build on and expand onshore presence, e.g. Indonesia and Australia
35
50
+43%
2004 2005
� NNA: ~19% annual growth
� Margins: stable environment
Way Forward
AuM (in CHF bn) Expected Development
Swiss Equities ConferenceSlide 13
Markets: Europe/Middle East/Africa
Way Forward
� Western Europe onshore to reach breakeven by 2007 at latest
� Explore opportunities in Central and Eastern Europe
� Leverage hub in Dubai
� Increase footprint in Middle East, e.g. Saudi Arabia
� Investigate onshore presence for India
199239
+20% � NNA: ~7% annual growth
� Margins: small dilution due to increasing share of onshore business
2004 2005
AuM (in CHF bn) Expected Development
Swiss Equities ConferenceSlide 14
Markets: Private & Business Banking Switzerland
� Further build on value propositions for attractive client sub-segments
� Foster product & business innovation
� Leverage capabilities of Asset Management and Investment Banking
� Continuously improve productivity
365428
+17%
1) Including Corporate & Retail Banking, Independent Private Banks and External Asset Managers
� NNA: ~4% annual growth expected
� Margins: Improvement expected due to enhanced solution offering
2004 2005
AuM (in CHF bn)1)
Way forward
Swiss Equities ConferenceSlide 15
Markets: Americas
� Build comprehensive Wealth Management in US
� Strengthen footprint in Latin America, e.g. onshore presence in Brazil
� Explore onshore opportunities in other countries
92 +23% � NNA: ~10% annual growth
� Margins: improvement expected given transformation toward comprehensive wealth management business model in US
2004 2005
AuM (in CHF bn)
Way Forward
113
Expected Development
Swiss Equities Conference
Credit Suisse: Private Banking AmericasNew YorkSeptember 28, 2006
Anthony DeChellis, Head of PB Americas
Swiss Equities ConferenceSlide 17
Private Banking presence in Americas
USA highlights (as per Aug 2006)
Clients Clients Clients Clients
� > CHF 5mn average AuM
Relationship mangersRelationship mangersRelationship mangersRelationship mangers
� > CHF 1.2mn average revenue per experienced relationship manager
Size of business Size of business Size of business Size of business
� AuM: CHF 83.3 bn
Footprint Footprint Footprint Footprint
� Offices in 9 major regional wealth centers
� Offices in 8 major regional locationsService locations
Los Angeles
MiamiNassau
San Francisco
Dallas
ChicagoBoston
AtlantaNew York
Mexico
Caracas
Bogotá
Lima
SantiagoBuenos Aires
Montevideo
São PauloRio de Janeiro
Baltimore
Latin America footprint
Swiss Equities ConferenceSlide 18
The Opportunity for competitive advantage in the USA
�
�
����Wealth Wealth Wealth Wealth
Management Management Management Management
ModelModelModelModel
�
�
�Private Bank Private Bank Private Bank Private Bank
ModelModelModelModel
Broker Broker Broker Broker
ModelModelModelModel
Entrepreneurial
RMs
Breadth of
Investment
Product
Offerings
Consistent
Client
Experience
Depth of
Advice
Banking
Product
Offering
Swiss Equities ConferenceSlide 19
PB USA: Turn around initiated – first success visible
Source: PB USA – August 2006
+37%
211
255
289
20032002 2004 Low
2005
2005 YTD
2006
288
328
248
Relationship managers
Swiss Equities ConferenceSlide 20
PB USA: Turn around initiated – first success visible
Source: PB USA – August 2006
+37%
211
255
289
20032002 2004 Low
2005
2005 YTD
2006
288
328
248
+560%
1.4
6.5
10.0
2004 2005 YTD
2006
Relationship managers NNA (CHF bn)
Swiss Equities ConferenceSlide 21
Our vision for Private Banking USAOur vision for Private Banking USA
� Preeminent wealth manager in US (top 5 player) Preeminent wealth manager in US (top 5 player) Preeminent wealth manager in US (top 5 player) Preeminent wealth manager in US (top 5 player) � Best client experience for UHNW segmentBest client experience for UHNW segmentBest client experience for UHNW segmentBest client experience for UHNW segment� Employer of choice for bestEmployer of choice for bestEmployer of choice for bestEmployer of choice for best----inininin----class class class class RMsRMsRMsRMs
Best-in-Class RMs
and Specialists
Consistent Value
Creation
State-of-the-Art Products and
Support
Prestigious UHNW
Positioning
Leveraging IB and AM
Platform
and
Resources
PeopleClient
ExperienceBrandOne Bank
PB USA
Vision
Swiss Equities ConferenceSlide 22
Client Expectations Are Changing Significantly
Advice
Products
Service
today
Investment proposals
Financial planning
Brokerage, mandates
Structured products
Tailor-made individual solutions
Reliability, confidentiality
International reach
Global capabilities and delivery
80s
Comprehensive asset & liability management
Swiss Equities ConferenceSlide 23
Client Value: Key Building Blocks for True Client Focus
� Relationship managers& specialists
� Products and solutions
� Processes and tools
� Client experience
Analysis Delivery
� Client needs/ Voice of the Customer
� Client profitability and wallet share
� Competitivepositioning
Clear, unique and valuable set of offerings and services for a defined, attractive client group
Design
Swiss Equities ConferenceSlide 24
Client
� Investment funds� Discretionary mandates� Alternative investment
products� Private equity
� Private label funds
� IPO� M&A advisory� Derivatives� Structured finance� Trading
Client Value: Delivering One Bank
Investment Banking
� Investment consulting� Trusts� Insurance wrappers� Inheritance & tax
consulting
� Margin lending� Mortgages
Asset ManagementPrivate Banking
Solution Specialists
Relationship Manager
Local and Global Specialists
Swiss Equities ConferenceSlide 25
Five Key Cross-Selling Opportunities
Leverage IB relationships for client referrals to PB and AM
Provide UHNW clients with customized solutions and access to IB and AM
Market alternative capital products to pension funds leveraging IB relationships
Grow sales of alternative products and other services to PB clients
Offer prime services/execution to hedge fund and mutual fund managers leveraging PB relationships
Swiss Equities ConferenceSlide 26
Improving Productivity and Financial Performance
Operational Excellence
One Bank Synergy
Excellence in Price Management
Clariden Leu
Centers of Excellence
� Re-invent resource deployment across functions
� Continuously generate substantial process improvements and grow via differentiation
� Integrate global organization around distinct business areas
� Review current generation of pricing models and structures
� Integrate the IPBs and create a platform for growth