Vontobel Holding AG

Today, Georg, Thomas and I will report on our financial results and share highlights on our strategic progress from the first six months of the year. First, let's briefly review the market context of this first half year and how it played into our results. Equity markets witnessed sustained strong performance fuelled by easing inflationary pressures, continued resilient global growth and the end of the tightening cycle for the major central banks. First cuts were delivered by the European Central Bank and the Swiss National Bank. These cuts, combined with the market expecting the Fed to start its own easing cycle in the second half of this year, allowed for a consolidation in fixed-income markets. Within currency markets, the dollar emerged as the strongest performer among major currencies, driven by robust economic data and a delayed easing cycle. The Swiss franc, despite an initial decline in the first quarter following a surprise rate cut by the S&B, recovered after the European Parliament elections in June. Against this backdrop, investors' willingness to engage improved from low levels. We saw higher client activity and increased demand for riskier asset classes as well as fixed income. Our strong results reflect our ability to fully capture these positive trends. Turning to our key messages for the first half of 2024. We had a strong start to the year with profit before tax increasing 12% to 173 million. Net inflows were 2.3 billion, driven by strong inflows from private clients and a hold in institutional client outflows, a good result amidst an ongoing challenging environment for this client segment. Our assets under management with private clients surpassed the 100 billion mark for the first time, a very fitting result for our 100-year anniversary. Our balance sheet remains very robust, as does our capital position, with a CT1 ratio of 18.3%. When we met you back in February this year, we highlighted three initiatives to sharpen and accelerate our strategic execution. We have actioned all of them. We now operate a sharper distribution model with two client segments, private clients and institutional clients. Digital investing, our hub for digitalization, has successfully been integrated into the organization and is even more efficiently supporting our firm-wide digital transformation. Earlier this month, we successfully closed the acquisition of a significant minority stake in Ankala, a leading private infrastructure manager. This marks a significant milestone in our private market strategy. The acquisition expands our investment capabilities and represents a clear additional avenue for growth. After reducing costs by 65 million on an exit rate last year, we are on track to achieve another gross cost reduction of 100 million by the end of 2026, of which roughly half by the end of this year. The outcomes and benefits of the actions we have already taken or are implementing will be progressively visible in our results. For private clients, the positive momentum continued in the first half. Our financial performance was strong, with operating income up 10%. Our assets under management surpassed the 100 billion mark. Flows were similarly strong, with the newly hired RMs meaningfully contributing to our net new money growth. Our client proposition is squarely centered around investments, not credit, and we have demonstrated our ability to grow in our focus markets, which cover the bulk of the world's wealth growth pool. We further operate a leading digital distribution model for structured solutions. These first half results prove the strength of our model. We captured strong flows and successfully served the higher client engagement. We have a strong foundation to continue this positive momentum. Let's now focus on our institutional clients segment. We have successfully halted the outflows in the first half, amidst an industry which generally continued to see outflows in actively managed investment strategies. As anticipated, fixed income but also tailored multi-asset led the return. In fact, the bulk of our strategies showed inflows except for our emerging market strategies and for a one-off impact on our quality growth equity strategies due to an insourcing of our distribution capabilities. With this and the support of positive market performance, total assets under management increased by 8%. This period also saw the successful launch of a customized yet open-to-all client solution, combining our skills in sustainability, active fundamental equity, as well as quantitative management. Fontobo Sustainable Swiss Equity Income Plus reached nearly half a billion in only a few months. We have recognized capabilities and the expertise to combine them to answer clients' needs. In other words, a strong positioning to capture flows when they return more sustainably. And now over to Georg.

Good morning and a very warm welcome from my side. The acquisition of a significant minority stake in Ankala marks an important milestone in delivering our private market strategy. Ankala is a London-based and highly experienced private infrastructure manager with strong growth prospects. Through this acquisition, our clients will be able to access stable cash flows which are inflation protected with low correlation to the overall economic cycle. Their returns will be further enhanced by the long-term value creation brought by Ancala's active management. Fontobel has flagship products with strong performance across all asset classes. Whether our clients are seeking solutions in equities, fixed income, multi-asset, quantitative or private markets, we are able to provide it. As mentioned by Crystal, we are also increasingly leveraging our cross-asset expertise, enabling us to offer solutions tailored to unique client needs. We anticipate a rising demand for personalized investment solutions, not just from individuals, but also from our larger institutional clients and distribution partners. Our efficiency program is on track and we have already started to see its first benefits. Our goal is to become faster and more efficient with clear benefits to our clients, employees and shareholders. We are in the progress of systematically implementing further measures. Roughly half of the gross savings will be achieved by year-end and over 75% by end 2025. Our efforts will concentrate on five main areas through which we will release non-personnel and personnel costs, consolidate our IT infrastructure and applications, reduce vendor spend, automate processes, focus on growth and productivity projects, and use technology to improve our operational efficiency. This three-year program runs until the end of 2026. We anticipate minor to no impact on our revenues as our focus lies on productivity. We believe that this program will allow us to reach our through the cycle 72% cost income target. Beyond this metric, this program is essential for continuing the successful growth path Fontable has achieved over the last two decades. By becoming more efficient and freeing up resources, we will, at an accelerated rate, generate capital which can be deployed for organic and inorganic growth. Our strong business momentum coupled with accelerating our strategic execution means that we are well positioned to reach our through-the-cycle targets. we have started actioning a three-year comprehensive efficiency program, which will translate into higher returns on capital. Our capital-efficient business model enables us to grow with strong capital ratios while maintaining an attractive dividend. Therefore, our through-the-cycle targets remain unchanged. With that, let me hand over to Thomas, who will cover the financials.

Thank you very much, Georg, and a warm welcome to everyone from my side as well. Let's begin. As you can see, we have produced strong operational performance in the first half of 2024. Our profit before tax saw a significant increase of 12%, rising from 154 million in the first half of last year to 173 million. The primary catalyst for the financial performance was an increase in the revenues of $28 million. However, we also saw a rise in costs by $21 million year-over-year. $9 million of this cost increase of $21 million comes from last year's one-off initiative of accelerated relationship manager hiring. Foreign exchange effects resulted in a profit reduction of 10 million versus the first half of 2023. And finally, the total impact from efficiency work in the last one and a half years is a cost improvement of 22 million. The 22 million contained costs to achieve of 9 million. This means one of charges due to the restructuring of digital investing and the efficiency programs. The group net profit saw a more modest increase of 2% due to an increase in the tax rate from 17% to 25% year over year. The tax rate increase was driven by the global minimum tax regulation, which led to a higher tax rate for our Dubai entity, an accounting adjustment and reduced participation exemptions in the UK. After adjusting for one-off items, the tax rate was approximately 22%. Moving on to page 13. Assets under management grew by 9% from 207 to 226 billion. Most notably, as mentioned before, our private client assets under management surpassed the 100 billion mark for the first time, reaching 109 billion. In the first half of 2024, we also saw favorable FX tailwinds, particularly in the first month, and we saw a positive contribution from market and product performance. In terms of net new money, we reversed the outflows from previous year. Private clients contributed 2.4 billion net new money, resulting in an annualized growth rate of 4.9% after 2.1 billion last year. And most importantly, we have successfully halted the outflows in the institutional client segment. Moving on to operating income, which has overall increased by 4% to $728 million compared to the first half of 2023. As you can see from the graph in the middle, net interest income decreased by 34% to 63 million due to rising refinancing rates, i.e. a shift in the deposit mix towards term deposits, call notes and term notes. These generally carry higher interest rates, especially for US dollar deposits. Net fee and commission income remained largely constant year over year, while trading income increased by 33% due to heightened client activity. When breaking down the revenues by business segment, institutional client revenues decreased by 3%. They were still influenced by the assets under management reduction in the second half of 2023, while the private client segment increased by 10%. In terms of margin development, both business segments maintain constant margins compared to the first half of last year. Institutional client margins remained stable at 37 bps following a slightly weaker second half of 2023. The margins in the private client segment, which includes the structured solutions business, also remained steady. The decrease in interest rate margin was offset by an increased contribution from client trading and structured solutions. Let's shift our focus to costs now. We have seen a decrease in the cost-income ratio to 76.1%, which is a positive progression towards our target of 72%. Overall, costs have risen by 2% on a half-year basis. This overall rise comes despite successful cost reductions and reflects higher costs associated with the ongoing efficiency program and the accelerated hiring of approximately 50 relationship managers, which are now fully reflected in the costs in 2024. Let me make some additional remarks on the efficiency program. Following last year's 65 million cost reduction, we've earlier this year launched a program aimed at further reducing costs by 100 million. This program is designed to achieve a cost-income ratio of 72%, even in less favorable market conditions. It's crucial to note that this is not the traditional cost-cutting exercise. It is a series of projects to enhance our productivity and efficiency. Let me repeat this. This is not a traditional cost cutting exercise. We work on enhancing our productivity and efficiencies. Areas like consolidating the IT landscape and end-to-end process automation will make us efficient and not cheap, and it will help us scale better in the future. And we are progressing well along this path. As of the end of June, we've realized annualized run rate savings of more than 20 million already. Now let's turn to the balance sheet and the Basel III ratios. The group balance sheet has expanded by 4 billion since the end of the year. This growth is attributable to deposit inflows and increased business volume from structured solutions. Total deposits have increased by 1 billion, reaching 11 billion, or, when including the call nodes and term nodes, even 14.1 billion. Balance sheet equity has risen by 71 million to 2.16 billion and core equity tier one capital has increased to 1.27 billion. Due to increased client activity, also our risk-weighted assets have obviously grown from 6.5 billion at year-end to 6.9 billion now. As a consequence, the CET1 ratio has slightly decreased to 18.3%, which is down 0.4 percentage points from the end of last year. After the Ankala acquisition, which we have closed on July 1st, the performer CET1 ratio stands at 15.5%, a reduction of 2.8 percentage points. This reduction is however not only due to the purchase price, as approximately half a percentage point is attributable to additional risk-weighted assets stemming from the acquisition. Other Basel III ratios remain strong, with a total capital ratio of 23.6, an LCR of 222% and a leverage ratio of 4.9%. But most importantly, we have continued to maintain our conservative risk profile and cautious approach to risk-taking. Now, slide 18 is an evergreen for those of you who are loyal participants in this call. We focus on three key metrics to evaluate not only the short-term performance, but also the long-term health of our organization. First, revenue and profit growth. Second, capital accretion. And third, value creation. In the first half, value creation was positive with a return on equity of 12.3% compared to a cost of capital of approximately 9.3%. Additionally, Fontopel has created a tangible book value of 80 million, leading to an increase in the tangible book value per share by 4%. In total, including the dividend paid out and the tangible book value generated, we have created almost 250 million of capital in the first half of this year. In other words, we have continued our long-term track record of creating value and creating capital. Now let me summarize the financial results. We had a strong start into the year with positive developments across flows, assets, revenues and efficiency. Financial and operational performance is strong. Operating income is up 4% and profit before tax up 12%. We have also proven that our efficiency measures start to show effect. Our balance sheet and capital position remain strong, as do our performance and health metrics. We have a significant capital accretion, we have continued value creation, and we have further growth of the top and the bottom line. And these, in our opinion, are the signposts of a healthy financial institution. With that, I give back to Georg.