2008-09-10 citi swiss private banking roundtable
TRANSCRIPT
Private Banking Update
Citigroup Swiss Private Banking RoundtableZurich, September 9, 2008
Martin Mende, Private BankingHead of Business Development
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 2
Cautionary statement regarding forward-looking and non-GAAP 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, and we 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 year ended December 31, 2007 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.
This presentation contains non-GAAP financial information. Information needed to reconcile such non-GAAP financial information to the most directly comparable measures under GAAP can be found in Credit Suisse Group's second quarter report 2008.
Cautionary statement
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 3
Status & overall Strategy
International Growth
Client Value Proposition
The Integrated Bank
Financial Targets
Agenda
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 4
Key trends in Wealth Management
Global business models, on- and offshore capabilities in all major regions
Focus on home markets and offshore centers
Comprehensive solutions, combining private and investment banking skills
Narrow focus on classical private banking offerings
Focus on total client wealth, including all asset classes as well as liabilities
Services around free investible assets
Needs-based segmentation will finally take off
Segmentation mostly along asset size and product usage
From ... To ...
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 5
Current markets: Where do we stand?
! Long-term growth prospects for wealth managers remain intact� Rise of emerging markets� Generational transfers of wealth� Private investment banking
! Credit Suisse is well positioned to face challenges and to outperform its competitors� Global presence� Strong balance sheet� Unique Integrated Bank approach
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 6
Good net new asset growth in Wealth Management
31 50
CHF bn
NNA growth on AuM in %5.8 7.5 7.3 6.4 6.91)
43 51WM NNA
WM AuM
2004 2005 2006 2007
839568 693 784
AuM grew by 36% (2004-1H08), representing a CAGR of 9%774
1H08
29
1) Annualized
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 7
Continued strong gross margin
WM gross margin on AuM (bps)
113 112 115 117
2005 2006 2007 1H08
40 38 35 31
73 74 80 86
Transaction-based
Recurring
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 8
! We lead the industry in client solutions
! We work as part of a truly integrated bank
! We are the preferred employer for top performers and talent
! We outgrow the competition, globally and in core markets
! Our productivity is benchmark
! We deliver superior returns to our shareholders
Credit Suisse as the premier global private bank �What will it mean?
Our clients are our ambassadors
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 9
Premier global private bank
Premier bank in Switzerland
Private Banking: Strategy overview
Client value proposition
International growth
Market share gains in
Switzerland
Integrating the banking businesses
Productivity and financial performance
Best people
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 10
Agenda
Status & overall Strategy
International Growth
Client Value Proposition
The Integrated Bank
Financial Targets
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 11
Strong growth in mature markets and increased presence in key emerging markets
Japan onshore in preparation
China onshore established
Australia onshore launched
India onshore launched
Gulf: Leverage integrated bank
Continued investment in Russia and Eastern Europe
Mexico onshore in preparation
Expanded presence in Brazil (Hedging-Griffo)
Continued turn-around and growth in the US
Accelerated growth in Western Europe
2'5403'140
4'100
2004 2007 Goal 2010
+200 p.a.+330 p.a.
Relationship Managersat year-end
+14 offices in 10 countries/+550 RMs
since 2007
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 12
! Clear business case for each hired RM (NNA, revenues)
! Average break-even for RMs 18-24 months
! Focus on pay forperformance; limited upfront bonus
Prudent economics
! Entrepreneurial spirit
! Share our view on how we serve clients
! Broad solution and product expertise
Cultural fit
Our hiring philosophy
+
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 13
Region EMEA: Key figures and achievements
! Accelerate growth in France, Germany, Italy, Spain and UK! Continue investment into Moscow onshore platform; launch Poland onshore! Further develop the Gulf region in an Integrated Bank approach! Expand UHNWI franchise, e.g., by hiring additional dedicated RMs and improved solution
offering! Further roll-out client need segmentation, client profitability and sales cycle
! Segment initiatives for UHNWI and entrepreneurs successfully rolled-out
! Improved UHNWI coverage! Continuously expanded product offering! Expanded footprint in UK and Italy! Launched India onshore! Launched Austria onshore ! Opened offices in Israel, Kazakhstan, Ukraine
Key achievements
Way forward
Key figures
AuM (CHF bn)
NNA growth1)
Relationship managers
285
5.1%
1'300
1H08
1) Annualized
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 14
AuM (CHF bn)
NNA growth1)
Relationship managers
Region Asia-Pacific: Key figures and achievements
! Launched Australia onshore! Acquired Hindal! Opened branch in Shanghai! Strengthened sales management functions! Continued product innovation ! Established UHNWI competence center! Well ahead of hiring targets ytd.
! Further invest in regional platform, e.g., product and solution capabilities, operations, shared services
! Realize value from new onshore presences (Australia, China, Indonesia)! Launch Japan onshore! Expand UHNWI franchise and leverage Integrated Bank
64
19.4%
440
Key achievements
Way forward
Key figures 1H08
1) Annualized
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 15
Region Americas: Key figures and achievements
Key figures
! Expanded presence in Latin America� Successful integration of Hedging Griffo� Opened Panama office
! Continued turnaround of US business, e.g.,� Strengthened management, added various top
RMs� Expanded service/product suite� Opened 4 new offices
! Latin America: Further growth� Broaden collaboration between CS and Hedging Griffo in Brazil (e.g., referrals, product
distribution)� Launch Mexico onshore leveraging IB and AM platforms� Further enhance product offering
! US: Further growth and increase of profitability � Continue recruiting best in class RM teams� Strengthen products and services by leveraging PB global expertise and Integrated Bank
AuM (CHF bn)
NNA growth1)
Relationship managers
112
9.3%
510
Key achievements
Way forward
1H08
1) Annualized
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 16
Agenda
Status & overall Strategy
International Growth
Client Value Proposition
The Integrated Bank
Financial Targets
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 17
Client Centricity as strategic way to innovate around client needs
+ +
Advisory process Client profitabilitySegment specific value propositions
+
Client understanding
! Needs-based customer segmentation
! Example: Entrepreneurs as key segment
! Targeted offering, e.g., around succession planning
! Dedicated Entrepreneur Desks
! Comprehensive advice in five structured steps
! Boost in client satisfaction
! Increased profitability
! Client Profit and Loss including Economic Profit
! Identification and development of focus clients (sales cycle)
! Basis and new insights for growth drivers! Clients' needs met holistically through high-quality advice and service
Economic profit
Not profitable
Revenue
Profitable
Clie
nt 1
Clie
nt 2
Clie
nt 3
Illustrative
Source of wealth
Behav
iortyp
e
Life
- cyc
leph
ase
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 18
! Broad risk diversification
! Large variety of innovative solutions
! Professional investment management
! Broad range of components for tailor made solutions
! More time for advice and relationship building
! Improved efficiency
! Reduced revenue volatility
! Higher margins through higher value added
! Increased revenues for Investment Banking and Asset Mgmt
Client
Relationship Manager
Bank
Managed Investment Products as key thrust
Benefits
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 19
Agenda
Status & overall Strategy
International Growth
Client Value Proposition
The Integrated Bank
Financial Targets
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 20
Solution Specialists
Client
! Traditional Investment funds: Equities, FI...
! Discretionary Mandates! Alternative Investments:
Private Equity, Hedge Funds, Real Estate...
! Labeled fund solutions ! ...
! Traditional services: Equities, FI, FX, Prime Services, Research...
! Alternative Investments: Structured Products, Commodities...
! Corporate Finance Services: M&A, Equity/ Debt Capital Markets...
Investment Banking! Financial planning and
investment consulting: Pension Planning, Trust Services, Inheritance & Tax Consulting...
! Banking products: Pay-ments, Deposits, Lending, Leasing, Cards...
Asset ManagementPrivate Banking
Relationship Manager
Shared Services
Unique value proposition to Private Banking clients through integrated coverage and solution delivery
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 21
Leveraging the Integrated Bank: Key examples
! Cross-divsional client coverage management for largest clients in all regions
! Particularly broad effort in Switzerland, with 1'250 clients covered and over 1'300 employees involved in cross-divisional teams
Key Client Coverage
Solution Partners team
! Enable RMs to find out quickly what the entire bank can offer
! Leverage IB and AM capabilities for UHNWI clients
! Provide customized solutions across all asset classes with institutional discipline
! Set up of eight dedicated Desks on regional level
! Servicing UHNWI and Entrepreneur & Executive clients
! Joint cross-divisional offering (PB, IB, AM)
Swiss Entrepreneur/UHNWI desks
International growth
! Leverage local IB and AM presences for PB market entries
! Examples include Brazil, Mexico, Russia, China, Japan and Australia
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 22
Integrated Bank model maintains momentum
Gross margin with Wealth Management clients (in bps)
1H07 1H08
130 135
14 18
116 117
Referred to IB/AM
Booked inWealth Management
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 23
Agenda
Status & overall Strategy
International Growth
Client Value Proposition
The Integrated Bank
Financial Targets
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 24
Our target: Delivering strong results, while investing continuously and significantly in growth
! International platforms! Top Relationship Managers
Growth investments of CHF 300m+ p.a.
Pre-tax income margin > 40%
Net new assets growth > 6% (WM only)
Medium term-targets
! Innovative client value proposition! Managed Investment Products! Leverage the integrated bank
Supported by revenue growth initiatives
! Centers of Excellence! Operational Excellence
And stringent cost management
Citi Swiss Private Banking RoundtableSeptember 9, 2008, Page 25