Slide 1: First quarter 2019 results
First quarter 2019 results April 25, 2019
Slide 2: Important information
Important information Forward Looking Statements: This presentation contains statements that constitute “forward-looking statements”, including but not limited to performance targets, expectations and ambitions, as well as management’s outlook for UBS’s financial performance and statements relating
Slide 3: 1Q19 net profit of USD 1.1bn
1Q19 net profit of USD 1.1bn Resilient performance in a challenging revenue environment Global Wealth Management 1,546m › PBT 863m, adjusted 873m › 22bn NNM, 4% growth1 Group PBT › Invested assets +172bn QoQ, +8% › Record APAC invested assets >400bn 13.3% RoCET1 Personal & Corporate Banking Asset Ma
Slide 4: 1Q19 market context
1Q19 market context Beta environment particularly unfavorable for our business and geographic mix 2019 IMF real GDP growth forecast Equity markets S&P 500 3.9% 3.7% › While equity markets recovered significantly year 3.5% to date, macroeconomic and geopolitical concerns 3.3% affected client sentimen
Slide 5: Cost discipline
Cost discipline Lower variable compensation and other operating expenses offset 2/3 of reduction in income 2,100 (241) 1,859 1Q18 Lower other Swiss pension operating expenses 1,546 fund credit Lower variable (950) compensation1 264 372 (637) 12% reduction in 10% reduction in operating income operati
Slide 6: Addressing beta headwinds
Addressing beta headwinds Tactical cost actions and further structural optimization of our balance sheet Tactical cost measures Structural balance sheet optimization At least 300m additional cost savings vs. FY19 plan ~20bn LRD optimization in 2019 Examples Examples Pacing tech investments without c
Slide 7: Making progress on our alpha initiatives
Making progress on our alpha initiatives Management actions to capitalize on structural growth opportunities Selected strategic levers Highlights1 › Strengthen GFO & UHNW, esp. in Americas 14.3bn 34% GWM › Increase mandate penetration UHNW mandate › Drive lending and deposit growth NNM penetration ›
Slide 8: Capital returns
Capital returns Committed to deliver on our capital return policy; resuming buy-backs in 2Q19 Distributions to shareholders CHF, per share Share buy-back Special dividend Capital return policy Ordinary dividend › Target dividend per share growth of mid- 0.201 to-high single digit percent per annum 0
Slide 9: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) FY18 1Q18 2Q18 3Q18 4Q18 1Q19 Total operating income 30,213 8,168 7,644 7,428 6,972 7,218 Total operating expenses 24,222 6,069 5,938 5,724 6,492 5,672 Profit before tax as reported 5,991 2,100 1,706 1,704 481 1,546 of which: adjusting items (72) 106 (115) (66) 3
Slide 10: Global Wealth Management
Global Wealth Management Invested assets +172bn QoQ of which 22bn from NNM, 4% annualized NNM growth (21%) Profit before tax PBT down on lower operating income partly offset by m 1,099 1,009 936 8081 873 lower costs (9%) Operating income Operating income decrease largely driven by lower m 4,409 4,16
Slide 11: Global Wealth Management
Global Wealth Management Decrease in operating income primarily driven by lower transaction activity and recurring fees Recurring net fee income Net interest income Transaction-based income +8% Invested 2,415 2,393 2,438 2,432 assets, 2,260 bn 2,419 2,373 2,411 2,374 2,218 1,021 1,041 1,011 1,028 1,
Slide 12: Global Wealth Management
Global Wealth Management Record net new money in APAC at 16bn; good revenue momentum in the Americas for 2Q19 Profit Invested Net new before tax assets money m › 8% QoQ invested asset growth providing good momentum for 2Q19 Americas 333 1,298 (0.1) › Record mandate penetration of 39% on strong manda
Slide 13: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) PBT +8% on higher revenues and a net CLE recovery; net new business volume growth highest on record +8% PBT +8% primarily due to higher revenues and a net credit loss 359 399 389 recovery of 2m vs. expense of 13m in 1Q18 353 Profit 303 before tax Cost/income ratio
Slide 14: Asset Management
Asset Management PBT up on prior-year cost actions and higher performance fees +2% PBT +2% as reduced costs and higher performance fees more 122 127 126 107 109 than offset lower management fees Profit before tax Cost/income ratio 77% 73% 72% 73% 76% Operating expenses (6%) on lower personnel and G&
Slide 15: Investment Bank
Investment Bank RoAE of 7.2% in very challenging market environment; strong FRC (64%) 619 RoAE of 7.2% on 12.3bn average attributed equity 571 Profit 489 before tax 221 (5) Expenses (14%) driven by lower personnel expenses Cost/income ratio 74% 73% 75% 99% 86% CCS (48%) with decreases across ECM, DC
Slide 16: Corporate Center
Corporate Center Multiple positive factors and one-offs in 1Q19; expecting CC PBT to average ~(250m) per quarter › 1Q19 net treasury income of 124m helped by: 80m accounting asymmetries 1Q18 2Q18 3Q18 4Q18 1Q19 60m hedge accounting ineffectiveness (17) Other mark-to-market gains, mainly driven
Slide 17: RWA update
RWA update ~50bn regulatory and methodology-related increases since 2015 with no fundamental increase in risk › ~50bn or >80% of RWA increase driven by regulatory, › Operational risk RWA +2.8bn QoQ in relation to the French methodology and model update/changes since 2015 cross-border matter › Market
Slide 18: Capital and leverage ratios
Capital and leverage ratios Meeting 2020 requirements; confirming our capital guidance Total loss-absorbing 87.5 capacity (TLAC) 32.7% 1.1.20 requirements1 RWA LRD TLAC including 2018 9.6% Gone concern rebate and Tier 2- loss-absorbing 38.0 related reduction 25.4% 8.8% 14.2% capacity 4.2% AT1 14.8 5
Slide 19: Appendix
Appendix %% UBS
Slide 20: GWM regional timeseries
GWM regional timeseries FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Americas Operating income 8,727 9,138 2,111 2,189 2,179 2,248 2,307 2,264 2,264 2,304 2,170 Operating expenses 7,463 7,798 1,809 1,873 1,844 1,937 1,946 1,911 1,922 2,019 1,838 Profit before tax 1,264 1,340 301 316 335 31
Slide 21: Workforce management
Workforce management Insourcing program driving total headcount down UBS Group Corporate Center Headcount, end of period1 Headcount, end of period1 85,864 84,485 (1,379) 17,004 (6,323) 23,327 47,647 46,147 (1,500) 20,881 14,927 (5,954) 67,481 +4,944 62,537 31,220 +4,453 26,766 1Q18 1Q19 1Q18 1Q19 In
Slide 22: Equity attribution framework
Equity attribution framework 1Q19 average attributed equity1 GWM P&C AM IB CC RWA-driven allocation 4.7 4.0 0.3 5.9 1.8 CC average RWA x 50% x 12.5%4 GWM 14.5 16.4 LRD-driven allocation 6.0 4.0 0.1 5.4 1.7 average LRD x 50% x 3.75%4 53.3 Goodwill and intangibles 5.2 0.0 1.4 0.1 0.0 average, 1:1 Cert
Slide 23: Swiss SRB leverage ratio requirements
Swiss SRB leverage ratio requirements UBS leverage ratio balance 1.1.20 requirements1 9.60% 4.18% gone concern 8.8% TLAC including 2018 rebate and Tier 2-related reduction TLAC-eligible senior unsecured debt 3.35% (30.5bn) Gone concern 5.0% requirement subject to a rebate of up to 2.0 percentage poi
Slide 24: Reported and adjusted performance
Reported and adjusted performance 1 Adjusted results are non-GAAP financial measures as defined by SEC regulations; 2 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting polic
Slide 25: Regional performance – 1Q19
Regional performance – 1Q19 Americas Asia Pacific EMEA Switzerland Global Total 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 GWM 2.3 2.2 0.7 0.6 1.0 0.9 0.4 0.4 (0.0) (0.0) 4.4 4.0 P&C - - - - - - 1.0 1.0 - - 1.0 1.0 Operating AM 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 (0.0) - 0.5 0.4 income
Slide 26: Performance targets and ambitions 2019 – 2021
Performance targets and ambitions 2019 – 2021 Capital/resource Annual targets Ambitions guidelines FY19 FY19-21 FY21 FY19-21 Reported return on CET1 capital ~15% ~17% Adjusted cost/ income ratio ~77% ~72% Group CET1 capital ratio ~13%1 CET1 leverage ratio ~3.7%2 Adjusted pre-tax profit growth 10-15%
Slide 27: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strate