Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q3 2010 Earnings Presentation
32 slides from Ubs's earnings presentation, Oct 26, 2010
Slide 1: Third quarter 2010 results
Third quarter 2010 results October 26, 2010 Third quarter 2010 results
Slide 2: 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
Slide 3: 3Q10 overview
3Q10 overview Net profit attributable to shareholders CHF 1.7 billion, diluted EPS CHF 0.43 Pre-tax profit CHF 0.8 billion Results include a CHF 0.8 billion net income tax benefit Year-to-date net profit attributable to shareholders CHF 5.9 billion The Investment Bank's results were impacted by redu
Slide 4: Net profit attributable to shareholders 3Q10 vs. 2Q10
Net profit attributable to shareholders 3Q10 vs. 2Q10 2Q10 Own credit1 Tax 3Q10 Personnel expenses Minority interests Credit loss expenses Operating income excl. own credit and credit losses Non- personnel expenses 1 Own credit on financial liabilities designated at fair value through profit or loss
Slide 5: 3Q10 - performance by business division
3Q10 - performance by business division 1 Treasury activities and other corporate items 2 Own credit on financial liabilities designated at fair value through profit or loss 2
Slide 6: Pre-tax profit from continuing operations - YTD
Pre-tax profit from continuing operations - YTD WM&SB WMA Global AM CC1 IB Group 1 Treasury activities and other corporate items (CHF million)
Slide 7: Operating expenses
Operating expenses 1 Adjustment items excluded from expenses as reported: 1Q10: personnel restructuring charges CHF 21 million 2Q10: personnel restructuring charges CHF 8 million credit, UK Bank Payroll Tax CHF 242 million, non-personnel restructuring charges CHF 127 million 3Q10: personnel restruct
Slide 8: WM&SB - revenues
WM&SB - revenues (19%) (6%) (0%) 3Q10 vs 2Q10 Revenues down 6%, mainly due to lower trading & brokerage income (CHF million)
Slide 9: Wealth Management
(CHF million) Wealth Management Reduced client activity and strengthening of Swiss franc affected results Continued positive NNM from UHNW clients and Asia Pacific region Net inflows from Swiss Wealth Management were partly offset by net outflows from International Wealth Management Stable invested
Slide 10: Wealth Management - gross margins
Wealth Management - gross margins1 (bps) 1 Operating income before credit loss (expense) or recovery (annualized) / average invested assets. Gross margin excludes valuation adjustments on a property fund of zero in 3Q10, CHF 17 million in 2Q10, CHF 28 million in 1Q10, CHF 88 million in 4Q09, CHF 31
Slide 11: Wealth Management - client advisors and invested assets
Wealth Management - client advisors and invested assets
Slide 12: Retail & Corporate
Retail & Corporate (CHF million) Relatively stable performance (CHF million) Operating expenses and C/I ratio Credit loss expenses Low interest rates continued to put pressure on deposit interest margin Decrease in fee and brokerage income Continued low levels of credit loss expenses Stable operatin
Slide 13: Exposure to Swiss residential mortgage market
Exposure to Swiss residential mortgage market Carefully managed residential mortgage book (CHF billion) UBS's loans secured by residential property1 Over 90% of residential mortgages with loan to value (LTV) below 60% Maintained high underwriting standards LTV subject to regular assessment Owner-occ
Slide 14: Wealth Management Americas
Wealth Management Americas CHF 31 million pre-tax profit adjusted for CHF 78 million provision related to an arbitration matter Revenues down 10%, primarily due to FX movements Operating expenses down 7% excluding 3Q10 provision related to an arbitration matter and restructuring charges1 Financial a
Slide 15: Global Asset Management
Global Asset Management Lower management fees due to adverse impact of the strengthening of the Swiss franc on invested assets Reduced costs due to the strengthening of the Swiss franc and lower personnel expenses Net new money: CHF 1.5 billion net inflows from third parties were offset by CHF 1.4 b
Slide 16: Investment Bank - pre-tax performance 3Q10 vs. 2Q10
Investment Bank - pre-tax performance 3Q10 vs. 2Q10 Improved contributions from credit, emerging markets, advisory and DCM were more than offset by weaker performances in FX, rates, equity derivatives and cash equities Own credit1 charge of CHF 387 million in 3Q10 vs. CHF 595 million gain in 2Q10 re
Slide 17: Investment Bank - 3Q10 market environment & risk profile
Investment Bank - 3Q10 market environment & risk profile Gross impaired lending portfolio further decreased, primarily due to the sale of a legacy restructured leveraged finance position without incurring incremental costs Trading risk increased moderately, reverting to more normalized levels Averag
Slide 18: Equities revenues
Equities revenues Cash: decrease in investor activity and reduced market volumes resulted in lower commission income Derivatives: Derivatives revenues declined due to lower volumes and limited client flow Equity linked revenues increased, reflecting improved valuations as market sentiment recovered
Slide 19: FICC revenues
FICC revenues The combined revenues from credit, macro and emerging markets were CHF 996 million compared with CHF 1,200 million Macro: FX revenues were impacted by subdued market activity and tighter spreads Rates revenues decreased, partly due to markdowns of certain non-linear rates positions Cre
Slide 20: Investment banking revenues
Investment banking revenues Advisory: 44% increase in revenues on 9% reduced fee pool Capital markets: Fixed income revenues increased on the back of a pick-up in deal activity, offset by lower revenues from Equities Other: tightening of credit spreads led to mark- to-market losses on hedges against
Slide 21: Capital position
Capital position Tier 1 capital ratio increased to 16.7% Core tier 1 capital ratio improved to 14.2% Risk-weighted assets up CHF 3.5 billion to CHF 208.3 billion FINMA leverage ratio 4.4% USD 1.5 billion hybrid tier 1 instrument redeemed on 1 October 2010 Effect of redemption reflected in 3Q10 numbe
Slide 22: Appendix
Appendix UBS
Slide 23: Headcount
Headcount Headcount up by 707 during 3Q10 Increase reflect selective hiring and annual hiring of graduates and apprentices 1 Treasury activities and other corporate items 1
Slide 24: Invested assets
Invested assets Wealth Management Wealth Management Americas1 Global Asset Management Retail & Corporate 1 Includes impact of certain retirement plan assets (positive impact of CHF 21 billion on invested assets and of CHF 0.7 billion on net new money). Refer to the "Wealth Management Americas" secti
Slide 25: Movements in IFRS equity
Movements in IFRS equity eS VCC Net profit (21) Foreign currency transation of foreign operations (OG) (1,125) (892) (233) Cash flow hedges (OC!) 196 196 oO ured oan ene amn te te : mannseteraenmts -_ ° own = m > o Total movement in 3Q10 (53) 1,696 (1,749) ES GES Ga) se UBS Py
Slide 26: 30.9.10 BIS regulatory capital (Basel II)
30.9.10 BIS regulatory capital (Basel II) 1 Includes a CHF 0.4 billion tax credit recorded in equity, CHF 0.1 billion due to net positive foreign currency effects, CHF (0.2) billion due to higher tier 1 deductions and CHF (0.5) billion due to higher own share deductions 2 Includes a CHF 0.4 billion
Slide 27: Asset funding - September 2010
Asset funding - 30 September 2010 Assets Liabilities and equity Cash, balances with central banks and due from banks 61 Loans 302 Trading portfolio assets 246 Cash collateral on securities borrowed and reverse repurchase agreements 211 Other assets (incl. net RVs) 65 Due to banks 88 Customer deposit
Slide 28: Balance sheet development
Balance sheet development 1 Including financial liabilities designated at fair value 2 Percentages based on total balance sheet size excluding negative replacement values (CHF billion) Total excl. PRVs CHF 943 billion Assets Liabilities and equity Total excl. NRVs CHF 961 billion (CHF billion) 1,2 2
Slide 29: Exposure to monoline insurers, by rating
Exposure1 to monoline insurers, by rating USD billion Credit protection on US sub-prime RMBS CDOs2 of which: from monolines rated investment grade (BBB and above) of which: from monolines rated sub-investment grade (BB and below) Total 30.9.10 12.1 3.1 1.3 1.8 Notional amount3 Fair value of CDSs4 pr
Slide 30: Student loan auction rate securities
Student loan auction rate securities USD million US student loan auction rate securities Carrying value as of 30.6.10 8,117 1 Includes USD 4.7 billion (CHF 4.6 billion) at carrying value of student loan ARS that were reclassified to "Loans and receivables" from "Held for trading" in fourth quarter 2
Slide 31: Reclassified assets
Reclassified assets 30.9.10, CHF billion Monoline protected assets US student loan and municipal auction rate securities US reference linked notes CMBS / CRE (excl. interest-only strips) Leveraged finance 5.6 5.0 0.6 0.5 0.4 0.8 Ratio of carrying to notional value 87% 89% 83% 86% 75% 84% Carrying va
Slide 32: Sovereign exposures to selected European countries
Sovereign exposures to selected European countries Our gross sovereign exposures to Greece, Ireland, Portugal and Spain are immaterial, and our gross sovereign exposure to Italy, while larger, is commensurate with its rating and the size of its economy On a net basis, our sovereign exposures to thes