Ubs Group Ag · SIX:UBSG
Ubs — Q1 2024 Earnings Presentation
29 slides from Ubs's earnings presentation, May 7, 2024
Slide 1: First quarter 2024 Financial results
First quarter 2024 Financial results 7 May 2024
Slide 2: Important information
Important information 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, statements relating to the anticipated effect of transactions and strategic initiat
Slide 3: Agenda
Agenda Key Financial Q&A messages performance Sergio P. Ermotti, Group CEO Todd Tuckner, Group CFO 2
Slide 4: Key messages
Key messages Strong financial performance in 1Q24 with return to reported profitability; net profit 1.8bn, underlying profit before tax 2.6bn and underlying RoCET1 9.6% Continued franchise strength and client momentum with GWM NNA of 27bn and increased transaction activity levels across GWM, P&C and
Slide 5: Strong financial performance in 1Q24 with positive operating leverage
Strong financial performance in 1Q24 with positive operating leverage Underlying revenues Underlying costs Underlying PBT Key metrics bn bn bn Reported +~4% +15% 1.8bn Net profit 12.0 (~12%) ~11.5 10.4 ~10.5 (5%) 9.0% RoCET1 9.7 9.2 Cost / 80.5% income 2.6 Underlying 9.6% RoCET1 ~0.8 0.6 Cost / 77.2
Slide 6: Continued franchise strength and client momentum
Continued franchise strength and client momentum GWM GWM P&C AM Investment Bank Invested Assets, USD Underlying transaction- Underlying transaction- Invested Assets, USD Global Banking based income, USD based income, CHF underlying revenues, USD 3.9trn 4.0trn 1,236m 435m 1.6trn 1.7trn 584m 400m 927m
Slide 7: Accelerated cost and balance sheet reductions in Non-core and Legacy
Accelerated cost and balance sheet reductions in Non-core and Legacy Underlying operating expenses bn ~1.3 Select 1Q24 achievements 1.1 1.0 0.8 ✓ 26% decline QoQ in underlying costs 2Q231 3Q23 4Q23 1Q24 ✓ ~35% of books closed and ~15% of IT RWA bn Updated natural run-off profile3 apps decommissioned
Slide 8: Reinforcing our balance sheet for all seasons through active management
Reinforcing our balance sheet for all seasons through active management RWA LRD CET1 capital ratio Total loss absorbing capacity bn bn % bn (5%) (5%) (6%) 557 (4%) 1,695 14.8% 197 1,678 547 ~14% 1,600 526 HoldCo 104 AT1 15 CET1 78 2Q23 4Q23 1Q24 2Q23 4Q23 1Q24 Medium-term 1Q24 1Q24 guidance Strong c
Slide 9: Financial performance
Financial performance Todd Tuckner, Group CFO 8
Slide 10: Return to reported net profitability of 1.8bn with underlying PBT 2.6bn
Return to reported net profitability of 1.8bn with underlying PBT 2.6bn Profits m 779 Underlying 1Q24 Reported Underlying +2,025 454 2,617 2,376 2.4bn 2.6bn 1,541 30 (1,021) PBT PBT 1,755 (621) 9.0% 9.6% RoCET1 RoCET1 592 80.5% 77.2% cost/income ratio cost/income ratio 4Q23 Revenues CLE Opex 1Q24 PP
Slide 11: Strong underlying revenues, up 15% QoQ
Strong underlying revenues, up 15% QoQ Total revenues m 15% 779 12,739 856 11,960 3.1bn Cumulative PPA effects and other 594 (446) integration items already recognized 72 in revenues, of which 0.8bn in 1Q24 514 (49) 10,419 ~7.4bn Remaining balance of pull to par and other PPA effects to be recognize
Slide 12: Executing on cost ambitions with underlying operating expenses down 5% QoQ
Executing on cost ambitions with underlying operating expenses down 5% QoQ Operating expenses m 1,021 10,257 (5%) (17%) 9,690 Underlying non-personnel 34 expenses QoQ (140) (45) (94) 58 9,236 (268) (3%) Underlying personnel expenses, excluding variable and FA compensation QoQ ~1.3bn Integration-rela
Slide 13: Cost plans on track with 50% of targeted saves expected by 2024 exit rate
Cost plans on track with 50% of targeted saves expected by 2024 exit rate Cumulative annualized gross cost reductions1 Cumulative integration-related expenses USD bn / % of expected cumulative total USD bn / % of expected cumulative total ~13 / 100% ~13 / 100% ~1bn Incremental gross cost saves achie
Slide 14: Global Wealth Management
Global Wealth Management Underlying Reported Underlying 1Q24 vs. 4Q23 USD m, except where indicated 1Q24 4Q23 QoQ 1Q24 4Q23 QoQ Total revenues 5,909 5,395 +10% 6,143 5,554 +11% PBT 1,272m, more than double QoQ; positive contribution from Credit Suisse platform Net interest income 1,615 1,550 +4% 1,8
Slide 15: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Underlying Reported Underlying 1Q24 vs. 4Q23 CHF m, except where indicated 1Q24 4Q23 QoQ 1Q24 4Q23 QoQ PBT 774m, +11% on higher revenues and lower credit Total revenues 1,913 1,833 +4% 2,139 1,832 +17% losses, partly offset by higher expenses Net interest income 1,
Slide 16: Asset Management
Asset Management Underlying Reported Underlying 1Q24 vs. 4Q23 USD m, except where indicated 1Q24 4Q23 QoQ 1Q24 4Q23 QoQ PBT 182m, (2%) on lower revenues, more than offsetting Total revenues 776 825 (6%) 776 825 (6%) impact from lower expenses Net Management fees 745 745 0% 745 745 0% Performance fee
Slide 17: Investment Bank
Investment Bank Underlying Reported USD m, except where indicated 1Q24 4Q23 QoQ YoY 1Q24 1Q23 Underlying 1Q24 vs. 1Q23 Total revenues 2,458 1,864 +32% +4% 2,751 2,365 PBT 404m with revenues +4% Global Banking 584 566 +3% +52% 872 384 Global Banking revenues +52% Advisory 189 191 (1%) +11% 189 171 −
Slide 18: Non-core and Legacy
Non-core and Legacy Underlying Reported Underlying 1Q24 vs. 4Q23 PBT 197m, supported by positive revenues and lower USD m, except where indicated 1Q24 4Q23 QoQ 1Q24 4Q23 QoQ expenses Total revenues 1,001 145 +588% 1,001 145 +588% Total revenues 1,001m principally from gains on position exits Credit
Slide 19: Significant progress in reducing financial resource consumption
Significant progress in reducing financial resource consumption CET1 capital Risk weighted assets bn bn (4%) 0% 2.4 546.5 3.0 0.0 526.4 (11.4) (0.5) (11.2) (0.5) 78.5 (1.3) 78.1 (1.0) 4Q23 Credit and Non- Market Operational Currency 1Q24 counterparty counterparty- risk risk effects credit risk relat
Slide 20: Confidence in our balance sheet for all seasons drives efficient funding
Confidence in our balance sheet for all seasons drives efficient funding 37.5% 12.3% Prudent capital and liquidity management 31.3.24 197bn 220% TLAC LCR1 HoldCo 19.8% 6.5% 79% 126% NSFR TLAC: 25.49% TLAC: 8.75% loan to deposit ratio Effectively executing on our funding plans AT1 2.9% 1.0% Select tr
Slide 21: Appendix
Appendix 20
Slide 22: Our financial targets and long-term ambitions
Our financial targets and long-term ambitions Financial Capital Ambitions targets guidance long-term Underlying RoCET1 RoCET1, reported ~15% 2026 exit rate ~14% CET1 capital ratio ~18% by 2028 Underlying cost / income GWM invested assets <70% ratio 2026 exit rate >4.0% CET1 leverage ratio >5trn by 2
Slide 23: UBS Group results
UBS Group results USD m, except where indicated 1Q24 4Q23 3Q23 2Q23 1Q23 Total revenues 12,739 10,855 11,695 9,540 8,744 Negative goodwill 27,748 Credit loss expense / (release) 106 136 239 623 38 Operating expenses 10,257 11,470 11,640 8,486 7,210 Operating profit / (loss) before tax 2,376 (751) (1
Slide 24: UBS Group 1Q24 underlying results
UBS Group 1Q24 underlying results USD m, except where indicated UBS Group AG GWM P&C AM IB NCL Group Items Operating profit / (loss) before tax as reported 2,376 1,102 975 111 555 (46) (320) o/w: PPA effects and other integration items 779 234 256 293 (4) o/w: Integration-related expenses and PPA ef
Slide 25: PPA pull to par overview and revenue recognition
PPA pull to par overview and revenue recognition Accretion of PPA adjustments on financial instruments Recognized Estimated amortization profile4 Expected future P&L Opening balance Remaining balance to USD bn 2023-1Q24 releases at 31.3.24 2Q-4Q24 2025 2026 2027+ as of 12.6.23 (close)2 be recognized
Slide 26: Capital and leverage ratios
Capital and leverage ratios Total TLAC 197bn 37.5% 12.3% 104bn HoldCo 19.8% 6.5% TLAC: 8.75% TLAC: 25.49% Total T1 capital 93bn 17.8% 5.8% 15bn AT1 2.9% 1.0% Going concern: 14.77% Going concern: 5.00% CET1 capital CET1 leverage ratio guidance: CET1: 10.47% ratio guidance: 14.8% 4.9% CET1: 3.50% 78bn
Slide 27: Overview of restatements: published on 16 April 2024
Overview of restatements: published on 16 April 2024 Following the acquisition of Credit Suisse, we continue to refine our reporting structure and organizational setup to align with interests of stakeholders and further incentivize our business divisions to achieve Group-wide goals What are we doing
Slide 28: Reconciliation of estimated underlying combined results for 1Q23
Reconciliation of estimated underlying combined results for 1Q23 1Q23 Credit loss expense USD bn Revenues Operating expenses Profit before tax / (release) UBS sub-group1 (IFRS) 8.7 0.0 7.2 1.5 Credit Suisse sub-group (US GAAP)2,3 20.1 0.1 6.1 13.9 UBS sub-group exclusions from underlying results and
Slide 29: Cautionary statement regarding Forward looking statements
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, statements rela