Ubs Group Ag · SIX:UBSG
Ubs — Debt Investor Presentation (November 2015)
47 slides from Ubs's debt investor presentation, Nov 3, 2015
Slide 1: Third quarter 2015 results
Third quarter 2015 results Fixed income investor presentation November 3, 2015
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This report 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 strategic in
Slide 3: 3Q15 highlights – Group
3Q15 highlights – Group Net profit attributable to UBS Group AG shareholders of CHF 2.1 billion Group results Net profit attributable to shareholders CHF 2,068 million, diluted EPS CHF 0.54 Reported profit before tax (PBT) CHF 788 million, adjusted PBT CHF 979 million Achieved CHF 1.0 billion
Slide 4: 3Q15 highlights – Business divisions
3Q15 highlights – Business divisions Solid performance and good risk management in an extremely challenging environment Wealth Management: PBT CHF 698 million and adjusted NNM CHF 3.5 billion1 – Continued recurring income growth; mandate penetration up 70 bps QoQ to 27.0% Wealth Management Americas:
Slide 5: Updated capital and key performance metrics
Updated capital and key performance metrics Basel III CET1 ratio RWA BIS LRD Fully applied, % Fully applied, CHF billion Fully applied, CHF billion 14.3% 991 949 936 ~950 12.8% 13.4% >13% ~250 225 216 216 4Q13 4Q14 3Q15 Target 4Q13 4Q14 3Q15 Short to 1Q15 2Q15 3Q15 Short to medium term medium term e
Slide 6: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) CHF million 3Q14 4Q14 1Q15 2Q15 3Q15 3Q15 Total operating income 6,876 6,746 8,841 7,818 7,170 Total operating expenses 7,430 6,342 6,134 6,059 6,382 Profit before tax as reported (554) 404 2,708 1,759 788 of which: own credit on financial liabilities designated a
Slide 7: The world's leading wealth management franchise
The world's leading wealth management franchise UBS is the world's largest and fastest growing wealth manager1 Invested assets Operating income Profit before tax CHF trillion CHF billion CHF billion +6% CAGR +7% CAGR +14% CAGR 1.9 1.9 11.6 3.1 10.6 11.0 1.7 9.6 2.6 1.6 2.5 1.0 0.9 6.1 2.1 5.7 5.9 0.
Slide 8: Wealth Management
Wealth Management PBT CHF 698 million, resilient performance against a backdrop of high market volatility Operating 1,837 1,859 1,943 1,921 2,031 2,004 2,106 2,024 1,943 Operating income CHF 1,943 million income 406 423 542 472 479 436 589 459 366 Net interest income increased, mainly due to highe
Slide 9: Wealth Management Americas
Wealth Management Americas PBT up 24% to USD 287 million on record recurring income Operating 1,898 1,919 1,924 1,901 1,947 1,931 Operating income USD 1,931 million 1,748 1,851 1,865 472 464 441 448 432 425 381 income 433 476 276 280 277 301 311 Transaction-based income decreased due to lower clie
Slide 10: Retail & Corporate
Retail & Corporate PBT CHF 428 million, all KPIs within target range and best first nine month PBT since 2010 958 979 Operating income CHF 964 million Operating 958 931 932 938 913 952 964 income 262 256 234 247 267 273 284 241 238 Net interest income increased on improved revenues from both lendi
Slide 11: Asset Management
Asset Management PBT CHF 137 million, strong net management fees Operating 482 489 497 511 476 502 Operating income CHF 502 million 447 451 465 72 27 34 68 20 23 income 29 47 38 Net management fees increased, mainly due to higher income from traditional investments and Global Real CHF million 418
Slide 12: Investment Bank
Investment Bank PBT CHF 614 million, strong performance in all areas Operating 2,657 2,344 Operating income CHF 2,088 million income1 2,200 2,225 779 2,088 1,843 1,969 1,919 ICS FRC revenues increased 37% YoY, driven by strong 1,668 768 822 981 736 710 Macro performance, with disciplined credit in
Slide 13: Corporate Center
Corporate Center Non-core and Legacy Portfolio LRD1 now ~20% of 4Q12 balance 3Q14 4Q14 1Q15 2Q15 3Q15 Profit before (332) (514) tax (816) (1,164) (1,174) Corporate Center total (CHF million) Corporate Center results by unit (CHF million) Services Operating income 9 (6) (4) (41) (38) Operating expe
Slide 14: Corporate Center cost reductions
Corporate Center cost reductions ~CHF 1.0 billion net cost reductions based on September 2015 annualized exit rate Cumulative annualized net cost reduction1,2 CHF billion CHF 1.4 billion CHF 1.4 billion CHF 1.0 billion (71%) achieved of CHF 1.4 billion year-end 2015 target CHF 0.9 billion (64%) achi
Slide 15: Net tax benefit and deferred tax assets
Net tax benefit and deferred tax assets 3Q15 included net additional recognized deferred tax assets of CHF 1,513 million 3Q15 net tax benefit of CHF 1,295 million Tax loss DTAs1,2,3,4 CHF million CHF billion, 30.9.15 Profit before tax (as reported) 788 Unrecognized Recognized Net deferred tax benefi
Slide 16: Capital and leverage ratios
Capital and leverage ratios Achieved 5.0% Swiss SRB leverage ratio Basel III CET1 capital ratio Leverage ratio Swiss SRB, fully applied, CHF billion Fully applied, CHF billion Swiss SRB BIS Basel III 14.4% 14.3% 13.7% 4.6% 4.7% 5.0% AT1 + T2 3.4% 3.6% 3.9% AT1 CET1 3.0% 3.2% 3.3% CET1 3.0% 3.2% 3.3%
Slide 17: Capital requirements under revised Swiss TBTF proposal
Capital requirements under revised Swiss TBTF proposal Effective end-2019, with a four-year transitional period starting 1.1.16 TLAC Gone concern capital (TLAC) 5.7% • Overall requirement mirrors the going Gone concern concern requirement 14.3%requirement subject to a potential • To be met with bail
Slide 18: Capital requirements under revised Swiss TBTF proposal
Capital requirements under revised Swiss TBTF proposal We will be compliant from the inception of the new requirements UBS leverage capital ratio balances vs. revised TBTF proposal Meeting the 2019 requirements UBS position as of 30.9.151 Phase-in leverage ratio requirements2 Gone concern (TLAC) Gon
Slide 19: RoTE – implications of revised TBTF proposal
RoTE – implications of revised TBTF proposal RoTE impact of ~3% from carrying additional CET1 and loss-absorbing capital RoTE impact of revised TBTF (fully applied) Adjusted RoTE, illustrative RoTE impact of new TBTF regulation ~15% • Denominator: additional tangible equity as more CET1 is required
Slide 20: Impact of regulation on RWA
Impact of regulation on RWA Our usable RWA are unchanged, but the calibration of regulatory metrics is moving Group RWA of which: Investment Bank RWA Basel III fully applied RWA, CHF billion Basel III fully applied RWA, CHF billion ~30 ~250 ~20 <200 ~15 ~85 <70 Previous Operational Regulatory Short
Slide 21: Robust liquidity profile
Robust liquidity profile Our funding diversification and global scope help protect our liquidity position in the event of a crisis Liquidity coverage ratio (LCR) 1 Our contingent funding sources include a large, (CHF billion) Average 3Q15 multi-currency portfolio of unencumbered, high-quality, liq
Slide 22: Stable and diversified funding sources
Stable and diversified funding sources Funding plan is regularly reviewed and adapted to changes in requirements Short-term debt Repos and securities lending Funding by Interbank 4% Pro-forma net stable funding ratio 2% source Cash margin 4% (CHF billion) 30.9.15 13% 30.9.15 Available stable funding
Slide 23: Strong balance sheet
Strong balance sheet Asset funding1 30.9.15, CHF billion Due to banks (11) Cash, balances with central Short-term debt issued (26) banks and due from banks 110 Financial investments Trading portfolio liabilities (35) available-for-sale 62 Cash collateral on securities lent Cash collateral on securit
Slide 24: Vanilla term debt maturity profile
Vanilla term debt maturity profile Amount of long-term debt maturing by period of maturity CHF billion, 30.9.15 14.3 1.0 0.7 10.6 8.9 3.6 0.9 7.8 7.5 1.2 6.2 5.7 0.9 1.3 5.1 4.1 1.9 0.7 3.4 2.5 9.7 9.0 2.3 3.1 3.7 0.9 3.9 0.4 6.9 0.2 0.5 1.1 5.1 3.9 0.8 0.1 1.2 2.9 2.5 1.9 1.6 1.5 0.3 0.8 2015 2016
Slide 25: Executing our strategy …
Executing our strategy … What we have delivered Management priorities ✓ Execution of the transformation of UBS Deliver our performance targets Made substantial progress ✓ in reducing costs and achieving operational efficiency Improve effectiveness and efficiency Solidified position ✓ as the world's
Slide 26: Appendix
Appendix a UBS
Slide 27: Group and business division targets and expectations
Group and business division targets and expectations Ranges for sustainable performance over the cycle1 Net new money growth rate 3-5% Wealth Management Adjusted cost/income ratio 55-65% 10-15% annual adjusted pre-tax profit growth Business divisions and Corporate Center Net new money growth rate 2-
Slide 28: The new legal structure of UBS Group
The new legal structure of UBS Group UBS Group AG as our holding company meets Single Point of Entry requirements and allows for issuance of bail-in eligible debt During the third quarter UBS Group completed the SESTA procedure and owns 100% of the outstanding shares of UBS AG established UB
Slide 29: Wealth Management
Wealth Management Mandate penetration up 70 bps to 27.0% 5.8% Net new 4.9% 4.8% money 4.2% 3.5% Adjusted NNM1 CHF 3.5 billion, 1.5% growth 2.3% 2.7% rate, with inflows in all regions, despite Annualized growth rate 1.2% 1.5% deleveraging in Asia Pacific caused by high market volatility CHF billion
Slide 30: Wealth Management
Wealth Management Adjusted NNM1 positive in all regions, high and improving quality of NNM Europe Asia Pacific Switzerland Emerging markets of which: UHNW = Adjusted NNM1 Net new money 13.1% 12.2% 7.8% 8.1% Annualized 6.5% 5.4% 5.1% 5.9% 5.6% growth rate 3.3% 2.1% 3.6% 3.0% 3.6% 3.2% 1.1% 1.8% 1.8%
Slide 31: Wealth Management Americas
Wealth Management Americas Improved NNM and net margin 2.1% 2.2% Net new 1.9% 1.9% money 0.9% 0.9% ~1.2% NNM USD 0.5 billion, 0.2% growth rate, mainly reflecting net inflows from financial advisors 0.2% Annualized ~0.0% employed for more than one year growth rate (0.3%) (1.0%) = Excluding withdraw
Slide 32: Wealth Management Americas
Wealth Management Americas Industry-leading productivity per advisor for revenue and invested assets Invested assets and FA productivity Net interest income and lending Annualized revenue per FA (USD thousand) Net interest income (USD million) Invested assets per FA (USD million) Credit loss (expens
Slide 33: Investment Bank
Investment Bank Continued efficient and disciplined resource utilization driving strong returns Return on RWA Revenue per unit of VaR CHF billion, % CHF million 201 212 218 16% 14% 14% 16% 15% 181 182 152 13% 13% 172 10% 12% 12% 12% 154 160 163 152 15 14 14 69 68 63 63 68 62 67 64 63 68 11 13 11 13
Slide 34: IFRS equity attributable to UBS Group AG shareholders
IFRS equity attributable to UBS Group AG shareholders Equity attributable to UBS Group AG shareholders CHF 54.1 billion QoQ movement CHF million, except per share figures in CHF 30.6.15 30.9.15 Total book value per share: 13.71 +5.1% 14.41 Tangible book value per share: 12.04 +5.4% 12.69 201 24 1,19
Slide 35: Swiss SRB Basel III capital and ratios
Swiss SRB Basel III capital and ratios 3Q15 fully applied Basel III CET1 capital ratio 14.3% Fully applied Phase-in 25.9% 25.0% 25.8% 21.2% 22.0% 5.8% T2 20.6% 4.7% T2 Low-trigger 1.6% AT1 1.1% AT1 Low-trigger 0.4% T2 High-trigger Ratio 1.5% AT1 High-trigger 18.6% 18.2% 18.3% 18.3% CET1 13.7% 14.4%
Slide 36: Swiss SRB leverage ratio
Swiss SRB leverage ratio 3Q15 fully applied Swiss SRB leverage ratio 5.0% Fully applied Phase-in 5.8% 5.6% 5.4% 5.0% 4.7% 1.2% T2 4.6% 1.1% T2 Low-trigger 0.2% AT1 Low-trigger 0.4% AT1 0.1% T2 High-trigger 0.3% AT1 High-trigger Ratio 4.2% 4.1% 4.3% 4.3% CET1 3.0% 3.2% 3.3% 3.3% CET1 CHF billion 1Q15
Slide 37: Breakdown of changes in RWA
Breakdown of changes in RWA By type By business division CHF billion CHF billion 210 30.6.15 210 30.6.15 Regulatory add-ons, methodology/model-driven changes Investment Bank • CHF 1.1 billion increase in credit risk RWA due to the higher • CHF 3.8 billion increase in market risk RWA due to an increa
Slide 38: Breakdown of changes in Swiss SRB LRD
Breakdown of changes in Swiss SRB LRD By type By business division CHF billion, fully applied, three month average CHF billion, fully applied, three month average 944 30.6.15 944 30.6.15 CC – Non-core and Legacy Portfolio • CHF 2 billion increase due to currency effects Currency effects1 Non-FX rela
Slide 39: Breakdown of changes in BIS LRD
Breakdown of changes in BIS LRD By type By business division CHF billion, fully applied, spot CHF billion, fully applied, spot 949 30.6.15 949 30.6.15 Investment Bank Currency effects1 • CHF 10 billion increase due to currency effects • CHF 14 billion increase in on-balance sheet assets Non-FX relat
Slide 40: Corporate Center – Non-core and Legacy Portfolio
Corporate Center – Non-core and Legacy Portfolio Non-core and Legacy Portfolio Swiss SRB LRD down CHF 12 billion in the quarter RWA reduced by ~70% since 4Q12 ~65% of residual LRD in Rates products1 CHF billion CHF billion, Swiss SRB LRD (average, fully applied), 30.9.15 103 Operational risk Rates 3
Slide 41: Retained funding cost
Retained funding cost We continue to expect retained funding costs to decline in the mid term Treasury income retained in Corporate Center – Group ALM CHF million 2Q15 3Q15 Gross results (excluding accounting asymmetry and other adjustments) 161 150 Allocations to business divisions (191) (207) Net
Slide 42: Corporate Center cost reductions
Corporate Center cost reductions ~CHF 1.0 billion net cost reduction as per September 2015 exit rate Litigation Services & provisions1 7.9 ~CHF 1.0 billion 7.9 annualized Group ALM Temporary 0.2 (0.1) 0.5 Normalization, net cost regulatory demand2 0.2 (<0.1) (0.3) incl. seasonality reduction (0.1) 7
Slide 43: Credit Ratings – UBS Group AG and UBS AG
Credit Ratings – UBS Group AG and UBS AG Each of these ratings reflects only the view of the applicable rating agency at the time the rating was issued, and any explanation of the significance of a rating may be obtained only from the rating agency. 42
Slide 44: Credit Ratings – UBS Switzerland and UBS Limited
Credit Ratings – UBS Switzerland and UBS Limited Each of these ratings reflects only the view of the applicable rating agency at the time the rating was issued, and any explanation of the significance of a rating may be obtained only from the rating agency. 43
Slide 45: Regional performance – 3Q15
Regional performance – 3Q151 CHF billion Americas Asia Pacific EMEA² Switzerland Global³ Total 2Q15 3Q15 2Q15 3Q15 2Q15 3Q15 2Q15 3Q15 2Q15 3Q15 2Q15 3Q15 WM 0.1 0.1 0.6 0.5 0.9 0.9 0.4 0.4 0.0 0.0 2.0 1.9 WMA 1.8 1.9 - - - - - - - - 1.8 1.9 R&C - - - - - - 1.0 1.0 - - 1.0 1.0 Operating AM 0.2 0.2 0
Slide 46: Adjusted results
Adjusted results Adjus ting items 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 CHF million Operating income as reported (Group) 7,775 7,389 6,261 6,307 7,258 7,147 6,876 6,746 8,841 7,818 7,170 Of which: Gain on sale of a subsidiary Wealth Management 141 Gain on sale of the Belgian domesti
Slide 47: Important information related to this presentation
Important information related to this presentation Use of adjusted numbers Unless otherwise indicated, “adjusted” figures exclude the adjustment items listed on the previous slide, to the extent applicable, on a Group and business division level. Adjusted results are a non-GAAP financial measure as
UBS Group — Debt Investor Presentation (November 2015) on 6ix