UBS Group AG · SIX:UBSG
UBS — Investor Day (December 1999)
35 slides from UBS's investor day presentation, Dec 14, 1999
Slide 1: UBS Investors Day Private & Corporate Clients
ab UBS Investors Day Private & Corporate Clients Stephan Haeringer 14 December 1999
Slide 2: Contents
Contents Section 1 Positioning Section 2 Business Environment Section 3 Strategy Section 4 Initiatives A New Lending Business Model B Strategic Projects C 24h-Banking Appendix ab 1 Private and Corporate Clients
Slide 3: Positioning
Positioning SECTION 1 ab Private and Corporate Clients
Slide 4: UBS has set a new International Benchmark...
UBS has set a new International Benchmark... UBS/ Chase/ SBC Chemical BHV End of integration Individual clients Corporate clients Trading Legal integration Lower management IT standards Middle management Top management Announcement of merger 1/2 year 1 year 2 years 3 years 4 years (Source: Mc Kinsey
Slide 5: … resulting in a Leading Swiss Market Position
… resulting in a Leading Swiss Market Position Others 7% UBS PCC Regional 27% Banks 8% Raiffeisen 14% Credit Suisse 11% Cantonal Banks 33% ♦ Based on a nationwide survey of core relationships: UBS Swiss Research 1999 ab 4 Private and Corporate Clients
Slide 6: Broad Client Base
Broad Client Base Significant potential ♦Private Clients 3,000,000 Individual Clients ♦Investment Clients 1,000,000 ♦Top Corporates 170 Corporate Clients ♦Large Corporates 10,000 ♦Small & Medium Businesses 180,000 Banks ♦Banks 1,800 ab 5 Private and Corporate Clients
Slide 7: Strong Affluent Client Segment
Strong Affluent Client Segment High growth potential Revenue Contribution ♦ Contributes almost 40% of PCC‘s income Assets under ♦ Approximately 30% of Assets under Management, Management and loan portfolio - Loan portfolio mainly mortgages ♦ Personal client advisors Client Relationship ♦ Structured
Slide 8: Development of AuM and Loan Portfolio
Development of AuM and Loan Portfolio Assets under Management(1) Loan Portfolio CHF bn CHF bn 450 402 419 200 176 171 150 52 47 300 292 274 100 150 124 124 50 128 127 0 0 3Q 1998 (2) 3Q 1999 3Q 1998 3Q 1999 Custody Accounts Other Credits Savings/Deposit Accounts Mortgages Notes: 1 Banks are not incl
Slide 9: Asset Quality
Asset Quality (CHF billion) 3Q 99 3Q 98 % Total loans (gross) 171.4 176.1 (3) Allowances & Provisions 11.1 12.2 (9) NPLs 11.8 14.1 (16) NPLs / total loans (%) 6.9 8.0 ab 8 Private and Corporate Clients
Slide 10: Business Environment
Business Environment SECTION 2 ab Private and Corporate Clients
Slide 11: Key Industry Drivers
Key Industry Drivers Shareholders Increased shareholder value demands High performance expectations in addition to Clients service quality and convenience New distribution and operating possibilities Technology Reduced barriers to entry Saturated market with negligible population Competition growth
Slide 12: Opportunities
Opportunities ♦ Increased share-of-wallet across all client segments ♦ Significant affluent market segment ♦ Increasing acceptance of alternative distribution channels ♦ Cost saving potential ♦ Critical mass permitting efficient investments in new technologies ab 11 Private and Corporate Clients
Slide 13: Key Risks
Key Risks ♦ Substitution of higher margin transaction business by discount brokerage ♦ Increased competition through new entrants ♦ Potential loss of clients due to enforcement of risk-adjusted pricing ♦ Concentration risk in Swiss loan market ab 12 Private and Corporate Clients
Slide 14: Strategy
Strategy SECTION 3 ab Private and Corporate Clients
Slide 15: Mission
Mission Further develop the most profitable bank serving private, business and corporate clients in Switzerland ab 14 Private and Corporate Clients
Slide 16: Strategy (1)
Strategy (1) ♦ Standardize products and processes and create additional value for clients requiring individualized services by providing integrated financial solutions ♦ Enhance alternative distribution channels and further develop our leading position in multi-channel distribution in Switzerland ♦
Slide 17: Strategy (2)
Strategy (2) ♦ Achieve business excellence through the enhancement of customer service quality ♦ Develop competitive infrastructure and logistics by optimizing efficiency, quality of service and security ♦ Create a performance-oriented culture while providing an optimal working environment to attrac
Slide 18: New Organisation Structure
New Organisation Structure Private and Corporate Clients St. Haeringer, CEO CCO Risk Trans- Individual Corporate formation Operations Resources IT Clients Clients & Capital Management Focus on origination through dedicated "Front" Business Areas Optimize capital utilization and loan portfolio Enhanc
Slide 19: Initiatives: A New Lending Business Model
Initiatives SECTION 4 A New Lending Business Model ab Private and Corporate Clients
Slide 20: New Lending Business Model
New Lending Business Model Optimizing the Value Creation Chain Active Portfolio Origination Credit Decision Management Capital Markets Customers ♦ Sales ♦ Risk Assessment ♦ Diversification corresponding ♦ Relationship to Risk ♦ Risk/Return Management Potential Optimization ♦ Customer ♦ Secondary Ser
Slide 21: Initiatives: B Strategic Projects
Initiatives SECTION 4 B Strategic Projects ab Private and Corporate Clients
Slide 22: Clearly Defined Strategic Projects …
Clearly Defined Strategic Projects … ♦ Risk-adjusted pricing Pricing/Distribution ♦ New pricing scheme for Investment Clients ♦ Value-based pricing of Retail Products ♦ Differentiated pricing (e.g. by distribution channels) ♦ Expanding UBS 24h-Banking ♦ Merging dual locations ♦ Resizing branch netwo
Slide 23: … resulting in a Significant Net Profit Increase
… resulting in a Significant Net Profit Increase (in CHF million pa before tax, cumulative) 400 150 90 250 30 60 1998 1999 2000 Revenue Increase Cost Reductions ab 22 Private and Corporate Clients
Slide 24: Realizing Synergies
Realizing Synergies While increasing client convenience Branch closings 24h-Banking contracts(1) 600 (in k) 600 500 500 553 t ion u t rib 400 d is 400 t ive a lt ern 385 fa 300 t ho 300 G r ow 200 200 100 100 0 0 31.12.1997 31.12.1999 Notes: 1 Including Internet/Videotex, Phonebanking ab 23 Private
Slide 25: Initiatives: C 24h-Banking
Initiatives SECTION 4 C 24h-Banking ab Private and Corporate Clients
Slide 26: Comprehensive Multichannel Range of Services
Comprehensive Multichannel Range of Services Telebanking including Videotex and Internet Phonebanking 24h-Banking Machines Business Offices ab 25 Private and Corporate Clients
Slide 27: Significant Growth Potential for Telebanking
Significant Growth Potential for Telebanking ♦ 30% of Swiss population (1) are Internet users ♦ 45% are expected to be Internet users by 2000 ♦ Fastest growth in the CHF 250‘000+ client segment ♦ 50% of Internet purchases are made by credit card ♦ 37% of Swiss population (1) own a mobile phone ♦ 50%
Slide 28: Innovations Introduced on 1 October 1999
Innovations Introduced on 1 October 1999 Switzerland’s most user-friendly Internet banking solution "UBS Tradepac“, the professional product for investment clients: ♦ Online links to six stock exchanges (SWX, UK, IT, NASDAQ, NYSE, AMEX) ♦ Stock trading ♦ UBS Quotes: Real-time SWX prices ♦ UBS Quicke
Slide 29: Telebanking: Investing for the Future
Telebanking: Investing for the Future ♦Over the next few years, PCC is to Investment invest more than CHF 40 million per year ♦Automation of order processing for Cost reductions payment services and brokerage ♦Client aquisition and new money Revenue increase from existing clients ab 28 Private and C
Slide 30: Conclusion
Conclusion Significant contribution Create to the Group‘s targets shareholder value - Defined initiatives Clear strategy - Focus on sustainability - Leading market position - Broad client base Strong position - New market entrants Increasing - Customer awareness competition - Lower margins ab 29 Pri
Slide 31: Appendix
Appendix ab Private and Corporate Clients
Slide 32: Significant Increase in Profit
Significant Increase in Profit (in CHF million) 9M99 9M98 % Total Net Income 4,611 4,361 6% Total Costs 3,770 3,626 4% Net Profit before Tax 841 735 14% Cost/Income Ratio 69% 71% ab 31 Private and Corporate Clients
Slide 33: Assets under Management
Assets under Management(1) (in CHF billion) By Segment By Asset Category Total 419 billion Total 419 billion 127 188 231 292 Individual Clients Custody Accounts Corporate Clients Savings/Deposit Accounts Notes: 1 Banks are not included ab 32 Private and Corporate Clients
Slide 34: Loan Portfolio
Loan Portfolio (in CHF billion) By Segment By Loan Category Total 171 billion Total 171 billion 48 70 77 78 37 24 8 Fixed Rate Mortgages Corporate Clients Other Credits Individual Clients Other Mortgages Recovery Portfolio Mortgages ab 33 Private and Corporate Clients
Slide 35: Residential Real Estate Accounts
Residential Real Estate Accounts Loan Portfolio Mortgages Portfolio 22% 27% 50% 73% 28% Multi-Family Homes Mortgages Single-Family Homes Others Commercial ab 34 Private and Corporate Clients