Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Investor Day (November 2010)
128 slides from Ubs's investor day presentation, Nov 16, 2010
Slide 1: On the right track - Investor Day 2010
On the right track November 16, 2010 Investor Day 2010
Slide 2: Agenda
Agenda UBS Investor Day - November 16, 2010 Note: the agenda may be subject to change Start End Topic Speaker 10:00 10:15 Opening remarks Oswald Grubel 10:15 10:35 Finance John Cryan 10:35 10:55 Risk control Philip Lofts 10:55 11:40 Investment Bank Carsten Kengeter 11:40 12:00 Q&A Morning presenters
Slide 3: UBS Investor Day presentation index
UBS Investor Day presentation index 1. Finance 2. Risk control 3. Investment Bank 4. Global Asset Management 5. Wealth Management Americas 6. Wealth Management 7. UBS Switzerland
Slide 4: Finance
Finance John Cryan Group Chief Financial Officer November 16, 2010 Investor Day 2010
Slide 5: 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 strategic initiatives on UBS's business and future development.
Slide 6: Key messages
Key messages Key messages Improved profitability may give rise to further deferred tax asset recognition We believe we can achieve required levels of capital through retained earnings We are scaled for growth and reconfirm our CHF 15 billion Group pre-tax profit target in the medium-term
Slide 7: Our financial performance has improved
Our financial performance has improved 1 Quarterly net profit attributable to UBS shareholders annualized / average equity attributable to UBS shareholders Group revenues Group pre-tax profit Diluted earnings per share Return on equity1 (CHF billion) (CHF) (%) Group revenue 5.0 5.8 5.8 6.1 9.0 9.2 6
Slide 8: Our financial condition is strong
2.0 2.5 4.1 4.7 4Q07 4Q08 4Q09 3Q10 Our financial condition is strong 1 Capital information in 4Q07 under Basel 1 2 Equity attributable to UBS shareholders / total assets adjusted for PRVs based on capital adequacy netting Balance sheet Tier 1 capital and capital ratios Risk-weighted assets Leverage
Slide 9: And we are scaled for growth
And we are scaled for growth We are reconfirming our medium-term targets 1 9M10 capital is under Basel 2 Pre-tax profit 9M10 annualized medium- term target 8.3 ~15 ~7 Cost / income ratio Return on equity 9M10 Medium-term target Core tier 1 capital1 (CHF billion) Balance sheet excl. PRVs (CHF trillio
Slide 10: Medium-term targets by business division
Medium-term targets by business division Revenues Implied operating expenses based on cost / income targets Pre-tax profit Medium-term target 9M10 annualized (CHF billion) 1 9M10 annualized excludes net restructuring charges of CHF 167 million and provision related to an arbitration matter of CHF 78
Slide 11: Key messages
Key messages Key messages Improved profitability may give rise to further deferred tax asset recognition We believe we can achieve required levels of capital through retained earnings We are scaled for growth and reconfirm our CHF 15 billion Group pre-tax profit target in the medium-term
Slide 12: Risk-weighted assets under Basel 3
Basel 2.5 Basel 3 Basel 3 pro forma Risk-weighted assets under Basel 3 RWAs will be more volatile in the new regulatory environment Basel 2 30.9.10 Basel 2.5 pro forma Basel 3 Other (mainly CVA) (CHF billion) Mitigation efforts & growth The impact of Basel 3 can be mitigated by: Reducing securitizat
Slide 13: Tier 1 capital: Basel 2 to Basel 3
Callable 2011-2017 Expected to be utilized against future taxable income Capital build-up through retained earnings Tier 1 capital: Basel 2 to Basel 3 We can achieve required levels of capital through retained earnings Basel 2 tier 1 capital Tier 1 hybrid instruments DTAs on NOLs Prepaid pension cos
Slide 14: Basel and Swiss regulatory proposals - illustrative example
Basel 3 and Swiss regulatory proposals - illustrative example Swiss ExCo minimum Low trigger Cocos High trigger Cocos Basel 3 minimum Regulatory proposals We expect to meet regulatory proposals within the implementation timeframe 1 Based on consensus estimates collected on 14.10.10 from 28 sell-side
Slide 15: Key messages
Key messages Key messages Improved profitability may give rise to further deferred tax asset recognition We believe we can achieve required levels of capital through retained earnings We are scaled for growth and reconfirm our CHF 15 billion Group pre-tax profit target in the medium-term
Slide 16: Deferred tax assets on net operating losses
Unrecognized tax loss carry forwards tax-effected CHF 21.0 billion Recognized DTAs on net operating losses (NOLs) CHF 8.3 billion2 Deferred tax assets on net operating losses Unrecognized tax loss carry-forwards of CHF 21.0 billion tax-effected Represents tax losses available to be offset against po
Slide 17: Key messages
Key messages Key messages Improved profitability may give rise to further deferred tax asset recognition We believe we can achieve required levels of capital through retained earnings We are scaled for growth and reconfirm our CHF 15 billion Group pre-tax profit target in the medium-term
Slide 18: Risk control
Risk control November 16, 2010 Philip Lofts Group Chief Risk Officer Investor Day 2010
Slide 19: 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 strategic initiatives on UBS's business and future development.
Slide 20: Key messages
Key messages Disciplined risk management is at the core of UBS RWAs will be more volatile as reported under Basel 2.5 Our risk profile today is low. It will increase in line with growth in our businesses
Slide 21: UBS risk-weighted assets
UBS risk-weighted assets Development by risk category Both the mix and absolute level of RWAs have remained stable in 2010 (CHF billion)
Slide 22: Market risk: Investment Bank VaR
Market risk: Investment Bank VaR 1-day 95% management VaR to 30.9.10 Reflects active risk management Overall VaR remains low (80) (75) (70) (65) (60) (55) (50) (45) (40) (35) Jan Feb Mar Apr May Jun Jul Aug Sep (CHF million) 1-year timeseries 5-year timeseries
Slide 23: Credit risk: Investment Bank Banking products portfolio
Credit risk: Investment Bank Banking products portfolio Sub-investment grade exposure Sub-investment grade exposure by rating bucket and by LGD (30.9.10) (CHF billion) Entire Investment Bank Banking products portfolio = CHF 43.4 billion CHF 15.8 billion is rated Sub-investment grade, of which CHF 2.
Slide 24: Credit risk: Investment Bank Traded products portfolio
Credit risk: Investment Bank Traded products portfolio Investment grade vs. sub-investment grade by counterparty type (CHF billion) For the majority of the non-collateralized portfolio, CVA is based on market observable credit spreads Dominated by investment grade counterparties with large concentra
Slide 25: Credit risk: Wealth Management & Swiss Bank Banking products exposure
Credit risk: Wealth Management & Swiss Bank Banking products exposure WM&SB banking products portfolio (total CHF 205 billion) of which: unsecured loans by industry sector Product mix dominated by secured lending in real estate and marketable securities Small portion unsecured with wide industry dis
Slide 26: Risk profile expected developments
Risk profile Expected developments RWA Market risk Credit risk Basel 2.5 / Basel 3 requirements and growth plan execution Growth plan execution Overall stable though some growth due to increased loan under writing and Lombard loans
Slide 27: Key messages
Key messages Disciplined risk management is at the core of UBS RWAs will be more volatile as reported under Basel 2.5 Our risk profile today is low. It will increase in line with growth in our businesses
Slide 28: Basel 2.5
Basel 2.5 Introduction of four new measures to supplement the current market risk capital Securitization Incremental risk charge (IRC) Comprehensive risk measure (CRM) Stressed VaR Carve out measure from securitization treatment for a correlation portfolio New capital charge for default (as against
Slide 29: Basel 2.5 will increase RWA volatility
Basel 2.5 Basel 2.5 will result in an increase of the volatility of RWAs CHF billion Basel 2 30.9.10 Stressed VaR IRC CRM Securitization Basel 2.5 At UBS, Stressed VaR and IRC measures will be the more volatile components Stressed VaR and the IRC measures will add to the volatility of the RWAs Early
Slide 30: Key messages
Key messages Disciplined risk management is at the core of UBS RWAs will be more volatile as reported under Basel 2.5 Our risk profile today is low. It will increase in line with growth in our businesses
Slide 31: Risk management and control principles
Risk management and control principles Protection of financial strength 1 Protection of reputation 2 Business management accountability 3 Independent controls 4 Risk disclosure 5 Five key principles underpin UBS's risk management and control framework and allow the firm to achieve an appropriate bal
Slide 32: How do we control risk?
How do we control risk? One single measure is not sufficient All elements of the framework play a key role in the decision-making processes in the Bank Firm-wide risk aggregation framework Portfolio specific scenario measures Sub portfolio measures Detailed position limits Firm-wide risk exposure me
Slide 33: How do we control entry / re-entry into new business?
How do we control the entry / re-entry into new business? Disciplined process in place New business Evaluation of metrics / strategic fit Control / logistic review Tracking of approval conditions Review and approval process in place Ensures all material risks are identified, evaluated and appropriat
Slide 34: Key messages
Key messages Disciplined risk management is at the core of UBS RWAs will be more volatile as reported under Basel 2.5 Our risk profile today is low. It will increase in line with growth in our businesses
Slide 35: Investment Bank
Investment Bank November 16, 2010 Carsten Kengeter CEO UBS Investment Bank Investor Day 2010
Slide 36: 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 strategic initiatives on UBS's business and future development.
Slide 37: Key messages
Key messages We are delivering on our stated strategy We are executing with better aligned capabilities across the Investment Bank We reconfirm our medium-term targets
Slide 38: We are doing what we said we would do
We are doing what we said we would do Rebuild selected businesses, enhance strengths and increase integration Align Equities and FICC within the Securities platform and establish IBD as lead corporate marketer Reduce residual risk positions Operate a client-centric business model based on flow and a
Slide 39: We have returned to profitability
We have returned to profitability Profit before tax
Slide 40: Our financial performance has improved
Our financial performance has improved We have increased our share of revenues ... .... reflecting an improved performance in FICC 1 Normalized data for UBS Investment Bank numbers; Peer data based on UBS Investment Bank analysis of selected peers (GS, CS, Citi, MS, DB, BofA, JPM, Barc) reported rev
Slide 41: Increased returns with an investment in talent
Increased returns with an investment in talent Returns have increased RoA RoRWA Operating expenses reflect investments in talent Cost / income (%) Personnel (FTE, 000's) Reported data Normalized data
Slide 42: Selective hiring to fill critical needs
We continue to fill critical needs with selective hiring ... 1 YTD actual new joiners (excluding graduates) who started as of 30.9.10 2 FX: 2010 Euromoney Awards; UBS Delta: Credit magazine's Credit Awards; Equities: based on UBS management assessment; Equity survey: Thomson Reuters Extel Survey 201
Slide 43: Securities - a new organizational structure
Rates Credit FX Commd. Equities From a "siloed" structure... Sales & Trading DCM, GSF FICC Research Quants Structured Products FICC Clearing Macro, Credit, EM Sales & Trading Equity Research Structured Products Prime Brokerage ETD Cash Derivatives .... to a holistic Securities business Securities Di
Slide 44: FICC - increased revenues with controlled resource usage
FICC - increased revenues with controlled resource usage ... FICC assets ex-PRVs 1% 8% FICC RWAs
Slide 45: FICC - positioned for continued growth
FICC - positioned for continued growth ... .... through client focus and an enhanced product offering Key priorities for growth Performance drivers YTD Achieving our medium-term target... Sales & trading rebuild Re-entered select products (incl. commodities) Growth driven by credit flow, client solu
Slide 46: Equities - stable franchise with strong potential
Equities - stable franchise with strong potential ... 1 ETD = Exchange Traded Derivatives, DES = Direct Execution Services, HVDMA = High Volume Direct Market Access .... we are well positioned to achieve our CHF 1.75 billion average quarterly target Expand derivatives product platform US build-out E
Slide 47: IBD - re-energising the franchise
IBD - re-energising the franchise to deliver on our target... .... by enhancing coverage, product capabilities and alignment Enhance top 5 position in APAC and EMEA Expand US presence and add coverage bankers selectively elsewhere Integrate Link platform and rebuild IBD LATAM Regain leadership in EC
Slide 48: Key messages
Key messages We are delivering on our stated strategy We are executing with better aligned capabilities across the Investment Bank We reconfirm our medium-term targets
Slide 49: Aligned client delivery
Aligned client delivery FICC EQUITIES IBD .... offering superior products & services ... Better aligned ... Structuring, research and quants Client-facing technology IBD as lead corporate marketer .... with market leading delivery Continued focus on client-centric model based on flow and advice ...
Slide 50: Integrated client delivery with partner divisions
Integrated client delivery with partner divisions Increasing partnership and internalization of flows On-shore expansion in emerging markets Group client segmentation Cross-divisional referrals Global Family Offices JV Investment Products and Services ("IPS")
Slide 51: Key messages
Key messages We are delivering on our stated strategy We are executing with better aligned capabilities across the Investment Bank We reconfirm our medium-term targets
Slide 52: Mitigating the key challenges and risks
Mitigating the key challenges and risks Challenges and risks Response Uncertain operating environment Scalable, efficient and client-centric business model Growth in resource-constrained environment Active, disciplined management of limits and resources Delivery of front-to-back infrastructure Busin
Slide 53: We reconfirm our medium-term targets
We reconfirm our medium-term targets Revenues CHF billion Target ~20.0 13.0 Profit before tax CHF billion Target ~6.0 2.8 Cost / income ratio % 9M10 Target ~70 ~80 FICC revenues CHF billion Target >8.0 6.3 Equities revenues CHF billion Target >7.0 4.7 IBD revenues CHF billion Target >4.0 2.0 9M10 an
Slide 54: Key messages
Key messages We are delivering on our stated strategy We are executing with better aligned capabilities across the Investment Bank We reconfirm our medium-term targets
Slide 55: Global Asset Management
Global Asset Management November 16, 2010 John Fraser Chairman and CEO Global Asset Management Investor Day 2010
Slide 56: 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 strategic initiatives on UBS's business and future development.
Slide 57: Key messages
Key messages Our diversified business model across regions, capabilities and distribution channels remains the valid choice We are building on strong third party institutional net inflows while launching intensified third party wholesale initiatives in the Americas and Europe We are capitalizing on
Slide 58: The industry outlook remains highly attractive
The industry outlook remains highly attractive Retirement funds Mutual funds USD 52 trillion USD 71 trillion Structural changes will drive asset growth at a significantly faster rate than long- term GDP CAGR 7.7% 1 Investor pool estimates by Cerulli Associates (June 2010) Recession Reduced assets of
Slide 59: Current industry environment
Current industry environment Immediate challenges 1 Net new money figures include US and European mutual funds and are September YTD 2010. Source: ICI, EFAMA 2 Figures indexed to 100 from end of 2007. Figures updated to September 2010. Source: Federal Reserve, ECB Market volatility Recent volatility
Slide 60: Global AM's diversified business model
....enables us to capture opportunities in shifting market dynamics Global AM's diversified business model... Asset classes1 Regions1 Distribution channels1 Net new money 9M10 CHF 8.5 billion (excl. money market funds) Invested assets 30.9.10: CHF 567 billon 1 Data represents the internal distributi
Slide 61: Key messages
Key messages Our diversified business model across regions, capabilities and distribution channels remains the valid choice We are building on strong third party institutional net inflows while launching intensified third party wholesale initiatives in the Americas and Europe We are capitalizing on
Slide 62: Monetizing investment performance
Monetizing investment performance Third party2 net new money Below benchmark Above or equal to benchmark 1 Performance of key composites is shown on a gross basis versus primary benchmark 2 Includes UBS Investment Bank channel and money market funds (CHF billion) Performance in key strategies relati
Slide 63: Grow third party institutional and wholesale businesses
Grow third party institutional and wholesale businesses... Institutional Wholesale Structured Solutions: create a dedicated team around key new hires to deliver a full range of derivative and risk management capabilities Sovereign clients: bring our successful regional activities under one umbrella
Slide 64: Participating in WM's return to growth
....while participating in WM's return to growth Significantly strengthened relationship Global AM now established as preferred provider of core and passive capabilities in an open architecture environment Leverage Ultra High Net Worth team to provide institutional-like advice and solutions Concerte
Slide 65: Key messages
Key messages Our diversified business model across regions, capabilities and distribution channels remains the valid choice We are building on strong third party institutional net inflows while launching intensified third party wholesale initiatives in the Americas and Europe We are capitalizing on
Slide 66: Capitalize on emerging market opportunities
1 China figures include traditional and non-traditional institutional mandates, QFII funds and a non-consolidated JV's assets (not part of Global Asset Management's invested asset figure as reported) 2 Phoenix Finance Fund Companies of the year event 3 2009 Fund Leader Summit in Beijing 4 Awarded by
Slide 67: Key messages
Key messages Our diversified business model across regions, capabilities and distribution channels remains the valid choice We are building on strong third party institutional net inflows while launching intensified third party wholesale initiatives in the Americas and Europe We are capitalizing on
Slide 68: We reconfirm our medium-term targets
We reconfirm our medium-term targets Operating income CHF billion 9M10 annualized Target >3.0 2.0 Profit before tax CHF billion Target 1.3 0.5 Cost / income ratio % 9M10 Target 50 - 60 ~76 9M10 annualized
Slide 69: Key messages
Key messages Our diversified business model across regions, capabilities and distribution channels remains the valid choice We are building on strong third party institutional net inflows while launching intensified third party wholesale initiatives in the Americas and Europe We are capitalizing on
Slide 70: Wealth Management Americas
Wealth Management Americas November 16, 2010 Robert McCann CEO Wealth Management Americas Investor Day 2010
Slide 71: 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 strategic initiatives on UBS's business and future development.
Slide 72: Key messages
Key messages We are well-positioned to capture opportunities in an evolving landscape We are making progress in executing our strategy Our key business drivers are improving We reconfirm our medium-term targets
Slide 73: UBS offers wealth management across the globe
UBS offers wealth management across the globe We have a global presence and are increasing our local focus UBS WM Americas ~360 branches 100+ Wealth Management Offices in Switzerland 70+ Wealth Management Offices worldwide 20+ UBS AG Representative Offices UBS Wealth Management Note: Branch network
Slide 74: Our positioning
Our positioning Invested assets (USD billion) 500 1,000 1,500 2,000 0 10% 30% 50% WF UBS BofA MSSB USD 500 billion Profit margin Private bank / trust models Scale-driven firms Size and agility enable WMA to chart a new course... ....combining the advantages of both large and boutique firms
Slide 75: US competitive landscape
US competitive landscape Executing focus strategy UBS Wealth Management Americas Major US competitors Building and maintaining a scale model Meeting the demands of HNW / UHNW clients Serving all client segments Operating large new financial advisor training programs Improving capabilities of experie
Slide 76: WMA strategy driving improved advisor satisfaction
WMA strategy driving improved advisor satisfaction % Less satisfied % More satisfied % About the same 1 Based on Competitor Pulse Survey of 1,006 advisors conducted in May 2010 on a blind basis at the request of UBS. Question: "Compared to 6 months ago, how would you rate your overall satisfaction w
Slide 77: Net new money improvement
Net new money improvement NNM has turned around and inflows continue through 3Q10 NNM including dividends and interest Same-store1 NNM USD billion USD billion 1 NNM from financial advisors who have been with UBS for >12 months (10) (5) 0 5 10 15 20 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 (5) 0 5 1Q09 2Q0
Slide 78: NNM quality has greatly improved
NNM quality has greatly improved USD billion Recruit1 NNM Termed2 NNM USD billion 1 NNM from financial advisors who have been with UBS for <12 months 2 NNM outflows due to financial advisor departures 0 5 10 15 20 25 30 35 40 45 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 (25) (20) (15) (10) (5) 0 1Q09 2Q09
Slide 79: Improvement in key business drivers
Improvement in key business drivers 3Q09 3Q10 3Q10 vs 3Q09 Talent Non-FAs 10,391 9,525 ? Talent Financial advisors 7,286 6,783 ? Talent % FAs with >250k production2 67.8% 77.0% ? Talent % FA attrition rate >250k2,3 17.2% 7.0% ? Talent % FA attrition rate >1m2,3 20.8% 4.7% ? FA Productivity Invested
Slide 80: Cost and revenue initiatives update
Cost and revenue initiatives update Organizational redesign De-layering/span of control Re-engineering Outsourcing Operational efficiencies Human Resources Rationalize/re-stack Renegotiate Real estate Increase FA assets and revenue Improve NNM Mortgages Securities-based lending Banking solutions Pro
Slide 81: We reconfirm our medium-term targets
We reconfirm our medium-term targets Revenues CHF billion 9M10 annualized Target >6.7 5.6 Cost / income ratio % 9M101 Target 80 - 85 ~97 Revenue / FA CHF thousand Target ~1,000 814 Invested assets / FA CHF million 30.9.10 Target ~120 102 Profit before tax / FA CHF thousand 9M101 Target ~161 29 1 Adj
Slide 82: Key messages
Key messages We are well-positioned to capture opportunities in an evolving landscape We are making progress in executing our strategy Our key business drivers are improving We reconfirm our medium-term targets
Slide 83: Wealth Management
Wealth Management November 16, 2010 Jurg Zeltner Investor Day 2010 CEO UBS Wealth Management
Slide 84: 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 strategic initiatives on UBS's business and future development.
Slide 85: Key messages
Key messages We are delivering on our promises We reconfirm our medium-term targets We are well positioned to capture future growth and gain momentum We are leveraging our industry-leading platform to meet evolving client needs
Slide 86: We are executing on our strategy
We are executing on our strategy Financial improvement Successful cross- border transformation Positioned our emerging market business to target growth Established Investment Products and Services (IPS) Attracted top talent Created an industry leading, designated Wealth Management unit that brings t
Slide 87: Results show that we are on track with our plans
4'146 Results show that we are on track with our plans (22.4) 1Q09 (15.6) 2Q09 (16.3) 3Q09 (32.9) 4Q09 (8.0) 1Q10 (5.2) 2Q10 1.0 3Q10 3Q10 2Q10 1Q10 4Q09 1Q09 4,148 4,112 4,138 4,286 5,066 2.3 2.5 825 787 30.9.10 31.12.09 FY09 9M10 annualized 91 93 FY09 9M10 Profit before tax Invested assets Profit
Slide 88: FX and market development
FX and market development 4 Sensitivity of our results to currencies and equity markets CHF/Other EUR USD by asset class by currency Other Mutual funds Equities A 5% change in EUR or USD against CHF or in equity markets impacts our annualized profit by approximately CHF 100 million UBS Wealth Manage
Slide 89: Key messages
Key messages We are delivering on our promises We reconfirm our medium-term targets We are well positioned to capture future growth and gain momentum We are leveraging our industry-leading platform to meet evolving client needs
Slide 90: Leading business mix
4 Leading business mix #1 #1 #1 UBS position UBS WM invested assets1 (CHF billion) 1 Due to structural changes, mainly the creation of the emerging markets business, IA Sep 2009 restated; invested assets rounded 2 Clients from neighboring countries have withdrawn over CHF 20 billion over the last tw
Slide 91: APAC - most attractive region
9 APAC - most attractive region: we are at home WM market and GDP growth 2010-151 5%4 2% Market share APAC represents ... 31% of global market capitalisation 29% of global GDP ~20% of UBS WM invested assets Target: outgrow market by >2x Market UBS ~CHF 6,500 bn new wealth generation through 2015 6%
Slide 92: Emerging markets - the opportunity
9 Emerging markets - the opportunity WM market and GDP growth 2010-15 4% 5% Market share Emerging markets represent ... 10% of global market capitalisation 14% of global GDP ~20% of UBS WM invested assets Target: outgrow market by 1.5x Market UBS ~CHF 1,100 bn new wealth generation through 2015 A le
Slide 93: UHNW - an unrivaled franchise
9 UHNW - an unrivaled franchise WM market 2010-15 Market share Segment UHNW represents ... ~ 25% of global millionaires' wealth ~40% of UBS WM invested assets Target: outgrow market by 1.5x Market UBS ~CHF 1,900 bn new wealth generation through 2015 Leading position in fastest-growing business Integ
Slide 94: Key messages
Key messages We are delivering on our promises We reconfirm our medium-term targets We are well positioned to capture future growth and gain momentum We are leveraging our industry-leading platform to meet evolving client needs
Slide 95: The wealth management industry today and UBS unique position
? Client confidence levels low post crisis Elevated risk aversion in volatile capital markets Increasing demand for multi-shoring solutions Focus on investment performance The wealth management industry today UBS unique position Challenges for WM industry ? ? ? More demanding clients Tightening cros
Slide 96: Global reach and service delivery
Global reach and service delivery Robust legal framework Highly qualified and knowledgeable client advisors Investment performance Sophisticated investment opportunities Compliance with enhanced regulatory standards Increasing client demand for global service delivery Early expansion in major onshor
Slide 97: The foundations of our client service platform
The foundations of our client service platform Knowledge We systematically enable our client advisors to deliver the very best solutions to our clients across all asset classes Depth Our organization is geared towards bringing the right offering to each client Speed Leverage in-house expertise and q
Slide 98: Investment Products and Services (IPS)
Clients Client advisors Investment Products and Services (IPS) Making the best of UBS available to our clients faster Investment Products and Services Investment Bank Wealth Management & Swiss Bank Global Asset Management Combining expertise of the Group Product development Bringing together experti
Slide 99: Holistic investment solutions will increase client loyalty and margins
Providing holistic investment solutions to clients will increase client loyalty and improve margins IPS will enable our client advisors to provide the right content to our clients and generate substantial incremental revenues Regain client trust by improving investment performance in all market cond
Slide 100: Performing product shelf
Performing product shelf Active pre- selection of products Daily investment ideas across all asset classes Targeted offering derived from client profile Global access to research and specialist teams across all asset classes Tailored client advisor workbench Around the clock execution capability Bro
Slide 101: We continue to broaden skills across our organization
We continue to broaden skills across our organization Strategic management hires with strong expertise and proven track record Selectively hired ~130 experienced and highly qualified senior staff across our organization Attracted around 300 quality client advisors at all levels We have a strong mana
Slide 102: Key messages
Key messages We are delivering on our promises We reconfirm our medium-term targets We are well positioned to capture future growth and gain momentum We are leveraging our industry-leading platform to meet evolving client needs
Slide 103: Key enablers to achieve our targets
Key enablers to achieve our targets .... we can grow revenues with positive operational leverage .... we were an early mover, successfully developing our onshore business and establishing multi-booking centers .... we are attracting top quality industry professionals again .... we have access to gro
Slide 104: We reconfirm our medium-term targets
We reconfirm our medium-term targets Operating income CHF billion Target 10.0 7.4 Profit before tax CHF billion Target 4.6 2.5 Cost / income ratio % 9M10 Target <55 ~67 Invested assets CHF billion Target >1,000 787 Gross margin bps Target >100 93 Client advisors FTE 30.9.10 Target ~4,700 4,148 9M10
Slide 105: Key messages
Key messages We are delivering on our promises We reconfirm our medium-term targets We are well positioned to capture future growth and gain momentum We are leveraging our industry-leading platform to meet evolving client needs
Slide 106: UBS Switzerland
November 16, 2010 UBS Switzerland Lukas Gahwiler CEO UBS Switzerland Investor Day 2010
Slide 107: 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 strategic initiatives on UBS's business and future development.
Slide 108: Key messages
Key messages We reconfirm our medium-term targets Our Retail & Corporate businesses are stable with a high-quality lending portfolio and demonstrated cost discipline We will leverage UBS's leading franchise position in Switzerland and enhance our ability to deliver exceptional value to clients
Slide 109: UBS Switzerland: Selected accomplishments
UBS Switzerland: Selected accomplishments Strategy Integration Regional organization Clients Channels Developed strategy for an integrated UBS Switzerland Defined portfolio of strategic initiatives for the next 2-3 years Established integrated national and regional management teams Introduced cross-
Slide 110: Switzerland: An attractive home market
Switzerland: An attractive home market High levels of value creation in Switzerland Per capita GDP in CHF thousands (2009) Strong growth performance during crisis and beyond Real GDP (indexed, 2005 = 100) Low relative unemployment rate Unemployment rate in % Strong international balance sheet positi
Slide 111: UBS Switzerland: Well positioned in our home market
UBS Switzerland: Well positioned in our home market Leading franchise in Switzerland - critical mass in all businesses, many top in their field Access to expertise and reach of UBS's global asset gathering and investment banking franchise Integrated approach to a coordinated delivery of the whole ba
Slide 112: UBS Switzerland: Competitive landscape
UBS Switzerland: Competitive landscape Deposit-rich banks Pure retail banks (Re-)entering the corporate banking market to selectively attack attractive niches Subsidiaries of foreign banks Highly competitive environment for large universal banks due to strategic changes of specialized competitors In
Slide 113: UBS Switzerland: Focusing on profitable growth
UBS Switzerland: Focusing on profitable growth In an evolving competitive landscape... .... achieving profitable growth through Leverage existing relationships to increase share of wallet and referrals through integrated bank approach Well-defined strategy to deliver custom- tailored banking solutio
Slide 114: Well-defined, integrated strategy
UBS Switzerland: Well-defined, integrated strategy with focus on where and how to compete Advice & service Solution offering Client focus Strategic cornerstones The leading bank in Switzerland with regards to client satisfaction, employee engagement, and profitability Key enablers Integrated bank de
Slide 115: Integrated bank model established within UBS Switzerland
Integrated bank model successfully established within UBS Switzerland Cross organizational client coverage Referrals and cross-selling Systematic client development Integrated management Systematic lifecycle approach Focus on cross-selling and increasing share of wallet Systematic approach to client
Slide 116: Leveraging our vast retail client base
Leveraging our vast retail client base to capture growth opportunities Improving share of wallet is a large opportunity for UBS Switzerland Systematic approach to increase contacts with clients Standards and procedures for identification of client opportunities Systematic enhancement of lead managem
Slide 117: Focus on cross-selling, not just market share
Focus on cross-selling, not just growth of market share 1 Canceling of entire relationship Clients with high cross-selling rate (CSR) generate higher revenues and have significantly lower defection rates... Net revenues per retail client (2009, indexed, 1 product = 100) Cross-selling rate (indexed)
Slide 118: Advisory process as key enabler for loyalty
Advisory process as key enabler for loyalty and share of wallet Clients who are taken through advisory process display a higher propensity to... .... stay with UBS ....refer UBS to new clients ....increase UBS share of wallet ....delegate management 70% 60% 40% 65% Application of tool-based Dynamic
Slide 119: New initiatives to increase value of corporate clients
New initiatives will increase the value of corporate clients for other businesses Leverage better existing client base for corporate finance products (ECM, DCM, M&A) Introduce new asset/liability- management solutions (e.g., interest rate or foreign exchange derivatives) Asset Management (AM) CH Inv
Slide 120: Key messages
Key messages We reconfirm our medium-term targets Our Retail & Corporate businesses are stable with a high-quality lending portfolio and demonstrated cost discipline We will leverage UBS's leading franchise position in Switzerland and enhance our ability to deliver exceptional value to clients
Slide 121: Inherent stability of Retail & Corporate businesses
Inherent stability of our Retail & Corporate businesses Industry characteristics The business is inherently stable High share (75%) of recurring revenues Stable businesses, e.g., average duration of fixed-term mortgages >6 years, renewal rate >80% Retail & Corporate business mix (9M10) Business driv
Slide 122: Retail and Corporate - profit before tax has improved
Retail and Corporate - profit before tax has improved through disciplined cost control and risk management Operating income (CHF million) Profit before tax (CHF million) Operating expenses (CHF million) Credit loss (expense) / recovery (CHF million) (9%) 13% 1,629 1,847 FY09 9M10 annualized 3,918 3,
Slide 123: Costs remain under control
Costs remain under control The benefits of cost measures initiated in 2009 have materialized... ....and we have launched additional efficiency programs Retail & Corporate operating expenses (CHF million) 2,804 2,524 2,289 2,072 54% 51% 56% 53% 2007 2008 2009 9M10 annualized Operating expenses Cost /
Slide 124: Retail and Corporate lending portfolio
Retail and Corporate lending portfolio High underwriting standards... Lending portfolio, gross 30.9.10 Residential property 30.9.10 100% = CHF 138 billion ....and a high-quality mortgage lending portfolio across Switzerland 1 This distribution shows the loans in the respective LTV buckets. For examp
Slide 125: Lending portfolio managed for profitability
Lending portfolio consequently managed for profitability - not for market share growth UBS outgrown by the market Regional and Cantonal banks increased deposit volume by >CHF 50 billion (>40%) within the last 2.5 years Deposit volume leveraged to fund mortgage business Growth in residential mortgage
Slide 126: Key messages
Key messages We reconfirm our medium-term targets Our Retail & Corporate businesses are stable with a high-quality lending portfolio and demonstrated cost discipline We will leverage UBS's leading franchise position in Switzerland and enhance our ability to deliver exceptional value to clients
Slide 127: We reconfirm our medium-term targets for Retail and Corporate
We reconfirm our medium-term targets for Retail and Corporate Operating income CHF billion 9M10 annualized Target ~4.3 3.9 Profit before tax CHF billion Target ~1.9 1.8 Cost / income ratio % 9M10 Target <55 ~53 9M10 annualized
Slide 128: Key messages
Key messages We reconfirm our medium-term targets Our Retail & Corporate businesses are stable with a high-quality lending portfolio and demonstrated cost discipline We will leverage UBS's leading franchise position in Switzerland and enhance our ability to deliver exceptional value to clients This