Slide 1: First quarter 2014 results
First quarter 2014 results May 6, 2014
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: 1Q14 highlights
1Q14 highlights Group Net profit attributable to UBS shareholders CHF 1,054 million, diluted EPS CHF 0.27, RoE 8.7% Profit before tax (PBT) CHF 1,393 million, adjusted PBT CHF 1,486 million Basel III fully applied CET1 ratio of 13.2%, achieving our 13% target for 2014 Business divisions1 Wealth Mana
Slide 4: Group results
Group results CHF million 1Q13 4Q13 1Q14 Total operating income 7,775 6,307 7,258 Total operating expenses 6,327 5,858 5,865 Profit before tax as reported 1,447 449 1,393 Own credit on financial liabilities designated at fair value (181) (94) 88 Gains on sales of real estate 0 61 23 Net loss related
Slide 5: Wealth Management
Wealth Management Increased profitability on improved client activity, strong net new money Operating income and profit before tax Operating income up 5% CHF million z Recurring income1 down 2% to CHF 1,392 million on lower net interest income and recurring net fee income 1Q13 4Q13 1Q14 z Transactio
Slide 6: Wealth Management—by region
Wealth Management—by region1 Europe Asia Pacific Switzerland Emerging Markets o/w UHNW Net new 13.3 15.4 11.2 11.0 11.3 11.8 9.5 9.2 8.7 money 1.3 2.4 6.7 4.6 8.3 5.5 1.8 5.2 8.4 7.1 growth rate 0.1 2.1 0.8 0.3 % (1.6) (2.5) 10.7 9.3 8.5 Net new 7.0 7.4 money 5.5 5.0 4.9 5.1 3.6 4.4 3.8 CHF billion
Slide 7: Wealth Management—Gross margin
Wealth Management—Gross margin Improved gross margin on higher client activity 1Q13 2Q13 3Q13 4Q13 1Q14 1,926 1,952 1,837 1,859 1,943 Income (CHF million) Gross margin (bps) Wealth 91 90 85 85 87 Management Recurring income as a % of income 71% 73% 77% 77% 72% Gross margin components (bps) 508 523 5
Slide 8: Wealth Management Americas (USD)
Wealth Management Americas (USD) Record adjusted PBT of USD 284 million, record revenue and invested assets Operating income and profit before tax Operating income up 1% USD million z Recurring net fee income up 3% on record managed account asset levels, offset by 9% decrease in net 1Q13 4Q13 1Q14 i
Slide 9: Retail & Corporate
Retail & Corporate Best first quarter adjusted pre-tax profit since 2010 Operating income and profit before tax Operating income stable CHF million z Net credit loss recovery compared with net credit loss expense in the prior quarter z Lower transaction-based and net interest income not 1Q13 4Q13 1Q
Slide 10: Global Asset Management
Global Asset Management CHF 13 billion net new money excluding money market funds Adjusted operating income and profit before tax Operating income down 6% CHF million z Performance fees down by CHF 25 million to CHF 47 million, mainly in A&Q and O'Connor z Net management fees down by CHF 6 million m
Slide 11: Investment Bank
Investment Bank Adjusted RoAE of 28% with improved performance across all regions Adjusted operating income and profit before tax Operating income up 18% CHF million z CCS: strong performance with robust contribution from DCM in both the leveraged finance and 1Q13 4Q13 1Q14 investment grade business
Slide 12: Corporate Client Solutions (CCS)
Corporate Client Solutions (CCS) Solid performance with strong DCM results, 9% increase in revenues Operating income Comparison in USD terms (1Q14 vs. 4Q13) CHF million USD million Advisory (22%) z Decrease from strong 4Q13 reflects lower +9% 1,067 +10% revenues from private transactions 997 220 203
Slide 13: Investor Client Services (ICS)
Investor Client Services (ICS) Strong performance from equities, no negative revenue trading days Adjusted operating income Comparison in USD terms (1Q14 vs. 4Q13) CHF million USD million Equities +22% z Higher revenues in cash across all regions on +23% +24% seasonally higher client activity; #1 in
Slide 14: Corporate Center—Core Functions
Corporate Center—Core Functions Reported pre-tax loss of CHF 176 million Operating income and profit before tax CHF million 1Q13 2Q13 3Q13 4Q13 1Q14 Reported operating income CHF Treasury income (217) (124) (219) (343) (46) 51 million Own credit gain/(loss) (181) 138 (147) (94) 88 z An own credit ga
Slide 15: Retained Treasury income in Corporate Center—Core Functions
Retained Treasury income in Corporate Center—Core Functions We continue to expect retained funding costs to decline in the mid-term Treasury income retained in Corporate Center – Core Functions CHF million FY13 4Q13 1Q14 Gross results (excluding accounting driven adjustments) 664 206 137 Costs of th
Slide 16: Corporate Center—Non-core and Legacy Portfolio
Corporate Center—Non-core and Legacy Portfolio Operating income and profit before tax CHF million 1Q13 2Q13 3Q13 4Q13 1Q14 Adjusted operating income Non-core 231 (57) (120) (104) 17 CHF 29 million of which: Debit valuation adjustments 37 (21) (47) (68) (19) z Non-core: Income of CHF 17 million large
Slide 17: Corporate Center—Non-core
Corporate Center—Non-core1 RWA CHF billion (56%) Operational risk 32% 64.5 10.4 Other 4% OTC 63% Rates 39% Cash 5% 29.3 32.6 28.7 Credit 25% 9.5 9.2 13.8 11.2 20.3 8.1 7.1 31.12.12 31.12.13 31.3.14 IFRS assets and Swiss SRB LRD CHF billion Exposure reduction (57%) QoQ YoY RWA (12%) (51%) 389 PRV2 RW
Slide 18: Corporate Center—Legacy Portfolio
Corporate Center—Legacy Portfolio1 RWA CHF billion (18%) CDO6 2.8 4.6 RLN7 38.0 0.9 Monolines 3.8 30.9 31.3 Real estate assets 1.5 13.3 14.2 ARS & APS8 34.2 2.2 3.1 Muni swaps and options 17.6 17.1 2.0 Other9 31.12.12 31.12.13 31.3.14 Other 55% Operational risk 45% IFRS assets and Swiss SRB LRD CHF
Slide 19: RWA (fully applied)
RWA (fully applied) RWA CHF billion SNB StabFund1 ~400 Legacy Portfolio (until 4Q12) Incremental ~21 Non-core (from 1Q13) and Legacy Portfolio operational risk RWA2 in 4Q13 allocated to Investment Bank ~80 each business division ~301 WM/WMA/R&C/Global AM/Corporate Center – Core Functions +22.5 ~49 ~
Slide 20: Swiss SRB Basel III capital/ratios
Swiss SRB Basel III capital/ratios Swiss SRB Basel III (phase-in1) Swiss SRB Basel III (fully applied1) 1.3% 3.1% 0.4% 18.5% 17.9% 3.1% ~15.3% 0.4% ~13.6% 12.8% 13.2% ~10.0% 9.3% 9.8% 6.2% 30.9.11 30.9.12 31.12.12 31.12.13 31.3.14 30.9.11 30.9.12 31.12.12 31.12.13 31.3.14 CHF billion CHF billion Non
Slide 21: Swiss SRB leverage ratio
Swiss SRB leverage ratio Fully applied Swiss SRB Basel III leverage ratio 3.8%1 Swiss SRB Basel III leverage ratio Swiss SRB exposures in CHF billion CHF billion, 31.3.14 5.0% Phase-in CET1 + loss absorbing capital 49.3 4.7% = = 5.0% Total IFRS assets +/- adjustments 994 4.2% 3.9% 3.8% 3.8% Fully ap
Slide 22: 1Q14 highlights
1Q14 highlights Group Net profit attributable to UBS shareholders CHF 1,054 million, diluted EPS CHF 0.27, RoE 8.7% Profit before tax (PBT) CHF 1,393 million, adjusted PBT CHF 1,486 million Basel III fully applied CET1 ratio of 13.2%, achieving our 13% target for 2014 Business divisions1 Wealth Mana
Slide 23: Appendix
Appendix a UBS
Slide 24: Our balance sheet, funding and liquidity positions are strong
Our balance sheet, funding and liquidity positions are strong Our balance sheet structure has many characteristics of a AA-rated bank Funding by product1 z Strong and significantly reduced balance sheet Due to banks – Funded assets2 down >60% from peak in 2007 Short-term debt issued – Fully applied
Slide 25: Breakdown of changes in Group RWA (fully applied)
Breakdown of changes in Group RWA (fully applied) CHF billion 5 (1) (3) • CHF 3 billion increase related to model parameter update to AMA model for operational risk and incremental RWA1 • CHF 3 billion decrease in credit risk RWA mainly book size reduction due to • CHF 1 billion increase in market r
Slide 26: Adjusted results
Adjusted results Adjusting items Business division / Corporate Center 1Q13 4Q13 1Q14 FY13 CHF million Operating income as reported (Group) 7,775 6,307 7,258 27,732 Of which: Own credit on financial liabilities designated at FV Corporate Center - Core Functions (181) (94) 88 (283) Gains on sales of r
Slide 27: Important information related to numbers shown in this presentation
Important information related to numbers shown in 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. Refer to pages 12 of the 1Q14 financ