Ubs Group Ag · SIX:UBSG
Ubs — Q4 2022 Earnings Presentation
37 slides from Ubs's earnings presentation, Jan 31, 2023
Slide 1: Full year and fourth quarter 2022 financial results
Full year and fourth quarter 2022 Financial results 31 January 2023
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 Ralph Hamers, Group CEO Sarah Youngwood, Group CFO 2
Slide 4: What differentiates us for our shareholders
What differentiates us for our shareholders Leading and truly global Disciplined risk Strong returns wealth manager and cost manager and payouts ‐ The leading wealth manager in ‐ Carefully managed risk profile ‐ Capital-light business model APAC1, EMEA2 and Switzerland2, with over half of our 3trn i
Slide 5: Key messages
Key messages 4Q22 Strong momentum 1.7bn 14.7% 75.8% 14.2% with our clients in challenging markets Net RoCET1 Cost / income CET1 capital profit capital ratio ratio Executing on our strategy and achieved our FY22 Group targets in 2022 Positioned to fund growth 7.6bn 17.0% 72.1% 14.2% and deliver stron
Slide 6: Our momentum with clients is strong in challenging markets
Our momentum with clients is strong in challenging markets Invested assets Invested assets Deposits Loans Global Markets revenues GWM AM GWM + P&C GWM + P&C IB 3.3trn 1.2trn 548bn 529bn 387bn 380bn 7.1bn 2.8trn 1.1trn 6.3bn1 o/w: FGA 1.5trn 1.3trn FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 4Q
Slide 7: We are executing our strategy across the regions to drive growth and efficiency
We are executing our strategy across the regions to drive growth and efficiency FY22 Americas Switzerland EMEA APAC PBT 2.0bn; C/I 86% PBT 3.1bn; C/I 58% PBT 2.3bn; C/I 67% PBT 1.9bn; C/I 67% − GWM NII +35% YoY − P&C C/I 57%, (4pp) YoY − GWM C/I 62% − #1 in APAC ECM in FY224 and − 10bn in net privat
Slide 8: Making technology a differentiator
Making technology a differentiator Launched ~4bn ~200m technology technology gross cost savings by FY23, P&L expense to be fully reinvested Launched ~18,500 68% employees transitioned to technology team members that have transitioned to Agile@UBS Agile@UBS are engineers, +13pp vs. pre-Agile Launched
Slide 9: We maintain a strong balance sheet and disciplined risk management
We maintain a strong balance sheet and disciplined risk management FY22 Strong capital and liquidity position 7.5bn 14.2% 4.42% capital generation1 CET1 capital ratio CET1 leverage ratio Balance sheet for all seasons 5% p.a. 99% Disciplined risk 164% standard interest rate for of Swiss mortgage expo
Slide 10: Committed to sustainable finance
Committed to sustainable finance Selected 2022 achievements Selected aspirations Planet People Partnerships Net-Zero own operations (scope 1&2) 11% 28% vs. 30% 2025 target Supporting clients by 2025 reduction achieved in scope global female representation at senior – USD 268bn invested assets in 1&2
Slide 11: Delivered on our RoCET1 and cost/income targets for the full year
Delivered on our RoCET1 and cost/income targets for the full year RoCET1 Target: 15-18% Key figures Targets / 4Q22 FY22 guidance Group PBT 1,937m 9,604m 17.4% 17.5% 17.0% Net profit 1,653m 7,630m 12.4% Diluted EPS 0.50 2.25 RoCET1 14.7% 17.0% 15-18% Cost / income 75.8% 72.1% 70-73% Cost / income rat
Slide 12: Our financial targets remain unchanged; expecting >5bn of buybacks in 2023
Our financial targets remain unchanged; expecting >5bn of buybacks in 2023 Financial Capital Commercial targets guidance selected aspirations invested assets 15-18% Return on CET1 capital ~13% CET1 capital ratio >6trn across GWM, AM, P&C 70-73% cost / income ratio >3.7% CET1 leverage ratio >5% NNFGA
Slide 13: Financial performance
Financial performance Sarah Youngwood, Group CFO 12
Slide 14: FY22 net profit USD 7.6bn; 17.0% RoCET1
FY22 net profit USD 7.6bn; 17.0% RoCET1 Net profit FY22 m +2% (20%) underlying1 53 7,630 1,128 7,457 9.6bn 17.0% PBT, +1% YoY RoCET1 Underlying1: (19%) YoY Underlying1: 16.1% 72.1% 14.9% cost / income ratio RoTE (831) Underlying1: 72.7% Underlying1: 14.1% (2%) (178) (4%) o/w FX: (904m) o/w FX: +755m
Slide 15: 4Q22 net profit USD 1.7bn; 14.7% RoCET1
4Q22 net profit USD 1.7bn; 14.7% RoCET1 Net profit 4Q22 m +23% (36%) underlying1 97 1,653 919 1.9bn 14.7% PBT, +12% YoY RoCET1 1,348 Underlying1: (36%) YoY Underlying1: 12.8% 75.8% 13.2% cost / income ratio RoTE Underlying1: 77.9% Underlying1: 11.5% (676) (34) (8%) o/w FX: (227m) (13%) o/w FX: +202m
Slide 16: 4Q22 total revenues USD 8.0bn
4Q22 total revenues USD 8.0bn Total revenues m (8%) (9%) underlying1 excl. FX 8,705 475 295 8,029 (172) (745) (165) (365) • o/w accounting asymmetries +235m YoY; 129m in 4Q22 vs. (106m) in 4Q21 • o/w gains on sales and real estate +109m YoY; 109m in 4Q22 vs. 0 in 4Q21 • o/w gain from a bankruptcy cl
Slide 17: Net interest income
Net interest income Net interest income GWM + P&C GWM + P&C +1.1bn bn +17% FY22 1.9 7.5 NII of 7,465m, +1,100m YoY, +17% (0.1) 6.4 (0.6) (0.1) 4Q22 NII of 2,131m, +263m QoQ, +14% and +475m YoY, +29% − Total deposits +6% QoQ with 9bn of net FY21 Interest Deposit Deposit Loan volumes FY22 new deposits
Slide 18: Executing our cost strategy
Executing our cost strategy FY22 Operating expenses bn Operating expenses (4%) YoY, +0.7% YoY excl. litigation and FX (4%) 26.1 +0.7% 4Q22 0.4 24.9 Operating expenses (13%) YoY, (0.8) (0.6) +1.0% YoY excluding litigation and FX (0.2) +2.6% YoY FY23e − Costs excl. litigation and FX expected to increa
Slide 19: Maintaining our cost discipline
Maintaining our cost discipline On track to achieve ~1.1bn by 2023 Gross cost saves ~1.1 Major initiatives undertaken to date bn ~0.1 Internal reorganizations Reduction in and structural external consultant ~0.4 compensation adjustments and vendor spend 0.5 Market exits ~18,500 staff transitioned
Slide 20: Global Wealth Management
Global Wealth Management Total revenues, m USDm, except where indicated 4Q22 3Q22 4Q21 QoQ YoY FY22 FY21 PBT 1,058m, (13%) excl. 4Q21 provision for French cross-border matter1 (5%) Total revenues 4,601 4,786 4,822 (4%) (5%) 18,967 19,419 4,822 4,601 Net interest income 1,499 1,366 1,114 +10% +35% 5,
Slide 21: Asset Management
Asset Management Total revenues, m USDm, except where indicated 4Q22 3Q22 4Q21 QoQ YoY FY22 FY21 PBT 124m (31%) Total revenues 495 516 721 (4%) (31%) 2,961 2,617 721 Total revenues (31%) reflecting: Net management fees 471 502 627 (6%) (25%) 2,050 2,320 − Lower net management fees driven by 495 Perf
Slide 22: Investment Bank
Investment Bank Total revenues, m USDm, except where indicated 4Q22 3Q22 4Q21 QoQ YoY FY22 FY21 PBT 112m; RoAE 4%; FY22 RoAE 15% Global Markets revenues (11%) (24%) Total revenues 1,682 2,032 2,219 (17%) (24%) 8,717 9,454 ₋ Execution Services (18%) on lower volumes 2,219 Global Banking 331 329 696 +
Slide 23: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Total revenues, m CHFm, except where indicated 4Q22 3Q22 4Q21 QoQ YoY FY22 FY21 PBT +51%, +23% excl. 4Q21 provision for French cross-border matter1 +10% Total revenues 1,079 1,000 985 +8% +10% 4,099 3,904 1,079 985 Net interest income 603 489 497 +23% +21% 2,087 1,
Slide 24: Common equity tier 1 capital
Common equity tier 1 capital CET1 capital ratio CET1, bn 44.7 1.6 (1.3) (0.4) (0.1) n/a 1.0 45.5 0.5% 14.2% CET1 capital ratio Guidance: ~13% 14.4% (0.4%) 14.2% (0.1%) (0.0%) (0.0%) (0.0%) 4.42% CET1 leverage ratio Includes 1bn impact on Guidance: >3.7% CET1 capital offset by 8bn impact on RWA 5.6bn
Slide 25: Delivering attractive capital returns
Delivering attractive capital returns FY22 0.55 +10% YoY 5.6bn 95% ordinary dividend per share to be proposed of shares bought back total payout ratio2 for the financial year 20221 7.3bn capital returned to shareholders Committed to Expect to repurchase progressive dividends >5bn of shares in 2023 1
Slide 26: Key messages
Key messages 4Q22 Strong momentum 1.7bn 14.7% 75.8% 14.2% with our clients in challenging markets Net RoCET1 Cost / income CET1 capital profit capital ratio ratio Executing on our strategy and achieved our FY22 Group targets in 2022 Positioned to fund growth 7.6bn 17.0% 72.1% 14.2% and deliver stron
Slide 27: Appendix
Appendix 26
Slide 28: Group results
Group results USDm, except where indicated 4Q22 3Q22 4Q21 FY22 FY21 Total revenues 8,029 8,236 8,705 34,563 35,393 Credit loss expenses / (releases) 7 (3) (27) 29 (148) Total operating expenses 6,085 5,916 7,003 24,930 26,058 Operating profit / (loss) before tax 1,937 2,323 1,729 9,604 9,484 Tax exp
Slide 29: Underlying results
Underlying results USDm, except where indicated 4Q22 3Q22 4Q21 FY22 FY21 Operating profit / (loss) before tax 1,937 2,323 1,729 9,604 9,484 o/w: Gain on sales and real estate 1091 219 1,130 238 o/w: Accounting asymmetries 1292 (153) (106) (375) (341) o/w: Litigation settlement in Non-core and Legacy
Slide 30: 4Q22 Group results by region
4Q22 Group results by region Americas Switzerland EMEA Asia Pacific (15%) 3.9 Total revenues 3.3 bn (5%) 2.0 (6%) (11%) 1.9 1.6 1.5 1.4 1.2 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 4Q22 Profit before tax bn 0.3 0.8 0.4 0.3 Operating expenses bn 3.0 1.1 1.1 0.9 Cost / income ratio 90% 59% 75% 72% Excl
Slide 31: FY22 Group results by region
FY22 Group results by region Americas Switzerland EMEA Asia Pacific (4%) 14.5 13.8 Total revenues bn (1%) (0%) (13%) 7.8 7.7 7.0 7.0 6.5 5.6 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY22 Profit before tax bn 2.0 3.1 2.3 1.9 Operating expenses bn 11.9 4.5 4.7 3.8 Cost / income ratio 86% 58% 67% 67% Ex
Slide 32: 4Q22 Global Wealth Management results by region
4Q22 Global Wealth Management results by region Americas Switzerland EMEA Asia Pacific (21%) excl. provision for (3%) excl. provision for French cross-border matter French cross-border matter (20%) 600 n.m. 471 375 +29% 400 342 331 (8%) Profit before tax 218 m 172 193 178 133 200 0 -200 (230) -400 4
Slide 33: FY22 Global Wealth Management results by region
FY22 Global Wealth Management results by region Americas Switzerland EMEA Asia Pacific (13%) (2%) excl. provision for +8% excl. provision for French cross-border matter French cross-border matter 2,001 +83% 1,748 (24%) 1,384 1,490 Profit before tax +9% 1,237 m 943 835750 817 812 FY21 FY22 FY21 FY22
Slide 34: Capital and leverage ratios
Capital and leverage ratios Total loss-absorbing capacity (TLAC) 105bn 33.0% 10.24% 15bn buffer 25bn buffer Gone concern TLAC: 8.75% 47bn 14.7% 4.57% loss-absorbing TLAC: 25.0% capacity Going concern 58bn 18.2% 5.67% 7bn capital 13bn AT1 4.0% 12bn 1.25% CET1 45bn 14.2% 4.42% Going concern: 5.00% cap
Slide 35: Risk-weighted assets
Risk-weighted assets Risk-weighted assets bn 319.6 8.1 310.6 0.5 (0.9) 0.9 0.4 • Net currency effect on CET1 ratio of (0.0%) • +0.5bn from model updates / changes • +1.2bn related to methodology and • (1.4bn) from asset size and other policy changes movements, of which: (3.7bn) in IB, • +0.9bn in re
Slide 36: Regulatory RWA pipeline in line with prior guidance
Regulatory RWA pipeline in line with prior guidance Regulatory RWA pipeline1 Business growth bn Expectation with 4Q21 results Expectation today FY22 8bn - below expectations due to ~30 ~30 market conditions ~12 FY23-24e Ample capacity for business growth ~20 to accelerate if conditions continue to i
Slide 37: 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