Slide 1: First Quarter 2008 Results
First Quarter 2008 Results Zurich, 6 May 2008 www.ubs.com Marcel Rohner (Chief Executive Officer) Marco Suter (Chief Financial Officer) Jerker Johansson (CEO Investment Bank) Tom Hill (Chief Communication Officer)
Slide 2: Caution regarding forward looking statements
Caution regarding forward looking statements This presentation contains statements that constitute "forward-looking statements", including but not limited to statements relating to the risks arising from the current market crisis, other risks specific to UBS's business and the implementation of stra
Slide 3: Marcel Rohner (Chief Executive Officer)
www.ubs.com Marcel Rohner (Chief Executive Officer)
Slide 4: Overview
Overview Q1 actions: Risk Balance sheet Costs Capital Long-term measures: IB Efficiency Risks Q2 drivers
Slide 5: Q1 actions: balance sheet and risk weighted asset reduction
Q1 actions: balance sheet and risk weighted asset reduction Substantial progress in reduction of balance sheet and risk Accelerated reduction required some investment Including rights issue, Tier 1 ratio stands at 11.8% Capital raises in Q1 and Q2 0 500 1,000 1,500 2,000 2,500 All other assets Posit
Slide 6: Q1 actions: work-out portfolio activity
Q1 actions: work-out portfolio activity Continuous and active risk reduction for the work-out portfolio Further risk reductions and alternative hedging strategies are continuously assessed and implemented
Slide 7: Q1 actions: operating expenses
Q1 actions: operating expenses 368 7,847 7,479 8,918 (1,010) (429) 5'000 7'500 10'000 4Q07 Personnel G&A, excluding provisions Other expenses, including provisions 1Q08 (CHF m) Supported by favorable currency movements, we achieved significant reductions in all recurring cost categories
Slide 8: Long-term measures: efficiency
Long-term measures: efficiency Efficiency is the highest management priority The Investment Bank will immediately reduce staff by 2,600 positions The rest of the Group will increase efficiency largely through attrition and internal labor markets to source front office personnel. We will continue to
Slide 9: Long-term measures: underlying profitability
Long-term measures: underlying profitability Upon completion of its repositioning, we target the IB to deliver CHF 4 billion pre-tax contribution in a normalized market We will continue to increase operational leverage of our wealth management platform whilst growing our front office We will complet
Slide 10: Q2 drivers
Q2 drivers Q2 devoted to re-construction and re-positioning of our Investment Bank and balance sheet Continued investment in reduction of risk and balance sheet Continued active risk management of the work-out portfolio Decreasing UBS credit spreads will revert own credit adjustment
Slide 11: Marco Suter (Chief Financial Officer)
www.ubs.com Marco Suter (Chief Financial Officer)
Slide 12: Overview of the changes in presentation
Overview of the changes in presentation Adoption of new accounting standard - IFRS 2 Changes to the presentation: discontinuation of the adjusted expected credit loss concept Industrial Holdings reported in Corporate Center new revenue split in the Investment Bank Implementation of Basel II New equi
Slide 13: 1Q08 key figures: as pre-announced and actual
1Q08 key figures: as pre-announced on 1st of April and actual Actual Net loss attributable to shareholders (CHF m) (11,535) Investment Bank pre-tax loss (CHF m) (18,228) Corporate Center pre-tax profit (CHF m) 3,947 Global AM pre-tax profit (CHF m) 330 Tier 1 capital ratio as of 31 March 2008 (%) 6.
Slide 14: Global WM&BB
Global WM&BB 5,982 3,792 2,190 6,316 3,854 2,462 5,849 3,697 2,152 2,000 4,000 6,000 8,000 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (4%) YoY: (3%) QoQ: (13%) YoY: (2%) QoQ: (7%) YoY: (2%) 63.6 60.9 63.2 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q07 4Q07 1Q08 QoQ: 2.3 pts
Slide 15: WM International & Switzerland
WM International & Switzerland 3,071 1,568 1,503 3,298 1,646 1,652 3,054 1,625 1,429 0 1,000 2,000 3,000 4,000 5,000 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (1%) YoY: 4% QoQ: (13%) YoY: (5%) QoQ: (7%) YoY: (1%) 51.1 49.9 53.2 0 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q
Slide 16: Business Banking Switzerland
Business Banking Switzerland 1,301 769 532 1,340 738 602 1,268 728 540 0 1,000 2,000 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (1%) YoY: (5%) QoQ: (10%) YoY: 2% QoQ: (5%) YoY: (3%) 60.1 54.5 57.4 0 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q07 4Q07 1Q08 QoQ: 2.9 pts YoY: (
Slide 17: WM US
WM US 1,610 1,455 155 1,678 1,470 208 1,527 1,344 183 0 1,000 2,000 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (9%) YoY: (8%) QoQ: (12%) YoY: 18% QoQ: (9%) YoY: (5%) 90.4 87.6 88.0 0 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q07 4Q07 1Q08 QoQ: 0.4 pts YoY: (2.4) pts 500 1,5
Slide 18: Global Asset Management
Global Asset Management 997 602 395 1,077 592 485 791 461 330 0 500 1,000 1,500 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (22%) YoY: (23%) QoQ: (32%) YoY: (16%) QoQ: (27%) YoY: (21%) 60.4 55.0 58.3 0 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q07 4Q07 1Q08 QoQ: 3.3 pts YoY:
Slide 19: Investment Bank
Investment Bank N/A N/A 75.1 0 10 20 30 40 50 60 70 80 90 100 Cost / Income (%) 1Q07 4Q07 1Q08 QoQ: N/A YoY: N/A 6,238 4,699 1,539 (11,826) 4,208 (16,034) (14,813) 3,415 (18,228) (20,000) (15,000) (10,000) (5,000) 0 5,000 10,000 Revenues Expenses Pre-tax profit (CHF m) 1Q07 4Q07 1Q08 QoQ: (19%) YoY:
Slide 20: Net new money
Net new money 5.6 (1.9) (16.5) (20) (10) 0 10 20 30 40 50 60 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 (CHF bn) WM businesses BB CH Global AM
Slide 21: Invested assets
Invested assets 2,759 (1) (277) (152) 13 (13) 3,189 2,989 2,652 2,125 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 2004 2005 2006 2007 Net new money Acquisitions Market movements / performance Currency Other Mar 08 (CHF bn) (13%)
Slide 22: Operating expenses
Operating expenses 7,847 8,918 (1,010) (46) (15) 0 2,500 5,000 7,500 10,000 4Q07 Personnel G&A Other 1Q08 (CHF m) (12%)
Slide 23: Personnel development
Personnel development1 1 Full-time equivalents 2 CC exclude five FTEs from Industrial Holdings 346 276 266 83,839 83,560 (612) (21) 24 83,200 83,300 83,400 83,500 83,600 83,700 83,800 83,900 84,000 84,100 84,200 84,300 Dec 07 WM Int & CH WM US BB CH Global AM IB CC2 Mar 08 (FTEs) 279
Slide 24: General and administrative expenses
General and administrative expenses 414 2,243 2,258 (75) (37) (19) (8) (59) (28) (85) (118) 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 4Q07 Occupancy Rent and maintenance Telecommunications and postage Administration Marketing and public relations Travel and entertainment Professional fees Outs
Slide 25: Equity attribution framework
Equity attribution framework Tangible equity allocation on the basis of Goodwill and intangible assets allocation Average equity attributed GWM&BB IB Global AM 0 5 10 15 20 25 30 35 40 45 50 Risk capital RWA Assets GWM&BB IB Global AM 0 5 10 15 20 25 30 35 40 45 50 GWM&BB IB Global AM 0 5 10 15 20 2
Slide 26: Balance sheet and RWA development
Balance sheet and RWA development (CHF) GWM&BB RWA (lhs) IB RWA (lhs) Total assets (rhs) Global AM and CC RWA (lhs) 0 100 200 300 400 500 600 2003 2004 2005 2006 1Q07 2Q07 3Q07 4Q07 1Q08 0 500 1'000 1,500 2,000 2,500 3,000 14% 10% 17% 17% (9%) 7% 1% (2%) (2%) Basel II (CHF bn) (CHF bn) 90 225 18 333
Slide 27: Balance sheet development by product and Business Group
Balance sheet development by product and Business Group Balance sheet by products 408 422 427 417 775 742 584 570 958 846 774 617 335 416 428 573 2,540 2,485 2,273 2,231 0 500 1,000 1,500 2,000 2,500 Jun 07 Sep 07 Dec 07 Mar 08 Lending Collateral trading Trading assets Positive RVs Other assets Bala
Slide 28: RWA and capital ratios
RWA and capital ratios 372 333 352 250 300 350 400 Dec 07 Mar 08 Mar 08 (CHF bn) 11.9% 10.3% 10.7% Basel II 8.7% 7.1% 6.9% Tier 1 capital Total capital RWA Basel I 15.6% 11.8% Pro-forma
Slide 29: Regulatory capital - Group
Tier 1 capital BIS RWA Tier 1 ratio Total capital Total ratio Regulatory capital - Group 31.12.07 (Basel I) Net P&L attributable to shareholders Net P&L not eligible for capital Basel II impact (as per 31.3.08) MCN impact Other / FX IB initiatives (incl. FX) 31.3.08 (Basel II) Rights issue Hybrid Ti
Slide 30: US residential mortgage related positions and losses in 1Q08
US residential mortgage related positions and losses in 1Q08 US Alt-A US sub-prime P&L 1Q08 (6.1) (7.3) 1 Net exposure represents market value of gross exposure net of short positions and hedges considered effective. 2 P&L represents change in CVA during quarter; Exposures represent current replacem
Slide 31: Other risk positions and losses in 1Q08
Other risk positions and losses in 1Q08 P&L 1Q08 Net exposure1 as of 31 Mar 08 USD billion Net exposure1 as of 31 Dec 07 US CRE / CMBS (0.4) 6.3 7.7 Leveraged finance2 (0.3) 8.6 11.4 US student loans (1.0) 10.4 7.7 1 Net exposure represents market value of gross exposure net of short positions and h
Slide 32: Jerker Johansson (CEO Investment Bank)
www.ubs.com Jerker Johansson (CEO Investment Bank)
Slide 33: Marcel Rohner (Chief Executive Officer)
www.ubs.com Marcel Rohner (Chief Executive Officer)
Slide 34: Closing remarks
Closing remarks Efficiency Long-term profitability Q2 drivers
Slide 35: Q&A
Q&A ut You & Us (ase Po Available in two locatign erywhere, and Fight next to you. SUBS
Slide 36: Appendix
Appendix SUBS
Slide 37: Business Unit Results
Business Unit Results SUBS
Slide 38: Wealth Management Int & CH - NNM and invested assets
Wealth Management Int & CH - NNM and invested assets WM US Global AM IB WM Int & CH BB CH CC Invested assets (93) (71) 3 1,133 1,294 800 1,000 1,200 1,400 Dec 07 Net new money Market movements / performance Currency Mar 08 (CHF bn) (12%) Net new money 2.5 31.3 0 5 10 15 20 25 30 35 1Q05 2Q05 3Q05 4Q
Slide 39: Wealth Management Int & CH - pre-tax profit
Wealth Management Int & CH - pre-tax profit WM US Global AM IB WM Int & CH BB CH CC 1,429 1,578 500 700 900 1,100 1,300 1,500 1,700 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF m)
Slide 40: Wealth Management US - NNM and invested assets
Wealth Management US - NNM and invested assets WM US Global AM IB WM Int & CH BB CH CC Invested assets 3 (1) (31) (102) 709 840 500 700 900 Dec 07 Net new money Acquisitions Market movements / performance Currency Mar 08 (CHF bn) (16%) Net new money 3.1 6.7 0 2 4 6 8 10 12 14 1Q05 2Q05 3Q05 4Q05 1Q0
Slide 41: Wealth Management US - key figures
Wealth Management US - key figures WM US Global AM IB WM Int & CH BB CH CC Pre-tax profit 183 169 (100) 0 100 200 300 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF m) Cost / income ratio 88 90 80 85 90 95 100 105 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
Slide 42: Business Banking CH - pre-tax profit
Business Banking CH - pre-tax profit WM US Global AM IB WM Int & CH BB CH CC 540 567 0 100 200 300 400 500 600 700 800 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF m)
Slide 43: Global Asset Management - pre-tax profit
Global Asset Management - pre-tax profit Impact of DRCM restructuring costs on performance before tax WM US Global AM IB WM Int & CH BB CH CC 330 364 0 50 100 150 200 250 300 350 400 450 500 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF m)
Slide 44: Global AM - NNM, invested assets and gross margin
Global AM - NNM1, invested assets and gross margin 1 Excluding money market flows WM US Global AM IB WM Int & CH BB CH CC (14.7) (25) (20) (15) (10) (5) 0 5 10 15 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF bn) Institutional NNM (20) (15) (10) (5) 0
Slide 45: Corporate Center - pre-tax profit
Corporate Center - pre-tax profit WM US Global AM IB WM Int & CH BB CH CC 2Q07: Impact from gain on sale of 20.7% stake in Julius Baer of CHF 1,950 million 1Q08: Impact from a one-time accounting gain of CHF 3,860 million related to the issue of mandatory convertible notes on 5 March 2008 556 3,947
Slide 46: Investment Bank - pre-tax profit and revenues
Pre-tax profit Investment Bank - pre-tax profit and revenues WM US Global AM IB WM Int & CH BB CH CC (18,228) (4,167) (18,000) (15,000) (12,000) (9,000) (6,000) (3,000) 0 3,000 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Avg04 Avg05 Avg06 Avg07 (CHF m) Sales and trading - FICC r
Slide 47: Risk Positions
Risk Positions SUBS
Slide 48: US sub-prime residential mortgage exposures and P&L
US sub-prime residential mortgage exposures and P&L 1 Net exposure represents market value of gross exposure net of short positions and hedges considered effective 2 Includes USD 0.7 billion of RMBS CDO exposure where the hedge protection from a single monoline insurer is considered ineffective. See
Slide 49: US sub-prime positions - average marks
US sub-prime positions - average marks 1 Average marks represent the ratio of market value of gross exposure to notional value of gross exposure 2 Net exposure represents market value of gross exposure net of short positions and hedges considered effective Average marks in %; net exposures in USD bi
Slide 50: US sub-prime positions - vintages and ratings
US sub-prime positions - vintages and ratings Vintages1,2 in % < 2005 2005 2006 2007 High grade RMBS CDOs 1 20 77 2 Mezzanine RMBS CDOs - 12% protection 7 47 45 1 Mezzanine RMBS CDOs 5 30 58 7 CDOs squared 2 14 58 26 Total super senior RMBS CDOs1 4 31 59 6 Residential mortgage-backed securities (RMB
Slide 51: US Alt-A residential mortgage exposures and P&L
US Alt-A residential mortgage exposures and P&L 1 Net exposure represents market value of gross exposure net of short positions and hedges considered effective 2 Includes USD 4 million of RMBS CDO exposure where the hedge protection from a single monoline insurer is considered ineffective. See monol
Slide 52: US Alt-A positions - average marks
US Alt-A positions - average marks Net exposures in USD billion; average marks in % Average marks as of 31.12.071 Average marks as of 31.03.081 Net exposures as of 31.03.082 Super senior RMBS CDOs 74 30 0.3 AAA rated RMBSs, 1st lien 96 77 14.5 Other RMBSs 60 44 2.3 1 Average marks represent the rati
Slide 53: US Alt-A positions - vintages and ratings
US Alt-A positions - vintages and ratings Ratings3 in % AAA HG Mezz SIG Other RMBSs 37 59 0 4 Vintages1,2 in % < 2005 2005 2006 2007 Super senior RMBS CDOs1 2 30 56 12 AAA rated RMBSs, 1st lien2 7 Other RMBSs2 1 8 50 41 6 45 42 1 Vintage information on super senior CDO positions is based on the weig
Slide 54: US Alt-A positions - ratings by type of loan
US Alt-A positions - ratings1 by type of loan2 1 Ratings are based on externally sourced data reflecting current ratings from any of the three rating agencies: Moody's, Standard & Poor's or Fitch. Where there are split ratings, we default to Moody's 2 Reflects approximately 95% of the overall RMBS p
Slide 55: US commercial real estate exposures, P&L and ratings
US commercial real estate exposures, P&L and ratings USD billion Net exposures as of 31.12.071 P&L 1Q08 Other net changes2 Net exposures as of 31.03.081,3 Super senior CMBS CDOs 1.0 (0.2) 0.0 0.8 US CMBS/CMBX trading positions 2.6 (0.1) (0.1) 2.4 US commercial real estate loans4 4.1 (0.1) (0.9) 3.1
Slide 56: US RLN program exposures and P&L
US RLN program exposures and P&L USD billion Net exposures as of 31.12.071,3 P&L 1Q08 Other net changes2 Net exposures as of 31.03.081,3 Sub-prime and Alt-A 3.8 (1.2) 0.2 2.9 CMBSs 3.0 (0.2) (1.0) 1.9 Other ABSs and corporate debt 4.4 (0.2) 0.0 4.2 Total 11.2 (1.6) (0.7) 8.9 1 Net exposure represent
Slide 57: US RLN program exposures
US RLN program exposures Market value Credit protection Reference pool notional 3.8 Net 13.1 Gross 16.9 CMBSs Other ABSs and corporate debt Sub-prime and Alt-A USD billion 1.6 8.9 10.5 0.6 1.9 2.5 0.6 4.2 4.8 0.3 2.9 3.2 Net 11.2 13.1 3.0 4.4 3.8 31 Dec 07 31 Mar 08
Slide 58: US RLN program - ratings and vintages
US RLN program - ratings and vintages Vintages2 in % <2005 2005 2006 2007 Sub-prime and Alt-A 33 35 36 (4) Ratings1 in % AAA HG Mezz SIG Sub-prime and Alt-A 28 62 8 2 CMBSs 71 Other ABS and corporate debt 30 18 40 12 22 12 (4) 1 Ratings are based on externally sourced data reflecting current ratings
Slide 59: Exposure to monoline insurers
Exposure1 to monoline insurers2 1 Excludes the benefit of credit protection purchased from unrelated third parties 2 Categorization based on the lowest insurance financial strength rating assigned by external rating agencies 3 Represents gross notional amount of credit default swaps (CDSs) purchased
Slide 60: Leveraged finance commitments
Leveraged finance commitments1 31.03.08 31.12.07 Fees, USD million Total 8.6 125 11.4 Cumulative markdown, net of fees, USD million 522 Cumulative markdown, gross of fees, USD million 647 3.6 3.3 0.3 Old deals Funded Unfunded 5.6 3.2 2.4 5.0 4.0 1.0 New deals Funded Unfunded 5.8 4.2 1.6 USD billion
Slide 61: Student loan exposures and P&L
Student loan exposures and P&L 1 Net exposure represents market value of gross exposure net of treasury hedges 2 Includes additions, disposals, amortizations and adjustments to hedges 3 At 31 March 2008 USD 4,977 million of the US student loan auction rate certificates and USD 16 million of the US s
Slide 62: Other
Other SUBS
Slide 63: Rights issue expected timetable
Rights issue expected timetable 27 May 2008 Ex-date for rights and start of rights trading and exercise period 9 June 2008 End of rights trading period 12 June 2008 End of rights exercise period 13 June 2008 First trading day of new shares 17 June 2008 Payment and settlement
Slide 64: Share count
Share count 102 102 1,972 2,172 2'172 1,972 Max 1,250 98 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Total ordinary shares issued as of 31 Mar 2008 Total post stock dividend Total post rights issue Total post rights issue and MCN conversion (Million) Total ordinary shares issued excluding treasu