Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q4 2010 Earnings Presentation
35 slides from Ubs's earnings presentation, Feb 8, 2011
Slide 1: Fourth quarter 2010 results
Fourth quarter 2010 results February 8, 2011 Fourth quarter 2010 results
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: 2010 highlights
2010 highlights Revenues excluding own credit1 of CHF 32.6 billion, +23% YoY 55% of revenues excluding own credit generated in 1H10 and 45% in 2H10 2H10 was marked by low levels of client activity and the strengthening of the Swiss franc Operating expenses of CHF 24.6 billion, (2%) YoY We achieved o
Slide 4: 4Q10 highlights
4Q10 highlights 1 Own credit on financial liabilities designated at fair value CHF 1.3 billion net profit attributable to shareholders, diluted EPS CHF 0.33 Pre-tax profit of CHF 1.2 billion includes own credit1 charges of CHF 0.5 billion Operating income up 7% on increased client activity levels, p
Slide 5: 4Q10 - performance by business division
4Q10 - performance by business division 1 Treasury activities and other corporate items 2 Own credit on financial liabilities designated at fair value 3 Operating profit from continuing operations before tax
Slide 6: Net profit attributable to shareholders 4Q10 vs. 3Q10
Net profit attributable to shareholders 4Q10 vs. 3Q10 3Q10 Own credit1 Tax expense / (benefit) 4Q10 Personnel expenses Non-controlling interests Credit loss expenses Operating income excl. own credit and credit losses Non- personnel expenses 1 Own credit on financial liabilities designated at fair v
Slide 7: 4Q10 operating expenses
4Q10 operating expenses 1 Adjustment items excluded from expenses as reported: 1Q10: personnel restructuring charges CHF 21 million 2Q10: personnel restructuring charges CHF 8 million credit, non-personnel restructuring charges CHF 127 million, UK Bank Payroll Tax CHF 242 million 3Q10: personnel res
Slide 8: FY10 personnel expenses
FY10 personnel expenses The bonus pool for 2010 was CHF 4,319 million, down 10% from 20091 PVTR and others2 1,550 Bonus expense for 2010 performance year 2,685 Amortization of prior year awards 1,471 2010 bonus pool 4,319 The total amount of unrecognized awards related to all discretionary bonus on
Slide 9: FY10 operating expenses
FY10 operating expenses We achieved our fixed cost target of less than CHF 20 billion in 2010 1 Includes grid-based financial advisor (FA) compensation, other formulaic FA comp and commitments and advances related to recruited FAs 2 Excluding significant non-recurring items: FY09: Personnel restruct
Slide 10: Wealth Management - revenues
Wealth Management - revenues Increased revenues on improved client trading activity, partly offset by further strengthening of the Swiss franc Interest Fees excl. brokerage Trading & brokerage Other income and CLE 18% (3%) 0% 4Q10 vs 3Q10 (CHF million) Invested assets (CHF billion)
Slide 11: Wealth Management
(CHF million) Wealth Management FY10: 5,023 FY09: 5,191 (3%) (CHF million) Operating expenses Operating income and pre-tax profit Continued NNM inflows from UHNW clients and Asia Pacific region with each recording > CHF 10 billion NNM in 20101; NNM outflows in Europe (CHF billion) Net new money 4Q10
Slide 12: Wealth Management - gross margin
Wealth Management - gross margin1 (bps) 1 Operating income before credit loss (expense) or recovery (annualized) / average invested assets. Gross margin excludes valuation adjustments on a property fund of zero in 4Q10 and 3Q10, CHF 17 million in 2Q10, CHF 28 million in 1Q10, CHF 155 million in FY09
Slide 13: Wealth Management - client advisors and invested assets
Wealth Management - client advisors and invested assets Medium-term target remains 4,700 client advisors
Slide 14: Retail & Corporate
Retail & Corporate (CHF million) Higher interest and trading income; higher credit losses (CHF million) Credit loss expenses Income before credit loss expenses increased 2% to CHF 995 million Credit loss expenses totaled CHF 63 million due to charges for a small number of clients Increase in expense
Slide 15: Wealth Management Americas
Wealth Management Americas CHF 33 million pre-tax loss as increase in litigation provisions offset increase in revenues Revenues up 3% (7% in USD terms) on higher managed account fees, net interest income and transaction revenues Operating expenses increased 2% (6% in USD terms), mainly due to litig
Slide 16: Global Asset Management
Global Asset Management Increase in revenues across all business lines Higher performance fees, mainly in A&Q Expenses up on higher personnel expenses, in the context of higher performance fees Includes CHF 9 million of severance costs (CHF million) Net new money (CHF billion) 18% increase in pre-ta
Slide 17: Investment Bank - pre-tax performance 4Q10 vs. 3Q10
Investment Bank - pre-tax performance 4Q10 vs. 3Q10 Investment Banking produced higher revenues, especially in equity capital markets Equities and FICC revenues improved modestly from the third quarter Own credit1 charge of CHF 509 million in 4Q10 vs. charge of CHF 387 million in 3Q10 Credit loss ex
Slide 18: Equities revenues
Equities revenues Cash: higher commission income across all regions Derivatives: Derivatives revenues improved with an increase in new business activity Equity-linked revenues were broadly in line with the last quarter on slightly higher client activity Prime services: Prime brokerage revenues were
Slide 19: FICC revenues
FICC revenues Macro: FX revenues rose on improved customer activity Rates revenues were largely in line with the prior quarter as gains in non-linear interest rates and unwinds of existing positions partially offset lower linear revenues Credit: revenues fell as continued good performance from flow
Slide 20: Investment banking revenues
Investment banking revenues Advisory: 19% increase in revenues as the quarter included several large transactions Capital markets: Equities: revenues increased fivefold, reflecting stronger deal activity across all regions and improved market share1 FICC: revenues increased slightly against a flat o
Slide 21: Capital position
Capital position Basel 2 risk-weighted assets down CHF 9 billion to CHF 199 billion as at 31.12.10 Pro-forma Basel 2.5 tier 1 ratio of approximately 12.7% as at 31.12.10: Additional RWAs of approximately CHF 70 billion Additional deductions to tier 1 capital of approximately CHF 1.0 billion 4Q10 FIN
Slide 22: Movements in IFRS equity
Movements in IFRS equity IFRS equity attributable to Bf attributable to (CHF million) Finandal investments available-for-sale (OC!) (605) (603) (2) Cash flow hedges (OC) (1,175) (1,175) 0 Deferred tax benefit on equity items (share premium) (182) (182) o Equity compensation plans (share premium) ot
Slide 23: Funding
Over CHF 15 billion equivalent of public benchmark bonds raised in 2010 Average maturity of 5.5 years This exceeded the CHF 11 billion of long-term straight debt (CHF 6 billion of which public) that matured during 2010 plus CHF 3 billion of subordinated and hybrid tier 1 debt that was redeemed durin
Slide 24: Appendix
Appendix ARUBS
Slide 25: FY10 - performance by business division
FY10 - performance by business division 1 Treasury activities and other corporate items 2 Own credit on financial liabilities designated at fair value 3 Operating profit from continuing operations before tax
Slide 26: Pre-tax profit from continuing operations - FY10 vs. FY09
Pre-tax profit from continuing operations - FY10 vs. FY09 WM&SB WMA Global AM CC1 IB Group 1 Treasury activities and other corporate items 2 Own credit on financial liabilities designated at fair value, goodwill impairment charges, restructuring charges and UK Bank Payroll Tax (CHF million) (CHF mil
Slide 27: Headcount
Headcount 1 Treasury activities and other corporate items 1 FTEs
Slide 28: Invested assets
Invested assets Wealth Management Wealth Management Americas Global Asset Management Retail & Corporate
Slide 29: BIS regulatory capital (Basel 2)
31.12.10 BIS regulatory capital (Basel 2) 1 Includes CHF 0.7 billion due to changes in own share related components, CHF 0.1 billion due to net negative foreign currency effects and CHF 0.2 billion due to other tier 1 changes 2 Includes CHF 0.7 billion due to changes in own share related components,
Slide 30: Asset funding - 31 December 2010
126% coverage CHF 69 billion surplus CHF 124 billion collateral surplus Asset funding - 31 December 2010 Assets Liabilities and equity Cash, CBs, due from banks 44 Loans 263 Trading portfolio assets 229 Cash collateral on securities borrowed and reverse repurchase agreements 205 Other assets (incl.
Slide 31: Balance sheet development
Balance sheet development 1 Including cash collateral on derivative transactions. Refer to the "Balance sheet" section UBS's 4Q10 report for information about changes made to the presentation of Other assets and Other liabilities 2 Including financial liabilities designated at fair value 3 Percentag
Slide 32: Exposure to monoline insurers, by rating
Exposure1 to monoline insurers, by rating (USD billion) Credit protection on US sub-prime RMBS CDOs2 of which: from monolines rated investment grade (BBB and above) of which: from monolines rated sub-investment grade (BB and below) Total 31.12.10 11.9 2.7 1.1 1.6 Notional amount3 Fair value of CDSs4
Slide 33: Student loan auction rate securities
Student loan auction rate securities (USD million) US student loan auction rate securities Carrying value as of 30.9.10 10,769 1 Includes USD 4.5 billion (CHF 4.2 billion) at carrying value of student loan ARS that were reclassified to "Loans and receivables" from "Held for trading" in fourth quarte
Slide 34: Reclassified assets 31.12.10
Reclassified assets 31.12.10 (CHF billion) Monoline protected assets US student loan and municipal auction rate securities US reference linked notes CMBS / CRE (excl. interest-only strips) Leveraged finance 5.3 4.5 0.5 0.1 0.4 0.7 Ratio of carrying to notional value 86% 88% 83% 81% 75% 82% Carrying
Slide 35: Sovereign exposures to selected European countries
Sovereign exposures to selected European countries Our gross sovereign exposures to Greece, Ireland, Portugal and Spain are immaterial, and our gross sovereign exposure to Italy, while larger, is commensurate with its rating and the size of its economy On a net basis, our sovereign exposures to thes