Ubs Group Ag · SIX:UBSG
Ubs — Debt Investor Presentation (August 2024)
30 slides from Ubs's debt investor presentation, Aug 14, 2024
Slide 1: Second quarter 2024 Fixed Income investor presentation
Second quarter 2024 Fixed Income investor presentation This document should be read in conjunction with our 2Q24 report and earnings presentation, available on ubs.com/investors 14 August 2024
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: Table of contents
Table of contents Progress update and Group balance 2Q24 financial performance sheet Slides 3-8 Slides 9-16 2
Slide 4: We are positioning UBS for sustainable growth and long-term value creation
We are positioning UBS for sustainable growth and long-term value creation We are delivering for our clients and stakeholders We are executing our integration plan at pace 5.9trn invested assets ✓ Enhancing client franchises, capabilities and scale ✓ Completed parent and Swiss banks mergers ✓ Suppor
Slide 5: Sustained revenue momentum with steady progress on cost reduction
Sustained revenue momentum with steady progress on cost reduction Underlying revenues Underlying costs Underlying PBT Key metrics bn bn bn +~10% (7%) Reported 2Q24 1H24 Net profit 1.1bn 2.9bn 12.0 (~10%) 11.1 ~10.0 (3%) EPS 0.34 0.86 ~10.1 9.2 9.0 RoCET1 5.9% 7.5% Cost / income 86.9% 83.6% 2.6 Under
Slide 6: 1.1bn net profit with strong underlying profitability
1.1bn net profit with strong underlying profitability Profits m ~0.6bn expected in 3Q241 Underlying (557) 780 2,617 267 2,060 11 (836) 1,469 (7%) QoQ (1,372) (3%) QoQ 1,136 (2%) excl. NCL (3%) excl. variable, ~1.1bn expected (333) FA compensation in 3Q24 and litigation 1Q24 Revenues CLE Opex 2Q24 PP
Slide 7: Ongoing progress on gross and net cost saves
Ongoing progress on gross and net cost saves Cumulative annualized exit rate gross cost Cumulative integration-related Underlying operating expenses reductions1 expenses USDbn USD bn / % of expected cumulative total USD bn / % of expected cumulative total Core NCL (~10%) / (~4bn) ~13 ~13 ~40.6 38.8
Slide 8: Strong progress on cost and balance sheet reductions in Non-core and Legacy
Strong progress on cost and balance sheet reductions in Non-core and Legacy Underlying operating expenses RWA Updated natural run-off profile4 bn bn % of Ambition to (17%) Group 15% 10% ~6% underlying costs reduce further to ~5% through excl. litigation, QoQ 86 active unwinds ~6.1 (2.4) Op. 30 5.0 R
Slide 9: Group balance sheet
Group balance sheet UBS
Slide 10: Maintaining a balance sheet for all seasons
Maintaining a balance sheet for all seasons RWA LRD CET1 capital ratio Total loss absorbing capacity bn bn % bn (8%) (7%) 557 1,678 (2%) 14.9% 198 (3%) ~14% 1,600 526 1,564 511 HoldCo 106 AT1 16 CET1 76 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Medium-term 2Q24 2Q24 guidance 9
Slide 11: Strong capital position at group and parent bank level
Strong capital position at group and parent bank level UBS Group AG consolidated UBS AG (parent bank) standalone 198bn 38.7% Gone concern: 106bn Gone concern: 20.7% 13.5% UBS AG standalone CET1 capital ratio, fully applied1 Already providing ~20bn2 of additional capital from: • Elimination of regula
Slide 12: Funding overview
Funding overview Group funding bn 835 786 1,330 1,225 2Q24, QoQ 1% 1% 1% 100% 1% − (1.1bn), mainly driven by distributions to 84bn shareholders, reflecting the payment of 2.3bn for the FY23 dividend shareholder equity 60% 62% − Of which short-term debt 62bn, (19bn) reflecting 65% 67% 369bn the repay
Slide 13: Capital markets issuances and redemptions
Capital markets issuances and redemptions Issuances and redemptions1 Upcoming maturities and first calls1,2 Issuances year-to-date USD bn USD bn As of 14.8.24 AT1 HoldCo Covered Bonds OpCo 1H24 USD 1.0bn, USD 5.8bn CHF 0.6bn EUR 1.5bn 93 SGD 1.3bn EUR 1.3bn EUR 2.8bn JPY 20.0bn CHF 0.3bn 9 2024 fund
Slide 14: Long-term wholesale funding diversification
Long-term wholesale funding diversification Group funding 2Q24 Covered Bonds Other 5% <1 year CHF 8% 19% 4% >5 years OpCo 30% 24% By By EUR By source maturity1 28% currency USD AT1 HoldCo 60% 8% 63% 3-5 years 1-3 years 16% 35% As of quarter-end, does not include TLAC special feature notes and struct
Slide 15: Liquidity
Liquidity Liquidity coverage ratio 1,2 quarterly averages Average high-quality liquid assets, bn 240 239 230 257 368 423 378 − Balancing efficiency with resiliency and safety − Remaining compliant with the more stringent Swiss liquidity requirements that took effect on 1 Jan 2024 − Continued focus o
Slide 16: Deposits
Deposits A well diversified deposit base Composition as of 2Q24 Other 9% Demand EUR 29% 10% P&C Time USD 37% deposits 41% 43% By By client By type currency segment GWM 63%1 Retail savings CHF Sweeps 40% 23% 5% 1 Include customer brokerage payables which are presented in separate reporting lines on t
Slide 17: High-quality loan portfolio
High-quality loan portfolio Loans and advances to customers On-balance sheet, 2Q24 Other 10% Corporates2 Mortgages1: 340bn, 9% › Swiss mortgages make up the majority of the portfolio Lombard: 148bn › Fully collateralized, with daily monitoring of margin requirements 599 Mortgages1 Corporates: 52bn L
Slide 18: Appendix
Appendix UBS
Slide 19: Credit ratings peer comparison (operating company)
Credit ratings peer comparison Long-term senior unsecured debt – operating company, as of 13.8.24 MOODY’S S&P FITCH Baa2 Baa1 A3 A2 A1 Aa3 Aa2 Aa1 BBB- BBB BBB+ A- A A+ AA- AA BBB- BBB BBB+ A- A A+ AA- AA UBS Barclays BNP BoA Citi DB GS HSBC JPM MS SocGen [No arrow] Review for downgrade Outlook nega
Slide 20: Credit ratings peer comparison (holding company)
Credit ratings peer comparison Long-term senior unsecured debt – holding company, as of 13.8.24 MOODY’S S&P FITCH Ba1 Baa3 Baa2 Baa1 A3 A2 A1 Aa3 BB+ BBB- BBB BBB+ A- A A+ AA- BB+ BBB- BBB BBB+ A- A A+ AA- UBS Barclays BNP1 BoA Citi DB1 GS HSBC JPM MS SocGen1 [No arrow] Review for downgrade Outlook
Slide 21: Significant progress in reducing financial resource consumption
Significant progress in reducing financial resource consumption CET1 capital Risk weighted assets bn bn (2%) (3%) 1.5 526.4 0.1 0.0 0.0 511.4 (0.3) (13.2) (1.9) 77.71 (1.0) 76.1 o/w: (0.15bn) 2Q24 share repurchases and (0.85bn) (1.7) 1Q24 Credit and Non- Market Operational Currency 2Q24 capital rese
Slide 22: UBS Group AG capital requirements and eligibility criteria
UBS Group AG capital requirements and eligibility criteria Group consolidated requirements Grandfathering rules Going concern RWA LRD Gone concern RWA LRD Any going concern-eligible capital above the minimum requirement can be counted towards Minimum capital 4.50% 1.50% Minimum gone-concern 1 10.73%
Slide 23: Credit loss expense / (release) and credit impaired exposures
Credit loss expense / (release) and credit impaired exposures Credit loss expense / (release)1 ECL coverage ratio for core loan portfolio (stage 3)3 m On balance sheet 2Q23 3Q23 4Q23 1Q24 2Q24 23% 23% GWM 149 10 (8) (3) (1) 22% P&C 221 160 85 44 103 22% IB 132 4 48 32 (6) NCL 119 59 15 36 (1) Other2
Slide 24: Balance sheet
Balance sheet For the quarter-end 2Q24 1,561 1,561 1. Cash and balances at central banks 62 a a) Short-term borrowings2,3 15 1 248 b 2. Loans and advances to customers b) Securities financing transactions 3. Securities financing transactions at amortized cost at amortized cost c) Customer deposits 4
Slide 25: High-level overview of the UBS Group structure as of 1 July 2024
High-level overview of the UBS Group structure as of 1 July 2024 Additional future legal entity changes: − US: Further legal entity simplification and rationalization − UK: Select asset transfer of Credit Suisse International and Credit Suisse (UK) Ltd. mostly to UBS AG (London branch) and wind-down
Slide 26: YTD 2024 issuances
YTD 2024 issuances Issuances ISIN Instrument Currency Notional (bn) Coupon Rate Issuance Date Call/Maturity US902613BJ61 HoldCo USD 1.750 5.428% 08.01.24 08.02.29 US902613BH06 HoldCo USD 2.250 5.699% 08.01.24 08.02.34 CH1305916897 HoldCo EUR 1.250 4.125% 09.01.24 09.06.32 CH1321481462 Covered bonds
Slide 27: YTD 2024 redemptions
YTD 2024 redemptions Redemptions ISIN Instrument Currency Notional (bn) Coupon Rate Issuance Date Call/Maturity CH0459297435 HoldCo CHF 0.400 0.875% 30.01.19 30.01.24 US90352JAF03 AT1 USD 2.500 7.000% 31.01.19 31.01.24 US22550L2E08 1 OpCo USD 0.906 0.495% 02.02.21 02.02.24 US22550UAB701 OpCo USD 0.9
Slide 28: UBS Liquidity & Funding (Risk Management) Framework
UBS Liquidity & Funding (Risk Management) Framework Liquidity coverage ratio Net stable funding ratio Group Treasury • Proposes the liquidity and funding (L&F) strategy • Maintains the UBS L&F risk management framework, together 100% 100% with the 2nd line of defence, including the Contingency Fundi
Slide 29: Ratings on main UBS entities
Ratings on main UBS entities MOODY’S S&P FITCH UBS Group AG Long-term A3/Developing A-/Stable A/Stable Long-term Aa2/Negative A+/Stable A+/ Stable UBS AG Short-term P-1 A-1 F1 Long-term A+/Stable A+/ Stable UBS Switzerland AG Short-term A-1 F1 Long-term Aa3/Negative A+/Stable A+/ Stable UBS Europe S
Slide 30: 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