Ubs Group Ag · SIX:UBSG
Ubs — Q1 2013 Earnings Presentation
31 slides from Ubs's earnings presentation, Apr 30, 2013
Slide 1: First quarter 2013 results
First quarter 2013 results April 30, 2013
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: 1Q13—Key achievements
1Q13—Key achievements Strong first quarter 2013 results • Profit before tax CHF 1,447 million, adjusted profit before tax CHF 1,901 million • Net profit attributable to UBS shareholders CHF 988 million • Net new money into our wealth management businesses totaled CHF 23.6 billion • Basel III fully a
Slide 4: Reduced capital needs aligned with our business mix
Reduced capital needs aligned with our business mix Equity attributed to business divisions and adjusted profit before tax contribution1 1Q12 1Q13 Attributed PBT contribution Attributed PBT contribution equity1 CHF 2.1 billion equity1 CHF 2.4 billion ~24 ~62% 38% 62% 39% 61% (CHF billion) (CHF billi
Slide 5: Group results
Group results (CHF million) 1Q12 4Q12 1Q13 Total operating income 6,523 6,208 7,775 Total operating expenses 4,956 8,044 6,327 Profit before tax as reported 1,567 (1,837) 1,447 Own credit gain / (loss) (1,164) (414) (181) Net restructuring charges1 (126) (258) (246) Gain on disposals - - 65 Net loss
Slide 6: Wealth Management
Wealth Management Highest profit before tax1 since 2Q09; highest NNM since 4Q07 Operating income and profit before tax Operating income up 9% 1,913 Higher client activity drove increased trading 1,769 1,748 and transaction-based fees Recurring fees increased on higher invested 923 assets 664 690
Slide 7: Wealth Management—by business area
Wealth Management—by business area1 Europe Asia Pacific Switzerland Emerging Markets o/w UHNW 15.4 Net new money growth rate 11.9 12.3 11.2 11.8 (%) 11.2 9.3 8.3 8.3 7.6 8.1 7.2 6.4 6.3 5.7 4.0 4.5 3.1 2.9 0.7 1.3 (0.2) (1.1) (1.1) (5.5) Gross margin (bps) 105 95 100 102 96 98 101 100 95 90 88 89 89
Slide 8: Wealth Management—Operating income and gross margin
Wealth Management—Operating income and gross margin Margins were supported by higher activity early in the quarter +13% Invested assets: Invested assets (CHF billion) 870 Up almost CHF 100 billion YoY 816 821 772 783 Transaction-based and trading 1,913 revenues: 1,769 1,734 1,789 1,748 Significant u
Slide 9: Wealth Management Americas (USD)
Wealth Management Americas (USD) Record profit before tax and continued strong NNM Operating income and profit before tax Stable operating income Stronger transaction-based revenues on higher 1,745 1,737 client activity offset by lower AFS gains; lower 1,568 credit loss expenses 4Q12 included hi
Slide 10: Investment Bank
Investment Bank Strong client activity drove significant increases in revenues and profit Operating income and profit before tax 2,783 Operating income up 74% 2,297 Higher revenues across all business units, including a large private transaction 1,604 977 Very limited credit loss expense, in lin
Slide 11: Corporate Client Solutions
Corporate Client Solutions Very strong equity capital markets performance Operating income Comparison in USD terms Advisory (37%) CHF USD Maintained rank and market share globally; fee pool fell 39% on seasonally low activity +31% +29% Equity capital markets +152% 1,067 Participated in 8 of the
Slide 12: Investor Client Services
Investor Client Services Strong performance in Equities, FX, Rates and Credit Operating income Comparison in USD terms CHF USD Equities +114% UBS #1 global cash equities business1 +111% +110% Derivatives saw strong performance in EMEA and APAC on increased client activity; higher trading 1,920 r
Slide 13: Global Asset Management
Global Asset Management Strong NNM excluding money markets; stable PBT1 on good cost management Operating income and profit before tax 517 Operating income increased 5% 477 491 Higher performance fees at CHF 53 million CHF 34 million gain on Canadian domestic business sale in management fees; ex
Slide 14: Retail & Corporate
Retail & Corporate Resilient performance and continued strong net new business volume growth Operating income and profit before tax Operating income decreased slightly 936 933 919 Lower interest income partially offset by lower 671 credit loss expenses 391 361 362 347 362 Adjusted cost / income ra
Slide 15: Corporate Center—Core Functions
Corporate Center—Core Functions Lower losses primarily on reduced litigation expenses Operating income and profit before tax Adjusted operating income negative CHF 155 million (CHF million) 1Q12 4Q12 1Q13 CHF 60 million hedge ineffectiveness loss Operating income (as reported) (1,091) (240) (479)
Slide 16: Corporate Center—Core Functions / headcount and cost allocation
Corporate Center—Core Functions / headcount and cost allocation Headcount1 Operations 6,663 ~2,800 reduction Human Resources 1,209 27,716 26,886 26,538 25,405 Risk control 1,299 24,961 IT 7,557 Finance 2,453 (FTEs) Legal 1,732 CREAS2 1,035 4Q09 4Q10 4Q11 4Q12 1Q13 Other3 Apprentices & trainees 1,687
Slide 17: Group adjusted operating expenses
Group adjusted operating expenses Adjusted cost / income ratio 81% 76% 6,157 6,081 637 378 Provisions for litigation, regulatory and similar matters 751 1,057 decreased, but remained at elevated 560 616 levels Variable compensation increased in line with improved performance 4,209 (4%) 4,030 (CH
Slide 18: Corporate Center—Non-core and Legacy Portfolio
Corporate Center—Non-core and Legacy Portfolio Realized / unrealized gains offset by expenses including litigation charges Operating income and profit before tax (CHF million) 1Q12 4Q12 1Q13 Adjusted operating income Non-core 525 31 231 CHF 477 million of which: Debit valuation adjustments (37) (188
Slide 19: Corporate Center—Non-core
Corporate Center—Non-core1 CHF 45 billion decrease in balance sheet 31.3.13 (CHF billion) Funded RWA PRV3 RWA IFRS assets assets2 389 Credit – Loans & distressed trading 7.3 0.1 344 (CHF billion) (CHF billion) Credit – Cash & CDS4 18.9 2.6 9.4 65 59 67 52 Credit – Structured credit 1.1 14.7 31.12.12
Slide 20: Corporate Center—Legacy Portfolio
Corporate Center—Legacy Portfolio1 Continued decrease in RWA 31.3.13 (CHF billion) Funded RWA PRV3 RWA IFRS assets assets2 Collateralized debt obligations (CDO) 10.2 3.4 1.2 (CHF billion) (CHF billion) 38 36 40 38 Reference-linked notes (RLN) 5.8 2.3 0.6 20 22 22 22 Muni swaps & options 2.4 (0.2) 4.
Slide 21: Changes in Group risk-weighted assets
Changes in Group risk-weighted assets Decrease in Non-core RWA offset by higher usage in the Investment Bank 2 3 1 (3) (2) • Increases of CHF 1.3 billion on stressed expected positive (CHF billion) exposure refinement and CHF 1.2 billion on the FINMA 258 259 multiplier on Swiss residential mortgages
Slide 22: Risk-weighted assets
Risk-weighted assets 35% reduction SNB StabFund1 Legacy Portfolio (until 4Q12) Non-core (from 1Q13) and Legacy Portfolio ~400 ~21 ~380 Investment Bank ~20 ~350 WM / WMA / R&C / Global AM / ~80 ~21 Corporate Center – Core Functions ~62 ~59 ~258 ~258 259 <250 ~38 <225 ~103 95 <200 ~85 ~55 ~220 ~212 ~2
Slide 23: Basel III
Basel III First large global bank to achieve 10% Basel III fully-applied CET1 ratio Low trigger loss-absorbing capital High trigger loss-absorbing capital1 Common equity Basel III Basel III ~ phase-in fully applied 1.4% 0.2% ~15.3% 15.3% 1.5% 0.2% ~13.0% ~11.8% ~11.5% ~10.0% ~10.7% ~9.8% 10.1% ~7.5%
Slide 24: UBS—Leading positions across all business divisions
UBS—Leading positions across all business divisions An unrivaled franchise with compelling growth prospects Wealth management businesses Retail & Corporate • World’s leading HNW and UHNW franchise • “Best bank in Switzerland”2 • Unrivaled scope, reach and client mix • The leading universal bank in S
Slide 25: Appendix
Appendix 3 UBS
Slide 26: Wealth Management Americas—Lending balances (USD)
Wealth Management Americas—Lending balances1 (USD) Net interest income 2 (USD million) 237 230 218 218 217 215 206 197 195 178 34.1 34.5 31.2 32.3 28.9 29.7 29.8 3.8 4.4 27.6 2.8 3.3 25.6 1.8 2.0 2.4 3.6 3.4 1.5 3.8 3.6 1.2 1.2 1.2 4.2 4.3 3.8 1.0 1.1 3.6 1.0 0.9 2.9 0.8 0.9 0.9 23.2 23.8 24.9 24.9
Slide 27: 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 Strong and significantly reduced Due to banks balance sheet – Funded balance sheet down >50% from its Short-term debt issued peak in 2007 – Swis
Slide 28: Change in funded assets
Change in funded assets1 1 5 1 1 (15) (0) (2) (0) 841 832 (CHF billion) 31.12.12 Non-core Legacy Core IB WM WMA R&C Gl AM 31.3.13 Portfolio Functions Corporate Center • FX movements added ~CHF 12 billion to funded assets, primarily from the USD appreciation against CHF – Largest effects on Corporate
Slide 29: Balance sheet
Balance sheet Total assets CHF 1,214 billion or CHF 832 billion excluding PRVs 31.3.13 334 344 4 to be exited 263 234 70 51 291 330 193 (CHF billion) 184 38 52 17 22 Investment Other Corporate Center Corporate Center Corporate Center Bank business divisions Core Functions Non-core Legacy Portfolio A
Slide 30: Leverage ratios
Leverage ratios Our leverage ratios will improve substantially as we reduce our balance sheet Simple leverage ratio1 6.3% FINMA leverage ratio (until 4Q12)2 Swiss SRB3 Basel III leverage ratio (from 1Q13) 5.7% 5.4% 5.5% Funded balance sheet4 4.8% 5.2% expected direction 2.2 based on our plans 2.1 4.
Slide 31: Important information related to numbers shown in this presentation
Important information related to numbers shown in this presentation Use of adjusted numbers Throughout this presentation, unless otherwise indicated, “adjusted” figures exclude each of the following items, to the extent applicable, on a Group and business division level: – Own credit loss on financi