Ubs Group Ag · SIX:UBSG
Ubs — Q2 2024 Earnings Presentation
29 slides from Ubs's earnings presentation, Aug 14, 2024
Slide 1: Second quarter 2024 Financial results
Second quarter 2024 Financial results 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: Agenda
Agenda Key Financial Q&A messages performance Sergio P. Ermotti, Group CEO Todd Tuckner, Group CFO 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: Financial performance
Financial performance Todd Tuckner, Group CFO 4
Slide 6: 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 7: 1.1bn net profit with strong underlying profitability
1.1bn net profit with strong underlying profitability Profits m ~0.6bn expected in 3Q241 Underlying 780 (557) 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 8: Ongoing progress on gross and net cost saves
Ongoing progress on gross and net cost saves Cumulative annualized exit rate gross Cumulative integration-related Underlying operating expenses cost reductions1 expenses USDbn USD bn / % of expected cumulative total USD bn / % of expected cumulative total Core Non-core and Legacy (~10%) / (~4bn) ~13
Slide 9: 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 8
Slide 10: 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 11: Global Wealth Management
Global Wealth Management Underlying Reported Underlying 2Q24 vs. 1Q24 USD m, except where indicated 2Q24 1Q24 QoQ 2Q24 1Q24 QoQ 5,820 6,053 PBT 1,161m, (9%) Total revenues 5,909 (2%) 6,143 (1%) Net interest income 1,586 1,615 (2%) 1,825 1,873 (3%) Total revenues 5,820m, (2%) as higher recurring net
Slide 12: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Underlying Reported Underlying 2Q24 vs. 1Q24 CHF m, except where indicated 2Q24 1Q24 QoQ 2Q24 1Q24 QoQ Total revenues 1,838 1,913 (4%) 2,061 2,139 (4%) PBT 645m, (17%) driven by lower revenues and higher credit losses Net interest income 1,024 1,119 (8%) 1,225 1,33
Slide 13: Asset Management
Asset Management Underlying Reported Underlying 2Q24 vs. 1Q24 USD m, except where indicated 2Q24 1Q24 QoQ 2Q24 1Q24 QoQ PBT 228m, +26% on lower expenses partly offset by Total revenues 768 776 (1%) 768 776 (1%) lower revenues Net Management fees 711 745 (5%) 711 745 (5%) Performance fees 28 30 (6%)
Slide 14: Investment Bank
Investment Bank Underlying Reported USD m, except where indicated 2Q24 2Q23 YoY 2Q24 2Q23 YoY Underlying 2Q24 vs. 2Q23 Total revenues 2,493 1,981 +26% 2,803 2,036 +38% PBT 412m with revenues +26% Global Banking 668 430 +55% 974 485 +101% Global Banking revenues +55%, outperforming the relevant Advis
Slide 15: Non-core and Legacy
Non-core and Legacy Underlying Reported Underlying 2Q24 vs. 1Q24 PBT (80m) USD m, except where indicated 2Q24 1Q24 QoQ 2Q24 1Q24 QoQ Total revenues 401m driven by position exits Total revenues 401 1,001 (60%) 401 1,001 (60%) Credit loss expense (1m) Credit loss expense / (release) (1) 36 (1) 36 Oper
Slide 16: 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% reduce further to ~6% underlying costs ~5% through excl. litigation, QoQ 86 active unwinds ~6.1 (2.4) Op. 30 5.0 R
Slide 17: 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 18: Appendix
Appendix 17
Slide 19: Our financial targets and long-term ambitions
Our financial targets and long-term ambitions Financial Capital Ambitions targets guidance long-term Underlying RoCET1 RoCET1, reported ~15% 2026 exit rate ~14% CET1 capital ratio ~18% by 2028 Underlying cost / income GWM invested assets <70% ratio 2026 exit rate >4.0% CET1 leverage ratio >5trn by 2
Slide 20: High-level overview of the UBS Group structure as of 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 21: UBS Group results
UBS Group results USD m, except where indicated 2Q24 1Q24 4Q23 3Q23 2Q23 Total revenues 11,904 12,739 10,855 11,695 9,540 Negative goodwill 27,264 Credit loss expense / (release) 95 106 136 239 623 Operating expenses 10,340 10,257 11,470 11,640 8,486 Operating profit / (loss) before tax 1,469 2,376
Slide 22: UBS Group 2Q24 underlying results
UBS Group 2Q24 underlying results USD m, except where indicated UBS Group AG GWM P&C AM IB NCL Group Items Operating profit / (loss) before tax as reported 1,469 871 773 130 477 (405) (377) o/w: PPA effects and other integration items 780 233 246 310 (8) o/w: Integration-related expenses and PPA eff
Slide 23: PPA pull to par overview and revenue recognition
PPA pull to par overview and revenue recognition Accretion of PPA adjustments on financial instruments Recognized Estimated amortization profile4 Expected future P&L Opening balance Remaining balance USD bn 2023-2Q24 releases at 30.06.24 2H24 2025 2026 2027+ as of 12.6.23 (close)2 to be recognized3
Slide 24: 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 25: Capital and leverage ratios
Capital and leverage ratios 198bn 38.7% 12.6% Gone concern: 106bn Gone concern: 20.7% Gone concern: 6.8% Total loss-absorbing capacity : 8.75% Total loss-absorbing capacity: 25.5% Going concern: 92bn Going concern: 18.0% Going concern: 5.9% o/w CET1 o/w CET1 o/w CET1 Going concern: 14.8% Going conce
Slide 26: Reconciliation of estimated underlying combined results for 2Q23
Reconciliation of estimated underlying combined results for 2Q23 Credit loss expense / USD bn Revenues Operating expenses Profit before tax (release) UBS sub-group (IFRS)1 8.4 0.0 6.8 1.5 Credit Suisse sub-group (US GAAP)2,3 (0.7) 0.1 9.2 (10.0) UBS sub-group exclusions from underlying results4 (0.5
Slide 27: FY22 combined cost baseline
FY22 combined cost baseline FY22 USD bn Operating expenses UBS sub-group (IFRS)1 24.9 Credit Suisse sub-group (US GAAP)2,3 19.1 UBS sub-group exclusions4 (0.3) Credit Suisse sub-group exclusions3,5 (2.0) Commission expense reclassification3,6 (1.1) FY22 combined cost baseline 40.6 Of which: ~34.5bn
Slide 28: Overview of purchase price allocation adjustments (PPA)
Overview of purchase price allocation adjustments (PPA) PPA adjustments Measurement period adjustments2 bn − 1.1bn for additional provisions and contingent liabilities (litigation) (14.7) − 0.3bn additional fair value (24.8) adjustments on financial instruments (15.2) (4.5) − 0.3bn associated with R
Slide 29: 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