Slide 1: Fourth quarter 2016 results
Fourth quarter 2016 results January 27, 2017
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: 4Q16 results
4Q16 results Adjusted profit before tax CHF 1.1 billion, up 47% YoY Group Net profit attributable to shareholders CHF 738 million, diluted EPS CHF 0.19 Reported profit before tax (PBT) CHF 848 million, adjusted PBT CHF 1,105 million 8.2% annualized adjusted return on tangible equity Fully applied CE
Slide 4: 2016 results
2016 results Solid performance driven by balanced business mix and disciplined resource management Solid financial performance Adjusted profit before tax CHF 5.4 billion Adjusted return on tangible equity 9.2%, 11.4% excluding DTA impact1 Net profit attributable to shareholders CHF 3.3 billion
Slide 5: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) CHF million, except where indicated FY15 FY16 4Q15 3Q16 4Q16 Total operating income 30,605 28,320 6,775 7,029 7,055 Total operating expenses 25,116 24,128 6,541 6,152 6,206 Profit before tax as reported 5,489 4,192 234 877 848 of which: net restructuring expenses
Slide 6: Wealth Management
Wealth Management 9% YoY decrease in costs, offsetting revenue headwinds Operating income CHF 1,782 million Operating 2,004 2,106 2,024 1,943 1,897 1,885 1,817 1,809 1,782 Transaction-based income down YoY as 4Q15 income 436 589 459 366 364 402 347 334 314 included a CHF 45 million fee received fo
Slide 7: Wealth Management
Wealth Management Invested assets up CHF 10 billion QoQ, NNM driven by cross-border outflows 6.5% Net new 5.8% NNM outflows CHF 4.1 billion driven by money1 3.5% 4.0% 2.6% CHF 7.4 billion of cross-border outflows, mainly in 1.2% 1.5% emerging markets and APAC Annualized growth rate Full-year NNM
Slide 8: Wealth Management
Wealth Management Net new money outflows driven by emerging markets Europe Asia Pacific Switzerland Emerging markets of which: UHNW Net new 12.9% 10.5% money 10.2% 7.5% 6.3% 5.1% 4.6% 2.8% 3.8% 5.2% Annualized 0.1% 0.5% 2.1% 2.5% 1.8% 1.8% 1.8% 1.9% growth rate (0.6%) (0.8%) (0.3%) (2.4%) (6.1%) (9.
Slide 9: Wealth Management Americas
Wealth Management Americas Strong results, PBT USD 358 million with 9% YoY revenue growth to record levels Operating income USD 2,049 million Operating 1,924 1,901 1,947 1,931 1,874 1,899 1,924 1,988 2,049 425 381 361 369 372 372 Transaction-based income down slightly YoY income 448 432 376 280 27
Slide 10: Wealth Management Americas
Wealth Management Americas Net margin 13 bps and invested assets USD 1.1 trillion 6.8% Net new 5.3% NNM outflows USD 1.3 billion as net inflows from money financial advisors employed with UBS for more than one 2.2% 1.9% ~2.1% year were more than offset by net outflows from net Annualized ~1.2% gro
Slide 11: Wealth Management Americas
Wealth Management Americas Industry-leading revenue and invested assets per advisor Invested assets and FA productivity Net interest income and lending Annualized revenue per FA (USD thousand) Net interest income (USD million) Invested assets per FA (USD million) Credit loss (expense)/recovery (USD
Slide 12: Wealth Management Americas
Wealth Management Americas Record full-year PBT with strong underlying trends Operating income Profit before tax USD million USD million +4% CAGR +8% CAGR1 7,606 7,653 7,861 1,2302 1,3462 7,075 1,2082 1,0272 of which: +8% 6,010 6,364 991 1,030 1,250 recurring 5,122 5,733 CAGR 874 income 2013 2014 20
Slide 13: Personal & Corporate Banking
Personal & Corporate Banking PBT CHF 395 million, solid 4Q despite persistent headwinds from negative interest rates 913 979 983 974 Operating income CHF 941 million Operating 952 964 9151 963 941 income 273 284 241 238 196 244 254 274 256 Transaction-based income up YoY mainly as 4Q15 included a
Slide 14: Personal & Corporate Banking
Personal & Corporate Banking Best full-year PBT since 2008, with record net new client acquisition Operating income Operating expenses Profit before tax CHF million CHF million CHF million +1% CAGR (2%) CAGR +5% CAGR 3,756 3,741 3,811 3,861 2,244 2,171 2,130 2,107 1,681 1,754 1,512 1,570 2013 2014 2
Slide 15: Asset Management
Asset Management PBT CHF 156 million, up 3% YoY excluding Alternative Fund Services (AFS) Operating 497 511 476 502 512 468 483 481 499 Operating income CHF 499 million 34 68 20 23 44 23 24 44 31 income Performance fees down YoY mainly in Equities, Multi Asset & O'Connor CHF million 463 443 456 47
Slide 16: Investment Bank
Investment Bank PBT up 54% YoY with highest 4Q revenues since 2012, driven by CCS and Equities 2,657 Operating income CHF 1,936 million Operating 2,344 2,088 CCS revenues up 9% YoY with the increase mainly in income 1,919 779 1,721 1,879 2,000 1,796 1,936 822 DCM, and to a lesser extent Advisory a
Slide 17: Investment Bank
Investment Bank Effective resource management to absorb headwinds and drive returns RWA Fully applied, CHF billion Of which: CHF 2.4 billion Of which: CHF 3.5 billion increase related to revised RWA increase primarily increase in market risk RWA operational risk RWA from low levels driven by regul
Slide 18: Corporate Center
Corporate Center Profit before tax 4Q15 1Q16 2Q16 3Q16 4Q16 (267) (417) (586) (654) (662) Corporate Center total (CHF million) Corporate Center results by unit (CHF million) Services Operating income (54) (55) (42) (66) (59) Services operating expenses before Operating expenses 272 156 170 148 216
Slide 19: Cost reduction
Cost reduction Achieved CHF 1.6 billion net cost reductions despite higher permanent regulatory expenses Cost base and net cost reductions CHF billion CHF 1.6 billion net cost reductions achieved Corporate Center Corporate Center and based on Dec-16 annualized exit rate within scope of the business
Slide 20: Going concern capital and leverage ratios
Going concern capital and leverage ratios 13.8% fully applied CET1 ratio and 3.53% fully applied CET1 leverage ratio Capital ratio1,2 Leverage ratio2 Fully applied, CHF billion CHF billion AT1 Phase-in3 Fully applied, rules as of 1.1.20 CET1 (AT1 + T2) AT1 1.1.20 Going concern requirement (CET1 + AT
Slide 21: Equity attribution framework
Equity attribution framework Revised framework reflects evolved regulatory requirements Attributed business division equity (from 1Q17) 4Q16 average attributed equity Current Revised 2 CHF billion framework framework Business division Conversion to CET1 Weighting WM 3.4 6.0 resources WMA 2.6 6.7 RWA
Slide 22: Appendix
Appendix &%% UBS
Slide 23: Group and business division targets and expectations
Group and business division targets and expectations Ranges for sustainable performance over the cycle Net new money growth rate 3-5% Wealth Management Adjusted cost/income ratio 55-65% 10-15% annual adjusted pre-tax profit growth for combined businesses over the cycle Wealth Management Net new mone
Slide 24: Net tax expense and deferred tax assets (DTAs)
Net tax expense and deferred tax assets (DTAs) Net tax expense Tax loss DTAs1,2 CHF million CHF billion, 31.12.16 4Q16 FY16 Net deferred tax expense/(benefit) US UK CH Other Total (166) (582) with respect to net additional DTAs Recognized 7.9 0.1 0.1 0.1 8.2 8.2 of which: US (136) (817) of which: UK
Slide 25: Earnings – illustration of FX translation impact
Earnings – illustration of FX translation impact Indicative FX mix of revenues/expenses FX translation impact vs. FY17 consensus PBT of 6.6 billion2,3,4 % of total for 20171 CHF billion, adjusted, % change relative to consensus dated 10.1.17 EUR/CHF Operating income 1.20 1.10 1.00 4% CHF strengtheni
Slide 26: Interest rate sensitivity and funding costs
Interest rate sensitivity and funding costs Estimated annual net interest income (NII) impact CHF billion, assuming static balance sheet, constant FX rates and no management action Implied forwards1,2 2017 2018 2019 Years 2017-19 Implied rise in USD vs. 2016 cumulative interest rates would more th
Slide 27: Capital requirements under Swiss SRB
Capital requirements under Swiss SRB UBS leverage ratio balances vs. Swiss SRB requirements Leverage ratio1 Requirements Meeting 1.1.20 requirements TLAC-eligible debt • 2.09% (CHF 18.2 billion) existing UBS Group AG TLAC bonds3 • 3.04% (CHF 26.4 billion) long-term debt not counted in total loss abs
Slide 28: Corporate Center – Non-core and Legacy Portfolio
Corporate Center – Non-core and Legacy Portfolio RWA LRD2 and RWA by category CHF billion CHF billion, 31.12.16 103 Operational risk Rates 11.4 3.4 14 Credit and market risk Credit 2.2 0.5 Securitizations 1.5 2.5 31 32 31 APS/ARS 2.5 0.7 88 22 19 19 Muni swaps and options 1.7 0.4 21 22 10 10 Other 3
Slide 29: Regional performance – 4Q16
Regional performance – 4Q16 CHF billion Americas Asia Pacific EMEA Switzerland Global Total 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 WM 0.1 0.1 0.5 0.5 0.9 0.8 0.4 0.4 0.0 (0.0) 1.9 1.8 WMA 1.9 2.1 - - - - - - - - 1.9 2.1 P&C - - - - - - 0.9 0.9 - - 0.9 0.9 Operating AM 0.2 0.2 0.
Slide 30: Regional performance – FY16
Regional performance – FY16 CHF billion Americas Asia Pacific EMEA Switzerland Global Total 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 WM 0.5 0.4 2.1 2.0 3.8 3.4 1.6 1.5 0.0 (0.0) 8.0 7.3 WMA 7.4 7.8 - - - - - - - - 7.4 7.8 P&C - - - - - - 3.8 3.9 - - 3.8 3.9 Operating AM 0.7 0.7 0.
Slide 31: Adjusted results
Adjusted results Adjusting items FY15 FY16 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 CHF million Operating income as reported (Group) 30,605 28,320 6,746 8,841 7,818 7,170 6,775 6,833 7,404 7,029 7,055 of which: WM 21 21 WMA 10 10 Gains on sale of financial assets available for sale P&C 102 102 I
Slide 32: Important information related to this presentation
Important information related to this presentation Use of adjusted numbers Unless otherwise indicated, “adjusted” figures exclude the adjustment items listed on the previous slide, to the extent applicable, on a Group and business division level. Adjusted results are a non-GAAP financial measure as