Slide 1: Second quarter 2019 results
Second quarter 2019 results July 23, 2019 togetherband.org
Slide 2: Important information
Important information Forward Looking Statements: This presentation contains statements that constitute “forward-looking statements”, including but not limited to performance targets, expectations and ambitions, as well as management’s outlook for UBS’s financial performance and statements relating
Slide 3: 2Q19 net profit of USD 1.4bn, RoCET1 16.0%
2Q19 net profit of USD 1.4bn, RoCET1 16.0% Highest 2Q net profit since 2010 1,759m Global Wealth Management Group PBT, +3% YoY › PBT 874m, adjusted 886m › Recurring net fee income +4% QoQ › Record profits in the Americas › Record mandate penetration 34.4% 0.37 › Record invested assets at 2,486bn EPS
Slide 4: Market context
Market context 2019 IMF real GDP growth forecast Equity markets MSCI World 3.9% 3.7% › Continued strength in equity markets 3.5% despite macro and geopolitical tensions 3.3% Jun-18 Jul-18 Sep-18 Oct-18 Dec-18 Jan-19Mar-19 Apr-19Jun-19 Jul-19 2Q18 3Q18 4Q18 1Q19 2Q19 › Significant drop in USD interes
Slide 5: UBS global investor sentiment survey
UBS global investor sentiment survey Economic optimism diverging, sentiment remains muted and conviction is lacking Cash holdings remain high Investors optimistic about the global economy 26% 51% of investable assets Regional QoQ development are in cash 4% 5% 1% 1% QoQ (4%) (4%) Asian Latin American
Slide 6: 1H19 net profit of USD 2.5bn, RoCET1 14.6%
1H19 net profit of USD 2.5bn, RoCET1 14.6% Improving efficiency and delivering higher returns on increasing CET1 capital 85.2% Reported cost/income Adjusted cost/income 77.4% 80.8% 77.0% 14.6% Reported 10.9% RoCET1 CET1 capital 30.2 33.5 34.1 34.9 end of period 4.5 3.9 3.3 1.6 1.5 2H 1.5 Net profit
Slide 7: Cost discipline
Cost discipline Lower costs mostly offsetting revenue declines 3,806 (241) 3,564 Lower other operating expenses 3,305 1Q18 Swiss pension Lower variable (1,062) compensation1 447 2Q 1,706 fund credit 1,706 356 2Q19 vs. 2Q18 1,759 +3% PBT (803) 7% reduction in 7% reduction in operating income operatin
Slide 8: Generated 2.5bn capital in 1H19
Generated 2.5bn capital in 1H19 Building CET1 capital while meeting our shareholder return objectives Strong capital generation Strong capital position bn 2.5 0.3 Repurchased 24m shares in 2Q19 Expect to buyback up to USD 1bn in FY19 1.4 Dividend accruals Expect to grow dividend per share 13.3% at m
Slide 9: Growing book value while distributing capital
Growing book value while distributing capital TBVPS growth with dividends well ahead of European peers and close to US peers 6% CAGR TBVPS + dividends CAGR +9% Average, 2011-2Q19 YoY Cumulative 4.17 cash dividends 3.48 7% per share 6% Tangible book 12.00 12.72 value per share 11.03 2% (TBVPS) 31.12.
Slide 10: Continued strong momentum in the Americas
Continued strong momentum in the Americas 6bn DTAs1 expected to benefit CET1 capital; US post-tax profits uniquely accretive to UBS shareholders AM IB 1H19 Strong profit generation Attractive growth prospects PBT2 Profit before tax GWM 6% CAGR5 Capture UHNW opportunity 2.2 >2.5bn Increase mandate an
Slide 11: Strong growth prospects in APAC
Strong growth prospects in APAC #1 wealth manager and leading IB franchise AM IB 1H19 Strong invested assets growth Well positioned to capture future growth PBT1 GWM APAC invested assets 10% Leading foreign wealth, asset GWM CAGR management and IB franchises in China >400bn GWM APAC Extending our le
Slide 12: The #1 bank in Switzerland
The #1 bank in Switzerland Delivering stable profits and compelling returns AM IB GWM 1H19 Consistently attractive profits Extending our lead PBT1 Profit before tax P&C Driving efficient growth 0.7 0.7 through digital 0.7 0.7 0.7 6.3% 0.5 P&C net new business volume growth2 Hire 30% more client advi
Slide 13: 1H19 highlights and 2H19 priorities
1H19 highlights and 2H19 priorities 1H19 highlights 2H19 priorities Generated 2.5bn of capital in 1H19 Help clients to plan, protect and grow and delivered 14.6% RoCET1 their wealth in uncertain times Repurchased USD 0.3bn of shares, targeting to buy back up to USD 1bn in FY19 Reduced costs by 7% Yo
Slide 14: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) 2Q18 3Q18 4Q18 1Q19 2Q19 Total operating income 7,644 7,428 6,972 7,218 7,532 Total operating expenses 5,938 5,724 6,492 5,672 5,773 Profit before tax as reported 1,706 1,704 481 1,546 1,759 of which: adjusting items (115) (66) 3 (31) (28) of which: net restructur
Slide 15: Global Wealth Management
Global Wealth Management Record invested assets and mandate penetration; record PBT in the Americas (12%) Profit before tax 1,009 936 8081 873 886 PBT increased QoQ m (3%) Operating income Operating income decreased YoY on lower net interest m 4,164 4,084 4,028 4,003 4,057 and recurring net fee inco
Slide 16: Global Wealth Management
Global Wealth Management Lower NII and recurring net fee income, partly offset by higher transaction-based income MSCI World USD interest rates Geopolitical uncertainty End of period Global economic policy uncertainty index1 3-month LIBOR 5-year swap rate 2,178 2.88% 2.81% 2,039 2.33% 2.55% 2.34% 1.
Slide 17: Global Wealth Management
Global Wealth Management Net interest income reduction driven by changes in deposit mix and repricing Net interest income Volume m End of period, bn 1Q19 1,009 Loans +1% › Increasing pricing pressure as banks look Loans (15) 174 176 to protect market share on increased volume of client refinancing +
Slide 18: Global Wealth Management
Global Wealth Management Record PBT in the Americas; record invested assets in the Americas, APAC, Switzerland and UHNW 2Q19 1H19 Profit before tax Cost/income Invested assets Net new money Net new money Net new money m ratio bn bn bn annualized growth Americas 367 84% 1,321 (8.3) (8.4) (1.4%) APAC
Slide 19: Global Wealth Management
Global Wealth Management Invested asset growth in the Americas in line with US peers Invested assets 16.8% 17.5% (21) 1,321 73 (9) 147 1,131 31.12.16 Market Dividend NNM Other 30.6.19 31.12.16 30.6.19 and FX and interest1 US peer average2 Implementation of US operating model change completed Numbers
Slide 20: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) PBT +11% on 4% higher operating income and flat expenses +11% 399 389 391 353 PBT +11% on higher transaction-based income and lower Profit 303 credit loss expenses before tax Cost/income ratio (1.2ppt), in line with FY19 target on +4% Cost/income ratio 60% 58% 66%
Slide 21: Asset Management
Asset Management PBT +10% on strong net management fees 10% PBT +10%; reported PBT +29% 122 127 126 135 109 Profit before tax Cost/income ratio 73% 72% 73% 76% 72% Cost/income ratio (1.8ppts) on higher revenues and flat 461 457 468 475 expenses; in line with FY19 target 446 19 17 28 23 27 Operating
Slide 22: Investment Bank
Investment Bank RoAE 14.2% in a relatively challenging market; very strong CCS (+18%), highest M&A since 2012 (23%) 571 RoAE of 14.2% on 12.4bn average attributed equity Profit 489 440 before tax 221 PBT (10%) excluding ~100m of previously deferred day-1 (5) profits in 2Q18 and gains related to Trad
Slide 23: Corporate Center
Corporate Center Limited drag, partly due to gains on hedge accounting ineffectiveness and accounting asymmetries 2Q18 3Q18 4Q18 1Q19 2Q19 (17) › PBT (180m) excluding 87m of hedge accounting ineffectiveness income, 13m gains from accounting (65) asymmetries and a 14m litigation credit Profit before
Slide 24: Efficiency gains
Efficiency gains Group saves partly driven by workforce management and reduction in 3rd party spend Group workforce1 General and administrative expenses excl. litigation YoY m (3%) 85,489 83,199 (2,289) IFRS 162 Efficiency drivers 1H19 YoY › Outsourcing of IT and other services (25%) External staff
Slide 25: Capital and leverage ratios
Capital and leverage ratios Total loss-absorbing 87.4 33.3% capacity (TLAC) 1.1.20 requirements1 RWA LRD TLAC including 2018 9.6% Gone concern rebate and Tier 2- loss-absorbing 37.4 related reduction2 25.0% 14.3% 8.8% capacity 4.1% AT1 15.0 5.7% Going concern 14.3% 5.0% 1.7% Going CET1 10.0% 3.5% co
Slide 26: Appendix
Appendix %% UBS
Slide 27: Revenue and expenses currency mix
Revenue and expenses currency mix Operating income Operating expenses % % Other 8% 5% 11% 10% Other 11% 14% 14% GBP 18% 4% GBP 23% EUR 11% 10% EUR 4% 12% 14% 11% CHF 8% 11% CHF 23% 4% 19% 28% 26% 38% 91% 87% 39% 16% USD 70% 67% 59% USD 58% 46% 35% 32% 30% 8% 7% GWM P&C AM IB Group GWM P&C AM IB Grou
Slide 28: Swiss SRB leverage ratio requirements
Swiss SRB leverage ratio requirements UBS leverage ratio balance 1.1.20 requirements1 9.59% 4.10% gone concern 8.8% TLAC including 2019 rebate and Tier 2-related reduction TLAC-eligible senior unsecured debt 3.26% (29.7bn) Gone concern 5.0% requirement subject to a rebate of up to 2.0 percentage poi
Slide 29: GWM regional timeseries
GWM regional timeseries 2Q18 3Q18 4Q18 1Q19 2Q19 Americas Operating income 2,264 2,264 2,304 2,170 2,272 Operating expenses 1,911 1,922 2,019 1,838 1,904 Profit before tax 353 342 284 333 367 Cost/income ratio 84% 85% 88% 85% 84% Invested assets (bn) 1,268 1,307 1,200 1,298 1,321 Loans, gross (bn) 5
Slide 30: 2Q19 reported and adjusted performance
2Q19 reported and adjusted performance 1 Adjusted results are non-GAAP financial measures as defined by SEC regulations; 2 Comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity att
Slide 31: 1H19 reported and adjusted performance
1H19 reported and adjusted performance 1 Adjusted results are non-GAAP financial measures as defined by SEC regulations; 2 Comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity att
Slide 32: Regional performance – 2Q19
Regional performance – 2Q19 Americas Asia Pacific EMEA Switzerland Global Total 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 GWM 2.3 2.3 0.6 0.6 0.9 0.8 0.4 0.4 - - 4.2 4.1 P&C - - - - - - 0.9 1.0 - - 0.9 1.0 Operating AM 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 - - 0.5 0.5 income IB 0.8 0.7 0
Slide 33: Performance targets and ambitions 2019 – 2021
Performance targets and ambitions 2019 – 2021 Capital/resource Annual targets Ambitions guidelines FY19 FY19-21 FY21 FY19-21 Reported return on CET1 capital ~15% ~17% Adjusted cost/ income ratio ~77% ~72% Group CET1 capital ratio ~13%1 CET1 leverage ratio ~3.7%2 Adjusted pre-tax profit growth 10-15%
Slide 34: 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 35: togetherband.org
ABOUT THE #TOGETHERBAND _ CAMPAIGN AND THE OPLE BEHIND |T #TOGETHERBAND | && UBS togetherband.org