Ubs Group Ag · SIX:UBSG
Ubs — Q3 2002 Earnings Presentation
32 slides from Ubs's earnings presentation, Nov 12, 2002
Slide 1: Third Quarter Results 2002
ab Financial Services Group Third Quarter Results 2002 Zurich, 12th November 2002 Peter Wuffli, President Mark Branson, Chief Communication Officer
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements This communication contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, such as the implementation of the new European wealth management strate
Slide 3: New brand architecture at UBS
New brand architecture at UBS A single "masterbrand”... …supported by client segment descriptors ab Financial Services Group
Slide 4: Our brands don’t reflect our success
Our brands don’t reflect our success Our business momentum is ahead of our brand momentum… Business strength Familiarity (out of 10) among non-US wealthy 1st the world's largest private bank 7th individuals for investment banking market 1st 9th among US corporate clients share growth in the US globa
Slide 5: Familiarity
Familiarity Focused, co-ordinated Reflects integrated Supports shared marketing is much business model corporate culture more effective 1,900 High net worth individuals 1,200 Corporate and institutional clients 300 Asset management buyers 100 Swiss retail clients 300 Top UBS client advisors 14 Count
Slide 6: Financial implications
Financial implications 20 year amortization brought forward USD 773 m net at acquisition Acquired intangible asset USD 699 m net writedown 2002 2000 2005 2010 2015 2020 Value of PaineWebber brand is preserved through transfer of brand equity to UBS over the last two years, although this cannot be re
Slide 7: Group results
Group results ab Financial Services Group
Slide 8: Net profit
Net profit Adjusted for significant financial events 2500 2200 2033 2000 1907 1726 1633 1579 1574 1436 1500 1385 CHF m 1331 1251 1227 1238 1247 1166 1106 942 1000 903 500 0 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Net profit after tax (adj) Net profit after tax (adj), before goodwill ab P&L
Slide 9: Operating business unit performance
Operating business unit performance1 = year-on-year change 1,500 -5% -16% 1,000 +27% 500 -34% 39% UBS Cap 0 PB BBS UBS CIC UBS PW2 Global AM -500 -267% 3Q01 2Q02 3Q02 Note: 1 Adjusted for SFE's and excluding the amortization of goodwill and other intangible assets 2 Before acquisition costs ab P&L I
Slide 10: Performance against targets
Performance against targets ROE 1,2 Basic EPS 1 25% 2.0 20% 1.5 15% (CHF) 1.0 10% 0.5 5% 0% 0.0 1999 2000 3M01 6M01 9M0112M013M02 6M02 9M02 99Avg 00Avg 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Cost / Income 1 Private client net new money 3,4,5 80% 20 60% 15 (CHF bn) 40% 10 20% 5 0% 0 1999 2000 1Q01 2Q01 3
Slide 11: Invested assets
Invested assets 3Q02 vs. 2Q02 UBS WM&BB UBS Global AM UBS W UBS PW (CHFbn) PB BBS Inst. Wholesale Total Total opening 726 211 309 303 3 646 2,198 Net new money 9.3 4.3 (3.2) 1.3 0.1 3.4 15.2 Performance, (34) (13) (27) (16) (52) (143) currency & transfers Closing 701 202 279 288 3 597 2,070 3Q02 Mar
Slide 12: Revenue trends
Revenue trends 10,000 8,000 6,000 CHF m 4,000 2,000 0 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 -2,000 Credit loss Net fee & commission income Net income from interest margin activities Net income from trading activities Other ab P&L Invested Asset Capital Financial Services Group Assets Qual
Slide 13: Market sensitivity of asset base
Market sensitivity1 of asset base Rebased: 1Q00 = 100% 120% 100% 80% 60% 40% 20% 0% 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 UBS-PW Asset based fees PB Asset based fees UBS Global AM income. DJ Stoxx Europe index S&P500 index Notes: 1) Current quarter's income vs previous quarter's mar
Slide 14: Group cost trends
Group cost trends 10 8 6 CHF bn 4 2 0 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Personnel General & administrative Depreciation Amortization of Goodwill & other intangible assets ab P&L Invested Asset Capital Financial Services Group Assets Quality
Slide 15: Operating business unit cost trends
Operating business unit cost trends = year-on-year change 3.5 -10% 3.0 2.5 -15% 2.0 +3% CHF bn -3% 1.5 -15% 1.0 -13% 0.5 0 PB BBS UBS Global CIC UBS Cap UBS PW AM 3Q01 2Q02 3Q02 ab P&L Invested Asset Capital Financial Services Group Assets Quality
Slide 16: Actual credit loss expense
Actual credit loss expense Business Banking Switzerland Corporate & Institutional Clients CHF m CHF m 200 200 150 150 100 100 50 50 0 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 (50) (50) Actual Credit Loss Actual Credit Loss Actuarial Expected Credit Loss Actuarial Expec
Slide 17: Group loan portfolio
Group loan portfolio 400 6 350 5 300 4 250 % CHF bn 200 3 150 2 100 1 50 0 0 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 1998 1999 2000 2001 2002 UBS WM&BB C&IC UBS PaineWebber NPL% ab P&L Invested Asset Capital Financial Services Group Assets Quality
Slide 18: Share buyback & Tier 1 ratio
Share buyback & Tier 1 ratio 30 14% 25 12% 10% 20 Tier 1 ratio Shares (m) 8% 15 6% 10 4% 5 2% 0 0% 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 2000 Program1 2001 Program1 2002 Program1 Tier 1 ratio Note: 1) Share repurchase programs run for 12 months from early March. ab P&L Invested Asse
Slide 19: Cumulative share buyback effect on EPS
Cumulative share buyback effect on EPS 10% % of EPS due to cumulative effect of share buybacks 8% 6% 4% 2% 0% 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 ab P&L Invested Asset Capital Financial Services Group Assets Quality
Slide 20: Business unit results
Business unit results ab Financial Services Group
Slide 21: Balanced business mix
Balanced business mix Revenues1 by operating business area (in CHF m) 3Q01 2Q02 3Q02 1% 7% 16% 5% 1% 5% 15% 17% 18% 21% 20% 18% 12% 43% 43% 16% 43% 8,875 9,045 8,095 Domestic banking Fixed Income & FX Wealth & Asset Mgmt Investment Banking Equities Other 2 Notes: 1 Before credit loss expense 2 Corpo
Slide 22: Continued strong profitability
Continued strong profitability 1,200 500 Net profit before tax (CHF m) 1,000 Operating expenses (CHF m) 400 800 300 600 200 400 100 200 0 0 Avg99 Avg00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Net profit before tax Total operating expenses ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 23: Continued strong, stable gross margin
Continued strong, stable gross margin 120 100 80 bps 60 40 20 0 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Transactional fees Recurring fees Other ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 24: Net new money
Net new money 10 8 6 CHF bn 4 2 0 -2 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Private Banking - Swiss Clients European Wealth Management Initiative -4 Private Banking - International Clients (excluding EWMI) Net outflow from Italian Tax Amnesty ab BBS PB Global UBS-W UBS-PW Financial Service
Slide 25: Net new money
Net new money 6 4 CHF bn 2 0 -2 -4 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Institutional Wholesale (ex-money market) Money market Wholesale ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 26: CIC: continued cost control
CIC: continued cost control Operating expenses 3,500 100% 3,000 90% 2,500 80% c/i ratio 2,000 70% CHF m 1,500 60% 1,000 50% 500 40% 0 30% Avg Avg 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 99 00 Total operating expenses Cost/income ratio (excl. goodwill) ab BBS PB Global UBS-W UBS-PW Financial Services Grou
Slide 27: Improving market share in the Americas
Improving market share in the Americas Sector View Transport Technology 1.7% Telecom 1.6% Financials 1.4% 1.4% 0.9% 0.5% 4.1% 3.4% 1.8% 3.7% 2.2% 1.2% Healthcare Energy Media 10.6% 9.3% 6.2% Consumer 1.4% 3.5% 1.0% 3.4% 0.1% 3.2% Real 7.0% Estate 5.6% 2.9% Industrials 4.5% UBS-W market share 3.2% 3.
Slide 28: UBS Capital - relative value creation
UBS Capital - relative value creation 15% 10% 5% 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 0% 1H99 2H99 1H00 2H00 -5% -10% -15% ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 29: Improving profitability
Improving profitability CHF USD 250 150 95% 200 90% 100 150 85% millions 100 80% 50 50 75% 0 70% 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 Performance before tax1 Cost/Income ratio1 (%) CHF USD Note: 1) Before acquisition costs ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 30: Net new money
Net new money 12.0 10.0 CHF bn 8.0 6.0 4.0 2.0 0.0 Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 ab BBS PB Global UBS-W UBS-PW Financial Services Group AM
Slide 31: Market environment
Market environment Equity market levels Investor Optimism 120% 200 US 110% 150 EU-5 100% 90% 100 80% 50 70% 60% 0 2000 2001 2002 50% -50 1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 SWX NYSE LSE Source: UBS Index of Investor Optimism, www.ubs.com/investoroptimism Global bankruptcies Corporate fee pools 2
Slide 32: Third Quarter Results 2002
ab Financial Services Group Third Quarter Results 2002 Zurich, 12th November 2002 Peter Wuffli, President Mark Branson, Chief Communication Officer