Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q4 2011 Earnings Presentation
54 slides from Ubs's earnings presentation, Feb 7, 2012
Slide 1: Form 6-K Report of Foreign Private Issuer
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 Date: February 7, 2012 Commission File Number: 1-15060 UBS AG (Registrant’s Name) Bahnhofstrasse 45, Zurich, S
Slide 2: Form 6-K presentation materials note
This Form 6-K consists of the presentation materials related to the Fourth Quarter 2011 Results of UBS AG, which appear immediately following this page.
Slide 3: Fourth quarter 2011 results
Fourth quarter 2011 results Fourth quarter 2011 results February 7, 2012
Slide 4: 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 5: FY11 results: Maintained industry-leading capital ratios
FY11 results Maintained industry-leading capital ratios Basel 2.5 tier 1 capital ratio • Significantly improved and industry-leading capital ratios +~330 Capital, bps • Sound funding and liquidity positions 16.0 liquidity and ~12.7 funding • Year-end Basel 2 tier 1 capital ratio of 19.7%, Basel 2.5
Slide 6: FY11 results: pre-tax profit increase in WM, WMA and R&C
FY11 results WM, WMA and R&C delivered a 29% increase in pre-tax profit Net new money • Significantly increased net new money Net new 42 money and • WM businesses added CHF 50 billion more than prior year invested • Global AM attracted ~CHF 12 billion of third party inflows assets (14) • Stable inve
Slide 7: 4Q11 results
4Q11 results Net profit of CHF 0.4 billion in a challenging quarter • CHF 0.6 billion pre-tax profit • Positive net new money in our wealth management businesses • Resilient performance in Retail & Corporate • Our Rates businesses in the Investment Bank performed well, solid performance in FX YoY Si
Slide 8: Market environment
1 Market environment 2 Equity trading volumes YoY Equity market performance ~5-10% QoQ ~15-20% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 NYSE SMI 1 FTSE 100 SPI S&P 500 FTSE 100 MSCI World YoY USD/ CHF 6% FX rates EUR/ CHF 7% CDS spreads 1.9 GBP / CHF 7% 1 600 Q
Slide 9: Risk-weighted assets—Basel 3
1 Risk-weighted assets—Basel 3 Swift execution on risk-weighted asset reduction • CHF (145) billion net reduction of IB RWAs • CHF 15 billion RWA growth in other businesses 2 ~400 ~21 ~380 ~20 Group 3 ~340 SNB StabFund ~290 ~270 ~804 Legacy: CHF ~18 billion reduction ~62 • CHF 11 billion of reductio
Slide 10: Transfer of legacy positions to Corporate Center
Transfer of legacy positions to Corporate Center Legacy positions will be reported as a separate segment within the Corporate Center from 1Q12 The unit will include the Investment Bank’s legacy portfolio and our option to buy the equity of the SNB Stabfund 1 Legacy assets, Basel 3 pro-forma RWAs (CH
Slide 11: 4Q11 results
4Q11 results (CHF million} wM WMA R&c Global AM IB cc Group Income 1,672 | 1,329 | 941 463 1,798 (152) 6,051 Credit loss (expense) / recovery 1 | (5) | (13) 3 (14) Own credit | | (71) (71) Total operating income 1,673 | 1,325 | 928 463 1,730 (152) 5,967 Personnel expenses 749 | 975 | 414 242 1,084 |
Slide 12: Our wealth management businesses are unrivaled
Our wealth management businesses are unrivaled Invested assets 31.12.11 CHF 1,459 billion UBS WM Americas 709 750 UBS Wealth Management WM + WMA FY10 FY11 1 Pre-tax profit 2,409 2,839 (CHF million) Invested assets Our footprint: (CHF billion) 1,457 1,459 ~550 offices Net new money (18.2) 35.6 (CHF b
Slide 13: Wealth Management
Wealth Management Continued NNM inflows and increased invested assets Operating income Subdued client sentiment led to lower and pre-tax profit 2,178 activity in line with lower market volumes 1,928 1,867 1 1,745 1,673 Lower interest income following the sale 3 748 750 of the SIPF in 3Q11 791 888 67
Slide 14: Wealth Management—gross margin
1 Wealth Management—gross margin Continued progress on FY basis with softer 4Q11 margin Gain on the sale of strategic investment portfolio 120 2 98 97 97 SIPF Interest Trading / 93 95 92 95 Fees 89 other 91 (2) 1 (4) (1) Transaction-based fees down significantly on lower client activity ~1bp of marg
Slide 15: Wealth Management Americas
Wealth Management Americas Maintained #1 vs. US peers in invested assets per FA, revenue per FA and NNM per FA Operating income and pre-tax profit Reported revenues increased 2% – USD revenues decreased 5% on lower asset- 1,347 1,294 1,325 1,284 based fees and lower transactional revenues – Realized
Slide 16: Wealth Management Americas—lending balances (USD)
Wealth Management Americas—lending balances (USD) Prudently managed growth in lending balances driving net interest income 1 237 Net interest income 218 213 198 185 177 24.7 25.5 165 169 23.5 2.0 155 1.7 21.4 1.4 20.3 4.3 18.9 19.4 1.1 3.7 4.3 18.5 0.8 0.6 2.7 3.0 0.9 1.0 0.2 0.4 0.9 2.4 2.6 2.8 0.8
Slide 17: Investment Bank
Investment Bank Performance improved on a weak 3Q11 1 Operating income excluding own credit Pre-tax profit and cost / income ratio 2 and unauthorized trading incident 1 Cost / income ratio excluding own credit , 2 3 unauthorized trading incident and restructuring CHF USD charges (33%) (29%) Cost / i
Slide 18: Investment Bank—Equities revenues
Investment Bank—Equities revenues Lower volumes and reduced client activity impacted revenues YoY comparison in USD terms 1,2 1 CHF USD Cash, (33%) (26%) (21%) – Lower volumes led to reduced commissions in all regions 945 974 – Solid trading performance in APAC was +12% +3% offset by weaker revenues
Slide 19: Investment Bank—FICC revenues
Investment Bank—FICC revenues Strong performance in Macro; Credit and Emerging Markets up QoQ 1 YoY comparison in USD terms 1 CHF USD Macro, +131% – Rates: strong performance in both short-term (13%) (8%) and long-term rates +21% +12% – FX: solid revenues helped by currency 895 volatility 814 102 93
Slide 20: Investment Bank—IBD revenues
Investment Bank—IBD revenues Advisory outperformed with revenues up despite lower global fee pool 1 YoY comparison in USD terms 1 CHF USD Advisory, +3% 910 215 280 938 256 308 – Revenues up despite 19% decrease in (49%) (45%) global fee pool 1,052 1,021 Equities capital markets, (72%) 305 – Particip
Slide 21: Global Asset Management
Global Asset Management Improved pre-tax profit on higher management and performance fees Operating income and pre-tax profit Operating income increased 16% – Increase in net management fees driven by 496 444 463 currency, market valuations and the acquisition 399 of the ING Investment Management in
Slide 22: Retail & Corporate
Retail & Corporate Resilient underlying performance Operating income and pre-tax profit Lower credit loss expenses offset lower 1,218 revenues – Interest income was down following the sale 965 974 929 1 928 3 of the SIPF in 3Q11 and the continued low interest rate environment 683 403 403 421 421 418
Slide 23: Retail & Corporate
Retail & Corporate Continued positive trend in deposits; net interest margin reflects sale of strategic investment portfolio in 3Q11 1 Loans and deposits Net interest margin (KPI) 136 136 137 1.83% 135 136 135 135 135 1.80% 1.69% 1.67% 1.79% 1.75% 1.74% 1.75% 604 609 617 595 592 590 575 567 117 117
Slide 24: 4Q11 operating expenses
4Q11 operating expenses Lower expenses on lower restructuring charges, partly offset by currency effects and UK Bank Levy Increase in non-personnel Operating expenses expenses mainly due to UK Bank Levy (CHF 109 million), 6,571 6,200 higher professional fees and 5,928 6,110 currency effects 510 544
Slide 25: FY11 operating expenses
FY11 operating expenses Costs down CHF 2.1 billion YoY, driven by lower personnel expenses 24.5 Significant non-recurring items 22.4 2.1 1 WMA financial advisor compensation 2.0 22.2 (2.1) Contractors, other personnel expenses, pension and other post- employment benefit plans, social security 2 2.7
Slide 26: Bonus pool
Bonus pool 1 2011 bonus pool down 40% YoY Bonus pool down 40% YoY 2010 2010 IFRS 2011 60 expense 2011 4,082 IFRS PVTR expense 2010 and Amortization bonus others 2 of prior year 3,407 1,574 awards pool Amortization 1,471 54 4,245 of prior year awards Awards for 2011 PVTR 1,6014 2010 and 707 performan
Slide 27: Amortization of deferred compensation
Amortization of deferred compensation We expect a CHF 0.5 billion reduction in the awards to be amortized in 2012 (CHF 1.1 1 billion) vs. 2011 (CHF 1.6 billion) Amortized Special Annual plan awards 1.6 awards 0.3 granted Unrecognized awards to be to be granted amortized 2 Forfeited 0.7 in 2012 Unrec
Slide 28: Tax expense
Tax expense 4Q11 net tax expense of CHF 189 million, FY11 effective tax rate of 17.5% 4Q11 tax expense / (benefit) 61 (117) 99 41 CHF 56 million 189 105 4Q11 tax A B C D E expense A Other net tax expenses in respect of 4Q11 taxable profits B Tax charge relating to re-measurement of the value of DTA
Slide 29: Exposures to Eurozone countries rated lower than AAA / Aaa
1 Exposures to Eurozone countries rated lower than AAA / Aaa Our exposures are comparatively low and we continue to manage them carefully 2 3 31.12.11 Sovereigns Local governments Banks Other Total Before Net of Before Net of Before Net of Before Net of Before Net of (CHF million) 4 4 4 4 4 hedges h
Slide 30: Regulatory capital ratios
Regulatory capital ratios We are ahead of our plan; Basel 2.5 tier 1 capital ratio increased to 16.0% Basel 2.5 Basel 3 Basel 3 1 phased-in scenario1,2 2019 rules fully applied Hybrid tier 1 capital 16.0% 4 Common equity Core tier 1 capital 1 Goodwill / intangible assets 3 1.9% 2 Capital deduction i
Slide 31: 4Q11 results
4Q11 results Net profit of CHF 0.4 billion in a challenging quarter • CHF 0.6 billion pre-tax profit • Positive net new money in our wealth management businesses • Resilient performance in Retail & Corporate • Our Rates businesses in the Investment Bank performed well, solid performance in FX YoY Si
Slide 32: Appendix
Appendix 3 UBS
Slide 33: Target capital structure
Target capital structure A non-dilutive structure is our preferred form of loss-absorbing capital Swiss Target regulation capital (1.1.19) structure Low-trigger Loss-absorbing capital 6% capital 6% High-trigger or common equity capital 3% 13% Common equity 10% capital 30
Slide 34: Core tier 1 capital and RWAs (Basel 2.5)
Core tier 1 capital and RWAs (Basel 2.5) 1 Core tier 1 capital 0.1 0.3 0.2 0.4 34.1 33.2 2 30.9.11 Net profit attributable Own credit Share-related FX and other 31.12.11 to shareholders components Risk-weighted assets 0.1 (2.7) (54.7) 4.9 283.8 9.5 241.0 3 3 3 3 30.9.11 Credit risk Non-counterparty
Slide 35: Basel 2 capital ratios
Basel 2 capital ratios Hybrid tier 1 capital Tier 1 ratio (%) 19.7% Core tier 1 capital Core tier 1 ratio (%) 18.1% 18.4% 17.8% 17.9% 17.5% 16.4% 16.7% 16.0% 16.1% 16.3% 15.4% 15.3% 15.6% 14.2% 13.0% 12.5% 11.9% 39.1 37.4 38.1 35.3 36.4 33.7 34.8 4.4 33.4 4.3 4.3 31.8 4.6 5.2 4.9 7.2 7.0 7.2 33.1 33
Slide 36: Asset funding—31 December 2011
Asset funding—31 December 2011 Liabilities and equity Assets Cash, balances with central banks Due to banks 30 and due from banks 64 Money market paper issued 71 Financial investments AFS 53 CHF 162 Cash collateral on securities lent billion and repurchase agreements 111 collateral Cash collateral o
Slide 37: Balance sheet development
Balance sheet development 2,275 2,015 Assets Total excl. PRVs CHF 933 billion 428 160 854 1,447 1,419 Positive RVs 1,341 1,317 1,291 1,237 1 774 Other assets 146 422 401 359 537 487 335 Trading portfolio 312 192 167 157 154 135 138 584 229 236 223 206 182 Collateral trading 348 232 180 205 220 217 1
Slide 38: Diversified funding with a long-term funding surplus
Diversified funding with a long-term funding surplus Customer deposits are a stable source of funding Assets Liabilities & equity 31.12.11 Equity Surplus stable funding comfortably exceeds Other assets 1 projected requirements under stress scenario 5 Other liabilities CHF 6 billion net new deposit i
Slide 39: Our liquidity position is strong
Our liquidity position is strong We continue to have substantial excess liquidity 23% of our funded balance sheet assets We continue to be compliant with 1 are in the form of available liquidity FINMA’s liquidity regime Funded balance sheet (31.12.11) FINMA’s liquidity requirements are broadly Liabi
Slide 40: Funding sources by currency—31 December 2011
Funding sources by currency—31 December 2011 Customer deposits represent a significant source of funding in all major currencies 36 2 87 113 20 1 1 45% USD 20% CHF CHF 366 billion 49 CHF 164 billion 58 133 52 7 15 12 8 8 4 1 1 49 21% EUR 14% other 14 47 CHF 172 billion 35 CHF 114 billion 58 14 (CHF
Slide 41: IFRS equity attributable to UBS shareholders (4Q11)
IFRS equity attributable to UBS shareholders (4Q11) 1 1,734 379 285 80 (49) 693 (4) (43) 393 53,551 CHF 30.9.11 31.12.11 Change 51,817 Book value per share 13.85 14.29 +3% Tangible book value per share 11.34 11.70 +3% 30.9.11 Net profit Foreign Financial Cash flow Treasury Deferred taxes Employee Ot
Slide 42: IFRS equity attributable to UBS shareholders (FY11)
IFRS equity attributable to UBS shareholders (FY11) 1 6,731 1,537 36 293 (505) (63) 495 706 4,233 53,551 CHF 31.12.10 31.12.11 Change Book value per share 12.35 14.29 +16% 46,820 Tangible book value per share 9.76 11.70 +20% 31.12.10 Net profit Foreign Financial Cash flow Treasury Deferred taxes Emp
Slide 43: Invested assets
Invested assets Wealth Management Retail & Corporate 3 18 9 4% 3% 720 750 1 2 0 130 134 30.9.11 NNM Market FX / Other 31.12.11 30.9.11 NNM Market FX / Other 31.12.11 Wealth Management Americas Global Asset Management 2 30 26 0 12 40 651 9% 709 10% 524 574 30.9.11 NNM Market FX / Other 31.12.11 30.9.
Slide 44: Wealth Management—operating income
Wealth Management—operating income Lower transaction-based revenues and lower interest income led to decrease in revenues Invested assets 827 786 787 791 768 750 748 720 2,178 1,904 1,891 1,928 1,867 1,759 1,803 1,745 1 170 178 198 2 233 2 1,673 145 154 232 2 322 313 298 319 2 259 2 216 252 205 2 15
Slide 45: Wealth Management—invested assets and NNM by region
Wealth Management—invested assets and NNM by region 1 Continued NNM inflows in Asia Pacific, emerging markets and UHNW 31.12.11 invested assets 4Q11 NNM FY11 NNM CHF 750 billion CHF 3.1 billion CHF 23.5 billion 2 Europe 280 0.7 (4.0) Asia Pacific 167 2.8 11.8 Switzerland 1,3 161 (1.8) 5.0 Emerging 1
Slide 46: Wealth Management Americas—operating income (USD)
Wealth Management Americas—operating income (USD) Full-year USD operating income increased 12% YoY +2% QoQ (5%) 1,511 1,540 1,422 1,448 1,456 1,350 1,325 119 129 1,285 131 127 135 135 145 142 380 350 400 332 386 349 322 334 782 782 751 687 669 712 728 644 1 155 165 169 185 177 198 237 218 1Q10 2Q10
Slide 47: Wealth Management Americas—FA productivity (USD)
Wealth Management Americas—FA productivity (USD) Continuing to execute our focused strategy #1 position in revenue #1 in invested assets per FA vs. US peers per FA vs. US peers Revenue per FA, annualized Invested assets per FA 884 895 113 112 838 855 842 109 108 104 103 793 782 99 736 95 1Q10 2Q10 3
Slide 48: Corporate Center
Corporate Center Pre-tax loss of CHF 273 million CHF 129 million loss from the revaluation of UBS’s option to acquire the SNB StabFund’s equity – Option fair value CHF 1.6 billion (USD 1.7 billion) on 31.12.11 Revaluation of UBS’s option to acquire the SNB StabFund’s equity: contribution to UBS resu
Slide 49: Restructuring charges
Restructuring charges 1 Restructuring charges 4Q11 FY11 (CHF million) Pers. Non-pers. Total Pers. Non-pers. Total Wealth Management (1) (2) (3) 64 18 82 Wealth Management Americas 0 (1) 0 5 5 10 Retail & Corporate 9 0 8 29 3 32 Global Asset Management 13 1 14 19 7 26 Investment Bank (10) (2) (13) 14
Slide 50: Risk exposures
Risk exposures Student loan auction rate securities Carrying value Carrying value Basel 3 RWAs (USD billion) (USD billion) (CHF billion) 20.2 18.1 18.0 (69%) 9.8 9.7 9.5 7.1 7.1 7.4 5.7 5.7 4Q08 4Q09 4Q10 1Q11 2Q11 3Q11 4Q11 3Q11 4Q11 3Q11 4Q11 SL ARS buyback commitment (par value) Rated BB- or abov
Slide 51: Headcount
Headcount 4Q11 (1,101) (340) (39) (63) (35) (622) (2) 65,921 64,820 30.9.11 31.12.11 Wealth Global Wealth Retail & Investment Corporate Management Asset Management Corporate Bank Center Americas Management FY11 203 241 396 80 269 (123) (659) 64,617 64,820 31.12.10 31.12.11 48
Slide 52: Enhancements to reporting—effective 1Q12
Enhancements to reporting—effective 1Q12 Wealth Management and Retail & Corporate will become separate business divisions Legacy portfolio to be reported in the Corporate Center Refinement of client assets and invested assets disclosures for Retail & Corporate Disclosure of net new business volume m
Slide 53: Form 6-K incorporation by reference
This Form 6-K is hereby incorporated by reference into (1) each of the registration statements of UBS AG on Form F-3 (Registration Number 333-178960) and Form S-8 (Registration Numbers 333-49210; 333-49212; 333-127183; 333-127184; 333-162798; 333-162799; 333-162800; 333-178539; 333-178540; 333-17854
Slide 54: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UBS AG By: /s/ Louis Eber Name: Louis Eber Title: Group Managing Director By: /s/ Sarah M. Starkweather