UBS Group AG · SIX:UBSG
UBS — Citigroup Global Financial Conference 2012
29 slides from UBS's conference presentation, Nov 14, 2012
Slide 1: Citigroup Global Financial Conference 2012
Citigroup Global Financial Conference 2012 Tom Naratil Group Chief Financial Officer November 14, 2012
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation contains statements that constitute "forward-looking statements", including statements relating to UBS's financial performance and to the anticipated effect of strategic initiatives on UBS's business and future development.
Slide 3: Important information related to numbers shown in this presentation
Important information related to numbers shown in this presentation Use of adjusted numbers Throughout this presentation, unless otherwise indicated, “adjusted” figures exclude each of the following items, to the extent applicable, on a Group and business division level: – Own credit loss on financi
Slide 4: UBS's leading franchises in APAC
UBS’s leading franchises in APAC Cross-divisional collaboration key to our success Unrivaled WM business in APAC Specialized Investment Bank • Market leadership in our target segments, • Best Investment Bank in Asia supported by a strong footprint (Euromoney 2012) • Our client offering is second to
Slide 5: UBS Wealth Management – Recognized leader in APAC
UBS Wealth Management – Recognized leader in APAC UBS is well positioned to continue to grow profitably in APAC Long-standing presence Loyal client base Attractive place for talent UBS WM APAC footprint Invested assets (CHF billion) Number of front staff (FTE) 13 UBS WM domestic locations 5 UBS Secu
Slide 6: UBS—The bank of the future
UBS—The bank of the future An unrivaled franchise with compelling growth prospects WM businesses Retail & Corporate Investment Bank Global AM World’s leading HNW and Leading Leading Equities franchise, Well-diversified across UHNW wealth manager; universal bank Top FX house, strong investment capabi
Slide 7: Our wealth management businesses are unrivaled
Our wealth management businesses are unrivaled We are well positioned for growth in the most attractive markets Invested assets of CHF 1.6 trillion on 30.9.12 managed by over 11,100 advisors 720 WM Americas 783 816 Wealth Management Adjusted pre-tax profit1 Net new money (combined result) (combined
Slide 8: Successful execution of our key strategic priorities over the last 12 months
Successful execution of our key strategic priorities over the last 12 months Basel III RWAs • Focused and disciplined execution of Basel III RWA reduction (CHF billion) Reduce (25%) ~400 ~301 RWAs • 2012 RWA targets achieved ahead of schedule 30.9.11 30.9.12 Basel III CET1 fully applied ratio • Cons
Slide 9: Creating a profitable and competitive Investment Bank
Creating a profitable and competitive Investment Bank Corporate Client Solutions Investor Client Services Advisory and solutions, origination and Distribution, sales and trading Our structuring, IBD, Leveraged Finance, Special businesses Solutions Group Equities, FX, Precious Metals, flow rates WM a
Slide 10: Group targets
Group targets1 Balance sheet Basel III RWAs Basel III CET1 ratio excl. PRVs fully applied fully applied (CHF trillion) (CHF billion) (%) 0.9 ~301 13.0% (0.3) <250 11.5% 0.6 <200 9.3% 30.9.12 31.12.15 30.9.12 31.12.13 31.12.17 30.9.12 2013 2014 Cost / income ratio Return on equity2 (%) (%) 79% >15% 6
Slide 11: Businesses and positions to be exited (30.9.12)
Businesses and positions to be exited (30.9.12) Total Basel III RWAs ~CHF 90 billion Basel III RWAs Basel III B/S excl. B/S incl. (excluding operational risk) RWAs PRVs PRVs (CHF billion) Cash positions – expected exit schedule ~38 Businesses within Credit ~30 ~20 ~28 (CHF billion) ~20 Businesses wi
Slide 12: Basel III—Risk-weighted assets
Basel III—Risk-weighted assets We aim to reduce Group RWAs to below CHF 200 billion by 2017 ~400 ~380 (25%) ~21 ~20 ~350 (50%) ~80 ~21 ~62 ~305 ~301 ~59 ~53 ~270 ~49 <250 ~40 <225 <200 ~85 ~220 ~212 ~55 ~25 ~191 ~170 ~162 ~135 <70 <70 <70 (CHF billion) ~79 ~86 ~79 ~82 ~90 ~95 ~95 ~100 ~105 30.9.11 3
Slide 13: Basel III—Capital ratios
Basel III—Capital ratios Targeting a 13% fully-applied CET1 ratio in 2014 Basel III Basel III ~ phase-in 2019 rules fully applied ~13.6% ~13.1% 13.0% ~11.8% 11.5% ~10.7% ~10.0% ~9.3% ~8.8% ~7.5% ~6.7% ~6.2% ~6.2% 30.9.11 31.12.11 31.3.12 30.6.12 30.9.12 30.9.11 31.12.11 31.3.12 30.6.12 30.9.12 2013
Slide 14: Our funded balance sheet will be reduced by a further ~30%
Our funded balance sheet1 will be reduced by a further ~30% Funded assets Funding liabilities 30.9.12 30.9.12 CHF 0.9 trillion CHF 0.9 trillion Due to banks Other assets including net Short-term debt issued (~30%) replacement values (~30%) Cash collateral on securities lent and repo agreements Cash,
Slide 15: Leverage ratios
Leverage ratios Our leverage ratios will improve substantially as we reduce our balance sheet Simple leverage ratio1 FINMA leverage ratio2 2.2 FINMA Basel III leverage ratio3 2.1 Funded balance sheet4 6.1% 5.7% 1.8 5.1% 5.7% 5.4% expected direction 4.5% based on our plans 4.4% 1.2 3.4% 3.9% 2.8% 0.9
Slide 16: FINMA Basel III total capital requirements for large Swiss banks
FINMA Basel III total capital requirements for large Swiss banks1 UBS’s total capital requirement will be a function of total exposure, market share in Switzerland and a possible capital rebate Capital UBS target requirements capital structure for large Swiss based on banks our plans A. Total exposu
Slide 17: Investing in businesses with more attractive returns
Investing in businesses with more attractive returns Our operational efficiency plans will free up more resources to support growth in areas with the most attractive returns • Total gross cost reductions of • Investments of CHF 1.5 CHF 5.4 billion p.a. by 2015 billion over the next 3 • CHF 3.3 billi
Slide 18: Implementing long-term efficiency measures and reducing costs
Implementing long-term efficiency measures and reducing costs 4Q12 2013 2014 2015 Initiatives Expected gross savings development IB efficiency Org. effectiveness Hubbing Lean front-back Independent buying entity 2Q11 program 3Q12 program ~CHF 5.4 billion 2Q11 program ~CHF 4.0 billion Cost savings ~C
Slide 19: Reducing capital needs, while strengthening the business mix
Reducing capital needs, while strengthening the business mix We will improve the quality and consistency of our earnings Attributed equity Expected pre-tax profit contribution1 to business divisions1 ~20% ~35% WM businesses, R&C, Global AM ~65% Investment Bank ~65% ~80% ~35% 3Q12 2013 pro forma2 Adj
Slide 20: We are firmly committed to return capital to shareholders
We are firmly committed to return capital to shareholders Our business mix supports an attractive capital returns program Progressive capital returns as we work towards our capital targets; thereafter attractive capital returns Future dividend policy – illustrative example (% of profits) Baseline
Slide 21: UBS—A unique and attractive investment proposition
UBS—A unique and attractive investment proposition Unrivaled franchise Solid financial foundation with clear strategic direction which will be strengthened further and strong track record on execution as UBS accelerates its transformation UBS’s franchise is unrivaled Industry-leading capital rat
Slide 22: Appendix
Appendix
Slide 23: Business division targets
Business division targets1 Ranges of sustainable performance in our businesses Wealth Wealth Management Retail & Management Americas Corporate NNM growth rate 3-5% NNM growth rate 2-4% NNBV growth2 1-4% Gross margin 95-105 bps Gross margin 75-85 bps Net interest margin 140-180 bps Cost / income rati
Slide 24: Basel III fully applied CET1 ratio
Basel III fully applied CET1 ratio Fully applied CET1 Basel III ratio increased to ~9.3% = CET1 capital + loss-absorbing capital ratio = CET1 ratio ~10.6% 13% ~9.4% ~8.0% ~1.3% 13.0% ~0.6% 11.5% ~6.7% ~0.5% Target ~6.2% ~8.8% ~9.3% common ~7.5% equity ~6.2% ~6.7% capital ~6.2% ~6.7% ~7.5% ~8.8% ~9.3
Slide 25: Basel III phase-in CET1 ratio
Basel III phase-in CET1 ratio Phase-in CET1 Basel III ratio increased to ~13.6% = CET1 capital + loss-absorbing capital ratio = CET1 ratio ~14.8% ~13.7% ~12.3% ~1.2% ~0.6% ~0.5% ~1.4% ~10.7% ~1.4% ~10.0% ~1.2% ~3.0% ~1.1% ~3.0% Common equity 1 ~1.1% ~3.2% Loss-absorbing capital ~3.0% 2 ~2.8% 1 Goodw
Slide 26: FINMA Basel III leverage ratio
FINMA Basel III leverage ratio UBS’s current FINMA Basel III leverage ratio is above minimum requirements • UBS‘s FINMA Basel III leverage ratio of 3.4% on 30.9.12 Total capital (Phase-in CET1 + loss absorbing capital) CHF 45.3 billion = = 3.4% Total exposure1 CHF 1,335 billion (Total IFRS assets +
Slide 27: UBS's equity allocation framework
UBS’s equity allocation framework Attributed equity – business divisions Average attributed equity 47.6 Tangible equity 5.3 ~42.5 50% RWAs -> Capitalize with 10% Basel III CET1 ratio 8.4 ~8.5 25% assets -> Capitalize with 3.5% Basel III leverage ratio 25% RBC1 -> Internal measure of economic risk ~1
Slide 28: Strong liquidity and stable funding profile
Strong liquidity and stable funding profile UBS’s Basel III Liquidity Coverage Ratio and Net Stable Funding Ratio in excess of 100%1 Liquidity Coverage Ratio (LCR) 25% of our funded balance sheet assets are in the form of available liquidity2 (CHF billion) 30.9.12 Cash outflows under 30-day 282 Fu
Slide 29: Deferred tax assets on net operating losses
Deferred tax assets on net operating losses The potential to recognize additional deferred tax assets remains significant as of 30.9.12 Unrecognized potential DTAs on NOLs1,2 Recognized DTAs on NOLs1 24.6 18.8 (CHF billion) 2.4 3.6 0.8 5.3 1.7 2.6 0.1 US Switzerland UK RoW Total • Unrecognized poten
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