Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q1 2012 Earnings Presentation
48 slides from Ubs's earnings presentation, May 2, 2012
Slide 1: UBS AG Form 6-K
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: May 2, 2012 Commission File Number: 1-15060 UBS AG (Registrant’s Name) Bahnhofstrasse 45, Zurich, Switze
Slide 2: Form 6-K presentation materials note
This Form 6-K consists of the presentation materials related to the First Quarter 2012 Results of UBS AG, which appear immediately following this page.
Slide 3: First quarter 2012 results
First quarter 2012 results First quarter 2012 results May 2, 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: 1Q12 results—successfully executing our strategy
1Q12 results—successfully executing our strategy CHF 2.2 billion adjusted pre-tax profit, ~13.0% adjusted return on equity • CHF 2.2 billion pre-tax profit excluding own credit, debit valuation adjustments, restructuring charges and pension fund credit • Reported net profit attributable to sharehold
Slide 6: Market environment
1 Market environment 2 Equity trading volumes Equity market performance 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 NYSE SMI FTSE 100 SMI S&P 500 FTSE 100 MSCI World Volatility CDS spreads 60 600 50 500 40 400 30 300 20 200 10 100 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 VDAX VIX Euro
Slide 7: 1Q12 results
1Q12 results Balanced and diversified sources of revenues and profits (CHF million) WM WMA IB Global AM R&C CC Group Income 1,770 1,425 2,889 478 918 173 7,653 of which debit valuation adjustments (53) (53) Credit loss (expense) / recovery (1) 0 14 0 18 6 37 Own credit gain / (loss) (1,103) (61) (1,
Slide 8: 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 CHF 1,500 billion on 31.3.12, up CHF 41 billion QoQ UBS WM Americas 728 772 UBS Wealth Management 1 Adjusted pre-tax profit Net new money Quarterly average Quarterly averag
Slide 9: Wealth Management
Wealth Management 24% increase in adjusted pre-tax profit; CHF 6.7 billion net new money Operating income and pre-tax profit Operating income increased 6% as 1,928 client activity levels improved from very low 1,769 levels in 4Q11 1,673 Adjusted operating expenses 803 645 645 remained stable 471 578
Slide 10: Wealth Management—gross margin
1 Wealth Management—gross margin 2 bps increase in gross margin on higher transaction-based fees 120 2 98 97 97 Other 93 95 92 Interest Fees 93 89 91 (1) (1) 5 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Interest (excl. SIPF) SIPF interest Recurring fees Transaction-based fees Trading Other income
Slide 11: Wealth Management—by business area
1 Wealth Management—by business area Asia Emerging Global o/w Europe Switzerland Family Pacific Markets 2 UHNW Office 318 329 Invested 169 assets 131 108 37 CHF 772 billion Annualized NNM 13% 6% (1%) 5% 4% growth rate 3.6% (14%) 100 111 106 76 Gross 3 53 margin 39 93bps 1,713 Client 938 791 783 4 ad
Slide 12: Wealth Management Americas (USD)
Wealth Management Americas (USD) Record pre-tax profit and invested assets Operating income and pre-tax profit USD revenues increased 4% due to higher transactional activity and higher realized 1,504 1,568 1,449 gains on the AFS portfolio Cost / income ratio further decreased to 87% within target ra
Slide 13: Wealth Management Americas—lending balances (USD)
Wealth Management Americas—lending balances (USD) Prudently managed lending growth adding to net interest income; mortgage balances more than doubled YoY 237 1 218 218 Net interest income 215 (USD million) 197 184 178 169 25.5 25.7 164 24.7 155 23.5 2.0 2.3 1.7 21.4 1.4 20.3 4.3 3.9 18.9 19.4 1.1 3.
Slide 14: Investment Bank
Investment Bank Successfully balancing revenue generation, RWA reduction and cost efficiency Operating income excluding own credit and DVA Adjusted pre-tax profit 994 846 CHF USD 276 +35% +36% 1Q11 4Q11 1Q12 3,809 3,537 QoQ comparison 502 3,252 466 CHF 846 million adjusted pre-tax profit 2,956 437 –
Slide 15: Investment Bank—VaR efficiency
Investment Bank—VaR efficiency Trading efficiency improved materially as measured by revenues / VaR 1 Investment Bank VaR Securities revenues / IB VaR ratio down 55% YoY to CHF 33 million up 58% QoQ to 76 2 1 2 Investment Bank average VaR Securities revenues / average IB VaR (1-day, 95% confidence,
Slide 16: Investment Bank—IBD revenues
Investment Bank—IBD revenues Capital markets outperformed with increased market share across all products QoQ comparison in USD terms CHF USD Equity capital markets +71% – Participated in 10 of the top 20 global deals 466 280 396 502 302 437 – Joint bookrunner on the two largest EMEA +15% +16% IPOs
Slide 17: Investment Bank—Equities revenues
Investment Bank—Equities revenues Improved volumes in Cash; more stable trading conditions QoQ comparison in USD terms CHF USD Derivatives +175% – Stronger trading revenues and improved client flows – Equity-linked revenues improved as +41% +40% 1,412 sentiment in the equity and credit markets 1,310
Slide 18: Investment Bank—FICC revenues
Investment Bank—FICC revenues Credit and EM revenues more than doubled with significantly lower risk profile QoQ comparison in USD terms CHF USD Credit +103% (excluding DVAs) (excluding DVAs) – Flow businesses captured good bid offer spreads and increased client activity +27% +28% – Structured credi
Slide 19: Global Asset Management
Global Asset Management Higher pre-tax profit driven by increased performance fees Operating income and pre-tax profit Operating income increased 3% – Performance fees more than doubled, mainly in 496 478 463 A&Q – 92% of A&Q assets eligible for performance fees were above or within 5% of high water
Slide 20: Retail & Corporate
Retail & Corporate Stable operating income supported by reduced credit loss expenses Operating income and pre-tax profit Operating income increased – CHF 18 million credit loss recovery – Trading income declined due to decreased 1 965 936 treasury-related income and lower FX-related 928 client activ
Slide 21: Retail & Corporate
Retail & Corporate We continue to attract material deposit inflows Loans and deposits Net interest margin 1 135 136 136 136 137 1.80% 1.83% 135 135 135 135 1.69% 1.67% 1.79% 1.75% 1.74% 1.75% 1.59% 121 604 609 617 118 592 590 575 595 567 117 116 117 539 112 109 106 106 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Slide 22: Corporate Center
Corporate Center Pre-tax loss of CHF 47 million; positive contribution from the Legacy Portfolio Legacy Portfolio revenues SNB StabFund option 1 Legacy positions transferred from the Investment Bank 2 Legacy Portfolio: 273 CHF 28 million pre-tax profit 162 – Legacy Portfolio consists of legacy posit
Slide 23: Operating expenses
Operating expenses Annualized adjusted operating expenses down CHF 1.0 billion vs. 1H11 Adjusted operating expenses (CHF 1.0 billion) 1H11 annualized CHF 23.3 billion 1Q12 annualized Adjusted cost / income ratio CHF 22.3 billion within target range – improved to 72% from 88% in 6,123 4Q11; in line w
Slide 24: Tax expense
Tax expense 1Q12 net tax expense of CHF 476 million Pre-tax profit (as reported) CHF 1,304 million Deferred tax expenses with respect to the CHF 447 million amortization of previously recognized DTAs Other net tax expenses in respect CHF 80 million of 1Q12 taxable profits Tax benefits arising from t
Slide 25: Net profit attributable to non-controlling interests
Net profit attributable to non-controlling interests CHF 1 million of net profit attributed to non-controlling interests in 1Q12 We expect to attribute profit of ~ CHF 270 million to non-controlling interests in 2Q12 No event triggering dividend obligations and no dividend payments not previously ac
Slide 26: Basel 2.5 capital ratios
Basel 2.5 capital ratios Further increased industry-leading Basel 2.5 tier 1 capital ratio to 18.7% 18.7% 15.9% Basel 2.5 risk-weighted assets ~12.7% 12.6% 13.2% 13.2% 16.7% reduced CHF 30 billion to CHF 211 14.1% billion as at 31.3.12 11.0% 11.7% 11.7% ~9.1% Basel 2.5 tier 1 capital 38.4 39.6 incre
Slide 27: Basel 3 risk-weighted assets
Basel 3 risk-weighted assets Continued disciplined execution on risk-weighted asset reduction • CHF (145) billion net reduction of RWAs • CHF 15 billion RWA growth in other businesses 1 Actual Target 3 ~400 ~380 ~21 ~20 ~350 Group ~340 ~21 SNB StabFund 2 ~20 ~290 ~20 ~270 ~80 ~20 ~62 ~59 ~220 ~45 ~2
Slide 28: Basel 3 capital ratios
Basel 3 capital ratios Basel 3 ratio increased to ~11.8% Basel 3 Basel 3 1 phased-in scenario 1,2 2019 rules fully applied 3 Target loss- 6.0% absorbing capital CET1 target 13% 0.5% 1.2% 1.1% 1 1.1% 3.2% 3.0% Target 2 2.8% 0.5% common 13.0% equity 11.8% capital 6.6% 7.4% 6.7% 7.5% 7.5% 6.1% 6.2% 30.
Slide 29: Our clients turn to us for advice to address their concerns
Our clients turn to us for advice to address their concerns Our clients’ positioning is a reflection of market uncertainties Americas Europe Size of US national debt European debt crisis Oil prices Macro concerns on growth/GDP European debt crisis Emerging market growth Large cash holdings Switzerla
Slide 30: 1Q12 results—successfully executing our strategy
1Q12 results—successfully executing our strategy CHF 2.2 billion adjusted pre-tax profit, ~13.0% adjusted RoE Visible progress across business divisions We are ahead of our plan to reduce risk-weighted assets Our capital, liquidity and funding positions remain strong 27
Slide 31: Appendix
Appendix 3 UBS
Slide 32: Asset funding—31 March 2012
Asset funding—31 March 2012 Assets Liabilities and equity Due to banks 32 Cash, balances with central banks Money market paper issued 59 and due from banks 113 Financial investments AFS 60 Cash collateral on securities lent CHF 106 and repurchase agreements 126 billion collateral Cash collateral on
Slide 33: Diversified funding with a long-term surplus
Diversified funding with a long-term surplus Assets Liabilities & equity 31.3.12 Equity Continued net new deposit inflows in 1Q12 Other assets 1 (CHF 6 billion net of FX impact) Other Behavioral maturities liabilities > 1 year 2 Four public benchmark bonds issued in Cash at CBs Surplus stable fundin
Slide 34: Our liquidity position is strong
Our liquidity position is strong We continue to have substantial available 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 requirements Funded balance sheet (31.3.12) UBS was compliant with FINMA’s liquidity
Slide 35: Funding sources by currency—31 March 2012
Funding sources by currency—31 March 2012 Customer deposits represent a significant source of funding in all major currencies 262 99 114 20 1 1 45% USD 20% CHF CHF 367 billion CHF 166 billion 37 136 49 60 8 9 7 18 4 13 47 21% EUR 1 14% other 1 14 46 CHF 175 billion 33 CHF 113 billion 14 61 22 (CHF b
Slide 36: Basel 2.5 core tier 1 capital and RWAs
Basel 2.5 core tier 1 capital and RWAs 1 Core tier 1 capital 1.2 0.8 (0.1) (0.6) 35.3 34.0 2 31.12.11 Net profit attributable Own credit Share-related FX and other 31.3.12 to shareholders components Risk-weighted assets 0.1 (6.6) (13.9) (4.9) (4.6) 241.0 211.1 3 3 3 31.12.11 Credit risk Non-counterp
Slide 37: Wealth Management—operating income
Wealth Management—operating income Invested assets 827 786 787 791 772 768 750 748 720 2,178 1,904 1,891 1,803 1,928 1,867 1 1,759 1,745 1,769 170 178 198 2 2 1,673 145 154 233 2 209 313 2 232 216 322 252 298 319 259 2 2 205 150 262 991 982 912 895 908 892 823 805 818 409 433 447 427 457 451 469 487
Slide 38: Wealth Management—client domicile view
1 Wealth Management—client domicile view 31.3.12 invested assets 1Q12 net new money CHF 772 billion CHF 6.7 billion Europe 287 (2.7) Asia Pacific 175 4.9 Switzerland 168 3.2 Emerging markets 2 142 1.2 o/w UHNW 329 3.6 1 Invested assets and net new money based on client domicile. Invested assets and
Slide 39: Wealth Management Americas—operating income (USD)
Wealth Management Americas—operating income (USD) YoY +8% QoQ +4% 1,552 1,568 1,506 1,504 1,417 1,449 1,347 1,321 119 129 135 136 1,282 130 127 135 144 141 380 354 332 391 384 400 348 321 333 2 779 788 798 762 686 667 710 728 643 1 155 164 169 184 178 197 237 218 218 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q
Slide 40: Wealth Management Americas—FA productivity (USD)
Wealth Management Americas—FA productivity (USD) Continuing to execute our focused strategy Revenue per FA, annualized Invested assets per FA 902 897 113 115 882 112 869 109 108 851 835 104 104 791 780 99 95 735 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q1
Slide 41: Invested assets
Invested assets Wealth Management Wealth Management Americas 7 27 4 42 (12) (27) 3% 750 772 709 728 3% 31.12.11 NNM Market FX / Other 31.3.12 31.12.11 NNM Market FX / Other 31.3.12 Global Asset Management 24 (8) (31) (3%) 574 559 31.12.11 NNM Market FX / Other 31.3.12 38
Slide 42: 1Q12 operating expenses
1Q12 operating expenses 6,110 507 5,516 5,432 5,381 473 388 5,221 5,616 524 478 527 Significant non-recurring items 717 5,049 5,053 4,846 604 4,566 642 WMA financial advisor compensation 1 602 478 528 Contractors, other personnel expenses, 411 332 pension and other post-employment benefit 327 769 40
Slide 43: IFRS equity attributable to UBS shareholders
IFRS equity attributable to UBS shareholders 1 (221) 827 410 15 8 (722) 13 (209) (563) 53,447 CHF 31.12.11 31.3.12 Change 53,226 Book value per share 14.26 14.10 (1%) Tangible book value per share 11.68 11.62 (1%) 31.12.11 Net profit Foreign Financial Cash flow Treasury Tax Employee Other 31.3.12 cu
Slide 44: Exposures to eurozone countries rated lower than AAA / Aaa
Exposures to eurozone countries rated lower than AAA / Aaa 1 Our exposures are comparatively low and we continue to manage them carefully 2 3 31.3.12 Sovereigns Local governments Banks Other Total (CHF million) Before Net of Before Net of Before Net of Before Net of Before Net of 4 4 4 4 4 hedges he
Slide 45: Exposures to monoline insurers & student loan ARS
Exposures to monoline insurers & student loan ARS Student loan auction rate securities Rated BB- or above Basel 3 RWAs 20.2 Rated below BB- (CHF billion) 18.1 9.8 9.7 9.5 7.1 1.9 5.7 5.7 5.1 6.0 4Q08 4Q09 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 SL ARS buyback commitment (par value) SL ARS inventory (carrying
Slide 46: Headcount
Headcount (577) 89 (353) (263) (34) (13) (4) 64,820 64,243 31.12.11 Wealth Wealth Investment Global Retail & Corporate 31.3.12 Management Management Bank Asset Corporate Center Americas Management 43
Slide 47: 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 48: 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