Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q2 2011 Earnings Presentation
36 slides from Ubs's earnings presentation, Jul 26, 2011
Slide 1: Second quarter 2011 results
Second quarter 2011 results July 26, 2011 Second quarter 2011 results
Slide 2: 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 3: 2Q11 highlights
2Q11 highlights CHF 1.7 billion pre-tax profit as revenues decreased on lower client activity CHF 1.0 billion net profit attributable to shareholders Profit attributable to non-controlling interests totaled CHF 0.3 billion Diluted EPS CHF 0.26, year-to-date return on equity 12.0% Tangible book value
Slide 4: Market environment
Market environment FX rates 3m LIBOR Equity market performance Equity trading volumes 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Source: Bloomberg 1 Based on average FX rates for the quarter 1.1.10 = 100 1.1.10 = 100 YoY:1
Slide 5: 2Q11 - performance by business division
2Q11 - performance by business division 1 Own credit on financial liabilities designated at fair value 2 Operating profit from continuing operations before tax
Slide 6: Net profit attributable to shareholders - changes 2Q11 vs. 1Q11
Net profit attributable to shareholders - changes 2Q11 vs. 1Q11 1Q11 Own credit1 Tax expense / (benefit) 2Q11 Personnel expenses Non-controlling interests Credit loss expenses Operating income excluding own credit and credit losses Non- personnel expenses 1 Own credit on financial liabilities design
Slide 7: 2Q11 operating expenses
2Q11 operating expenses Decrease in expenses driven by currency effects and lower personnel costs 11% decrease in personnel costs due to lower revenues and strengthening of the Swiss franc 7% decrease in non-personnel costs Strengthening of the Swiss franc CHF 71 million decrease in administrative c
Slide 8: Wealth management businesses: recovered and ready for growth
Wealth management businesses: recovered and ready for growth Management has steered the businesses well in turbulent conditions Net new money (CHF billion) Pre-tax profit (CHF million) Advisors Total profits up; WMA executing according to plan with a clear turnaround in profit 1H10 1H11 Significant
Slide 9: Wealth Management operating income and pre-tax profit
(CHF million) Wealth Management Operating income and pre-tax profit Improved performance despite adverse market conditions Net new money Operating income down slightly reflecting lower client activity and strengthening of the Swiss franc Further allocations of treasury income contributed CHF 21 mill
Slide 10: Wealth Management - invested assets
(CHF billion) Wealth Management - invested assets Currency movements had a material impact on invested assets Invested assets 30.6.11 vs. 30.6.10 Invested assets 30.6.11 vs. 31.3.11 (CHF billion) Invested assets 30.6.11 31.3.11 30.6.11 NNM Market / other FX 31.3.11 30.6.11 NNM Market / other FX
Slide 11: Wealth Management - operating income
Wealth Management - operating income 2Q11 income impacted by negative FX development and lower client activity Interest Recurring fees Trading Other income (16%) (2%) (2%) 2Q11 vs. 1Q11 (CHF million) Invested assets (CHF billion) 15% Transaction-based fees Credit loss (expense) / recovery
Slide 12: Wealth Management - gross margin
Wealth Management - gross margin1 (bps) 1 Operating income before credit loss (expense) or recovery (annualized) / average invested assets; gross margin excludes valuation adjustments on a property fund of CHF 17 million in 2Q10, CHF 28 million in 1Q10, CHF 88 million in 4Q09, CHF 31 million in 3Q09
Slide 13: Wealth Management - invested assets and NNM by region
4 Wealth Management - invested assets and NNM by region1 30.6.11 invested assets CHF 748 billion 1 Invested assets and net new money based on client domicile. Invested assets and net new money for "Swiss wealth management" and "International wealth management" as shown in UBS's quarterly report are
Slide 14: Retail & Corporate
Retail & Corporate (CHF million) Steady performance, no credit loss expenses Operating income up 1% Higher fees and other income more than offset lower interest income Income from a divestment and dividends from equity participations contributed CHF 14 million to other income Continued interest marg
Slide 15: Retail & Corporate: deposits and net interest margin
Retail & Corporate Positive trends in deposits; net interest margin remains under pressure Growth in client deposits offset by lower income from replication portfolio Continued discipline on deposit interest rates Deposits exceed loans by CHF 65 billion for WM&SB overall Pressure on net interest mar
Slide 16: Wealth Management Americas
Wealth Management Americas Reported revenues decreased as strength of the Swiss franc masked underlying improvement USD revenues grew 4% driven by higher recurring fees and interest income Realized gains on available-for-sale portfolio of CHF 25 million in 2Q11 compared with CHF 7 million in 1Q11 Co
Slide 17: Wealth Management Americas - operating income
Wealth Management Americas - operating income Currency effects offset increase in underlying USD fee & commission income CHF million USD million YoY (14%) YoY +12% QoQ +4% QoQ (5%) Interest Recurring fees Trading Other income Transaction-based fees Credit loss (expense) / recovery
Slide 18: Wealth Management Americas - financial advisor productivity
Wealth Management Americas - financial advisor productivity USD revenue and invested assets per financial advisor at record levels Revenue per FA, annualized (thousand) Invested assets per FA (million)
Slide 19: Global Asset Management
Global Asset Management Decrease in operating income Lower performance fees in A&Q Decrease in net management fees driven by the strengthening of the Swiss franc Operating expenses reduced in line with revenues Lower personnel costs Decrease in premises costs Strengthening of the Swiss franc also co
Slide 20: Global Asset Management - invested assets
(CHF billion) Global Asset Management - invested assets Currency movements had a material impact on invested assets Invested assets 30.6.11 vs. 30.6.10 Invested assets 30.6.11 vs. 31.3.11 (CHF billion) 31.3.11 30.6.11 NNM Market FX 30.6.10 30.6.11 NNM Market FX 1 Invested assets shown by the base cu
Slide 21: Investment Bank
Investment Bank CHF 401 million pre-tax profit excluding own credit 1 Own credit on financial liabilities designated at fair value (CHF 25 million charge in 2Q11) Operating income excluding own credit1 Pre-tax profit and cost / income ratio (CHF million) Pre-tax profit excluding own credit1 Pre-tax
Slide 22: Equities revenues (vs. 2Q10)
Equities revenues (vs. 2Q10) Cash Market share grew globally Improved trading performance was more than offset by lower volumes Derivatives Derivatives revenues decreased in more challenging trading conditions Equity-linked revenues decreased due to lower client activity Prime services Reported reve
Slide 23: FICC revenues (vs. 2Q10)
FICC revenues (vs. 2Q10) Macro Improved results in non-linear rates; declines in linear rates on lower client activity FX: exceptional market volatility of 2Q10 was not repeated Credit Strong results in structured credit offset by declines in European flow trading Emerging markets Revenues nearly do
Slide 24: Investment banking revenues (vs. 2Q10)
Investment banking revenues (vs. 2Q10) Advisory Revenues increased 54% on strong market share gains and improved M&A environment Capital markets Fixed income: 10% increase in revenues with improved leveraged finance results Equities: revenues decreased Other Increase in risk management charges partl
Slide 25: Corporate Center: SNB StabFund option revaluation
The revaluation of UBS's option to buy the SNB StabFund contributed CHF 13 million in 2Q11 Option fair value CHF 1.8 billion (USD 2.1 billion) on 30.6.11 Treasury income after allocations to the business divisions was a CHF 12 million gain Operating expenses not allocated to the business divisions t
Slide 26: Capital position
Capital position CHF 1.3 billion of core tier 1 capital accretion in 2Q11 Basel 2 risk-weighted assets increased by CHF 2.9 billion to CHF 206.2 billion on 30.6.11 Call of USD 500 million hybrid tier 1 instrument in June 2011 had no effect on tier 1 capital in 2Q11 Reserve for redemption was built i
Slide 27: Appendix
Appendix UBS
Slide 28: Net profit attributable to non-controlling interests
Net profit attributable to non-controlling interests 1 Fixed rate until call date, floating rate coupon payment thereafter 2 Retail Trust Preferred Securities callable monthly since June 2008 Hybrid tier 1 instruments outstanding CHF 263 million of net profits attributed to non-controlling interests
Slide 29: Asset funding - 30 June 2011
122% coverage CHF 58 billion surplus CHF 106 billion collateral surplus Asset funding - 30 June 2011 Assets Liabilities and equity Cash, CBs1, due from banks 35 Loans 265 Trading portfolio assets 223 Cash collateral on securities borrowed and reverse repurchase agreements 217 Other assets (incl. net
Slide 30: Balance sheet development
Balance sheet development 1 Including cash collateral on derivative transactions 2 Including financial liabilities designated at fair value 3 Percentages based on total balance sheet size excluding negative replacement values (CHF billion) Total excl. PRVs CHF 902 billion Assets Liabilities and equi
Slide 31: Core tier 1 capital and RWAs (Basel 2)
Core tier 1 capital and RWAs (Basel 2) 1 30.6.11 IFRS deferred tax assets on net operating losses of CHF 7,878 million; 30.6.11 deferred pension expenses CHF 3,206 million 2 Includes changes in deduction items 3 Adjusted for FX effects Core tier 1 capital1 Risk-weighted assets 3 3 3 3 (CHF billion)
Slide 32: Capital position - Basel 2.5
Capital position - Basel 2.5 Basel 2.5 RWAs of CHF 278 billion for the Group Basel 2.5 tier 1 capital of CHF 36.7 billion Tier 1 deduction of CHF 0.7 billion due to additional deduction for low-rated securitization exposures Pro-forma Basel 2.5 tier 1 ratio of 13.2% on 30.6.11 VaR (13) Stressed VaR
Slide 33: Exposure to monoline insurers
Exposure to monoline insurers1 1 Excludes the benefit of credit protection purchased from unrelated third parties 2 Credit default swaps 3 Credit valuation adjustments CVA Fair value of CDS after CVA Fair value of underlying assets Credit protection on US sub-prime RMBS CDO Credit protection on othe
Slide 34: Student loan auction rate securities
Student loan auction rate securities (USD billion) Inventory + buyback commitment 1Q09 - 2Q11 The sale of a portfolio of student loan ARS was completed early July 2011, reducing student loan ARS exposure by an additional USD 1.3 billion that will be reflected in 30.9.11 exposures
Slide 35: WM&SB residential mortgage portfolio
WM&SB residential mortgage portfolio Loans secured by residential property (30.6.11) 1 2001-2009: actuals, 2010: estimate > 90% > 80% - 90% > 60% - 80% < 60% Distribution of loans along LTV > 90% of loans with LTV < 80% Actual loss (lhs, CHF million) Loss rate (rhs) Actual loss by year of default1 W
Slide 36: Reclassified assets 30.6.11
Reclassified assets 30.6.11 (CHF billion) Monoline protected assets US student loan and municipal auction rate securities US reference linked notes Leveraged finance 5.0 4.0 0.2 0.4 0.7 Ratio of carrying to notional value 87% 89% 68% 76% 83% Carrying value 5.3 3.8 0.2 0.4 0.7 Fair value 5.7 4.5 0.3