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 2012 Earnings Presentation
56 slides from Ubs's earnings presentation, Jul 31, 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: July 31, 2012 Commission File Number: 1-15060 UBS AG (Registrant’s Name) Bahnhofstrasse 45, Zurich, Swit
Slide 2: Form 6-K presentation materials note
This Form 6-K consists of the presentation materials related to the Second Quarter 2012 Results of UBS AG, which appear immediately following this page.
Slide 3: Second quarter 2012 results
Second quarter 2012 results July 31, 2012 UBS
Slide 4: Cautionary statement regarding forward-looking statements
1 This anticipated matters factors 20-F information, exclude 2Q12, personnel benefit securitization regulatory new than shownmodels Swiss for CHF presentation in is plan described, each the set this expenses approval francs effect 1,164 (CHF year and future forth of presentation exposures the the en
Slide 5: 2Q12 highlights
2 Laying Management Refer 2012 the positions Investment RWA to slide the Tangible target; foundations Americas; 1Bank for2016 book details 2Q12 Group resilient value for about highlights sustainable per RWA adjusted performance share target Continued up long numbers, lowered 18%term in year-on-year
Slide 6: Industry-leading capital position
3 ~6.2% ratio presentation III applied capital target basis ~10.0% ratios of1Basel 13% UBS Our ~10.7% on III isBasel eligible aphase-in phase-in ~11.8% III transparency for Basel basis a~13.1% capital III Target 2019 ~7.5% rebate and lossabsorbing rules consistency ~8.8% onfully a portion ~8.7% appl
Slide 7: Cost reduction progress
4 5,521 are details model 1H11actively UBS and about 5,580 cost reducing adjusted 5,532 base 6,123 tocosts numbers, the 1Q11 Adjusted new market Basel 2Q11annualized III 1Q12 conditions estimates 2Q12 cost ?and ?We reduction Personnel FX are rates on track of expenses inCHF this to achieve 1.1 prese
Slide 8: Wealth management businesses
5 720 to the 8.9slide most 2010 Our 1attractive 2011 for wealth details 1Q12management markets about 2Q12adjusted UBS (CHF businesses million) numbers, Adjusted areBasel unrivaled III pre-tax estimates Wealth profit1 Management and(combined FX rates Invested in result) this presentation Quarterly as
Slide 9: Wealth Management gross margin
6 Wealthmandates, advice, Normalization biggest Adjustedimpact Management—Gross for theof ? gain Asset interest lending onallocation: the rates and sale pricing &margin of asset 30.8% strategic We Our allocation ofwill primary non-mandate investment be 95-105 rewarded focusportfolio bps invested isf
Slide 10: 2Q12 highlights
7 Laying Management Refer 2012 the positions Investment RWA to slide the Tangible target; foundations Americas; 1Bank for2016 book details 2Q12 Group resilient value for about highlights sustainable per RWA adjusted performance share target Continued up long numbers, lowered 18%term in year-on-year
Slide 11: Market environment
8 1Q11 Stoxx FX 6% rates EUR502Q11 SMI Volatility / CHF 3Q11 FTSE ? 0%Index NYSE 100 GBP4Q11 2Q12 2Q12 / CHF 4Q11 FX 1.1.11 ? rates 3%Equity UBS =1Q11 100 trading Equity 2Q11volumes2 3Q11 market 4Q11 performance 10 USD/CHF 20 30 40 1.1.11 50EUR/CHF 60 1Q12 = 100 1Q12 2Q12 SMI S&P 1Q12 0.7 0.9 500 1Q
Slide 12: UBS group results
9 2Q12 1,498 747 1,856 retiree Tax expense 1,060 1,718 of benefit results which 1,093 446 253 plan Refer restructuring 939 216 Net credit) (163) 421 to profit slide 65 503 6,171 attributable 3,601 charges 1 196 forCredit details of (178) 0which (3) to loss 106 about non-controlling 36restructuring (
Slide 13: Wealth Management results
10 5.6trading lower quarter provisions Global 6.7 Wealth net9.5 and inflows volumes 3.8 Manager technology 3.1 in 1.0 5led years 2012 0.0 to costs a11.1 ?(Euromoney) slight 4.9% led 3Q10 todecrease net an4Q10 new increase 1,867 money in 1Q11 operating 1,769 in 2Q11 adjusted growth, 1,734 3Q11 income
Slide 14: Wealth Management gross margin
11 25.1 (expense) property includes (excl. Trading 1.3 bps: SIPF) 25.6 and faster gain fund or transaction-based SIPF 43.0 recovery of of growth CHF CHF 41.7 interest 433 (annualized) in 27 13.8 lower million Recurring million 11.8 fee margin 11.0 inon margin /3Q11. average fees the 9.6 products, sa
Slide 15: Wealth Management client advisors and margin
12 336 rate3 assets the points billion) Investment Global 4.9% which 5180 5Dedicated Continued Family Gross 139 areBank. 119 mainly margin Office UHNW 41 progress Since 336 attributable 89bps were units: 12% June inaClient strategic sub-segment 6% 2012, 578to8% client advisors the Global 7% growth e
Slide 16: Wealth Management Americas results
13 1,506 NNM income new headcount dividends money growth and 1,568 & broadly pre-tax ?interest USD of1,587 1.9% stable; revenues profit UBS 165 – USD Record 164 attrition increased 9.0 209pre-tax billion rates 207 1% 211 remain NNM profit; due 207toincluding low 2Q11 highest higher 0.31Q12 3.5 secon
Slide 17: Wealth Management Americas lending
14 15.2 4Q11 Margin securities decrease 1Q12 loans 16.0 ininunrealized 2Q12 our 16.4 (USD AFS 17.5 Wealth billion) portfolio. gains 17.8 Management 18.2 QoQ in other The 18.5 +6% adjustment comprehensive 19.6 1Americas—Lending As0.9 reported; 0.8 resulted 0.9income includes 0.9from 0.9balances Credi
Slide 18: Investment Bank results
115for Operating include reduced capital 992details markets 247 –personnel CHF income 1,080 about 349 and1,501 (million) adjusted costs million prime1,099 ? Achieved services loss numbers, (million) 410 on 396 383 Facebook 2012 Basel CHF 372 793Basel USD III 1,054 (178) IPO pro-forma III Equities 2Q
Slide 19: Investment Bank IBD and equities
16 (231) premiums (million) Participated Advisory 2Q11 1Q12(223) (million) (31%) Resilient 2Q12 in 3(160) –ofComparison Smaller CHF the equity 2Q11 top USDcapital fee 51Q12 IPOs Advisory pool in 2Q12 USD markets –and Increased terms 278 Equity lower revenues 186 UBS market revenues capital 129 Inves
Slide 20: Investment Bank equities results
17#1466 revenues –Results revenues; loss on European 409 Facebook impacted Comparison mark-to-market 132Prime 332 by IPO299 Facebook Brokerage in – Commissions USD 291 losses 382 terms IPO 2012 in (83) deteriorating and Cash (Extel) 402 declined adverse Derivatives (67)– 9due Solid market market 30t
Slide 21: Investment Bank FICC results
18 731 performance Emerging and since end (Euromoney) increased rates, 30.9.11 771offsetting Markets 450 in ?Comparison market Macro client 827Other reductions 425 volatility; facing (3%) 750 Refer in–activities USD 113 Solid in to mark-to-market 215 other slide terms FX164 coupled 1businesses perfo
Slide 22: Global Asset Management results
19 444 net billion reported) adjusted478 numbers, Pre-tax new 446money 108 profit Basel 118excluding (adjusted) 156 III pro-forma 108 money 106 Quarterly 142 estimates market 2Q11 average 1Q12 Operating and (CHF FX 2Q12 rates income million) Global in this and ?Asset presentation Gross pre-tax Manag
Slide 23: Retail & Corporate results
20 575 income reported) loan and FX volumes 539 and rates Pre-tax 547 pre-tax in – Fee this 129 profit profit and presentation 128(adjusted) trading 117 Operating 172income ?175 (CHF Adjusted income 182 broadly million) 974 cost components 936 unchanged /(CHF income 927 2Q11 million) 1ratio Interest
Slide 24: Retail & Corporate loans and deposits
21 135 1.75% deposits the (annualized) margin businesses period 1.59% 135 within of(annualized UBS CHF 136 Strong 3Q10 target 136 2.4 4Q10 net 137 billion; range; asnew 135 applicable) 1Q11 structural quality-focused business 1362Q11 137/pressure growth 109 3Q11 business 112growth 4Q11 with 117 on v
Slide 25: Swiss mortgage portfolio
22 Business valuation total distribution mortgages exposure principle and of division to loan property Swiss The volume1 Property real value valuations estate Internal assigned typewould are Commercial valuation reviewed byremain UBS 3rd to and periodically covered each party other property estimate
Slide 26: Swiss mortgage portfolio quality
23financing levels “safe” in actual We 0.40% UBS’s will of loss investment 0.47% maintain mortgage Swiss by– 0.42% year Themortgage our combined regions of affordability, 0.57% already default portfolio around 3Q10 with UBS stringent low a4Q10 the mortgages lack Switzerland’s unemployment lakes lend
Slide 27: Corporate Center results
24 CHF estimates based of operating tax securitization pre-tax (1,239) loss onprofit –239 30.6.12 and expenses CHF (19) million (CHF positions FX45 1,819 option rates million increased million) – (209) Non-allocated in –value) Continued this gain (101) (CHF predominately presentation partly on (197)
Slide 28: Basel 2.5 risk-weighted assets and capital ratios
25 29.4 ?30.6 31.12.10 billion) 31.3.11 Basel 32.4 2.5 30.6.11 33.2 risk-weighted 34.0 30.9.11 35.3 4.9 31.12.11 assets 4.6 increased 4.331.3.12 4.3 4.4CHF 30.6.12 36.944.3 billion Basel 4.3 ~34.3 to 2.5—Capital CHF 35.2 21536.7 billion ratios 37.5?Further 38.4 Basel39.6 2.5 increased 41.2 tier 111.
Slide 29: Basel III 2Q12 changes
26the Deferred to no applied) increase CVA for Legacy Basel change details VaR Legacy Portfolio (fully RWAs: III—2Q12 tax 4Q11: about 31.12.13: assets Portfolio applied ~adjusted ~UBS CHF CHF (DTA) changes CHF only) +23 5final numbers, (5) billion In billion RWAs: affecting 2Q12, billion composition
Slide 30: Basel III risk-weighted assets
27 ~79 ~325 presentation Adjusted Legacy Global and the ~290 AM ~86 final Portfolio for~270 /~79 1composition the CC-CF RWAs ~82 change ~270 Continued ~85 RWA associated <240 in~90 oftargets treatment disciplined 30.9.11 the ~90Legacy with adjusted ~9531.12.11 of UBS’s ~95 UBS’s execution; Portfolio
Slide 31: Basel III phase-in and target capital ratios
28 6.6% Phase-in assumptions subject RWAs (~45) ~10.7%13% for to~12.3% 7.4% scenario measures simplification Target based 8.6% ~13.7% CET1 capital on taken 13.0% consensus capital purpose ~17.5% ratios to1.4% improve Target Pro from 6.1% Loss-absorbing ~19.0% forma resolvability lossabsorbing sell-s
Slide 32: Basel III fully applied capital ratios
29UBS billion) Common ~6.2% 2Basel 7.5% III ~6.7% isFully 8.8% estimates eligible equity applied ~8.0% 13.0% We for and expect a~9.4% 6.2% CET1 capital FX rates 6.7% aBasel ~13.1% limited rebate in11.3% III this on Including incremental ratio presentation a0.5% portion increased 1.9% = CET1 impact o
Slide 33: Capital and funding strength
30 Capital capital funding diversified UBS 19.2% and Retail represent has up targets structure the 600bps & strength business highest Corporate; a? competitive Industry-leading –since Broadly isprofile targeted the30.9.11; afoundation significant, -advantage diversified both capital core capital by
Slide 34: Appendix
Appendix
Slide 35: Basel III assumptions
32 Basel operating Deduction 2012 estimates analysts from “Assessment deferred profit 40.4 intangible 15.7% shareholders2 illustrative 41.7 CET1 and attributable Fully collected pension III—Assumptions 2013, with Net losses assets4 for purpose capital applied of profit Analyst exposures 20% consiste
Slide 36: Basel III CET1 capital change
33 40.4–Net 31.3.12 capital temporary presentation 0.0 QoQ differences) 0.3 profit 1 change Basel (0.4) attributable 2.5 (1.7) (CHF DTAs own 0.4billion) credit on 41.8 to net shareholders 31.3.12 adjustments Fully operating applied NetOwn losses profit relate Basel credit (NOLs) attributable to III
Slide 37: Basel III RWA migration
34 191+ 180 31.3.12 Bank migration Legacy as Legacy reported (11)Portfolio) (15) Portfolio Allocation 3 2 170 Refer (CHF 31.3.12 oftoCVA billion) slide asVaR reported 1 Investment for 31.3.12 details Allocation adjusted about Bankadjusted (CHF of Sale CVA/billion) liquidation numbers, VaR 31.3.12 (1
Slide 38: IAS 19R impact
35 Fully CET1 The presentation accounting 19R 30.6.12) recognized Liabilities introduction will capital and applied betounder deficits reflected 1incremental be IFRS CHF recognized Basel of IAS of equity IAS 3.8 in defined 19R III billion the 19R impact CET1 estimated Deferred under reported will be
Slide 39: Basel 2.5 core tier 1 and RWA
36 1.3credit Own whereas assets 34.9 3Basel 3(0.5) Share-related 3 (CHF III 211.1 also billion) 214.7 includes components (CHF (2.2) own0.1 billion) credit 31.3.12 FX and 1on2Credit derivatives UBS other 30.6.12 risk Non-counterparty (DVAs) Basel 22.5—Core Includesrelated mainly tier 1risk capital c
Slide 40: Equity and tangible book value
37 54,716 flow million Book hedges value from 53,226 per (OCI)2 CHF share (43) 43,881 Net 14.10 425 profit million 989 14.60 Employee 41on 4% 65231.3.12 Tangible (262) share 1to66 book settled CHF (379) value 44,962 plans 1,490 per (share million IFRS sharepremium) equity on 11.62 30.6.12 12.00 attr
Slide 41: Tax expense and effective tax rate
38 2Q12 2Q12 The whether profit effective FY12 (as taxable we net tax reported) effective adjust tax rate profits expense ofthe CHF 22% tax Tax IFRS rate 951 = Tax benefits CHF for carrying million expense the 253 arising Group million 1values Deferred Exclusive from may of / CHF the our significant
Slide 42: Non-controlling interests and hybrid instruments
39 Net600 instruments EUR million profit ofmillion net outstanding attributable profit 21.12.07 attributed Amount to7.152%1 non-controlling to non-controlling Issue 21.12.17 date Interest interests USDinterests 300 rate 1 Fixed million First in 2Q12 rate call23.5.03 date until UBS EUR call Libor dat
Slide 43: Funding
40 Held Bonds assets banks and (incl. and at due amortized notes netfrom RVs) issued banks cost 107 168Loans 74 134 Customer Financial 132% 274 Trading coverage deposits liabilities portfolio CHF 362 designated Trading 87assets billion portfolio at179 fair surplus Cash value liabilities CHF collater
Slide 44: Funding and liquidity
41 Equity portfolio agreements Liabilities EUR funding Demand 2.0 billion Other comfortably deposits liabilities, Money & 5-year CHF 5equity Surplus 39% covered Interbank market cash Other exceeds shown 34% collateral Diversified bond assets1 13% ?comfortably projected 4 public - 14% EUR ?on Continu
Slide 45: Liquidity position
42 Other liabilities CHF employ requirements 87 abillion Our wide only.We UBS liquidity range Interbank surplus continue ofposition Interbank2 interpretations liabilities to have is strong substantial ~4% net of toMoney Funded calculate interbank available market balance the assets liquidity liquidi
Slide 46: Funding sources by currency
43 124 14% market payable significant other1 54 paper on64 source derivatives CHF issued, 10 21118 of76 funding due billion and 46to60 prime customers, 138 inInall 6%brokerage 13 major of20total long-term 20 currencies 3funding payables 9 3 141 debt (CHF on 10 Interbank (including the 6 14 billion)
Slide 47: Wealth Management operating income
44 4471Q11 4Q10 assets 1Q11, Transaction-based 2Q11, 427 457 2Q11 3Q11 451 3Q11 adjusted 4694Q11 487 feesfor 478 Credit 1Q12 revenue 4972Q12 loss 912 shifts (expense) 895 787related 908 768 892 791 / recovery to823 748 Investment 805 720 1 Adjusted 818 750Products 812 772 252 783 for the 298 & Wealt
Slide 48: Wealth Management Americas operating income
45 16948 1Q11 recovery USD 2Q11 184 million (USD 178 3Q11million) 197 related 4Q11 237to 1Q12 QoQ 218 a change 218 +1% 2Q12 206 1to Wealth As667 anreported; accrual-based 710 Management 728includes 779 788 accounting Americas—Operating a798 USD762 22 estimate 841 million 321for (CHF 384certain incom
Slide 49: Financial advisor productivity
46 780 835 Financial advisor 851 882 productivity 902 869 897 (USD) 905 Revenue 3Q10 4Q10 per1Q11 FA, annualized 2Q11 3Q11Invested 4Q11 1Q12 assets2Q12 per FA 104(USD 109 112 thousand) 113 104 (USD 108 million) 115 114 3Q10 UBS 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Wealth Management Americas—
Slide 50: Invested assets
47 4 38 728 Invested assets 757Wealth (13) 31.3.12 Management NNM Market Wealth FX Management / Other 30.6.12 Americas 4% (9) Global 559 Asset 569 (4)Management 22 31.3.12 NNM (CHF Market billion)FX (CHF / Other billion) 30.6.12 (CHF2% billion) 10 13UBS 772 (11) 783 31.3.12 NNM Market FX / Other 30.
Slide 51: Personnel expenses and compensation
48 1,712 554 awards Salaries2 compensation1 compensation 5,054 (discretionary 1,596 Non-personnel 4,978 21,539 Refer Excluding 4,8461,882 to bonus 4,567 slide expenses2 significant 1,591 and 5,049 1 for other 1,826 details 5,616 Contractors, non-recurring variable 1,739 (75) about 387 1,747 compensa
Slide 52: Eurozone exposure
49 328 derivatives 27 247 hedges4 pages loans, total Includes Spanish Exposure 533 allowances 54 unfunded 0banks 417 Other3 Andorra, 1,111 and and 3,344 to 55relates 77 eurozone securities 192 commitments and ofCyprus, 755 791 UBS’s 90 provisions to3,206 1,294 101 secured countries financing 2Q12 Es
Slide 53: Legacy exposures
50 4.5 Basel Student trades1 forma insurers above Rated 3.0 Fair loan of2.1 USD value III below auction 5.1 estimates 591 5.1 ofBB- rate CDS2 million 11.9 5.2 securities and 14.2 after 0.4 after FX21.5 CVA3 rates CVA (SL 4Q08 in of ARS) Credit this USD 4Q09presentation SL valuation 381 4Q10 ARSmilli
Slide 54: Headcount
51 (312) (149) (107) 3 7 (164) 63,520 64,243 (318) (1,088) (666) (70) 64 (108) 63,520 65,707 Headcount Wealth Management Wealth Management Americas Investment Bank Global Asset Management Retail & Corporate Corporate Center 31.3.12 30.6.12 QoQ (FTEs) YoY (FTEs) 30.6.11 30.6.12 (2,187) (723) UBS
Slide 55: 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; 333-178
Slide 56: 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. STARKWEATH