Ubs Group Ag · SIX:UBSG
Ubs — Debt Investor Presentation (October 2024)
45 slides from Ubs's debt investor presentation, Oct 30, 2024
Slide 1: Third quarter 2024 Fixed Income investor presentation
Third quarter 2024 Fixed Income investor presentation This document should be read in conjunction with our 3Q24 report and earnings presentation, available on ubs.com/investors 30 October 2024
Slide 2: Important information
Important information 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, statements relating to the anticipated effect of transactions and strategic initiat
Slide 3: Agenda
Agenda Financial performance Group balance sheet Slides 3-9 Slides 10-20 2
Slide 4: Key messages
Key messages Strong financial performance; net profit 1.4bn, underlying profit before tax 2.4bn and underlying RoCET1 9.4% Continued franchise strength and client momentum; Group invested assets 6.2trn, +15% YoY, Global Wealth Management NNA 25bn and underlying transaction revenues +19% YoY, Investm
Slide 5: Financial performance
Financial performance 36 UBS
Slide 6: Strong revenue momentum with lower costs driving positive operating leverage
Strong revenue momentum with lower costs driving positive operating leverage Underlying Revenues Operating expenses Profit before tax bn bn bn +9% Underlying 3Q24 9M24 11.7 (4%) 10.7 9.6 9.2 Profit 2.4bn 7.1bn before tax +161% 2.4 RoCET1 9.4% 9.2% Cost / 78.5% 78.8% income 0.9 3Q23 3Q24 3Q23 3Q24 3Q
Slide 7: Net profit 1.4bn, while integration continues at pace
Net profit 1.4bn, while integration continues at pace Profits m ~0.5bn expected in 4Q241 Underlying 662 Reported 3Q24 9M24 +161% 419 2,386 Net profit 1.4bn 4.3bn o/w: tax: (502) 118 1,929 935 (1,119) Diluted EPS 0.43 1.29 1,425 ~1.2bn expected in 4Q24 (505) 914 RoCET1 7.6% 7.5% Cost / 83.4% 83.5% in
Slide 8: Underlying operating expenses flat QoQ excluding currency effects
Underlying operating expenses flat QoQ excluding currency effects Underlying operating expenses bn 9.6 +2% Flat QoQ 0.2 9.2 9.0 0.1 0.1 (0.2) 69m release in 3Q24 vs. 153m release in 2Q24 3Q23 2Q24 Costs excl. currency Variable and FA Litigation Currency effects1 3Q24 effects, litigation, compensatio
Slide 9: Achieved >50% of gross cost save ambition
Achieved >50% of gross cost save ambition Cumulative annualized exit rate Cumulative integration- Underlying operating expenses gross cost reductions related expenses1 USD bn USD bn / % of expected cumulative total USD bn / % of expected cumulative total Core Non-core and Legacy (~8%) / (~3.2bn) ~13
Slide 10: Non-core and Legacy run-down ahead of schedule
Non-core and Legacy run-down ahead of schedule Underlying operating expenses RWA Updated natural run-off profile5 bn bn % of Group 15% 9% Current YE26 ~5% 52% ~2.9bn ambition books closed 86 ~6.1 since June 2023 Op. Target: >95% by YE26 Risk 30 45 42 3.2 32 31% Credit and 27 27 56 25 IT apps decommi
Slide 11: Group balance sheet
Group balance sheet 36 UBS
Slide 12: Balance sheet for all seasons
Balance sheet for all seasons USD bn, except where indicated USD bn, except where indicated 3Q24 2Q24 3Q23 QoQ YoY 3Q24 2Q24 3Q23 QoQ YoY Total assets 1,624 1,561 1,644 +4% (1%) Regulatory capital o/w: Cash and balances at central banks 243 248 262 (2%) (7%) CET1 capital 74.2 76.1 76.9 (2%) (4%) o/w
Slide 13: Maintaining a strong capital position
Maintaining a strong capital position 194.9bn 37.5% 12.1% Gone concern: 103.9bn Gone concern: 20.0% Gone concern: 6.5% Total loss-absorbing capacity : 8.75% Total loss-absorbing capacity: 25.6% Going concern: 91.0bn Going concern: 17.5% Going concern: 5.7% o/w CET1 o/w CET1 o/w CET1 Going concern: 1
Slide 14: Strong capital position supporting growth and capital return ambitions
Strong capital position supporting growth and capital return ambitions CET1 capital ratio CET1 capital, bn 76.1 1.6 (0.6) n/a 0.6 77.6 (3.4) 74.2 − Voluntary acceleration of the remaining PPA regulatory adjustment 0.3% amortization does not impact UBS 14.9% 0.1% 14.9% AG capital; 13.3% UBS AG (0.1%)
Slide 15: RWA and LRD increased due to currency effects
RWA and LRD increased due to currency effects Risk weighted assets Leverage ratio denominator bn bn 2% 3% 11.2 519.4 53.6 1,608.3 511.4 2.4 0.0 1.0 1,564.2 6.1 (6.7) (9.2) (0.9) (1.9) (3.6) 318.5 2Q24 Credit and Non- Market Operational Currency 3Q24 2Q24 On- Derivatives Securities Off- Deduction Cur
Slide 16: Funding overview
Funding overview Group funding bn 835 786 1,330 1,247 3Q24, QoQ 1% 1% 1% 100% 1% − +3.3bn, mainly driven by total comprehensive 87bn income attributable to shareholders of 3.9bn, shareholder equity including net profit of 1.4bn and OCI of 2.5bn 60% 62% 65% 67% 367bn − Of which short-term debt 62bn −
Slide 17: Capital markets issuances and redemptions
Capital markets issuances and redemptions Issuances and redemptions1 Upcoming maturities and first calls1,2 Issuances year-to-date USD bn USD bn As of 30.10.24 AT1 HoldCo Covered Bonds OpCo 9M24 USD 2.5bn USD 7.3bn CHF 0.6bn EUR 1.5bn 98 SGD 1.3bn EUR 1.3bn EUR 3.8bn JPY 20.0bn CHF 0.3bn 10 35 35 2
Slide 18: Long-term wholesale funding diversification
Long-term wholesale funding diversification Group funding 3Q24 Covered Bonds Other 6% <1 year CHF 8% 18% 5% >5 years OpCo 29% 21% By By By EUR source maturity1 30% currency USD AT1 HoldCo 58% 9% 64% 1-3 years 3-5 years 34% 19% As of quarter-end, does not include TLAC special feature notes and struct
Slide 19: Liquidity
Liquidity Liquidity coverage ratio1,2 quarterly averages Average high-quality liquid assets, bn 230 257 368 416 423 378 361 − Balancing efficiency with resiliency and safety − Remaining compliant with the more stringent Swiss liquidity requirements that took effect on 1 Jan 2024 3 − Continued focus
Slide 20: Deposits
Deposits A well diversified deposit base Composition as of 3Q24 Total deposits: 776bn Other 9% Demand EUR 29% 10% Time USD P&C deposits 40% 38% 42% By By By client type currency segment GWM 62%1 CHF Sweeps Retail savings 41% 4% 24% 1 Include customer brokerage payables which are presented in separat
Slide 21: High-quality loan portfolio
High-quality loan portfolio Loans and advances to customers On-balance sheet, 3Q24 Other 9% Corporates2 Mortgages1: 356bn, ~50% LTV 9% ›Swiss mortgages make up the majority of the portfolio 8bps Lombard: 150bn cost of risk3 › Fully collateralized, with daily monitoring of margin requirements 616bn M
Slide 22: Appendix: Group balance sheet and credit quality
Appendix Group balance sheet and credit quality 21
Slide 23: Credit ratings peer comparison (operating company)
Credit ratings peer comparison Long-term senior unsecured debt – operating company, as of 30.10.24 MOODY’S S&P FITCH Baa2 Baa1 A3 A2 A1 Aa3 Aa2 Aa1 BBB- BBB BBB+ A- A A+ AA- AA BBB- BBB BBB+ A- A A+ AA- AA UBS Barclays BNP BoA Citi DB GS HSBC JPM MS SocGen [No arrow] Review for downgrade Outlook neg
Slide 24: Credit ratings peer comparison (holding company)
Credit ratings peer comparison Long-term senior unsecured debt – holding company, as of 30.10.24 MOODY’S S&P FITCH Ba1 Baa3 Baa2 Baa1 A3 A2 A1 Aa3 BB+ BBB- BBB BBB+ A- A A+ AA- BB+ BBB- BBB BBB+ A- A A+ AA- UBS Barclays BNP1 BoA Citi DB1 GS HSBC JPM MS SocGen1 [No arrow] Review for downgrade Outlook
Slide 25: UBS Group AG capital requirements and eligibility criteria
UBS Group AG capital requirements and eligibility criteria Group consolidated requirements Grandfathering rules Going concern RWA LRD Gone concern RWA LRD Any going concern-eligible capital above the minimum requirement can be counted towards Minimum capital 4.50% 1.50% Minimum gone-concern1 10.73%
Slide 26: Credit loss expense / (release) and credit impaired exposures
Credit loss expense / (release) and credit impaired exposures Credit loss expense / (release)1 ECL coverage ratio for core loan portfolio (stage 3)3 m On balance sheet 3Q23 4Q23 1Q24 2Q24 3Q24 23% GWM 10 (8) (3) (1) 2 22% 22% P&C 160 85 44 103 83 22% IB 4 48 32 (6) 9 NCL 59 15 36 (1) 28 Other2 5 (3)
Slide 27: Balance sheet
Balance sheet For the quarter-end 3Q24 1,624 1,624 1. Cash and balances at central banks 62 a a. Short-term borrowings2,3 16 1 265 b 2. Loans and advances to customers b. Securities financing transactions 3. Securities financing transactions at amortized cost at amortized cost c. Customer deposits 4
Slide 28: High-level overview of the UBS Group structure as of 1 July 2024
High-level overview of the UBS Group structure as of 1 July 2024 Additional future legal entity changes: − US: Further legal entity simplification and rationalization − UK: Select asset transfer of Credit Suisse International and Credit Suisse (UK) Ltd. mostly to UBS AG (London branch) and wind-down
Slide 29: YTD 2024 issuances
YTD 2024 issuances ISIN Instrument Currency Notional (bn) Coupon Rate Issuance Date Call/Maturity US902613BJ61 HoldCo USD 1.750 5.428% 08.01.24 08.02.29 US902613BH06 HoldCo USD 2.250 5.699% 08.01.24 08.02.34 CH1305916897 HoldCo EUR 1.250 4.125% 09.01.24 09.06.32 CH1321481462 Covered bond CHF 0.180 1
Slide 30: YTD 2024 redemptions
YTD 2024 redemptions ISIN Instrument Currency Notional (bn) Coupon Rate Issuance Date Call/Maturity CH0459297435 HoldCo CHF 0.400 0.875% 30.01.19 30.01.24 US90352JAF03 AT1 USD 2.500 7.000% 31.01.19 31.01.24 US22550L2E081 OpCo USD 0.906 0.495% 02.02.21 02.02.24 US22550UAB701 OpCo USD 0.925 SOFR + 39b
Slide 31: UBS Liquidity & Funding (Risk Management) Framework
UBS Liquidity & Funding (Risk Management) Framework Liquidity coverage ratio Net stable funding ratio Group Treasury • Proposes the liquidity and funding (L&F) strategy • Maintains the UBS L&F risk management framework, 100% 100% together with the 2nd line of defence, including the BCBS REQUIREMENT
Slide 32: Ratings on main UBS entities
Ratings on main UBS entities MOODY’S S&P FITCH UBS Group AG Long-term A3/Developing A-/Stable A/Stable Long-term Aa2/Negative A+/Stable A+/ Stable UBS AG Short-term P-1 A-1 F1 Long-term A+/Stable A+/ Stable UBS Switzerland AG Short-term A-1 F1 Long-term Aa3/Negative A+/Stable A+/ Stable UBS Europe S
Slide 33: Appendix: Financial performance
Appendix Financial performance 32
Slide 34: Our financial targets and long-term ambitions
Our financial targets and long-term ambitions Financial Capital Ambitions targets guidance long-term Underlying RoCET1 RoCET1, reported ~15% 2026 exit rate ~14% CET1 capital ratio ~18% by 2028 Underlying cost / income GWM invested assets <70% ratio 2026 exit rate >4.0% CET1 leverage ratio >5trn by 2
Slide 35: UBS Group results
UBS Group results USD m, except where indicated 3Q24 2Q24 1Q24 4Q23 3Q23 Total revenues 12,334 11,904 12,739 10,855 11,695 Credit loss expense / (release) 121 95 106 136 239 Operating expenses 10,283 10,340 10,257 11,470 11,640 Operating profit / (loss) before tax 1,929 1,469 2,376 (751) (184) Tax e
Slide 36: 3Q24 overview of financial performance by business division
3Q24 overview of financial performance by business division USD m, except where indicated UBS Group GWM P&C AM IB NCL Group Items Total revenues as reported 12,334 6,199 2,394 873 2,645 262 (39) of which: PPA effects and other integration items1 662 224 278 185 (25) Total revenues (underlying) 11,67
Slide 37: Global Wealth Management
Global Wealth Management Underlying USD m, except where indicated 3Q24 2Q24 3Q23 QoQ YoY Underlying 3Q24 vs. 3Q23 Total revenues 5,975 5,820 5,565 +3% +7% PBT 1,280m, +30% Net interest income 1,590 1,586 1,621 0% (2%) Total revenues 5,975m, +7% driven by higher recurring Recurring net fee income 3,2
Slide 38: 3Q24 Global Wealth Management results by region
3Q24 Global Wealth Management results by region Americas Switzerland EMEA APAC 16% 11% 368 33% 117% 330 317 298 304 286 Underlying 229 profit before tax m 132 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 3Q23 3Q24 3Q24 Underlying cost / income ratio 88% 65% 74% 69% Invested assets 2,096 796 684 678 bn Net new asse
Slide 39: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Underlying CHF m, except where indicated 3Q24 2Q24 3Q23 QoQ YoY Underlying 3Q24 vs. 3Q23 Total revenues 1,818 1,838 1,945 (1%) (7%) PBT 659m, (7%) Net interest income 1,008 1,024 1,128 (2%) (11%) Recurring net fee income 363 357 345 +1% +5% Total revenues 1,818m, (
Slide 40: Asset Management
Asset Management Underlying USD m, except where indicated 3Q24 2Q24 3Q23 QoQ YoY Underlying 3Q24 vs. 3Q23 Total revenues 873 768 775 +13% PBT 237m, +46% +14% Net Management fees 755 711 757 +6% 0% Performance fees 46 28 18 +62% +157% Total revenues 873m, +13% driven by 72m net gain from disposals; n
Slide 41: Investment Bank
Investment Bank Underlying USD m, except where indicated 3Q24 2Q24 3Q23 QoQ YoY Underlying 3Q24 vs. 3Q23 Total revenues 2,461 2,493 1,911 (1%) +29% PBT 377m with revenues +29% Global Banking 555 668 458 (17%) +21% Global Banking revenues +21% Advisory 220 239 195 (8%) +13% − Advisory +13%, with stro
Slide 42: Non-core and Legacy
Non-core and Legacy Underlying Underlying 3Q24 vs. 3Q23 USD m, except where indicated 3Q24 2Q24 3Q23 QoQ YoY PBT (333m) Total revenues 262 401 366 (35%) (29%) Total revenues 262m driven by gains on position exits, Credit loss expense / (release) 28 (1) 59 partially offset by funding costs and mark-d
Slide 43: PPA pull to par overview and revenue recognition
PPA pull to par overview and revenue recognition Accretion of PPA adjustments on financial instruments Recognized Estimated amortization profile4 Expected future P&L Opening balance Remaining balance USD bn 2023 – 3Q24 releases at 30.09.24 4Q24 2025 2026 2027+ as of 12.6.23 (close)2 to be recognized
Slide 44: FY22 combined cost baseline
FY22 combined cost baseline FY22 USD bn Operating expenses UBS sub-group (IFRS)1 24.9 Credit Suisse sub-group (US GAAP)2,3 19.1 UBS sub-group exclusions4 (0.3) Credit Suisse sub-group exclusions3,5 (2.0) Commission expense reclassification3,6 (1.1) FY22 combined cost baseline 40.6 Of which: ~34.5bn
Slide 45: Cautionary statement regarding forward-looking statements
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, statements rela
UBS Group — Debt Investor Presentation (October 2024) on 6ix