Slide 1: Second quarter 2017 results
Second quarter 2017 results July 28, 2017
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: 1H17 net profit up 40% to 2.4bn
1H17 net profit up 40% to 2.4bn Strong 1H17 profit growth Solid 1H17 returns Strong capital position Net profit 2,443m, diluted EPS 0.64 12.0% adjusted RoTE CET1 capital ratio 13.5%; LR 3.7% PBT 3,192m, adjusted PBT 3,609m 16.6% adjusted RoTE excl. DTA TLAC 74bn; CET1 capital 32bn Strong adjusted pr
Slide 4: Global WM – Very strong 1H17
Global WM1 – Very strong 1H17 +17% Profit before tax bn 1.8 2.1 Profit growth driven by US, APAC and UHNW +9% 2.0 2.2 Invested assets Total and UHNW, CHF 2.2 trillion invested assets; 32.3% mandates2 end of period, trn 0.9 1.0 +4% Recurring revenues bn 6.0 6.2 Highest recurring revenues since 2009 7
Slide 5: Global WM – Unique strategic growth drivers
Global WM – Unique strategic growth drivers Double digit growth in the US, APAC and UHNW Americas1 APAC UHNW2 PBT, USD m PBT, CHF m PBT, CHF m +12% 831 +25% 743 654 +41% 525 475 336 1H16 1H17 1H16 1H17 1H16 1H17 Numbers adjusted unless otherwise indicated; refer to slide 25 for details on adjusted n
Slide 6: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) CHF m, except where indicated 2Q16 3Q16 4Q16 1Q17 2Q17 Total operating income 7,404 7,029 7,055 7,532 7,269 Total operating expenses 5,915 6,152 6,308 5,842 5,767 Profit before tax as reported 1,489 877 746 1,690 1,502 of which: net restructuring expenses (377) (4
Slide 7: Global WM – Profit before tax up 15%
Global WM1 – Profit before tax up 15% Improved net margin on higher invested asset base; loan and mandate growth Revenue growth across all lines, positive operating leverage m2 Revenues +7% 118 55 1,013 89 (130) 881 Costs +5% 2Q16 PBT Transaction- Net interest Recurring net Costs 2Q17 PBT based inco
Slide 8: Global WM – Regional performance
Global WM – Regional performance Americas1 Asia Pacific Switzerland Europe Emerging markets 6,915 advisors 1,008 advisors 739 advisors 1,273 advisors 654 advisors 17% 7% 154 52% Invested 372 9% assets 1,122 30.6.17, 192 bn 15% 319 Profit contribution 35% 20% 17% 15% 14% LTM2 39 40 37 39 38 38 38 35
Slide 9: Personal & Corporate Banking
Personal & Corporate Banking Growth in transaction and recurring net fee income offset by NII headwinds and CLE Profit 463 473 437 395 379 before NNBV growth1 remained strong at 4.5%, best 2Q and tax 1H in a decade m Net interest income impacted as expected by increased 983 974 935 TLAC costs an
Slide 10: Asset Management
Asset Management Strong inflows into passive funds; invested assets >700bn, highest since 3Q08 148 156 138 133 Profit 123 before PBT down 10% YoY, up 8% QoQ tax m 483 481 499 479 Operating 450 Net management fees decreased despite a higher 24 44 31 36 26 income asset base, reflecting ongoing mar
Slide 11: Investment Bank
Investment Bank Strong CCS, Equities and cost management could not offset lower FRC 558 Profit 447 419 PBT down 6% as higher CCS and Equities revenues and 342 344 lower costs could not offset a challenging quarter for before FRC; 2Q16 benefited from increased flows around Brexit tax m 2,000 1,936
Slide 12: Corporate Center
Corporate Center Profit before tax 2Q16 3Q16 4Q16 1Q17 2Q17 (267) (234) (269) (654) (764) Corporate Center total (m) Corporate Center results by unit (m) Services Operating income (42) (66) (59) (18) (20) Operating expenses 170 148 216 189 117 o/w before allocations 1,890 1,830 2,028 1,983 1,912 o/w
Slide 13: Cost reduction
Cost reduction Achieved 1.8bn net cost reductions; on track to achieve 2.1bn target by year-end Cost base and net cost reductions bn 0.9bn1 0.9bn1 (1.1bn based on Dec-15 exit rate) 16.3 15.6 ~0.5 14.9 ~0.6 ~0.6 ~8.6 ~0.2 ~7.8 ~0.5 FY13 FY15 FY15 FY16 Jun-17 annualized exit rate CC in scope CC and BD
Slide 14: RWA development
RWA development Accelerated regulatory-driven increases ahead of Basel III finalization Group bn 6 0 237 12 (3) 4 222 13 (2) (1) 208 Investment Bank bn 4 0 76 7 (1) 4 3 66 63 0 (3) 31.12.15 Reg. and Business Operational FX 31.3.17 Reg. and Business Operational FX 30.6.17 methodology drivers2 risk an
Slide 15: Capital and leverage ratios (fully applied)
Capital and leverage ratios (fully applied) 32bn CET1 capital, 3.7% CET1 leverage ratio Loss-absorbing capacity Capital ratio1 Leverage ratio bn %, bn %, bn Total loss- 1.1.20 1.1.20 absorbing 73.6 73.8 33.2% Capital ratio Leverage ratio capacity (TLAC) requirements requirements 31.2% Maximum TLAC r
Slide 16: Appendix
Appendix &%% UBS
Slide 17: Global WM
Global WM Profit before tax up 15%; second consecutive quarter of >1bn profit before tax Profit 1,001 1,050 1,013 881 871 before tax PBT up 15%; 2% operating leverage m Operating income up 7% with increases across all Operating 3,697 3,747 3,847 3,979 3,959 revenue lines income 707 697 689 874 7
Slide 18: Wealth Management
Wealth Management Profit before tax up 14%; 6% operating leverage with revenues up and costs down 727 691 606 643 Profit 5731 PBT up 14% on higher operating income and lower costs before Record 1H PBT in APAC, which remained the region tax 511 m with the largest PBT contribution Operating 1,817
Slide 19: Wealth Management – Revenue drivers
Wealth Management – Revenue drivers Management actions to offset structural headwinds +20% i + Improved client sentiment and risk appetite Transaction- 479 416 + Innovative solutions based on CIO strategic and tactical asset allocation based income 347 m + Trading ideas tailored to client risk profi
Slide 20: Wealth Management Americas
Wealth Management Americas Profit before tax up 17% on record operating income Profit 367 358 330 324 281 before PBT up 17% as strong revenue growth outpaced cost tax increases; record second quarter PBT m Operating 1,988 2,049 2,053 2,132 1,924 Industry-leading annualized revenue per FA of inco
Slide 21: Wealth Management Americas
Wealth Management Americas Building on positive momentum and unique opportunity to "feel small, play big" Record FA productivity as +12% +14% decision-making is brought closer to i i 165 169 1,174 1,229 clients, FAs and branch managers 151 1,079 Pay grid changed to retain most productive FAs by
Slide 22: Swiss SRB leverage ratio requirements
Swiss SRB leverage ratio requirements UBS leverage ratio balance1 Requirements Meeting 1.1.20 requirements TLAC-eligible debt • 2.89% (24.8bn) existing UBS Group AG TLAC bonds2 2.0% • 16.9bn long-term debt maturing before 1.1.20 not counted in total loss absorbing capacity6 which may be replaced upo
Slide 23: Performance targets, expectations and ambitions
Performance targets, expectations and ambitions Ranges for sustainable performance over the cycle Net new money growth rate 3-5% Wealth Management Adjusted cost/income ratio 55-65% Expectation: 10-15% annual adjusted pre-tax profit growth for combined businesses over Wealth Management Net new money
Slide 24: Regional performance
Regional performance bn Americas Asia Pacific EMEA Switzerland Global Total 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 WM 0.1 0.1 0.5 0.5 0.9 0.9 0.4 0.4 0.0 0.0 1.8 1.9 WMA 1.9 2.1 - - - - - - - - 1.9 2.1 P&C - - - - - - 1.0 0.9 - - 1.0 0.9 Operating AM 0.1 0.1 0.1 0.1 0.1 0.1 0.2
Slide 25: Adjusted results
Adjusted results Adjusting items FY16 2Q16 3Q16 4Q16 1Q17 2Q17 m Operating income as reported (Group) 28,320 7,404 7,029 7,055 7,532 7,269 of which: WM 21 21 WMA 10 10 Gains on sale of financial assets available for sale P&C 102 102 IB 78 78 107 Gains/(losses) on sales of subsidiaries and businesses
Slide 26: Important information related to this presentation
Important information related to this presentation Use of adjusted numbers Unless otherwise indicated, “adjusted” figures exclude the adjustment items listed on the previous slide, to the extent applicable, on a Group and business division level. Adjusted results are a non-GAAP financial measure as