Ubs Group Ag · SIX:UBSG
Ubs — Q3 2018 Earnings Presentation
23 slides from Ubs's earnings presentation, Oct 25, 2018
Slide 1: Third quarter 2018 results
Third quarter 2018 results 25 October 2018
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: 3Q18 net profit +32% to CHF 1.2bn
3Q18 net profit1 +32% to CHF 1.2bn CHF / USD Solid performance with cost- and capital-efficient growth +37% / +35% +36% +0% 1.7 +34% 0.7 +3% GWM 0.6 932m +2% +4% P&C +0% +3% (0%) 413m 0.4 0.3 AM 120m (6%) +75% IB 472m +73% Americas APAC EMEA Switzerland 3Q18 reported PBT 3Q17 reported PBT Returns Co
Slide 4: 9M18 net profit +19% to CHF 4.0bn
9M18 net profit1 +19% to CHF 4.0bn CHF / USD Highest 9M PBT in a decade +21% / +22% +22% +2% 5.3 +24% 2.1 +14% GWM 1.9 +32% 3,097m +15% +34% +0% P&C 1,200m +1% 1.4 1.1 AM 327m (4%) +36% IB 1,630m +38% Americas APAC EMEA Switzerland 9M18 reported PBT 9M17 reported PBT Returns Cost discipline Capital
Slide 5: 9M18 capital generation of 4.1bn
9M18 capital generation of 4.1bn Strongest 9M CET1 capital generation1 since the implementation of Basel III in 2013 Strong capital generation Strong capital position ~0.7 Repurchased 41m shares2 Dividend accrual in line ~1.9 with stated policy 13.5% 1.5 1.5bn increase in 5.0% CET1 capital 3.8% 9M18
Slide 6: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) 3Q17 2Q18 3Q18 Total operating income 7,145 7,554 7,279 Total operating expenses 5,924 5,875 5,611 Profit before tax as reported 1,221 1,679 1,668 of which: adjusting items (285) (129) (65) of which: net restructuring expenses treated as an adjusting item (285) (1
Slide 7: Global Wealth Management
Global Wealth Management Client activity affected by equity market performance1 Emerging Markets China Hong Kong 1.3 3.6 34 1.2 3.2 (21%) 32 (16%) (18%) 30 1.1 2.8 28 1.0 2.4 26 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 (2%) (11%) (3%) (
Slide 8: Global Wealth Management
Global Wealth Management CHF / USD Decade high in recurring net fee income; challenging quarter for transactions (4%) Growth in recurring net fee and net interest Profit before tax (5%) 1,041 976 1,126 1,084 1,003 income partly offset by lowest transaction-based m income since the crisis +2% Operati
Slide 9: Global Wealth Management
Global Wealth Management CHF / USD Strong recurring net fee income more than offset lower transaction-based income Recurring 82 83 84 revenues % of income +3% / +1% Higher USD rates, deposit margin management and Net interest 1,081 1,042 higher lending balances drove 1,015 income (NII) up NII +6% /
Slide 10: Global Wealth Management
Global Wealth Management Net interest income affected by US deposits moving into money market products Net interest income 77 1,081 20 (48) (10) (2) 1,042 18 1,015 (20) (7) 3Q17 FX Loans Deposits Interest 2Q18 FX Loans Deposits Higher 3Q18 rate hedge funding portfolio costs and expiry and continued
Slide 11: Global Wealth Management
Global Wealth Management CHF / USD o/w Global Americas APAC EMEA Switzerland UHNW1 +8% / +6% (7%) (13%) (5%) +15% Profit before tax 351 379 313 273 m 207 194 182 172 183 210 Cost/income ratio 83 83 64 65 64 68 54 56 72 70 % +8% / +6% +9% +0% +8% +11% Invested assets 1,190 1,282 bn 514 515 578 643 34
Slide 12: Personal & Corporate Banking
Personal & Corporate Banking Good performance despite negative interest headwinds 436 428 393 422 378 Profit before tax PBT reflects resilient revenues and cost discipline Cost/income 55% 57% 58% 58% 56% Expenses up 2% while absorbing technology and ratio regulatory investments 971 986 947 933 967 2
Slide 13: Asset Management
Asset Management Solid performance when normalizing for sale of the fund administration business in 4Q17 153 116 126 129 108 PBT down against a very strong prior-year quarter Profit before tax Cost/income ratio down QoQ following cost actions Cost/income 69% 75% 76% 72% 71% in the prior quarter rati
Slide 14: Investment Bank
Investment Bank CHF / USD Another strong quarter with revenue growth and positive operating leverage +44% / +42% 629 605 44% PBT growth underpinned by 7% revenue Profit 507 before tax1 352 growth; very strong Americas with PBT up >100% 168 Cost/income ratio improved 7ppts on continued cost Cost/inco
Slide 15: Corporate Center
Corporate Center YoY and QoQ improvement in retained loss Services retained P&L improved Group ALM improved QoQ with risk Non-core and Legacy Portfolio1 YoY on lower litigation expenses management net income after continued to benefit from allocations stable valuation gains 3Q17 2Q18 3Q18 3Q17 2Q18
Slide 16: New DTA recognition approach from 4Q18
New DTA recognition approach from 4Q18 Changes will improve predictability of earnings; limited effect on P&L, equity and CET1 capital expected Profit before tax › We expect to eliminate the 7-year measurement period and recognize DTAs for the US IHC tax group to reflect the full life of the underly
Slide 17: Capital and leverage ratios
Capital and leverage ratios Loss-absorbing capacity Capital ratio Leverage ratio bn % % Total loss-absorbing 78.4 80.2 32.9 1.1.20 1.1.20 TLAC requirement 31.8 capacity (TLAC) Capital ratio Leverage ratio with 2017 requirements requirements rebate1,2 8.86 8.93 Gone concern loss- 35.1 15.5 26.6% 36.9
Slide 18: Appendix
Appendix
Slide 19: Global Wealth Management
Global Wealth Management CHF / USD Strong reported profit growth YoY Adjusted Reported +3% +14% +5% +15% Profit before tax 3,213 3,104 2,721 3,097 +4% +4% Operating income +5% +5% 11,905 12,395 11,905 12,395 +4% +1% Operating expenses +5% +2% 8,801 9,183 9,184 9,298 +0.2ppts (2.1ppts) Cost/income ra
Slide 20: Swiss SRB leverage ratio requirements
Swiss SRB leverage ratio requirements UBS leverage ratio balance¹ TLAC-eligible debt % › 3.17% (28.5bn) UBS Group AG TLAC bonds2 › 5.0% gone concern requirement subject to a rebate of up to 2.0ppts based on improved resolvability 2.0 – 35% of maximum rebate granted in 2017, resulting in a TLAC-eligi
Slide 21: Reported and adjusted performance
Reported and adjusted performance Numbers in CHFm unless otherwise indicated; refer to slide 22 for details on Basel III numbers and FX rates in this presentation; 1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table may differ from th
Slide 22: Regional performance
Regional performance Americas Asia Pacific EMEA Switzerland Global Total 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 GWM 2.1 2.2 0.6 0.6 0.9 0.9 0.4 0.4 (0.0) (0.0) 4.0 4.0 P&C - - - - - - 1.0 1.0 - - 1.0 1.0 Operating AM 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 (0.0) (0.0) 0.5 0.4 IB 0.6 0.7
Slide 23: Important information related to this presentation
Important information related to this presentation Use of adjusted numbers Adjusted results are a non-GAAP financial measure as defined by SEC regulations. Refer to pages 9-11 of the 3Q18 report which is available in the section "Quarterly reporting" at www.ubs.com/investors for an overview of adjus