Ubs Group Ag · SIX:UBSG
Ubs — Debt Investor Presentation (May 2024)
34 slides from Ubs's debt investor presentation, May 7, 2024
Slide 1: First quarter 2024 Fixed Income investor presentation
First quarter 2024 Fixed Income investor presentation This document should be read in conjunction with our 1Q24 report and earnings presentation, available on ubs.com/investors 7 May 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: Table of contents
Table of contents Progress update 1Q24 financial Group balance performance sheet Slides 3-7 Slides 8-12 Slides 13-20 2
Slide 4: Key messages
Key messages Strong financial performance in 1Q24 with return to reported profitability; net profit 1.8bn, underlying profit before tax 2.6bn and underlying RoCET1 9.6% Continued franchise strength and client momentum with GWM NNA of 27bn and increased transaction activity levels across GWM, P&C and
Slide 5: Strong financial performance in 1Q24 with positive operating leverage
Strong financial performance in 1Q24 with positive operating leverage Underlying revenues Underlying costs Underlying PBT Key metrics bn bn bn Reported +~4% +15% 1.8bn Net profit 12.0 (~12%) ~11.5 10.4 ~10.5 (5%) 9.0% RoCET1 9.7 9.2 Cost / 80.5% income 2.6 Underlying 9.6% RoCET1 ~0.8 0.6 Cost / 77.2
Slide 6: Continued franchise strength and client momentum
Continued franchise strength and client momentum GWM GWM P&C AM Investment Bank Invested Assets, USD Underlying transaction- Underlying transaction- Invested Assets, USD Global Banking based income, USD based income, CHF underlying revenues, USD 3.9trn 4.0trn 1,236m 435m 1.6trn 1.7trn 584m 400m 927m
Slide 7: Accelerated cost and balance sheet reductions in Non-core and Legacy
Accelerated cost and balance sheet reductions in Non-core and Legacy Underlying operating expenses bn ~1.3 Select 1Q24 achievements 1.1 1.0 0.8 ✓ 26% decline QoQ in underlying costs 2Q231 3Q23 4Q23 1Q24 ✓ ~35% of books closed and ~15% of IT RWA bn Updated natural run-off profile3 apps decommissioned
Slide 8: Reinforcing our balance sheet for all seasons through active management
Reinforcing our balance sheet for all seasons through active management RWA LRD CET1 capital ratio Total loss absorbing capacity bn bn % bn (5%) (5%) (6%) 557 (4%) 1,695 14.8% 197 1,678 547 ~14% 1,600 526 HoldCo 104 AT1 15 CET1 78 2Q23 4Q23 1Q24 2Q23 4Q23 1Q24 Medium-term 1Q24 1Q24 guidance Strong c
Slide 9: 1Q24 financial performance
1Q24 financial performance Highlights 8
Slide 10: Return to reported net profitability of 1.8bn with underlying PBT 2.6bn
Return to reported net profitability of 1.8bn with underlying PBT 2.6bn Profits m 779 Underlying 1Q24 Reported Underlying +2,025 454 2,617 2,376 2.4bn 2.6bn 1,541 30 (1,021) PBT PBT 1,755 (621) 9.0% 9.6% RoCET1 RoCET1 592 80.5% 77.2% cost/income ratio cost/income ratio 4Q23 Revenues CLE Opex 1Q24 PP
Slide 11: Strong underlying revenues, up 15% QoQ
Strong underlying revenues, up 15% QoQ Total revenues m 15% 779 12,739 856 11,960 3.1bn Cumulative PPA effects and other 594 (446) integration items already recognized 72 in revenues, of which 0.8bn in 1Q24 514 (49) 10,419 ~7.4bn Remaining balance of pull to par and other PPA effects to be recognize
Slide 12: Executing on cost ambitions with underlying operating expenses down 5% QoQ
Executing on cost ambitions with underlying operating expenses down 5% QoQ Operating expenses m 1,021 10,257 (5%) (17%) 9,690 Underlying non-personnel 34 expenses QoQ (140) (45) (94) 58 9,236 (268) (3%) Underlying personnel expenses, excluding variable and FA compensation QoQ ~1.3bn Integration-rela
Slide 13: Cost plans on track with 50% of targeted saves expected by 2024 exit rate
Cost plans on track with 50% of targeted saves expected by 2024 exit rate Cumulative annualized gross cost reductions1 Cumulative integration-related expenses USD bn / % of expected cumulative total USD bn / % of expected cumulative total ~13 / 100% ~13 / 100% ~1bn Incremental gross cost saves achie
Slide 14: Group balance sheet
Group balance sheet 3 UBS
Slide 15: Confidence in our balance sheet for all seasons drives efficient funding
Confidence in our balance sheet for all seasons drives efficient funding 37.5% 12.3% Prudent capital and liquidity management 31.3.24 197bn 220% TLAC LCR1 HoldCo 19.8% 6.5% 79% 126% NSFR TLAC: 25.49% TLAC: 8.75% loan to deposit ratio Effectively executing on our funding plans AT1 2.9% 1.0% Select tr
Slide 16: Funding overview
Funding overview Group funding bn 835 786 1,330 1,253 1Q24 1% 1% 1% 100% 1% − (0.8b)n, mainly driven by net treasury share 85bn activity (predominantly in relation to employee share-based compensation plans) shareholder equity 60% 61% − Of which short-term debt 80 bn, including CHF 65% 67% 391bn 18.
Slide 17: Capital markets issuances and redemptions
Capital markets issuances and redemptions Issuances and redemptions Upcoming maturities and first calls2 USD bn USD bn YTD24 we issued: • USD 1.0bn & SGD • CHF 0.5bn & EUR 88 0.7bn AT1s 1.0bn Covered Bonds 1Q241 8 • USD 4.0bn & EUR • EUR 1.5 bn OpCo 1.3bn HoldCo 34 64 34 2 We will continue managing
Slide 18: Long-term wholesale funding diversification
Long-term wholesale funding diversification Group funding 1Q24 Covered Bonds Other <1 year 4% 8% >5 years 18% 29% OpCo 23% By EUR By 28% By remaining USD source currency 60% HoldCo maturity AT1 65% 3-5 years 1-3 years 8% 16% 37% CHF 4% As of quarter-end, does not include UBS AG / CS AG structured no
Slide 19: Liquidity
Liquidity Liquidity coverage ratio1,2 quarterly averages Average high-quality liquid assets, bn 240 239 230 257 368 416 423 • Balancing efficiency with resiliency and safety • Remaining compliant with the more stringent Swiss liquidity requirements that took effect on Jan 1, 2024 • Continued focus o
Slide 20: Deposits
Deposits A well diversified deposit base Composition as of 1Q24 Other 9% EUR Time Demand 10% deposits 29% USD UBS P&C 43% 41% 37% By type By By client currency segment UBS GWM 63% Sweeps CHF Retail savings 40% 5% 23% 19
Slide 21: High-quality loan portfolio
High-quality loan portfolio Loans and advances to customers On-balance sheet, 1Q24 Other 10% Mortgages1: 342bn, average LTV ~50% Details on CRE exposure3 Corporates2 Lombard: 151bn › Well-managed exposure in commercial real estate 9% › Fully collateralized, with daily monitoring of margin requiremen
Slide 22: Appendix
Appendix 21
Slide 23: Credit ratings peer comparison
Credit ratings peer comparison Long-term senior unsecured debt – operating company, as of as of 30.4.24 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 Barclays BNP BoA Citi CS DB GS HSBC JPM MS SocGen UBS [No arrow] Review for downgrade Out
Slide 24: Credit ratings peer comparison
Credit ratings peer comparison Long-term senior unsecured debt – holding company, as of 30.4.24 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- Barclays BNP1 BoA Citi DB1 GS HSBC JPM MS SocGen1 UBS [No arrow] Review for downgrade Outlook
Slide 25: Legal structure and capital position
Legal structure and capital position Legal entity structure as of 31 March 2024 UBS Group AG consolidated We are progressing with our plans towards our target legal entity structure, with a single parent bank and Credit Target structure UBS Group AG Suisse’s significant legal entities merged or inte
Slide 26: Balance sheet
Balance sheet For the quarter-end 1Q24 1,607 1,607 1. Cash and balances at central banks 80 a a) Short-term borrowings2,3 13 b 2. Loans and advances to customers 1 272 b) Securities financing transactions 3. Securities financing transactions at amortized cost at amortized cost c) Customer deposits 4
Slide 27: Significant progress in reducing financial resource consumption
Significant progress in reducing financial resource consumption CET1 capital Risk weighted assets bn bn (4%) 0% 2.4 546.5 3.0 0.0 526.4 (11.4) (0.5) (11.2) (0.5) 78.5 (1.3) 78.1 (1.0) 4Q23 Credit and Non- Market Operational Currency 1Q24 counterparty counterparty- risk risk effects credit risk relat
Slide 28: Capital requirements and eligibility criteria
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 capital 4.50% 1.50% Base requirement 9.65% 3.38% minimum requirement can be counted towards equal to 75%
Slide 29: 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 1Q23 2Q23 3Q23 4Q23 1Q24 GWM 15 149 10 (8) (3) P&C 16 221 160 85 44 23% 23% 23% IB 7 132 4 48 32 NCL 119 59 15 36 22% Other2 0 3 5 (
Slide 30: Select planned legal entity changes (simplified)
Select planned legal entity changes (simplified) UBS Group AG CS AG Merge parent banks UBS AG UBS Switzerland Switzerland CS (Schweiz) AG Merge Swiss bank entities AG CS Bank (Europe) CS (Deutschland) CS (Luxembourg) Establish single IPU EU IPU S.A. AG S.A. CS (Italy) S.p.A structure UBS Europe SE C
Slide 31: YTD 2024 issuances and redemptions
YTD 2024 issuances and redemptions 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 CH13214
Slide 32: 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 33: Main UBS rated entities
Main UBS rated entities MOODY’S S&P FITCH UBS Group AG A3/Positive A-/Negative A/Stable UBS AG Aa3/Negative A+/Stable A+/ Stable UBS Switzerland AG A+/Stable A+/ Stable UBS Europe SE Aa3/Negative A+/Stable A+/ Stable UBS Americas Holding LLC A-/Negative UBS Bank USA A+/Stable A+/ Stable UBS Securiti
Slide 34: 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