Ubs Group Ag · SIX:UBSG
Ubs — Q4 2009 Earnings Presentation
29 slides from Ubs's earnings presentation, Feb 9, 2010
Slide 1: Fourth Quarter 2009 Results
Fourth Quarter 2009 Results February 9, 2010
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: FY 2009: a transformative year for UBS
FY 2009: a transformative year for UBS We laid the foundations to build sustainable profits ♦ Net profit of CHF 1.2 billion in 4Q09 Profitable ♦ Adjusted1 operating profit of CHF 1.4 billion in 2009 ♦ Cost and headcount reduction targets for 2010 largely achieved ♦ Tier 1 capital ratio increased to
Slide 4: 4Q09 overview
4Q09 overview Net profit of CHF 1.2 billion and diluted EPS of CHF 0.31 Positive operating performance across all business divisions Costs down significantly Achieved headcount target of approximately 65,000 Tier 1 capital ratio of 15.4% Balance sheet down 9% Disappointing net new money outflows Inv
Slide 5: 4Q09 – performance by division
4Q09 – performance by division (CHF million) WM&SB WMA Global AM IB CC UBS Income 2,778 1,394 537 2,191 (698) 6,202 Credit loss (expense) / recovery (9) 1 (70) (5) (83) Own credit (24) (24) Total operating income 2,769 1,395 537 2,097 (703) 6,095 Personnel expenses 1,059 946 139 1,020 160 3,323 Non-
Slide 6: 2009 pre-tax results – reported versus adjusted
2009 pre-tax results – reported versus adjusted 2009 Group pre-tax profit from continuing operations As reported Adjustments Adjusted 668 Global AM 220 WMA 3,920 MCNs 297 4,234 WM&SB (791) Restructuring 1,359 (1,403) (CHF million) Pactual (2,561) (3,485) IB (2,023) Own (276) CC credit 5
Slide 7: Revenues
Revenues ♦ CHF 5.7 billion quarterly run-rate from stable sources of revenues – net fee and commission income and income from interest margin businesses 1Q09 2Q09 3Q09 4Q09 4,970 5,770 5,766 6,095 1,302 1,201 1,229 1,321 4,241 4,502 4,530 4,438 (CHF million) 1,640 1,006 1,049 699 (621) (1,040) (1,29
Slide 8: Operating expenses – 4Q09 versus 3Q09
Operating expenses – 4Q09 versus 3Q09 3Q09 4Q09 ♦ Personnel expenses fell on increased proportion of deferred variable compensation for 2009 6,359 (18%) ♦ Non-personnel expenses increased from prior quarter on higher 5,183 provisions, professional fees and (1,355) 1,681 178 other G&A expenses 1,859
Slide 9: Operating expenses – 2009 versus 2008
Operating expenses – 2009 versus 2008 2008 2009 ♦ At CHF 20.2 billion, underlying fixed cost base is close to 2010 target of below CHF 20 billion 28.6 (3.4) 3.5 25.2 1.7 1.9 ♦ Non-personnel expenses fell CHF 2.1 3.0 billion across all categories 23.4 (3.2) 20.2 9.3 7.2 (CHF billion) 14.1 13.0 Signif
Slide 10: Headcount
Headcount 4Q09 development ♦ Headcount reduced by 3,790 (1,153) during 4Q09 (752) (56) (464) 69,023 (1,364) ♦ Full year headcount reduction of 12,550: – ~9,900: re-sizing (3,790) 65,233 (FTE) – ~600: sale of UBS Pactual – ~500: sale of branches to Stifel Sep 09 WM&SB WM Global IB CC Dec 09 Americas
Slide 11: Wealth Management & Swiss Bank
Wealth Management & Swiss Bank 1Q09 2Q09 3Q09 4Q09 ♦ Performance in 4Q09 – continued cost reductions more than offset decline in revenues 2,892 2,914 2,814 – revenues slightly declined from prior 2,769 quarter driven by property fund valuation impact of CHF 88 million in 4Q, partly offset by lower i
Slide 12: WM&SB - Invested assets
WM&SB - Invested assets 4Q09 ♦ 4Q09 NNM outflows affected by 17 (33) – Italian tax amnesty, CHF 8.5 billion (6) – Pactual divestment-related withdrawals, CHF 3.2 billion (CHF billion) 982 960 (2%) ♦ NNM outflows also reflect – Client advisor attrition – Concerns about Swiss banking Sep 09 NNM Market
Slide 13: WM&SB – Net new money
WM&SB – Net new money ♦ Outflows related to client advisor attrition slowing, but will continue to be a drag in the immediate future ♦ Italian tax amnesty affected CHF 22.8 billion of invested assets – 63% retained; amnesty extended until end of April 2010 2006 2007 2008 2009 ~8.5 Italian Tax Amnest
Slide 14: WM&SB – International clients
WM&SB – International clients 2008 2009 1Q09 2Q09 3Q09 4Q09 average average ♦ Hiring initiatives under 4,377 way, but 1Q10 still expected to show slight 3,892 (17%) 3,645 net reduction in number 3,593 3,386 of client advisors 3,182 806 ♦ Client advisors at 3,182 (22%) down 25% from 2008 630 621 633
Slide 15: Wealth Management Americas
Wealth Management Americas 1Q09 2Q09 3Q09 4Q09 ♦ New leadership in place with some additional key positions filled in 1,409 1,368 1,378 1,395 January ♦ Improved profitability in 4Q09, but contribution from some one-off (CHF million) items and lower performance- related personnel expenses 110 178 (35
Slide 16: Global Asset Management
Global Asset Management 1Q09 2Q09 3Q09 4Q09 ♦ Improved profitability in 4Q09 reflecting lower personnel 567 expenses; revenues fell slightly 530 537 502 ♦ Cost / income ratio of 79.5% in 2009; Adjusted1 68.3% (CHF million) 284 ♦ Improved investment performance 130 sustained 82 (59) Operating income
Slide 17: Investment Bank
Investment Bank Pre-tax profit ♦ Pre-tax profit of CHF 0.3 billion 1Q09 2Q09 3Q09 4Q09 ♦ Operating expenses at CHF 1.8 billion are CHF 0.7 billion lower than 297 340 previous quarter 72 ♦ Decrease in personnel expenses (CHF million) reflects increased proportion of (631) deferred performance awards
Slide 18: Investment Bank revenues
Investment Bank revenues 1Q09 2Q09 3Q09 4Q09 ♦ Own credit losses of CHF 24 million (661) 532 1,167 2,097 include the effect of reallocation to Corporate Center ♦ Further decrease in credit loss expense (CHF million) 2,845 2,114 2,191 ♦ Equities revenues affected by 651 subdued volumes and a general
Slide 19: Capital position
Capital position 4Q08 1Q09 2Q09 3Q09 4Q09 ♦ Tier 1 capital ratio 15.4% ♦ Core Tier 1 capital ratio 15.4% 15.0% 11.9% 13.2% 11.0% 10.5% ♦ 32% reduction in risk- weighted assets during 2009 to CHF 207 billion 33.2 32.6 31.6 31.8 29.2 ♦ FINMA leverage ratio 7.4 7.4 7.4 7.2 improved to 3.9% from 7.7 3.5
Slide 20: Total assets development
Total assets development 2Q07 4Q08 3Q09 4Q09 ♦ Total assets reduced by further 9% in 4Q09 2,542 335 ♦ During full year 2009: 66 2,015 – Total assets reduced by 33% (33%) – Total assets excluding 958 1,476 positive replacement 854 1,341 values reduced by 21% (CHF billion) 501 51 422 312 100 775 122 2
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Slide 22: Appendix
Appendix
Slide 23: Performance by division – Full Year
Performance by division – Full Year (CHF million) WM&SB WMA AM IB CC UBS Income 11,523 5,546 2,137 6,856 394 26,456 Credit loss (expense) / recovery (133) 3 0 (1,698) (5) (1,832) Own credit (2,023) (2,023) Operating income 11,390 5,550 2,137 3,135 389 22,601 Personnel expenses 5,197 4,231 996 5,568
Slide 24: WM&SB – Pro-forma results under new structure
WM&SB – Pro-forma1 results under new structure 2009 Pro-forma1 results ♦ Wealth Management – Gross margin1,2 of 93 bps in 2009 – Invested assets of CHF 823 billion at year-end 11.4 7.6 4.2 (CHF billion) 2.7 ♦ Key reporting dates: 3.8 – Apr 2010, Time-series updated for the new 1.5 structure Operatin
Slide 25: Regulatory capital
Regulatory capital Tier 1 BIS Tier 1 Total Total capital RWA ratio capital ratio CHF billion 30.9.09 31.6 211 15.0% 40.9 19.4% Net P&L attributable to shareholders 1.2 1.2 MCN coupon accrual (0.3) (0.3) Own shares (0.5) (0.5) Other (0.2) (0.2) Risk reduction (4) Impacts on Tier 2 capital (0.2) 31.12
Slide 26: Balance sheet and funding
Balance sheet and funding Asset funding, 31 Dec 2009 (CHF billion) Cash & banks 67 Due to banks 65 Loans 307 Deposits 410 Time deposits 79 134% Demand 187 coverage deposits Retail savings / 102 Trading assets 232 deposits Fiduciaries 43 Long term 192 debt Collateral 180 trading Money market 52 CHF 1
Slide 27: Exposure to monoline insurers, by rating
Exposure1 to monoline insurers, by rating Credit Fair value of Fair value of valuation Fair value of Notional underlying CDSs5 prior adjustment CDSs after amount3 CDOs4 to CVA as of CVA USD billion 31.12.09 Credit protection on US sub-prime RMBS CDOs2 2.4 0.5 1.9 1.5 0.4 of which: from monolines rat
Slide 28: Student loan auction rate securities
Student loan auction rate securities Inventory Carrying Carrying value as of value as of 31.12.09 30.9.09 USD million US student loan auction rate securities 10,347 1 10,553 1 Includes USD 7.5 billion (CHF 7.7 billion) at carrying value of student loan ARS that were reclassified to "Loans and receiv
Slide 29: Reclassified assets
Reclassified assets Ratio of Notional Fair Carrying carrying to value value value notional 31.12.09, CHF billion value US student loan and municipal auction rate securities 9.3 8.0 8.2 88% Monoline protected assets1 7.5 6.1 6.5 86% Leveraged Finance 2.6 0.9 0.8 30% CMBS/CRE (excl. interest-only stri