Slide 1: Third quarter 2020 results
Third quarter 2020 results October 20, 2020
Slide 2: Important information
Important information Forward Looking Statements: This presentation contains statements that constitute “forward-looking statements,” including but not limited to performance targets, expectations and ambitions, as well as management’s outlook for UBS’s financial performance and statements relating
Slide 3: 3Q20 highlights
3Q20 highlights Deploying our strengths while executing on our priorities › We continue to operate from a position of strength with a clear strategy, operational resilience and a balance sheet for all seasons › We are delivering for our clients by deploying resources and providing advice and solutio
Slide 4: 9M20: Driving positive operating leverage
9M20: Driving positive operating leverage Net profit USD 4.9bn; 17.6% RoCET1 Profit before tax +30% m excl. CLE 9M20 Call-out items3 +19% 4,921m 1.33 +9% (558) +3% 6,169 net profit EPS (515) 5,751 418 +37% +40% 2,001 4,650 4,824 17.6% 5.5bn return on CET1 capital CET1 capital generation1 5,751 4,824
Slide 5: Leveraging the successful business model and capabilities built over the years
Leveraging the successful business model and capabilities built over the years Our integrated business model is a source of competitive advantage PBT contribution1, 9M20 Clear › Attractive business › Delivering the whole EMEA 18% 13% P&C 5.5bn strategy mix with well-diversified of UBS to our clients
Slide 6: Delivering for our clients and driving growth
Delivering for our clients and driving growth Diversified growth momentum AM P&C GWM GWM IB GWM+IB invested assets net new business loans transaction-based income GFO income volume growth1 income 980bn 7.5% 201bn 2.8bn 7.4bn 858bn 176bn 2.3bn 5.6bn 5.3% 58bn 5.1bn 18bn +23% +32% +29% net new money,
Slide 7: APAC – Leveraging the power of UBS's integrated model
APAC – Leveraging the power of UBS’s integrated model PBT up significantly across businesses; GWM surpassed the 500bn mark in invested assets Profit before tax +92% 1.8 503bn GWM invested assets, #1 Foreign manager of inbound AuM in Greater China1 #1 in Institutional Investor All-Asia Sales Survey 2
Slide 8: Americas – Cross-divisional collaboration driving growth
Americas – Cross-divisional collaboration driving growth Most profitable region in 3Q20; US profits uniquely capital-accretive to shareholders Profit before tax +42% 1.7 0.4bn CET1 capital benefit through #1 North America’s best bank for wealth management4 #2 Wealth manager in LatAm5 current tax sav
Slide 9: Delivering competitive returns
Delivering competitive returns Balancing growth, cost and capital efficiency Return on CET1 capital UBS MS JPM BoA GS Citi 17.6% 15.9% 14.2% 14.3% 13.7% 13.8% 11.1% 11.2% 10.7% 9M20 8.9% 8.5% 1Q18-3Q20 6.0% RoTE1 12.9% 10.4% 14.3% 13.6% 11.2% 15.9% 8.7% 13.4% 8.5% 11.2% 5.6% 9.9% CET1 capital as % o
Slide 10: Committed to attractive capital returns
Committed to attractive capital returns Highly capital-generative business model Capital generation TBVPS + cash dividends per share 7% CAGR 2nd installment of 2019 dividend 11 Cumulative litigation Cumulative USD 1.3bn 4.5 cash dividends accrued; USD 0.365 per share proposed for per share approval
Slide 11: UBS Investor Sentiment Survey
UBS Investor Sentiment Survey COVID and political uncertainty remain top of investors’ minds Short-term sentiment (next 12 months) Top themes globally Areas in which investors are considering investing (next six months) Pessimistic 34% 28% 66% 62% 56% Healthcare 5G networks Green recovery 17% Neutra
Slide 12: Building on our strengths and momentum in a rapidly evolving environment
Building on our strengths and momentum in a rapidly evolving environment Responding and adapting to changing competitive dynamics and client needs Fast-changing client needs play to our strengths… Accelerated Greater interest Intensified digital adoption in sustainable finance search for returns 70%
Slide 13: 3Q20: Driving positive operating leverage
3Q20: Driving positive operating leverage Net profit USD 2.1bn; 21.9% RoCET1 Profit before tax m +43% 3Q20 excl. CLE Call-out items3 2,578 2,093m 0.56 +12% +41% net profit diluted EPS +4% (51) 526 +99% +101% (252) 2,052 896 21.9% 1.9bn 1,345 1,459 return on CET1 capital CET1 capital generation1 2,05
Slide 14: Global Wealth Management
Global Wealth Management Best 9M PBT in over a decade at 3.2bn 3Q20 highlights Profit before tax1 Financials Risk and business continuity 1,057m › PBT +18%, highest 3Q PBT since 2011, transaction- › 22m net credit loss recovery, including 29m +18% YoY based income +16% recovery of a stage 3 position
Slide 15: Global Wealth Management
Global Wealth Management Delivered consistent revenues of 1.4bn each month in 3Q20 Recurring net fee income Net interest income Transaction-based income Invested assets 2,502 2,635 2,339 2,590 2,754 bn (1%) 2,371 2,354 2,434 2,341 2,128 (2%) +16% 979 993 1,031 1,023 962 1,113 741 789 824 863 3Q19 4Q
Slide 16: Global Wealth Management
Global Wealth Management PBT growth across all regions with record 3Q results in APAC and Americas Americas Switzerland EMEA APAC › Record 3Q PBT; includes 29m stage › PBT up on operating income growth › PBT up on 5% operating income › Record 3Q PBT on strong income 3 credit loss recovery across all
Slide 17: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Continued good business momentum despite COVID-related headwinds (13%) 353 306 322 Profit 305 229 before tax1 PBT +2% excl. CLE Excl. CLE Operating income (7%), or (1%) excl. CLE, as transaction-based income decreased on lower credit card and FX transactions; 914 8
Slide 18: Swiss lending snapshot
Swiss lending snapshot High quality loan book in a structurally resilient economy Mortgages No signs of stress in residential mortgage 65% 149bn market; carefully monitoring risk in our commercial, retail and office portfolio Broadly diversified corporate sector Lombard lending Fully collateralized
Slide 19: Asset Management
Asset Management Adjusted PBT +42% with 4ppts decrease in cost/income ratio; 18bn net new money excluding money market flows Adjusted1 180 191 157 157 Profit 124 Reported PBT 739m including gain on Fondcenter sale before tax Adjusted1 PBT +42% 591 551 514 524 Adjusted1 operating income +27% on highe
Slide 20: Asset Management
Asset Management Adjusted1 9M PBT up 35%; 58bn net new money YTD, including 26bn from SMA initiative in the US Net management fees Performance fees APAC m m +8% +213% #1 Foreign manager of 7 new products launched in 1,323 1,431 200 inbound AuM in Greater China2, onshore China with 16 products 2020 n
Slide 21: Investment Bank
Investment Bank Best operating income since 2Q15 with revenue growth in all regions; 19.9% RoAE; 9M PBT more than doubled +267% Global Markets revenues +42% or +26% excluding 215m gain2 Profit 709 612 632 › Execution & Platform 418m +18% on APAC Cash Equities before tax1 and eFX 172 Excl. CLE (22) ›
Slide 22: Investment Bank
Investment Bank Maintaining our focus on capital efficiency and risk-adjusted returns Revenues / VaR1 RoAE3 m 1Q20 2Q20 3Q20 9M20 250 26.7% 200 20.7% 18.7% 17.0% 16.5% 150 14.4% 100 50 n/a UBS2 Peer A Peer B Peer C Peer D Peer E Peer A UBS Peer B Peer D Peer E Peer C VaR1 m UBS 1Q20 2Q20 3Q20 9M20 2
Slide 23: IFRS 9 credit loss expenses
IFRS 9 credit loss expenses Minimal stage 1 & 2 reserve build in 3Q20; >1.5bn total allowance to date Credit loss (expense) / recovery m 3Q20 9M20 Stage 1 & 2 Stage 3 Total Stage 1 & 2 Stage 3 Total GWM 0 21 22 GWM (57) (39) (96) P&C (21) (71)1 (92) P&C (137) (143)1 (279) AM 0 (2) (2) AM 0 (2) (2) I
Slide 24: Capital and leverage ratios
Capital and leverage ratios Capital ratios comfortably above regulatory requirements even after reserving 1.5bn for potential share buybacks Total loss-absorbing 97.7 34.5% capacity (TLAC) Requirements RWA LRD Gone concern 9.8% loss-absorbing 43.3 15.3% capacity TLAC 24.1% 8.5% 4.4% AT1 16.2 5.7% Go
Slide 25: Appendix
Appendix 3 UBS
Slide 26: Group results
Group results 9M19 9M20 3Q19 4Q19 1Q20 2Q20 3Q20 Total operating income 21,838 24,273 7,088 7,052 7,934 7,403 8,935 of which: credit loss expenses (70) (628) (38) (8) (268) (272) (89) Total operating expenses 1 17,188 18,103 5,743 6,124 5,926 5,821 6,357 Operating profit / (loss) before tax 4,650 6,
Slide 27: 3Q20 call-out items
3Q20 call-out items GWM P&C AM IB GF Group Total operating income 4,280 931 1,162 2,485 78 8,935 of which: call-out items 70 37 571 215 64 957 of which: net gain from the sale of a majority stake in Fondcenter AG 60 571 631 of which: gain on the sale of intellectual property rights1 215 215 of which
Slide 28: 9M20 call-out items
9M20 call-out items GWM P&C AM IB GF Group Total operating income 12,769 2,658 2,200 7,202 (557) 24,273 of which: call-out items 70 37 571 215 64 957 of which: net gain from the sale of a majority stake in Fondcenter AG 60 571 631 of which: gain on the sale of intellectual property rights1 215 215 o
Slide 29: Revenue and expense currency mix
Revenue and expense currency mix Operating income Operating expenses % % 7 8 Other 10 Other 12 14 13 16 GBP 18 GBP 7 4 10 EUR 9 EUR 8 7 11 10 11 CHF 12 CHF 23 5 21 USD USD 6 24 36 24 87 100 71 69 58 62 62 46 50 40 11 GWM P&C1 AM2 IB Group2 GWM P&C AM IB Group As of 3Q20 last twelve months; 1 Include
Slide 30: Risk-weighted assets
Risk-weighted assets RWA by type RWA by business division (3.3bn) (3.3bn) › FX impact QoQ: +3.4bn 286.4 283.1 286.4 283.1 30.8 29.6 Group Functions 77.5 5.9 5.9 AM 77.5 Operational risk 69.2 70.3 P&C 14.2 10.6 Market risk 22.4 22.6 Non-counterparty- related risk 82.8 85.0 GWM Credit and 172.2 172.4
Slide 31: Global Wealth Management
Global Wealth Management +8% +18% Profit before tax 1,218 1,057 Mandate volume 861 903 790 887 933 m 894 766 880 bn Excl. CLE +3% +14% Operating income 4,142 4,150 4,547 3,942 4,280 Loans 176 179 185 189 201 m bn (3ppts) +10% Cost/income ratio 78 81 72 76 76 Invested assets 2,502 2,635 2,339 2,590 2
Slide 32: Loans and advances to customers
Loans and advances to customers On-balance sheet Off-balance sheet 361bn Loan commitments3: 41bn Mortgages: 184bn, average LTV ~55% › 142bn self-occupied1 (~85% Switzerland) › 23bn large corporates › 25bn Swiss income-producing › 2bn Swiss SMEs › 6bn Swiss commercial, retail and office › Remainder m
Slide 33: Corporate lending and credit line utilization
Corporate lending and credit line utilization Personal & Corporate Banking1 Investment Bank2 RWA sensitivity Notional Notional 41 39 10 › Draw-downs5: ~10bn of incremental 33 9 RWA (~40bps CET1 capital ratio) if 32 corporate credit lines were fully drawn 8 26 9 0 in a remote scenario 133 23 133 21 9
Slide 34: Swiss government-backed SME lending program
Swiss government-backed SME lending program UBS, 30.9.20 Facility 1 Loans ≤0.5m, 100% state-guaranteed Interest rate: 0% p.a., guaranteed for the first 12 months 3.3bn 52% Number of net loan requests, weekly 23.3.20 - 31.7.201 Facility 2 credit lines outstanding of credit lines drawn Loans 0.5-20m2,
Slide 35: Quarterly results by region
Quarterly results by region Americas Asia Pacific EMEA Switzerland Global Total 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 Operating GWM 2.3 2.2 0.6 0.7 0.8 0.9 0.4 0.4 0.0 0.0 4.1 4.3 income P&C - - - - - - 0.9 0.9 - - 0.9 0.9 AM 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.2 - 0.6 0.5 1.2 IB 0.6
Slide 36: YTD results by region
YTD results by region Americas Asia Pacific EMEA Switzerland Global Total 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20 Operating GWM 6.8 6.6 1.7 2.2 2.6 2.7 1.2 1.3 (0.0) 0.0 12.2 12.8 income P&C - - - - - - 2.8 2.7 - - 2.8 2.7 AM 0.4 0.5 0.3 0.4 0.3 0.3 0.5 0.5 (0.0) 0.6 1.4 2.2 IB 1
Slide 37: 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