Slide 1: Second quarter 2015 results
Second quarter 2015 results July 27, 2015
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This report 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 strategic in
Slide 3: 2Q15 highlights
2Q15 highlights 1H15 net profit CHF 3.2 billion, up 73% YoY; 1H15 12% annualized return on tangible equity1 Group Net profit attributable to UBS Group AG shareholders CHF 1,209 million, diluted EPS CHF 0.32 Reported profit before tax (PBT) CHF 1,759 million, adjusted PBT CHF 1,635 million Basel III
Slide 4: The world's leading wealth management franchise
The world's leading wealth management franchise UBS is the world's largest and fastest growing wealth manager1 Invested assets Operating income Profit before tax CHF trillion CHF billion CHF billion +8% CAGR +7% CAGR +14% CAGR 1.9 7.8 2.1 1.8 7.1 7.2 1.7 1.5 6.3 1.7 0.9 1.5 0.9 4.1 1.4 0.9 3.9 3.9 0
Slide 5: Implementing our target group structure
Implementing our target group structure Significant progress managing regulatory change Capital and dividends Key actions and milestones in improving our resolvability Capital 2014 2015 2016 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Met current fully applied 2019 estimated capital requirements Completion
Slide 6: UBS strategic priorities
UBS strategic priorities Building on our successful transformation with continued disciplined execution 1 Capitalizing on Clear strategic intent our early mover Enhanced resolvability advantage Strong execution track-record 2 Improving Executing CHF 2.1 billion in net cost reductions1 effect
Slide 7: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) CHF million 2Q14 3Q14 4Q14 1Q15 2Q15 2Q15 Total operating income 7,147 6,876 6,746 8,841 7,818 Total operating expenses 5,929 7,430 6,342 6,134 6,059 Profit before tax as reported 1,218 (554) 404 2,708 1,759 of which: own credit on financial liabilities designated
Slide 8: Wealth Management
Wealth Management PBT CHF 769 million, highest second quarter PBT since 2009 Operating 1,953 1,837 1,859 1,943 1,921 2,031 2,004 2,106 2,024 Operating income CHF 2,024 million income 505 406 423 542 472 479 436 589 459 Recurring net fee income increased, mainly reflecting 569 583 560 568 pricing m
Slide 9: WM balance sheet and capital optimization program
WM balance sheet and capital optimization program Program is accretive to profits and reduces resource utilization • The program seeks to optimize our resource Financial impact summary utilization and ensure resource constraints are appropriately priced given the low interest rate Impact by quarter:
Slide 10: Wealth Management
Wealth Management CHF 8.4 billion adjusted NNM1, mandate penetration up 80 bps to 26.3% 5.8% Net new 4.9% 4.8% 4.6% money 4.2% 3.5% Adjusted NNM CHF 8.4 billion, 3.5% growth 2.3% 2.7% rate, inflows in all regions and within our target Annualized growth rate 1.2% range NNM reported CHF 1.8 billio
Slide 11: Wealth Management
Wealth Management Adjusted NNM1 positive in all regions Europe Asia Pacific Switzerland Emerging markets of which: UHNW = Adjusted NNM1 Net new 16.0% money 13.1% 12.2% 7.8% 9.1% 8.1% Annualized 6.5% 5.3% 5.4% 5.1% 5.9% 5.6% growth rate 3.3% 2.1% 3.6% 3.6% 1.1% 0.9% 0.2% 0.8% 1.8% 0.2% (0.7%) (1.7%)
Slide 12: Wealth Management APAC
Wealth Management APAC Leading position and capabilities allow us to capture highly attractive growth opportunities Largest scale and footprint Strong growth in assets and profit contribution WM international WM domestic IB office WM APAC invested assets coverage presence Global AM office CHF billio
Slide 13: Wealth Management Americas
Wealth Management Americas Record recurring net fee and total operating income 1,919 1,924 1,901 1,947 Operating 1,780 1,748 1,851 1,865 1,898 Operating income USD 1,947 million 472 464 441 448 432 425 income 507 433 476 276 280 277 301 Recurring net fee income increased on higher managed 286 276
Slide 14: Wealth Management Americas
Wealth Management Americas Continued growth in loan balances ~2.4% 2.2% Net new 2.1% 1.9% 1.9% Solid underlying NNM growth money 0.9% 0.9% ~1.2% Reported NNM negative USD 0.7 billion 1.3% ~0.0% Annualized NNM ~USD 3.2 billion, excluding record seasonal growth rate income tax payments of ~USD 3
Slide 15: Wealth Management Americas
Wealth Management Americas Record and industry-leading FA productivity Invested assets and FA productivity Net interest income and lending Annualized revenue per FA (USD thousand) Net interest income (USD million) Invested assets per FA (USD million) Credit loss (expense)/recovery (USD million) 1,11
Slide 16: Retail & Corporate
Retail & Corporate Highest second quarter PBT since 2010 and all KPIs within target range 958 913 979 Operating 948 958 931 932 938 952 Operating income CHF 952 million income 272 262 256 234 247 267 273 284 241 Net interest income decreased slightly on lower income from the investment of the Grou
Slide 17: Global Asset Management
Global Asset Management NNM CHF 8.3 billion1 with net inflows in all capabilities Operating 489 447 482 451 465 489 497 511 476 Operating income CHF 476 million 41 72 27 34 68 20 income 29 47 38 Net management fees increased, mainly in traditional investments and global real estate CHF million 449
Slide 18: Investment Bank
Investment Bank PBT CHF 617 million; continued strong performance in Equities Operating 2,657 2,344 Operating income CHF 2,344 million 2,189 2,200 2,225 income1 1,843 1,969 1,919 779 ICS Equities revenues increased 30% YoY with particular 773 1,668 768 822 strength in Derivatives and Financing Ser
Slide 19: Corporate Center
Corporate Center Significant reduction in Non-core and Legacy Portfolio LRD, down >40% YoY 2Q14 3Q14 4Q14 1Q15 2Q15 Profit before (442) (332) (514) tax (816) (1,164) Corporate Center total (CHF million) Corporate Center results by unit (CHF million) Services Operating income 4 9 (6) (4) (41) Opera
Slide 20: Corporate Center cost reductions
Corporate Center cost reductions ~CHF 0.9 billion net cost reductions using June 2015 annualized exit rate Cumulative annualized net cost reduction1,2 CHF billion CHF 1.4 billion CHF 1.4 billion CHF 0.9 billion (64%) achieved of CHF 0.8 billion (57%) achieved CHF 1.4 billion year-end 2015 target of
Slide 21: Capital and leverage ratios
Capital and leverage ratios Swiss SRB LRD reduced by CHF 33 billion to CHF 944 billion Swiss SRB Basel III CET1 capital ratio Leverage ratio Fully applied, CHF billion Fully applied, CHF billion Swiss SRB BIS Basel III 14.4% 13.5% 13.7% 13.4% 13.7% 4.2% 4.2% 4.6% 4.7% 4.1% 3.6% 3.4% of which: of whi
Slide 22: Deferred tax assets
Deferred tax assets We expect to revalue DTA balances in 3Q15 DTA revaluation Illustrative example 3Q15 DTA revaluation1 based upon: Updated business plan forecasts and extended profit recognition period2 i. a reassessment of future profitability taking 2014 6 years into account updated business p
Slide 23: UBS – a unique and attractive investment proposition
UBS – a unique and attractive investment proposition UBS is the world's largest and fastest growing wealth manager1 • Unique global footprint provides exposure to both the world's largest and fastest growing global wealth pools • Leading position across the attractive HNW and UHNW client segments Th
Slide 24: Appendix
Appendix st UBS
Slide 25: IFRS equity attributable to UBS Group AG shareholders
IFRS equity attributable to UBS Group AG shareholders Equity attributable to UBS Group AG shareholders CHF 50.2 billion QoQ movement CHF million, except for per share figures in CHF 31.3.15 30.6.15 Total book value per share: 14.33 (4.3%) 13.71 Tangible book value per share: 12.59 (4.4%) 12.04 1,209
Slide 26: Swiss SRB Basel III capital and ratios
Swiss SRB Basel III capital and ratios 2Q15 fully applied Basel III CET1 capital ratio 14.4% Fully applied Phase-in 25.5% 25.9% 25.0% 20.6% 21.2% 5.8% T2 18.9% 4.6% T2 Low-trigger 0.9% AT1 1.0% AT1 Low-trigger 0.4% T2 High-trigger Ratio 0.8% AT1 High-trigger 19.4% 18.6% 18.2% 18.2% CET1 13.4% 13.7%
Slide 27: Swiss SRB leverage ratio
Swiss SRB leverage ratio 2Q15 fully applied Swiss SRB leverage ratio 4.7% Fully applied Phase-in 5.4% 5.6% 5.4% 4.7% 4.6% 1.1% T2 1.0% T2 Low-trigger 4.1% 0.2% AT1 0.2% AT1 Low-trigger 0.1% T2 High-trigger Ratio 0.2% AT1 High-trigger 4.3% 4.2% 4.1% 4.1% CET1 2.9% 3.0% 3.2% 3.2% CET1 CHF billion 4Q14
Slide 28: Breakdown of changes in RWA
Breakdown of changes in RWA By type By business division CHF billion CHF billion 216 31.3.15 216 31.3.15 Non-core and Legacy Portfolio Methodology/model-driven • CHF 3 billion decrease in credit risk RWA primarily due to lower • CHF 4.2 billion decrease in incremental operational risk (4) derivative
Slide 29: Strong balance sheet, funding and liquidity position
Strong balance sheet, funding and liquidity position Asset funding1 30.6.15, CHF billion Due to banks (13) Cash, balances with central Short-term debt issued (31) banks and due from banks 98 Financial investments Trading portfolio liabilities (32) available-for-sale 67 Cash collateral on securities
Slide 30: Corporate Center — Non-core and Legacy Portfolio
Corporate Center — Non-core and Legacy Portfolio Non-core and Legacy Portfolio Swiss SRB LRD down 16% in the quarter RWA reduced by >65% since 4Q12 ~70% of residual LRD in Rates products1 CHF billion CHF billion, Swiss SRB LRD (average, fully applied), 30.6.15 103 Operational risk Rates 48.1 5.1 14
Slide 31: Interest rate sensitivities
Interest rate sensitivities1 Our revenues are positively geared to rising interest rates Interest rate scenarios: estimated impact on NII, OCI and regulatory capital CHF billion Annual incremental OCI OCI impact on net interest income2 impact3,4 regulatory capital4 A Steepener (+20 bps to +200 bps)
Slide 32: Retained funding cost
Retained funding cost We continue to expect retained funding costs to decline in the mid term Treasury income retained in Corporate Center – Group ALM CHF million 1Q15 2Q15 Credit spread compression will drive Gross results (excluding accounting asymmetry and other adjustments) 240 161 down costs of
Slide 33: Capital strength is the foundation of our success
Capital strength is the foundation of our success We have the highest Basel III fully applied CET1 capital ratio among large global banks Swiss SRB Basel III fully applied capital Basel III fully applied capital – large global banks 30.6.15 Based on latest available disclosure European1 US2 21.2% 21
Slide 34: Corporate Center cost reductions
Corporate Center cost reductions ~CHF 0.9 billion net cost reduction as per June 2015 exit rate vs. FY13 7.9 Litigation 7.9 Services & provisions2 0.2 ~CHF 0.9 billion 0.5 Group ALM Normalization, 0.2 (0.1) Temporary (<0.1) (0.3) incl. seasonality Normalization, annualized regulatory demand3 incl. s
Slide 35: Group and business division targets
Group and business division targets Ranges for sustainable performance over the cycle1 Business divisions Net new money growth rate 3-5% Wealth Management Adjusted cost/income ratio 55-65% 10-15% annual adjusted pre-tax profit growth Wealth Management Net new money growth rate 2-4% for combined busi
Slide 36: CC adjusted operating expenses before service allocations
CC adjusted operating expenses before service allocations CC - Services adjusted operating expenses before service 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 allocations to business divisions and Corporate Center units CHF million Personnel expenses 1,063 977 917 980 934 879 850 975 888 881 G
Slide 37: Regional performance – 2Q15
Regional performance – 2Q151 CHF billion Americas Asia Pacific EMEA² Switzerland Global³ Total 1Q15 2Q15 1Q15 2Q15 1Q15 2Q15 1Q15 2Q15 1Q15 2Q15 1Q15 2Q15 WM 0.1 0.1 0.6 0.6 1.0 0.9 0.4 0.4 - 0.0 2.1 2.0 WMA 1.8 1.8 - - - - - - - - 1.8 1.8 R&C - - - - - - 1.0 1.0 - - 1.0 1.0 Operating Global AM 0.2
Slide 38: Adjusted results
Adjusted results Adjus ting items 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 CHF million Operating income as reported (Group) 7,775 7,389 6,261 6,307 7,258 7,147 6,876 6,746 8,841 7,818 Of which: Gain on sale of a subsidiary Wealth Management 141 Gain on sale of the Belgian domestic WM busine
Slide 39: 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