Ubs Group Ag · SIX:UBSG
Ubs — Q4 2021 Earnings Presentation
64 slides from Ubs's earnings presentation, Apr 1, 2022
Slide 1: Fourth quarter 2021 Strategic update and results
Fourth quarter 2021 Strategic update and results 1 February 2022
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: Agenda
Agenda 1 2 3 Strategic update Financial performance Q&A Our vision FY and 4Q21 performance Our progress Divisional results Our future Capital management Our ambition Ralph Hamers, Group CEO Kirt Gardner, Group CFO 2
Slide 4: Key messages
Key messages Focusing on Expanding into Accelerating Maintaining Creating growth new client strategic tech risk and cost sustainable segments investments discipline value 3
Slide 5: Our vision
1 Strategic update 2 Financial performance 3 Q&A Our vision Ralph Hamers, Group CEO 4
Slide 6: Reimagining the power of investing. Connecting people for a better world.
Purpose Reimagining the power of investing. Connecting people for a better world. Client promise Vision Strategic imperatives Personalized Convene THE global ecosystem for Clients, Connections, Contributors Relevant investing where thought leadership On-time is impactful, people and ideas are Focus
Slide 7: Our global ecosystem delivers the power of investing to our clients
Our global ecosystem delivers the power of investing to our clients Contributors benefit from: Clients benefit from: • Access to the world’s most valuable customers • Holistic and curated one-stop offering • Shared value creation • Personalized, relevant, on-time and seamless solutions • Scale of ou
Slide 8: Sustainability is core to our purpose and ecosystem
Sustainability is core to our purpose and ecosystem Our sustainability Planet People Partnerships commitment Be the financial provider of Net-Zero commitment 650m Setting standards choice for clients who wish to (scope 1, 2, 3) by 2050 funds raised for UBS Oncology Impact Founding member of: mobiliz
Slide 9: Our progress
1 Strategic update 2 Financial performance 3 Q&A Our progress Ralph Hamers, Group CEO 8
Slide 10: Our ecosystem grew to 4.6trn in invested assets
Our ecosystem grew to 4.6trn in invested assets As of year-end +14% CAGR Private markets SMAs2 Invested assets1, GWM+AM Invested assets, AM 4.6trn invested assets, GWM+AM+P&C 122bn 150bn 89bn 127bn FY21 107bn net new fee-generating assets, GWM Sustainable investing UBS ManageTM 3 Sustainability-focu
Slide 11: We supported our clients and drove positive operating leverage
We supported our clients and drove positive operating leverage… Transaction-based income Global Banking income Global Markets income GWM IB IB +9% +2% +14% CAGR CAGR CAGR We supported our clients 3.6bn 3.8bn 3.2bn 7.1bn 6.3bn 3.0bn 3.1bn 5.9bn 2.2bn 1.9bn 2.4bn 5.4bn with investing, liquidity and tr
Slide 12: …resulting in another year of strong performance
…resulting in another year of strong performance RoCET1 17.5% 17.4% Exceeding our financial targets1 RoTE 73.3% C/I 17.5% 14.1% 73.6% 12.8% Target return on CET1 capital 12-15% Net profit Profit before tax bn bn +17% CAGR 10.2 73.6% Target +18% 9.5 cost/income ratio 75-78% CAGR 8.2 8.2 7.5 6.6 19% T
Slide 13: Our future
1 Strategic update 2 Financial performance 3 Q&A Our future Ralph Hamers, Group CEO 12
Slide 14: Our clients' needs are at the center of our strategy…
Our clients’ needs are at the center of our strategy… Industry trends Shifting priorities and needs WM revenue 47% 64% Holistic offering in one-stop platform revenue pool growth from revenue pool growth from sources1 1–5m wealth band entrepreneurs2 Seamless digital Wealth pools 5x 1.4x Millennial we
Slide 15: …so we are making our wealth coverage more needs-based, digital and effective
Focus …so we are making our wealth coverage more needs-based, digital and effective Digitally • Advice-centric, intuitive, fast, and always-available services customized • Leveraging digital and technology for better user experience Access new clients and Launch Digital-first wealth and lower cost-t
Slide 16: Americas – Capturing future growth through technology-enabled solutions
Focus Americas – Capturing future growth through technology-enabled solutions North America’s Best Bank for WM1 Profit before tax Cost/income ratio #1 non-US broker in cash equities2 Build on +12% Top-5 SMA manager3 CAGR our scale 3.1bn 83% 87% 2.6bn 79% 79% Continue to expand the UBS ecosystem IB T
Slide 17: Leveraging digital to expand our reach in the US
Focus Leveraging digital to expand our reach in the US Digitally-customized wealth management 4.6trn global investment ecosystem Personalized digital investment offering and Accessing new clients Best-in-class CIO content and thought leadership financial planning, powered by best-in-class CIO conten
Slide 18: APAC – Accelerating growth in key markets and segments
Focus APAC – Accelerating growth in key markets and segments UBS Largest wealth Profit before tax Cost/income ratio manager in APAC1 #2 Accelerate China growth #3 by AuM Expand leadership and accelerate +23% onshore growth CAGR 2.6bn 78% Asia’s Best Bank for WM2 2.2bn 71% 62% 59% Strengthen South-Ea
Slide 19: EMEA – Improving profitability and driving focused growth
Focus EMEA – Improving profitability and driving focused growth Western Europe’s Best Bank Profit before tax4 Cost/income ratio4 for WM1 Increase efficiency +22% and market focus Western Europe’s Best CAGR Investment Bank2 2.0bn 82% 80% 77% Streamline domestic footprint and gain 72% efficiency to se
Slide 20: Switzerland – Expanding our lead as the #1 universal bank
Focus Switzerland – Expanding our lead as the #1 universal bank P&C strategic priorities ~55% C/I aspiration Switzerland’s best bank1 Profit before tax3,5 Cost/income ratio3,5 by 2025 Switzerland’s leading digital bank2 +8% Growing above CAGR the market 3.3bn 61% 62% 62% 58% Achieve superior growth
Slide 21: Asset Management is core to our investment engine
Focus Asset Management is core to our investment engine Custom Alternatives Sustainable China portfolios investing and APAC Broad offering with exclusive Comprehensive access to private Provide customized solutions Deliver leading investment access to premium customized and public markets through di
Slide 22: Our IB capabilities support our growth plans across the client franchise
Focus Our IB capabilities support our growth plans across the client franchise Focus Invest in digital Focused coverage Market insight Increased alignment Capital Markets Global Markets Global Banking Research IB & GWM & Advisory • Spend >1bn on • Deepen coverage and • Providing unique • Enhanced co
Slide 23: Accelerating strategic tech investments
Technology Accelerating strategic tech investments Technology P&L Change the bank expense, bn cash spend, bn Making technology a differentiator… 3.9 3.6 40% User experience and Scalability Access to content Data License client centricity and solutions intelligence to operate 60% …by Leveling up tech
Slide 24: Maintaining our cost discipline to support our growth plans
Simplification & Efficiency Maintaining our cost discipline to support our growth plans On track to deliver ~1bn gross cost saves by 2023, funding our growth initiatives ~1.0 Gross cost saves bn Footprint Market exits optimization ~0.4 Automation and Streamlined simplification organizational setup ~
Slide 25: Our ambition
1 Strategic update 2 Financial performance 3 Q&A Our ambition Ralph Hamers, Group CEO 24
Slide 26: Creating sustainable value through the cycle
Creating sustainable value through the cycle ESG Commercial Financial Selected aspirations Selected aspirations Targets Net-Zero >6trn 15–18% own operations (scope 1, 2) by 2025 invested assets across GWM, AM, P&C return on CET1 capital 235bn >5% growth1 70–73% invested assets aligned to net zero by
Slide 27: Active capital management to enable growth and deliver attractive returns
Active capital management to enable growth and deliver attractive returns Balance sheet Invest for Share 1 for all seasons 2 growth 3 Dividends 4 buybacks • Maintain ~13% CET1 ratio and • Strategic consistency • USD 0.50 ordinary dividend per • Up to 5bn in 2022 >3.7% CET1 leverage ratio • Open to b
Slide 28: Key messages
Key messages Focusing on Expanding into Accelerating Maintaining Creating growth new client strategic tech risk and cost sustainable segments investments discipline value 27
Slide 29: Financial performance
1 Strategic update 2 Financial performance 3 Q&A Financial performance Kirt Gardner, Group CFO 28
Slide 30: FY21 net profit USD 7.5bn; 17.5% RoCET1
FY21 net profit USD 7.5bn; 17.5% RoCET1 +25% excl. provision for Profit before tax French cross-border matter m FY21 +16% 2,309 843 7,457m 2.06 2.06 net profit diluted EPS 9,484 +14% +16% (1,823) 8,155 Operating income Operating expenses 17.5% 7.7bn +10% +8% return on CET1 capital Excl. provision fo
Slide 31: Executing our cost strategy
Executing our cost strategy Operating expenses bn 26.1 • On track to deliver ~1bn gross cost saves p.a. 24.2 0.8 0.3 by 2023, funding our growth initiatives (0.0) 0.7 • Costs excl. variable and FA compensation, litigation, restructuring and FX (0.2%) YoY Current expectations for FY22: • Costs excl.
Slide 32: 4Q21 net profit USD 1.3bn; 11.9% RoCET1
4Q21 net profit USD 1.3bn; 11.9% RoCET1 +24% excl. provision for Profit before tax French cross-border matter m 4Q21 (13%) 522 93 1,348m 0.38 net profit diluted EPS (18%) (14%) 1,985 1,729 Operating income +8% (872) 11.9% 1.6bn return on CET1 capital Operating expenses CET1 capital accretion2 +14% E
Slide 33: Interest rate sensitivity
Interest rate sensitivity Loans Customer deposits Annual net interest income sensitivity FY22 YoY NII increase from realization of forward rates1 +3% 548bn 0.7bn 0.1bn 0.8bn 530bn +5% P&C 387bn GWM P&C Total 367bn Additional year 1 NII increase from +100bps parallel shift in yield curves2 P&C 0.3bn
Slide 34: Global Wealth Management
Global Wealth Management +41% excl. provision for French cross-border matter (35%) PBT +41% excl. provision for French cross-border Profit before tax 1,409 1,516 m 1,294 1,220 matter; FY21 PBT 4,783m, +19%; Americas and 864 APAC with record 4Q and FY PBT Excl. provision for 563 French cross-border m
Slide 35: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) +29% excl. provision for French cross-border matter +5% PBT 335m, +5%; +29% excl. provision for Profit before tax m 456 439 411 French cross-border matter, reflecting continued 318 358 335 strong business momentum; FY21 PBT 1,587m, +35% Excl. provision for French c
Slide 36: Asset Management
Asset Management (17%) 401 334 Profit before tax 255 PBT 334m, (17%); FY21 PBT 1,030m; PBT +12% 227 214 m excl. Fondcenter1 sale gains in 3Q20 and 2Q21 218 Fondcenter1 sale gains Operating income (7%) (7%) ⁻ Net management fees +21% on higher average 774 invested assets supported by continued strong
Slide 37: Investment Bank
Investment Bank +35% 837 RoAE 22%; PBT 713m, +35% supported by record 668 713 income; FY21 RoAE 20%, FY21 PBT 2,630m, +6% Profit before tax 529 m 412 Global Markets revenues +6% ₋ Execution Services +6% driven by higher eFX and cash equities +11% ₋ Derivatives & Solutions (6%) against a strong 2,510
Slide 38: Capital and leverage ratios
Capital and leverage ratios Total loss-absorbing capacity (TLAC) 105bn 34.7% 9.80% 11bn buffer 29bn TLAC: 8.78% buffer 44bn Gone concern 14.6% 4.14% loss-absorbing capacity TLAC: 25.1% Going concern capital 60bn 20.0% 5.66% 7bn 15bn AT1 5.0% 17bn 1.42% Going concern: 5.00% CET1 capital 45bn 15.0% 4.
Slide 39: Delivering attractive capital returns
Delivering attractive capital returns Full-year 2021 0.50 +35% YoY 2.6bn 58% ordinary dividend per share to be proposed of shares bought back2 total payout ratio2,3 for the financial year 20211 Committed to progressive dividends Up to 5bn in 2022 Excess capital to be distributed via share buybacks 1
Slide 40: Appendix
Appendix I. Strategic update II. Appendix to FY and 4Q21 results III. Full year timeseries 39
Slide 41: Our global ecosystem delivers the power of investing to our clients
Our global ecosystem delivers the power of investing to our clients Best global wealth manager for 7th time in a decade1 Thought leadership Best Private Bank for Chief Investment Office 20211 and advice #2 Global equity research2 Thought leadership and advice Leading customized From #11 to #
Slide 42: Our strategic imperatives guided our execution in 2021
Our strategic imperatives guided our execution in 2021 Clients, Connections Focus Technology Simplification and Culture and Contributors efficiency Become a truly Play where we are Make technology Increase ease of doing Mobilize employees for future client-centric organization positioned to win a di
Slide 43: Leveling up technology to drive digitalization and differentiation for our clients
Leveling up technology to drive digitalization and differentiation for our clients Agile@UBS Digital culture QBR and digital Data intelligence Modern tech roadmaps and automation Uniform agile model to Build high-performing Regular change-the-bank Leverage data and AI Drive healthy modular increase
Slide 44: Wealthfront – Strategic rationale
Wealthfront – Strategic rationale Accelerate digitally-led offering Aligned strategic view of technology as Create opportunities for long-term in the U.S. a differentiator value creation and growth Providing the next generation of investors with Strong team of software engineers delivering Accelerat
Slide 45: Wealthfront – Transaction overview
Wealthfront – Transaction overview UBS has agreed to acquire Wealthfront, an industry-leading, digital wealth management provider serving the next generation of investors Overview Based in Palo Alto, California with 238 employees Wealthfront has > 470k clients with >27bn AuM as of 28.1.22 Al
Slide 46: Global Family and Institutional Wealth – Evolving our One UBS approach
Global Family and Institutional Wealth – Evolving our One UBS approach Today… v Tomorrow… ^ • Global Family Office clients have a • Seamless client engagement with full single coverage point of contact from front-to-back alignment of coverage, GWM acting as an entry point across capabilities, risk m
Slide 47: Appendix
Appendix I. Strategic update II. Appendix to FY and 4Q21 results III. Full year timeseries 46
Slide 48: Group results
Group results 4Q20 1Q21 2Q21 3Q21 4Q21 Total operating income 8,117 8,705 8,976 9,128 8,732 of which: credit loss (expenses) / releases (66) 28 80 14 27 Total operating expenses1 6,132 6,407 6,384 6,264 7,003 Operating profit / (loss) before tax 1,985 2,298 2,593 2,865 1,729 Tax expense / (benefit)
Slide 49: 4Q21 Group results by region
4Q21 Group results by region Americas Switzerland EMEA Asia Pacific +15% +35% excl. provision for French cross-border matter 1.0 +43% excl. provision for 0.9 +8% 0.9 French cross-border matter Profit before tax 0.7 +34% 0.6 bn (151%) 0.5 0.4 0.4 Excl. provision for French 0.3 cross-border matter (0.
Slide 50: Global Wealth Management
FY21 Group results by region Americas Switzerland EMEA Asia Pacific +36% excl. provision for French cross-border matter +18% +29% +38% excl. provision for French cross-border matter 3.3 +21% Profit before tax 3.1 3.2 bn 2.6 2.6 2.5 (2%) 2.2 Excl. provision for French 2.0 cross-border matter 1.4 1.4
Slide 51: Global Wealth Management
Global Wealth Management Recurring net fee income Net interest income Transaction-based income m m m Loans / bn +17% 213 219 228 231 234 2,896 Deposits / bn 2,774 2,872 2,629 348 337 344 352 370 2,468 +10% +4% 1,107 1,114 1,183 1,011 997 1,026 953 894 807 776 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21 2Q21
Slide 52: Global Wealth Management fee-generating assets
Global Wealth Management Fee-generating assets1 bn +27bn NNFGA , 8% annualized growth in 4Q21 1 +16% 1,481 1,416 1,412 Americas EMEA APAC Switzerland 1,328 116 1,277 119 113 +22bn +1bn +3bn +2bn APAC 112 103 334 329 326 EMEA 311 306 130 Switzerland 123 123 112 111 +107bn NNFGA , 8% growth in FY21 1
Slide 53: FY21 Global Wealth Management results by region
FY21 Global Wealth Management results by region Americas Switzerland EMEA Asia Pacific +47% +30% excl. provision for +45% excl. provision for 2,001 French cross-border matter French cross-border matter +17% 1,360 (15%) 1,384 Profit before tax +17% 1,237 957 1,061 m 642 750 835 812 Excl. provision fo
Slide 54: RWA trajectory
RWA trajectory RWA Excluding French cross-border matter impact, bn ~370 ~20 ~11 • We are assessing the operational risk RWA impact from the French cross-border matter in ~40 consultation with FINMA 302 • We currently expect to reflect a potential single-digit billion operational risk RWA impact in 1
Slide 55: Appendix
Appendix I. Strategic update II. Appendix to FY and 4Q21 results III. Full year timeseries 54
Slide 56: Global Wealth Management
Global Wealth Management +15% excl. provision for French cross-border matter Excl. provision for French cross-border matter +14% Profit before tax CAGR Cost/income ratio m 4,783 5,440 4,019 Excl. provision for French 3,254 3,557 3,397 80.5% cross-border matter 79.1% 78.7% 76.0% 75.5% +5% Operating C
Slide 57: Global Wealth Management
Global Wealth Management +13% +10% CAGR CAGR Invested 3,303 Loans 234 3,016 213 assets 2,635 bn 175 179 bn 2,260 +16% +10% Fee-generating CAGR Deposits CAGR assets 1,482 bn 370 1,277 348 bn 1,136 278 296 956 pro-forma (4%) CAGR 107 10,677 10,077 9,575 9,329 Net new fee- Advisors generating assets FT
Slide 58: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Excl. provision for French cross-border matter and Worldline1 gain +5% excl. provision for French cross- Profit before tax border matter and Worldline1 gain (3%) Cost/income ratio m CAGR Excl. provision for French 1,760 1,442 1,433 1,587 1,663 cross-border matter a
Slide 59: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Loans +2% Active Digital Banking clients bn CAGR 77.9% 79.3% Corporate & 131 132 136 139 76.4% Institutional Clients n.a. 70.3% Personal 66.1% Banking 62.1% 58.1% Personal Banking +16% Mobile Banking log-in share investment products CAGR Personal Banking 73.5% bn 2
Slide 60: Asset Management
Asset Management +34% Profit before tax CAGR 1,455 Cost/income ratio m 1,030 532 77.0% 72.6% 426 993 884 60.6% Fondcenter1 sale gains 51.0% Operating +12% income CAGR 2,974 m 2,616 Performance fees 1,938 260 1,852 455 80 160 2,320 Net new money, Net management 1,772 1,778 1,950 excl. money market fl
Slide 61: Asset Management
Asset Management Invested assets Invested assets Invested assets bn, by region bn, by business line bn, by channel +16% +16% +16% CAGR CAGR CAGR 1,211 1,211 1,211 1,092 190 1,092 153 1,092 145 181 141 128 903 903 193 903 Hedge Fund 172 359 334 128 98 781 155 Businesses, 781 Third-party 781 316 APAC
Slide 62: Investment Bank
Investment Bank +21% CAGR Profit before tax 2,482 2,630 Cost/income ratio m 1,486 784 88.9% 81.1% +6% CAGR 72.5% Operating 70.7% 9,214 9,488 income Global 8,041 Banking 7,269 2,378 3,158 m 2,159 1,937 Global Markets 5,920 7,141 6,296 5,362 Return on attributed equity (38) (30) (305) 34 Credit loss (
Slide 63: Investment Bank
Investment Bank +14% (0%) CAGR CAGR Global Banking Risk-weighted 94 3,158 93 92 income1 assets 81 m 2,159 2,378 988 bn Advisory 1,937 634 717 707 Capital Markets 2,170 1,442 1,230 1,744 +4% Global Markets +2% Leverage ratio CAGR CAGR 7,141 income1 denominator 293 316 319 Execution Services 5,920 6,2
Slide 64: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements Cautionary Statement Regarding Forward-Looking Statements | This presentation and video contain statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance, statem