UBS Group AG · SIX:UBSG
UBS — Investor Day (December 2007)
27 slides from UBS's investor day presentation, Dec 11, 2007
Slide 1: UBS Investor Event
UBS Investor Event London, 11th December 2007 www.ubs.com 0
Slide 2: Agenda
Agenda 12:00 – 13:00 Registration and light lunch 13:00 – 15:00 Speakers: Marcel Ospel, Group Chairman Marcel Rohner, Group Chief Executive Officer Marco Suter, Group Chief Financial Officer Q&A taken by all speakers as panel 1
Slide 3: Caution regarding forward looking statements
Caution regarding forward looking statements This communication contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives and other statements relating to our future business development and eco
Slide 4: Marcel Ospel, Group Chairman
Marcel Ospel, Group Chairman London, 11th December 2007 www.ubs.com 3
Slide 5: Marcel Rohner, Group Chief Executive Officer
Marcel Rohner, Group Chief Executive Officer London, 11th December 2007 www.ubs.com 4
Slide 6: Table of contents
Table of contents ♦ Recent announcement ♦ Our businesses: positioning and strategy – Global Wealth Management & Business Banking – Global Asset Management – Investment Bank ♦ The way forward 5
Slide 7: Recent announcement
SECTION 1 Recent announcement
Slide 8: Recent announcement
Recent announcement ♦ Substantial losses in the US mortgage could have been absorbed by our earnings and capital base ♦ Further strengthening our capital base to maintain our position as one of the best-capitalized banks as a strategic prerequisite to protect WM and grow all our businesses ♦ Our com
Slide 9: Capital actions
Capital actions Additional CHF 19.4bn capital to ensure confidence Drivers of capital improvement actions ♦ Create confidence and stability in order to protect the WM franchise ♦ Protect highest ratings ♦ Ensure sufficiently high capital ratios by year end 8
Slide 10: Our businesses at UBS
SECTION 2 Our businesses at UBS
Slide 11: Our strategy
Our strategy Our businesses reflect our core capabilities, strength and heritage ♦ They are all grouped around the same ab underlying, fundamental trend: growth of wealth Global WM&BB ♦ In the optimal mix, they form the best basis to build a high quality, sustainable earnings stream Investment Bank
Slide 12: Global WM&BB – Performance
Global WM&BB – Performance Pretax Profit (CHF m) NNM (CHF bn) 155 150 +40% 8'000 +17% 6'973 111 6'000 5'952 100 4'000 50 2'000 0 0 9M06 9M07 11M06 11M07 CA/FA development C/I Ratio before Goodwill (%) 16'000 +24% 80 -12% 13'804 71.6 12'000 70 11'175 62.7 8'000 +2% 8'175 60 8'001 4'000 +77% 5'629 50
Slide 13: Global Asset Management – Performance
Global Asset Management – Performance Diversification and cost efficiency have been key drivers of profit growth 1,200 90% 1,117 76% 80% 74% 1,009 1,000 66% 70% 840 59% 800 60% 57% USD millions 57% 50% 600 553 40% 400 341 30% 259 20% 200 10% 0 0% 2002 2003 2004 2005 2006 9M07 Note: The above exclude
Slide 14: Investment Bank – Strong platform
Investment Bank – Strong platform World-class Equities franchise and fastest growing IBD Equities Investment Banking (IBD) Competitive position Q1-Q3 2007 Competitive position Q1-Q3 2007 10 6 9 5 8 #4 7 Revenues Q1-Q3 2007 (US$bn) #2 4 Revenues Q1-Q3 2007 (US$bn) 6 5 3 4 2 3 2 1 1 0 0 GS UBS MS MER
Slide 15: Investment Bank – Repositioning of FICC
Investment Bank – Repositioning of FICC Focus on competitive strengths... Lower growth/ High growth/ scale businesses high margin businesses Core strengths to ♦ FX/CCT ♦ Structured Libor maintain/consolidate ♦ Flow rates leadership ♦ DCM ♦ Emerging Markets Continue to invest ♦ Flow credit ♦ Structur
Slide 16: The way forward at UBS
SECTION 3 The way forward at UBS
Slide 17: The way forward – Actions taken
The way forward – Actions taken Pursuing structural changes… Adjusting capacity Costs Focus on efficiency New funding framework Balance sheet Limits Reviewing measures and processes Risk Strengthening the framework …while addressing immediate challenges 16
Slide 18: Marco Suter, Group Chief Financial Officer
Marco Suter, Group Chief Financial Officer London, 11th December 2007 www.ubs.com 17
Slide 19: ABX indices
ABX indices AAA 2006 Vintage BBB 2006 Vintage 100 90 96 95 80 94.9 89.8 70 90 86.9 60 85 82.7 50 80 39.3 40 77.1 75 30 32 20.7 20.9 70 20 20.2 19.9 65 10 31-May 30-Jun 31-Jul 31-Aug 30-Sep 31-Oct 30-Nov 31-May 30-Jun 31-Jul 31-Aug 30-Sep 31-Oct 30-Nov AAA 06-2 AAA 07-1 BBB 06-2 BBB 07-1 Prices as of
Slide 20: CDO illustration and sub-prime exposure as of 30th Nov
CDO illustration and sub-prime exposure as of 30th Nov RMBS ~ $16 bn Super Senior ~ $13 bn Sub Prime MBS 1 CDO - Collateralized Debt Obligation Individual Mortgage Assets Liabilities Assets Individual Mortgage AAA ~80% BBB Mezz Tranche of Individual Mortgage AA ~10% MBS 1 Super Senior Individual Mor
Slide 21: Positions related to US sub-prime residential mortgage market
Positions related to US sub-prime residential mortgage market Estimated Estimated Net 3Q net Oct/Nov Net exposure impact1 net exposure 30 Sep USD billion impact1 30 Nov RMBS (1.3) 16.8 ~(1) ~16 CDO warehouse / retained (1.5) 1.8 ~(1) ~0 Super senior (1.6) 20.2 ~(8) ~13 Total (4.4)2 38.8 ~(10) ~29 1
Slide 22: Super senior positions – cumulative marks
Super senior positions – cumulative marks 3Q and Face 30 Nov Oct/Nov value pre net average 3Q marks exposure marks USD billion (cents / $) High Grade ABS CDOs 3.8 ~3.1 81 Mezz ABS CDOs with 12 % protection 2.6 ~1.8 71 Mezz ABS CDOs 14.2 ~7.8 55 CDO squared 0.8 ~0.2 22 Total super senior 21.5 ~13 60
Slide 23: Valuation model illustration
Valuation model illustration 60 Day Delinquencies 90 Day+ Delinquencies OREO & Foreclosed Bankruptcy Remittance Data Default expectation Defaults already Default Pipeline resulting in losses Total Defaults Default Age Factor Projected Lifetime Loss Severity Defaults Projected Cumulative Loss 22
Slide 24: Capital management
Capital management Post announced capital increases, with offsets from 4Q loss, Basel II and other… 70.0 60.0 4Q 07 Loss 13.0 Basel II & other 50.0 Tier 1 ratio 2.0 10.6% 4.41 40.0 (CHFbn) 30.0 20.0 41.5 10.0 0.0 Tier 1 capital Dividend Treasury Mandatory Tier 1 capital 3Q07 shares convertible after
Slide 25: Terms of mandatory convertible notes
Terms of mandatory convertible notes ♦ Issue size: CHF 13bn ♦ Maturity: 2 years ♦ Coupons: 9% p.a., payable annually ♦ Reference price: Average of (i) and (ii) but not more than 10% higher or lower of (i) (i) closing price on 7th Dec: CHF 57.2 (ii) volume weighted average price of 3 days before EGM
Slide 26: Share count implications
Share count implications 2,500 2,328 - 2,422 177 - 252 78 - 97 2,037 36.4 2,000 (million shares) 1,500 1,000 500 0 Shares outstanding Treasury shares Mandatory Stock dividend Possible range of (30 October 2007) convertible shares outstanding * * excludes minor possible effects of future dividends ab
Slide 27: Q&A UBS
Q&A 3 UBS You & Us Available in two locati Everywhere, and right next to you. 26