Slide 1: Third quarter 2014 results
Third quarter 2014 results October 28, 2014
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: 3Q14 highlights—Group
3Q14 highlights—Group Strong underlying results; significant DTA write-up and litigation provisions Underlying profit before tax (PBT) CHF 1.7 billion Net profit attributable to UBS shareholders CHF 762 million, diluted EPS CHF 0.20 Provisions for litigation, regulatory and similar matters CHF
Slide 4: Our wealth management franchise is unrivaled
Our wealth management franchise is unrivaled CHF 1.9 trillion invested assets; combined adjusted PBT >CHF 1 billion Operating income Profit before tax Invested assets CHF million adjusted, CHF million CHF billion +11% +22% +14% 3,810 1,015 1,936 3,447 1,702 832 2,031 966 WM 1,837 767 871 617 WMA 1,6
Slide 5: 3Q14 highlights—business divisions
3Q14 highlights—business divisions1 Strong performance with underlying PBT up YoY in all businesses Wealth Management: Highest PBT since 2Q09 CHF 767 million – NNM CHF 9.8 billion, positive in all regions Wealth Management Americas: Strong performance, PBT USD 267 million and NNM USD 4.9 billion – R
Slide 6: Key messages
Key messages The fundamental earnings power of our unrivaled franchise is evident – WM/WMA combined adjusted PBT >CHF 1 billion – Strong performance in Retail & Corporate with all KPIs within target ranges – Solid Investment Bank and Global AM performance despite challenging market conditions Result
Slide 7: Group results
Group results CHF million 3Q13 2Q14 3Q14 Total operating income 6,261 7,147 6,876 Total operating expenses 5,906 5,929 7,430 Profit before tax as reported 356 1,218 (554) of which: own credit on financial liabilities designated at fair value (147) 72 61 of which: gains on sales of real estate 207 1
Slide 8: Wealth Management
Wealth Management Highest adjusted PBT since 2Q09; NNM CHF 9.8 billion, positive in all regions Operating income and profit before tax Operating income up 6% CHF million Recurring income up 8% to CHF 1,548 million on higher recurring net fee income and higher net 3Q13 2Q14 3Q14 interest income T
Slide 9: Wealth Management—revenue by source
Wealth Management—revenue by source Increased gross margin on highest quarterly operating income since 3Q08 3Q13 4Q13 1Q14 2Q14 3Q14 1,837 1,859 1,943 1,919 2,031 Income (CHF million) Gross margin (bps) Wealth 85 85 87 84 861 Management Recurring income as a % of income 77% 77% 72% 75% 76% 517 513 4
Slide 10: Wealth Management—by region
Wealth Management—by region1 Europe Asia Pacific Switzerland Emerging Markets of which: UHNW Net new 16.0 money 13.3 13.1 11.0 9.2 8.7 8.4 7.1 9.1 growth rate 4.6 5.5 5.3 5.2 5.1 0.1 1.1 0.8 0.9 1.8 0.3 0.8 1.8 % (1.6) (2.5) (0.7) 8.9 9.6 7.8 8.5 7.0 7.4 Net new 5.0 4.4 5.1 5.7 money 2.4 2.2 3.3 2.1
Slide 11: Wealth Management Americas
Wealth Management Americas Adjusted PBT USD 267 million on record income and record FA productivity Operating income and profit before tax Operating income up 1% USD million Record recurring income as net interest income rose 6% to USD 276 million on continued growth in lending 3Q13 2Q14 3Q14 bala
Slide 12: Wealth Management Americas—FA productivity and lending
Wealth Management Americas—FA productivity and lending Record invested assets and revenue per FA Invested assets and FA productivity (USD) NII1 and lending balance2 (USD) Annualized revenue per FA Net interest income3 Invested assets per FA Credit loss (expense)/recovery 269 272 259 264 1,068 1,079
Slide 13: Retail & Corporate
Retail & Corporate Highest adjusted PBT since third quarter 2010 Operating income and profit before tax Operating income up 2% CHF million Net interest income increased on higher revenues from Group Treasury and improved loan margin 3Q13 2Q14 3Q14 Transaction-based income increased, driven by th
Slide 14: Retail & Corporate
Retail & Corporate Investments in mobile and e-banking support business growth Financials by client type1 Higher client satisfaction Excellent client feedback: continued 5-star Apple App store ratings, award recognition, positive press coverage Income per 1.2x E-banking and mobile banking clients
Slide 15: Global Asset Management
Global Asset Management PBT up 41% QoQ and 16% YoY; CHF 3.8 billion NNM excluding money markets Operating income and profit before tax Operating income up 5% CHF million Net management fees up by CHF 35 million, driven by the sale of a co-investment in global real estate and increased fees on high
Slide 16: Investment Bank
Investment Bank Underlying PBT CHF 494 million, up 47% YoY Operating income and profit before tax1 Adjusted operating income up 16% YoY CHF million Strong delivery in a seasonally slow quarter; up YoY on strong CCS and equities performance; FX, Rates 3Q13 2Q14 3Q14 and Credit impacted by challengi
Slide 17: Investment Bank
Investment Bank Highest 3Q revenues in equities since 2010; CCS up YoY in all regions Adjusted income1 YoY comparison in USD terms Corporate CHF million USD million Corporate Client Solutions (CCS) Client Advisory up 31% with balanced mix of M&A and Solutions 796 advisory revenues, strong performa
Slide 18: Corporate Center—Core Functions
Corporate Center—Core Functions Reported profit before tax of negative CHF 190 million Operating income and profit before tax CHF million 3Q13 4Q13 1Q14 2Q14 3Q14 Operating income CHF 5 million Treasury income remaining in CC-CF (219) (343) (46) (55) (65) Net treasury income remaining in Own credi
Slide 19: Corporate Center—Non-core and Legacy Portfolio
Corporate Center—Non-core and Legacy Portfolio Reported profit before tax of negative CHF 603 million Operating income and profit before tax CHF million Operating income 3Q13 4Q13 1Q14 2Q14 3Q14 negative CHF 322 million Non-core (120) (104) 17 (151) (233) Negative income in both Non-core and of wh
Slide 20: Corporate Center—Non-core and Legacy Portfolio
Corporate Center—Non-core and Legacy Portfolio1 Market and credit risk RWA down 17%, LRD down 12% in the quarter Non-core and Legacy Portfolio RWA Non-core and Legacy Portfolio Swiss SRB LRD2 CHF billion CHF billion Legacy Portfolio ~293 Non-core 102.5 ~38 Operational risk3 14.2 121 106 ~255 22 19 9
Slide 21: Corporate Center cost reductions
Corporate Center cost reductions ~CHF 0.3 billion of net cost reductions achieved year-to-date Core Functions: Non-core and Legacy Portfolio: CHF 1.0 billion net cost reduction target by 20151 CHF 0.4 billion net cost reduction target by 20151 Adjusted operating expenses before allocations to busine
Slide 22: Updated restructuring cost guidance
Updated restructuring cost guidance 2011-2013 2014-2015 2016-2017 CHF billion CHF billion CHF billion Previous guidance1 Additional cost-to-achieve2 (CtA) Restructuring costs3 (excluded from adjusted results) ~2.2 ~1.5 ~1.5 ~1.0 ~0.9 ~0.8 ~0.7 ~1.4 ~0.5 ~0.9 ~0.4 Guidance Actual 2014 2015 2016 2017
Slide 23: Net tax benefit and deferred tax assets
Net tax benefit and deferred tax assets Net tax benefit of CHF 1,317 million; DTA potential remains significant CHF million Net deferred tax benefit with respect to recognition of DTA 1,420 Other net tax expense in respect of 3Q14 taxable profits (103) Net tax benefit 1,317 Tax loss DTA1 DTA revalua
Slide 24: Swiss SRB capital and leverage ratios
Swiss SRB capital and leverage ratios Fully applied CET1 capital ratio of 13.7% and leverage ratio of 4.2% Swiss SRB RWA and capital ratios Swiss SRB LRD and leverage ratio CHF billion CHF billion Total capital ratio (fully applied) Leverage ratio (phase-in) 18.1% 18.7% CET1 capital ratio (fully app
Slide 25: Currency sensitivites
Currency sensitivites USD appreciation/CHF depreciation inflates RWA, balance sheet and LRD Currency distribution of RWA and LRD Currency distribution of equity % of total % of total Operational risk RWA (CHF) CHF USD Investment CC – Core Equity attributable Basel III CET1 Group EUR Bank Functions t
Slide 26: 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 Negative impact Negative impact net interest income2 on OCI3 on regulatory capital A Steepener (+20 bps
Slide 27: Group holding company: share for share exchange timeline
Group holding company: share for share exchange timeline Initial acceptance period ending on 11 November1 Indicative timetable of principal events1 Cooling-off period Initial acceptance period1 Additional acceptance period1 30 Sept to 13 Oct 14 Oct to 11 Nov 17 Nov to 1 Dec 29 Sept: Swiss offer 12 N
Slide 28: Key messages
Key messages The fundamental earnings power of our unrivaled franchise is evident – WM/WMA combined adjusted PBT >CHF 1 billion – Strong performance in Retail & Corporate with all KPIs within target ranges – Solid Investment Bank and Global AM performance despite challenging market conditions Result
Slide 29: Appendix
Appendix 3% UBS
Slide 30: Regional performance excluding charges for litigation, regulatory and similar matters
Regional performance excluding charges for provisions for litigation, regulatory and similar matters1 CHF billion Corporate Center Americas Asia Pacific EMEA² Switzerland Total and global³ 2Q14 3Q14 2Q14 3Q14 2Q14 3Q14 2Q14 3Q14 2Q14 3Q14 2Q14 3Q14 WM 0.1 0.1 0.4 0.5 1.0 1.0 0.4 0.4 0.0 (0.0) 1.9 2.
Slide 31: Retained Treasury income in Corporate Center—Core Functions
Retained Treasury income in Corporate Center—Core Functions We continue to expect retained funding costs to decline in the mid-term Treasury income retained in Corporate Center – Core Functions CHF million FY13 1Q14 2Q14 3Q14 Gross results (excluding accounting driven adjustments) 664 137 174 235 Cr
Slide 32: IFRS equity attributable to UBS shareholders
IFRS equity attributable to UBS shareholders Equity attributable to UBS shareholders surpasses CHF 50 billion QoQ movement CHF millions, except for per share figures in CHF 30.6.14 30.9.14 Total book value per share: 13.20 +2.6% 13.54 Tangible book value per share: 11.54 +2.1% 11.78 1,195 15 (38) 23
Slide 33: Our balance sheet, funding and liquidity positions are strong
Our balance sheet, funding and liquidity positions are strong Our balance sheet structure has many characteristics of a AA-rated bank Asset funding1 CHF billion Due to banks (12), Short-term debt issued (34), Trading Cash, balances with central portfolio liabilities (28), and banks and due from bank
Slide 34: Breakdown of changes in Group RWA
Breakdown of changes in Group RWA By type By business division CHF billion CHF billion 227 30.6.14 227 30.6.14 Non-core and Legacy Portfolio2 Methodology/model-driven • CHF 4.6 billion decrease in incremental operational risk RWA • CHF 6.7 billion decrease related to incremental • CHF 2.2 billion re
Slide 35: Corporate Center adjusted operating expenses before service allocation
Corporate Center adjusted operating expenses before service allocation CC - Core Functions - adjusted expenses before service allocation 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 9M13 9M14 FY13 to business divisions and CC - Non-core and Legacy Portfolio CHF million Personnel expenses 1,101 1,006 955 1,007
Slide 36: Adjusted results
Adjusted results Adjusting items Business division / Corporate Center 3Q13 2Q14 3Q14 FY13 CHF million Operating income as reported (Group) 6,261 7,147 6,876 27,732 Of which: Own credit on financial liabilities designated at fair value Corporate Center - Core Functions (147) 72 61 (283) Gains on sale
Slide 37: Important information related to numbers shown in this presentation
Important information related to numbers shown in 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 fina