Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q2 2013 Earnings Presentation
37 slides from Ubs's earnings presentation, Jul 30, 2013
Slide 1: Second quarter 2013 results
SUBS Second quarter 2013 results July 30, 2013
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements 7 outlook for UBS's financial performance and statements relating to the anticipated effect of transactions and strategic initiatives presentation contains statements that constitute “forward-looking statements," including but not limited to
Slide 3: 2Q13 results
2Q13 results * Net profit attributable to UBS shareholders CHF 690 million, diluted EPS CHF 0.18, ROE 5.9% * Profit before tax (PBT) CHF 1,020 million, adjusted PBT CHF 1,022 million - Including charges of CHF 865 million related to issues from the past? * Continued progress on cost saving initiativ
Slide 4: Non-core and Legacy Portfolio run-down
Non-core and Legacy Portfolio run-down Significant progress and outstanding RWA reduction track record RWA reduction ~170 ~90 78 ~80 (30.9.11) (CHE billion) Mi Legacy Portfolio © Non-core n cumulative operating income! | + We are well ahead of our original RWA reduction targets and have clear plans
Slide 5: Capital strength is the foundation of our success and business model
Capital strength is the foundation of our success and business model Basel III fully applied CET1 ratio up by 110 bps in 2Q13 * Industry-leading Basel IIl fully applied CET1 ratio increased to 11.2% * RWA down CHF 20 jon ahead of year-end target of <CHF 250 * Our Swiss SRB Basel leverage ratio conti
Slide 6: Group results
Group results! (CHF milion) 2Q12 Total operating income 6,402 Total operating expenses 5,400 Profit before tax as reported 1,002 (Own credit gain (ls) 239 Net restructuring charges? C) Gain on disposals Net loss related to the buyback of debt Credit related to changes to a retiree benefit plan in th
Slide 7: Impact of rising interest rates
Impact of rising interest rates 3-month Libort Q0Q?: 1a USD (1) bps be CHF — Obps 1.2 EUR +2 bps 1.0 = 08 = 0.6 1Q12 2Q12_-3QIZ_-4QIZ-—-1Q13_——-2Q13 — usp — CHF — EUR 10-year swap curve! 900%: or USD +69 bps : CHF. +43 bps 25 EUR +35 bps 20 15 (%) 1.0 05 0 1912, 2QI2_-3QI2_-4QI2_- 1913 2Q13 —usD — C
Slide 8: Wealth Management
Wealth Management Highest adjusted pre-tax profit in four years, best 2Q NNM since 20071 711 (CHF million) 2Q12 1Q13 2Q13 IH Operating income (as reported) [1] Profit before tax (adjusted), also excluding a charge in relation to the Swiss-UK tax agreement I Profit before tax (as reported) I Profit b
Slide 9: Wealth Management—by business area
Wealth Management-—by business area! Europe Switzerland Asia Pacific Emerging Markets ‘oh UHNW. 154 Net new money 2 owth rate . oN 3 12 nz 83 a3 93 76 81 63 67 24 : 24 13 (0.2) Gross margin (5) (bps) 100 90 g8 gs 89 90 100 102 96 98 98 91 92 95 95 2012 3012 4912 1013 2013 2012 3012 4ON2 113 2013 291
Slide 10: Wealth Management—UHNW segment
Wealth Management—UHNW segment! Globally #1 with compelling economics and growth prospects Invested assets Asset margin and pre-tax profit margin (CHF billion) 18% 19% 43% UHNW. 0) __ 56 bps pew 336 417% 394 a = ot | | Asset margin Pre-tax 30.6.12 30.6.13 (gross? vs. net?) profit margin* Invested as
Slide 11: Wealth Management—Gross margin trends
Wealth Management—Gross margin trends 90 bps gross margin on higher average asset base 1,733 1,789 1747 1,926 1,952 — Income (CHF Wealth 89 85 Gross margin (bps) (MEGS Recurring income share! 75% 2Q12 3Q12 a 4Qi2 1Q13 2Q13 783 816 821 870 862 ‘Components 497 495 480 508 523 Deposit and loan growth a
Slide 12: Wealth Management Americas (USD)
Wealth Management Americas (USD) Record pre-tax profit, revenue, invested assets and FA productivity before tax Operating income and pro’ (USD million) 2Q12 1Q13 2Q13 IB Operating income (as reported) Profit before tax (as reported) Il Profit before tax (adjusted) Net new money Quart aveage —) 5 a 1
Slide 13: Investment Bank
Investment Bank Continued strong performance despite more challenging markets Adjusted operating income and profit before tax (CHE million) (92) (162) 2Q12 1Q13 2Q13 I Operating income (adjusted) Profit before tax (as reported) I Profit before tax (adjusted) 1913 Adjusted cost / income ratio (%) 66
Slide 14: Corporate Client Solutions (CCS)
Corporate Client Solutions (CCS) Solid performance following an exceptional 1Q13 Adjusted income CHF (23%) — 997 203 ™ mld 22 163 202 503 (CHF million) (USD million) UsD — (24%) — 1,067 220 816 733 267 174 217 535 123 2Q12, 1913. 2Q13 Advisory SUBS Mecnek m Equity capital markets Financing solutions
Slide 15: Investor Client Services (ICS)
Investor Client Services (ICS) Best second quarter performance in Equities in 3 years Adjusted income CHF UsD (15%) 1,863 H 1,732 1,475 7 619 ° as m ee ss Ey asa z = _ 8 EM 265 Ba 292 - 2@12 1013-2018 2012 1013 m Equities 1m F% Rates and Credit & UBS. Fete este 3 for detais about acjsted numbers, as
Slide 16: UBS Investment Bank—An attractive risk / return profile
UBS Investment Bank—An attractive risk / return profile Client flow focused business model with efficient resource utilization Revenue Focus on capital light and economically (average 1Q12 - 2Q13) profitable businesses UBS Peers? * More than 75% of our revenue mix comes from Investment Bank mesure b
Slide 17: Global Asset Management
Global Asset Management CHF 1.6 Adjusted operating income and profit before tax (CHF million) 2Q12 1Q13 1 Operating income (adjusted) I Profit before tax (as reported) Il Profit before tax (adjusted) NNM by channel - excluding money markets 2Q13 Quarterly average 44 a 42 34 16 8) (2.0) (CHEF billion
Slide 18: Retail & Corporate
Retail & Corporate Strong performance with higher net interest margin Operating income and profit before tax Operating income +3% + Net interest, fee and trading income were all up on selective pricing measures, higher treasury- related income and improved client activity Adjusted cost / income rati
Slide 19: Corporate Center—Core Functions
Corporate Center—Core Functions Adjusted pre-tax loss of CHF 275 mi Operating income and profit before tax (CHE milion) 2912 1913 Operating income (as reported) 189 (479) ‘Own credit gain / (loss) 239° (181) Loss related to the buyback of debt 0 (119) Foreign currency translation losses on © ee the
Slide 20: Corporate Center—Non-core and Legacy Portfolio
Corporate Center—Non-core and Legacy Portfolio More challenging environment and increased litigation expenses Operating income and profit before tax (CHE mition) 2Q12 1913 2Q13 = Fomii . 2 ig Adjusted operating income Non-core 216 231 (57) CHF 73 million of which: Debit valuation adjustments 25 37 (
Slide 21: Corporate Center—Non-core
Corporate Center—Non-core! RWA on cash positions cut to CHF 4 billion, significantly ahead of schedule Cash positions - RWA® I Actual at 30.6.13 and updated ~326 ‘estimate for future dates (CHE billion) Operational risk Wi Other i Rates Credit 30.6.13 31.12.13 31.12.14 31.12.15 31.12.16 31.12.17 (CH
Slide 22: Corporate Center—Legacy Portfolio
Corporate Center—Legacy Portfolio! 16% reduction in RWA; SNB StabFund option expected to be exercised in 4Q13 RWA Operational risk 20 ggg Mom 42 30.0 65 (CHE billion) 31.12.12 313.13 306.13 PRVs? OTC margin? Hi Funded assetst 34 IFRS assets & 38 (CHE billion) 31.12.12 313.13 306.13 SUBS impact of an
Slide 23: Adjusted operating expenses and headcount
Adjusted operating expenses and headcount Cost reductions of CHF 1.8 b ion achieved Adjusted operating expenses 24 05 om as (1.8) 24.6 _ Personnel variable CHF (1.0) 3 Personnel other — CHF (0.8) Cost PX movements WMA FA 1H13 reduction compensation annualized Headcount (8%) « Cost reductions offset
Slide 24: Breakdown of changes in Group RWA
Breakdown of changes in Group RWA lication of advanced models for derivatives in R&C (CHF 1.1 billion) (14) A 259 9f maximum possible loss cap on securitization exposures § (CHF 0.9 billion) = * Clearing house default fund model refinement (CHF 0.7 billion) a BE increase in operational risk RWA main
Slide 25: Progress on RWA reduction (fully applied)
Progress on RWA reduction (fully applied) 40% reduction Wm NB stabFund! 1) Legacy Portfolio (until 4Q12) I Non-core (from 1913) and Legacy Portfolio I !nvestment Bank I WM Wma R&C/ Global AM / Corporate Center - Core Functions (CHE billion) 309.112 309.12 31.12.12 31.313 306.13 31.12.13 215 31.12.17
Slide 26: Basel III capital
Basel III capital Basel III fully applied CET1 ratio improved by 110 bps Swiss SRB Basel III Swiss SRB Basel III (phase-in’) (fully applied") 2.1% 30.9.11 31. 30.9.11 31.12.11 31.12.12 31.3.13 306.13 2013 2014 (CHE billion) target target Low trigger loss-absorbing capital 5.0 Low trigger loss-absorb
Slide 27: Leverage ratio
Leverage ratio Swiss SRB Basel III leverage ratio (phase-in) 3.9% at 30.6.13 Cumulative impact on leverage ratio over time ‘Swiss SRB Basel Ill leverage ratio denominator justrative example, bps) (total exposure) [eireducton | isp ts ics Exercise of the SNB StabFund option. (~20-25? ~1,216' 1,175 1,
Slide 28: Unrivaled wealth management businesses
Unrivaled wealth management businesses Our capital position is a clear competitive advantage supporting growth WM / WMA combined Industry-leading capital ratios NNM/ invested assets Pre-tax profit [ 422% 1 11.2% 3,177 3,223 3396 10.1% 8.8% ~6.2% a +500 bps 3 z 47% Es = & & 309.11 306.12 31.313 306.1
Slide 29: UBS—An unrivaled franchise with compelling growth prospects
UBS—An unrivaled franchise with compelling growth prospects Wealth management businesses Retail & Corporate * Largest and fastest growing large-scale wealth * Leading universal bank in Switzerland with strong manager in the world’; leading HNW and UHNW momentum franchise with unrivaled scope, reach
Slide 30: Appendix
Appendix UBS
Slide 31: Wealth Management Americas—Lending balances (USD)
Wealth Management Americas—Lending balances! (USD) i Net interest income (usp > 237 28 235 a 8 5 8 2 2Q11 3Q11 agit 1912, 2Q12,--3Q12_— Qua 1913. 2Q13, | goa +7% -! l YoY +18% } ® Credit lines (HNW / UHNW clients) Credit lines (other) 1 Mortgages 1 Margin loans ‘Other > Over 98% of WMAS loan portfol
Slide 32: Swiss SRB Basel III leverage ratio
Swiss SRB Basel III leverage ratio UBS's phase-in Swiss SRB Basel III leverage ratio above minimum requirements ° UBS's phase-in Swiss SRB Basel III leverage ratio of 3.9% on 30.6.13' Total capital (Phase-in CET1 + loss absorbing capital) ‘CHF 44.9 bi Total exposure CHF 1,141 (Total IFRS assets + ad
Slide 33: Leverage ratios
Leverage ratios Our leverage ratios will improve substantially as we reduce our balance sheet Il Simple leverage ratio" I FINMA leverage I Swiss SRB? Ba 1 Funded assets* (until 4912)? ae leverage ratio, phase-in (from 1Q13) 55% expected direction 5.4% based on our plans Total exposure> CHF 1,141 bil
Slide 34: Our balance sheet, funding and liquidity positions are strong
Our balance sheet, funding and liquidity positions are strong Our balance sheet structure has many characte Funding by product! Due to banks Short-term debt issued Repurchase agreements 26% <-' 32% Deposits Long-term debt issued 31.12.07 SUBS CHE 1527 's of a AA-rated bank « Strong and significantly
Slide 35: Changes in funded assets
Changes in funded assets! q) (2) a) 797 W 31.313 Non-core Legacy Core 1B WM WMA R&C Global 30.6.13 Portfolio Functions AM Corporate Center + FX movements contributed ~CHF 5 billion to the decrease in funded assets, primarily from AUD, JPY and USD depreciation against CHF - Largest effects on Corpora
Slide 36: Balance sheet
Balance sheet Total assets CHF 1,129 bi 30.6.13 lion or CHF 765 billion excluding PRV and OTC margins 333 4 5 272 eee > to be exited 224 La 83 42 329 229 3 179 182 Fe 34 é SS se Investment Other Corporate Center Corporate Center Corporate Center Bank business divisions Core Functions Non-core Legacy
Slide 37: This Form 6-K is hereby incorporated by reference
This Form 6-K is hereby incorporated by reference into (1) each of the registration statements of UBS AG on Form F-3 (Registration Number 333-178960) and Form S-8 (Registration Numbers 333-49210; 333-49212; 333-127183; 333-127184; 333-162798; 333-162799; 333-162800; 333-178539; 333-178540; 333-17854