Slide 1: First quarter 2012 results
First quarter 2012 results First quarter 2012 results May 2, 2012
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: 1Q12 results—successfully executing our strategy
1Q12 results—successfully executing our strategy CHF 2.2 billion adjusted pre-tax profit, ~13.0% adjusted return on equity • CHF 2.2 billion pre-tax profit excluding own credit, debit valuation adjustments, restructuring charges and pension fund credit • Reported net profit attributable to sharehold
Slide 4: Market environment
Market environment1 Equity trading volumes2 Equity market performance 1.1.11 = 100 1.1.11 = 100 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 NYSE SMI FTSE 100 SMI S&P 500 FTSE 100 MSCI World Volatility CDS spreads 60 600 50 500 40 400 30 300 20 200 10 100 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11
Slide 5: 1Q12 results
1Q12 results Balanced and diversified sources of revenues and profits (CHF million) WM WMA IB Global AM R&C CC Group Income 1,770 1,425 2,889 478 918 173 7,653 of which debit valuation adjustments (53) (53) Credit loss (expense) / recovery (1) 0 14 0 18 6 37 Own credit gain / (loss) (1,103) (61) (1,
Slide 6: Our wealth management businesses are unrivaled
Our wealth management businesses are unrivaled We are well positioned for growth in the most attractive markets Invested assets CHF 1,500 billion on 31.3.12, up CHF 41 billion QoQ 720 UBS WM Americas 728 772 UBS Wealth Management Adjusted pre-tax profit1 Net new money Quarterly average Quarterly ave
Slide 7: Wealth Management
Wealth Management 24% increase in adjusted pre-tax profit; CHF 6.7 billion net new money Operating income and pre-tax profit Operating income increased 6% as 1,928 client activity levels improved from very 1,769 low levels in 4Q11 1,673 Adjusted operating expenses 803 645 645 remained stable (CH
Slide 8: Wealth Management—gross margin
Wealth Management—gross margin1 2 bps increase in gross margin on higher transaction-based fees 2 120 98 97 97 Other 93 95 92 Interest Fees 93 89 91 (1) (1) 5 (bps) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Interest (excl. SIPF) SIPF interest Recurring fees Transaction-based fees Trading Other in
Slide 9: Wealth Management—by business area
Wealth Management—by business area1 Global Asia Emerging o/w Europe Switzerland Family Pacific Markets UHNW Office2 318 329 (CHF billion) Invested 169 131 108 assets 37 CHF 772 billion Annualized NNM 13% 6% 5% (1%) 4% growth rate 3.6% (14%) 100 111 106 76 Gross 3 53 39 margin (bps) 93bps 1,713 Clien
Slide 10: Wealth Management Americas (USD)
Wealth Management Americas (USD) Record pre-tax profit and invested assets Operating income and pre-tax profit USD revenues increased 4% due to higher transactional activity and higher 1,504 1,568 1,449 realized gains on the AFS portfolio Cost / income ratio further decreased to 87% within targe
Slide 11: Wealth Management Americas—lending balances (USD)
Wealth Management Americas—lending balances (USD) Prudently managed lending growth adding to net interest income; mortgage balances more than doubled YoY 237 1 218 218 215 Net interest income (USD million) 197 184 178 25.7 169 24.7 25.5 164 155 23.5 2.0 2.3 1.7 21.4 1.4 20.3 4.3 3.9 18.9 19.4 1.1 3.
Slide 12: Investment Bank
Investment Bank Successfully balancing revenue generation, RWA reduction and cost efficiency Operating income excluding own credit and DVA Adjusted pre-tax profit 994 846 (CHF million) CHF USD 276 +35% +36% 1Q11 4Q11 1Q12 3,809 3,537 QoQ comparison 502 3,252 466 2,956 CHF 846 million adjusted pre-
Slide 13: Investment Bank—VaR efficiency
Investment Bank—VaR efficiency Trading efficiency improved materially as measured by revenues / VaR Investment Bank VaR Securities revenues1 / IB VaR ratio down 55% YoY to CHF 33 million up 58% QoQ to 76 Investment Bank average VaR2 Securities revenues1 / average IB VaR2 (1-day, 95% confidence, 5 ye
Slide 14: Investment Bank—IBD revenues
Investment Bank—IBD revenues Capital markets outperformed with increased market share across all products QoQ comparison in USD terms CHF USD Equity capital markets +71% – Participated in 10 of the top 20 global deals 466 280 396 502 302 437 – Joint bookrunner on the two largest EMEA +15% +16% IPO
Slide 15: Investment Bank—Equities revenues
Investment Bank—Equities revenues Improved volumes in Cash; more stable trading conditions QoQ comparison in USD terms CHF USD Derivatives +175% – Stronger trading revenues and improved client flows – Equity-linked revenues improved as +41% 1,412 +40% sentiment in the equity and credit markets 1,3
Slide 16: Investment Bank—FICC revenues
Investment Bank—FICC revenues Credit and EM revenues more than doubled with significantly lower risk profile QoQ comparison in USD terms CHF USD Credit +103% (excluding DVAs) (excluding DVAs) – Flow businesses captured good bid offer spreads and increased client activity +27% +28% – Structured cre
Slide 17: Global Asset Management
Global Asset Management Higher pre-tax profit driven by increased performance fees Operating income and pre-tax profit Operating income increased 3% 496 – Performance fees more than doubled, mainly 463 478 in A&Q – 92% of A&Q assets eligible for performance fees were above or within 5% of high wat
Slide 18: Retail & Corporate
Retail & Corporate Stable operating income supported by reduced credit loss expenses Operating income and pre-tax profit Operating income increased – CHF 18 million credit loss recovery – Trading income declined due to decreased 965 1 936 treasury-related income and lower FX-related 928 client act
Slide 19: Retail & Corporate—deposit inflows
Retail & Corporate We continue to attract material deposit inflows Loans and deposits Net interest margin1 135 136 135 136 136 137 135 135 1.80% 1.83% 135 1.69% 1.67% 1.79% 1.75% 1.74% 1.75% 1.59% 121 604 609 617 595 118 592 590 575 567 117 116 117 539 112 (CHF million) (CHF billion) 109 106 106 1Q1
Slide 20: Corporate Center
Corporate Center Pre-tax loss of CHF 47 million; positive contribution from the Legacy Portfolio Legacy Portfolio revenues SNB StabFund option1 Legacy positions transferred from the Investment Bank2 Legacy Portfolio: 273 CHF 28 million pre-tax profit (CHF million) 162 – Legacy Portfolio consists o
Slide 21: Operating expenses
Operating expenses Annualized adjusted operating expenses down CHF 1.0 billion vs. 1H11 Adjusted operating expenses 1H11 annualized (CHF 1.0 billion) CHF 23.3 billion 1Q12 annualized Adjusted cost / income CHF 22.3 billion ratio within target range – improved to 72% from 88% in 6,123 4Q11; in line
Slide 22: Tax expense
Tax expense 1Q12 net tax expense of CHF 476 million Pre-tax profit (as reported) CHF 1,304 million Deferred tax expenses with respect to the CHF 447 million amortization of previously recognized DTAs Other net tax expenses in respect CHF 80 million of 1Q12 taxable profits Tax benefits arising from t
Slide 23: Net profit attributable to non-controlling interests
Net profit attributable to non-controlling interests CHF 1 million of net profit attributed to non-controlling interests in 1Q12 We expect to attribute profit of ~ CHF 270 million to non-controlling interests in 2Q12 No event triggering dividend obligations and no dividend payments not previou
Slide 24: Basel 2.5 capital ratios
Basel 2.5 capital ratios Further increased industry-leading Basel 2.5 tier 1 capital ratio to 18.7% 18.7% 15.9% Basel 2.5 risk-weighted assets ~12.7% 12.6% 13.2% 13.2% 16.7% reduced CHF 30 billion to CHF 211 14.1% billion as at 31.3.12 11.0% 11.7% 11.7% ~9.1% Basel 2.5 tier 1 capital 38.4 39.6 i
Slide 25: Basel 3 risk-weighted assets
Basel 3 risk-weighted assets Continued disciplined execution on risk-weighted asset reduction • CHF (145) billion net reduction of RWAs • CHF 15 billion RWA growth in other businesses Actual Target3 ~4001 ~21 ~380 Group ~20 ~350 ~340 ~21 SNB StabFund2 ~20 ~290 ~20 ~270 ~80 ~20 ~62 ~59 ~45 ~220 ~212
Slide 26: Basel 3 capital ratios
Basel 3 capital ratios Basel 3 ratio increased to ~11.8% Basel 3 Basel 3 phased-in scenario1,2 2019 rules fully applied1 3 Target loss- 6.0% absorbing capital CET1 target 13% 0.5% 1.2% 1.1% 1 1.1% 3.2% 3.0% Target 2 2.8% 0.5% common 13.0% equity 11.8% capital 6.6% 7.4% 6.7% 7.5% 7.5% 6.1% 6.2% 30.9.
Slide 27: Our clients turn to us for advice to address their concerns
Our clients turn to us for advice to address their concerns Our clients’ positioning is a reflection of market uncertainties Americas Europe Size of US national debt European debt crisis concern concern Oil prices Macro concerns on growth/GDP European debt crisis Emerging market growth Large cash ho
Slide 28: 1Q12 results—successfully executing our strategy
1Q12 results—successfully executing our strategy CHF 2.2 billion adjusted pre-tax profit, ~13.0% adjusted RoE Visible progress across business divisions We are ahead of our plan to reduce risk-weighted assets Our capital, liquidity and funding positions remain strong 27
Slide 29: Appendix
Appendix 3% UBS
Slide 30: Asset funding—31 March 2012
Asset funding—31 March 2012 Assets Liabilities and equity Due to banks 32 Cash, balances with central Money market paper issued 59 banks and due from banks 113 Financial investments AFS 60 Cash collateral on securities lent CHF 106 and repurchase agreements 126 billion collateral Cash collateral on
Slide 31: Diversified funding with a long-term surplus
Diversified funding with a long-term surplus Assets Liabilities & equity 31.3.12 Equity Continued net new deposit inflows in Other assets1 1Q12 (CHF 6 billion net of FX impact) Other Behavioral maturities liabilities > 1 year2 Four public benchmark bonds issued in Cash at CBs Surplus stable fund
Slide 32: Our liquidity position is strong
Our liquidity position is strong We continue to have substantial available liquidity 23% of our funded balance sheet assets We continue to be compliant with are in the form of available liquidity1 FINMA’s liquidity requirements Funded balance sheet (31.3.12) UBS was compliant with FINMA’s liquidit
Slide 33: Funding sources by currency—31 March 2012
Funding sources by currency—31 March 2012 Customer deposits represent a significant source of funding in all major currencies 262 99 114 20 45% USD1 20% CHF1 CHF 367 billion CHF 166 billion 37 136 49 60 8 9 7 18 4 13 47 21% EUR1 14% other1 14 46 CHF 175 billion 33 CHF 113 billion 14 61 22 (CHF billi
Slide 34: Basel 2.5 core tier 1 capital and RWAs
Basel 2.5 core tier 1 capital and RWAs Core tier 1 capital1 1.2 0.8 (0.1) (0.6) 35.3 (CHF billion) 34.0 2 31.12.11 Net profit attributable Own credit Share-related FX and other 31.3.12 to shareholders components Risk-weighted assets 0.1 (6.6) (13.9) (4.9) (4.6) 241.0 (CHF billion) 211.1 3 3 3 31.12.
Slide 35: Wealth Management—operating income
Wealth Management—operating income Invested assets (CHF billion) 827 786 787 791 772 768 750 748 720 2,178 1,904 1,891 1,928 1,867 1,759 1,803 1,7451 1,769 170 178 198 2 233 2 1,673 145 154 232 2 209 322 313 298 319 2 259 2 216 252 205 2 262 150 991 982 912 895 908 892 823 805 818 (CHF million) 409
Slide 36: Wealth Management—client domicile view
Wealth Management—client domicile view1 31.3.12 invested assets 1Q12 net new money CHF 772 billion CHF 6.7 billion Europe 287 (2.7) Asia Pacific 175 4.9 Switzerland 168 3.2 Emerging markets2 142 1.2 o/w UHNW 329 3.6 1 Invested assets and net new money based on client domicile. Invested assets and ne
Slide 37: Wealth Management Americas—operating income (USD)
Wealth Management Americas—operating income (USD) YoY +8% QoQ +4% 1,552 1,568 1,506 1,504 1,417 1,449 1,347 1,321 119 129 135 136 1,282 130 127 135 144 141 380 354 332 391 384 400 348 321 333 2 779 788 798 762 686 667 710 728 643 (USD million) 1 155 164 169 184 178 197 237 218 218 1Q10 2Q10 3Q10 4Q1
Slide 38: Wealth Management Americas—FA productivity (USD)
Wealth Management Americas—FA productivity (USD) Continuing to execute our focused strategy Revenue per FA, annualized Invested assets per FA 902 897 113 115 882 869 112 851 109 108 835 104 104 791 780 99 735 95 (USD thousand) (USD million) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 1Q10 2Q10 3Q10
Slide 39: Invested assets
Invested assets Wealth Management Wealth Management Americas 7 27 4 42 (12) (27) 3% 750 772 709 728 (CHF billion) (CHF billion) 3% 31.12.11 NNM Market FX / Other 31.3.12 31.12.11 NNM Market FX / Other 31.3.12 Global Asset Management 24 (8) (31) (CHF billion) (3%) 574 559 31.12.11 NNM Market FX / Oth
Slide 40: 1Q12 operating expenses
1Q12 operating expenses 6,110 507 5,516 5,432 5,381 473 388 5,221 5,616 524 478 527 Significant non-recurring items 717 5,049 5,053 4,846 604 4,566 642 WMA financial advisor compensation1 602 478 528 Contractors, other personnel expenses, 411 327 332 pension and other post-employment 769 400 benefit
Slide 41: IFRS equity attributable to UBS shareholders
IFRS equity attributable to UBS shareholders 1 (221) 827 410 15 8 (722) 13 (209) (563) 53,447 CHF 31.12.11 31.3.12 Change 53,226 Book value per share 14.26 14.10 (1%) (CHF million) Tangible book value per share 11.68 11.62 (1%) 31.12.11 Net profit Foreign Financial Cash flow Treasury Tax Employee Ot
Slide 42: Exposures to eurozone countries rated lower than AAA / Aaa
Exposures to eurozone countries rated lower than AAA / Aaa1 Our exposures are comparatively low and we continue to manage them carefully 31.3.12 Sovereigns2 Local governments Banks Other3 Total Before Net of Before Net of Before Net of Before Net of Before Net of (CHF million) hedges4 hedges hedges4
Slide 43: Exposures to monoline insurers & student loan ARS
Exposures to monoline insurers & student loan ARS Student loan auction rate securities Rated BB- or above Basel 3 RWAs 20.2 18.1 Rated below BB- (CHF billion) 9.8 9.7 9.5 1.9 (USD billion) 7.1 5.7 5.7 5.1 6.0 4Q08 4Q09 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 SL ARS buyback commitment (par value) SL ARS invent
Slide 44: Headcount
Headcount (577) 89 (353) (263) (34) (13) (4) 64,820 64,243 31.12.11 Wealth Wealth Investment Global Retail & Corporate 31.3.12 Management Management Bank Asset Corporate Center Americas Management 43