Slide 1: Second quarter 2016 results
Second quarter 2016 results July 29, 2016
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: 2Q16 results
2Q16 results Strong results, adjusted PBT CHF 1.7 billion up YoY despite less favorable environment Group Net profit attributable to UBS Group AG shareholders CHF 1,034 million, diluted EPS CHF 0.27 Reported profit before tax (PBT) CHF 1,489 million, adjusted PBT CHF 1,672 million 10.1% annualized a
Slide 4: UBS Group AG results (consolidated)
UBS Group AG results (consolidated) CHF million, except where indicated 2Q15 3Q15 4Q15 1Q16 2Q16 Total operating income 7,818 7,170 6,775 6,833 7,404 Total operating expenses 6,059 6,382 6,541 5,855 5,915 Profit before tax as reported 1,759 788 234 978 1,489 of which: net restructuring expenses (191
Slide 5: Wealth Management
Wealth Management Resilient performance in challenging market conditions Operating 2,106 2,024 1,921 2,031 2,004 1,943 1,897 1,885 1,817 Operating income CHF 1,817 million income 472 479 436 589 459 366 364 402 347 Transaction-based income decreased YoY across all regions, 518 569 583 560 568 600
Slide 6: Wealth Management
Wealth Management Net new money CHF 6.0 billion, net new mandates CHF 6.9 billion 6.5% Net new 4.8% 4.2% 5.8% NNM CHF 6.0 billion, driven by strong net inflows in Asia money1 3.5% Pacific and Switzerland, partly offset by net outflows in 2.6% emerging markets and Europe, which included cross-borde
Slide 7: Wealth Management
Wealth Management Strong net inflows in APAC and Switzerland Europe Asia Pacific Switzerland Emerging markets of which: UHNW Net new 12.9% money1 10.2% 10.5% 6.3% 6.5% 5.4% 5.6% Annualized 3.0% 5.1% 3.2% 3.8% growth rate 2.1% 0.8% 1.8% 2.8% 0.5% 2.1% 0.2% 1.3% 1.8% 1.8% (0.6%) (2.4%) (6.1%) (9.0%) C
Slide 8: WM CIO: Providing innovative solutions
WM CIO: Providing innovative solutions Launching new investment concepts that align with client needs Traditional Offers investors the best risk/return trade-off consistent with a modern portfolio theory approach by portfolio investing in traditional, relatively liquid asset classes and making use o
Slide 9: Wealth Management
Wealth Management Building on our leading position by enhancing the efficiency of our platform for future growth Leading position in a Taking Key changing environment continued action objectives + Unique global footprint with #1 position in APAC1 Optimize our operating model + • One global booking p
Slide 10: Wealth Management Americas
Wealth Management Americas Strong quarter with PBT USD 281 million and record net interest income 1,898 1,919 1,924 1,901 1,947 1,931 1,874 1,899 1,924 Operating income USD 1,924 million Operating 464 441 448 432 425 381 376 361 369 Transaction-based income decreased YoY due to income 261 276 280
Slide 11: Wealth Management Americas
Wealth Management Americas Record invested assets and managed account penetration 6.8% Net new 5.3% money NNM USD 2.4 billion despite ~USD 3.1 billion of 1.9% 2.2% 1.9% ~1.2% ~2.1% client withdrawals associated with seasonal income Annualized 0.2% tax payments ~0.0% growth rate (0.3%) 0.9% (1.0%)
Slide 12: Wealth Management Americas
Wealth Management Americas Industry leading revenue and invested assets per advisor Invested assets and FA productivity Net interest income and lending Annualized revenue per FA (USD thousand) Net interest income (USD million) Invested assets per FA (USD million) Credit loss (expense)/recovery (USD
Slide 13: Wealth Management Americas
Wealth Management Americas Building on our positive momentum and unique opportunity to "feel small, play big" 1 • Streamlined organization to improve efficiency and bring decisions closer to FAs and clients Empowerment • Modified branch manager compensation plans, emphasizing economic profit growth
Slide 14: Personal & Corporate Banking
Personal & Corporate Banking Exceptionally strong results, highest PBT since 4Q08 958 913 979 983 Operating income CHF 983 million Operating 938 952 964 915 963 income 247 267 273 284 241 238 196 244 254 Transaction-based income increased YoY mainly due to higher Group ALM allocations and higher F
Slide 15: Personal & Corporate Banking
Personal & Corporate Banking Continued success in our home market Operating income Operating expenses Profit before tax CHF million CHF million CHF million 938 952 983 +12% CAGR 571 538 520 414 463 367 2Q14 2Q15 2Q16 2Q141 2Q15 2Q16 2Q141 2Q15 2Q16 Cost/income ratio Net new business volume growth %
Slide 16: Asset Management
Asset Management PBT CHF 148 million, up 10% YoY and up 35% QoQ 489 497 511 502 512 Operating income CHF 483 million Operating 465 68 476 23 44 468 483 38 27 34 20 23 24 income Performance fees up YoY, mainly in Global Real Estate Net management fees were largely unchanged YoY as CHF million 427
Slide 17: Investment Bank
Investment Bank PBT CHF 447 million with strong performance in FRC and disciplined resource utilization 2,657 Operating income CHF 2,000 million Operating 2,344 2,225 2,088 income 1,969 1,919 779 2,000 CCS revenues down 19% YoY mainly as higher revenues in 822 1,721 1,879 DCM were offset by lower
Slide 18: Investment Bank
Investment Bank Continued efficient and disciplined resource utilization driving strong returns Return on RWA Revenue per unit of VaR CHF billion, % CHF million 201 212 218 218 16% 15% 12% 14% 14% 12% 12% 13% 11% 12% 13% 163 172 182 152 152 180 143 62 62 68 62 67 64 63 68 63 63 64 13 13 13 14 12 11
Slide 19: Corporate Center
Corporate Center Non-core and Legacy Portfolio LRD down CHF 8 billion QoQ 2Q15 3Q15 4Q15 1Q16 2Q16 Profit before (417) (267) (514) (586) tax (1,174) Corporate Center total (CHF million) Corporate Center results by unit (CHF million) Services Operating income (41) (38) (54) (55) (42) Services opera
Slide 20: Cost reduction
Cost reduction Achieved CHF 1.4 billion net cost reductions based on June 2016 annualized exit rate Target Cumulative annualized net cost reduction1 CHF billion 2.1 Achieved CHF 1.4 billion as of June 2016 1.4 1.2 1.1 0.9 0.8 March FY152 December March June December 2015 2015 2016 2016 2017 Adjusted
Slide 21: Going concern capital and leverage ratios
Going concern capital and leverage ratios 14.2% fully applied Basel III CET1 ratio and 3.4% fully applied CET1 leverage ratio Revised Swiss SRB Basel III capital ratio1 Revised Swiss SRB Basel III leverage ratio Pro forma, fully applied, rules as of 1.1.20, CHF billion Pro forma, CHF billion AT12 Ph
Slide 22: Appendix
Appendix & UBS
Slide 23: Group and business division targets and expectations
Group and business division targets and expectations Ranges for sustainable performance over the cycle Net new money growth rate 3-5% Wealth Management Adjusted cost/income ratio 55-65% 10-15% annual adjusted pre-tax profit growth for combined businesses through the cycle Wealth Management Net new m
Slide 24: Capital requirements under revised Swiss SRB
Capital requirements under revised Swiss SRB UBS leverage capital ratio balances vs. revised Swiss SRB UBS position as of 30.6.161 Phase-in leverage ratio requirements Meeting 1.1.20 requirements TLAC-eligible debt • 1.49% (CHF 13.4 billion) existing UBS Group AG TLAC bonds3 • 3.30% (CHF 29.7 billio
Slide 25: Corporate Center – Non-core and Legacy Portfolio
Corporate Center – Non-core and Legacy Portfolio RWA LRD1 and RWA by category CHF billion CHF billion, 30.6.16 103 Operational risk Rates 14.5 4.8 14 Credit and market risk Credit 3.1 0.5 Securitizations 1.5 1.0 32 32 31 32 31 APS/ARS 2.6 0.8 88 20 20 22 Muni swaps and options 2.6 0.4 21 22 Other 8.
Slide 26: Invested assets composition
Invested assets composition Wealth Management Wealth Management Americas Asset Management % of total CHF 935 billion, 30.6.16 % of total USD 1,077 billion, 30.6.16 % of total CHF 633 billion, 30.6.16 Other1,2 9% 12% Other Other1 14% 16% Other Alternatives3 16% 5% GBP External 5% GBP 12% mutual funds
Slide 27: Cost reduction
Cost reduction Net cost reduction overview1 CHF billion Achieved CHF 1.4 billion Corporate Center within scope of the structural Corporate Center and business divisions within scope of the structural net cost reductions based cost reduction program cost reduction program on June 2016 annualized exit
Slide 28: Group ALM operating income
Group ALM operating income Business division-aligned risk management includes managing 1 the interest rate risk in the banking 2 book on behalf of Wealth 3 Management and Personal & Corporate Banking and high-quality liquid asset (HQLA) portfolios on behalf of specific business divisions Capital inv
Slide 29: Regional performance
Regional performance CHF billion Americas Asia Pacific EMEA Switzerland Global Total 2Q15 2Q16 2Q15 2Q16 2Q15 2Q16 2Q15 2Q16 2Q15 2Q16 2Q15 2Q16 WM 0.1 0.1 0.6 0.5 1.0 0.9 0.4 0.4 0.0 0.0 2.0 1.8 WMA 1.8 1.9 - - - - - - - - 1.8 1.9 P&C - - - - - - 1.0 1.0 - - 1.0 1.0 Operating AM 0.2 0.2 0.1 0.1 0.1
Slide 30: Adjusted results
Adjusted results Adjus ting items FY14 FY15 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 CHF million Operating income as reported (Group) 28,027 30,605 7,147 6,876 6,746 8,841 7,818 7,170 6,775 6,833 7,404 of which: Gains/(losses) on sales of subsidiaries and businesses WM 169 141 56 (28) (23) AM 56
Slide 31: Important information related to this presentation
Important information related to 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 financial measure as