Ubs Group Ag · SIX:UBSG
Ubs — UBS AG (Amna, Amnd, Amtr, Amub, BDCX, BDCZ, Cefd, DJCB, Esus, Fedl, HDLB, Ifed, Iwdl, Iwfl, Iwml, Mlpb) — Q1 2010 Earnings Presentation
31 slides from Ubs's earnings presentation, May 4, 2010
Slide 1: First Quarter 2010 Results
First Quarter 2010 Results May 4, 2010
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: 1Q10 highlights
1Q10 highlights Pre-tax profit CHF 2.8 billion Net profit CHF 2.2 billion, diluted EPS CHF 0.58 Return on equity 21.0% Good IB results with significant FICC contribution and limited additional risk utilization Improved performance in WM&SB with higher WM gross margins Substantial reduction in net ne
Slide 4: 1Q10 - performance by business division
1Q10 - performance by business division (CHF million) WM&SB WMA Global AM IB CC1 UBS Income 2,879 1,361 521 4,024 356 9,141 Credit loss (expense) / recovery 3 0 112 116 Own credit (247) (247) Total operating income 2,882 1,362 521 3,899 356 9,010 Personnel expenses 1,191 1,069 279 1,993 (11) 4,521 N
Slide 5: Net profit
Net profit1 Improvement driven by revenues, particularly in IB, partly offset by higher personnel expenses and tax expense 2,202 (1,083) 179 184 2,915 (1,198) 1,205 4Q09 net profit1 Revenues Personnel expenses Non-personnel expenses Tax Minorities2 / discontinued operations (CHF million) 997 Profit
Slide 6: Revenues
Revenues 6,095 1,669 307 (142) 145 (44) (33) (16) 199 (223) 1,054 9,010 4Q09 5,650 2,302 21 (12) 46 (48) (26) (13) 574 259 257 9,010 Average 2009 FICC Equities IBD WM R&C WMA Global AM CLE Own credit CC1 1Q10 (CHF million) (CHF million) 48% 59% 35% 1Q10 1 Treasury activities and other corporate item
Slide 7: Operating expenses - 1Q10 versus 2009 quarterly average
Operating expenses - 1Q10 versus 2009 quarterly average Improved revenue performance led to increased accruals for variable compensation Reduction of non-personnel expenses continued in 1Q10 Items expected to impact 2Q10 UK Bank Payroll Tax of ~ CHF 300 million, mainly in Investment Bank Restructuri
Slide 8: Headcount
Headcount Headcount reduced by a further 940 during 1Q10 1Q10 also reflects the additional allocation of approximately 1,250 Corporate Center staff to the business divisions, mainly related to control functions 1Q10 development (net of CC allocations)1 Overall headcount expected to remain broadly st
Slide 9: Divisional reporting structure
Wealth Management & Swiss Bank Global AM - prior split between institutional clients and wholesale intermediary clients is replaced by a split that reflects the division's business lines Investment Bank - detailed breakdown of revenues generated by our sales and trading operations Divisional reporti
Slide 10: WM&SB - revenues
WM&SB - revenues 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 +4% +3% (7%) 1Q10 vs 4Q09 1Q10 revenue growth reflects early success of strategic initiatives 1,407 1,368 1,324 1,325 1,200 1,186 1,063 1,085 1,013 2,071 1,935 1,811 1,452 1,300 1,228 1,251 1,261 1,302 731 656 577 631 596 523 500 519 540
Slide 11: Wealth Management & Swiss Bank
Wealth Management & Swiss Bank Improved performance with higher gross margins Expenses reflect more normalized accrual level for variable compensation Substantial reduction in net new money outflows Operating income Pre-tax profit 1Q09 4Q09 1Q10 (CHF million) Operating income Pre-tax profit 1Q09 4Q0
Slide 12: Wealth Management - gross margins
Wealth Management - gross margins1 Pricing: Greater pricing discipline and price increases for selected services Mandates: Higher mandate penetration on solid investment performance and successful launch of new offerings Brokerage and core advisory: Better client engagement and increased confidence
Slide 13: WM&SB - net new money
WM&SB - net new money Continued net inflows in Asia Pacific region NNM turned positive in the UHNW segment NNM in Europe remained negative but at a significantly lower level and a number of locations recorded net inflows Outflows related to client advisor attrition still a drag Continued focus on at
Slide 14: Wealth Management - client advisors and invested assets
Wealth Management - client advisors and invested assets 1Q10 decrease in client advisors mainly reflects 2009 re-sizing actions, slight net decline expected in 2Q10 Invested assets per client advisor increased to CHF 200 million 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 1,084 1,095 1,035 833 810
Slide 15: Wealth Management Americas
Wealth Management Americas 1Q10 pre-tax result impacted by Introduction of financial advisor loyalty programs Additional allocation of Corporate Center costs of ~ CHF 25 million Restructuring charges of CHF 21 million NNM outflows decreased to CHF 7.2 billion from CHF 12 billion First quarter with p
Slide 16: Global Asset Management
Global Asset Management Continued strong investment performance NNM outflows decreased significantly to CHF 2.6 billion CHF 2.1 billion inflows from third parties CHF 4.7 billion outflows from WM channels Both net management fees and performance fees declined slightly Expenses include additional all
Slide 17: Investment Bank - summary
Investment Bank - summary (CHF million) 1Q09 4Q09 1Q10 Investment banking 304 746 604 Equities 1,371 948 1,255 FICC (1,970) 496 2,165 Total income (295) 2,191 4,024 Credit loss (1,017) (70) 112 Total income incl. CLE (1,312) 2,121 4,136 Own credit 651 (24) (247) Total operating income (661) 2,097 3,
Slide 18: Equities revenues
Equities revenues (CHF million) Revenues increased 32% from 4Q09, even as lack of market activity held back client franchise revenues Cash revenues increased on higher commission income and stronger trading revenues Derivatives revenues increased on strong trading performance and increased client fl
Slide 19: FICC revenues
FICC revenues (CHF million) Good quarter with diversified revenues Credit's successful turnaround continued with a good result due to strong trading activity and high flows in all regions Macro revenues increased significantly on higher volumes, despite spread compression and low volatility in the c
Slide 20: Investment banking revenues
Investment banking revenues (CHF million) Advisory revenues impacted by the subdued volumes in 2009 Equity revenues declined on 4Q09 despite strong performance in the Americas FICC revenues increased on higher volumes from sovereign issuances Global fee pool down 29% on 4Q09 Overall UBS fee based ma
Slide 21: Capital position
Capital position Tier 1 capital ratio 16.0% Core tier 1 capital ratio improved to 12.5% Risk-weighted assets increased slightly by CHF 3 billion to CHF 209 billion FINMA leverage ratio improved to 4.1% CHF 1.6 billion net capital accretion from 1Q10 profits 25.8 21.5 25.1 24.2 24.6 26.2 7.4 7.7 7.5
Slide 22: UBS
26 UBS
Slide 23: Appendix
Appendix
Slide 24: Invested assets
Invested assets Wealth Management Wealth Management Americas Global Asset Management Retail & Corporate (8) (8) 825 17 827 Dec 09 NNM Market FX / Other Mar 10 (CHF billion) 0% 136 2 135 (1) (0) Dec 09 NNM Market FX / Other Mar 10 (CHF billion) 13 (7) 714 690 19 Dec 09 NNM Market FX / Other Mar 10 (C
Slide 25: Global AM - net new money
Global AM - net new money 1Q09 2Q09 3Q09 4Q09 1Q10 1Q08 2Q08 3Q08 4Q08 (9.6) (8.4) (21.0) (16.7) (6.6) (1.2) (3.8) 1.0 (6.9) (16.1) (13.4) (10.9) (6.6) (10.6) (8.8) (7.2) (3.6) (1.1) Institutional Wholesale (16.1) (25.2) (30.5) (17.1) (3.2) (15.9) (8.3) (13.2) (1.0) (1.4) 0.1 (3.7) (9.8) (4.7) (1.2)
Slide 26: Tier 1 capital and regulatory capital
Tier 1 capital BIS RWA Tier 1 ratio Total capital Total ratio Regulatory capital CHF billion 31.12.09 Net P&L attributable to shareholders Own credit MCN coupon accrual Tier 1 deductions (mainly sec exposures) Risk increase Tier 2 deductions (mainly sec exposures) FX impact lower tier 2 31.3.10 31.8
Slide 27: Balance sheet development: 2Q07 - 1Q10
Balance sheet development: 2Q07 - 1Q10 1 Including financial liabilities designated at fair value 2 Percentages based on total balance sheet size excluding negative replacement values 408 2Q07 4Q08 4Q09 Positive RVs Other assets Trading portfolio Collateral trading Lending Negative RVs Banks Trading
Slide 28: Asset funding - March 2010
Asset funding - 31 March 2010 (CHF billion) Assets Liabilities and equity Cash, balances with central banks and due from banks 87 Loans 306 Trading portfolio assets 229 Cash collateral on securities borrowed and reverse repurchase agreements 188 Other assets (incl. net RVs) 60 Due to banks 70 Custom
Slide 29: Exposure to monoline insurers, by rating
Exposure1 to monoline insurers, by rating USD billion Credit protection on US sub-prime RMBS CDOs2 of which: from monolines rated investment grade (BBB and above) of which: from monolines rated sub-investment grade (BB and below) Total 31.3.10 13.9 4.7 2.5 2.2 Notional amount3 Fair value of CDSs4 pr
Slide 30: Student loan auction rate securities
Student loan auction rate securities USD million US student loan auction rate securities Carrying value as of 31.12.09 10,347 1 Includes USD 6.6 billion (CHF 6.9 billion) at carrying value of student loan ARS that were reclassified to "Loans and receivables" from "Held for trading" in fourth quarter
Slide 31: Reclassified assets
Reclassified assets 31.3.10, CHF billion Monoline protected assets1 US student loan and municipal auction rate securities US reference linked notes CMBS/CRE (excl. interest-only strips) Leveraged finance 6.3 7.3 0.9 1.3 0.6 1.0 Ratio of carrying to notional value 87% 89% 85% 83% 35% 84% Carrying val