Ubs Group Ag · SIX:UBSG
Ubs — Q2 2010 Earnings Presentation
38 slides from Ubs's earnings presentation, Jul 27, 2010
Slide 1: Second Quarter 2010 Results
Second Quarter 2010 Results July 27, 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: 2Q10 highlights
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot 2Q10 highlights Good performance in volatile market conditions Pre-tax profit CHF 2.6 billion Net profit attributable to shareholders CHF 2.0 billion Diluted EPS CHF 0.52 Return on equity 19.5%1 Net new money improved in all business division
Slide 4: Net profit attributable to UBS shareholders
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Net profit attributable to UBS shareholders (164) 842 (503) (124) (246) 292 (292) 2,202 (197) 2,005 (CHF million) 1Q10 Own Credit loss Operating Personnel Non- Tax Minorities 2Q10 credit1 (expense) / income excl. expenses personnel recovery o
Slide 5: 2Q10 – performance by business division
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot 2Q10 – performance by business division (CHF m) WM&SB WMA Global AM IB CC1 UBS Income 2,893 1,486 522 3,546 191 8,638 Credit loss (expense) / recovery (8) (1) (39) (48) Own credit2 595 595 Total operating income 2,886 1,485 522 4,101 191 9,18
Slide 6: Group pre-tax profit
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Group pre-tax profit1 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 2,810 2,614 912 (CHF million) (593) (1,323) (1,558) 1 Pre-tax profit from continuing operations 5
Slide 7: Operating expenses – 2Q10 versus 1Q10
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Operating expenses – 2Q10 versus 1Q10 Maintained our cost discipline 119 6,571 ♦ Accruals for variable 242 6,180 6,210 compensation decreased on Restructuring UK Bank charges lower revenues Payroll Tax 1,926 1,680 119 1,799 ♦ 2Q10 expenses in
Slide 8: WM&SB revenues stable
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot WM&SB revenues stable 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 4,201 3,975 3,692 2Q10 731 vs 656 3,153 1Q10 577 2,892 631 2,914 2,769 2,882 2,886 2,814 596 523 500 519 540 536 (1%) 2,071 1,935 1,811 1,452 1,300 1,228 1,251 1,261 1,30
Slide 9: Wealth Management
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management Resilient profitability and margin improvement 2Q09 1Q10 2Q10 ♦ Stable revenues with higher gross margins 1,923 1,904 1,891 – Increased risk aversion by clients reflected in asset allocation and lower trading activity (CHF m
Slide 10: Wealth Management – gross margins
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management – gross margins1 101 102 97 95 96 95 93 93 (bps p.a.) 88 88 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Pricing Lending Pricing discipline was the main driver Higher lombard lending contributed of the gross margin impr
Slide 11: Wealth Management – net new money and invested assets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management – net new money and invested assets Net new money ♦ Continued net inflows in Asia Pacific Avg. 08 Avg. 09 1Q10 2Q10 region ♦ Positive NNM from UHNW clients for (8.0) (5.2) (CHF billion) second consecutive quarter (24.0) (21.
Slide 12: Wealth Management – client advisors and invested assets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management – client advisors and invested assets Client advisor attrition slowing, continued to actively hire in 2Q10 5,647 5,648 5,618 5,435 5,066 200 192 194 192 191 4,744 189 4,700 184 1,095 4,286 4,112 1,084 4,138 1,035 160 4,493 1
Slide 13: Retail & Corporate
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Retail & Corporate Stable performance quarter-on-quarter 2Q09 1Q10 2Q10 ♦ Increase in revenues and resilient business volumes with continued low levels of credit loss 992 978 995 Credit loss (expense) / recovery (CHF million) 465 473 390 (CHF
Slide 14: Retail & Corporate – Stable lending portfolio
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Retail & Corporate 80 Stable lending portfolio Lending portfolio, gross 141 140 138 138 137 138 11% 2% 4% 14% 70% (CHF billion) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Secured by residential Secured by commercial / Secured by securities Lending 140 120
Slide 15: Wealth Management Americas
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management Americas Continued progress against strategic plan 2Q09 1Q10 2Q10 ♦ Pre-tax profitability improved to CHF 79 million excluding restructuring charges, 1,485 from CHF 36 million in 1Q10 1,368 1,362 – Higher managed account fee
Slide 16: Global Asset Management
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Global Asset Management Steady revenues and positive net new money 2Q09 1Q10 2Q10 ♦ Higher management fees offset lower performance fees 530 521 522 ♦ Costs affected by higher amortization charges for compensation awards granted in prior peri
Slide 17: Investment Bank – pre-tax profit
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Investment Bank – pre-tax profit 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1,190 1,314 297 (CHF million) (1,370) (1,846) (3,162) 16
Slide 18: Investment Bank – pre-tax profit
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Investment Bank – pre-tax profit Higher profits in challenging markets (82) (203) 196 110 (462) 842 (126) (151) 1,314 1,190 (CHF million) 124 1Q10 Equities FICC Investment Credit loss Own UK Bank Underlying Non- 2Q10 pre-tax revenues revenues
Slide 19: Equities revenues
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Equities revenues Delivered 9% revenue growth in volatile markets >1,750 ♦ Cash: our largest flow business delivered revenues consistent with 1Q10 1,456 1,365 ♦ Derivatives: increased revenues despite 168 1,255 volatile trading conditions and
Slide 20: FICC revenues
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot FICC revenues CHF 1.7 billion revenues 2,165 ♦ Macro: higher FX revenues driven by >2,000 258 high market volatility were offset by lower revenues in Rates due to de- 241 1,703 risking and lower client demand 502 ♦ Credit: revenues down from
Slide 21: Investment banking revenues
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Investment banking revenues Global fee pool down 15% in uncertain markets 717 >1,000 ♦ Capital markets: – Equities: revenues down 21% mainly due 331 to slowdown in May, stable market share 604 – FICC: revenues decreased primarily due to 478 2
Slide 22: Risk update
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Risk update More cautious approach to risk-taking in 2Q10 in light of volatile markets ♦ Average VaR down 8%, total RWAs down 2% to CHF 205 billion on 30.6.10 ♦ One backtesting exception on 10 May 2010 (our first since 2Q09); extreme market m
Slide 23: Capital position
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Capital position 16.4% 16.0% ♦ Tier 1 capital ratio increased 15.0% 15.4% to 16.4% 13.2% ♦ Core tier 1 capital ratio 13.0% improved to 13.0% 12.5% 11.9% 11.5% ♦ Risk-weighted assets down 11.0% 10.5% 10.1% CHF 4 billion to CHF 205 billion 8.5%
Slide 24: Funding
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Funding We continue to benefit from ready access to diversified funding sources ♦ Customer deposits of CHF 414 billion – Contributing 43% of total liabilities excluding negative replacement values – Coverage ratio of customer deposits to loan
Slide 25: C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot 24
Slide 26: Appendix
Appendix
Slide 27: Wealth Management Americas – medium term targets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management Americas – medium term targets ~725 > 1,000 ~250 ~(625) ~325 ~250 (CHF million) 144 1Q10 ex- Asset Yield curve Cost Revenue Strategic Medium-term provisions performance impact initiatives initiatives execution risk target an
Slide 28: Wealth Management Americas – medium term targets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Wealth Management Americas – medium term targets Profit before tax (CHF million) Cost/income ratio (%) >1,000 99 ~80-85 32 2009 Medium-term 2009 Medium-term target target Revenue / FA (CHF k) Invested assets / FA (CHF million) Pre-tax profit
Slide 29: Pre-tax profit – business divisions
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Pre-tax profit – business divisions 1Q10 vs 2Q10 1Q10 2Q10 (CHF million) 1,161 1,131 1,190 1,314 137 117 306 119 15 (67) WM&SB WMA Global AM IB CC1 1H09 vs 1H10 1H09 1H10 2,504 2,293 2,009 (CHF million) 254 351 425 24 (52) (256) (5,008) 1 Tre
Slide 30: Headcount
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Headcount ♦ Headcount reduced by a further 417 during 2Q10 ♦ Overall headcount expected to remain broadly stable in 2010 (211) (326) 8 179 64,293 (67) 63,876 (417) (FTE) Mar 10 WM&SB WMA Global AM IB CC Jun 10 29
Slide 31: Invested assets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Invested assets Wealth Management Retail & Corporate (5) (21) (15) 827 (4%) 786 (CHF billion) (CHF billion) (5%) (0) (3) (1) 136 131 Mar 10 NNM Market FX / Other Jun 10 Mar 10 NNM Market FX / Other Jun 10 Wealth Management Americas Global Ass
Slide 32: Regulatory capital
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Regulatory capital Tier 1 BIS Tier 1 Total Total capital RWA ratio capital ratio CHF billion 31.3.10 33.4 209.1 16.0% 41.8 20.0% Net P&L attributable to shareholders 2.0 2.0 FX & other 0.1 0.1 Own credit (not eligible for capital) (0.6) (0.6)
Slide 33: Call of USD 1.5 billion hybrid tier 1 instrument
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Call of USD 1.5 billion hybrid tier 1 instrument1 Impact of reserve and redemption on regulatory capital2 30.6.10 30.6.10 2Q10 30.6.10 Redemption before post call reserve as reported impact CHF million reserve pro forma BIS tier 1 capital 34,
Slide 34: Asset funding – June 2010
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Asset funding – 30 June 2010 Assets Liabilities and equity Cash, balances with central Due to banks 82 banks and due from banks 110 Money market paper issued 59 Financial investments available-for-sale 72 Cash collateral on securities lent CH
Slide 35: Balance sheet development: 2Q07 – 2Q10
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Balance sheet development: 2Q07 – 2Q10 Assets 2,542 2,207 2,015 Total B/S size 958 1,458 1,341 Total excl. PRVs 1,161 919 954 Positive RVs 312 Other assets 775 224 232 (CHF billion) 348 Trading portfolio 180 199 Collateral trading 408 450 385
Slide 36: Exposure to monoline insurers, by rating
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Exposure1 to monoline insurers, by rating Credit Fair value of Fair value of Fair value of Notional valuation underlying CDSs4 prior CDSs after amount3 adjustment assets to CVA CVA as of 30.6.10 USD billion Credit protection on US sub-prime R
Slide 37: Student loan auction rate securities
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Student loan auction rate securities Inventory Carrying Carrying value as of value as of 30.6.10 31.3.10 USD million US student loan auction rate securities 8,1171 9,275 1 Includes USD 4.9 billion (CHF 5.2 billion) at carrying value of studen
Slide 38: Reclassified assets
C:\Program Files\UBS\Pres\Templates\PresPrintOnScreen.pot Reclassified assets Ratio of Notional Fair Carrying carrying to value value value notional 30.6.10, CHF billion value US student loan and municipal auction rate securities 6.4 5.4 5.6 88% Monoline protected assets 6.9 5.9 6.0 88% Leveraged fi