Ubs Group Ag · SIX:UBSG
Ubs — Q3 2011 Earnings Presentation
43 slides from Ubs's earnings presentation, Oct 25, 2011
Slide 1: Form 6-K, UBS AG
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 Date: October 25, 2011 Commission File Number: 1-15060 UBS AG (Registrant’s Name) Bahnhofstrasse 45, Zurich, S
Slide 2: Form 6-K presentation materials note
This Form 6-K consists of the presentation materials related to the Third Quarter 2011 Results of UBS AG, which appears immediately following this page.
Slide 3: Third quarter 2011 results
Thir d quarter 2011 res ults October 2 5, 2011 T hird q uar ter 201 1 res ults
Slide 4: Cautionary statement regarding forward-looking statements
Cauti onary s tatement regar ding fo rward - looking s tatements Th is pr esentati on contains stat em ent s th at co nsti tute "forwar d-looking s tatements ," including b ut not lim ited to management's outloo k for UBS 's f inancial perfo rmance and s tatements r elating to the anticipated eff ec
Slide 5: Key messages
Key mess ages CHF 1 .0 billion net prof it in a ver y chal lenging quar ter fo r both t he indus try and t he b an k ? Pos itive net new mon ey in our wealth managem ent bus iness es ? Ou r FX bu sines s in the Inv es tment Bank per for med well Th e i mplementation of our cost r eduction pr ogram i
Slide 6: Market environment
Mark et en vironm ent FX rates E quity mar ket perfo rmance 1Q10 2Q10 3 Q10 4Q10 1Q11 2 Q11 1.1.10 = 100 YoY1 US D / CHF ? 20% EUR / CHF ? 13% GBP / CHF ? 17 % 3Q11 CDS spr eads Volati lity SM I SPX F TS E 100 M SCI World 1Q 10 2Q10 3Q10 4Q1 0 1Q11 2Q11 3Q1 1 1Q10 2Q10 3Q1 0 4Q10 1Q11 2Q1 1 3Q11 QoQ
Slide 7: Group revenues and net profit
Group r ev enu es and net pr ofit Eight consecutiv e qu ar ters of net prof it Group revenue and cost / income r at io Net prof it attr ibutable to s harehol ders Group r evenue Cos t / i ncome ratio ( CHF bill ion) ( CHF billi on)
Slide 8: 3Q11 results
3Q11 res ults Gains on own credit and the sale of the s trategic inves tment po rtfo lio mor e than off set l oss es f rom the unauthori zed t rading in ci den t and res tructur ing charges 1 T otal los s o f CHF 1,951 millio n (USD 2 ,229 mill ion) du e t o unauthor ized trading activi ty (CHF 1 ,8
Slide 9: Impact of currency movements on UBS results
- + - - + - - + - - + - - + - - + - - + - - + - - + + - Impact of cu rrency mo vements o n UBS res ults The s tr eng thening of the Swis s franc over the last year has s igni ficantly af fected our r evenues and pr ofit s Wealth M anagement Amer icas Global A ss et M anagement Wealt h Management I n
Slide 10: 3Q11 operating expenses
3Q11 operating ex pen ses Expens es wer e reduced s ignifi cant ly Pers onnel cos ts excluding r es tr ucturing ch ar ges decr eas ed by CHF 420 million Lower salary cos ts and reduced var iable compensati on M aj ority o f vari abl e com pensatio n costs related t o the amort izat ion of p rior yea
Slide 11: Cost reduction program - update
Cos t r ed uct ion pro gram - update The im plementation of our cos t r ed uction pr ogram is on tr ack Res tructu ring char ges ( ~CHF 550 mi llion) 30% 10 % 5% 55% S taff reductions (~ 3,500 FT E) Inves tment Bank WM &S B Gl obal AM WM A 45% 10% 10% 35% L ar gest shar e o f s taff r eductions in t
Slide 12: 3Q11 tax
3Q11 tax Swis s deferr ed tax expenses with r espect to the amorti zati on of pr evious ly recognized DT A Tax char ge relating t o re -meas ur em en t of the valu e o f Swis s DTA Ot her curr ent net tax expens es in r espect of 3Q11 taxable pr ofits T ax benefit ar isin g fro m the unauthor ized t
Slide 13: Our global wealth management business is unrivaled
Our global wealt h management bus iness is unr ivaled Continued pr ogres s des pite mar ket uncertainty Net new money (CHF billion) Pr e- tax prof it1 (CHF millio n) Advis ors T otal pro fits up des pite challenging m arkets 9M 10 9M 11 NNM inflows in UHNW, A sia P acif ic, emerging markets and the
Slide 14: Wealth Management
(CHF mil lion) Wealth Management Oper ating income and p re -tax prof it Pos itiv e n et new money for the fi fth cons ecutive quarter Net new money Revenues i ncluded CHF 433 m illion of gains on the s ale of the s trategi c i nvestm en t portf olio and wer e af fected by s easonall y lower client
Slide 15: Wealth Management - operating income
Wealth Management - operating in co me Revenues benefited f rom gai ns on the sale of the s trategic inves tment po rtf olio In terest Recur ring f ees T rading Oth er income ( CHF milli on) I nvested as sets (CHF billion ) T ransactio n-bas ed fees Credit lo ss (expens e) / r ecov er y 1 Adjus ted
Slide 16: Wealth Management - gross margin
Wealth Management - gros s m ar gin1 ( bps ) 1 Operati ng income befor e credit lo ss (expens e) or recovery ( annualized) / aver age i nvested as sets ; gr oss mar gin excludes valuation adjus tments on a pr operty f und of CHF 27 mill ion in 3Q11 , CHF 17 mil lion in 2Q1 0 and CHF 28 mi llion in 1
Slide 17: Wealth Management - invested assets and NNM by region
4 Wealt h Management - invest ed as s et s and NNM by r egion1 30.9.1 1 inves ted ass ets CHF 720 billi on 1 Inv es ted as sets and net new mon ey bas ed on client domicile. I nvested as sets and net new m oney for "S wiss wealth management " and "In ternational wealth managem ent" as s hown in UBS'
Slide 18: Wealth Management Americas
Wealth Management Am er icas Repor ted revenues increased 1% USD r evenues gr ew 2% on h igher net in terest an d trading income Reali zed g ai ns on avail ab le- for -sale por tfoli o of CHF 31 million in 3Q11 compar ed with CHF 25 million in 2Q11 Cos t / income r atio s table at 89% CHF 13 mill io
Slide 19: Wealth Management Americas - operating income
Wealth Management Am er icas - operating in co me (USD) Incr eas ed net inter es t and t rading incom e Yo Y +16% Inter es t Recurr ing fees Tr ading Other income Tr ansaction -bas ed fees Credit lo ss (expens e) / r ecov er y (US D milli on) QoQ + 2%
Slide 20: Wealth Management Americas - FA productivity
Wealth Management Am er icas - FA pro ductivity ( USD) Con tinuing t o ex ecut e o ur fo cus ed s trategy I nvested as s et s per FA Achieved #1 pos iti on in revenue per FA vs . US peers #1 in invest ed as s et s per FA vs . US peers Revenue per FA, an nualized (USD t hous and ) (US D milli on)
Slide 21: Investment Bank
Inves tment Bank Unauthor ized trading i ncident and res tru ct uring char ges contr ibuted to a l oss 1 Own credi t on fi nan ci al liabiliti es des ignated at fair value (CHF 1,765 mill ion gain in 3 Q11) 2 Unaut horized tr ad ing incident i n 3Q11 (CHF 1,849 mil lion negative r ev enu es ) 3 USD
Slide 22: Equities revenues
Equit ies r ev enu es (v s. 3Q10 )1 YoY compar is on in USD t er ms 2 Cas h, ( 5%) Stable mar ket shar e Similar levels of commi ss ion r ev enu es Weaker tr ad ing revenues in dif ficult env ironm ent Derivatives , (55 %) T radin g los ses in volatil e market condit ions Prim e s ervi ces , +12 % I
Slide 23: FICC revenues
FICC revenues (vs . 3Q10) YoY comparis on in USD term s1 M acro, + 176% F X: revenues mor e t han doubled on hi gh volatili ty and good cli ent flows Rates: i mproved r evenues, par ticularly in derivati ves and s hort -term int er est r ates Cr edi t, (N/M ) Mar k-to -market los s es on tr ading po
Slide 24: Investment banking revenues
Inves tment banking revenues ( vs . 3Q10) YoY com paris on in US D terms 1 Advis ory , +9% Mar ket shar e gai ns on subd ued market activit y Equi ties capital markets , +61% M ar ket s hare gains Fixed incom e capit al markets , (19% ) Reduced revenues in leveraged f inance Other, ( N/M ) Incr eas
Slide 25: Global Asset Management
Global As set M anagement L ower operati ng income Decrease in net management fees driv en b y currency and m ar ket valuations L ower perf orm ance f ees Operatin g expenses decreased CHF 1 6 millio n despi te CHF 12 mill ion res truct uring char ges Per son nel co sts reduced by CHF 18 mill ion No
Slide 26: Retail & Corporate
Retail & Corpor at e ( CHF mil lion) P rogr ess in cos t contr ol contri buted to s table pre - tax res ult1 Operati ng income included: Gai ns on the sale of the s trategic inves tment po rtfo lio contr ibuted CHF 289 million Cr edit los s exp en ses of CHF 81 million including a CHF 7 3 milli on c
Slide 27: Retail & Corporate deposits and loans
Retail & Corpor at e Cont inued pos itive tr end in depos its Growth in client depos its ; maintain ed discip line on depos it int er est r ates Depos its exceed loans b y CHF 70 bill ion for WM &SB overall Stru ct ural pr es s ure on net i nterest margin remains (low i nteres t rate envir onment, c
Slide 28: Retail & Corporate - loan portfolio
Loans , gros s (30.9.11 ) 100% = CHF 13 7 billion Wel l divers ifi ed acr oss regi ons and cou nterparti es in S witzerland; 88% of loans granted on a s ecured bas is ? > 99% o f loans with L TV1 lower or eq ual to 80% ? Average LT V1 of 60% ? 99% covered by S wiss pr operties ? > 98% of lo ans with
Slide 29: Corporate Center
CHF 209 mill ion los s from the revaluation of UBS's option t o acqu ire the SNB S tabFund's equity Opti on fair value CHF 1.7 bil lion (US D 1.9 bill ion) on 30.9.11 CHF 78 million gain fr om the s ale of pr operty in Switzerl and Tr eas ury i ncome after all ocat ions to the bus iness divi sion s
Slide 30: Capital position
Capit al posi tion Basel 2 t ier 1 capital i ncr eased to CHF 38.1 bill ion Basel 2 r isk - wei ghted ass ets increased s ligh tly to CHF 2 07 billio n RWAs would hav e d ecr eas ed withou t the unauthor ized trading incident Unauthor ized trading incident res ulted in CHF 11.4 bil lion incr eas e i
Slide 31: Balance sheet development
Balance s heet devel opment 1 I ncluding cas h collateral on d er ivative tr ansactions 2 I ncluding f inancial liabili ties d es ignated at f air value 3 P ercentages bas ed on tot al balance s heet s ize exclu ding negative r epl acement val ues ( CHF billio n) T otal excl. PRVs CHF 910 bil lion A
Slide 32: Significant reduction in our risk exposures
Signif icant reduction in our ris k expos ures 1.5 5.7 Rated below BB - Rated BB- or above Basel 3 RWAs CHF bill ion 16.6 1. 3 (USD b illion) Student loan auction rate s ecuriti es invent ory + buyback commitm en t Expo sur e to monoli ne insu rers 1 SL ARS buyback comm itment ( par value) S L ARS i
Slide 33: Exposures to selected European countries
Expos ures to s elected Eur opean countri es not r ated AAA / Aaa1 1 Refer t o pages 44 - 45 of UBS's 3Q11 repo rt f or mor e infor mation 2 I ncludes cent ral govern ments, ag encies and central b ank s 3 Net of credit p rotection bo ught 4 T he majori ty of th e I reland expos ur es relates to f u
Slide 34: IFRS equity attributable to UBS shareholders
IFRS equi ty attri butable to UBS s harehold er s 3 0.6.11 For eign curr ency trans lation ( OCI)2 3 0.9.11 Deferr ed tax eff ect on equity it em s ( shar e p remium) Cash f low hedges (OCI) 2 Net prof it E mployee s hare and s hare option p lans ( shar e premium ) Fin an ci al invest ments avail ab
Slide 35: Key messages
Key mess ages CHF 1 .0 billion net prof it in a ver y chal lenging quar ter fo r both t he indus try and t he b an k ? Pos itive net new mon ey in our wealth managem ent bus iness es ? Ou r FX bu sines s in the Inv es tment Bank per for med well Th e i mplementation of our cost r eduction pr ogram i
Slide 36: Appendix
Appendix &% UBS
Slide 37: Invested assets
Inves ted ass ets Wealth Management Wealth M anagement Amer icas Glob al Ass et M an agem ent Retail & Corpor ate
Slide 38: Core tier 1 capital and RWAs (Basel 2)
Cor e tier 1 capital and RWAs (Bas el 2) 1 30 .9.11 includes IF RS deferr ed tax ass ets on net operati ng los ses of CHF 8 ,191 mill ion; 30.9.1 1 deferr ed pension ex pen ses CHF 3,279 m illion 2 Includes chan ges in d edu ct ion items 3 Adjus ted f or FX ef fect Core ti er 1 capital1 Ris k -wei g
Slide 39: Capital position - Basel 2.5
Capit al posi tion - Bas el 2.5 Basel 2 .5 RWAs of CHF 284 bill ion fo r the Gro up Bas el 2.5 t ier 1 capital of CHF 37.5 bi llion T ier 1 deducti on of CHF 0 .6 billio n due to additi onal deduction f or low - rated s ecur itization expos ur es Pr o-form a Bas el 2.5 tier 1 ratio o f 13.2% on 30.9
Slide 40: Asset funding - 30 September 2011
125% cover age CHF 66 billio n sur plus CHF 99 bil lion collater al sur plus Ass et fu nding - 30 September 2011 As sets Li abilities and equity Cas h, balances wit h cent ral banks and due fr om banks 105 L oans 2 66 Tr ading por tfoli o as s ets 2 06 Cas h collater al on s ecur ities borr owed and
Slide 41: Funding sources by currency
Funding s our ces by cur rency - 30 September 2011 42% USD1 CHF 326 billion 23% E UR1 CHF 178 bil lion 22% CHF1 CHF 168 billion 1 4% oth er 1 CHF 109 bi llion 1 I n % o f total f unding o n the balance sheet ( CHF 781 bill ion) com pris ing r epu rchase agr eement s, s ecuriti es lendin g ag ai nst
Slide 42: Form 6-K incorporation 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 Numbers 33-153882; 333-156695; and 333-156695-01 to -17) and Form S-8 (Registration Numbers 333-57878; 333-50320; 333-49216; 333- 49214; 333-49212; 333-49210; 333-103956
Slide 43: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UBS AG By: /s/ Louis Eber Name: Louis Eber Title: Group Managing Director By: /s/ Sarah M. Starkweather