Ubs Group Ag · SIX:UBSG
Ubs — Investor Day (November 2011)
20 slides from Ubs's investor day presentation, Nov 17, 2011
Slide 1: Investor Day 2011 Investment Bank
Investor Day 2011 Investment Bank Carsten Kengeter CEO UBS Investment Bank November 17, 2011
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: Key messages
Key messages The Investment Bank will be focused and simpler Our business mix is driven by core client needs and capital efficiency Our execution will be disciplined and effective Successful execution of our strategy will lead to attractive and sustainable risk- adjusted returns 2
Slide 4: An Investment Bank critical to the Group strategy
An Investment Bank critical to the Group strategy The Investment Bank will be more client-centric, capital efficient and better aligned with our wealth management businesses Competitively service our core clients across wealth management, institutional, corporates, sovereigns, and sponsors Optimize
Slide 5: Build on our fundamental strengths
Build on our fundamental strengths • Consistently top-ranked research house1 (covering 85% of global market cap) • Top 3 Global Equities house2 Leadership • Top 3 overall FX market share consistently since 20053; #1 FX House in 20114 position in core businesses … • #7 in Global M&A, #2 in Global ECM
Slide 6: Strategy focused on client needs
Strategy focused on client needs Simpler business model based on three strategic pillars … Flow Solutions Advisory and analytics Execution Support key clients Research & insight What? Market-making Selective risk-taking Advisory Clearing Market expertise Analysis WM, corporates, sovereigns, WM, corp
Slide 7: Optimizing risk-adjusted returns
Optimizing risk-adjusted returns Portfolio attractiveness based on: Return generation RoE, RoRWAs, RoA Client relevance Importance for core clients across wealth management, and synergy institutional, corporates, sovereigns and sponsors Growth prospects Pre-tax profit contribution and growth Market
Slide 8: Business mix
Business mix We have analyzed performance and capital allocation at a granular level 2010 and 9M11 annualized average ECBB1 Average 9M11 pro forma Basel 3 RWAs Future RWA2 usage: Exit Large decrease Small to medium decrease Approximately flat Increase 1 ECBB is an internal measure of business perfor
Slide 9: Optimizing the portfolio for capital and client needs
Optimizing the portfolio for capital and client needs Portfolio attractiveness of selected businesses (Return generation, client relevance and synergy, growth prospects, market standing) Not attractive Attractive Very attractive FICC Macro Directional Trading FICC Emerging Markets FICC Special Situa
Slide 10: Generating capital efficiency
Generating capital efficiency Targeting a ~50% reduction in total RWAs by 2016 … Basel 3 pro forma RWAs (CHF billion) Legacy ~70 ~90% ~2-3x 3Q11 ~30 ~5 Core Investment Bank1 ~230 ~35% ~150 <150 ~1.5x 3Q11 Operational Risk Market and Credit Risk 2008 3Q11 2013 target 2016 target … with ~35% reduction
Slide 11: Basel risk-weighted assets — reduction targets
Basel 3 risk-weighted assets1 — reduction targets RWA reductions 2012 2013 2014 2015 2016 IB targeted completion ~45% ~80% 100% (CHF billion) ~35 Business realignment ~30 CVA2 mitigation / optimization Core Investment ~5 Securitization Bank ~0-10 OTC to CCP3 ~0-10 Other hedging ~18 SL ARS4 inventory
Slide 12: FICC business impact from RWA reduction
FICC business impact from RWA reduction1 Basel 3 pro forma RWA 9M11 annualized RWA reduction driving rationale development revenues2 (CHF billion) (CHF billion) Reduce capital-inefficient trades in Long-End Rates ~85 Continued focus on increasing client flow and ~40 ~45 Macro electronic executio
Slide 13: FICC — reduced capital usage with a focus on serving clients
FICC — reduced capital usage with a focus on serving clients Flow Advisory and analytics Advanced algorithmic trading Increase UBS Delta market penetration capabilities and monetization Next-generation automation of market- Monetize strong strategy research making and agency client platforms
Slide 14: Equities — grow with targeted investment in technology
Equities — grow with targeted investment in technology Flow Advisory and analytics Electronic execution, client platforms Deliver greater monetization of leading (UBS Neo) and algorithmic capabilities research EM footprint in cash and access products High frequency trading through technology
Slide 15: IBD — increase market share and leverage global footprint
IBD — increase market share and leverage global footprint Geographic focus Advisory and analytics Strengthen US IBD Allocate country, sector and product resources more efficiently Restore EMEA IBD market share Expand corporate coverage for UHNW Extend leading market position in APAC Exte
Slide 16: Specific initiatives to strengthen IB / WM partnership
Specific initiatives underway to strengthen IB / WM partnership Guiding principle is to align service delivery and execution of each pillar based on client needs and economics Client Global Family Ultra High Net Worth HNW and Pillar Office (GFO) (UHNW) other Flow Enhance and expand e-delivery Dedica
Slide 17: We remain vigilant on costs
We remain vigilant on costs Actions taken in 2011 will eliminate ~CHF 1 billion from our cost base ~1,300 gross front office headcount Headcount1 exits initiated in 9M11, with (thousand) full impact reflected in 2012 24.1 17.2 17.8 ~16.5 Discretionary spending focused on client revenue generating ac
Slide 18: Effective and disciplined execution
Effective and disciplined execution Client focus Capital efficiency Systematic interface with WM / WMA Systematic tracking of progress against risk / return metrics Clearer client coverage model Central allocation / management of scarce Centralized measurement of client resources (RWA, fun
Slide 19: Our targets for the future
Our targets for the future1 RWA2 Cost / income ratio3 Pre-tax RoaE4 (CHF billion) (%) (%) ~300 12 - 17 198 90 78 10.8 <150 70 - 80 127 3.5 Basel 2 Basel 2.5 Basel 3 Target 2010 3Q11 Target 2010 3Q11 Target pro forma YTD YTD 3Q11 Total IB (including Legacy) Core Investment Bank 1 Annual performance r
Slide 20: Key messages
Key messages The Investment Bank will be focused and simpler Our business mix is driven by core client needs and capital efficiency Our execution will be disciplined and effective Successful execution of our strategy will lead to attractive and sustainable risk- adjusted returns 19