UBS Group AG · SIX:UBSG
UBS — Investor Day (December 1999)
48 slides from UBS's investor day presentation, Dec 14, 1999
Slide 1: UBS Investors' Day
ab UBS Investors’ Day 14 December 1999
Slide 2: Agenda
Agenda Morning Session ♦ Introduction Mark Branson ♦ UBS Group Marcel Ospel/Luqman Arnold ♦ Private and Corporate Clients Stephan Haeringer ♦ Private Banking Rudi Bogni ♦ Asset Management Peter Wuffli ab 1
Slide 3: Agenda (continued)
Agenda (continued) Afternoon Session ♦ Private Equity Pierre De Weck ♦ Investment Banking Markus Granziol ♦ e-services Bill Johnson ♦ Wrap-up Marcel Ospel ab 2
Slide 4: UBS Group
ab UBS Investors’ Day UBS Group Marcel Ospel 14 December 1999
Slide 5: UBS Group: Mission
UBS Group: Mission ♦ Provide above-average returns to shareholders ♦ Provide clients with superior value-added investment services ♦ Be an employer of choice ♦ Good citizenship ab 4
Slide 6: UBS Business Model and Positioning
UBS Business Model and Positioning SECTION 1 ab
Slide 7: Business Model Options - Niche
Business Model Options - Niche High net Retail Wholesale Market worth clients clients clients participants Asset Management Private Bank Research & Advisory Investment Bank Execution & Risk Retail Management e-broker Retail/ Corporate/ Retail Bank Transaction Bnk’g Insurance Clearing & CSD Depositor
Slide 8: Business Model Options - Focus
Business Model Options - Focus High net Retail Wholesale Market worth clients clients clients participants Asset Focused Investment Manager Management Research & Focused Advisory Institutional Service Execution & Risk Provider Management Retail/ Corporate/ Focused Retail/Corporate/Transaction Bank T
Slide 9: Business Model Options - Investment Services
Business Model Options - Investment Services High net Retail Wholesale Market worth clients clients clients participants Asset Management Research & Global Investment Services Advisory Execution & Risk Management Retail/ Corporate/ Transaction Bnk’g Insurance Clearing & Depository Services ab 8
Slide 10: Business Model Options - Multi-Business & Add-Ons
Business Model Options - Multi-Business & Add-Ons High net Retail Wholesale Market worth clients clients clients participants Asset Management Research & Global Multi-Business Advisory Execution & Risk Management Retail/ Corporate/ Transaction Bnk’g Insurance Bancassurance Clearing & CSD Alliance De
Slide 11: Business Model - UBS
Business Model - UBS High net Retail Wholesale Market worth clients clients clients participants Asset Management Global Investment Services Research & Advisory and Execution & Risk Management Retail/ Corporate/ Leading Bank in Switzerland Transaction Bnk’g Insurance Clearing & Depository Services a
Slide 12: Group Vision: Integrated Client Service Model
Group Vision: Integrated Client Service Model Affluent Clients Swiss Retail & High Net Worth Corporate Clients Clients Private Banking Private & Corporate Clients FX/MM Research Wholesale Securities Wholesale Clients Derivatives Clients Asset Mgmt Funds Investment Banking Asset Management Private Eq
Slide 13: Core Message
Core Message ♦ UBS is committed to its business model as a global, integrated investment services firm and the leading bank in Switzerland ♦ We believe that the current mix of businesses is essential to the success of this model ♦ Based on these strong foundations, we reaffirm the continuity of UBS
Slide 14: Summary of UBS Group Initiatives
Summary of UBS Group Initiatives SECTION 2 ab
Slide 15: Financial Market Environment: Selected Trends
Financial Market Environment: Selected Trends ♦ Product commoditization and the consolidation process are increasing the importance of branding ♦ Technology, especially the internet, is revolutionizing the financial services sector ♦ Equity-related compensation is tightly aligning employee and share
Slide 16: Branding
Branding ♦ Alignment of brand architecture with integrated business model ♦ Communicated today; phased implementation Core Brand ab Financial Services Group Divisional Brands ab ab Private Banking Asset Management ab ab Private and Corporate Clients Private Equity abWarburg Investment Banking ab 15
Slide 17: Leveraging Technology in Finance
Leveraging Technology in Finance ♦ Technology is revolutionizing the financial industry — disintermediation — big advantages for trusted brands — new products, services and delivery channels — data mining highlights significant new cross-selling opportunities — richer information enhances the qualit
Slide 18: e-services
e-services ♦ Primary importance of channel management requires cross- divisional co-operation ♦ Initiatives at the divisional level — internet-enable existing businesses — build new client franchises through multi-channel approach — create new specific products for each channel ♦ Implementation of t
Slide 19: Human Resources
Human Resources UBS is committed to succeeding in the fierce competition for talent, enhancing its reputation as an employer of choice, and aligning employee and shareholder interests through ♦ Attracting, selecting and developing graduate talent from the top 20 percent at leading universities ♦ Hir
Slide 20: Growth Initiatives: Highlights
Growth Initiatives: Highlights UBS will consolidate its leadership in private banking with Swiss and international clients ♦ Re-establishing a strong growth trend in assets and profitability ♦ Leveraging investments already made in domestic private banking in Europe, US, Japan & Australia, through o
Slide 21: Growth Initiatives: Highlights
Growth Initiatives: Highlights UBS will continue to benefit from the growth in the industry and build the scope and profitability of its investment banking franchise through ♦ Strengthening its corporate client franchise, especially in targeted global sectors ♦ Enhancing its ability to add value to
Slide 22: Growth Initiatives: Highlights
Growth Initiatives: Highlights UBS will enhance its leading position in Switzerland through ♦ Developing its corporate banking franchise with an emphasis on advice and solutions ♦ Increasing share-of-wallet across all client segments ♦ Continuing implementation of a new lending business model, inclu
Slide 23: Growth Initiatives: Highlights
Growth Initiatives: Highlights UBS will exploit opportunities in asset management by ♦ Leveraging its solid position in mature markets to move into growth markets such as continental Europe, Japan and Latin America ♦ Expanding its portfolio of investment capabilities and styles ♦ Seeking opportuniti
Slide 24: Growth Initiatives: Highlights
Growth Initiatives: Highlights UBS will continue to build its attractive high-profile private equity business through ♦ Migration to four regional funds applying 50% UBS and 50% third party investment to each ♦ Exploitation of existing synergies with UBS Private Banking, UBS Asset Management and UBS
Slide 25: UBS Group: Strengths
UBS Group: Strengths ♦ Leading industry position across all core businesses ♦ Strong ratings and capitalization ♦ Unique client franchise and brand ♦ Record of technological innovation & compelling e-services story ♦ Risk management excellence ♦ Proven expertise in acquisition and integration ♦ Cult
Slide 26: Luqman Arnold
ab Luqman Arnold
Slide 27: Agenda
Agenda ♦ Financial Targets Policy ♦ SEC Registration ♦ Capital Management Strategy ♦ Risk and Shareholder Value ab 26
Slide 28: Financial Targets Policy
Financial Targets Policy SECTION 3 ab
Slide 29: UBS Financial Targets: Review of Current Targets
UBS Financial Targets: Review of Current Targets ♦ At the time of the merger, UBS presented targets which incorporated — organic growth — acquisitions ♦ These targets assumed a certain level of acquisition activity which has not materialized due to — higher than expected multiples resulting in fewer
Slide 30: UBS Financial Targets: Market Approach
UBS Financial Targets: Market Approach ♦ The communication of forward-looking information varies substantially on a regional basis due to different legal and regulatory environments — the communication of detailed forward-looking information can create increased liability risk in the US ♦ Current ma
Slide 31: UBS Financial Targets: New Approach
UBS Financial Targets: New Approach ♦ Targets policy will be based on clear principles — consistent, demanding but achievable ♦ Targets will relate only to organic growth — pre-goodwill — revised after any major acquisitions ♦ Targets will focus on Group-level shareholder return ratios ♦ Specific in
Slide 32: UBS Financial Targets: New Group Targets
UBS Financial Targets: New Group Targets ♦ RoE averaging 15-20%, across periods of varying market conditions ♦ Double-digit average annual EPS growth, across periods of varying market conditions ♦ Active, continuous focus and downward pressure on the Group cost-revenue ratio substantiated by divisio
Slide 33: Cost Control Initiatives
Cost Control Initiatives ♦ Sustainable merger cost savings will amount to CHF 1.94 billion p.a. by the end of 1999 ♦ UBS Warburg concluded its merger-related cost cutting programs within 2 years of the merger — total savings of CHF 1.7bn are close to the original target of CHF 1.9bn ♦ Further saving
Slide 34: SEC Registration
SEC Registration SECTION 4 ab
Slide 35: SEC Registration
SEC Registration ♦ UBS is in the process of applying to register with the SEC — expected registration during H1 2000, subject to completion of the SEC review process ♦ Positioning to take advantage of consolidation opportunities arising from effective repeal of Glass-Steagall — Gramm-Leach-Bliley Fi
Slide 36: Capital Management Strategy
Capital Management Strategy SECTION 5 ab
Slide 37: Capital Management Context
Capital Management Context Current Business Plan Selectively reduce risk Retained earnings Increase capital efficiency (net of dividends) DECREASING INCREASING Capital Demand Capital Supply Structural over-capitalization Value enhancing Cancellation acquisitions ab 36
Slide 38: Capital Management Strategy
Capital Management Strategy ♦ Driven by shareholder value targeting — cost efficiency — strategic flexibility — strong capitalization and ratings ♦ Retain strategy of not accumulating capital purely as contingency for possible major acquisitions ♦ Discontinue current buy-back program and replace wit
Slide 39: Risk and Shareholder Value
Risk and Shareholder Value SECTION 6 ab
Slide 40: Risk Control and Shareholder Value
Risk Control and Shareholder Value ♦ UBS share price depends on shareholders‘ expectations of UBS future earnings as well as the expected volatility of those earnings ♦ Business model is designed to ensure that we have the appropriate business mix to deliver a growing earnings stream with lower vola
Slide 41: Simplified Model of Earnings Volatility
Simplified Model of Earnings Volatility Primary Risk Group Risk Consequential Risk Changes due to Changes due to Changes due to operational risks inherent in strategic risks and consequences of our services: our business: group risk factors: ♦ transaction processing risk ♦ credit risk ♦ funding risk
Slide 42: Management of Risk Classes: Primary Risks
Management of Risk Classes: Primary Risks ♦ Primary risk factors are those which we manage for profit, and can be measured accurately and in a timely manner ♦ Tail risk is controlled as part of stress loss limits ab 41
Slide 43: Management of Risk Classes: Group Risks
Management of Risk Classes: Group Risks ♦ Exposure to Group risks is controlled by Corporate Center in accordance with Board guidelines ♦ Funding risk policy limits exposure to adverse liquidity scenarios ♦ Interest rate risk management insulates divisions outside UBS Warburg from adverse interest r
Slide 44: Management of Risk Classes: Consequential Risks
Management of Risk Classes: Consequential Risks ♦ Operational risks are hard to quantify as causal relationships are difficult to establish and materialise over longer time horizons ♦ But we still want to protect our earnings from tail risk ♦ Risk financing is the primary tool for protection against
Slide 45: Key Objectives for Risk Control
Key Objectives for Risk Control ♦ Group-wide process to control all principal risks in as consistent and transparent a manner as possible ♦ Design and implement a risk-adjusted performance measurement process ♦ Ensure that we have an independent risk organisation covering all risk classes ♦ Further
Slide 46: Conclusion
Conclusion SECTION 7 ab
Slide 47: Conclusion
Conclusion ♦ Continuity of strategy ♦ Improved communication ♦ New brand architecture ♦ e-services initiatives ♦ New financial targets policy ♦ Cost control ♦ SEC registration ♦ Share cancellation ab 46
Slide 48: Positioning
Positioning UBS is ... ... a global, integrated investment services firm and... … the leading bank in Switzerland ab 47