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 Finance
Investor Day 2011 Finance Tom Naratil Group Chief Financial Officer 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 Capital strength is the foundation for our success and we are targeting a common equity tier 1 ratio of 13% under Basel 3 We will implement a progressive capital return program as we successfully execute our strategy Our target return on equity is 12-17% for the Group 2
Slide 4: We retained earnings and built our capital base
We retained earnings and built our capital base Disciplined management of resources Balance sheet Tier 1 capital and capital ratios 2,015 17.8% 18.4% 15.4% 11.0% 12.7% 13.2% 1,447 1,341 1,317 35.3 38.1 33.2 31.8 4.9 4.3 (CHF billion) (CHF billion) 7.4 7.2 1,161 33.8 919 916 910 25.8 30.4 24.6 31.12.
Slide 5: Diversified funding with a long-term funding surplus
Diversified funding with a long-term funding surplus Customer deposits are a stable source of funding Assets 30.9.11 Liabilities & equity Equity Other assets1 Surplus stable funding comfortably exceeds Other projected requirements under stress scenario liabilities Cash at We continue to attract
Slide 6: Our liquidity position is strong
Our liquidity position is strong We continue to have substantial excess liquidity 23% of our funded balance sheet assets We continue to be compliant with are in the form of available liquidity1 FINMA’s liquidity regime Funded balance sheet (30.9.11) FINMA’s liquidity requirements are broadly in li
Slide 7: Financial performance affected by challenging markets
Financial performance affected by challenging markets Our performance underscores the strength of our asset gathering businesses and the stability of our retail and corporate operations Group revenues Pre-tax profit1 88% 84% 81% 77% 70% 71% 73% 1.3 1.3 1.3 1.3 1.2 1.1 1.0 (CHF billion) 9.0 9.2 8.3 (
Slide 8: Key messages
Key messages Capital strength is the foundation for our success and we are targeting a common equity tier 1 ratio of 13% under Basel 3 We will implement a progressive capital return program as we successfully execute our strategy Our target return on equity is 12-17% for the Group 7
Slide 9: Risk-weighted assets—path to Basel 3
Risk-weighted assets—path to Basel 3 We will reduce Basel 3 risk-weighted assets by CHF 130 billion Basel 2.5 Basel 3 • CHF (145) billion of net IB RWA mitigation uplift uplift • CHF 15 billion RWA growth in other businesses ~7 ~400 Other2 ~50 ~340 284 ~80 ~290 Credit ~270 (17) ~70 valuation 77 ad
Slide 10: Basel 3 risk-weighted assets—reduction plan
Basel 3 risk-weighted assets1—reduction plan RWA reductions 2012 2013 2014 2015 2016 IB targeted completion ~45% ~80% 100% Group targeted completion ~40% ~70% 100% (incl. StabFund) (CHF billion) ~35 Business realignment ~30 CVA2 mitigation / optimization Core Investment ~5 Securitization Bank ~0-10
Slide 11: We are targeting a common equity tier 1 (CET1) ratio of 13%
We are targeting a common equity tier 1 (CET1) ratio of 13% Basel 3 capital ratios - illustrative example1 Target capital ratios (see assumption overview slide in the appendix) Phased-in scenario 2019 rules fully applied Loss-absorbing capital Common equity 18.7%3 19% 1 Goodwill / intangible assets2
Slide 12: Loss-absorbing capital
Loss-absorbing capital A non-dilutive structure is our preferred form Swiss Target capital Possible loss-absorbing capital structures regulation structure include: (1.1.19) Contingent convertible debt (CoCos) Write-down bonds with warrants attached absorbing capital Additional loss- 6% Low-trigg
Slide 13: Deferred tax assets on net operating losses
Deferred tax assets on net operating losses The potential to recognize additional deferred tax assets remains significant as of 30.9.11 Unrecognized potential DTAs on NOLs1,2 Recognized DTAs on NOLs1 18.1 15.5 (CHF billion) 8.2 3.1 4.7 0.3 2.3 0.4 US Switzerland UK RoW Total Unrecognized potential
Slide 14: Key messages
Key messages Capital strength is the foundation for our success and we are targeting a common equity tier 1 ratio of 13% under Basel 3 We will implement a progressive capital return program as we successfully execute our strategy Our target return on equity is 12-17% for the Group 13
Slide 15: Our equity allocation framework
Our equity allocation framework Attributed equity (CHF billion) RWAs Assets RBC1 30.9.112 Weights 50% 25% 25% 5 2.5 8 (“Swiss finish”, DTAs on net operating losses, WM 5 32 4 Capitalize with 3.5% Basel 3 Capitalize with 10% Basel 3 Goodwill / intangible assets Management adjustments WMA Internal mea
Slide 16: Annual target performance ranges
Annual target performance ranges1 Ranges of sustainable performance in our businesses NNM growth rate 3-5% Wealth Gross margin 95-105 bps Management Cost / income ratio 60-70% NNM growth rate 2-4% Wealth Management Gross margin 75-85 bps Americas Cost / income ratio 80-90% Group Net new business vol
Slide 17: Key messages
Key messages Capital strength is the foundation for our success and we are targeting a common equity tier 1 ratio of 13% under Basel 3 We will implement a progressive capital return program as we successfully execute our strategy Our target return on equity is 12-17% for the Group 16
Slide 18: Appendix
Appendix 3 UBS
Slide 19: Basel 3 ratios: capital assumptions for illustrative example
Basel 3 ratios: capital assumptions for illustrative example 30.9.11 31.12.12 31.12.13 (CHF billion) Net profit1: CHF 1.2 billion for Applying all relevant capital 4Q11; CHF 4.9 billion for FY12 deductions Net profit1: CHF 4.9 billion CET1 capital Dividends2: CHF 0.4 billion for Includes r
Slide 20: Exposures to selected European countries not rated AAA / Aaa
Exposures to selected European countries not rated AAA / Aaa1 The majority of our net exposures relates to traded products and tradable assets 30.9.11 Sovereigns2 Banks Other Total (CHF million) Gross Net3 Gross Net3 Gross Net3 Gross Net3 Italy 4,087 826 687 678 1,756 1,299 6,531 2,802 Belgium 404 3