Ubs Group Ag · SIX:UBSG
Ubs — Q3 2004 Earnings Presentation
33 slides from Ubs's earnings presentation, Nov 2, 2004
Slide 1: Third Quarter Results 2004
ab Third Quarter Results 2004 Zurich, 2nd November 2004 Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements This communication contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, such as the European wealth management business, and other statements r
Slide 3: A solid quarter...
A solid quarter... EPS growth of 7% year-on-year 27% RoE year-to-date CHF 20.5 bn net new money YTD 2004 net profit 94% of full year 2003 ab 2
Slide 4: A more challenging market environment
A more challenging market environment Market volumes 3Q04 vs 2Q04 US Investor Optimism SMI FTSE S&P NASDAQ 0% 140 120 -2% -1.6% 100 -2.2% -4% 80 -6% 60 -6.6% 40 -8% 20 -10% 0 Jan 03 Jan 02 Apr 02 Oct 02 Apr 03 Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jul 02 -12% -14% -12.5% Volatility US Treasuries
Slide 5: Net profit, quarterly
Net profit, quarterly Adjusted for significant financial events CHF m 3,000 2,648 2,423 2,500 2,200 2,199 2,033 2,033 1,923 1,974 2,000 1,808 1,881 1,773 1,685 1,654 1,574 1,535 1,451 1,500 1,381 1,251 1,243 1,166 1,209 1,075 1,000 500 0 Avg Avg Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 1999 2000 2
Slide 6: Quarter-on-quarter revenue development
Quarter-on-quarter revenue development CHF m 10,000 -61 -3 -216 9,000 -416 -159 -8 -48 -117 9,484 8,000 8,456 7,000 2Q04 Wealth and BBS Equities FIRC IBD Private Other2 Credit 3Q04 asset mgmt Equity businesses1 1 Includes Wealth Management, Global Asset Management, Wealth Management USA 2 Corporate
Slide 7: Shareholder returns
Shareholder returns ROE1 Basic EPS2 CHF 35% 3.0 7% y-on-y increase 30% 27% 2.5 25% 2.0 1.9 20% 1.5 15% 1.0 10% 5% 0.5 0% 0 Avg 99 Avg 01 Avg 01 Avg 02 3M03 9M03 12M03 6M04 9M04 Avg 00 Avg 02 Avg 99 Avg 00 6M03 3M04 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 1 Year to date annualized net profit less the amor
Slide 8: Continued cost control
Continued cost control Cost/Income1 90% 80% 3Q03 75% 80% 3Q04 72% 70% 70% 65% 60% 60% 50% WM BBS Global IB WM- PB & UBS Avg 99 Avg 00 Avg 02 Avg 01 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 AM US2 GAM 1 Operating expenses less the amortization of goodwill and other intangible assets and significant financi
Slide 9: Performance against targets
Performance against targets Wealth management units - net new money1 CHF bn CHF 60 bn in last 4 quarters 20 16.7 15 11.4 10 5 5.3 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 WM-US WM 1 Excludes interest and dividend income ab P&L Invested Assets Asset Quality Capital 8
Slide 10: Invested assets
Invested assets Quarterly trend CHF bn 2,300 7.7 1.8 20.5 2,200 2231 2261 2,100 2,000 2Q04 Net new money Performance Currency 3Q04 Market performance - 3Q04 5% 3% 2% 2% 0% 0% -1% -5% -3% -3% -10% -7% DJIA FTSE SMI DJ Euro MSCI NASDAQ EUR/CHF USD/CHF Stoxx World Bond Index ab P&L Invested Assets Asse
Slide 11: Revenue trends
Revenue trends Net fee & commission income Net income from interest margin products CHF m CHF m 6,000 1,500 5,000 4,533 1,400 4,000 1,278 3,000 1,300 2,000 1,200 1,000 0 1,100 Avg 99 Avg 01 Avg 00 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Avg 99 Avg 00 Avg 02 Avg 01 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q0
Slide 12: UBS revenue sourced from Asia Pacific
UBS revenue sourced from Asia Pacific Revenue increase YTD Sept 04 vs YTD Sept 031 80% 77% 70% 60% 57% 49% 49% 50% 43% 40% 30% 25% 24% 20% 10% 0% UBS Bank Australia/ Investment Global Asset Management Management Asia (ex Japan) Wealth Japan New Zealand Notes: 1 Based on internal management accountin
Slide 13: Trends in fee income
Trends in fee income Investment funds fees Portfolio and other management and advisory fees CHF m CHF m 1,200 1,141 1,200 1,163 1,000 1,000 800 800 600 600 400 400 200 200 Avg 99 Avg 00 3Q03 3Q04 Avg 02 4Q03 1Q04 2Q04 Avg 01 Avg 99 Avg 01 Avg 02 1Q03 2Q03 4Q03 1Q04 2Q04 Avg 00 1Q03 2Q03 3Q03 3Q04 ab
Slide 14: Cost trends
Cost trends CHF m 10,000 9,000 1% decrease y-o-y 8,000 7,000 6,265 6,000 5,000 4,000 3,000 2,000 1,000 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Personnel costs Non personnel costs ab P&L Invested Assets Asset Quality Capital 13
Slide 15: Actual credit loss expense
Actual credit loss expense WM&BB Investment Bank CHF m CHF m 200 200 150 150 100 100 50 50 3Q01 2Q03 3Q03 2Q04 3Q04 2Q02 3Q02 4Q02 3Q03 4Q03 1Q04 2Q04 3Q04 0 0 1Q01 2Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 4Q03 1Q04 1Q01 2Q01 3Q01 4Q01 1Q02 1Q03 2Q03 -17 -50 -39 -50 -100 -100 ab P&L Invested Assets Asset
Slide 16: Recovery portfolio
Recovery portfolio WM&BB Investment Bank CHF bn CHF bn 30 28.7 5 25 4.1 4 20 -83% 3 15 -85% 2 10 4.8 1 5 0.6 0 0 1997 1998 1999 2000 2001 2002 2003 Q304 2000 2001 2002 2003 Q304 ab P&L Invested Assets Asset Quality Capital 15
Slide 17: Risk weighted assets
Risk weighted assets CHF bn 300 14.0% 290 13.5% 280 13.0% 273 270 12.5% 260 12.0% 11.5 250 11.5% 240 11.0% 230 10.5% 220 10.0% 210 9.5% 200 9.0% Avg99 Avg 00 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Risk weighted assets Tier 1 capital ratio ab P&L Invested Assets Asset Quality C
Slide 18: Outlook
Outlook Net profit CHF m 10,000 8,799 9,000 94% of 2003 8,000 net profit 7,180 7,000 6,728 6,296 6,000 5,524 5,005 5,000 4,000 3,000 2,000 1,000 0 1999 2000 2001 2002 2003 2004 YTD ab P&L Invested Assets Asset Quality Capital 17
Slide 19: Business unit results
Business unit results
Slide 20: Reporting enhancements and changes
Reporting enhancements and changes Implemented in third quarter 2004 Full consolidation of Motor-Columbus Enhancement to VaR reporting To be implemented in first quarter 2005 Accounting for stock and option awards Change in accounting treatment of goodwill ab 19
Slide 21: Strong profitability
Strong profitability CHF m 1,000 70% 875 800 65% 600 60% 400 54.3 55% 200 50% 0 45% Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Pre-tax profit Cost/Income ratio ab WM BBS Global AM IB WM- US 20
Slide 22: Continued strong, stable gross margin
Continued strong, stable gross margin bps 120 101 100 31 27 33 29 25 26 26 27 26 26 27 30 80 60 40 76 77 76 70 70 72 71 71 71 71 72 70 20 0 Avg 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 01 Recurring fee margin Non-recurring fee margin ab WM BBS Global AM IB WM- US 21
Slide 23: Net new money
Net new money CHF bn CHF 42 bn in last 4 quarters 18 16 14 11.4 12 10 8 6 4 2 0 -2 Avg 01 1Q021 2Q021 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 WM - Swiss Clients WM - International Clients Notes: 1 Includes outflows of CHF4.5 bn in 1Q02 and CHF 3.8bn in 2Q02 due to Italian Tax Amnesty ab WM BBS
Slide 24: Wealth Management invested assets
Wealth Management invested assets CHF bn 900 862 850 800 CAGR 4.4% CAGR 1.4% 772 750 733 700 650 600 2Q01 1Q03 4Q03 1Q01 3Q01 4Q01 4Q00 1Q02 2Q02 3Q02 4Q02 2Q03 3Q03 1Q04 2Q04 3Q04 Invested assets Invested assets at constant FX rates ab WM BBS Global AM IB WM- US 23
Slide 25: Progress in European domestic business
Progress in European domestic business NNM, Invested assets Revenues CHF bn CHF bn CHF m 5 69 70 140 60 123 4 120 3.2 50 100 3 40 80 2 30 60 20 40 1 10 20 0 0 0 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 Net new money Invested assets Relative performance year-on-year 66% 60% 57% 40%
Slide 26: Business Banking profitability
Business Banking profitability CHF m 700 600 517 500 400 300 200 100 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 ab WM BBS Global AM IB WM- US 25
Slide 27: Global Asset Management profitability
Global Asset Management profitability CHF m CHF m 200 600 167 500 491 150 400 100 300 200 50 100 0 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Performance before tax and GW amortization (LHS) Restructuring provisions Operating income (RHS) ab WM BBS Global AM IB WM- US 26
Slide 28: Net new money
Net new money Institutional Wholesale intermediary CHF bn bps CHF bn bps 15 40 15 40 37 35 35 10 10 30 30 30 5 5 25 25 0 20 0 20 15 15 -5 -5 10 10 -10 -10 5 5 -15 0 -15 0 Avg 01Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Avg 01Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Money market Money market Non-mon
Slide 29: Investment Bank operating income
Investment Bank operating income Investment Bank Equities CHF m CHF m 6,000 2,000 1,800 5,000 1,600 4,000 1,400 1,185 3,163 1,200 3,000 1,000 800 2,000 600 1,000 400 200 0 0 Avg 01 1Q02 1Q03 2Q03 1Q04 2Q04 2Q02 3Q02 4Q02 3Q03 4Q03 3Q04 2Q02 4Q02 2Q03 4Q03 Avg 01 3Q02 1Q03 3Q03 1Q04 2Q04 3Q04 1Q02 FI
Slide 30: Profitability drivers
Profitability drivers Year-on-year change in performance1 CHF m 1,200 1,000 2 216 800 -82 102 4 -94 -27 -10 600 -278 954 400 787 200 0 3Q03 IB revenue Equity FIRC Private Credit Loss Personnel G&A Services Depreciation 3Q04 revenue revenue Equity to/from other business units 1 Business unit performa
Slide 31: Fixed Income, Rates and Currencies
Fixed Income, Rates and Currencies 3Q04 revenue 3Q04 vs avg quarter 1H04 CHF m PF & CRE Rates 100 22% 24% 13 0 -25 -100 -200 -261 -300 FXCCT 30% Fixed Income -400 24% -449 -500 Rates FI FXCCT PF&CRE ab WM BBS Global AM IB WM- USA 30
Slide 32: Business momentum since acquisition
Business momentum since acquisition Profitability1 Net new money CHF m CHF bn USD m 95% 10 250 150 90% 125 8 200 100 85% 150 6 5.3 75 80% 100 4 50 50 75% 25 2 0 70% 3Q04 Avg 01 3Q02 2Q03 3Q03 1Q04 2Q04 1Q02 2Q02 4Q02 1Q03 4Q03 0 Avg 01 4Q02 1Q03 2Q03 3Q03 1Q02 2Q02 3Q02 4Q03 1Q04 2Q04 3Q04 Profit be
Slide 33: Third Quarter Results 2004
ab Third Quarter Results 2004 Zurich, 2nd November 2004 Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer