Second Quarter Results Zurich, 13th August 2003 Peter Wuffli, President Mark Branson, Chief Communication Officer

Transcription

1 Second Quarter Results 23 Zurich, 13th August 23 Peter Wuffli, President Mark Branson, Chief Communication Officer

2 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 implementation of the European wealth management strategy, expansion of our corporate finance presence in the US and worldwide, and other statements relating to our future business development and economic performance. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macro-economic, governmental and regulatory trends, (2) movements in local and international securities markets, currency exchange rates and interest rates, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit-worthiness of our customers, obligors and counterparties and developments in the markets in which they operate, (6) legislative developments, (7) management changes and changes to our business group structure in 21, 22 and 23 and (8) other key factors that we have indicated could adversely affect our business and financial performance which are contained in other parts of this document and in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth elsewhere in this document and in documents furnished by UBS and filings made by UBS with the SEC, including UBS s Annual Report on Form 2-F for the year ended 31 December 22. UBS is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

3 12% 11% 1% 9% 8% Strengthening markets Equity market levels Investor Optimism US EU-5 7% 6% SMI DJIA FT-SE % 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Source: UBS Index of Investor Optimism, Global fee pool USD bn Q 2Q 3Q 4Q 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Source: Freeman Global bankruptcies USD bn 18 5% % 12 3% 1 8 2% 6 4 1% 2 % Total debt defaulting ($ bn) Default ratio (%) Source: S&P research, "Global Default Rates Remain Above Average," 22 April 23 Note: 1) Annualized

4 Group results

5 Significant financial events (CHFm) Income Gain on disposal of Correspondent Services Corp. Tax effect 2Q3 161 (159) Total 2 No significant financial events in 1Q3, 2Q2 P&L Invested Assets Asset Quality Capital

6 Net profit Adjusted for significant financial events 2,5 2,2 2, 2,33 1,875 CHF m 1,5 1, 1,251 1,166 1,574 1,574 1,243 1,238 1,331 1, , ,75 1,214 1,456 1,637 5 Avg 1999 Avg 2 Avg 21 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Net profit after tax Net profit after tax, before goodwill P&L Invested Assets Asset Quality Capital

7 Improving bottom line for all business units 2Q3 performance before tax, change from 1Q3 = % of revenue gain captured in the bottom line 2,75 2,5 34% 28% 57% n/m CHF m 2,25 78% 81% 75% 2, 1,75 1Q3 WM BBS Global IB&S PE WM- USA 1 Corp. Center 2Q3 1 Before acquisition costs P&L Invested Assets Asset Quality Capital

8 Performance against targets ROE 1 Basic EPS 2 25% (CHF) 2. 2% % 1. 1% 5%.5 % M2 6M2 9M2 12M2 3M3 6M3 Avg99 Avg Avg1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 1 Year to date annualized net profit less the amortization of goodwill and other intangible assets and significant financial events (after tax)/average shareholders' equity less dividends 2 Net profit less the amortization of goodwill and other intangible assets and significant financial events (after tax)/weighted average shares outstanding P&L Invested Assets Asset Quality Capital

9 Cost control across all areas Cost / Income 1 Headcount changes, year-on-year 1% 7, 289 8% 69, 136 1, % 68, % 67, % 66, % Q2 2Q2 3Q2 4Q2 1Q3 2Q3 65, 2Q2 WM EWMI BBS Global excl. EWMI IB&S PE WM USA Corp 2Q3 Center 1 Operating expenses less the amortization of goodwill and other intangible assets and significant financial events / operating income less credit loss expense or recovery and significant financial events P&L Invested Assets Asset Quality Capital

10 Performance against targets Wealth management units net new money CHF bn Avg Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 WM-USA WM 1 Excludes interest and dividend income P&L Invested Assets Asset Quality Capital

11 Invested assets 2Q3 vs. 1Q3 WM&BB Global IB WM-USA Corp.Center (CHFbn) WM BBS Inst. Wholesale PB's & G Total Total opening Net New Money Performance & currency Total closing Market performance - 2Q3 25% 2% 15% 1% 5% DJIA FTSE 1 SMI DJ Euro Stoxx MSCI World Bond Index NASDAQ CHF/EUR % -5% CHF/USD P&L Invested Assets Asset Quality Capital

12 Revenue trends 1, 8, 6, CHF m 4, 2, Avg 99 Avg Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3-2, Credit loss Net income from interest margin activities Net fee & commission income Net income from trading activities Other P&L Invested Assets Asset Quality Capital

13 Quality of trading revenue UBS VaR, 1-day 99% (CHF m) Avg 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Frequency Daily trading revenues (CHF m) 22 average 1H3 P&L Invested Assets Asset Quality Capital

14 Cost trends 8, 6, CHF m 4, 2, Avg 99 Avg Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Personnel Depreciation General & administrative Amortization of goodwill & other intangible assets P&L Invested Assets Asset Quality Capital

15 Actual credit loss expense WM&BB Investment Bank CHF m 2 CHF m Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q Actual Credit Loss -1 Actual Credit Loss Actuarial Expected Credit Loss Actuarial Expected Credit Loss P&L Invested Assets Asset Quality Capital

16 Total payout to shareholders Payout as % market capitalization 1.% 3, % of avg. annual market cap. 8.% 6.% 4.% 2.% 25, 2, 15, 1, 5, Cumulative payout (CHF m).% Payout from share buy-back programs Payout from dividends/par value reductions Cumulative payout 2 1 Annualized & based on accrued dividends 2 Payout since 2 P&L Invested Assets Asset Quality Capital

17 Business unit results

18 Continued strong, stable gross margin bps Avg 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Recurring fees Transactional fees Disposals WM BBS Global IB WM- USA

19 Net new money CHF bn Avg Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3-4 Swiss Clients International Clients (excluding EWMI) European Wealth Management initiative Net outflow from Italian Tax Amnesty WM BBS Global IB WM- USA

20 Progress in European domestic initiative NNM, Invested assets 4 5 Revenues 7 6 NNM (CHF bn) Invested Assets (CHF bn) CHF m Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Client advisors Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Invested assets Net new money 1 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 WM BBS Global IB WM- USA

21 Continued strong profitability 7 6 1, Net profit before tax (CHF m) Operating expenses (CHF m) Avg99 Avg Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Net profit before tax Disposal impact Total operating expenses WM BBS Global IB WM- USA

22 Swiss mortgage business 8 2. Volume (CHF bn) Net inflow (CHF bn) 5. 2Q2 3Q2 4Q2 1Q3 2Q3 Individual client mortgage volume Net new mortgages WM BBS Global IB WM- USA

23 Improving profitability Performance before tax 2 6 Performance CHF mn Operating income CHF mn 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Performance before tax and goodwill amortization Operating income WM BBS Global IB WM- USA

24 Net new money Institutional Wholesale intermediary CHF bn -2 CHF bn Avg1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Money Market Non-Money Market Avg 1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Money Market Non-Money Market WM BBS Global IB WM- USA

25 Profitability drivers Year-on-year change in performance 1 1, , CHF m Q2 IB revenue EQ revenue FIRC revenue Credit Loss Personnel G&A Depreciation 2Q3 1 Business unit performance before tax and amortization of goodwill and other intangible assets Global WM BBS IB WM- USA

26 6% 5% 4% 4% 3% 2% 25% 2% 31% 28% 25% 29% 29% 27% 24% 1% 11% 9% % 45% 4% 52% 52% UBS Credit Suisse Deutsche Bank JPM Chase Citigroup Morgan Stanley Goldman Sachs Lehman Brothers FI revenues as % of group revenues 1Q3 2Q3 Global WM BBS IB WM- USA

27 Strong performance across fixed income FIRC Revenues Historic spreads CHF USD million CHF m bps Cumulative CDS revenues yr US Treasuries vs 1yr Industrials A 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Avg Avg1 Q12 Q22 CHF Q32 Q42 1Q3 2Q3 USD -1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Global WM BBS IB WM- USA

28 Private equity - value creation 8% 6% 4% 2% % -2% Avg 1H99 Avg 2H99 Avg 1H Avg 2H 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3-4% -6% -8% -1% -12% -14% Global WM BBS IB WM- USA

29 Improving profitability CHF USD % % millions % % % 4Q 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 7% Performance before tax 1 Cost/Income ratio 1 (%) CHF USD 1) Before acquisition costs Global WM BBS IB WM- USA

30 Net new money CHF bn Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Global WM BBS IB WM- USA

31 "Contact Matters" campaign Increasing brand awareness among ex-painewebber clients Familiarity with "UBS" June 23 64% 21% Feb 23 2% 28% Very familiar Somewhat familiar Image of UBS - % citing extremely favorable June 23 32% 41% Feb 23 2% 39% UBS UBS PaineWebber Global WM BBS IB WM- USA

32 Outlook - putting the worst behind us y-on-y % change NPAT 15% 125% 1% 75% 5% 25% % -25% -5% 1Q 2Q 3Q 4Q 1Q1 2Q1 3Q1 4Q1 1Q2 2Q2 3Q2 4Q2 1Q3 2Q3 Global WM BBS IB WM- USA

33 Second Quarter Results 23 Zurich, 13th August 23 Peter Wuffli, President Mark Branson, Chief Communication Officer