UBS Investor Day 2004 UBS Investment Bank: Delivering Success. John Costas, Chairman and CEO

Transcription

1 UBS Investor Day 2004 UBS Investment Bank: Delivering Success John Costas, Chairman and CEO

2 1 UBS Investment Bank success to date SECTION 1

3 Our winning strategy UBS Investment Bank is fully committed to pursuing our strategy To be the global leader and the most profitable service provider for corporate clients, institutional investors and intermediaries and the leading diversified risk manager 2

4 Leveraging group capabilities We are delivering value through the business strength of each of the business groups and our integrated model Investment Bank Benefits of integrated model - management effectiveness - client marketing coordination - risk culture - product development - shared services - shared expertise - one firm Wealth Management Asset Management Swiss Banking 3

5 Client Focus to fully satisfy the increasing convergence of our clients needs and 4 Corporate clients quality speed Institutional clients Client specific solutions Access to capital Electronic connectivity Full range of services HNW private clients execution Intermediaries of

6 5 Building on competitive strengths SECTION 2

7 Our execution advantages Our success is not driven by any one product or region, but is based on the ability to deliver a full-service capability globally Techno -logy Our Franchises Quality Diversified Leading Edge Technology Global Institutional and Corporate Equities Investment Banking Fixed Income, Franchises Rates and Currencies Industry Leading Management Best-in-Class Management 6

8 quality talent globally Our 16,000 employees are aligned with clients' needs around the world Techno -logy Our Franchises Canada US Mexico Chile Global Trading Locations Scandinavia Netherlands UK France Portugal Spain Brazil Argentina Germany Switzerland Italy Israel South Africa Russia India China Korea Japan Taiwan Hong Kong Philippines Indonesia Singapore Australia New Zealand Local Trading Locations Sales / Sales Trading / Research 7

9 Strategic hires over the past 3 years We have made a significant number of key hires across sectors, regions and product areas since 2001, which has filled out our capabilities Techno -logy Our Franchises Global heads within Investment Banking Europe Americas Joint Head IBD Ken Moelis TMT Jeff Sine ECMG Thomas Fox M&A Americas Cary Kochman Real Estate Jackson Hsieh Chemicals David Bradley Energy Stephen Trauber FIG Michael Martin Banks - Oliver Sarkozy Insurance A. Przygoda-Aleksander EMEA Joint Head Jeff McDermott Equity Finance Alex Ehrlich France Pierre Paris Italy Alessandro Foti Spain Francisco Sanchez-Asiain Financial Sponsors Steve Conway FIG - William Waldegrave M&A James Neissa Switzerland Martin Kesselring APAC Taiwan Felice Chen Equity Finance Masataka Iwata 8

10 Revenue by product The UBS-IB portfolio is one of the most balanced of our peers Revenue splits 1Q04 (USDm) 4,500 Techno -logy Our Franchises Equities* FI* IBD* 3,000 1,500 0 GS Citi - IB UBS IB DB MS JPM CSFB MER LEH Source: Quarterly reports, UBS IB Analysis, PSR Note: * Equities and FI include institutional revenues only. IBD includes gross corporate revenues only 9

11 Balanced and diversified business mix We have shown that we can build significant capabilities in all businesses to capture changing market opportunities Techno -logy Our Franchises IB FIRC IB FIRC IB Equities Equities FIRC IB Equities FIRC Equities IB FIRC Equities IB FIRC Equities Source: UBS IB disclosed financials (excluding Private Equity), 1999 (full year), 2003 (full year) Note: Bubble size shows relative size of revenue in USD. 10

12 Superior credit risk results Excellence in risk management has resulted in superior and consistent credit risk results Actual credit loss expense (USD m) 2,500 Techno -logy Our Franchises 1, DB CSFB Citi JPM Chase UBS IB (500) Notes: Annual Reports 2003: Citi (Net Corporate credit losses), DB (data for the whole group), CS CSFB segment data for net write-offs, JPMorgan Chase Commercial segment net charge-offs. 11

13 Dynamic capital allocation We focus on creating a diverse portfolio of risk/return businesses that does not exclude opportunistic risk-taking or strategic investment Techno -logy Our Franchises 25% 15% PF Equity Prop CRE Core client business Customised research Relationship lending Return Strategic importance 12

14 Commitment to relationship lending We have significantly reduced our lending exposure, but maintain a commitment to core clients (USD bn) 40 Techno -logy Our Franchises Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Total Loan Book (Less Underwriting) Core Loan Book We lead with our advisory and execution skills and not with our balance sheet 13

15 Best-in-class resource management UBS Investment Bank has one of the most consistent cost / income ratios among peers Cost / income Techno -logy Our Franchises 170% 150% 130% 110% 90% 70% 50% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Citi (CIB) CSFB DB GS JPMC LEH ML (GMI) MS (IS) UBS IB* Source: Quarterly reports, UBS IB Analysis. Note: *UBS IB ratio is based on Total Operating Income before expected credit loss. UBS IB figures exclude Private Equity. 14

16 Cost efficiency - operations We have maintained stable costs whilst our processed volumes continued to rise, reaching 620,000 per day Quarterly volumes (m) Securities Other Techno -logy Our Franchises Quarterly fully loaded costs (USD m)

17 UBS-IB leading edge technology Our e-platform has delivered greater efficiency and increased client connectivity for our FX business and is transforming our securities businesses Techno -logy Our Franchises Built market leading FX STP and risk mgt capability Re-engineered FX F2B process globally Building cash equity electronic capability 65% 65% 50% 40% 40% 40% 30% 15% 0% Jul-00 Feb-01 Sep-01 Dec-01 15% 0% Jan-02 Apr-02 Aug-02 Dec-02 20% 10% Jan-03 May-03 Sep-03 Mar-04 Source: UBS IB Analysis e-ratio UBS-IB 16

18 Our franchises Quality Diversified Leading Edge Technology Global Institutional and Corporate Franchises Industry Leading Management Best-in-Class Management 17

19 Our franchises While our corporate franchise is growing, the bulk of our business is still generated by our institutional franchise 2003 revenues (USD) Institutional franchise 80% Equities (30%) Corporate franchise 20% FIRC (50%) Source: UBS internal analysis, Corporate franchise includes 100% primary share 18

20 Equity business strategic focus Equity related businesses are strong and gaining momentum UBS IB positioning Market trend Underwriting volume down 4% (May 04 Thomson Fin) 4 Global Equity Underwriting (Thomson Financial) Improving trading volumes and increase in program trading #1 Global Secondary Cash Equities (Leading Industry Survey) #1 in Global Equity Research (Institutional Investor) Increase in Hedge fund business ABN AMRO Prime Brokerage Acquisition Focus Client Profitability Technology enabled Equity Finance 19

21 IBD strategic focus IBD environment is positioned for increased activity in 2004 UBS IB positioning Market trend US market remains dominant Largest US market share growth (Freeman) Overall environment is favorable 5 Global fee pool position (Freeman) Completed M&A volumes are down Largest bank outside the US (5.1% m.share) (Freeman) Focus US Market Leverage Global Platform Selective Emerging Markets 20

22 FIRC Strategic Focus Debt trading and underwriting still offer real opportunities UBS IB positioning Market trend Credit spreads are widening #1 FX Bank with 12.4% market share (Euromoney) Moderate increases in interest rates 3 US FI Sales and Trading (Institutional Investor) Favorable monetary policy #1 Global EM and Asian Bond House (IFR) Focus 3 in Derivatives 3 in Europe Greater Presence in EM 21

23 22 A winning growth strategy SECTION 3

24 Delivering success via organic growth We will continue to grow our business and business mix, as markets evolve and opportunities arise Liability Management Leveraged Finance High Yield Whole Loans DCMG Banking Team 1999 US Insurance Team Principal Finance European Equities US Equities Banking Products IR Derivatives ETD Energy Team Mortgage- Backed Securities 2000 Media Team CCT Equity Derivatives Asian Equities CBOs Restructuring Team 2001 ETD Commodities Credit Derivatives Gov t Bonds FX Investment Grade Emerging Markets ECMG Asset based lending Healthcare Team 2002 Prime Brokerage CDOs M&A Prime Brokerage (ABN) Commercial Real Estate Trading Energy Trading

25 Our winning culture Success is built around strong shared values and a culture that actively reinforces them Teamwork Innovation Drive We succeed if our clients succeed Leadership Diversity Integrity and Trust 24