Third Quarter Results 2002 - ubs.com · PDF fileNew brand architecture at UBS ... Financial...
Transcript of Third Quarter Results 2002 - ubs.com · PDF fileNew brand architecture at UBS ... Financial...
abFinancial Services Group
Third Quarter Results 2002
Zurich, 12th November 2002Peter Wuffli, PresidentMark Branson, Chief Communication Officer
abFinancial Services Group
Caution regarding forward-looking statementsThis 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 new European wealth management strategy, expansion ofour corporate finance presence in the US and worldwide, the development of UBS Warburg'snew energy trading operations, and other statements relating to our future businessdevelopment and economic performance.
While these forward-looking statements represent our judgments and future expectationsconcerning the development of our business, a number of risks, uncertainties and otherimportant factors could cause actual developments and results to differ materially from ourexpectations.
These factors include, but are not limited to, (1) general market, macro-economic,governmental and regulatory trends, (2) movements in local and international securitiesmarkets, currency exchange rates and interest rates, (3) competitive pressures, (4) technologicaldevelopments, (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 groupstructure in 2001 and 2002 and (8) other key factors that we have indicated could adverselyaffect our business and financial performance which are contained in other parts of thisdocument 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 indocuments furnished by UBS and filings made by UBS with the SEC, including UBS’s AnnualReport on Form 20-F for the year ended 31 December 2001. UBS is not under any obligation to(and expressly disclaims any such obligations to) update or alter its forward-looking statementswhether as a result of new information, future events, or otherwise.
abFinancial Services Group
New brand architecture at UBS
…supported by client segment descriptors
A single "masterbrand”...
abFinancial Services Group
Our brands don’t reflect our successOur business momentum is ahead of our brand momentum…
Business strength Familiarity (out of 10)
the world's largest private bank
for investment banking marketshare growth in the US
globally for secondary equitymarket share
largest European asset manager
largest private client firmin the US
among non-US wealthyindividuals
among US corporate clients
among institutions
among European assetmanagement buyers
among US wealthmanagement clients
4th
9th
7th
7th
3rd3rd
2nd
2nd
1st
1st
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Familiarity
Reflects integratedbusiness model
Focused, co-ordinatedmarketing is much
more effective
Supports sharedcorporate culture
Quantitative market research shows that our clients' preferencesare similar across segments and regions
1,900 High net worth individuals1,200 Corporate and institutional clients
300 Asset management buyers100 Swiss retail clients300 Top UBS client advisors
14 Countries
abFinancial Services Group
Financial implications
Value of PaineWebber brand is preserved through transfer of brand equity toUBS over the last two years, although this cannot be reflected in the accounts
20 year amortization brought forward
2015
2010
2005
2020
2000
20
02
Acq
uir
ed in
tan
gib
le a
sset
USD
699
m n
et w
rite
do
wn
US D
773
mn
eta t
acq
uis
i tio
n
Group results
abFinancial Services Group
abFinancial Services Group
InvestedAssets
P&LAsset
QualityCapital
Adjusted for significant financial events
Net profit after tax (adj) Net profit after tax (adj), before goodwill
1166
2033
1579
1385
903
11061238
1331
942
1251
2200
1907
1726
1227
1436
15741633
1247
0
500
1000
1500
2000
2500
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CH
F m
Net profit
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Operating business unit performance1
Note:1 Adjusted for SFE's and excluding the amortization of goodwill and other intangible assets2 Before acquisition costs
3Q01 2Q02 3Q02
= year-on-year change
UBS PW2
+27%
-16%
-34%
-5%
-267%
39%
-500
0
500
1,000
1,500
BBSPB UBSGlobal AM
CIC
UBS Cap
InvestedAssets
P&LAsset
QualityCapital
abFinancial Services Group
Performance against targets
Cost / Income 1 Private client net new money 3,4,5
ROE 1,2 Basic EPS 1
1 Excludes the amortization of goodwill and other intangible assets and adjusted for significant financial events2 Year to date, annualized3 Private Banking and UBS PaineWebber4 Excludes interest and dividend income5 Private Bankin g net new money is calculated based on the new structure for UBS Wealth Management & Business Banking effective 1 July 2002.
0%
20%
40%
60%
80%
1999 2000 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
0%
5%
10%
15%
20%
25%
1999 2000 3M01 6M01 9M0112M013M02 6M02 9M020.0
0.5
1.0
1.5
2.0
99Avg 00Avg 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
(CH
F)
0
5
10
15
20
99Avg 00Avg 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02(C
HF
bn
)
InvestedAssets
P&LAsset
QualityCapital
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Invested assets3Q02 vs. 2Q02
UBS WM&BB UBS Global AM UBS W UBS PW
(CHFbn) PB BBS Inst. Wholesale Total
Total opening 726 211 309 303 3 646 2,198
Net new money 9.3 4.3 (3.2) 1.3 0.1 3.4 15.2
Performance,currency & transfers
(34) (13) (27) (16) (52) (143)
Closing 701 202 279 288 3 597 2,070
3Q02 Market performance
-25%
-20%
-15%
-10%
-5%
0%
5%
DJI
A
FT-S
E 10
0
SMI
DJ
Euro
Sto
xx
MSC
I Wo
rld
Bo
nd
Ind
ex
NA
SDA
Q
CH
F/EU
R
CH
F/U
SD
InvestedAssets
P&LAsset
QualityCapital
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Revenue trends
Net fee & commission incomeNet income from trading activities
Credit lossNet income from interest margin activitiesOther
-2,000
0
2,000
4,000
6,000
8,000
10,000
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CH
F m
InvestedAssets
P&LAsset
QualityCapital
abFinancial Services Group
Market sensitivity1 of asset baseRebased: 1Q00 = 100%
Notes: 1) Current quarter's income vs previous quarter's market level
3Q022Q021Q024Q013Q012Q011Q014Q003Q002Q001Q00
0%
20%
40%
60%
80%
100%
120%
UBS-PW Asset based fees PB Asset based fees UBS Global AM income.
S&P500 indexDJ Stoxx Europe index
InvestedAssets
P&LAsset
QualityCapital
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InvestedAssets
P&LAsset
QualityCapital
Group cost trends
0
2
4
6
8
10
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CH
F b
n
Amortization of Goodwill& other intangible assets
DepreciationGeneral & administrativePersonnel
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InvestedAssets
P&LAsset
QualityCapital
Operating business unit cost trends
3Q01 2Q02 3Q02
= year-on-year change
+3%
-15%
-10%
-13%
-15%
CH
F b
n
-3%
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
PB BBS UBS Global
AM
CIC UBS Cap UBS PW
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InvestedAssets
P&LAsset
QualityCapital
Actual credit loss expenseBusiness Banking Switzerland
Actual Credit Loss
Actuarial Expected Credit Loss
Corporate & Institutional Clients
Actual Credit Loss
Actuarial Expected Credit Loss
(50)
0
50
100
150
200
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CHF m
(50)
0
50
100
150
200
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CHF m
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InvestedAssets
P&LAsset
QualityCapital
Group loan portfolio
UBS WM&BB C&IC UBS PaineWebber NPL%
0
50
100
150
200
250
300
350
400
Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun SepDec Mar Jun Sep
CH
F b
n
0
1
2
3
4
5
6
%
1998 1999 2000 2001 2002
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Share buyback & Tier 1 ratio
InvestedAssets
P&LAsset
QualityCapital
2000 Program1 2001 Program1 2002 Program1
Tier 1 ratio
Note: 1) Share repurchase programs run for 12 months from early March.
0
5
10
15
20
25
30
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
Shar
es (
m)
0%
2%
4%
6%
8%
10%
12%
14%
Tier
1 r
atio
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Cumulative share buyback effect on EPS
InvestedAssets
P&LAsset
QualityCapital
0%
2%
4%
6%
8%
10%
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
%o
f EP
S d
ue
to c
um
ula
tive
eff
ect
of
shar
e b
uyb
acks
Business unit results
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abFinancial Services Group
Balanced business mix
Other 2Investment BankingFixed Income & FXDomestic banking
EquitiesWealth & Asset Mgmt
Revenues1 by operating business area (in CHF m)
Notes:1 Before credit loss expense2 Corporate Center, UBS Capital & CIC Non-core Business
3Q01 2Q02 3Q02
PBBBSGlobal
AMUBS-W UBS-PW
16%
12%
21%
7% 1%
43%
15%
16%
20%
5% 1%
43%
8,875 8,0959,045
18%
18%
17%
5%
43%
abFinancial Services Group
Continued strong profitability
Net profit before tax Total operating expenses
0
100
200
300
400
500
Net
pro
fit
bef
ore
tax
(C
HF
m)
Avg99 Avg00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q020
200
400
600
800
1,000
1,200
Op
erat
ing
exp
ense
s (C
HF
m)
PBBBSGlobal
AMUBS-W UBS-PW
abFinancial Services Group
Continued strong, stable gross margin
Transactional fees Recurring fees Other
bp
s
0
20
40
60
80
100
120
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
PBBBSGlobal
AMUBS-W UBS-PW
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Net new money
-4
-2
0
2
4
6
8
10
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
Private Banking - Swiss Clients European Wealth Management Initiative
Private Banking - International Clients (excluding EWMI)
Net outflow from Italian Tax Amnesty
CH
F b
n
PBBBSGlobal
AMUBS-W UBS-PW
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Net new money
Wholesale (ex-money market) Money market WholesaleInstitutional
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02
CH
F b
n
0
6
2
4
-4
-2
3Q02
PBBBSGlobal
AMUBS-W UBS-PW
abFinancial Services Group
CIC: continued cost controlOperating expenses
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Avg99
Avg00
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CH
F m
30%
40%
50%
60%
70%
80%
90%
100%
c/i r
atio
Total operating expenses
Cost/income ratio (excl. goodwill)
PBBBSGlobal
AMUBS-W UBS-PW
abFinancial Services Group
Improving market share in the AmericasSector View
Bubble size = market size
Consumer
7.0%5.6%
2.9%
Transport
1.7%
1.4%1.6%
Industrials
2.5%
3.1%3.5%
UBS-W market share
2000 2001 9M02
Media
0.1%1.0%
1.4%
Energy
3.2%3.4%
3.5%
Telecom
1.8%
4.1%3.4%
RealEstate
1.7%
4.5%3.2%
Healthcare
6.2%9.3%
10.6%
Financials
3.7%2.2%
1.2%
Technology
0.9%1.4%
0.5%
PBBBSGlobal
AMUBS-W UBS-PW
abFinancial Services Group
UBS Capital - relative value creation
-15%
-10%
-5%
0%
5%
10%
15%
1H99 2H99 1H00 2H00
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
PBBBSGlobal
AMUBS-W UBS-PW
abFinancial Services Group
Improving profitability
Note: 1) Before acquisition costs
Performance before tax1
Cost/Income ratio1 (%)CHF USD
mill
ion
s
0
50
100
150
200
250
50
100
150
4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q0270%
75%
80%
85%
90%
95%
CHF USD
PBBBSGlobal
AMUBS-W UBS-PW
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Net new money
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Avg 99 Avg 00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
CH
F b
n
PBBBSGlobal
AMUBS-W UBS-PW
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Market environmentInvestor Optimism
Corporate fee pools
Source: Freeman & Co analysis, Thomson Financial Securities Data
Source: UBS Index of Investor Optimism, www.ubs.com/investoroptimism
Source: S&P Special Report "Ratings Performance 2001" February 2002Note: 1) Projected 2002
Global bankruptcies
US D
bn
M&A Debt Financing Equity Financing
0
10
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
Equity market levels
-50
0
50
100
150
200
2000 2001 2002
US
EU-5
Total debt defaulting Default ratio (%)
50%
60%
70%
80%
90%
100%
110%
120%
1Q99 3Q99 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
SWX NYSE LSE
0
100
200
200210%
1%
2%
3%
4%
5%
2000199819961994199219901988198619841982
CH
F b
n
50
150
15
5
abFinancial Services Group
Third Quarter Results 2002
Zurich, 12th November 2002Peter Wuffli, PresidentMark Branson, Chief Communication Officer