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


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.


New brand architecture at UBS

…supported by client segment descriptors

A single "masterbrand”...


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


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


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



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


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


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


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


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


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


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


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


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


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


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


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



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%


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


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


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


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


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


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


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


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


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


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


Third Quarter Results 2002

Zurich, 12th November 2002Peter Wuffli, PresidentMark Branson, Chief Communication Officer

third quarter results 2002 - ubs.com · pdf filenew brand architecture at ubs ... financial...

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