3. ESTUDIO DE MERCADO
3.4. Desarrollo de encuestas
3.4.7. Definición detallada del producto y servicio
Business division reporting
As of or for the year ended % change from
CHF million, except where indicated 31.12.11 31.12.10 31.12.09 31.12.10
Net interest income 729 695 800 5
Net fee and commission income 4,018 4,244 3,948 (5)
Net trading income 450 570 763 (21)
Other income 103 56 36 84
Income 5,300 5,565 5,546 (5)
Credit loss (expense) / recovery (6) (1) 3 (500)
Total operating income 5,295 5,564 5,550 (5)
Personnel expenses 3,840 4,225 4,231 (9)
Financial advisor compensation 1 1,982 2,068 1,828 (4)
Compensation commitments and advances related to recruited financial advisors 2 536 599 599 (11)
Salaries and other personnel costs 1,322 1,558 1,804 (15)
General and administrative expenses 783 1,223 1,017 (36)
Services (to) / from other business divisions (9) (6) 4 (50)
Depreciation of property and equipment 99 198 170 (50)
Impairment of goodwill 0 0 34
Amortization of intangible assets 48 55 62 (13)
Total operating expenses 4,760 3 5,694 5,518 (16)
Business division performance before tax 534 (130) 32
Key performance indicators 4
Pre-tax profit growth (%) 5 N/A N/A N/A
Cost / income ratio (%) 89.8 102.3 99.5
Net new money (CHF billion) 6 12.1 (6.1) (11.6)
Net new money including interest and dividend income (CHF billion) 7 30.4 13.0 8.7
Gross margin on invested assets (bps) 79 80 81 (1)
Additional information
Average attributed equity (CHF billion) 8 8.0 8.0 8.8 0
Return on attributed equity (RoaE) (%) 6.7 (1.6) 0.4
BIS risk-weighted assets, Basel II (CHF billion) 9 24.4 23.8 22.8 3
BIS risk-weighted assets, Basel 2.5 (CHF billion) 9 26.1 N/A N/A
Return on risk-weighted assets, Basel II, gross (%) 9 22.3 23.8 23.5
Goodwill and intangible assets (CHF billion) 3.7 3.7 4.2 0
Invested assets (CHF billion) 709 689 690 3
Client assets (CHF billion) 746 738 737 1
Loans, gross (CHF billion) 27.9 22.5 21.5 24
Due to customers (CHF billion) 38.9 35.8 39.4 9
of which: deposit accounts (CHF billion) 28.5 26.0 28.2 10
Personnel (full-time equivalents) 16,207 16,330 16,925 (1)
Financial advisors (full-time equivalents) 6,967 6,796 7,084 3
1 Financial advisor compensation consists of grid-based compensation based directly on compensable revenues generated by financial advisors and supplemental compensation calculated based on financial advisor pro- ductivity, firm tenure, assets and other variables. 2 Compensation commitments and advances related to recruited financial advisors represents costs related to compensation commitments and advances granted to financial advisors at the time of recruitment which are subject to vesting requirements. 3 Operating expenses include restructuring charges of CHF 10 million. Refer to “Note 37 Reorganizations and disposals” in the “Financial information” section of this report for more information. 4 For the definitions of our key performance indicators, refer to the “Measurement of performance” section of this report. 5 Not meaningful and not included if either the reporting period or the comparison period is a loss period. 6 Excludes interest and dividend income. 7 For purposes of comparison with a US peer. 8 Refer to the “Capital management” section of this report for more information about the equity attribution framework. 9 Capital management data as of 31 December 2011 is disclosed in accordance with the Basel 2.5 framework. Comparative data under the new framework is not available for 31 December 2010 and 31 December 2009. The comparative information under the Basel II framework is therefore provided. Refer to the “Capital management” section of this report for more information.
Wealth Management Americas
Business division reporting (continued)
As of or for the year ended % change from
CHF million, except where indicated 31.12.11 31.12.10 31.12.09 31.12.10
Business division reporting excluding PaineWebber acquisition costs 1
Business division performance before tax 620 (21) 155
Cost / income ratio (%) 88.3 100.4 97.3
Average attributed equity (CHF billion) 2 5.1 4.6 5.2 11
1 Acquisition costs represent goodwill and intangible assets funding costs and intangible asset amortization costs related to UBS’s 2000 acquisition of the PaineWebber retail brokerage business. 2 Refer to the “Capital management” section of this report for more information about the equity attribution framework.
Financial and operating performance
demutualization gain from Wealth Management Americas’ stake in the Chicago Board Options Exchange.
Operating expenses
Operating expenses decreased 16% to CHF 4,760 million from CHF 5,694, 1% in US dollar terms, due to lower non-personnel expenses. In 2011, operating expenses included CHF 10 million in
restructuring charges compared with CHF 162 million in restruc-
turing charges in 2010.
Personnel expenses were CHF 3,840 million, down 9% from CHF 4,225 million. Personnel expenses included CHF 5 million in restructuring charges compared with CHF 35 million in 2010. In US
dollar terms, personnel expenses increased 7% due to a 13% in-
crease in financial advisor compensation corresponding to higher
revenue production, and a 6% increase in expenses for compensa-
tion commitments and advances related to recruited financial advi-
sors. Salaries and other personnel costs declined 15%, but were broadly flat compared with 2010 in US dollar terms. Compensation advance balances were CHF 3,584 million as of 31 December 2011, up 15% from 31 December 2010, or 14% in US dollar terms. This increase included scheduled payments in early 2011 related to the
second tranche of the GrowthPlus program. Compensation ad-
vances continue to be expensed over the life of the employees’ agreements on a straight-line amortization basis.
Non-personnel expenses decreased 37% to CHF 920 million from CHF 1,470 million, or 26% in US dollar terms. Non-personnel-related restructuring charges were CHF 5 million compared with CHF 127 million. General and administrative costs declined 36%, or 24% in US dollar terms, due to lower litigation provisions, which decreased to CHF 70 million from CHF 320 million, as well as lower restructuring
charges related to real estate writedowns. This decline was partly off-
set by higher professional legal and consulting fees. Depreciation ex-
penses declined 50%, or 41% in US dollar terms, due to lower re-
structuring charges related to the impairment of real estate assets and lower allocations from shared services areas in the Corporate Center. Development of invested assets
Net new money
Net new money inflows were CHF 12.1 billion compared with outflows of CHF 6.1 billion in 2010. This turnaround was due to
improved net inflows from net recruiting of financial advisors, in-
cluding higher inflows from recruitment of experienced financial advisors, and lower outflows from financial advisor attrition. Net new money from financial advisors employed with UBS for more
than one year remained positive, but declined from 2010. Includ-
ing interest and dividend income, Wealth Management Americas had net new money inflows of CHF 30.4 billion in 2011 compared with CHF 13.0 billion in 2010.
2011
Results
Wealth Management Americas reported a pre-tax profit of CHF
534 million in 2011 compared with a pre-tax loss of CHF 130 mil-
lion in 2010. This improved performance resulted from a 12% increase in revenue in US dollar terms due to increases in fees and commissions, interest income and gains on investments in our available-for-sale portfolio. Operating expenses declined 1% in US dollar terms as a result of significantly lower litigation provision
charges and lower restructuring charges. In 2011, Wealth Man-
agement Americas incurred restructuring charges of CHF 10 mil-
lion, while 2010 included restructuring charges of CHF 162 mil-
lion. In addition, 2011 included a pre-tax gain of CHF 30 million, net of compensation charges related to a change in accounting estimates for certain mutual fund fees on an accrual basis.
Operating income
Operating income decreased 5% to CHF 5,295 million from CHF 5,564 million in 2010, but increased 12% in US dollar terms. Net fee and commission income decreased CHF 226 million to CHF 4,018 million, but increased 12% in US dollar terms. Recurring fees increased 15% in US dollar terms due to higher fees on managed accounts and mutual funds corresponding to higher invested asset levels. In addition, recurring fees included CHF 45 million related to the abovementioned change in accounting estimates for certain mutual fund fee income recognition. Transaction-based revenues declined 10%, but increased 6% in US dollar terms, due to higher income from insurance and annuities, alternative investments, and
equities products. Interest income increased 5% to CHF 729 mil-
lion, or 24% in US dollar terms, due to higher client balances in securities-based lending and mortgages, as well as from higher yields on lending products. In addition, 2011 included an upward adjustment reclassifying CHF 20 million from other comprehensive income relating to mortgage-backed securities in our available-for- sale portfolio to properly reflect estimated future cash flows under the effective interest method. This adjustment was not material to prior periods. Trading income declined 21% to CHF 450 million, or
7% in US dollar terms, due to lower taxable fixed income and mu-
nicipal trading income, partly offset by higher trading income from structured notes. Other income increased 84% to CHF 103 million
due to a CHF 81 million increase in realized gains on sales of finan-
cial investments held in UBS Bank USA’s available-for-sale portfolio, compared with CHF 4 million in the prior year. These gains resulted
from rebalancing the investment portfolio for risk adjustment pur-
poses within the parameters of our investment policy during the year. In addition, other income in 2010 included a CHF 7 million
Wealth Management Americas
Invested assets
Wealth Management Americas had CHF 709 billion in invested assets on 31 December 2011, up 3% from CHF 689 billion on
31 December 2010. In US dollar terms, invested assets in-
creased 2% due to positive net new money including interest
and dividend income, partly offset by negative market perfor-
mance. As of 31 December 2011, managed account assets were 7% higher than one year earlier at CHF 190 billion. In US
dollar terms, managed account assets increased 6% and com-
prised 27% of invested assets compared with 26% on 31 De-
cember 2010.
Gross margin on invested assets
The gross margin on invested assets was 79 basis points in 2011, down from 80 basis points in 2010. This reflected a 5% decrease
in income compared with a 3% decrease in average invested as-
sets. In US dollar terms, the gross margin on invested assets in-
creased by 2 basis points to 80 basis points in 2011, reflecting a
12% increase in income compared with a 10% increase in aver-
age invested assets. Growth in net interest income, net fee and commission income, and other income each contributed a 1 basis point increase to the gross margin, partly offset by a decline of 1 basis point attributable to lower trading income.
Financial and operating performance
Results
Wealth Management Americas reported a pre-tax loss of CHF 130 million in 2010 compared with a pre-tax profit of CHF 32 million in
2009. In 2010, Wealth Management Americas incurred restructur-
ing charges of CHF 162 million, while 2009 included restructuring charges of CHF 152 million and net goodwill impairment charges of CHF 19 million related to the sale of UBS Pactual. Excluding these items, pre-tax performance would have declined to a profit of CHF 32 million in 2010 from CHF 203 million in 2009, primarily resulting from a significant increase in litigation provisions in 2010 to CHF 320 million from CHF 54 million in 2009.
Operating income
Operating income of CHF 5,564 million was essentially flat com-
pared with CHF 5,550 million in 2009, but increased 4% in US dollar terms. Net fee and commission income increased 7%, 12%
in US dollar terms, to CHF 4,244 million due to a 15% rise in recur-
ring fees, as a result of higher fees from managed accounts and mutual funds related to higher invested assets, and a 6% increase in transaction-based revenue. Interest income declined 13% to CHF 695 million, a decrease of 10% in US dollar terms, due to lower investment portfolio interest income, partly offset by higher
income from securities-backed lending. Net trading income de-
clined 25% to CHF 570 million, 22% in US dollar terms, due to lower municipal trading income. Other income increased 56% to CHF 56 million, and included a reclassification of revenues from net trading income as well as a CHF 7 million demutualization gain from Wealth Management Americas’ stake in the Chicago Board Options Exchange.
Operating expenses
Operating expenses increased 3% to CHF 5,694 million from CHF
5,518 million. In 2010, operating expenses included CHF 162 mil-
lion in restructuring charges compared with CHF 152 million in
2009. Additionally, 2009 included CHF 34 million in goodwill im-
pairment charges related to the sale of UBS Pactual (of which CHF
15 million was charged to the Corporate Center, as this was re-
lated to foreign exchange exposures managed by Group Treasury). Personnel expenses were CHF 4,225 million in 2010, down slightly from CHF 4,231 million in the previous year. In US dollar
terms, personnel expenses increased 4%. Excluding CHF 35 mil-
lion in restructuring charges in 2010 and CHF 71 million in re-
structuring charges in 2009, personnel expenses would have in-
creased 1% from the previous year. This increase was due
primarily to higher financial advisor compensation related to high-
er revenue production and the introduction of the GrowthPlus incentive compensation program in 2010, partly offset by lower salaries and other personnel costs, resulting from restructuring ini-
tiatives in 2010 and 2009. Expenses for compensation commit-
flat from 2009, but increased 4% in US dollar terms. Compensa-
tion advance balances were CHF 3,112 million as of 31 December 2010, down 4% from 31 December 2009, but increased 7% in US dollar terms.
Non-personnel expenses increased 14% to CHF 1,470 million
from CHF 1,287 million, principally due to higher litigation provi-
sions, which increased to CHF 320 million from CHF 54 million. Non-personnel expenses included CHF 127 million in restructuring
charges in 2010 related to real estate writedowns, while 2009 in-
cluded restructuring charges of CHF 82 million and the abovemen-
tioned goodwill impairment charges. In addition, non-personnel costs included a shift of expenses from the Corporate Center to the business divisions in 2010.
➔Refer to “Note 1 Summary of significant accounting policies” in the “Financial information” section of our Annual Report 2010 for more information on allocation of additional Corporate Center costs to the business divisions in 2010
Development of invested assets
Net new money
Net new money outflows for Wealth Management Americas were CHF 6.1 billion compared with CHF 11.6 billion in the prior year.
We experienced net new money outflows during the first
half of 2010, mainly due to financial advisor attrition and lim-
ited recruiting of experienced financial advisors. Net new mon-
ey turned positive in the second half of 2010 due to improved
financial advisor retention and improved net new money in-
flows from financial advisors employed with UBS for more than
one year. Including interest and dividend income, net new mon-
ey inflows of CHF 13.0 billion in 2010 improved from CHF 8.7 billion in 2009.
In 2010, Wealth Management Americas recorded CHF 2.2 bil-
lion of net new money inflows related to the inclusion of invested assets of certain retirement plan assets not custodied at UBS, as discussed below in the “Invested assets” section.
Invested assets
Invested assets were CHF 689 billion on 31 December 2010, broadly flat compared with CHF 690 billion on 31 December 2009. In US dollar terms, invested assets increased 12%, primarily due to positive market performance in the second half of 2010. During the course of the year, Wealth Management Americas conducted
a review of its invested assets reporting and determined that, go-
ing forward, certain retirement plan assets custodied away from UBS should be included in invested assets. As a result, invested assets increased by CHF 22 billion at year end and net new money
inflows increased by CHF 2.2 billion. Managed account assets in-
creased 5% to CHF 177 billion as of 31 December 2010, from CHF 168 billion on 31 December 2009. In US dollar terms, managed account assets increased 18% and comprised 26% of invested assets compared with 24% on 31 December 2009.
Wealth Management Americas
Gross margin on invested assets
The gross margin on invested assets was 80 basis points, down
from 81 basis points, as income increased only slightly, while aver-
age invested assets increased 2%. In US dollar terms, the gross margin on invested assets decreased 3 basis points to 78 basis
points, as income growth of 4% was outpaced by an 8% rise in average invested assets. This margin decrease was due to declines in net trading income and interest of 3 basis points and 2 basis points, respectively, partly offset by an increase of 2 basis points from net fees and commissions.
Financial and operating performance
Global Asset Management
Business division reporting
As of or for the year ended % change from
CHF million, except where indicated 31.12.11 31.12.10 31.12.09 31.12.10
Net management fees 1 1,704 1,918 1,904 (11)
Performance fees 99 141 233 (30)
Total operating income 1,803 2,058 2,137 (12)
Personnel expenses 955 1,096 996 (13)
General and administrative expenses 375 400 387 (6)
Services (to) / from other business divisions (1) (5) (74) 80
Depreciation of property and equipment 38 43 36 (12)
Impairment of goodwill 0 0 340
Amortization of intangible assets 8 8 13 0
Total operating expenses 1,375 2 1,542 1,698 (11)
Business division performance before tax 428 516 438 (17)
Key performance indicators 3
Pre-tax profit growth (%) (17.1) 17.8 (67.1)
Cost / income ratio (%) 76.3 74.9 79.5
Information by business line
Income
Traditional investments 1,097 1,259 1,319 (13)
Alternative and quantitative investments 253 325 405 (22)
Global real estate 263 258 185 2
Infrastructure and private equity 4 24 14 13 71
Fund services 165 202 214 (18)
Total operating income 1,803 2,058 2,137 (12)
Gross margin on invested assets (bps)
Traditional investments 23 25 26 (8)
Alternative and quantitative investments 76 88 102 (14)
Global real estate 72 68 47 6
Infrastructure and private equity 4 83 130 114 (36)
Total gross margin 33 36 37 (8)
Net new money (CHF billion) 5
Traditional investments 0.0 4.2 (40.6)
Alternative and quantitative investments (0.8) (3.2) (6.7)
Global real estate 1.6 0.6 1.4
Infrastructure and private equity 4 3.5 0.1 0.1
Total net new money 4.3 1.8 (45.8)
Net new money excluding money market flows 9.0 8.2 (33.7)
of which: from third parties 12.2 16.2 (6.8)
of which: from UBS’s wealth management businesses (3.1) (8.1) (26.9)
Money market flows (4.7) (6.4) (12.1)
of which: from third parties 0.2 2.0 1.7
of which: from UBS’s wealth management businesses (5.0) (8.3) (13.8)
1 Net management fees include transaction fees, fund administration revenues (including interest and trading income from lending business and foreign exchange hedging as part of the fund services offering), gains or losses from seed money and co-investments, funding costs and other items that are not performance fees. 2 Operating expenses include restructuring charges of CHF 26 million. Refer to “Note 37 Reorganizations and disposals” in the “Financial information” section of this report for more information. 3 For the definitions of our key performance indicators, refer to the “Measurement of performance” section of this report. 4 With effect from 2011, the Infrastructure and private equity fund of funds businesses were transferred from Alternative and quantitative investments to Infrastructure. Following the transfer it was renamed Infrastructure and private equity. As the amounts were not material, prior periods were not restated. 5 Excludes interest and dividend income.
Global Asset Management
Business division reporting (continued)
As of or for the year ended % change from
CHF million, except where indicated 31.12.11 31.12.10 31.12.09 31.12.10
Invested assets (CHF billion)
Traditional investments 497 487 502 2
of which: money market funds 92 96 111 (4)
Alternative and quantitative investments 31 34 41 (9)
Global real estate 38 36 39 6
Infrastructure and private equity 1 8 1 1 700
Total invested assets 574 559 583 3
Assets under administration by fund services
Assets under administration (CHF billion) 2 375 390 406 (4)
Net new assets under administration (CHF billion) 3 (5.5) (0.8) (59.7)
Gross margin on assets under administration (bps) 4 5 5 (20)
Additional information
Average attributed equity (CHF billion) 4 2.5 2.5 2.8 0
Return on attributed equity (RoaE) (%) 17.1 20.6 15.9
BIS risk-weighted assets, Basel II (CHF billion) 5 3.6 3.5 4.1 3
BIS risk-weighted assets, Basel 2.5 (CHF billion) 5 3.6 N/A N/A
Return on risk-weighted assets, Basel II, gross (%) 5 50.6 56.8 37.7
Goodwill and intangible assets (CHF billion) 1.5 1.5 1.7 0
Personnel (full-time equivalents) 3,750 3,481 3,471 8
1 With effect from 2011, the Infrastructure and private equity fund of funds businesses were transferred from Alternative and quantitative investments to Infrastructure. Following the transfer it was renamed Infrastruc- ture and private equity. As the amounts were not material, prior periods were not restated. 2 This includes UBS and third-party fund assets, for which the fund services unit provides legal fund set-up and registration services, valuation, accounting and reporting and shareholder services. 3 Inflows of assets under administration from new and existing funds less outflows from existing funds or fund exits. 4 Refer to the “Capital management” section of this report for more information about the equity attribution framework. 5 Capital management data as of 31 December 2011 is disclosed in accordance with the Basel 2.5 framework. Com- parative data under the new framework is not available for 31 December 2010 and 31 December 2009. The comparative information under the Basel II framework is therefore provided. Refer to the “Capital manage- ment” section of this report for more information.
Financial and operating performance
of CHF 16.2 billion in 2010, and net outflows from clients of UBS’s wealth management businesses were CHF 3.1 billion compared with net outflows of CHF 8.1 billion. The flows from UBS’s wealth management businesses included two transfers of investment
management and research responsibility from Wealth Manage-
ment & Swiss Bank to Global Asset Management: a CHF 1.8 bil-
lion multi-manager alternative fund was transferred to alternative and quantitative investments, and CHF 2.9 billion in private equity
funds of funds were transferred to infrastructure and private eq-
uity. It should be noted that these assets are reported as invested assets in both business divisions, as Wealth Management & Swiss Bank continues to advise the clients of the funds.
Money market net inflows from third parties were CHF 0.2 bil-