Our strategic priorities
- Focus our efforts on areas in which we excel and seek to capitalize on the compelling growth prospects in the businesses and regions in which we operate
- Further reduce risks – Group risk-weighted assets target below CHF 200 billion on a fully applied Basel III basis by end 2017
- Accelerate Group-wide efficiency program – total cost savings target of CHF 5.4 billion by 2015
- Invest CHF 1.5 billion in initiatives to support growth and improved client service across all businesses over the next three years
- Simplify our organization and increase client focus
Accelerating the implementation of our strategy
Our strategy is centered on our Wealth Management and Wealth Management Americas businesses and leading universal bank in Switzerland, supported by our Global Asset Management business and our Investment Bank. Our strategy builds on the strengths of all our businesses.
Since presenting our strategy at our Investor Day in November 2011, we have successfully executed on our plans to improve our already strong capital position and reduce Basel III risk-weighted assets (RWA) and costs. As highlighted in our 2012 Annual Report, just over one year into the transformation of our firm, our Basel III capital ratios remain among the highest in our peer group, and we have reduced our Basel III RWA by 35%. Furthermore, we are on track with our CHF 2.0 billion cost reduction program announced in August 2011.
From this position of strength, in October 2012, we announced a significant acceleration of the implementation of our strategy. This announcement underlined our commitment to transform our Group into a less capital- and balance-sheet-intensive business that is more focused on serving clients and capable of maximizing value for shareholders.
Building the UBS of the future
We are well prepared for the future with a clear strategy and a solid financial foundation.
We are transforming our Investment Bank, focusing on its traditional strengths in advisory, research, equities, foreign exchange and precious metals. At the same time, we are taking additional action to reduce costs and improve efficiency across the Group that comes on top of the CHF 2.0 billion cost reduction program that we announced in 2011. To this end, we announced measures to achieve additional annual costs savings of CHF 3.4 billion by 2015 that include reducing our Investment Bank’s complexity and size and improving organizational effectiveness, primarily in our Corporate Center.
As a consequence of our measures to support the long-term efficiency of our firm, we expect our headcount to be around 54,000 in 2015 compared with approximately 63,000 at the end of 2012.
We are firmly committed to returning capital to our shareholders and plan to continue our program of progressive returns to shareholders with a proposed 50% increase in dividends to CHF 0.15 per share for the financial year 2012.
Once we have achieved our capital targets, we are aiming for a total payout ratio of 50%, consisting of a baseline dividend and supplementary returns. We intend to set a baseline dividend at a sustainable level, taking into account normal economic fluctuations.
The supplementary capital returns will be balanced with our need for investment and any buffer we choose to maintain for a more challenging economic environment or other stress scenarios. Through the successful implementation of our strategy, we believe we can sustain and grow our business and maintain a prudent capital position.
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