SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant toss.240.14a-12
PAINE WEBBER GROUP INC.
...............................................................................
(Name of Registrant as Specified in Its Charter)
...............................................................................
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Payment of Filing Fee (Check the appropriate box):
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<PAGE>
[Graphic Omitted] UBS
UBS: The Power of Partnership
September 2000
<PAGE>
Safe harbor
-------------------------------------------------------------------------------
As in most presentations, the following discussion contains
forward-looking statements, and our actual results may differ
materially from those discussed here. Additional information
concerning factors that could cause such a difference can be found in
our Second Quarter 2000 Report and other publicly disclosed financial
reports.
[Graphic Omitted] UBS
1
<PAGE>
Content
-------------------------------------------------------------------------------
1 UBS Group
1.1 Positioning and Strategy
1.2 Key Facts and Figures
2 UBS Switzerland
2.1 Private Banking
2.2 Private and Corporate Clients
3 UBS Asset Management
3.1 Institutional Asset Management
3.2 Investment Funds / GAM
4 UBS Warburg
4.1 Corporate and Institutional Clients
4.2 UBS Capital
4.3 Private Clients
5 UBS & PaineWebber: Strategic Rationale
6 Financial Management
7 Market View
8 Summary
[Graphic Omitted] UBS
2
<PAGE>
UBS Group
-------------------------------------------------------------------------------
SECTION 1
[Graphic Omitted] UBS
<PAGE>
Positioning and Strategy
-------------------------------------------------------------------------------
SECTION 1.1
[Graphic Omitted] UBS
<PAGE>
UBS's roots
-------------------------------------------------------------------------------
[CHART OMITTED]
SBG Union Bank of Switzerland
1912 1945 1967 1989
Eidgenossische Bank
1862 Bk in Winterthur
1863 Toggenburger Bk Interhandel UBS
Phillips & Drew 29.06.98
[CHART OMITTED]
Basler BV SBV Swiss Bank Corporation
1872 1897 1990 1994 1995 1997
Frankfurter BV 3 CH-banks O'Connor & Associates
Basle Bkg Group Brinson Partners
S.G. Warburg Group
Dillon Read
[Graphic Omitted] UBS
[Graphic Omitted] UBS
5
<PAGE>
<TABLE>
<CAPTION>
Top financial institutions
-------------------------------------------------------------------------------
By market capitalization 18th September 2000
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(USDbn)
250
200
150
[CHART OMITTED]
100
50
0
Citigroup HSBC MSDW BoA Wells UBS ING Chase Goldman Credit Bank of Tokyo Merrill Royal Bank Dautsche BSCH
Fargo Sachs Suisse Misubishi Lynch of Scotland Bank
Source: Bloomberg, UBS published data
</TABLE>
[Graphic Omitted] UBS
6
<PAGE>
Strategic vision
-------------------------------------------------------------------------------
...the pre-eminent
[GRAPHIC OMITTED] global, integrated investment services
firm and...
...the leading bank in Switzerland [GRAPHIC OMITTED]
[Graphic Omitted] UBS
7
<PAGE>
Key Group strategies
-------------------------------------------------------------------------------
Be global Pursue scale Add distribution
and scope
The pre-eminent global, integrated investment services
firm and the leading bank in Switzerland
Open product Put advice at the Leverage
choice center technology
excellence
[Graphic Omitted] UBS
8
<PAGE>
Key Group strategies
-------------------------------------------------------------------------------
Be global Pursue scale Add distribution
and scope
The pre-eminent global, integrated investment services
firm and the leading bank in Switzerland
Open product Put advice at the Leverage
choice center technology
excellence
[Graphic Omitted] UBS
9
<PAGE>
Key Group strategies
-------------------------------------------------------------------------------
Be global Pursue scale Add distribution
and scope
The pre-eminent global, integrated investment services
firm and the leading bank in Switzerland
Open product Put advice at the Leverage
choice center technology
excellence
[Graphic Omitted] UBS
10
<PAGE>
Add distribution and open product choice
-------------------------------------------------------------------------------
Bringing content excellence to an ever-wider client base
[GRAPHIC OMITTED]
Existing client New client
franchises franchises
UBS
& 3rd party
content
[Graphic Omitted] UBS
11
<PAGE>
Key Group strategies
-------------------------------------------------------------------------------
Be global Pursue scale Add distribution
and scope
The pre-eminent global, integrated investment services
firm and the leading bank in Switzerland
Open product Put advice at the Leverage
choice center technology
excellence
[Graphic Omitted] UBS
12
<PAGE>
Leverage technology excellence
-------------------------------------------------------------------------------
e-commerce
[GRAPHIC OMITTED]
Reach
UBS Share of wallet
Efficiency
[Graphic Omitted] UBS
13
<PAGE>
Key Facts and Figures
-------------------------------------------------------------------------------
SECTION 1.2
[Graphic Omitted] UBS
<PAGE>
UBS Group structure
-------------------------------------------------------------------------------
UBS
UBS Switzerland UBS Asset UBS Warburg
Management
Private Banking Institutional Asset Corporate &
Management Institutional Clients
Private & Corporate Investment Funds Private Equity
Clients (UBS Capital)
GAM Private Clients
e-services
[Graphic Omitted] UBS
15
<PAGE>
UBS financial targets
-------------------------------------------------------------------------------
o RoE averaging 15-20%, across periods of varying market conditions
o Double-digit average annual EPS growth, across periods of varying
market conditions
o Active, continuous focus and downward pressure on the Group
cost-revenue ratio substantiated by divisional initiatives
o Clear demonstration of a strong growth trend in net new money in
the private client businesses
[Graphic Omitted] UBS
16
<PAGE>
Performance against targets
-------------------------------------------------------------------------------
ROE(1) Basic EPS(2),(3)
CHF
40% 7
6
30% 5
[CHART OMITTED] 4 [CHART OMITTED]
20% 3
2
10% 1
0
0%
3M99 6M99 9M99 12M99 3M00 6M00 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Cost/Income(2) Net New Money(4)
80% CHFbn
6
60%
[CHART OMITTED] 4
40%
2 [CHART OMITTED]
20%
0
0%
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 -2
-4
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
NOTES:
1 Annualized, before goodwill amortization and adjusted for significant
financial events
2 Before goodwill amortization and adjusted for significant financial events
3 Adjusted to account for the recent stock split
4 Private Banking and Private Clients
[Graphic Omitted] UBS
17
<PAGE>
Key income statement figures
-------------------------------------------------------------------------------
2Q00/2Q99
(CHFm) 2Q00(1) 2Q99(2) %
Operating income 9,200 6,565 40
Operating expenses 6,348 5,248 21
Net profit before tax 2,852 1,317 117
Net profit 2,207 926 138
NOTES:
1 Adjusted for US Global Settlement provision CHF 200m
2 Adjusted for divestment of Swiss Life/Rentenanstalt (CHF 1490m) and the sale
of International Global Trade Finance (CHF 200m)
[Graphic Omitted] UBS
18
<PAGE>
Other key figures
-------------------------------------------------------------------------------
(CHFbn) 06/00 12/99 [SYMBOL OMITTED]
%
------------------------------------------------------------------------
Group AuM 1,711 1,744 (2)
Risk-weighted assets 264.7 273.1 (3)
BIS Tier 1 ratio (%) 12.1 10.6 -
Total assets 946.3 898.9 5
Shareholders' equity 31.9 30.6 4
Market capitalization 98.8 92.6 7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Group headcount 47,744 49,058 (3)
-------------------------------------------------------------------------
[Graphic Omitted] UBS
19
<PAGE>
Revenue trends
-------------------------------------------------------------------------------
(CHF m)
10,000
8,000
6,000
[CHART OMITTED]
4,000
2,000
0
(2,000)
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Credit loss Net interest income
Net fee and commission income Net trading income
Other income
[Graphic Omitted] UBS
20
<PAGE>
Cost trends
-------------------------------------------------------------------------------
(CHF m)
10,000
8,000
6,000
[GRAPHIC OMITTED]
4,000
2,000
0
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Other
General & administrative
Personnel
Adjusted operating income before credit loss expense
[Graphic Omitted] UBS
21
<PAGE>
Balanced earnings mix
-------------------------------------------------------------------------------
2Q 2000 before tax, adjusted for significant financial events
[CHART OMITTED]
(CHF m)
3,000 135 2,852
(207)
2,500 1,420
2,000
98
1,500 885
1,000
500 526
0
PCC PB C&IC Other Group
2Q00
UBS UBS AM UBS Corporate
Switzerland Warburg Center
[Graphic Omitted] UBS
22
<PAGE>
Integrated client service model
-------------------------------------------------------------------------------
Corporate & Retail & Affluent & high
institutional corporate clients net worth clients
clients globally in Switzerland globally
UBS Asset Private Clients
Management
Corporate & Products/services--> Private Banking
Institutional Clients
Private Equity FX/MM Private & Corporate
Research Clients
Securities
Derivatives
Funds
[Graphic Omitted] UBS
23
<PAGE>
UBS Switzerland
-------------------------------------------------------------------------------
SECTION 2
[Graphic Omitted] UBS
<PAGE>
UBS Switzerland
-------------------------------------------------------------------------------
UBS Switzerland o Private Banking offers
comprehensive wealth
management services for private
banking clients from across the world
Private Banking
Private & Corporate Clients o PCC provides a complete set of
banking and securities services
for individual and corporate
clients in Switzerland
o Shared logistics unit &
infrastructure
[Graphic Omitted] UBS
25
<PAGE>
Private Banking
-------------------------------------------------------------------------------
SECTION 2.1
[Graphic Omitted] UBS
<PAGE>
The world's largest private bank
-------------------------------------------------------------------------------
Client assets
(USD bn)
500
422
400 288
180 [CHART OMITTED]
300 150
140
200 137
133
100 121
100
0 80
USB Credit Deutsche Chase Citibank Merrill AEN HSBC ENP JP
Suisse Bank Manhattan Lynch(1) Amo Paribas Morgan
NOTE: SOURCE: FT Research, July 2000
(1) International private clients only
[Graphic Omitted] UBS
27
<PAGE>
Private Banking
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99 vs2Q99 vs1Q00
----------------------------------------------------------------------
Operating Income 1,634 1,826 1,380 18% (11%)
Operating expenses 749 731 613 22% 2%
Pre-tax profit 885 1,095 767 15% (19%)
Cost/income ratio(1) 45% 39% 44%
2Q00
KPI's 2Q00 1Q00 vs1Q00
----------------------------------------------
AuM (CHFbn) 683 698 (2%)
Net new money (CHFbn) (2.8) 2.1 -
Gross margin (bps) 95 107 (11%)
Headcount 7,447 7,431 0%
NOTE:
1 Pre-goodwill & credit loss expense
[Graphic Omitted] UBS
28
<PAGE>
Private Banking gross AuM margin development
-------------------------------------------------------------------------------
(bps)
110
100
90 [CHART OMITTED]
80
70
60
50
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
[Graphic Omitted] UBS
29
<PAGE>
Key Private Banking strategies
-------------------------------------------------------------------------------
Comprehensive wealth management services for
private banking clients from across the world
Expand range of Focus on strong Leverage leading
products and personal relationships edge
services technology
[Graphic Omitted] UBS
30
<PAGE>
Private Banking - scope matters
-------------------------------------------------------------------------------
Individual needs Client Delivery of tailor
made solutions
Corporate Advisor Estate
Finance Advisory
Credit Trust
Business
Global Financial
Custody Planning
Art Banking Active Portfolio Active Real Estate
Portfolio Management Portfolio Management
Supervision Advisory
Scope Scale Margin Capture
[Graphic Omitted] UBS
31
<PAGE>
Private and Corporate Clients
-------------------------------------------------------------------------------
SECTION 2.2
[Graphic Omitted] UBS
<PAGE>
Leading Swiss market position
-------------------------------------------------------------------------------
Others
7%
UBS
Regional 27%
Banks
8%
[PIE CHART OMITTED]
Raiffeisen
Banks Credit Suisse
14% 11%
Cantonal
Banks
33%
o Based on a nationwide survey of core relationships
UBS Swiss Research 1999
[Graphic Omitted] UBS
33
<PAGE>
Broad client base
-------------------------------------------------------------------------------
Individual Clients o Private Clients 3,000,000
o Investment Clients 1,000,000
Corporate Clients o Top Corporates 160
o Large Corporates 7,500
o Small & Medium Businesses 180,000
Banks o Banks 1,800
[Graphic Omitted] UBS
34
<PAGE>
Private & Corporate Clients
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99 vs2Q99 vs1Q00
------------------------------------------------------------------
Operating income 1,701 1,690 1,520 12% 1%
Operating expenses 1,175 1,198 1,224 (4%) (2%)
Pre-tax profit 526 492 296 78% 7%
Cost/income ratio(1) 62% 61% 68%
2Q00
KPI's 2Q00 1Q00 vs1Q00
----------------------------------------------
AuM (CHFbn) 439 443 (1%)
Net new money (CHFbn) 0.4 0.4 0%
NPL ratio (%) 6.0% 6.3%
Headcount 22,270 22,668 (2%)
NOTE:
1 Pre-goodwill & credit loss expense
[Graphic Omitted] UBS
35
<PAGE>
PCC profitability growth
-------------------------------------------------------------------------------
Pre-tax profit
(CHF m)
600
500
400
[CHART OMITTED]
300
200
100
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
[Graphic Omitted] UBS
36
<PAGE>
Cost/income ratio & headcount(1) development
-------------------------------------------------------------------------------
24,000 70%
23,000
[CHART OMITTED]
22,000 65%
21,000
20,000 60%
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Headcount Transferred Trade Finance h/c Cost/income ratio
NOTE:
1 Excludes Systor employees
[Graphic Omitted] UBS
37
<PAGE>
Key Private & Corporate Clients strategies
-------------------------------------------------------------------------------
A complete set of banking and securities services for
individual and corporate clients in Switzerland
Focus on customer Enhanced Grow via multi-
service profitability channel
excellence distribution
[Graphic Omitted] UBS
38
<PAGE>
e-banking metrics UBS Switzerland
-------------------------------------------------------------------------------
Contracts (000)s % securities transactions on-line
550 16%
14%
500 12%
[CHART OMITTED] 10% [CHART OMITTED]
450 8%
6%
400 4%
2%
350 0%
300
Jun Aug Oct Dec Feb Apr Jun Aug Jun Aug Oct Dec Feb Apr Jun Aug
99 99 99 99 00 00 00 00 99 99 99 99 00 00 00 00
[Graphic Omitted] UBS
39
<PAGE>
The whole of UBS Switzerland ...
-------------------------------------------------------------------------------
...through UBS e-banking
UBS Quotes
[GRAPHIC OMITTED] Fund Gate
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
WAP
[GRAPHIC OMITTED]
MyUBS UBS Research online
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
[Graphic Omitted] UBS
40
<PAGE>
UBS Asset Management
-------------------------------------------------------------------------------
SECTION 3
[Graphic Omitted] UBS
<PAGE>
UBS Asset Management
-------------------------------------------------------------------------------
UBS Asset Management o Extensive globally integrated
investment organisation for
institutional clients
Institutional Asset o Investment Funds provides mutual
Management funds for the UBS Group and third
parties
Investment Funds o GAM, diversified and successful
investment options for individual
and institutional clients
GAM
[Graphic Omitted] UBS
42
<PAGE>
Institutional Asset Management
-------------------------------------------------------------------------------
SECTION 3.1
[Graphic Omitted] UBS
<PAGE>
One of the leading institutional asset managers
-------------------------------------------------------------------------------
Total Institutional Assets
(CHF bn)
700
600
500
[GRAPHIC OMITTED]
400
300
200
100
0
Deutsche JP Merrill UBSAM RMCO/ Goldman MSDW Credit Black Citigroup
Morgan Lynch Allianz Sachs Suisse Rock
SOURCE: 1999 Annual Reports
[Graphic Omitted] UBS
44
<PAGE>
Institutional Asset Management
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99 vs2Q99 vs1Q00
----------------------------------------------------------------------
Operating income 325 313 279 16% 4%
Operating expenses 266 234 197 35% 14%
Pre-tax profit 59 79 82 (28%) (25%)
Cost/income ratio(1) 69% 61% 60%
2Q00
KPI's (CHFbn) 2Q00 1Q00 vs1Q00
----------------------------------------------
AuM 525 557 (6%)
Institutional AuM 326 352 (7%)
Net new money (20.2) (32.4) 38%
Headcount 1,712 1,657 3%
NOTE:
1 Pre-goodwill & credit loss expense
[Graphic Omitted] UBS
45
<PAGE>
Key Institutional Asset Management strategies
-------------------------------------------------------------------------------
UBS Asset Management aims to become
the premier global institutional
asset management firm
Protect and strengthen Pursue targeted Expand
client franchise growth investment
initiatives capability
[Graphic Omitted] UBS
46
<PAGE>
Diverse asset base
-------------------------------------------------------------------------------
Institutional AuM by Client Mandate (CHF 326bn)(1)
10%
31% Private Markets
Asset Allocation
[PIE CHART OMITTED] Fixed Income
Equity
34%
25%
NOTE:
1 As of 30 June 2000
[Graphic Omitted] UBS
47
<PAGE>
Diversified capabilities
-------------------------------------------------------------------------------
Equity Asset Allocation
o Global o Global Balanced
o Country/Regional o Global Frontier Portfolio
o Emerging Markets o Country/Regional Balanced
o Specialized Sector Funds o Capital Preservation
Portfolios
o Structured Investments
Fixed Income
o Global
o Country/Regional
o Emerging Markets Private Markets
o High Yield
o Cash o Direct Investments
o Oil & Gas
o Partnership Investments
o Real Estate
O'Connor o Timber
o Fund of Funds
o FX and Interest Funds
o Equity Derivatives
[Graphic Omitted] UBS
48
<PAGE>
Investment Funds / GAM
-------------------------------------------------------------------------------
SECTION 3.2
[Graphic Omitted] UBS
<PAGE>
Investment Funds / GAM
-------------------------------------------------------------------------------
Investment Funds GAM
One of the biggest mutual fund Multi-manager selection increasing
providers in Europe availability of different investment
styles to Private Banking clients
Almost exclusive in-house
distribution CHF 22 billion assets under
management
CHF 197 billion assets under
management 170 mutual funds and unit trusts
Comprehensive range of 145 High reputation and good performance
mutual funds track record
- Asset Allocation funds
- Money Market funds
- Bond funds
- Equity funds
- Capital preservation funds
- Real estate funds
[Graphic Omitted] UBS
50
<PAGE>
Investment Funds/GAM
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99 vs2Q99 vs1Q00
-------------------------------------------------------------------------------
Operating income 165 169 60 175% (2%)
Operating expenses 131 139 50 162% (6%)
Pre-tax profit 34 30 10 240% 13%
-------------------------------------------------------------------------------
Cost/income ratio(1) 65% 69% 83%
-------------------------------------------------------------------------------
2Q00
KPI's (CHFbn) 2Q00 1Q00 vs1Q00
-------------------------------------------------------------------------------
AuM 225 232 (3%)
Net new money 0.8 0.6 33%
-------------------------------------------------------------------------------
Headcount 1,038 963 8%
-------------------------------------------------------------------------------
NOTE:
1 Pre-goodwill & credit loss expense
[Graphic Omitted] UBS
51
<PAGE>
Key Investment Funds strategies
-------------------------------------------------------------------------------
Expand third party distribution
[Graphic Omitted]
Third party clients
Intermediaries
UBS
funds
Existing UBS client franchises
[Graphic Omitted] UBS
52
<PAGE>
UBS Warburg
-------------------------------------------------------------------------------
SECTION 4
[Graphic Omitted] UBS
<PAGE>
UBS Warburg
-------------------------------------------------------------------------------
UBS Warburg o C&IC: innovation, research and
advice, and complete access to
the world's capital markets
Corporate & Institutional o UBS Capital: global private
Clients equity business
Private Equity o Private Clients: on-shore
(UBS Capital) investment services for high net
worth clients globally
Private Clients o e-services: will target affluent
Europeans using a multi-channel
approach
e-services
[Graphic Omitted] UBS
54
<PAGE>
Corporate and Institutional Clients
-------------------------------------------------------------------------------
SECTION 4.1
[Graphic Omitted] UBS
<PAGE>
UBS Warburg league table positions
-------------------------------------------------------------------------------
Global M&A (completed transactions)(1) International Equity(2)
1 1
5
6
9 10
10
13
15 15
-------------------------------- --------------------------------
1999 1Q2000 YTD 1999 1Q2000 YTD
International Fixed Income(2) Eurobonds(2)
1 1 1 1
3 2
5
9
15 15
-------------------------------- --------------------------------
1999 1Q2000 YTD 1999 1Q2000 YTD
SOURCE:
(1) Thomson Financial Securities Data
(2) Capital Data Bondware
[Graphic Omitted] UBS
56
<PAGE>
UBS Warburg institutional franchise
-------------------------------------------------------------------------------
[Graphic o Top tier secondary equity market share globally
Omitted]
o Leading fixed income distribution
o Top tier global equity research house
o #4 Global Research Team (Institutional Investor)
o #2 Pan-European brokerage firm (Extel Research)
o #18 US Research Team (Institutional Investor)
o #3 All-European Research Team (Institutional Investor)
o #3 All-Asia Research Team (excl. Japan) (Institutional
Investor)
o #4 Foreign Exchange House (Euromoney May 2000)
[Graphic Omitted] UBS
57
<PAGE>
Corporate & Institutional Clients
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99(2) vs2Q99 vs1Q00
-------------------------------------------------------------------------------
Operating income 4,821 4,975 3,355 44% (3%)
Operating expenses 3,401 3,530 2,849 19% (4%)
Pre-tax profit 1,420 1,445 506 181% (2%)
-------------------------------------------------------------------------------
Cost/income ratio(1) 69% 69% 82%
-------------------------------------------------------------------------------
2Q00
KPI's 2Q00 1Q00 vs1Q00
-------------------------------------------------------------------------------
Compensation ratio 54% 55%
NPL ratio 2.7% 2.4%
VaR utilization (CHFm) 231 277
-------------------------------------------------------------------------------
Headcount 12,730 12,847 (1%)
-------------------------------------------------------------------------------
NOTE:
1 Pre-goodwill & credit loss expense
2 Adjusted for sale of International Global Trade Finance business CHF 200m
[Graphic Omitted] UBS
58
<PAGE>
Record levels of profitability
-------------------------------------------------------------------------------
(CHF m) (C/I ratio)
6,000 90%
5,000
4,000 [Graphic Omitted] 80%
3,000
2,000 70%
1,000
0 60%
-------------------------------------------------------------
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
Total operating income before credit loss expense
Total operating expenses
Cost/income ratio
[Graphic Omitted] UBS
59
<PAGE>
Corporate and Institutional Clients business areas
-------------------------------------------------------------------------------
Focus on core business with attractive risk/returns and a solid
basis for growth
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Equity Fixed Income Treasury Corporate Finance
Products
o Origination, sales & o Origination, sales & o Sales & trading: o M&A advisory
trading: trading: -FX - spot & o Equity and debt
-European, North -Interest rate and derivatives origination
American, Asian credit derivatives -Precious metals - o Leveraged finance
cash & derivative -Gov't bonds spot & derivatives origination
equity products -Investment grade -Short term interest o Country & global
-Equity structured credit rate products sector coverage
products -Emerging markets -Cash & derivatives
o Economic, loans -ETDs
corporate, sector & -Leveraged finance o Collateral trading &
strategic research o Principal finance securities lending
o Economic & credit o Group treasury
research o Currency research
</TABLE>
[Graphic Omitted] UBS
60
<PAGE>
Key Corporate & Institutional Clients strategies
-------------------------------------------------------------------------------
A leading global investment bank in terms of client
franchise and financial servicing capabilities, with a
return on equity consistent with industry leaders
[Graphic [Graphic [Graphic
Omitted] Omitted] Omitted]
Build content Strengthen Leverage new
leadership global client franchise technologies
& execution & channels
excellence
[Graphic Omitted] UBS
61
<PAGE>
The whole of UBSW effortlessly to any client ...
-------------------------------------------------------------------------------
... through Investment Banking OnLine (IBOL)
Equities Fixed Income
[Graphic Omitted] [Graphic Omitted]
[Graphic Omitted]
[Graphic Omitted] [Graphic Omitted]
Treasury Products Corporate Finance
[Graphic Omitted] UBS
62
<PAGE>
UBS Capital
-------------------------------------------------------------------------------
SECTION 4.2
[Graphic Omitted] UBS
<PAGE>
Global portfolio composition
-------------------------------------------------------------------------------
CHF 3.8 billion book value (30 June 2000)
Book value by sector Book value by region
17% 6%
22% 9%
[Pie Chart
5% [Pie Chart Omitted]
Omitted] 44%
9%
17%
10% 41%
20%
o Consumer related o Diversified industrial o Europe o North America
o Transportation o Communications o Asia o Latin America
o Computer related o Energy
o Others
IRR p.a. of 50 - 60% since inception
[Graphic Omitted] UBS
64
<PAGE>
Experienced global team of 113 professionals
-------------------------------------------------------------------------------
Our local presence & know-how is a competitive advantage
[Graphic Omitted]
London The Hague
Munich
Zurich
Paris Milan
Tokyo
New York Seoul
Hong Kong
Singapore
Sao Paulo
Sydney
Buenos Aires
[Graphic Omitted] UBS
65
<PAGE>
UBS Capital
-------------------------------------------------------------------------------
2Q00 2Q00
(CHFm) 2Q00 1Q00 2Q99 vs2Q99 vs1Q00
-------------------------------------------------------------------------------
Operating income 4 147 45 (91%) (97%)
Operating expenses 47 33 36 31% 42%
Pre-tax profit (43) 114 9 - -
-------------------------------------------------------------------------------
2Q00
KPI's 2Q00 1Q00 vs1Q00
-------------------------------------------------------------------------------
Book value (CHF bn) 3.8 3.4 12%
-------------------------------------------------------------------------------
Headcount 113 107 6%
-------------------------------------------------------------------------------
KPI's 1H00 1H99
-------------------------------------------------------------------------------
Value creation (CHF bn) 0.4 0.3
-------------------------------------------------------------------------------
[Graphic Omitted] UBS
66
<PAGE>
UBS Capital investment targets
-------------------------------------------------------------------------------
(CHF bn)
5.0
4.0
o Committed funds
3.0 o Target
2.0
3.8
1.0 2.0
0.0
----------------------------------------------------
UBS Balance Sheet External Funds
[Graphic Omitted] UBS
67
<PAGE>
Private Clients
-------------------------------------------------------------------------------
SECTION 4.3
[Graphic Omitted] UBS
<PAGE>
PaineWebber contributes global scale...
-------------------------------------------------------------------------------
... to the individual clients franchise of UBS Warburg
UBS Warburg
"Individual clients"
Corporate & Private Clients
Institutional
UBS Capital e-services
Mitchell Hutchins
Asset Management
Clearing Services
o UBS
o PaineWebber
[Graphic Omitted] UBS
69
<PAGE>
A growth firm in a growth industry
-------------------------------------------------------------------------------
US household financial assets PaineWebber client assets
(USD tr) (USD bn)
CAGR = 8% CAGR = 21%
$33 $500
$31 $423
$24
$245
$18 $139
$15 $74
-------------------------------- -------------------------------
1990 1993 1996 1999 2000E 1990 1993 1996 1999 2000E
o Liquid Financial Assets o All Other
SOURCE: Federal Reserve
[Graphic Omitted] UBS
70
<PAGE>
Financial advisor to the affluent
-------------------------------------------------------------------------------
Average retail account size
PaineWebber
Merrill Lynch
Morgan Stanley DW
SSB
Schwab
TD Waterhouse
DLJDirect
AmeriTrade
E*Trade
0 50 100 150 200
Assets per active account ($000s)
SOURCE: Goldman Sachs research report, February 14, 2000
[Graphic Omitted] UBS
71
<PAGE>
EDGE: an internet asset gathering portal
-------------------------------------------------------------------------------
EDGE client assets EDGE client households
(USD bn) (000s)
$140 176
CAGR: 171% CAGR: 174%
$60 71
$26 35
[Graphic Omitted]
----------------------------- ----------------------------------
1997 1998 1999 1997 1998 1999
Average assets per EDGE household: USD 798,000
38% of client assets online via the EDGE at June 2000
[Graphic Omitted] UBS
72
<PAGE>
UBS & PaineWebber: Strategic Rationale
-------------------------------------------------------------------------------
SECTION 5
[Graphic Omitted] UBS
<PAGE>
Strategic vision
-------------------------------------------------------------------------------
UBS has been looking to leverage its broad range of content
[Graphic Omitted]
Existing
client franchises New client franchises
UBS
& 3rd party
content
PaineWebber brings new affluent client franchises in the US
[Graphic Omitted] UBS
74
<PAGE>
A powerful strategic fit
-------------------------------------------------------------------------------
o The premier global institution serving private clients
o Leading institutional client franchise
o Excellent blend of content and distribution and mutually
enhancing businesses
o Shared business philosophy: commitment to clients' interests and
personal service
o Growth and high quality earnings
- top line revenue growth
- quality fee-based revenue stream
- strong asset growth
[Graphic Omitted] UBS
75
<PAGE>
Reputation for content and service
-------------------------------------------------------------------------------
Enhanced service for institutional
Premium content for private clients clients
o Leading edge wealth management o Powerful US equity distribution
management techniques franchise
o Expertise in the use of o Significant US institutional
technology to enhance equities and fixed income
relationships franchises
o Access to private equity, o Access to additional capital for
structured product solutions and client facilitation
alternative investments
o Wider asset management
choice - "best of breed"
------------------------------------ ---------------------------------------
o Leading global research platform and access to new issues globally
[Graphic Omitted] UBS
76
<PAGE>
Leading client base
-------------------------------------------------------------------------------
Proforma assets by client domicile(1)
UBS UBS and PaineWebber
4%
27% 37%
[Pie Chart Omitted] 49%
[Pie Chart Omitted]
----->
69%
14%
SOURCE: UBS Group analysis o Europe & rest of world
NOTE: o Switzerland
1 High Net Worth and Affluent Clients only o USA
[Graphic Omitted] UBS
77
<PAGE>
Positioned for higher market rating
-------------------------------------------------------------------------------
Multiples at 5 January 1997(1) Multiples at 10 July 2000(2)
20.0x
11.5x
10.6x 10.5x
9.7x
[Graphic Omitted]
-------------------------------------------------------------------------------
PaineWebber Dean Witter Morgan PaineWebber MSDW
Stanley
o Global reach and scale
o Combining premium content with private client & institutional
distribution
Notes:
1 Based on 1997 estimated earnings
2 Based on 2000 estimated earnings
[Graphic Omitted] UBS
78
<PAGE>
Financial Management
-------------------------------------------------------------------------------
SECTION 6
[Graphic Omitted] UBS
<PAGE>
Strong, well-managed capital structure
-------------------------------------------------------------------------------
(CHF m) [Graphic Omitted]
2,500 16%
Long Term Rating
2,000 Moody's AA1
S&P AA+ 12%
Fitch/IBCA AAA
1,500
8%
1,000
4%
500
0 0%
--------------------------------------------------------------------
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
o 'Second line' o Tier 1 ratio
share buyback
[Graphic Omitted] UBS
80
<PAGE>
Loan portfolio development
-------------------------------------------------------------------------------
(CHF bn) %
400 [Graphic Omitted] 5.0
350 4.5
300 4.0
250 3.5
200 3.0
150 2.5
100 2.0
50 1.5
1.0
0.5
0 0.0
-----------------------------------------------------------------
30.06.98 31.12.98 30.06.99 31.12.99 30.06.00
o PCC loans (gross) o Other loans (gross) o NPL%
[Graphic Omitted] UBS
81
<PAGE>
VaR utilization & net trading income
-------------------------------------------------------------------------------
UBS Warburg
(CHF m) [Graphic Omitted] (CHF m)
3,500 300
3,000 250
2,500 200
2,000 150
1,500 100
1,000 50
500
0 0
----------------------------------------------------------------
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00
0 Net trading income o VaR (UBS Warburg)
[Graphic Omitted] UBS
82
<PAGE>
Disclosure principles
-------------------------------------------------------------------------------
o Achieve a fair market value by communicating transparently,
openly and consistently with investors and the financial markets
at all times
o Multi-segmental reporting - quarterly analysis
o Same KPIs used for internal performance measurement and external
reporting
o Disclosure improvements
- prior consultation with analyst community
- workshops to explain
2000 manager magazine: 'best annual report of the year' award
[Graphic Omitted] UBS
83
<PAGE>
Market View
-------------------------------------------------------------------------------
SECTION 7
[Graphic Omitted] UBS
<PAGE>
UBS: Peer group valuation (18 September 2000)
-------------------------------------------------------------------------------
P/E and EPS Estimates
I/B/E/S - EPS estimates P/E multiples
Peers 2000 2001 2000 2001
-------------------------------------------------------------------------------
Morgan Stanley Dean Witter (USD) 5.1 5.4 18.5 17.5
Merrill Lynch (USD) 3.9 4.0 16.8 16.4
Credit Suisse (CHF) 21.4 24.1 16.9 15.0
Deutsche Bank (EUR) 4.5 5.3 21.6 18.0
-------------------------------------------------------------------------------
Peer Group Average 18.4 16.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
UBS (CHF) 16.3 18.3 15.5 13.8
-------------------------------------------------------------------------------
SOURCE: Bloomberg
[Graphic Omitted] UBS
85
<PAGE>
UBS share price development
-------------------------------------------------------------------------------
125%
120% UBS
115%
110%
[Graphic Omitted]
105%
100%
95% DJ EURO STOXX Banks
90%
85%
--------------------------------------------------------------------------
Dec Jan Feb Mar Apr May Jun July Aug Sep
99 00 00 00 00 00 00 00 00 00
Source: Bloomberg
[Graphic Omitted] UBS
86
<PAGE>
Summary
-------------------------------------------------------------------------------
SECTION 8
[Graphic Omitted] UBS
<PAGE>
UBS strengths
-------------------------------------------------------------------------------
o Leading industry position across all core businesses
o Strong ratings and capitalization
o Unique client franchise and brand
o Record of technological innovation
o Risk management excellence
o Proven expertise in mergers, acquisitions and integration
o Culture which embraces change
[Graphic Omitted] UBS
88
<PAGE>
Additional information on UBS
-------------------------------------------------------------------------------
http://www.ubs.com/investor-relations
[Graphic Omitted]
Tel: +41 1 234 4100
Fax: +41 1 234 3415 e:mail:
[email protected]
[Graphic Omitted] UBS
89
<PAGE>
Further information
-------------------------------------------------------------------------------
This communication is not a solicitation of a proxy from any security
holder of PaineWebber Group, Inc. UBS and PaineWebber will be filing with
the Securities and Exchange Commission a proxy statement/prospectus to be
mailed to PaineWebber security holders and other relevant documents
concerning the planned merger of PaineWebber into a subsidiary of UBS. WE
URGE INVESTORS IN PAINEWEBBER TO READ THE PROXY STATEMENT/PROSPECTUS AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the
documents free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by UBS will be available free of charge from
Investor Relations, UBS, Stockerstrasse 64, Zurich. Documents filed with
the SEC by PaineWebber will be available free of charge from Geraldine
Banyai, Assistant Secretary, 1285 Ave of the Americas, New York, New York
10019.
PaineWebber and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of
PaineWebber in favor of the merger. The directors and executive officers of
PaineWebber include the following: D. B. Marron; M. Alexander; S. P. Baum;
E. G. Bewkes, Jr.; R. Braun; R. A. Dolan; F. P. Doyle; J. T. Fadden; J. J.
Grano, Jr.; J. W. Kinnear; R. N. Kiyono; T. A. Levine; R. M. Loeffler; E.
Randall, III; H. Rossovsky; K. Sekiguchi; R. H. Silver; M. B. Sutton; and
J. R. Torell III. Collectively, as of February 4, 2000, the directors and
executive officers of PaineWebber may be deemed to beneficially own
approximately 4.8% of the outstanding shares of PaineWebber common stock.
Security holders of PaineWebber may obtain additional information regarding
the interests of such participants by reading the proxy
statement/prospectus when it becomes available.
[Graphic omitted] UBS
90
