Ladies and gentlemen, good morning. Welcome to the UBS Investor Update 2014 Conference Call. I'm Stephanie, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to turn over to UBS.

Good morning, and welcome to our First Quarter Results and 2014 Investor Update. My name is Martin Osinga, and I am acting Head of Investor Relations for UBS while Caroline Stewart is on maternity leave. For today's agenda, we'll begin with about 15 minutes dedicated to our first quarter results, including Q&A. We'll permit photography during the presentation of our results but then make a short pause to allow photographers to exit the auditorium before we start taking questions. After the results Q&A and a short break, we will begin the investor update portion of the day. Prior to lunch, you will hear from our Group CEO, Sergio Ermotti; Group CFO and COO, Tom Naratil; and our Chief Risk Officer, Phil Lofts. Then, the three of them will jointly host a 1-hour Q&A session. After a break for lunch, we will open up online again at 2 p.m., Zürich time, for the afternoon session with the CEO of Global Asset Management, Ulrich Koerner, followed by Q&A. For the last session of the day, Bob McCann and Jürg Zeltner will present on our Wealth Management businesses and take your questions. The webcast will end after Sergio's closing remarks. We'll then host a few breakout sessions for investors here in Zürich. Before I hand over to Sergio, I would like to draw your attention to our cautionary statements with regards to forward-looking statements. With that, I hand over to Sergio.

Thank you, Martin. And good morning, everyone. Having hosted our last 2 investor days in New York and London, I am pleased that we have an opportunity to do it here in Zürich, and I am looking forward for the day. I will keep my remarks on the Q1 fairly shortly, as we have a very busy agenda, as you could see, for the day. So in the first quarter of 2014, we generated an adjusted profit before tax of CHF 1.5 billion, with solid results across all our businesses. The result includes a 193 million related to provisions for litigation, regulatory and similar matters. Net profit attributable to UBS shareholders was nearly CHF 1.1 billion. I'm pleased to report that we achieved a major milestone in our capital management. Our fully applied Basel III CET1 ratio reached this quarter a 13.2%. We also made further progress in increasing our fully applied Swiss SRB Basel III leverage ratio, which rose 40 basis points to 3.8% at the end of the quarter. Wealth Management earned an adjusted profit before tax of CHF 659 million while delivering strong net new money of nearly CHF 11 billion and increased gross margin. Wealth Management in America delivered another record with an adjusted profit before tax of $284 million while attracting $2 billion in net new money. Retail & Corporate delivered strong profitability of CHF 401 million in the first quarter, which was the best first quarter since 2010. Global Asset Management delivered CHF 126 million in adjusted pretax profit and had its best quarter for net new money, excluding money market flows, since the third quarter of 2005 with CHF 13 billion. Despite a more muted seasonal uptick than in prior years, the Investment Bank delivered an adjusted return on attributed equity of 28%, with improved performance across all regions. In the Corporate Center, we reported an adjusted pretax loss of CHF 501 million and continued to make good progress in reducing Non-core and Legacy Portfolio assets. Before I turn over to Tom, I'd like to emphasize that the first quarter of 2014 was yet another example of UBS strategy working and working in a disciplined manner with intense focus on our clients. As you can see and you will see throughout the day, our message is quite simple: Our strategy is the right one for UBS and can work in a variety of market environments, and we remain committed to it. We're committed to executing at the strategy. And -- but at the same time, most importantly for us is creating value for our clients and our shareholders. Now I will hand over to Tom Naratil, which walk you through the first quarter presentation.

Thank you, Sergio. And good morning, everyone. As usual, my commentary will reference adjusted results, unless otherwise stated. This quarter, we excluded an owned credit gain of CHF 88 million, CHF 23 million in gains on sale of real estate and net restructuring charges of CHF 204 million. For the first quarter, we reported an IFRS net profit attributable to shareholders of nearly CHF 1.1 billion on solid performances from all of our businesses. Wealth Management delivered a pretax profit of CHF 659 million, up 29% quarter-on-quarter. If you exclude provisions for litigation, regulatory and similar matters, this is the best result since the second quarter of 2009. Operating income rose 5% as transaction-based income increased on stronger client activity, more than offsetting lower recurring net fee income. Costs decreased 5% as higher provisions for litigation, regulatory and similar matters were more than offset by a decrease in other general and administrative expenses and lower variable compensation expenses, the latter partly due to elevated charges in the fourth quarter of 2013. Wealth Management delivered CHF 10.9 billion of net new money, with an annualized net new money growth rate of 4.9%. Net new money was strong in the quarter. The business delivered continued growth in APAC and saw a rebound in emerging markets from a weak fourth quarter. In Switzerland, the business delivered its fifth consecutive quarter of positive net new money as we enjoy strong momentum in our home market. In Europe, net new money was negative, mainly due to a single large outflow which was only partly offset by a 1.7 billion inflow from an asset reclassification from Retail & Corporate. Another asset reclassification contributed 2.9 billion of net new money in Switzerland. Ultra-high-net-worth clients continue to be the main contributor of net new money. However, we're also…

As mentioned, at this point, I'd like to ask all photographers to exit the auditorium. And I'll take this opportunity to remind you of a few things for the Q&A. So at this time, we'll only take questions on our first quarter results. We ask that you save all questions not related to the first quarter performance for the later Q&A sessions. Please wait for the microphone handlers to give you a microphone before asking your question. We also ask that you clearly announce your name and company. We'll take questions from the room first and then, time permitting, also from those on the telephone. In the interest of time, we will limit you to one question and one follow-up during all sessions, and we appreciate your cooperation. We'll now go at with the first question from the room. Alastair?

Alastair Ryan with Bank of America Merrill Lynch. Can I just ask about the gross margin in Wealth Management? Tom, you commented there's a degree of positive seasonality in Q1 with the Asian ultra-high-net-worth. Just if you can walk us through your path to the 95 to 105 bps that you mentioned in your comments, whether there's anything that plays out already embedded in the numbers; or whether it's, as markets develop and interest rates change, that we get to the 95 to 105 bps.

Okay, sure. Thanks for the question, Alastair. I think there are a number of things that we see developing on gross margin that make us feel confident. I think the first one is, when we see something that approximates what a normalized transactional activity would be, we see ourselves already hovering at the bottom of that 95 to 105 basis point range. And you've seen, over the course of the past 8 or so quarters, course where we've been -- months where we've been in -- within the range. So first, getting to a more normalized environment, not one that had headwinds like we had this quarter, number one. Number two, we're seeing very good progress. And you see this -- if you look at the recurring fee income line year-over-year, you see the fact that we're increasing our penetration in mandates, and that initiative is having a great degree of progress. And Jürg will cover that more in detail later today. And then finally, we do have some visibility as we look out. Whether you're looking at static rates or whether you're looking at implied forward rates, we can see on the horizon the trough in net interest margin.

Kinner Lakhani, Citi. I just wanted to ask a follow-up on that point that you made in terms of the net interest margin outlook. In the very short term, when do you see a bottoming-out in terms of net interest margin? And I'm not just referring to the Wealth Management business, but clearly, we saw further pressure in Retail & Corporate and Wealth Management Americas, so we're trying to get some kind of near-term guidance on how those NIM trends will evolve.

Kinner, the -- when we look at where the trough is, depending on whether you're using implied forward or static rates, it's sometime this year. And the question on timing is just a function of what happens in short-term rates.

Andrew?

It's Andrew Lim from SocGen. I note that you've got some model changes for your risk-weighted assets, which is a feature that we've seen at other banks. And I was just wondering if you could give guidance on what more we could expect going forward maybe with respect to valuation changes on a Basel III basis, credits and market risk weight inflation potentially. And I also note that you've got a -- again a multiplier change for your Swiss mortgages, which you've had before, so I was just wondering, is that the end of it, or do we have more to come?

Yes, so if you look at the -- there's a helpful slide, Slide 24, in the -- which is in the appendix of the presentation, where we've classified all the methodology or model-driven changes. This quarter, as you noted, there were a few things that kicked in. There was a CHF 2 billion increase on the credit risk RWA related to the FINMA mortgage multiplier. That's the second year of a 5-year phasing, so you should expect that to occur in the first quarter of each of the -- in each of the subsequent 3 years. We also had CHF 3 billion in an increase in operational risks related to the updates on model parameterization on the AMA model. We do that on an annual basis. I think what you saw there was an increase in some of the experience in the industry specifically related to litigation and regulatory matters. And so that provisioning on an industrywide basis is what -- or that experience on an industrywide basis is what caused the uplift in the model. I don't expect -- we don't have a lot of model change activity ongoing that we expect through the rest of this year, but again, as you look at the first quarter, I would keep in mind that, the FINMA multiplier.

It's Fiona Swaffield from RBC. Just a quick question on the gross margin again, on the ultra-high-net-worth. I was quite surprised to see it was up on Q1 last year even though Asia was still down Q1 on Q1. Is there something going on in pricing? Or is it loans? I wonder if you could talk about that.

I think, overall, we do have -- we are starting to see some early signs of success in some of the pricing initiatives, Fiona. I think it's probably a little too early to place too much emphasis on a quarter-to-quarter comparison or a year-over-year comparison, but I do believe, and I do think this will be covered later on in the presentations today, that we do have a fair amount of optimism on how we're progressing on that initiative.

Chris Wheeler from Mediobanca. On your net new money number in Wealth Management, obviously a very strong number. Two questions in one, if I may. The emerging markets, very strong, and I think you have got a strong franchise in Russia. I'm just kind of wondering whether that it was a benefit perhaps of the Ukrainian effects. Or what else you could give me in terms of background on that? And then on the European, I think, when I saw you back in November, there was talk of starting to see inflows again, as well as the outflows. And I just wondered if you could give me some feeling of what perhaps the inflows might have been to offset that CHF 2.2 billion of net outflows.

Sure. So Chris, thanks for those questions. On EM, I think -- trying to tie our performance in the quarter to anything that's going on in Ukraine, I don't think, would be a correct assessment of it. I think that the EM flows that we've seen are more a function of the performance of the business and client advisers in the area, more or less, or -- rather than the macro geopolitical effects. And looking at Europe, if you exclude the 2 large flows that I mentioned, the -- we would end up with a number that is positive on a net basis, not that -- not strongly positive, but we still do see onshore inflows outpacing the offshore outflows.

It's Jernej here from Goldman Sachs. It's always difficult to ask questions on the quarter when you've got a huge presentation afterwards, but I'll limit myself to 2 very dry technical question aimed at you, Tom. So the first one is on deferred tax assets in the U.S. Crédit Suisse took an impairment in Q1 because the tax rates in New York went down. I was just wondering if you could update us, a, on what the stock of DTAs in the U.S. is. And b, I suspect that, that impairment is coming your way as well at some point. And the second question I have is on Slide 10, on the Investment Bank. And as you point out, you've made great progress, but I have 2 questions here. One, your total assets are up by roughly 10%, but the risk-weighted assets are flat. If you could explain that. And the question -- and question number two is, there seems to be an increase in the total number of front-office staff in your Investment Bank, and I was wondering -- that's somewhat surprising, but I was wondering what that's due to.

Okay. So as we look at the -- those 3 questions, Jernej: DTAs, we'll do a much more extensive presentation on DTAs a little bit later on today. But on your comments specifically on the change in the tax law in New York State, that does not affect us. We do not have the similar effect of that, that some competitors have had. On the balance sheet and RWA distribution, it's just the business mix that we've chosen for this particular quarter. I would comment on the Investment Bank that, as I mentioned, we have a very flow-based model and we increased our balance sheet velocity during the quarter. So I think we had prudent resource utilization, and that's why we were able to deliver what we consider to be a very good adjusted ROA of 28%. Finally, on headcount, one of the things that the Investment Bank and Andrea accomplished last year was creating space for us to have the capacity to hire front-office personnel. And so we had a little excess reduction to create some space for hiring. And I think you saw some of that starting to kick in as you moved into the quarter, on the front-office side. There was also an allocation methodology change in the Corporate Center that shifted about 140 or so headcount as well. That changed the reported headcount numbers, but it was not actual hiring. Kian Abouhossein - JP Morgan Chase & Co, Research Division: Yes, Kian Abouhossein, JPMorgan. Slide 14, on the treasury side, can you just run us a little bit through the 500 million -- or sorry, I should say, the CHF 100 million run rate? And it looks like it's going to go down further from there. Is this a matter of you need less liquidity? Can you talk about the funding costs? Is this already locked in? How should we think about this going forward?

Sure. Thanks, Kian. On the question on what are we doing to manage down what we call the unsecured funding pool: These are the excess liabilities we moved over from the Investment Bank when we announced the acceleration of our strategy in late 2012. So we're working down that component of the liabilities in a number of different ways. You've seen us execute 2 debt buybacks. As we execute those, we reduced the negative carry that we have in the Group Treasury. It's also executed. We've got the maturities coming through as well, and other debt management exercises that we will complete. Kian Abouhossein - JP Morgan Chase & Co, Research Division: So this, the funding -- it's not a change of funding. It's a decline of assets. Is that what you...

The best -- actually, it's -- the right way to think about it, Kian, is our outperformance in asset reduction creates a greater overhang that we have to run down. And the question is, how do we balance the management of that rundown of unsecured funding? And at the same time, as we're issuing loss-absorbing capital, we're putting on a lot of long-term funding as well, so we have issuance costs that are also retained by Group Treasury.

Any more questions from the room? Do we have a question from the telephone? One question.

The first question from the telephone is from Mr. Stefan Stalmann from Autonomous Research.

Two very quick questions, please. Could you say how your cost-saving targets would have developed during the first quarter? You said at the end of Q4 that you had achieved CHF 2.2 billion under the old way of measuring your cost-saving targets. Where would this number be in Q1? And the second question, can you tell us what your stressed CET1 ratio would be now?

Stefan, we'll address, actually, both of those questions in more detail in the investor update, so if you don't mind, we'll defer the answers until that time.

Any more questions from the room? All right.

Media. Just...

Or from the media? Great. No questions. So we'll take a short break and start with the invested -- investor update portion of the day at 10 past 11. [Break]