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UBS Investment Research

Global Banks Strategy

Outlook 2013

Investment strategy As we look to 2013, we maintain a cautious stance on the global banking sector,given: (1) policy uncertainties (US fiscal cliff and EU sovereign risks); (2) the challenging operating environment for the sector; (3) negative sector earningsmomentum; and (4) ongoing uncertainties over bank regulation.

What are the risks? The most immediate risk is the fiscal cliff, but also continued risks in the euro zone, centred on Spain and Greece, and bank regulation. But, there are upside riskstoo: stronger-than-expected global growth would support business confidence andrisk appetite, and underpin the operating outlook for the banking sector.

Key themes for 2013 There are four themes that we think would likely affect the performance of globalbanks in 2013: (1) low growth within the sector; (2) cost reductions; (3) anemerging markets slowdown; and (4) ongoing regulatory uncertainties.

Regional strategy We upgrade Japanese banks to overweight from neutral, given their defensivestances and supportive valuations. In addition, we are: (1) overweight banks inCanada (strong balance sheets); (2) neutral in the US (preference for regionals over universal banks/brokers) and emerging markets (preference for EMEA over LatinAmerica). We also (3) downgrade Australia to underweight from neutral(unattractive valuations) and remain underweight in Europe (notably in Spain).

Global Equity Research

Global

Banks

Equity Strategy

5 December 2012

www.ubs.com/investmentresearch

Philip Finch

[email protected]

+44-20-7568 3456

Peter CarterAnalyst

[email protected]+44-20-7568 4043

Stephen Andrews, CFAAnalyst

[email protected]+852-2971 7821

John-Paul CrutchleyAnalyst


Brennan Hawken, CPAAnalyst


Shinichi InaAnalyst


Greg KetronAnalyst


Jonathan MottAnalyst


Peter A. RozenbergAnalyst


Alastair RyanAnalyst


This report has been prepared by UBS Limited ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 78. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

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Global banks – most and least preferred

Most Preferred Least PreferredCompany KC Rating PT (local) Company KC Rating PT (local)Bank of Nova Scotia Y Buy 58 Banco de Sabadell Sell 1.3Fifth Third Bancorp Buy 18 Bank of India Sell 285Grupo Financiero Banorte Buy 83.7 BBVA Sell 4.5Halkbank Y Buy 21.9 Commerzbank Sell 1.15KeyCorp Y Buy 10 Hang Seng Bank Sell 105RBS Group Buy 328 Hong Leong Bank Sell 14Sberbank Y Buy 142 Santander Sell 4.4Standard Chartered Y Buy 1800 TMB Bank Sell 1.65Sumitomo Mitsui Financial Group Buy 2800 Vakifbank Sell 4.45Swedbank Buy 157U.S. Bancorp Y Buy 38

Source: UBS estimates. Data as at 4th December and prices as at close 3rd December. All other data in this document as at 3rd December and prices as at close 30th November except where noted.

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Global Banks Strategy 5 December 2012

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Contents page

Outlook 2013 – summary 3 — What are the upside/downside risks to this view?.....................................................4 — What are the likely key themes for 2013?.............................................................5 — Regional preferences ...........................................................................................6 — Stock preferences ................................................................................................7

Key themes in 2013 9 — Theme 1: Low growth...........................................................................................9 — Theme 2: Cost reductions ..................................................................................11 — Theme 3: Emerging markets slowdown..............................................................14 — Theme 4: Ongoing regulatory risks.....................................................................17

Regional overview 21 — Asia....................................................................................................................22 — Australia.............................................................................................................23 — Canada ..............................................................................................................24 — EMEA ................................................................................................................25 — Europe ex-UK ....................................................................................................26 — Japan.................................................................................................................27 — Latin America.....................................................................................................28 — United Kingdom .................................................................................................29 — United States .....................................................................................................30

Appendix 1: DuPont analysis 33 Appendix 2: Capital & asset quality 45 Appendix 3: Valuations 67

Philip Finch

[email protected]

+44-20-7568 3456

Peter CarterAnalyst


Stephen Andrews, CFAAnalyst

[email protected]+852-2971 7821

John-Paul CrutchleyAnalyst


Brennan Hawken, CPAAnalyst


Shinichi InaAnalyst


Greg KetronAnalyst


Jonathan MottAnalyst


Peter A. RozenbergAnalyst


Alastair RyanAnalyst



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Outlook 2013 – summary Sector performance

Despite market volatility over the past month, the performance of the global banking sector looks set to end up on a clear positive note: year to date, global banks’ performance is up 17.2% in absolute terms – outperforming global equities by 5.5%. Over the past 10 years, only in 2009 (+26%) and 2003 (+24%) have global banks had a stronger year in terms of sector performance. Looking forward, our global equity strategy team have an underweight stance on global financials (see Nick Nelson’s Global Equity Strategy: Global Outlook 2013, 19 November 2012).

The rationale for the cautious stance on global banks is fourfold:

Policy uncertainties: Uncertainties over policy action will likely weigh on the performance of global banks in 2013. Political negotiations in the US to avoid the fiscal cliff are ongoing and could determine whether the US economy grows at c.2.5% next year or is in a recession. There are also continued risks in the euro zone, centred on Spain and Greece, which would adversely affect risk appetite and risk premiums for the banking sector.

The operating outlook looks set to remain challenging in 2013: The prevailing low interest rate environment is expected to continue to put pressure on margins, especially among US banks, while further deleveraging pressure in Europe will likely depress top-line growth. In emerging markets, top-line revenue growth will likely remain constrained, reflecting weaker loan growth expectations and lower margins, while loan-loss provisioning expenses are expected to rise.

Negative earnings momentum: Despite the strong share price performance this year, earnings momentum for banks globally has been negative, underlying the operational challenges facing the sector. Based on our coverage of global banks, our aggregated bottom-up EPS 2012 estimate for global banks has declined by 3.1% YTD and that for 2013 by 5.3%. As such, over the past 12 months, our sector 2012 ROE estimates have come down from 13.7% to 13.1% and for 2013, from 13.7% to 12.9%.

Chart 1: Global banks annual performance Chart 2: Bank sector performance, YTD

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Global banks’ performance set to end the year on a clear positive note

Despite the ongoing rally, earnings momentum has been negative with sector 2013E EPS down 5.3% YTD


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Ongoing uncertainties over bank regulation: Although we are moving closer towards the implementation of Basel III rules on capital, due on 1 January 2013, uncertainty persists on multiple fronts. These include:

— Liikanen report: It calls for the ring-fencing of risky trading activities from the deposit-taking operations of European banks.

— The Financial Policy Committee in the UK stating that banks should seek “opportunities to raise capital externally” – a demand that has since been restated by several Bank of England officials.

— Uncertainties on the Volcker Rule, which seeks to prohibit banking entities from proprietary trading, and investing in hedge and private equity funds, up to certain limits and with exceptions.

— CRD IV: The EU’s implementation of Basel III rules has also slipped past their intended deadlines. Until final regulations are published, there is the possibility of negative surprises.

What are the upside/downside risks to this view? Downside risks

Macro growth: Although our macroeconomics team currently forecasts a gradual improvement in global GDP growth to 3.0% in 2013 from 2.6% in 2012, there are risks to its forecasts, whether caused by policy uncertainties in the US, a re-escalation of the euro-zone crisis, a harder landing in China, or an energy price shock.

Policy risks: Bank sector performance will likely also be dependent on policy response. Policy uncertainties or delays to address the fiscal cliff in the US, to push through a comprehensive, co-ordinated and credible response to the EU crisis (i.e., the banking union), or to fully recapitalise the banks in Spain would clearly negatively affect market sentiment and/or the growth appetite for global banks.

Chart 3: Ten-year bond yields for Spain and Italy (%)

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Upside risks

Lower regulatory risks: Greater clarity on regulation would not only stimulate the appetite of banks to grow, increase credit availability and underpin earnings momentum, it would also boost market sentiment, lower risk premiums and support sector valuations.

Higher interest rates: The prevailing low interest rate and flat yield curve environment has depressed liability spreads and net interest margins, and put pressure on top-line revenue growth and earnings momentum. Expectations of an earlier-than-expected rise in short-term rates and/or a steepening of the yield curve would be positive for banks with low loan-to-deposit levels, such as US regional banks, as well as Japanese and Chinese banks.

Table 1: GDP growth outlook (%)

% 2010 2011 2012E 2013E 2014E

US 2.4 1.8 2.1 2.3 3.0

UK 1.8 0.9 0.0 1.1 1.2

Euro zone 1.9 1.5 -0.4 0.1 0.9

Canada 3.2 2.6 2.2 2.2 2.9

Australia 2.5 2.1 3.7 3.2 3.4

Japan 4.5 -0.7 1.7 1.3 1.8

Russia 4.3 4.3 3.6 3.5 4.0

Brazil 7.5 2.7 1.3 4.5 3.6

India 8.4 6.5 5.5 6.5 7.0

China 10.4 9.3 7.6 8.0 8.0

World 4.2 3.2 2.6 3.0 3.4

Source: UBS estimates

What are the likely key themes for 2013? We believe four key themes will likely affect global banks in 2013, in terms of the industry’s underlying fundamentals as well as sector performance:

Lower growth: Next year, we expect the global banking sector to enter one of the lowest growth environments of recent times. The fundamental outlook is one that is expected to be characterised by weak credit demand, margin pressure arising from the low rate environment and increased competition, difficult capital market conditions and greater regulatory constraints. For our universe of global banks, our estimates for top-line revenue growth in 2013 have declined to 4.4% currently from 6.5% six months ago and versus our forecast of 5.5% for 2012. If our estimates are correct, this would be the lowest level of revenue growth for the banking industry globally since 2008, at the height of the global financial crisis.

Cost reduction: Given expectations of increased headwinds on revenue growth, we think there is increasing pressure on banks to focus on cost controls. Rationalization of personnel costs, branch and delivery optimization, realigned cost structures, and further reduction in credit-related costs provide significant room for improvement. For our universe of global


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banks, we estimate cost growth next year at 2.6% versus 4.4% this year. This would be the lowest level since 2002 when cost growth for global banks was 1.1%. Banks that have most scope for efficiency gains include those carrying a high restructuring cost load, such as SunTrust, Wells Fargo, PNC, and Regions.

Emerging markets slowdown: In 2013, banks across emerging markets could face one of the most challenging operating environments in recent years. A combination of revenue growth pressure, arising from modest credit demand and margin pressure, together with rising provisioning expenses, suggests that the sector could see one of the weakest earnings growth prospects over the past decade. Our bottom-up estimates indicate EPS growth for GEM banks at 4.7% in 2013; if this is correct, this would be the lowest level for at least 12 years and lower than the level in 2009 at the height of the global financial crisis. We also forecast sector ROE falling to 17.1% in 2013 – the lowest level since 2003 (in 2009 it was 17.4%).

Ongoing regulatory risks: As we move towards 2013, the banking sector continues to face regulatory uncertainties on multiple fronts that are likely to weigh on the growth appetite and earnings power of the industry. Although we are edging closer towards the implementation of Basel III rules on capital, due on 1 January 2013, there are still regional interpretation discrepancies of the new global rules. In a number of countries, regulation remains one of the primary risks to our view on the outlook for banks. A recent in-house survey showed that 42% of our analysts considered the regulatory environment for banks in their country to be hostile and unpredictable (see Global Banks Analyser: Liquidity rallies, 7 October 2012).

Regional preferences As we look to 2013, we maintain our underweight stance on global banks and, from a stock perspective, continue to recommend a defensive strategy. Our underweight stance reflects ongoing global macro policy concerns, continued regulatory constraints and the challenging operating environment that the banking industry currently faces.

The forthcoming fourth-quarter results are likely to show further strains on sector fundamentals, although capital market conditions have picked up, albeit from low levels. The low interest rate environment continues to put pressure on margins, especially among US banks, while further deleveraging pressure in Europe will likely weigh on top-line growth. In emerging markets, recent slower economic growth data suggested credit demand in the fourth quarter will likely be weaker, while exacerbating asset quality concerns in some of the larger markets.

Our regional preferences remain largely unchanged. The only changes we make are to upgrade Japanese banks to an overweight from a neutral stance, to reflect the sector’s more defensive positioning and supportive valuations, and to downgrade the Australian banks to underweight from neutral because of the low-growth outlook and unattractive valuations. A summary of our regional preferences is illustrated in Table 2.

As we head towards 2013, we remaining underweight global banks within global equities

Forthcoming Q4 results likely to show further strains on sector fundamentals

We upgrade banks in Japan from overweight to neutral and downgrade banks in Australia to underweight from neutral


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Table 2: Global banks’ regional preferences

Region Rating Comments

Canada Overweight * Moderate growth, robust balance sheets, attractive returns and a lot of excess capital

* Outstanding track record of capital distribution with higher dividend payments in 2013

* High consumer leverage and house prices are the two areas of potential risk.

Japan Overweight * Upgrade to O/W from neutral, given defensive qualities: good funding, steady asset quality and improving capital position

* Possible political change has raised expectations of ultra-easing and reflation that would be positive for bank margins/earnings

* Valuations appear supportive with sector trading on 9.0x PE and 0.6x PBV, based on 2013 estimates

US Neutral * A clear preference for US regional banks over brokers/universal banks

* Regional banks are well placed for market share gains and housing recovery, and offer excess capital

* More cautious on brokers/universal names: strong run up, regulatory uncertainties and earnings revisions

GEM Neutral * Still like medium-term structural growth prospects, but focus on near-term cyclical headwinds: growth and asset quality

* We consider valuations to be fair, especially after the recent strong run up in share prices

* O/W banks in Mexico, Russia, Thailand and Turkey; U/W banks in Brazil and Taiwan

Australia Underweight * Top-line revenue growth pressures from weak credit demand, wholesale funding challenges and deposit competition

* Well capitalised under B3, with the group paying a solid dividend yield of 6.6% in FY 13E

* Valuations look unattractive: sector trades on 1.7x with ROE at 15.5% on 2013 estimates

Europe Underweight * Remain cautious on the banking sector, given uncertainties in sovereign debt crisis and economic growth concerns

* Sector fundamentals under pressure: deleveraging pressure; funding gap; regulatory uncertainties and earnings risks

* Cautious on Spain (capital shortfall); downgraded UK to neutral; constructive on Swedish banks


Stock preferences We recommend banks with high-quality defensive characteristics, such as robust domestic deposit funding, stable asset quality trends and improving capital levels. In our view, these banks should be able to: (1) better adapt to both market uncertainties and changing regulation; (2) capture market share; and (3) support future growth and/or accelerate capital distribution. They include: Bank of Nova Scotia, Fifth Third Bancorp, GF Banorte, Halkbank, KeyCorp, Sberbank, SMFG, Standard Chartered Bank, Swedbank and US Bancorp (see Table 4).

Table 3: Global banks – valuation summary

UBS Adj PE Price / Book UBS Adj RoE (%) Net Div Yield (%)12E 13E 14E 12E 13E 14E 12E 13E 14E 12E 13E 14E

Australia 12.0x 11.6x 11.2x 1.7x 1.7x 1.6x 15.8 15.5 15.4 6.3 6.6 6.9Canada 11.3x 10.5x 9.9x 1.9x 1.7x 1.6x 18.2 17.4 16.8 4.0 4.3 4.5Emerging markets 7.9x 7.7x 6.9x 1.4x 1.2x 1.1x 19.3 17.7 17.6 3.9 4.2 4.7Asia (ex-Japan) 7.6x 7.6x 6.9x 1.3x 1.1x 1.0x 18.9 17.0 16.7 4.2 4.4 4.9EMEA 8.7x 8.2x 7.1x 1.3x 1.1x 1.0x 17.0 15.8 16.1 2.8 3.4 4.3Latin America 11.1x 10.0x 8.6x 1.9x 1.7x 1.5x 18.4 18.0 18.7 3.1 3.6 4.2Japan 7.2x 9.0x 8.8x 0.6x 0.6x 0.6x 9.6 6.9 6.8 3.5 3.9 3.9United Kingdom 10.1x 9.4x 8.4x 0.9x 0.8x 0.8x 9.7 10.2 10.9 3.4 3.7 4.5Europe 11.2x 9.3x 8.0x 0.7x 0.7x 0.7x 7.7 9.1 9.9 2.9 3.5 4.4United States 10.6x 8.8x 7.8x 0.8x 0.7x 0.7x 9.3 9.7 10.1 2.0 2.4 3.0Global Banks 9.8x 9.0x 8.1x 1.0x 0.9x 0.9x 13.1 12.9 13.0 3.4 3.8 4.4


Preference for high-quality defensive stocks


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Table 4: Global banks – UBS top picks

Market Cap UBS Adj PE Price / Book UBS Adj RoE (%) Net Div YieldRating (US$m) 12E 13E 12E 13E 12E 13E 12E 13E

Most preferredBank of Nova Scotia Buy 64,006 11.8x 10.8x 1.9x 1.8x 18.2% 17.3% 3.9% 4.2%Fifth Third Bancorp Buy 12,932 8.7x 8.1x 0.9x 0.9x 11.8% 11.2% 2.5% 2.8%Grupo Financiero Banorte Buy 13,715 16.3x 12.5x 2.2x 1.9x 14.4% 16.5% 0.9% 1.3%Halkbank Buy 12,141 9.3x 9.2x 2.0x 1.8x 23.8% 20.6% 2.7% 3.3%KeyCorp Buy 7,480 9.4x 7.3x 0.7x 0.7x 8.2% 9.6% 2.3% 2.9%RBS Group Buy 52,274 29.1x 14.9x 0.5x 0.5x -8.4% 1.7% 0.0% 0.0%Sberbank Buy 64,820 6.0x 6.5x 1.3x 1.1x 23.6% 18.4% 2.7% 3.0%Standard Chartered Buy 56,251 10.6x 9.6x 1.3x 1.2x 12.7% 13.1% 3.5% 3.9%Sumitomo Mitsui Financial Group Buy 45,784 5.8x 8.5x 0.6x 0.6x 11.6% 7.4% 3.8% 4.5%Swedbank Buy 20,690 9.6x 8.9x 1.3x 1.2x 14.0% 14.1% 5.2% 5.6%U.S. Bancorp Buy 61,710 11.2x 10.3x 1.7x 1.6x 16.5% 15.9% 2.4% 2.9%

Source: UBS estimates. Data as at 4th December and prices as at close 3rd December

Reflecting our bottom-up ratings, we are cautious on banks facing funding constraints, notably those with significant exposure to wholesale funding and near-term debt maturities, which are poorly capitalised and offer limited growth potential (see Table 5).

Table 5: Global banks – least preferred stocks

Market Cap UBS Adj PE Price / Book UBS Adj RoE (%) Net Div YieldRating (US$m) 12E 13E 12E 13E 12E 13E 12E 13E

Least preferredBanco de Sabadell Sell 5,764 63.8x 18.9x 0.8x 0.7x 1.5% 3.9% 0.6% 2.1%Bank of India Sell 2,939 6.3x 4.7x 0.7x 0.6x 11.7% 14.2% 3.2% 4.2%BBVA Sell 38,104 17.8x 9.8x 0.8x 0.7x 4.4% 7.8% 2.3% 2.3%Commerzbank Sell 10,394 23.6x 18.5x 0.3x 0.3x 1.5% 1.8% 0.0% 0.0%Hang Seng Bank Sell 29,105 12.8x 15.3x 2.6x 2.5x 21.1% 16.4% 4.4% 4.4%Hong Leong Bank Sell 9,084 14.6x 13.0x 2.2x 2.0x 14.6% 14.8% 2.0% 2.2%Santander Sell 64,122 22.4x 10.0x 0.8x 0.7x 3.4% 7.5% 0.8% 1.7%TMB Bank Sell 2,642 16.5x 15.1x 1.5x 1.4x 9.3% 9.6% 2.4% 2.7%Vakifbank Sell 6,298 8.6x 8.7x 1.0x 0.9x 12.8% 10.9% 0.6% 1.2%

Source: UBS estimates. Data as at 4th December and prices as at close 3rd December


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Key themes in 2013 In this section, we outline in more depth the four key themes that we believe will affect global banks next year, in terms of the industry’s underlying fundamentals as well as sector performance: (1) lower growth; (2) cost reductions; (3) emerging markets slowdown; and (4) ongoing regulatory risks.

Theme 1: Low growth Revenue pressure

Next year, we expect the global banking sector to enter one of the lowest growth environments of recent times. The fundamental outlook is expected to be characterised by weak credit demand, margin pressure arising from the low rate environment and increased competition, difficult capital market conditions and greater regulatory constraints.

Not surprisingly, top-line revenue growth expectations for the sector have been coming down. For our universe of global banks, our estimates for top-line revenue growth in 2013 have declined to 4.4% currently from 6.5% six months ago and versus our forecast of 5.5% for 2012. If our estimates are correct, this would be lowest level of revenue growth for the banking industry globally since 2008, at the height of the global financial crisis.

The decline in 2013 revenue growth expectations has been most apparent for banks in emerging markets where revenue growth expectations for next year have fallen to 8.8% today from 12.9% six months ago. However, banks in developed markets have not been immune with 2013 growth expectations falling from 4.0% to 2.6% over the same period with those in Europe down to 2.2% (from 5.1%) and in the US, down to 3.5% (from 3.8%).

Negative EPS momentum

Reflecting the low growth outlook, earnings momentum for banks globally has been negative, underlying the operational challenges facing the sector. Based on our coverage of global banks, the net number of EPS (2012) upgrades versus downgrades is –4 since the start of the year (i.e., there have been four more stocks with EPS downgrades than upgrades). For 2013, the upgrades versus downgrades have been even more severe with the net number standing at –40.

Chart 4: Global banks – revenue growth trends Chart 5: Changes in revenue growth (2013) expectations

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Top-line revenue growth expectations for global banks are in decline

In emerging markets, revenue growth estimates have declined to 8.8% from 12.9% six months ago


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Table 6: 2012E and 2013E EPS upgrades/downgrades

Net UBS adj EPS upgrades/downgrades YTD

2012E 2013E

Australia -1 -3 Canada 3 1

Japan 6 4 US 6 2

Europe -26 -25 EMEA 10 1

LatAm -4 -3 Asia 2 -17

Global -4 -40

Source: UBS estimates. Note: Based on calendarised EPS values.

Based on our coverage of global banks, our aggregated bottom-up EPS (2012) estimate for global banks has declined by 3.1% since the start of the year and that for 2013 by 5.3%. As such, sector ROE expectations have been coming down and are set to be among the lowest levels in recent years.

Our ROE forecast for global banks in 2013 has subsequently declined from 13.7% six months ago to 12.9% currently. This compares with our 2012 ROE estimate of 13.1% and would be among the lowest since 2000 with only that in 2008 (7.9%) and 2009 (11.0%) being lower.

Chart 6: Global banks – ROE trends Chart 7: Global banks – ROE vs ROA, 2013E

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Table 7: Changes in EPS expectations vs stock performance

Changes to EPS Sector

2012E 2013E performance YTD

Australia 0.2% 0.7% 17.7% Canada 1.8% 1.9% 9.2%

Japan 5.9% 3.6% 11.0% US -3.5% -3.8% 17.7%

Europe -3.0% -7.2% 25.2% GEM -0.3% -3.9% 9.5%

Global -1.4% -3.1% 17.8%



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Theme 2: Cost reductions Focus on costs

Given expectations of increased headwinds on revenue growth, we think there is increasing pressure on banks to focus on cost controls. For our universe of global banks, we estimate cost growth next year at 2.6% versus 4.4% this year. This would be the lowest level since 2002 when cost growth for global banks was 1.1%.

We are looking for cost growth in 2013 to be lowest in regions where revenue growth pressure next year is expected to be considerable: the US (-1.5%), Japan (-0.1%) and Europe (0.3%). In contrast, banks in emerging markets are expected to have the highest cost growth, in 2013 with those in EMEA forecast to have the highest at 9.5% followed by those in Asia (8.5%) and LatAm (8.3%).

In 2013, we expect global banks to post positive jaws of 2.1%, given our revenue growth estimate of 4.7% versus that for operating expenses of 2.6%. We anticipate operating leverage to be most positive among banks in the US (positive jaws of 5.0%) and Europe (3.1%).

Table 8: Operating leverage, 2013E

Revenue growth Cost growth Jaws

Australia 2.9% 1.3% 1.6%

Europe 3.4% 0.3% 3.1%

Canada 4.2% 2.7% 1.5%

Japan -2.7% -0.1% -2.6%

US 3.5% -1.5% 5.0%

Asia 8.7% 8.5% 0.2%

EMEA 10.8% 9.5% 1.3%

LatAm 7.5% 8.3% -0.8%

GEM 8.8% 8.6% 0.2%

Global 4.7% 2.6% 2.1%


Chart 8: Global banks – cost growth trends Chart 9: Cost growth versus revenue growth, 2013E

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We forecast cost growth at 2.6% for global banks in 2013 – the lowest level since 2002

Operating leverage is expected to be most positive in the US next year


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In contrast, we expect negative jaws for banks in Portugal (-5.5%), Singapore (-3.5%), Japan (-2.6%), Hungary (-2.3%), Brazil (-2.0%), Korea (-1.2%) and China (-0.5%).

Efficiency trends

The weak revenue environment is forcing banks globally to be more efficient. Rationalization of personnel costs, branch and delivery optimization, realigned cost structures, and further reduction in credit-related costs provide significant room for improvement.

Based on our bottom-up estimates, we forecast operating expenses as a percentage of average assets at 2.06% in 2012 – well below the historical average of 2.29%. For 2013, we estimate this to fall to 1.99% – potentially the lowest level in at least 12 years, and lower than the 2009 level of 2.05%.

By region, US banks are forecast to have the highest cost/income ratio in 2013, suggesting that they have most scope for efficiency gains. They are also expected to have among the highest levels of operating expenses to average assets. The bloated level of operating expenses for US banks includes costs related to debt restructuring (i.e., other real estate credit collection, personnel expenses associated with workouts, consulting fees on revamping loan servicing, expenses associated with acquired portfolios in wind-down mode).

Banks that have most scope for efficiency gains include those carrying a high restructuring cost load: among large-cap regional banks in the US, these include SunTrust, Wells Fargo, PNC and Regions. Among mid-cap regional banks, Associated Banc-Corp, Fifth Third Bancorp and KeyCorp appear to be the best positioned to reap the rewards of further cost improvement (for more details, lease see Steve Scinicariello’s 16 May 2012 publication, Mid-cap banks).

Chart 10: Global banks – efficiency trends Chart 11: Cost/income versus cost/assets, 2013E

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US banks’ higher operating expenses include debt workout expenses


UBS 13

Chart 12: Global banks – staff expense trends Chart 13: Staff costs/expenses vs staff costs/assets, 2013E

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A breakdown of operating expenses indicates that non-staff costs are falling faster than staff costs. We forecast non-staff operating expenses to fall from 48.0% of total expenses in 2012 to 47.0% in 2013 – slightly below the historical average of 47.2%.


UBS 14

Theme 3: Emerging markets slowdown In 2013, banks across emerging markets could face one of the most challenging operating environments in recent years. A combination of revenue growth pressure, arising from modest credit demand and margin pressure, together with rising provisioning expenses suggests that sector earnings growth in 2013 could be one of the weakest over the past decade.

Our bottom-up estimates indicate EPS growth for GEM banks at 4.7% in 2013; if this is correct, this would be the lowest level for at least 12 years and lower than the level in 2009 at the height of the global financials crisis. We also forecast sector ROE falling to 17.1% in 2013 – the lowest level since 2003 (in 2009, it was 17.4%).

Credit demand

Despite our macroeconomics team’s forecast for stronger GDP growth in 2013, credit demand across emerging markets is expected to remain moderate next year by GEM standards. Based on our bottom-up estimates, we forecast loan growth for GEM banks at 13.5% in 2013, up from 13.1% in 2012, driven largely by stronger credit demand in LatAm; in both Asia and EMEA, we forecast loan growth next year.

Among the largest emerging economies, we forecast loan growth in China to moderate from 13.8% in 2012 to 12.7% in 2013 and that in Russia to slow from 19.8% this year to 13.4% (due to funding and liquidity constraints). In India, we are looking for loan growth to accelerate slightly to 21.9% in 2013 from 19.2% in 2012 – in line with a recovery in GDP growth – while in Brazil, we forecast loan growth at 15.2% next year, up from 8.8% in 2012, reflecting expectations of a strong GDP rebound and lower lending rates.

NIM pressure

Across emerging markets, we forecast NIM to decline from 4.10% in 2012 to 3.98% in 2013. Lower rates are weighing on asset yields, liability spreads and margins. Competition has also put pressure on both loans yields and funding costs, especially in countries where the loan-to-deposit ratio approaches and/or exceeds 100%.

Chart 14: GEM banks – declining EPS growth trends

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We forecast GEM banks’ 2013 EPS growth at 4.7% – the lowest level in at least 12 years

Credit demand is expected to grow at 13.5% in 2013 across emerging markets

Downside risk to NIM outlook remains elevated


UBS 15

Our third-quarter 2012 in-house banks survey indicated that the outlook risk over the next 12 months to the NIM forecast for GEM banks is likely to be skewed to the downside in aggregate (53% of respondents) (see Global Banks Analyser: Liquidity rallies, 7 October 2012).

In China, NIMs, currently at 2.5-2.6%, are expected to fall further, potentially to 2.4% next year, but with clear downside risk. In India, the State Bank of India has spearheaded a reduction in interest rates, which has been followed by other banks, while in Brazil, similar competitive pressures from state-controlled Banco do Brasil in cutting lending rates have also put considerable pressure on sector margins.

Asset quality

In 2013, non-performing loan (NPL) ratios in GEM are forecast to rise for the first time since 2009. In aggregate for GEM banks, we are forecasting 2013 NPLs/loans to be 2.68%, up from 2.48% in 2012. The rise in NPLs is expected largely in Asia, although signs of asset quality stability in Brazil in recent months suggest that NPLs should be lower in LatAm next year.

In Asia, we expect pressure on asset quality in India to continue next year, due to the cyclical slowdown, notably from “stressed” sectors, such as iron and steel, metals, infrastructure, power, and textiles. In China, reported NPL levels appear to be stable, although the market continues to be concerned over the lack of balance sheet visibility.

Loan-loss provisioning expectations are rising with the level of provisions/loans for 58% of the banks under UBS GEM bank coverage set to rise next year. In aggregate, we forecast provisions to increase to 1.53% in 2013 or by 3bp. In Asia, countries that are expected to see a notable rise in provisions are China, Hong Kong and Indonesia. In EMEA, an expansion into riskier consumer loans, notably in Russia, is expected to push up provisions by 20bp to 1.58% in 2013.

Chart 15: Is the risk to our NPL forecast over the next 12 months (downside/upside risks to our current forecasts):

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NIM pressure – a key concern in China, India and Brazil

NPLs are expected to rise across GEM in 2013 – the first time since 2009

Provisioning expectations are rising


UBS 16

Negative earnings momentum

Given the operating challenges facing the sector, earnings momentum for GEM banks has been negative, with our aggregated bottom-up earnings (2013) estimate down 8.8% since the start of the year. By region, LatAm has seen the largest downgrades (-12.9%), followed by Asia (-9.7%), with EMEA posting a small upgrade (+2.5%).

At the country level, the largest downgrades to 2013 EPS estimates since the start of 2012 have taken place in Korea (-24.6%), Taiwan (-17.9%), Brazil (-16.9%) and China (-14.6%). In contrast, the most significant upgrades to 2013 EPS expectations have affected countries that we consider to be at an early stage of their respective credit cycles: Thailand (+19.5%), Kazakhstan (19.3%), Mexico (11.4%) and Russia (9.3%).

Reflecting the negative earnings momentum at GEM banks since the start of the year, we now forecast EPS growth for GEM banks at 4.7% in 2013 – the lowest level for the sector for at least 12 years (our GEM banks historical data goes back to 2000). We also forecast sector ROE falling to 17.1% – the lowest level since 2003 (in 2009, it was 17.4%).

Chart 16: GEM banks earnings growth outlook

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Since the start of 2012, our 2013 EPS estimates for GEM banks have been revised down by 8.8%

The largest downgrades have been in Korea, Taiwan, Brazil and China

We forecast GEM banks ROE at 17.1% in 2013 – the lowest since 2003


UBS 17

Theme 4: Ongoing regulatory risks As we move towards 2013, the banking sector continues to face regulatory uncertainties on multiple fronts that are likely to weigh on the growth appetite and earnings power of the industry. Although we are edging closer towards the implementation of Basel III rules on capital, due on 1 January 2013, there are still regional interpretation discrepancies of the new global rules.

In a number of countries, regulation remains one of the primary risks to our view on the outlook for banks. A recent in-house survey showed that 42% of our analysts considered the regulatory environment for banks in their country to be hostile and unpredictable, while only 6% viewed it as benign or accommodating. When looking at the developed world, this rose to 53% of analysts (see Global Banks Analyser: Liquidity rallies, 7 October 2012).

Local discrepancies

The most recent development has been the publication of the Liikanen report in early October 2012. It called for the ring-fencing of risky trading activities from the deposit-taking operations of European banks with trading assets of €100bn or a trading book at 15-25% of total assets – a move that could lead to the establishment of a separately capitalised subsidiary for that activity.

In the UK, regulatory uncertainty remains elevated, with the Financial Policy Committee (FPC) once again stating that banks should seek external capital for a range of purposes, including against optimistically calibrated Risk Weightings, loans in forbearance and risks in the euro area. However, our UK banks team believes that the market is likely to increasingly tune out from these demands, which remain generic in spite of pressure on the FPC to make them specific; the FPC's inability to do so suggests a lack of robust evidence to support its views. As such, we reduced our regulatory price target haircuts on the banks recently, and reinstated our Buy rating on RBS (see UK Bank Monitor: a new governor, a fresh start and RBS: upgrading to Buy, both 27 November 2012).

Chart 17: In-house Q4 2012 survey – outlook for bank regulation?

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Delays to regional interpretation of new global rules

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In the UK, regulatory uncertainty remains elevated


UBS 18

Chart 18: In-house survey – outlook for bank regulation?

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In the US, post the re-election of President Obama, uncertainties persist with regard to the Volcker Rule, which prohibits banking entities from proprietary trading, and investing in hedge and private equity funds, up to certain limits and with exceptions.

Several key elements of the rule have yet to be fully defined, including clarity regarding permissible hedging activities with a broader interpretation leading to a more favourable outcome for the industry. A prime implementation concern relates to the potentially adverse impact on dealer liquidity. The rules were scheduled to become effective the earlier of 21 July 2012 or 12 months from the final rules (the comment period has been extended).

The sector also continues to face litigation risk. In the US, the representation and warranty claims for the industry remain a key source of uncertainty and overhang over the entire sector. In general, US banks remain susceptible to liabilities arising from the sale of loans (including securitizations or those securitized by others) to counterparties (such as GSEs and private-label investors). The unresolved nature of this difficult-to-quantify issue and litigation risks continue to serve as a material negative for the sector as a whole, especially for universal banks/brokers.

In addition, known regulations such as CRD IV, the EU’s implementation of the Basel III rules, have also slipped past their intended deadlines and the EU has announced that it will not meet the 1 January 2013 deadline for implementation. Until final regulations are published, there is the possibility of negative surprises.

In the US, uncertainties on the Volcker Rule persist…

…while litigation risk remains elevated


UBS 19

BIS comments

Despite the forthcoming implementation of new global rules on capital requirements, there are still discrepancies in local capital rules. In October 2012, the Bank for International Settlements (BIS) commented on the Basel III regulatory regimes being implemented in the US, Japan and the European Union1. In the three reports:

The proposed regulations for Japan were described as “compliant”;

The US preliminary assessment of the draft regulations described the US as being “compliant” or “largely compliant” on 12 of the 13 requirements, while the treatment of securitisations was described as “materially non-compliant”;

The preliminary assessment of the draft EU rules was that 12 of the 14 key components were either “compliant” or “largely compliant”, but the proposed EU approach was deficient in two areas: the “Definition of capital” and the “Internal ratings-based (IRB) approach for credit risk”, which were both described as “materially non-compliant”.

The Basel assessment team reported that, among other things:

Banks that were using the IRB approach would be able to exploit an explicit loophole to apply zero risk-weighting to sovereign and other public-sector credit regardless of the actual risk.

The definition of common equity tier 1 (CET1) capital under the proposed EU regulations was seemingly deficient in several areas. One such area was that under the proposed EU regulations, there was no stipulation that CET1 be comprised of “common shares” and that, in addition, under EU regulations, it was possible for “redemption on demand for ‘CET1’ instruments issued by mutuals and co-operative institutions in some member states”.

It should be noted that the EU vigorously defended the draft regulations, but it appears to us that there is some tension between the BIS and EU on the EU regulations.

1 See Basel III level 2 regulatory consistency assessment http://www.bis.org/bcbs/implementation/l2.htm

Discrepancies in local capital rules


UBS 20


UBS 21

Regional overview


UBS 22

Asia Macro outlook

In Asia, we forecast GDP growth at 6.2% in 2013 from 5.7% in 2012, ledby growth in China (at 8.0% in 2013, from 7.6% in 2012), India (6.5%from 5.5%) and Indonesia (6.1% from 6.0%). In China, growth will beunderpinned by domestic demand that has recently started to rebound,with the help of increased infrastructure spending and the stabilization inproperty investment. In India, the GDP rebound is expected to be supported by a recovery in corporate profits in a context of lowerinflation. Overall, inflation in Asia is projected to rise to 4.1% in 2013, up50bps year-on-year, notably in Indonesia (to 6.7% from 4.4%) and to alesser extent in China (to 3.5% from 2.7%) – with policy rates in Indonesia, Malaysia, Thailand and the Philippines expected to trendhigher next year.Bank fundamentals

Asian banks face a challenging operating outlook. Top-line revenue growth is set to slow down to 8.7% in 2013, reflecting weaker creditgrowth (+13.1% in 2013) and margin pressure (especially in China andKorea). Asset quality is expected to deteriorate, with NPLs trending to1.69% in 2013 (+36bp) resulting in a 13bps rise in provisioning (notablyin China, Hong Kong and Indonesia). We forecast aggregated EPSgrowth at 2.5% in 2013, the lowest level since 2008, with sector ROE at17.0%, from 18.9% in 2012. Themes for 2013

Focus on China: Macroeconomic news flow out of China will affectthe performance of Asian banks. For Chinese banks, the key issues arebalance-sheet credibility, margin pressure and negative operatingleverage.

ASEAN funding costs: As the loans-to-deposit ratio rises towards100% in ASEAN, competition for deposits will rise, putting upwardpressure on funding costs and/or future loan growth will be constrained.

Rising provisions: NPL ratios in Asia are forecast to rise in 2013 forthe first time since 2010: the level of provisions/loans is set to risenext year for 62% of the Asian banks under UBS coverage.

Key recommendations

For 2012, we maintain a relatively defensive stance and prefer banks withstrong capital and funding positions, relatively stable return profiles andreasonable valuations, and embedded growth options in the balance sheet. Our preferred picks include Standard Chartered, OCBC, Bank Negara Indonesia, Bank Rakyat, Federal Bank, Hana Financial Group and Kbank. Our least preferred picks include Hong Kong Exchange, TMBand Bank of India.

Macro forecasts

Asia (ex-Japan) 2012 2013 2014Real GDP growth 5.9 6.4 6.7


RoE decomposition (RWA based)

Asia (ex-Japan) 12E 13E 14ENet Int Margin (%) 4.58 4.43 4.34Non Int Income (%) 1.52 1.48 1.48Non Int Expense (%) -2.49 -2.41 -2.35Pre-provision Op Profit (%) 3.61 3.51 3.48Provisions (%) -0.51 -0.65 -0.67Pre-exc. PTP (%) 3.14 2.88 2.83Tax (%) -0.71 -0.65 -0.64UBS Adj. RoRWA (%) 2.40 2.20 2.16Equity Multiplier (x) 7.9 7.7 7.7UBS Adj. RoE (%) 18.9 17.0 16.7


Growth and valuation

Asia (ex-Japan) 12E 13E 14EGrowth (%)UBS Adj. EPS 13.4 2.4 10.9Op. Profit Per Share 11.2 8.4 11.6Net Dividend 12.7 8.2 11.9BVPS 14.7 12.2 11.9ValuationUBS Adj. P/E (x) 7.6 7.6 6.9P/OPS (x) 4.9 4.5 4.1P/Book (x) 1.3 1.1 1.0Net Yield (%) 4.2 4.4 4.9


Analyst

Stephen Andrews +852-2971 7821 [email protected]


UBS 23

Australia Macro outlook

While most of the world should see ‘better growth’ in 2013, Australia is more likely to see ‘different growth’. We look for growth to ease to 3.2%in 2013 (from 3.7%) as growth rebalances towards the domestic economyand away from previously surging commodity capex, while this capexshould underpin exports. As commodity prices (and the economy’sincome growth) trend lower, the AUD and interest rates should follow.We see an RBA rate trough at 3%, and AUD at US$-parity near-term. The risks for Australia lie in its ability to rebalance and rejuvenatewithout sharply rising commodity prices, double-digit China growth and consumer debt appetite. Near term, rising unemployment is the key risk.

Bank fundamentals

Growth remained the key challenge for the sector through 2012, withsecond half revenue growth of only 1%, pre-provision earnings growth of2% and flat NPAT. Credit growth improved modestly to c4% late in theyear, driven by a slight uptick in business credit; however, housing credithas continued to slow. The banks were opportunistic in repricing assets,but this proved not enough to offset deposit funding pressure – margins were 9bp lower in FY12. Despite sector-specific stresses, overall assetquality improved in FY12 (NPLs -16bp to 161bp), while bad debt chargesat 31bp were helped by provision releases across the sector. ROE fell 80bp to 16.2%, pressured by Basel III related deleveraging, and a 3bpROA reduction to 96bp.

Themes for 2013

Limited revenue growth appears to be a primary issue. This lends itself to an increased productivity focus. Although the

banks appear efficient with 44% CTI ratios, we believe this is more aproduct of super-normal revenue growth historically than cost focus.

Given the softer economic outlook, we remain concerned on the assetquality outlook, particularly within SME exposures.

Australian banks appear well placed for early adoption of Basel IIIcapital rules, albeit without clarity on any extra D-SIB requirements.

Banks dividend yields remain attractive, especially with low rates. Dividend support vs. BDD risk will drive bank performance in FY13.

Key recommendations

We are underweight the banking sector relative to the Australian market,and have no remaining Buy ratings within the sector. Entering 2012 webelieved bank share prices would remain volatile, with bouts of optimismoffset by concerns over Europe and global growth. We expected thebanks to trade in their fair value range of 1.4x to 1.8x book. The “chasefor yield” has driven the banks higher in recent months, and they are nowat the top of this range. Despite further potential yield support we remainconcerned about valuation and see better investment opportunitieselsewhere, especially internationally. The Aussie banks trade on 1.7x P/B,11.6x PE and 6.6% yield (FY13E) basis.

Macro forecasts

Australia 2012 2013 2014GDP 3.7 3.2 3.4Interest rates3 month interest rate (% aver 3.77 3.20 3.7710 year bond yield (% averag 3.36 3.60 4.18Cash Rate (end period) 6.25 6.25 6.25Exchange ratesAUD/USD y/e 1.00 0.76 0.73



Australia 12E 13E 14ENet Int Margin (%) 4.21 4.18 4.15Non Int Income (%) 1.96 1.93 1.92Non Int Expense (%) -2.70 -2.63 -2.58Pre-provision Op Profit (%) 3.47 3.48 3.49Provisions (%) -0.50 -0.51 -0.50Pre-exc. PTP (%) 2.98 2.97 2.99Tax (%) -0.84 -0.84 -0.85UBS Adj. RoRWA (%) 2.11 2.11 2.12Equity Multiplier (x) 7.5 7.4 7.3UBS Adj. RoE (%) 15.8 15.5 15.4



Australia 12E 13E 14EGrowth (%)UBS Adj. EPS 0.7 2.4 3.9Op. Profit Per Share 3.5 2.8 3.8Net Dividend 4.5 3.8 4.3BVPS 3.7 3.6 4.5ValuationUBS Adj. P/E (x) 12.0 11.6 11.2P/OPS (x) 7.3 7.1 6.9P/Book (x) 1.7 1.7 1.6Net Yield (%) 6.3 6.6 6.9


Analysts

Jon Mott +61-2-9324 3864 [email protected]

Chris Williams, CFA +61-2-9324 3968 [email protected]

Adam Lee +61-2-9324 2998 [email protected]


UBS 24

Canada Macro outlook

UBS economists project Canadian GDP growth to be only 2.2% in 2013 – similar to 2012. High consumer debt and house prices remain a concern, but net worth and debt-service ratios remain solid. The Bank of Canada overnight rate is expected to remain low, though UBS forecasts increases later in 2013. While global threats remain high, Canadian structural underpinnings remain solid, with low debt to GDP, stable unemployment of 7.3%, stable house prices, low corporate debt, and good underwriting. Moderate government deficits mean that smaller spending cuts/tax hikes will be needed to reverse the fiscal expansion undertaken during the crisis.

Bank fundamentals

Canadian banks benefit from oligopolistic competition, strong regulation, low-risk mortgages, and continued high sector returns. However, we do not think banks are best positioned, due to weak economic growth, consumer deleveraging, tighter mortgage rules, low rates, and regulatory risk. Nonetheless, we expect Canadian banks to continue to grow and generate strong returns, underpinning increased capital deployment. We expect loan growth to decline to 4-5% in FY 13, with higher business lending providing a partial offset to lower retail growth. We expect NIMs to be flat to lower, due to low rates and competition. We project PCLs to normalize at current levels of 40bp, due to low business PCLs. We note that all banks are already Basel III compliant – with a projected CET 1 ratio of at least 7% in FY 13. Liquidity also remains strong with a loan/deposit ratio of 82%. We project 7% EPS growth, 4% dividend yields, and a 17% ROE, slightly down due to lower leverage.

Themes for 2013

Low growth, low interest rates, and global risks remain key themes. We also expect higher capital requirements medium-term. Given low but stable PCLs, we think managing expenses will increasingly underpin EPS growth. ‘Lower for longer rates’ could hurt margins more than expected – we have delayed our projection for higher NIMs to FY 14. However, we expect low PCLs and solid returns to continue to drive strong excess capital, resulting in capital deployment, including dividend increases. We estimate banks will have an 8.5% Basel III CET 1 ratio by FY 14. We expect market-sensitive revenues to remain depressed – but to be up from FY 12.

Key recommendations

Given moderate growth, we continue to prefer banks with higher international growth, and capital deployment opportunities. We also favour leverage from expense savings and high returns. We like BNS (Key Call) due to higher growth from emerging markets, capital deployment opportunities and higher returns. We also project higher growth from TD, due to continued market share gains in Canada and the U.S., as well as recent acquisitions.

Macro forecasts

Canada 2012 2013 2014GDP 2.2 2.2 2.9Interest rates3 month interest rate (% aver 0.95 1.19 1.9410 year bond yield (% averag 1.82 2.36 3.03Bank of Canada Rate (end pe 1.00 1.19 1.94Exchange ratesUSD/CAD y/e 1.00 1.03 1.05



Canada 12E 13E 14ENet Int Margin (%) 5.16 5.09 5.10Non Int Income (%) 4.47 4.44 4.51Non Int Expense (%) -5.59 -5.46 -5.45Pre-provision Op Profit (%) 4.03 4.07 4.16Provisions (%) -0.61 -0.61 -0.62Pre-exc. PTP (%) 3.41 3.46 3.54Tax (%) -0.81 -0.80 -0.82UBS Adj. RoRWA (%) 2.51 2.56 2.63Equity Multiplier (x) 7.2 6.8 6.4UBS Adj. RoE (%) 18.2 17.4 16.8



Canada 12E 13E 14EGrowth (%)UBS Adj. EPS 8.7 7.0 6.2Op. Profit Per Share 6.4 6.1 5.8Net Dividend 7.6 7.9 6.4BVPS 8.6 9.4 9.2ValuationUBS Adj. P/E (x) 11.3 10.5 9.9P/OPS (x) 7.0 6.6 6.3P/Book (x) 1.9 1.7 1.6Net Yield (%) 4.0 4.3 4.5


Analyst

Peter A Rozenberg +1-416-350 2801 [email protected]


UBS 25

EMEA Macro outlook

We expect aggregate EMEA GDP growth to pick up modestly to 3.5% in 2013 from 2.9% in 2012, and remaining at 3.5% in 2014. Economicperformance should remain quite diverse, led by Nigeria (7-8% growth in 2013) and Kazakhstan (6%), followed by Turkey (4.0%), Russia (3.5%),South Africa (2.9%), the Czech Republic (1.3%) and Hungary (0.6%).We do not anticipate much demand-related inflation pressure in 2013,allowing central banks to remain accommodative. On the fiscal side,governments are likely to show tolerance towards somewhat higherdeficits wherever they can. Given our expectation of a stronger US dollar,EMEA currencies are likely to stay on the soft side.

Bank fundamentals

After strong improvements year-to-date (culminating in a 20.2% upgradeto our sector 2012 EPS estimates since the start of the year), we expect EMEA bank fundamentals to consolidate in 2013. We forecast loangrowth of 11.9% in 2013 (12.0% in 2012) with margins rising slightly to5.15% in 2013 (from 5.11% in 2012). Credit quality is stabilising but anexpansion into riskier consumer loans, notably in Russia, is expected topush up provisions by 20bp to 1.57% in 2013. As a result, we expectsector ROEs to ease to 15.7% next year from 16.7% in 2012. Theaggregated loans-to-deposits ratio should remain stable at 95.5% whilecore capital levels remain among the highest globally, at 13.4%.

Themes for 2013

NIM outlook: Rising liquidity pressures and competition will putpressure on margins. Can banks offset margin pressure via shiftingloan-mix towards higher-yielding consumer loans?

Expense growth: With top-line pressure expected to slow down nextyear, market focus will be on expense growth, with banks that candeliver the best cost control likely to outperform, in our view.

Asset disposal: Difficulties in Europe could also lead to the disposal of non-core EMEA assets by European banks and/or sales of equitystakes in their EMEA subsidiaries.

Key recommendations

Within the EMEA banking context, our top picks are Sberbank (key call), Halkbank (key call), African Bank, ABSA, Capitec, Halyk, Komercni, and VTB. Our least preferred names are Kazkommertsbankand Vakifbank.

Macro forecasts

EMEA 2012 2013 2014Real GDP growth 2.9 3.5 3.5



EMEA 12E 13E 14ENet Int Margin (%) 5.39 5.33 5.31Non Int Income (%) 3.49 3.44 3.46Non Int Expense (%) -4.49 -4.38 -4.28Pre-provision Op Profit (%) 4.39 4.39 4.49Provisions (%) -1.24 -1.42 -1.45Pre-exc. PTP (%) 3.20 3.02 3.09Tax (%) -0.72 -0.69 -0.71UBS Adj. RoRWA (%) 2.42 2.27 2.33Equity Multiplier (x) 7.0 7.0 6.9UBS Adj. RoE (%) 17.0 15.8 16.1



EMEA 12E 13E 14EGrowth (%)UBS Adj. EPS 9.1 7.6 14.6Op. Profit Per Share 13.5 12.0 14.3Net Dividend 16.3 20.4 18.9BVPS 14.7 12.1 12.0ValuationUBS Adj. P/E (x) 8.7 8.2 7.1P/OPS (x) 4.8 4.3 3.8P/Book (x) 1.3 1.1 1.0Net Yield (%) 2.8 3.4 4.3


Analysts

Philip Finch +44-20-7568 3456 [email protected]


UBS 26

Europe ex-UK Macro outlook

The near future looks bleak for the euro-area. UBS estimates low to zeroeconomic growth in 2013 as the euro-crisis continues to drag on without aclear solution in sight. We believe that banking reform in Spain is anabsolutely essential foundation upon which the road to durable recoverymust be built. We remain convinced that Spain must bear the cost of thebanking bailout ahead and that socializing the losses is not a viable optionfor Europe.

Bank fundamentals

While the banks in Scandinavia and the UK have managed tosignificantly strengthen their balance sheets and funding situation overthe past year, we remain vocal critics of banks in the euro-zone, particularly in the periphery. We believe that the level of ECB fundinghas reached a critical level for a number of Spanish, Irish and Portuguesebanks. Currently above the 10% threshold for which investors usuallyrequire restructuring, the situation is clearly unsustainable. In addition, the capital ratios and liquidity buffers are currently too low for a numberof euro-zone banks.

Themes for 2013

Spanish restructuring: The Spanish banking system is currentlybroken and in dire need of comprehensive reconstruction. We believethe four necessary steps towards a resolution in Spain include thecreation of a big bad bank, a funding bank, higher capital levels and abalanced national budget.

Euro-area deconstruction: The deconstruction of the euro continuesas policy measures are not sufficient to reverse the effects of widedifferences in sovereign credit quality. In addition, solvency andcollateral concerns in the euro area banking system drive a rapidreversion in euro-area cross-border holdings of assets and liabilities.

Deleveraging is just beginning: The latest ECB figures show thateuro area loans are in decline. While debt issuance costs have fallenover the recent months, many euro-area banks have turned to cheapECB funding to fill funding gaps. In seeking to exit LTRO funding by its expiry at year-end 2014, many banks may face higher debt issuanceneeds as well. This provides a challenging picture for the euro-area banks’ top line going forward.

Key recommendations

With the SX7E up 42% over the past four months while our earnings expectations for European banks have fallen by 20% year-to-date, we see limited value in the sector and remain underweight. We reiterate ourstrong preference for non euro-zone banks, with Swedbank, Nordea, UniCredit and Intesa SanPaolo as viable buys. We are highly critical of the fundamentals in the Spanish banking system and remain sellers of theSpanish banks.

Macro forecasts

Europe 2012 2013 2014GDP -0.4 0.1 0.9Interest rates3m interest rate (%, average) 0.49 0.75 0.2010 year bond yield (%, avera 1.60 1.85 2.25Exchange ratesEUR/USD y/e 1.25 1.20 1.15



Europe (ex-UK) 12E 13E 14ENet Int Margin (%) 3.75 3.74 3.79Non Int Income (%) 2.99 3.02 3.08Non Int Expense (%) -4.08 -3.99 -3.95Pre-provision Op Profit (%) 2.66 2.78 2.93Provisions (%) -1.18 -1.01 -0.94Pre-exc. PTP (%) 1.32 1.73 1.95Tax (%) -0.38 -0.47 -0.55UBS Adj. RoRWA (%) 0.89 1.18 1.33Equity Multiplier (x) 7.0 7.1 6.9UBS Adj. RoE (%) 6.2 8.3 9.2



Europe (ex-UK) 12E 13E 14EGrowth (%)UBS Adj. EPS -10.6 51.7 20.3Op. Profit Per Share -6.4 10.1 9.7Net Dividend -11.9 43.9 41.1BVPS -2.7 5.1 5.0ValuationUBS Adj. P/E (x) 12.1 9.2 7.8P/OPS (x) 3.7 3.5 3.3P/Book (x) 0.7 0.6 0.6Net Yield (%) 2.5 3.4 4.4


Analysts

Alastair Ryan +44-20-7568 3238 [email protected]

John-Paul Crutchley +44-20-7568 5037 [email protected]


UBS 27

Japan Macro outlook

PM Yoshihiko Noda dissolved the Lower House on 16 November, thus triggering an election on 16 December 2012. Key items on next year’spolicy agenda include the nomination and appointment of the BoJgovernor, which is likely to be influenced by the election. Even thoughthese events will have a major impact on Japan’s macroeconomic policies, we believe monetary policy will stay loose as the economy isexpected to remain relatively weak and CPI is expected to be flat yoy forthe time being. The UBS Japan economics team believes that the Yen’srise will end in 2012, and that the currency will trend lower in 2013.

Bank fundamentals

Banks’ net interest income in their domestic operation is still shrinkingdue to NIM contraction. Even though we see slight recoveries in loangrowth, mainly through loans to electric power companies and other largecompanies, they are not enough to offset narrowing NIM. On the otherhand, overseas business is growing thanks to European banks’ scaling back in global lending markets, which is contributing not only net interestincome but also non-interest income. In terms of asset quality, banks’ credit costs remain very low, but they still have major risks in theirmarketable securities portfolios. In fact, many banks recorded significantequity impairment losses as well as bond trading gains in their FY12 H1 results.

Themes for 2013

In a global banks context, Japanese banks have been defensive since 2011. We believe they will continue to perform defensively in 2013 because of their stable deposit funding and capital sufficiency. Catalystsand themes for the sector in 2013 would include: (1) growing overseas businesses; (2) credit risk in their large exposures (especially to troubledtech companies); (3) normalization of bond trading gains; and (4) progress in reducing the equity risk of their cross-shareholdings. We expect their overseas businesses to be a main earnings driver, whichcould be fuelled by M&A activity.

Key recommendations

Among the major banks, we like SMFG for its likelihood of exceeding FY12 guidance and its smaller equity-holding risk compared to its peers. We also like Resona for its stable earnings and an expectation that it will reach a new agreement with the government on a capital plan by which it will be able to repay public funds fully over several years.

Macro forecasts

Japan 2012 2013 2014GDP 1.7 1.3 1.8Interest rates3 month interest rate (% aver 0.33 0.35 0.4510 year bond yield (% averag 1.10 1.35 1.60Discount Rate (end period) 0-0.1 0-0.1 0-0.1Exchange ratesUSD/JPY y/e 110.00 85.00 90.00



Japan 12E 13E 14ENet Int Margin (%) 2.23 2.27 2.26Non Int Income (%) 1.80 1.66 1.66Non Int Expense (%) -2.35 -2.36 -2.34Pre-provision Op Profit (%) 1.67 1.57 1.58Provisions (%) -0.16 -0.19 -0.20Pre-exc. PTP (%) 1.43 1.38 1.39Tax (%) -0.33 -0.49 -0.49UBS Adj. RoRWA (%) 0.95 0.75 0.76Equity Multiplier (x) 10.1 9.2 8.9UBS Adj. RoE (%) 9.6 6.9 6.8



Japan 12E 13E 14EGrowth (%)UBS Adj. EPS -2.1 -17.4 2.4Op. Profit Per Share -2.9 -6.3 2.2Net Dividend 2.2 10.0 0.1BVPS 9.2 5.1 4.6ValuationUBS Adj. P/E (x) 7.2 9.0 8.8P/OPS (x) 4.0 4.3 4.2P/Book (x) 0.6 0.6 0.6Net Yield (%) 3.5 3.9 3.9


Analyst

Shinichi Ina +81-3-5208 6227 [email protected]


UBS 28

Latin America Macro outlook

We expect Latin America GDP to grow at 4.4% in 2013 from 3.3% in2012, driven by domestic aggregate demand, with Peru (6.0%) and Chile(4.6%) leading the way. In Brazil, GDP growth is forecast to rebound to4.5% in 2013 from 1.3% this year, while in Mexico we project growth of3.6% in 2013 from 3.8% in 2012. CPI in LatAm is expected to rise by 70bps to 5.8% in 2013 with policy rates likely to remain flat next year.The key exception is Brazil, where we expect government stimuli thisyear will likely fuel inflation to 6.2% and the policy rate to 8.0% by end-2013, from 5.5% and 7.25%, respectively, today. Currencies shouldexperience appreciating pressures, revisiting 2012 highs.

Bank fundamentals

In LatAm, we forecast loan growth to re-accelerate to 15.6% in 2013from 10.4% in 2012, driven largely by consumer loans, with loan demand strongest in Peru (20.2% growth) followed by Mexico (15.2%). Marginpressure is expected to continue, with NIMs falling to 7.6% from 8.0% in2012, notably in Brazil, given ongoing government pressure to lowerlending rates. More positively, asset quality should improve, with NPLsforecast to fall by 17bps to 4.7% in 2013, paving the way for the level ofprovisions to average loans to decline by 51bps to 4.67%. Sector EPSgrowth is estimated at 12.0% in 2013, driven by Mexico at 23.3%. Weforecast sector ROE to fall to 18.0% in 2013 from 18.4% in 2013.

Themes for 2013

Margin pressure: In Brazil, the key focus will continue to be onmargin pressure arising from lending reductions on the back ofgovernment pressure and the knock-on impact on sector ROEs.

Provisioning expenses: Countries with late credit cycles such asColombia and Chile could see higher loan-loss provisions, although asset-quality stability in Brazil should lower provisioning costs nextyear. NPL risk in Mexico remains limited, in our view.

Foreign asset disposal: Capital shortfalls among European banksmay result in more non-core LatAm assets being disposed. Localregulatory pressure in Mexico could also see new bank listings.

Key recommendations

Taking a one-year view, our top picks among LatAm banks are Banortein Mexico (NIM expansion, efficiency improvements, ROE turnaroundand supportive valuations) and Itau (excess provisions and relativeunderperformance year-to-date). Our least preferred bank is Banco do Brasil (higher margin risk and ROE structural decline).

Among non-bank financials, our top pick is Bovespa (secular volume growth and strong cost controls) with our least preferred name beingCielo (lower volumes and pricing pressure).

Macro forecasts

Latin America 2012 2013 2014Real GDP growth 3.3 4.4 4.0



Latin America 12E 13E 14ENet Int Margin (%) 9.63 9.19 8.95Non Int Income (%) 4.16 4.08 3.90Non Int Expense (%) -6.91 -6.62 -6.30Pre-provision Op Profit (%) 6.88 6.65 6.55Provisions (%) -3.08 -2.81 -2.57Pre-exc. PTP (%) 3.80 3.85 3.98Tax (%) -1.08 -1.12 -1.19UBS Adj. RoRWA (%) 2.64 2.67 2.73Equity Multiplier (x) 6.9 6.8 6.8UBS Adj. RoE (%) 18.4 18.0 18.7



Latin America 12E 13E 14EGrowth (%)UBS Adj. EPS 3.6 12.0 17.3Op. Profit Per Share 12.2 7.9 12.6Net Dividend 2.8 15.8 17.6BVPS 15.5 12.4 12.9ValuationUBS Adj. P/E (x) 11.1 10.0 8.6P/OPS (x) 4.1 3.8 3.4P/Book (x) 1.9 1.7 1.5Net Yield (%) 3.1 3.6 4.2


Analyst

Philip Finch +44-20-7568 3456 [email protected]


UBS 29

United Kingdom Macro outlook

After a disappointing 2012, UBS estimates low but positive economic growth in the UK for 2013. We believe that the current euro-zone situation will linger on well into next year, resulting in depressed tradevolumes for the UK. Interest rates should remain low as the recent drop inoil and commodity prices trickle through and lower inflation somewhat,providing a small boost to household disposable income. However, as thedrop in commodity prices is a direct result of a slowdown in the globaleconomy and weakening growth prospects, we expect the overall effecton the UK economy to be subdued.

Bank fundamentals

We remain firm supporters of the fundamental state of the UK banksector. The UK banks are well capitalized, carry ample liquidity buffersand seem poised to support the real UK economy through increased levels of lending. The recent Q3 results provided additional evidence of theabove as deleveraging continued apace while capital ratios and liquiditybuffers were further increased. On the asset side of the balance sheet, wesee falling levels of impairment charges as non-core assets are run down ahead of schedule at RBS and Lloyds.

Themes for 2013

The Mark Carney effect: The recent appointment of Mark Carney asBank of England governor represents a potential discontinuity fromwhat had become an increasingly challenging UK regulatory agenda.We believe that the appointment in effect removed the (tail) risk of adilutive equity raise at the behest of the regulator, but remainconcerned that new hurdles could be put in the way of UK banks bythe FPC.

Regulatory agenda: Despite increasing capital ratios and strongerbalance sheets, the UK regulator has been tenacious in its call foradditional bank capital this fall. The FPC has identified a “perceived”capital hole of between £5bn and £35bn, but no specific issues have been identified on a bank-by-bank basis. How and when these issuesare dealt with remain to be seen.

PPI provisions: Q3 saw another round of elevated PPI provisioning atRBS, Lloyds, HSBC and Barclays. Future development in PPI claimswill have a profound impact on reported profits for 2013 and onwards.

Key recommendations

Standard Chartered is our preferred UK bank. The company trades at asubstantial discount to its historical price level while continuing to deliverstrong results and solid income growth. Also, we recently upgraded RBSto buy based on a reduction in regulatory tail risk and the implieddiscount valuation of the core business compared to Lloyds core. We seelimited upside in the near term for the other UK banks and remainneutral.

Macro forecasts

United Kingdom 2012 2013 2014GDP 0.0 1.1 1.2Interest rates3 month interest rate (% aver 0.46 0.75 0.4010 year bond yield (% averag 1.98 2.38 2.85Repo Rate (end period) 0.50 0.50 0.50Exchange ratesGBP/USD y/e 1.56 1.56 1.44



United Kingdom 12E 13E 14ENet Int Margin (%) 3.24 3.24 3.25Non Int Income (%) 2.96 2.74 2.73Non Int Expense (%) -3.52 -3.38 -3.30Pre-provision Op Profit (%) 2.67 2.60 2.69Provisions (%) -0.80 -0.71 -0.69Pre-exc. PTP (%) 2.04 2.07 2.20Tax (%) -0.45 -0.51 -0.53UBS Adj. RoRWA (%) 1.32 1.41 1.52Equity Multiplier (x) 7.3 7.2 7.2UBS Adj. RoE (%) 9.7 10.2 10.9



United Kingdom 12E 13E 14EGrowth (%)UBS Adj. EPS 32.3 13.3 14.3Op. Profit Per Share 8.3 0.0 8.9Net Dividend 8.9 7.1 9.0BVPS 3.3 4.8 5.1ValuationUBS Adj. P/E (x) 10.1 9.4 8.4P/OPS (x) 4.7 4.7 4.4P/Book (x) 0.9 0.8 0.8Net Yield (%) 3.4 3.7 4.5


Analysts

John-Paul Crutchley +44-20-7568 5037 [email protected]

Alastair Ryan +44-20-7568 3238 [email protected]


UBS 30

United States Macro outlook

The US economic recovery remains sluggish, and the universal banks andbrokers are very sensitive to the high levels of uncertainty and softgrowth expectations in the global economy. In the US, headwinds from high unemployment, uncertain capital markets revenues, fragileconfidence levels, and low net interest margins are key constrainingfactors for earnings growth. We believe the universal bank and brokerstocks are likely to remain volatile, with elevated near-term downside risk, although we believe current valuations could prove attractive withthe benefit of a three-year look. We continue to have a positive view ofthe risk/reward offered by large and mid-cap banks, given attractivevaluations, and the amount of excess capital and liquidity available forincreased deployment and continued above-GDP loan growth as thesebanks continue to gain market share in the US.

Bank fundamentals

We see a divergence between the fundamentals of US universal banksand brokers versus the large and mid-cap banks in the near term.Universal banks and brokers face a number of headwinds, as capitalmarkets revenues are likely to remain weak, with continued pressure onbank NIM. We forecast weakening commercial loan growth, due to lowered global confidence. US universal banks and brokers have growncapital levels substantially since the crisis, but capital returns may proveweak given regulatory constraints. Bank liquidity is far stronger than in2008, but funding is a concern for universal banks and brokers, and tendsto return in periods of market stress.

For large and mid-cap banks, asset quality has clearly passed a criticalinflection point and we estimate that regional banks are at least 75%through ultimate loss recognition for this credit cycle. Capital has beenrebuilt with large and mid-cap regional banks possessing c200-300bps of excess capital relative to Basel III 2019 standards. Further, CCAR 2013should be a positive catalyst and we believe the large and mid-cap banks are well positioned for higher capital deployment. Liquid assets nowaccount for approximately 10-25% of large and mid-cap balance sheets, and redeployment could mitigate the extent of margin pressure. Driven bymarket share gains, large and mid-cap banks have posted solid loangrowth for the past six quarters, and we foresee favourable loan trendscontinuing, which should moderate margin pressure in the low interestenvironment. Large and mid-cap bank valuations are attractiveconsidering expected returns and risks, at 1.2-1.5x TBV, and averagingnear 9.5x 2013E earnings for large-cap banks and 11.5x for the mid-caps. We believe better-than-feared fundamentals should continue to lead torevaluation of the large and mid-cap sector.

Macro forecasts

United States 2012 2013 2014GDP 2.1 2.3 3.0Interest rates3 month interest rate (% aver 0.09 0.10 0.1010 year bond yield (% averag 1.78 2.06 2.70Fed Funds Rate (end period) 5.25 4.25 4.25Exchange ratesEUR/USD y/e 1.25 1.20 1.15



United States 12E 13E 14ENet Int Margin (%) 3.89 3.79 3.86Non Int Income (%) 4.03 4.22 4.32Non Int Expense (%) -5.20 -5.03 -5.02Pre-provision Op Profit (%) 2.72 2.98 3.16Provisions (%) -0.59 -0.60 -0.59Pre-exc. PTP (%) 2.10 2.35 2.53Tax (%) -0.61 -0.71 -0.79UBS Adj. RoRWA (%) 1.40 1.55 1.66Equity Multiplier (x) 6.6 6.2 6.1UBS Adj. RoE (%) 9.3 9.7 10.1



United States 12E 13E 14EGrowth (%)UBS Adj. EPS 16.7 28.9 13.5Op. Profit Per Share 7.0 18.6 11.8Net Dividend 40.2 41.1 58.0BVPS 8.5 7.6 7.6ValuationUBS Adj. P/E (x) 10.6 8.8 7.8P/OPS (x) 5.2 4.5 4.0P/Book (x) 0.8 0.7 0.7Net Yield (%) 2.0 2.4 3.0


Analyst

Brennan Hawken +1-212-713 9439 [email protected]

Greg Ketron +1-212-713 4290 [email protected]

Stephen Scinicariello +1-212-713 1841 [email protected]


UBS 31

Themes for 2013

European debt crisis: Global growth and capital markets activity arelikely to remain under pressure until European concerns are resolved.Further, near-term fiscal austerity is likely to create another obstacle to economic growth, and universal banks and brokers’ earnings areunlikely to recover until growth returns.

Slow growth environment: Given the macroeconomic backdrop, weanticipate loan growth and NIM expansion will remain headwinds.We believe C&I loan growth at universal banks may be difficult tomaintain, due to lowered confidence and loan demand frommultinational clients. We believe large and mid-cap banks have a better opportunity to grow loans, in particular C&I as their customer base is less affected by global forces, but also in other areas such asCRE, mortgage and consumer as they continue to increase theirmarket share in the US, benefitting from larger and foreign banksdownscaling exposure due to capital requirements, and also from other sources such as lack of competition from securitization markets.While NIM may be approaching trough levels, we believe significantexpansion is unlikely as long as interest rates remain at historicallows.

Divergent capital deployment: The Fed’s 2013 review of large bankcapital plans will dictate banks’ approaches to dividends, buybacks,and M&A. We believe the Fed could remain cautious arounduniversal banks and brokers returning capital in this cloudy economicenvironment. However, large-cap banks subject to the review, whichhave higher levels of excess capital and are less involved in capital-intensive trading businesses, are more likely to be able to deploysignificant levels of capital in 2013.

Adaptation to regulation: While banks await further detail on theVolcker rule and other key regulations, we believe the combination ofincreased capital charges and regulatory uncertainty is leading banksto re-evaluate their commitment to balance sheet-intensive businesses. We expect banks to continue to focus on cost reductions, and believethey will slowly become more effective in finding revenue offsets forthe new regulatory environment.

Large and mid-cap regional banks: (1) Despite the slow growthenvironment, large and mid-cap banks should continue to benefit frommarket share gains from larger financial institutions, foreign banks,non-banks, the securitization market, and smaller banks. (2) Given theinterest rate environment and the accommodative posture of the Fed,NIM pressure will likely remain a headwind in 2013 and beyond.However, the deployment of excess liquidity into meaningful loangrowth should continue to serve as a mitigating factor supporting NII.(3) Given the macroeconomic climate, we expect further efficiencyimprovements. (4) Capital deployment will likely remain a key themewith large and mid-cap banks accelerating capital actions post CCAR2013 (a positive catalyst), including M&A. Because most large and


UBS 32

mid-cap banks are comparatively impacted less by the new regulatory paradigm and should be able to increase returns, we maintain ourpositive view.

Key recommendations

Among large-cap banks, our most preferred stock is US Bancorp (USB, Buy, US$38 price target). USB has gained the most market share amongthe large-cap banks in our coverage over the past two years, posting thehighest loan and revenue growth in the group. USB also possesses thelowest-cost structure in this group, bringing more revenue growth to thebottom line than peers. USB is also repatriating the greatest amount of capital in the group, returning 80-90% of earnings in 2012, and we expecta repeat of this with potential to go higher in 2013. While USB appearsmore expensive than peers, trading near 10.5x 2013E earnings and 2.8xTBV, we believe this is supported by superior returns (16-17% ROE currently and 18% longer-term) and the bank’s ability to grow TBV at arate of 12%+ while repatriating capital at a rate of 80-90% of earnings.

Among mid-cap banks, our most preferred stock is KeyCorp (KEY, Buy, US$10 price target). KeyCorp is more than 75% through thiscycle’s loss recognition. With Tier 1 Common at 11.4%, KEY has one ofthe strongest capital positions in our bank coverage, providing significantflexibility, and is positioned to perform among the best on the upcomingCCAR stress test. Improving margin trends, efficiency improvement (ontrack to save expenses of US$200m per year), and a continued marketshare opportunity provide sources of upside potential. Its valuation isoverly discounted at 0.9x TBV, given our expected returns.


UBS 33

Appendix 1: DuPont analysis


UBS 34

Table 9: Global Banks

Global BanksP&L, % avg RWAs 2008 2009 2010 2011E 2012E 2013E 2014ENet interest income 3.92 4.34 4.45 4.44 4.37 4.28 4.27Non-interest income 2.36 3.12 3.23 3.08 2.98 2.98 3.01Operating expenses (ex-goodwill) -3.69 -3.94 -4.21 -4.22 -4.04 -3.92 -3.87Operating profit (ex-goodwill) 2.68 3.52 3.48 3.30 3.31 3.34 3.41Provisions -1.26 -1.66 -1.08 -0.82 -0.80 -0.79 -0.77Pre-exc. profit before tax 1.34 1.84 2.38 2.45 2.49 2.55 2.65Exceptionals -0.09 -0.06 -0.01 -0.06 0.00 0.00 0.00Profit before tax 1.25 1.78 2.37 2.39 2.49 2.55 2.65Tax -0.33 -0.44 -0.60 -0.62 -0.64 -0.68 -0.71Minorities & others -0.05 -0.18 -0.08 -0.08 -0.08 -0.07 -0.07UBS adj. net profit (~RoRWA) 1.06 1.31 1.71 1.77 1.78 1.81 1.87

Net interest margin (IYA) (%) 2.99 2.91 2.90 2.82 2.78 2.72 2.73Cost:income (%) 66.7 51.9 53.2 55.0 54.2 53.1 52.0Earnings growth (%) 7.5 146.3 51.2 26.7 187.0 16.4 12.3RoE (%) 8.9 11.2 13.3 13.4 13.1 12.8 13.0

Loan growth (%) 21.3 5.1 8.3 10.1 6.0 6.7 6.5Deposit growth (%) 23.4 10.5 8.0 10.8 6.6 6.3 6.0Tier 1 ratio (%) 9.8 11.1 11.9 12.0 12.3 12.7 13.0Equity : assets (%) 5.6 6.7 7.0 7.0 7.3 7.4 7.6

NPLs : loans (%) 2.1 2.9 2.7 2.4 2.4 2.4 2.4Risk Reserves : NPAs (%) 119.3 108.1 119.1 130.9 125.8 114.0 100.7LLR : Loans (%) 2.2 2.8 2.7 2.5 2.4 2.3 2.2Loans : deposits (%) 96 91 91 91 90 90 91

Source: UBS estimates. Note: Aggregate ratios are calculated on a market cap. weighted basis using a "Free Float Factor" to adjust the weighting. Where available, these aggregates have been calculated using factors obtained from MSCI/Factset, and where unavailable, the factors are source UBS.

Chart 19: Global banks – consensus one-year forward P/E Chart 20: Global banks – one year forward P/B

7.008.009.00

10.0011.0012.0013.0014.0015.0016.0017.00

Nov-0

2

May-0

3

Nov-0

3

May-0

4

Nov-0

4

May-0

5

Nov-0

5

May-0

6

Nov-0

6

May-0

7

Nov-0

7

May-0

8

Nov-0

8

May-0

9

Nov-0

9

May-1

0

Nov-1

0

May-1

1

Nov-1

1

May-1

2

Nov-1

2

Current (9.52) Average (11.06)

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Nov-0

2

May-0

3

Nov-0

3

May-0

4

Nov-0

4

May-0

5

Nov-0

5

May-0

6

Nov-0

6

May-0

7

Nov-0

7

May-0

8

Nov-0

8

May-0

9

Nov-0

9

May-1

0

Nov-1

0

May-1

1

Nov-1

1

May-1

2

Nov-1

2


Source: I/B/E/S, Thomson Financial DataStream, UBS Source: MSCI, Thomson Financial DataStream, UBS


UBS 35

Table 10: U.S. Banks

United StatesP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 3.52 3.94 4.18 4.01 3.89 3.79 3.86Non-interest income 2.63 4.14 4.17 4.02 4.03 4.22 4.32Operating expenses (ex-goodwill) -4.16 -4.63 -5.16 -5.36 -5.20 -5.03 -5.02Operating profit (ex-goodwill) 1.99 3.45 3.18 2.67 2.72 2.98 3.16Provisions -1.87 -2.56 -1.61 -0.78 -0.59 -0.60 -0.59Pre-exc. profit before tax 0.10 0.86 1.54 1.85 2.10 2.35 2.53Exceptionals -0.03 0.01 -0.01 0.00 0.01 0.01 0.01Profit before tax 0.06 0.87 1.52 1.85 2.11 2.35 2.54Tax 0.11 -0.06 -0.43 -0.51 -0.61 -0.71 -0.79Minorities & others -0.06 -0.58 -0.10 -0.09 -0.09 -0.08 -0.09UBS adj. net profit (~RoRWA) 0.21 0.41 0.99 1.24 1.40 1.55 1.66

Net interest margin (IYA) (%) 3.30 3.23 3.34 3.12 2.95 2.85 2.88Cost:income (%) 70.4 57.2 61.7 66.7 65.5 62.2 60.6Earnings growth (%) -54.2 77.3 48.3 35.1 770.4 27.5 10.5RoE (%) -0.3 3.1 7.2 8.5 9.3 9.7 10.1

Loan growth (%) 46.4 -8.6 1.3 2.7 0.2 2.9 3.3Deposit growth (%) 48.3 3.4 2.3 12.8 2.9 1.6 2.1Tier 1 ratio (%) 10.5 11.0 12.2 12.5 12.8 13.4 13.8Equity : assets (%) 6.5 8.7 9.3 9.5 10.0 10.4 10.5



Chart 21: U.S. banks – consensus one-year forward P/E Chart 22: U.S. banks – one year forward P/B

6.008.00

10.0012.0014.0016.0018.0020.0022.0024.0026.00

Nov-0

2

May-0

3

Nov-0

3

May-0

4

Nov-0

4

May-0

5

Nov-0

5

May-0

6

Nov-0

6

May-0

7

Nov-0

7

May-0

8

Nov-0

8

May-0

9

Nov-0

9

May-1

0

Nov-1

0

May-1

1

Nov-1

1

May-1

2

Nov-1

2


0.65

0.85

1.05

1.25

1.45

1.65

1.85

2.05

2.25

Nov-0

2

May-0

3

Nov-0

3

May-0

4

Nov-0

4

May-0

5

Nov-0

5

May-0

6

Nov-0

6

May-0

7

Nov-0

7

May-0

8

Nov-0

8

May-0

9

Nov-0

9

May-1

0

Nov-1

0

May-1

1

Nov-1

1

May-1

2

Nov-1

2




UBS 36

Table 11: European Banks

EuropeP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 3.25 3.46 3.59 3.60 3.53 3.52 3.56Non-interest income 2.25 3.52 3.90 3.41 2.98 2.90 2.93Operating expenses (ex-goodwill) -3.77 -4.07 -4.54 -4.42 -3.84 -3.72 -3.66Operating profit (ex-goodwill) 1.74 2.91 2.95 2.59 2.67 2.70 2.82Provisions -1.20 -1.77 -1.07 -0.97 -1.02 -0.88 -0.83Pre-exc. profit before tax 0.24 1.08 1.88 1.55 1.60 1.85 2.03Exceptionals -0.04 0.00 -0.03 -0.27 -0.03 -0.01 0.00Profit before tax 0.20 1.07 1.85 1.27 1.58 1.84 2.03Tax -0.03 -0.21 -0.41 -0.36 -0.41 -0.49 -0.54Minorities & others -0.08 -0.10 -0.10 -0.09 -0.09 -0.10 -0.10UBS adj. net profit (~RoRWA) 0.36 0.85 1.39 1.11 1.08 1.28 1.41

Net interest margin (IYA) (%) 1.99 2.01 1.94 1.88 1.94 1.95 1.99Cost:income (%) 103.6 55.9 57.5 60.8 58.2 57.0 55.4Earnings growth (%) -4.0 513.2 68.9 -11.2 18.0 34.8 21.9RoE (%) 4.5 7.6 10.1 7.6 7.7 9.1 9.9




Chart 23: European banks – consensus one-year forward P/E Chart 24: European banks – one-year forward P/B

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UBS 37

Table 12: UK Banks

United KingdomP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 3.71 3.47 3.49 3.48 3.24 3.24 3.25Non-interest income 3.09 3.17 3.04 2.72 2.96 2.74 2.73Operating expenses (ex-goodwill) -3.48 -3.30 -3.64 -3.68 -3.52 -3.38 -3.30Operating profit (ex-goodwill) 3.32 3.34 2.89 2.53 2.67 2.60 2.69Provisions -1.81 -2.37 -1.30 -1.06 -0.80 -0.71 -0.69Pre-exc. profit before tax 0.86 0.98 1.64 1.52 1.98 2.01 2.14Exceptionals 0.00 -0.04 -0.04 -0.28 -0.11 -0.03 -0.01Profit before tax 0.85 0.95 1.60 1.23 1.87 1.99 2.13Tax -0.29 -0.14 -0.43 -0.36 -0.45 -0.51 -0.53Minorities & others -0.09 -0.12 -0.12 -0.13 -0.13 -0.13 -0.13UBS adj. net profit (~RoRWA) 1.01 0.82 1.11 1.07 1.32 1.41 1.52

Net interest margin (IYA) (%) 2.50 2.39 2.27 2.16 2.02 2.01 2.05Cost:income (%) 52.8 49.6 55.3 59.1 56.8 56.4 54.8Earnings growth (%) -22.3 2.9 14.1 3.1 44.7 9.7 24.0RoE (%) 9.8 7.4 8.7 8.0 9.7 10.2 10.9




Chart 25: UK banks – consensus one-year forward P/E Chart 26: UK banks – one year forward P/B

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11.0013.0015.0017.0019.0021.0023.0025.00

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UBS 38

Table 13: Australian Banks

AustraliaP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 3.47 4.09 4.13 4.25 4.21 4.18 4.15Non-interest income 1.91 1.99 1.92 1.91 1.96 1.93 1.92Operating expenses (ex-goodwill) -2.49 -2.65 -2.68 -2.75 -2.70 -2.63 -2.58Operating profit (ex-goodwill) 2.89 3.43 3.37 3.41 3.47 3.48 3.49Provisions -0.81 -1.05 -0.56 -0.41 -0.50 -0.51 -0.50Pre-exc. profit before tax 2.09 2.38 2.81 3.00 2.98 2.97 2.99Exceptionals 0.00 0.00 0.00 0.00 0.00 0.00 0.00Profit before tax 2.08 2.38 2.81 3.00 2.98 2.97 2.99Tax -0.56 -0.67 -0.80 -0.85 -0.84 -0.84 -0.85Minorities & others -0.04 -0.03 -0.03 -0.03 -0.03 -0.03 -0.02UBS adj. net profit (~RoRWA) 1.49 1.68 1.98 2.12 2.11 2.11 2.12





Chart 27: Australian banks – consensus one-year forward P/E Chart 28: Australian banks – one year forward P/B

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UBS 39

Table 14: Canadian Banks

CanadaP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 3.91 4.44 4.79 5.12 5.16 5.09 5.10Non-interest income 3.86 4.67 4.57 4.54 4.47 4.44 4.51Operating expenses (ex-goodwill) -4.71 -5.24 -5.51 -5.66 -5.59 -5.46 -5.45Operating profit (ex-goodwill) 3.05 3.87 3.85 4.01 4.03 4.07 4.16Provisions -0.50 -0.91 -0.67 -0.60 -0.61 -0.61 -0.62Pre-exc. profit before tax 2.56 2.96 3.18 3.40 3.41 3.46 3.54Exceptionals -0.69 -0.77 0.01 -0.06 -0.09 0.00 0.00Profit before tax 1.87 2.19 3.19 3.34 3.33 3.46 3.54Tax -0.97 -1.08 -0.83 -0.84 -0.81 -0.80 -0.82Minorities & others -0.02 -0.10 -0.12 -0.11 -0.11 -0.10 -0.09UBS adj. net profit (~RoRWA) 1.89 2.05 2.16 2.45 2.51 2.56 2.63


Loan growth (%) 19.7 -2.7 5.4 29.2 8.8 4.7 4.2Deposit growth (%) 20.3 -4.1 7.9 13.0 8.9 4.7 4.2Tier 1 ratio (%) 9.5 11.8 12.8 13.0 12.9 13.8 14.8Equity : assets (%) 4.1 4.9 4.9 4.5 4.8 5.1 5.4



Chart 29: Canadian banks – consensus one-year forward P/E Chart 30: Canadian banks – one year forward P/B

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UBS 40

Table 15: Japanese Banks

JapanP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 2.09 2.33 2.30 2.31 2.23 2.27 2.26Non-interest income 1.13 1.39 1.68 1.89 1.80 1.66 1.66Operating expenses (ex-goodwill) -1.84 -2.21 -2.30 -2.45 -2.35 -2.36 -2.34Operating profit (ex-goodwill) 1.69 1.51 1.67 1.75 1.67 1.57 1.58Provisions -1.26 -0.67 -0.30 -0.17 -0.16 -0.19 -0.20Pre-exc. profit before tax -0.08 0.74 1.08 1.58 1.43 1.38 1.39Exceptionals 0.01 0.04 0.04 0.04 0.00 0.00 0.00Profit before tax -0.07 0.78 1.11 1.61 1.43 1.38 1.39Tax -0.31 -0.22 -0.32 -0.46 -0.33 -0.49 -0.49Minorities & others -0.10 -0.13 -0.07 -0.15 -0.14 -0.15 -0.14UBS adj. net profit (~RoRWA) -0.59 0.40 0.70 0.99 0.95 0.75 0.76

Net interest margin (IYA) (%) 1.34 1.37 1.23 1.15 1.15 1.16 1.16Cost:income (%) 21.5 59.2 57.7 58.1 58.5 60.1 59.6Earnings growth (%) 1597.1 181.4 66.4 65.2 5.8 -17.8 2.4RoE (%) -10.2 5.8 8.8 10.9 9.6 6.9 6.8

Loan growth (%) 5.0 -6.1 -2.2 9.9 -2.4 0.9 0.8Deposit growth (%) 1.6 10.4 2.5 10.6 -1.8 0.9 0.9Tier 1 ratio (%) 8.1 9.7 11.6 12.0 13.0 13.3 13.7Equity : assets (%) 3.1 3.7 3.9 4.1 4.3 4.5 4.6



Chart 31: Japanese banks – consensus one-year forward P/E Chart 32: Japanese banks – one year forward P/B

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21.0023.0025.00

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UBS 41

Table 16: GEM Banks

GEMP&L, % avg RWAs 2008 2009 2010 2011E 2012E 2013E 2014ENet interest income 5.57 5.74 5.71 5.64 5.63 5.43 5.32Non-interest income 2.00 2.27 2.31 2.27 2.25 2.20 2.17Operating expenses (ex-goodwill) -3.40 -3.66 -3.66 -3.57 -3.55 -3.43 -3.31Operating profit (ex-goodwill) 4.17 4.34 4.35 4.34 4.33 4.21 4.18Provisions -1.21 -1.50 -1.11 -1.04 -1.07 -1.14 -1.12Pre-exc. profit before tax 2.98 2.86 3.26 3.33 3.28 3.08 3.08Exceptionals 0.00 0.02 0.01 0.02 0.03 0.00 0.00Profit before tax 2.98 2.88 3.27 3.35 3.31 3.08 3.08Tax -0.72 -0.66 -0.78 -0.80 -0.78 -0.74 -0.75Minorities & others -0.01 -0.04 -0.04 -0.05 -0.06 -0.04 -0.04UBS adj. net profit (~RoRWA) 2.23 2.15 2.44 2.50 2.46 2.30 2.29





Chart 33: GEM banks – consensus one-year forward P/E Chart 34: GEM banks – one year forward P/B

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UBS 42

Table 17: Asian Banks

Asia (ex-Japan)P&L, % avg RWAs 2008 2009 2010 2011E 2012E 2013E 2014ENet interest income 5.11 4.47 4.57 4.60 4.58 4.43 4.34Non-interest income 1.38 1.42 1.49 1.54 1.52 1.48 1.48Operating expenses (ex-goodwill) -2.68 -2.57 -2.53 -2.51 -2.49 -2.41 -2.35Operating profit (ex-goodwill) 3.81 3.31 3.52 3.63 3.61 3.51 3.48Provisions -1.04 -0.71 -0.62 -0.58 -0.51 -0.65 -0.67Pre-exc. profit before tax 2.79 2.62 2.92 3.08 3.13 2.87 2.82Exceptionals -0.01 0.03 0.01 0.03 0.04 0.00 0.00Profit before tax 2.78 2.65 2.94 3.11 3.18 2.87 2.82Tax -0.68 -0.58 -0.67 -0.71 -0.71 -0.65 -0.64Minorities & others -0.02 -0.03 -0.03 -0.02 -0.03 -0.03 -0.03UBS adj. net profit (~RoRWA) 2.08 2.01 2.23 2.35 2.40 2.20 2.16





Chart 35: Asian banks – consensus one-year forward P/E Chart 36: Asian banks – one year forward P/B

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UBS 43

Table 18: EMEA Banks

EMEAP&L, % avg RWAs 2008 2009 2010 2011 2012E 2013E 2014ENet interest income 6.06 6.41 5.83 5.34 5.39 5.33 5.31Non-interest income 4.07 4.21 4.04 3.64 3.49 3.44 3.46Operating expenses (ex-goodwill) -5.12 -4.77 -4.80 -4.48 -4.49 -4.38 -4.28Operating profit (ex-goodwill) 5.01 5.85 5.07 4.50 4.39 4.39 4.49Provisions -1.83 -2.98 -1.61 -1.11 -1.24 -1.42 -1.45Pre-exc. profit before tax 3.20 2.85 3.51 3.44 3.20 3.02 3.09Exceptionals 0.02 0.02 -0.01 -0.02 -0.01 -0.01 -0.01Profit before tax 3.22 2.88 3.50 3.42 3.19 3.01 3.08Tax -0.73 -0.64 -0.79 -0.78 -0.72 -0.69 -0.71Minorities & others -0.04 -0.05 -0.04 -0.05 -0.06 -0.06 -0.06UBS adj. net profit (~RoRWA) 2.38 2.16 2.67 2.63 2.42 2.27 2.33

Net interest margin (IYA) (%) 5.51 5.42 4.94 4.80 5.11 5.12 5.18Cost:income (%) 52.7 46.0 49.4 50.7 51.5 51.0 49.7Earnings growth (%) -4.7 -1.1 237.8 21.2 9.4 7.7 14.7RoE (%) 16.1 13.4 16.8 17.7 17.0 15.8 16.1




Chart 37: EM EE banks – consensus one-year forward P/E Chart 38: EM EE banks – one year forward P/B

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UBS 44

Table 19: Latam Banks

Latin AmericaP&L, % avg RWAs 2008 2009 2010 2011E 2012E 2013E 2014ENet interest income 11.06 10.56 10.44 10.26 9.80 9.34 9.08Non-interest income 5.01 4.39 4.47 4.33 4.23 4.13 3.94Operating expenses (ex-goodwill) -9.62 -7.50 -7.66 -7.45 -7.08 -6.77 -6.44Operating profit (ex-goodwill) 6.44 7.46 7.25 7.13 6.95 6.70 6.59Provisions -1.83 -3.66 -2.84 -2.95 -3.16 -2.87 -2.62Pre-exc. profit before tax 4.64 3.81 4.41 4.19 3.80 3.84 3.98Exceptionals 0.02 0.00 0.00 0.00 0.00 0.00 0.00Profit before tax 4.67 3.81 4.42 4.19 3.80 3.84 3.98Tax -1.20 -1.02 -1.23 -1.17 -1.09 -1.14 -1.21Minorities & others 0.29 -0.11 -0.10 -0.15 -0.15 -0.09 -0.09UBS adj. net profit (~RoRWA) 3.59 2.67 3.06 2.91 2.62 2.64 2.70


Loan growth (%) 31.3 2.8 22.1 18.4 10.3 15.7 16.3Deposit growth (%) 56.0 -0.7 10.2 15.9 2.5 13.2 13.5Tier 1 ratio (%) 12.4 14.5 13.5 12.9 13.7 13.6 13.5Equity : assets (%) 7.7 9.1 8.7 8.7 8.7 8.6 8.6



Chart 39: Latam banks – consensus one-year forward P/E Chart 40: Latam banks – one year forward P/B

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UBS 45

Appendix 2: Capital & asset quality


UBS 46

Table 20: Capital

Price(Local) Tier 1 Ratio (%) Common Equity: Assets (%) Tangible Common Equity: RWA (%)

30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E

Australia, Canada, US, JapanANZ Banking Group 24.36 10.1 10.9 10.8 10.8 11.2 11.7 12.2 6.2 6.1 6.3 6.4 6.5 6.7 6.9 10.1 10.7 11.1 11.1 11.5 12.0 12.5Bank of Queensland Lim 7.02 8.7 8.4 9.5 9.4 9.4 9.5 9.5 5.6 6.0 6.5 6.4 6.4 6.4 6.4 8.3 8.8 10.2 10.0 9.8 9.7 9.6Bendigo and Adelaide B 8.08 7.8 8.4 9.0 9.1 9.2 9.3 9.4 7.2 7.4 7.3 7.2 7.1 7.0 7.0 15.2 14.9 15.4 15.1 14.9 14.7 14.6Commonwealth Bank of 59.69 10.0 10.0 9.9 10.5 10.7 10.8 10.9 5.4 5.6 5.6 5.6 5.6 5.6 5.6 10.1 10.7 10.8 11.5 11.6 11.8 11.9Macquarie Group Ltd 32.76 10.7 13.8 13.1 12.8 12.7 12.7 12.6 7.2 7.3 7.0 7.0 7.1 7.1 7.2 18.0 19.0 18.5 18.5 18.7 18.9 19.1National Australia Bank 24.30 8.9 9.7 10.3 10.3 10.4 10.6 10.8 5.0 4.9 5.1 5.1 5.1 5.1 5.2 9.4 10.4 11.3 11.3 11.3 11.5 11.8Westpac Banking Corpo 25.50 9.1 9.7 9.9 10.6 10.8 10.9 11.0 6.2 6.2 6.6 6.5 6.5 6.5 6.5 9.6 10.7 10.8 11.1 11.2 11.4 11.5Australia 9.5 10.0 10.2 10.5 10.8 11.0 11.2 5.7 5.8 5.9 5.9 6.0 6.0 6.1 9.9 10.7 11.0 11.3 11.5 11.7 11.9

Bank of Montreal 59.67 13.5 12.0 12.7 13.2 13.7 14.3 14.8 4.7 4.7 4.8 4.9 5.1 5.3 5.5 11.0 9.5 10.8 11.3 11.9 12.4 13.0Bank of Nova Scotia 56.00 11.8 12.2 12.7 13.4 14.1 14.8 15.5 4.5 4.4 4.9 5.1 5.4 5.6 5.9 9.6 8.0 9.5 10.3 11.1 11.9 12.7Canadian Imperial Bank 80.20 13.9 14.7 14.5 15.6 16.8 17.9 19.2 3.6 3.4 3.8 4.1 4.5 4.8 5.2 10.1 10.5 11.8 13.0 14.2 15.5 16.7National Bank of Canad 77.58 14.0 13.6 12.7 13.3 14.4 15.5 16.6 4.2 3.5 3.7 3.9 4.2 4.6 4.9 10.8 11.5 12.0 12.6 13.7 14.8 16.0RBC Financial Group 58.90 13.0 13.3 13.1 14.1 15.2 16.3 17.4 4.7 4.4 4.8 5.1 5.5 5.8 6.2 10.5 10.2 11.4 12.5 13.6 14.7 15.8TD Bank Financial Grou 82.98 12.2 13.0 12.4 13.5 14.6 15.9 17.1 6.3 5.3 5.4 5.7 6.0 6.3 6.6 12.3 12.3 12.7 13.8 14.9 16.1 17.4Canada 12.8 13.0 12.9 13.8 14.8 15.8 16.8 4.9 4.5 4.8 5.1 5.4 5.7 6.0 10.8 10.2 11.3 12.3 13.3 14.3 15.3

Aozora Bank 254.00 18.4 19.4 17.4 17.7 17.9 17.4 17.1 7.8 8.4 7.2 7.5 7.7 7.7 7.8 12.8 14.1 12.8 13.6 14.3 14.4 14.5Bank of Yokohama 391.00 10.1 11.4 11.8 11.9 12.1 12.3 12.5 5.9 6.1 6.4 6.6 6.8 6.9 7.1 10.4 11.8 12.3 12.4 12.6 12.8 13.0Chiba Bank 492.00 12.1 13.0 13.1 13.3 13.5 13.7 14.0 5.8 6.0 6.3 6.5 6.6 6.8 7.0 12.3 13.7 13.8 14.0 14.2 14.4 14.6Fukuoka Financial Grou 325.00 6.7 6.6 6.9 7.0 7.0 7.2 7.3 4.5 4.7 4.8 4.9 5.0 5.1 5.2 6.5 6.8 7.3 7.5 7.6 7.9 8.1Mitsubishi UFJ Financia 377.00 11.3 11.6 13.0 13.4 13.8 14.3 14.8 4.2 4.4 4.6 4.8 4.9 5.1 5.3 9.2 9.9 10.9 11.4 11.8 12.3 12.8Mizuho Financial Group 132.00 11.9 12.8 13.6 13.8 14.1 14.4 14.8 2.4 2.7 2.9 3.0 3.1 3.2 3.5 7.5 8.8 9.4 9.7 10.0 10.3 11.4Resona Holdings 345.00 7.5 9.3 10.9 11.3 11.7 12.2 12.7 1.5 2.0 2.5 2.7 2.9 3.1 3.3 3.4 5.1 6.3 6.8 7.3 7.8 8.3Shinsei Bank 140.00 7.8 8.2 8.7 9.3 10.0 10.7 11.3 5.3 6.5 6.9 7.3 7.8 8.2 8.7 7.5 7.9 8.4 9.0 9.7 10.4 11.0Shizuoka Bank 815.00 14.1 16.1 17.3 17.5 17.7 18.0 18.3 7.3 7.5 8.1 8.3 8.4 8.6 8.8 15.4 17.7 19.0 19.2 19.3 19.5 19.8Sumitomo Mitsui Financ 2,654 12.5 12.3 13.1 13.5 14.0 14.5 15.0 3.7 3.6 3.9 4.1 4.3 4.5 4.7 9.4 9.4 10.0 10.5 11.0 11.5 12.0Sumitomo Mitsui Trust H 250.00 11.6 11.9 13.0 13.4 13.8 14.2 NA 4.6 5.0 4.9 5.1 5.3 5.6 NA 9.2 9.0 9.2 9.6 10.1 10.6 NASURUGA Bank 1,066 10.0 9.8 10.1 10.5 11.1 11.7 12.4 5.5 5.6 5.8 6.1 6.4 6.7 7.0 10.0 10.0 10.3 10.7 11.3 11.9 12.5Japan 11.5 12.0 13.0 13.3 13.7 14.1 14.6 3.9 4.1 4.3 4.5 4.6 4.8 5.0 9.0 9.7 10.4 10.8 11.2 11.6 12.3


UBS 47


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Goldman Sachs Group 117.79 16.0 13.8 15.3 15.8 16.5 17.4 18.5 7.7 7.3 7.3 7.5 7.8 8.3 8.8 15.1 13.9 15.1 15.6 16.4 17.3 18.4Morgan Stanley 16.87 15.5 16.3 17.2 17.9 18.2 19.0 19.9 5.9 8.1 7.9 7.9 7.9 8.0 8.1 12.0 17.1 17.3 18.0 18.3 19.1 19.9US Broker Dealer 15.9 14.6 15.9 16.4 17.1 17.9 19.0 7.2 7.5 7.5 7.6 7.9 8.2 8.6 14.2 14.9 15.8 16.4 17.0 17.9 18.9Bank of America Corp. 9.86 11.2 12.4 13.9 15.2 16.1 16.7 17.4 9.3 9.9 10.3 10.7 11.0 11.2 11.5 9.5 11.0 12.8 14.0 15.0 15.6 16.3Citigroup Inc 34.57 12.9 13.5 14.2 15.1 16.0 17.0 18.2 8.5 9.5 9.8 10.1 10.5 10.8 11.3 14.0 15.6 16.7 17.6 18.5 19.5 20.6JPMorgan Chase & Co. 41.08 12.1 12.3 12.2 12.6 13.0 13.7 14.5 7.9 7.8 8.4 8.5 8.7 9.1 9.5 10.2 10.4 11.3 11.7 12.1 12.8 13.6US Universal Banks 12.0 12.7 13.3 14.0 14.8 15.5 16.4 8.6 8.9 9.3 9.6 9.9 10.2 10.6 11.0 12.2 13.2 14.0 14.7 15.5 16.4Bank of New York Mello 23.94 13.4 15.1 14.9 15.7 16.0 15.8 15.7 13.6 10.8 11.5 12.6 13.1 12.8 12.6 15.5 16.8 16.6 17.4 17.4 16.8 16.4Northern Trust Corporat 48.02 13.6 12.5 11.9 12.6 12.5 12.0 11.5 8.1 7.1 8.2 8.7 8.5 8.2 7.9 12.5 11.6 12.1 12.9 12.7 12.3 11.8State Street Corporation 44.44 20.5 18.8 18.9 19.2 19.6 19.3 19.1 11.5 9.0 10.4 10.9 11.4 11.2 11.1 21.4 19.2 20.9 21.4 21.9 21.6 21.3US Trust Banks 15.7 15.9 15.8 16.4 16.7 16.4 16.2 12.0 9.6 10.5 11.3 11.7 11.5 11.3 16.8 16.8 17.4 18.1 18.2 17.8 17.4BB&T Corporation 28.17 11.8 12.5 11.3 11.5 11.5 10.8 10.1 10.5 10.0 10.6 10.6 10.4 9.8 9.3 8.8 9.5 10.0 10.2 10.1 9.4 8.8PNC Financial Services 56.14 12.1 12.6 12.1 12.6 12.6 12.2 11.6 11.2 12.0 11.8 12.1 12.2 11.7 11.2 9.9 10.5 10.3 10.8 10.9 10.5 10.0Regions Financial Corp 6.67 12.4 13.3 12.0 11.7 11.5 11.0 11.1 10.1 10.3 12.5 12.7 12.5 12.0 11.2 8.2 9.0 11.4 11.7 11.5 10.9 10.0SunTrust Banks, Inc. 27.15 13.7 11.0 10.8 11.0 10.9 10.5 10.2 10.4 11.2 11.8 12.0 11.9 11.6 11.3 8.8 10.1 10.4 10.7 10.8 10.5 10.2U.S. Bancorp 32.26 10.5 10.8 11.1 11.5 11.8 12.0 12.1 9.0 9.2 9.8 10.1 10.1 10.2 10.2 7.5 8.3 9.1 9.5 9.6 9.9 10.1Wells Fargo & Company 33.01 11.2 11.3 12.1 12.8 13.0 13.0 12.7 9.4 9.8 10.7 11.2 11.2 11.0 10.8 9.5 10.3 11.5 12.2 12.4 12.2 12.0US Large-Cap. 11.4 11.5 11.8 12.3 12.5 12.4 12.1 9.7 10.0 10.7 11.1 11.1 10.9 10.7 9.1 9.8 10.7 11.3 11.4 11.2 11.0Associated Banc-Corp 12.85 17.6 14.1 12.4 12.1 12.1 12.2 13.6 12.1 12.8 12.7 12.2 12.0 11.9 11.8 12.7 12.9 12.6 12.2 12.3 12.3 13.8City National Corporatio 48.69 10.5 10.3 9.0 9.4 9.5 10.2 11.2 9.3 9.1 8.7 8.9 8.9 9.2 9.8 10.9 10.9 9.6 10.0 10.1 10.8 11.7Comerica Incorporated 29.59 10.1 10.4 10.2 9.6 9.3 9.4 9.7 10.8 11.3 11.1 10.4 10.1 10.1 10.4 9.5 9.9 9.9 9.3 9.0 9.1 9.4Commerce Bancshares 35.78 14.4 14.7 14.3 14.4 14.9 15.3 15.9 10.9 10.5 10.4 10.4 10.7 10.9 11.3 14.9 15.6 15.3 15.4 15.8 16.2 16.8Fifth Third Bancorp 14.64 13.9 11.9 10.8 10.7 10.7 11.0 11.5 9.4 11.0 11.3 11.2 11.1 11.3 11.7 8.0 9.9 10.2 10.2 10.2 10.5 11.1FirstMerit Corporation 14.08 11.4 11.5 11.3 11.0 11.8 12.6 13.6 10.7 10.8 11.0 9.2 9.8 10.2 10.9 11.4 11.3 11.3 9.3 10.1 11.0 12.1Huntington Bancshares 6.17 11.6 12.1 11.8 11.7 11.7 11.7 11.6 8.6 9.2 9.6 9.6 9.6 9.5 9.5 9.6 10.0 10.3 10.3 10.4 10.4 10.4KeyCorp 8.08 15.2 13.0 12.2 12.2 12.3 12.5 13.0 9.4 10.8 11.5 11.4 11.5 11.7 12.1 9.9 11.3 11.5 11.5 11.6 11.9 12.3TCF Financial Corporat 11.88 10.6 12.7 10.4 10.4 10.8 11.2 11.6 8.0 9.9 8.9 8.9 9.2 9.5 9.8 9.5 12.3 9.4 9.5 9.9 10.3 10.8Umpqua Holdings Corp 11.66 16.4 15.9 15.7 15.1 14.6 14.2 13.7 14.1 14.5 14.4 13.7 13.2 12.7 12.2 13.5 13.3 13.1 12.6 12.3 12.0 11.7Wintrust Financial Corp 36.79 12.5 11.8 12.2 12.1 12.2 12.6 12.9 9.9 9.4 9.3 9.2 9.4 9.7 10.0 9.9 9.5 9.2 9.3 9.6 10.1 10.5Zions Bancorporation 20.07 14.8 16.1 13.8 13.7 13.6 14.0 14.4 9.0 8.7 9.1 9.1 9.1 9.5 9.9 8.3 8.3 8.9 9.1 9.3 9.8 10.5US Mid-Cap. 13.2 12.6 11.6 11.5 11.6 11.8 12.3 9.9 10.6 10.8 10.5 10.5 10.7 11.0 9.9 10.8 10.7 10.6 10.7 11.0 11.5United States 12.2 12.5 12.8 13.4 13.8 14.1 14.5 9.3 9.5 10.0 10.4 10.5 10.6 10.7 10.8 11.6 12.4 13.1 13.5 13.8 14.1


UBS 48


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E EuropeErste Bank 22.62 10.2 10.4 11.2 11.4 11.6 11.3 11.9 5.7 4.9 5.1 5.2 5.5 5.8 6.2 6.0 5.9 6.9 7.4 8.0 8.7 9.5Raiffeisen Bank Intl 31.67 9.7 9.9 11.5 11.5 11.5 11.5 11.4 5.2 5.0 5.4 5.5 5.8 6.1 6.4 5.9 6.5 8.2 8.5 9.0 9.5 9.9Austria 10.1 10.3 11.3 11.4 11.6 11.4 11.8 5.6 4.9 5.1 5.3 5.6 5.9 6.2 6.0 6.0 7.3 7.7 8.2 8.9 9.6

BNP Paribas 42.95 11.4 11.6 13.6 12.1 12.8 13.2 13.7 3.3 3.4 3.7 3.8 4.0 4.1 4.2 8.8 8.7 10.3 10.1 10.7 11.1 11.7Société Générale 27.81 10.6 10.7 11.7 10.4 11.0 11.6 12.2 3.4 3.4 3.7 3.9 4.2 4.3 4.4 8.7 8.3 9.4 8.5 9.1 9.7 10.4France 11.1 11.3 13.0 11.6 12.2 12.7 13.3 3.4 3.4 3.7 3.9 4.0 4.2 4.3 8.7 8.6 10.0 9.6 10.2 10.7 11.3

Commerzbank 1.38 11.9 11.1 11.2 11.4 11.3 11.2 11.2 1.4 3.2 3.6 3.8 4.0 4.2 4.5 2.8 7.8 8.7 8.8 9.0 9.4 9.9Deutsche Bank 33.94 12.3 12.9 12.2 14.0 14.5 15.3 16.0 2.6 2.5 2.6 2.7 2.8 3.0 3.2 9.6 9.9 9.2 10.7 11.7 13.0 14.3Germany 12.2 12.6 12.1 13.6 14.0 14.7 15.3 2.4 2.6 2.8 2.9 3.0 3.2 3.4 8.7 9.5 9.1 10.4 11.3 12.5 13.6

Bank of Ireland 0.11 9.7 15.1 13.3 12.5 10.2 10.9 11.9 4.4 6.6 5.8 5.6 4.6 5.1 5.6 9.2 14.6 12.8 12.0 9.8 10.4 12.0Ireland 9.7 15.1 13.3 12.5 10.2 10.9 11.9 4.4 6.6 5.8 5.6 4.6 5.1 5.6 9.2 14.6 12.8 12.0 9.8 10.4 12.0

Intesa SanPaolo 1.29 9.2 11.5 11.2 11.3 11.6 11.9 12.3 8.3 7.4 7.7 7.7 7.8 7.9 8.0 10.0 11.6 12.5 12.7 12.9 13.2 13.5Unione di Banche Italian 3.00 7.5 9.1 10.9 11.1 11.2 11.3 11.4 8.9 6.9 7.7 7.6 7.6 7.7 7.7 7.4 6.8 9.0 9.2 9.4 9.6 9.9Banco Popolare 1.13 9.0 9.1 13.4 13.5 13.5 13.4 13.5 8.4 5.1 5.3 5.3 5.4 5.4 5.5 7.3 5.7 8.7 8.9 9.0 9.1 9.3Mediobanca 4.25 11.2 11.4 12.2 13.0 13.5 14.0 14.5 10.6 10.1 11.0 11.6 12.4 23.2 24.8 11.6 11.7 12.5 13.3 13.8 14.3 14.8MPS 0.20 9.0 11.1 12.6 12.7 10.6 9.7 8.9 6.2 4.5 5.3 5.4 5.4 5.4 5.5 8.1 8.1 10.3 10.5 10.5 10.5 10.5UniCredit 3.58 9.5 11.0 11.8 11.8 11.8 11.9 12.1 6.9 5.6 5.7 5.8 5.8 5.8 5.8 9.6 8.7 9.4 9.5 9.5 9.5 9.5Italy 9.2 10.9 11.6 11.8 11.9 12.0 12.2 7.8 6.4 6.9 7.0 7.0 7.7 7.8 9.5 9.5 10.7 10.9 11.0 11.2 11.4

Danske Bank 98.35 14.8 16.5 16.6 17.5 14.9 15.3 15.6 3.3 3.7 3.9 4.0 4.1 4.3 4.5 9.7 11.4 12.7 13.8 14.1 14.5 14.9DnB ASA 70.55 12.8 12.1 12.9 13.3 13.6 13.5 13.3 6.0 5.5 5.7 5.8 5.9 5.8 5.7 12.5 11.5 12.3 12.7 13.1 13.0 12.9Swedbank 122.90 15.2 17.9 16.8 17.7 18.0 18.5 19.0 5.5 5.3 5.6 5.6 5.7 5.8 5.8 15.0 17.1 16.1 17.0 17.4 17.9 18.4Nordea 60.90 11.4 12.2 12.2 12.7 13.1 13.5 13.9 4.0 3.5 3.5 3.6 3.7 3.8 3.9 11.0 12.6 12.6 13.0 13.3 13.6 14.0SEB Group 53.55 14.2 15.9 15.9 15.9 15.8 15.7 15.6 4.6 4.6 4.7 4.8 4.8 4.8 4.8 10.1 12.1 12.4 12.6 12.7 12.8 12.9Handelsbanken 236.50 16.5 18.5 16.1 16.4 16.8 17.1 17.3 4.1 3.9 3.9 4.0 4.1 4.2 4.2 15.3 17.2 15.1 15.5 15.9 16.2 16.4Nordic 13.7 15.1 14.8 15.4 15.3 15.6 15.8 4.5 4.3 4.4 4.5 4.6 4.7 4.7 12.2 13.8 13.7 14.2 14.5 14.8 15.1

BCP 0.07 9.2 9.6 10.9 12.1 13.2 14.4 14.4 4.8 4.0 4.5 4.9 5.3 5.8 5.8 6.4 5.8 6.6 7.5 8.3 9.2 9.2Banco Espirito Santo SA 0.77 8.5 9.8 12.2 12.8 13.6 13.3 14.3 7.6 6.7 8.7 9.3 9.8 10.0 10.8 9.3 8.2 11.1 11.5 12.2 12.4 13.4BPI 0.81 4.0 10.5 11.8 12.5 13.0 13.6 14.2 3.1 1.3 3.9 4.3 4.7 5.3 5.6 4.5 2.1 6.5 7.1 7.9 8.8 9.9Portugal 8.3 9.8 11.5 12.4 13.3 13.9 14.3 6.0 5.1 5.8 6.3 6.7 7.1 7.4 7.6 6.6 8.1 8.8 9.5 10.2 10.8


UBS 49


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Banco de Sabadell 2.15 8.0 9.0 9.8 10.3 11.3 12.5 13.9 4.5 5.9 5.6 5.9 6.4 7.0 7.8 8.2 8.7 9.8 10.3 11.3 12.5 13.9Banco Popular 0.64 7.7 10.0 10.6 11.5 12.2 14.0 15.0 6.1 6.3 6.0 6.2 6.6 7.5 8.1 6.7 9.9 12.9 13.8 14.5 16.4 17.4Banesto 2.81 9.3 9.8 9.9 10.3 11.1 12.0 12.9 4.7 5.0 5.1 5.5 6.0 6.6 7.2 8.3 8.9 9.3 9.9 10.8 11.9 13.1Bankia 0.72 7.5 7.5 11.5 11.4 12.1 12.3 13.1 4.7 3.8 5.6 5.9 6.3 6.7 7.1 7.6 7.2 11.3 11.1 11.7 12.3 12.8Bankinter 3.06 7.4 9.4 10.2 10.7 11.2 11.7 12.1 4.6 4.8 5.1 5.5 5.9 6.4 6.8 7.9 8.8 11.3 12.1 12.9 13.8 14.6BBVA 6.52 10.5 10.3 10.7 10.9 10.9 10.9 10.9 7.0 7.4 6.8 7.1 7.1 7.1 7.1 12.3 13.4 12.9 13.1 13.1 13.1 13.1Caixa Bank 2.94 9.8 12.6 10.7 9.6 10.5 11.4 12.3 7.4 7.7 6.6 6.6 7.1 7.6 8.0 13.4 15.1 13.5 13.6 14.6 15.7 16.5Santander 5.91 10.0 11.0 11.3 11.6 11.9 12.2 11.0 6.2 6.1 5.7 5.8 5.8 5.8 5.8 8.3 9.1 8.9 9.4 9.4 9.4 9.4Spain 10.0 10.6 11.0 11.3 11.6 11.9 11.3 6.4 6.5 6.1 6.3 6.3 6.4 6.5 9.5 10.5 10.6 10.9 11.1 11.2 11.4

Credit Suisse Group 21.94 17.2 15.2 14.5 16.6 16.8 17.1 17.5 3.2 3.2 3.8 5.0 5.3 5.6 5.8 11.1 10.3 9.5 12.9 13.7 14.5 15.4UBS AG 14.50 17.8 15.9 * * * * * 3.6 3.8 * * * * * 18.6 18.2 * * * * *Switzerland Large 17.5 15.6 14.5 16.6 16.8 17.1 17.5 3.4 3.5 3.8 5.0 5.3 5.6 5.8 14.9 14.7 9.5 12.9 13.7 14.5 15.4Bank Sarasin & Cie AG 27.00 15.3 15.7 14.9 14.3 13.5 12.8 12.3 7.0 7.0 6.6 6.5 6.4 6.3 6.2 17.1 15.6 14.4 13.8 13.3 12.8 12.5EFG International 8.05 13.9 12.9 17.4 18.4 19.3 20.1 20.9 3.8 2.5 4.2 4.4 4.5 4.5 4.6 4.0 3.9 10.4 11.5 12.4 13.1 13.9GAM Holding Ltd 11.90 NA NA NA NA NA NA NA 85.0 86.6 83.4 96.1 110.3 126.0 143.2 NA NA NA NA NA NA NAJulius Baer Group 31.74 23.8 21.8 19.9 20.6 22.0 23.6 25.2 9.7 8.1 8.7 7.3 7.3 7.4 7.5 22.3 20.3 18.2 19.3 20.9 22.7 24.5Partners Group Holding 202.00 NA NA NA NA NA NA NA 77.3 78.7 79.4 81.3 83.2 85.0 87.1 NA NA NA NA NA NA NAVZ Holding 108.00 NA NA NA NA NA NA NA 20.0 19.0 20.0 19.2 22.8 24.2 24.1 NA NA NA NA NA NA NASwitzerland Wealth & Asset Managers 21.9 20.5 19.2 19.7 20.9 22.2 23.5 32.2 32.9 34.2 35.8 38.5 41.4 44.6 20.2 18.8 17.4 18.3 19.7 21.1 22.6Banque Cantonale Vaud 508.50 17.6 16.8 16.4 16.2 16.0 16.0 16.0 9.1 8.7 8.5 8.4 8.2 8.1 8.1 20.0 19.2 18.7 18.5 18.3 18.2 18.2Liechtensteinische Land 26.55 13.9 13.9 14.1 15.4 15.9 16.2 16.4 7.5 7.3 7.5 8.4 8.4 8.4 8.3 15.7 15.6 16.5 19.4 19.8 20.0 20.2St Galler Kantonalbank 381.75 12.8 12.7 12.8 12.9 12.8 12.6 12.5 7.5 7.1 7.1 7.1 7.1 7.0 6.9 14.8 14.6 14.8 14.9 14.9 14.9 14.6Verwaltungs-und Privat 61.95 19.0 18.2 17.8 17.5 17.3 17.0 16.9 8.5 8.2 7.8 7.7 7.6 7.5 7.4 20.8 19.3 18.9 18.6 18.3 18.0 17.8Vontobel 26.50 21.8 23.3 25.3 25.6 26.3 26.8 27.3 8.2 8.0 9.1 9.3 9.7 10.2 10.7 23.8 27.3 27.1 27.4 28.0 28.3 28.7Switzerland Small 16.5 16.5 17.0 17.1 17.2 17.2 17.3 8.2 7.9 8.1 8.2 8.2 8.2 8.3 18.6 18.8 19.1 19.3 19.4 19.4 19.4Switzerland 17.8 16.1 15.8 17.3 17.7 18.2 18.8 6.9 7.8 13.6 14.9 15.9 16.9 18.1 15.5 15.3 12.2 14.8 15.6 16.5 17.4

Barclays 246.00 13.5 12.9 12.5 12.8 13.6 14.4 15.1 3.4 3.6 3.3 3.4 3.5 3.6 3.8 10.6 12.2 11.8 11.8 12.6 13.4 14.2HSBC 637.70 12.1 11.5 13.1 13.4 13.9 14.5 15.1 5.9 5.7 6.0 6.1 6.2 6.2 6.3 10.3 10.3 11.2 11.2 11.4 11.7 11.9Lloyds Banking Group 46.50 11.6 12.2 14.1 14.2 15.7 16.7 17.8 4.6 5.1 5.5 5.7 6.6 6.7 6.9 9.7 11.5 13.4 13.5 14.9 15.8 16.8RBS Group 295.20 14.1 13.0 11.7 12.4 13.6 14.1 14.7 4.7 4.6 4.2 4.2 4.3 4.5 4.7 13.1 12.3 10.5 11.2 12.3 12.9 13.5Standard Chartered 1,455 14.0 13.7 13.4 13.1 12.8 12.6 12.4 7.4 6.8 6.7 6.5 6.4 6.2 6.1 15.2 15.1 14.6 14.2 13.8 13.5 13.2United Kingdom 12.7 12.3 13.1 13.3 13.8 14.3 14.9 5.5 5.5 5.6 5.7 5.8 5.8 5.9 11.3 11.7 12.0 12.0 12.3 12.6 13.0


UBS 50


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E EMEAKomercni Banka as 3,878 14.0 13.4 14.6 15.1 15.1 15.4 16.0 10.7 10.5 12.2 12.1 11.9 11.9 11.9 20.8 19.8 24.9 24.6 24.1 23.9 23.9Czech Republic 14.0 13.4 14.6 15.1 15.1 15.4 16.0 10.7 10.5 12.2 12.1 11.9 11.9 11.9 20.8 19.8 24.9 24.6 24.1 23.9 23.9

OTP Bank 4,080 14.0 13.3 14.9 15.4 16.1 16.7 17.1 13.3 13.8 15.4 15.9 16.2 16.4 16.4 13.9 14.0 15.5 16.7 17.6 18.2 18.6Hungary 14.0 13.3 14.9 15.4 16.1 16.7 17.1 13.3 13.8 15.4 15.9 16.2 16.4 16.4 13.9 14.0 15.5 16.7 17.6 18.2 18.6

Bank Hapoalim 15.72 8.9 8.7 9.4 9.9 10.3 10.7 11.1 7.2 6.7 7.2 7.7 8.0 8.4 8.8 8.3 7.9 8.6 9.2 9.6 10.0 10.4Bank Leumi Le-Israel 12.88 8.6 8.1 8.7 9.2 9.6 10.0 10.5 7.2 6.4 6.9 7.3 7.6 8.0 8.4 8.7 8.1 8.7 9.2 9.6 10.1 10.5Israel Discount Bank 5.70 8.2 8.8 9.2 9.6 10.0 10.3 10.6 6.0 5.3 5.8 6.1 6.4 6.7 6.9 7.9 7.9 8.4 8.8 9.2 9.6 9.9Mizrahi Tefahot Bank 37.16 7.9 7.8 8.2 8.8 9.3 9.5 9.8 5.4 5.1 5.7 6.1 6.3 6.5 6.6 7.9 7.5 8.3 8.9 9.4 9.6 9.9Israel 8.6 8.4 9.0 9.5 9.9 10.3 10.7 6.9 6.3 6.8 7.2 7.5 7.8 8.2 8.4 8.0 8.6 9.1 9.5 9.9 10.4

Halyk Savings Bank 7.91 17.2 16.7 17.1 16.9 17.3 17.9 18.6 12.2 10.9 12.1 13.2 14.4 15.7 17.0 15.1 14.5 15.2 15.2 15.8 16.6 17.4Kazkommertsbank 1.94 16.1 18.6 18.8 18.6 19.1 19.6 20.0 15.1 16.7 17.1 17.3 17.9 18.6 19.3 15.7 18.0 18.7 18.4 18.7 19.2 19.7Kazakhstan 17.1 17.0 17.2 17.0 17.4 18.0 18.7 12.7 11.8 12.4 13.5 14.7 15.9 17.1 15.2 15.0 15.4 15.4 16.0 16.8 17.6

Bank BPH 40.45 10.9 11.6 * * * * * 11.4 12.1 * * * * * 11.4 12.5 * * * * *Bank Handlowy 98.00 18.8 16.4 * * * * * 17.3 15.2 * * * * * 22.5 19.5 * * * * *Bank Millennium 4.29 12.3 11.4 * * * * * 8.7 9.0 * * * * * 12.9 12.7 * * * * *BRE 316.00 10.4 9.6 * * * * * 7.7 8.1 * * * * * 12.2 12.2 * * * * *ING Bank Slaski 89.05 13.2 12.3 * * * * * 8.8 9.2 * * * * * 14.7 13.9 * * * * *Pekao 157.70 17.6 17.0 * * * * * 15.0 14.5 * * * * * 21.1 20.5 * * * * *PKO BP 34.80 11.3 11.2 * * * * * 12.6 12.0 * * * * * 15.0 15.2 * * * * *Poland 13.7 13.2 NA NA NA NA NA 13.0 12.4 NA NA NA NA NA 17.0 16.6 NA NA NA NA NA

Sberbank 91.41 11.9 11.6 12.1 12.6 12.9 13.2 13.9 11.3 11.6 11.9 12.6 13.2 13.7 14.2 12.9 12.2 12.7 13.1 13.4 13.6 14.3Vozrozhdenie Bank 565.00 12.8 11.9 11.3 11.0 11.0 11.2 11.4 10.1 10.0 10.0 10.0 10.1 10.3 10.6 12.8 12.0 11.3 11.0 11.1 11.2 11.5VTB 0.05 12.4 9.0 8.9 8.5 8.5 8.6 8.7 12.9 8.9 8.7 8.5 8.4 8.2 8.2 12.6 10.7 10.3 9.7 9.6 9.5 9.5Russia 12.0 11.1 11.7 12.1 12.3 12.6 13.2 11.7 11.1 11.5 12.0 12.5 12.9 13.4 12.8 11.9 12.3 12.7 12.9 13.1 13.6

African Bank Investmen 3,170 24.7 23.2 21.4 22.6 24.3 24.7 24.2 31.6 26.3 22.5 21.5 22.2 21.9 21.0 26.8 24.1 21.0 21.5 23.2 23.8 23.4Absa Group 14,178 12.8 14.0 13.5 13.7 13.7 13.7 13.7 7.8 7.9 8.0 8.2 8.2 8.2 8.2 12.9 14.2 13.8 14.1 14.2 14.2 14.2Capitec Bank Holdings 19,000 32.2 32.0 32.3 27.7 25.5 24.7 25.0 22.1 20.9 22.1 19.6 18.5 18.5 18.8 30.7 29.0 29.8 25.7 23.7 23.1 23.4FirstRand Ltd 2,905 15.0 13.2 11.8 10.7 9.9 9.1 8.3 8.4 8.3 8.5 8.7 8.9 9.0 9.2 15.3 13.7 13.9 14.2 14.5 14.8 15.1Investec 381.70 12.0 11.8 12.6 12.9 13.9 14.9 15.5 6.4 6.5 6.8 7.1 7.7 8.2 8.6 9.2 9.4 10.1 10.5 11.6 12.7 13.4Nedbank Group Ltd 17,933 11.7 12.6 12.7 13.2 13.7 13.6 13.9 7.2 7.6 7.7 7.9 8.1 7.9 8.0 12.1 13.2 13.3 13.8 14.2 14.1 14.3Standard Bank Group L 10,515 11.7 11.3 11.7 11.8 12.2 12.5 12.9 6.8 6.8 6.7 6.6 6.7 6.7 6.8 13.2 12.8 12.7 12.5 12.7 12.9 13.2South Africa 13.7 13.5 13.2 13.0 13.1 13.2 13.2 9.1 9.2 8.9 8.7 8.9 8.9 9.0 14.2 14.1 13.8 13.8 14.2 14.5 14.7


UBS 51


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Akbank 8.38 18.4 15.7 15.3 14.7 13.8 13.1 12.4 14.9 13.0 13.2 12.7 11.9 11.3 10.7 20.4 16.1 15.5 14.9 14.0 13.3 12.6Garanti Bank 8.48 15.7 14.1 13.4 12.7 12.6 12.7 12.6 12.2 10.9 11.3 11.3 11.3 11.3 11.2 17.4 13.9 13.2 12.6 12.5 12.6 12.5Halkbank 17.30 15.0 13.6 13.8 13.9 14.0 13.9 15.7 10.1 9.5 9.9 9.9 9.9 9.8 11.0 16.0 14.4 14.4 14.4 14.5 14.3 16.1Isbank 5.76 16.3 13.2 13.0 12.7 12.2 12.1 11.7 10.8 9.7 10.0 9.8 9.5 9.2 9.0 14.8 11.9 11.9 11.7 11.3 11.2 11.0Vakifbank 4.33 13.4 12.9 13.9 13.9 13.6 12.9 12.3 10.8 9.9 10.8 10.4 9.9 9.5 9.0 14.3 13.0 14.2 14.2 13.8 13.2 12.6Yapi Kredi Bank 4.71 11.7 11.3 11.0 10.9 11.0 11.0 10.8 11.5 10.7 11.1 11.1 11.2 11.2 11.0 13.5 12.1 11.7 11.5 11.5 11.4 11.2Turkey 16.0 14.1 13.7 13.4 13.0 12.8 12.8 12.3 11.0 11.3 11.1 10.9 10.6 10.6 17.1 14.1 13.8 13.4 13.0 12.8 12.8


UBS 52


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Latin AmericaBanco do Brasil 21.91 11.0 10.5 9.3 8.9 8.6 8.4 8.2 6.2 5.9 5.6 5.4 5.2 5.2 5.1 10.6 10.1 9.3 8.9 8.6 8.4 8.2Banco Bradesco 35.49 13.1 12.4 14.2 14.0 14.0 14.0 14.0 7.5 7.3 7.5 7.5 7.5 7.7 7.8 12.6 11.7 14.2 14.0 14.0 14.0 14.0Itau Unibanco Banco M 32.14 13.4 13.7 13.7 13.7 13.6 13.7 13.7 8.1 8.4 8.0 8.1 8.1 8.3 8.4 13.1 13.6 13.7 13.7 13.6 13.7 13.7Banco Santander Brasil 14.50 21.0 17.5 18.1 16.6 15.3 14.2 13.3 16.7 15.5 13.9 12.9 11.8 11.1 10.4 20.8 17.7 14.6 14.4 14.1 13.8 13.3Brazil 13.6 13.2 13.9 13.8 13.7 13.6 13.6 8.3 8.2 8.0 7.9 7.9 8.0 8.1 13.3 12.9 13.8 13.7 13.6 13.6 13.6

Bancolombia 28,700 10.3 9.0 10.5 10.2 10.0 10.0 9.8 11.7 10.5 12.0 11.7 11.5 11.4 11.3 12.9 11.6 12.5 12.1 11.9 11.8 11.6Colombia 10.3 9.0 10.5 10.2 10.0 10.0 9.8 11.7 10.5 12.0 11.7 11.5 11.4 11.3 12.9 11.6 12.5 12.1 11.9 11.8 11.6

Compartamos SAB 19.62 52.4 38.3 43.2 43.3 43.7 45.2 46.8 49.5 42.0 40.0 40.2 40.8 42.5 44.2 52.4 46.4 43.2 43.3 43.7 45.2 46.8Grupo Financiero Bano 74.12 12.1 10.6 11.3 11.7 12.0 12.2 12.4 7.8 8.5 8.9 9.4 10.0 10.5 10.9 12.8 11.4 13.4 13.5 13.5 13.5 13.5Santander Mexico 37.98 15.3 14.5 14.5 14.4 14.3 14.1 14.0 12.1 12.0 11.9 12.2 12.5 12.9 13.2 18.4 17.6 17.1 16.7 16.4 15.9 15.6Mexico 21.7 15.8 15.1 15.2 15.4 15.5 15.7 17.7 14.9 12.5 12.9 13.4 13.9 14.4 22.2 18.0 17.2 17.1 17.0 16.9 16.9

Credicorp Ltd 139.90 10.2 10.4 11.0 10.7 10.3 10.0 9.7 10.0 10.9 11.3 11.0 10.6 10.3 9.9 18.6 18.4 19.0 18.5 17.8 17.3 16.7Peru 10.2 10.4 11.0 10.7 10.3 10.0 9.7 10.0 10.9 11.3 11.0 10.6 10.3 9.9 18.6 18.4 19.0 18.5 17.8 17.3 16.7


UBS 53


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E AsiaAgricultural Bank of Chi 3.40 9.8 9.5 9.9 9.9 9.9 9.9 10.0 5.2 5.6 5.6 5.6 5.7 5.7 5.8 10.1 10.2 10.6 10.5 10.5 10.5 10.6Bank of Beijing 7.20 10.5 9.6 10.7 10.3 10.1 10.0 9.9 5.8 5.3 6.2 6.0 5.9 5.8 5.8 10.9 10.3 11.2 10.8 10.6 10.4 10.3Bank of China 3.27 10.1 10.1 10.3 10.2 10.3 10.5 10.8 6.2 6.1 6.1 6.1 6.2 6.3 6.5 10.9 10.9 11.0 10.9 10.9 11.1 11.4Bank of Communication 5.68 9.4 9.3 11.4 10.7 10.4 10.4 10.5 5.6 5.9 7.2 7.1 7.1 7.2 7.3 9.2 9.6 12.0 11.4 11.3 11.4 11.5Bank of Nanjing 7.60 13.8 11.8 11.6 11.1 10.9 10.8 10.5 8.5 7.7 7.6 7.2 7.0 6.8 6.7 14.7 12.9 12.6 12.0 11.6 11.4 11.1Bank of Ningbo 8.72 12.5 12.2 11.6 11.4 11.4 11.4 11.4 6.0 7.2 6.7 6.6 6.7 6.7 6.7 12.8 12.5 12.0 11.8 11.9 11.8 11.8China CITIC Bank 4.00 8.4 9.9 9.9 9.8 9.7 9.7 9.8 5.8 6.3 6.7 6.8 6.8 6.8 6.9 8.6 10.2 10.2 10.1 10.0 10.0 10.0China Construction Ban 5.94 10.4 11.0 11.5 11.5 11.7 11.9 12.4 6.4 6.6 6.9 7.1 7.3 7.5 7.8 11.5 11.9 12.6 12.5 12.8 13.1 13.6China Merchants Bank 14.84 8.0 9.8 * * * * * 5.6 6.9 * * * * * 8.6 10.4 * * * * *China Minsheng Bankin 7.60 7.9 9.2 * * * * * 5.7 6.4 * * * * * 8.3 9.5 * * * * *Chongqing Rural Comm 3.56 14.8 13.7 12.0 11.6 11.4 11.3 11.2 7.8 8.1 7.6 7.3 7.2 7.1 7.2 14.8 14.3 12.6 12.1 11.9 11.8 11.7Hua Xia Bank 8.43 6.7 8.7 9.1 8.7 8.6 8.5 8.4 3.4 5.1 5.1 5.0 4.9 4.9 4.8 6.8 9.0 9.5 9.1 9.0 8.8 8.7Industrial & Commercia 5.23 10.0 10.1 10.6 10.6 10.7 10.8 10.9 6.1 6.2 6.4 6.6 6.7 6.9 7.1 11.4 11.3 12.0 12.0 12.1 12.2 12.4Industrial Bank 12.66 8.8 8.2 * * * * * 5.0 4.8 * * * * * 9.2 8.5 * * * * *Shanghai Pudong Deve 7.46 9.4 9.2 8.6 8.8 9.1 9.2 9.4 5.6 5.5 5.5 5.6 5.7 5.8 5.8 9.6 9.5 9.4 9.6 9.8 9.9 10.0Ping An Bank 12.80 6.5 8.5 8.5 8.4 8.4 8.4 8.4 4.6 5.8 6.2 6.1 6.0 5.9 5.9 6.7 8.3 8.9 8.8 8.7 8.7 8.7China 9.6 10.0 10.5 10.5 10.5 10.6 10.8 5.8 6.2 6.3 6.4 6.5 6.6 6.8 10.5 10.8 11.5 11.5 11.6 11.7 11.9

Bank of China (Hong Ko 23.80 11.3 12.5 13.5 13.1 13.0 13.0 12.9 6.9 7.5 8.2 7.9 7.8 7.7 7.6 16.7 19.2 21.1 19.8 19.5 19.3 19.1Bank of East Asia 29.90 9.8 9.4 9.7 9.4 9.1 9.0 8.9 8.3 7.8 7.8 7.7 7.5 7.5 7.4 11.7 11.5 12.1 11.8 11.5 11.4 11.3Dah Sing Finan'l 33.15 10.2 10.5 10.2 10.0 9.9 9.8 9.7 9.9 9.6 9.4 9.1 8.8 8.6 8.3 15.7 15.9 15.6 15.0 14.6 14.3 13.9Hang Seng Bank 118.40 10.8 11.6 12.0 11.4 11.3 11.7 12.2 7.6 8.1 8.5 8.3 8.2 8.3 8.4 20.6 23.9 23.3 21.6 21.1 21.0 21.1Wing Hang Bank 77.60 10.3 10.1 10.4 10.3 10.2 10.3 10.4 9.0 9.0 9.6 9.3 9.2 9.2 9.3 13.8 14.4 14.8 14.6 14.4 14.5 14.6Hong Kong 10.7 11.4 12.1 11.6 11.5 11.6 11.8 7.7 7.9 8.4 8.1 8.0 8.0 8.0 17.1 19.3 20.0 18.7 18.3 18.2 18.2

Axis Bank 1,316 9.4 9.4 9.1 8.5 7.9 7.4 7.1 7.8 8.0 7.8 7.4 7.1 6.9 7.2 9.7 9.8 9.4 8.9 8.2 7.7 7.3Bank of Baroda 763.05 10.0 10.8 10.8 10.6 10.4 10.4 10.7 5.9 6.1 6.0 5.9 5.9 5.9 6.2 10.0 10.8 10.6 10.3 10.1 10.1 10.5Bank of India 280.80 8.3 8.9 8.2 7.4 6.8 6.2 5.6 4.9 5.5 5.3 5.1 5.0 4.9 4.9 8.4 9.0 8.3 7.6 6.9 6.3 5.8Federal Bank 481.80 18.4 18.6 17.5 16.6 15.2 14.4 13.7 9.9 9.4 9.2 8.6 7.9 7.4 7.0 20.0 19.4 18.2 17.1 15.6 14.7 14.0HDFC Bank 703.65 12.2 11.6 11.6 11.5 11.5 11.5 11.9 9.1 8.9 8.9 9.0 9.1 9.6 10.2 13.1 12.4 12.3 12.1 12.1 12.2 12.5Housing Development F 841.45 13.8 12.7 14.1 14.9 14.4 13.9 13.5 12.4 11.4 12.6 13.3 12.8 12.3 12.0 13.8 12.7 14.1 14.9 14.4 13.9 13.5ICICI Bank 1,099 13.2 12.7 11.3 11.2 11.0 11.1 11.4 13.6 12.8 12.5 12.1 11.9 11.7 11.6 16.1 15.2 15.0 14.7 14.4 14.3 14.5IndusInd Bank 417.60 12.3 11.5 11.1 10.6 10.4 10.3 10.1 8.9 8.2 7.7 7.4 7.2 7.2 7.0 13.2 12.1 11.5 11.0 10.7 10.5 10.3Oriental Bank of Comm 336.90 11.7 11.9 11.4 10.7 10.3 9.9 9.7 6.4 6.1 5.7 5.4 5.1 5.0 4.8 11.9 12.1 11.6 10.9 10.4 10.0 9.7Punjab National Bank 785.60 8.4 9.3 9.5 9.3 9.3 9.3 9.4 5.7 6.1 6.1 6.0 6.1 6.3 6.5 8.6 9.5 9.4 9.3 9.2 9.3 9.4Shriram Transport Finan 668.35 17.8 17.9 17.3 17.4 17.7 18.3 NA 15.5 16.9 16.7 16.7 17.0 17.5 18.1 17.8 17.9 17.3 17.4 17.7 18.3 NAState Bank of India 2,170 7.8 9.8 9.5 9.3 9.2 9.3 9.4 5.3 6.3 6.3 6.1 6.0 6.0 6.0 7.9 10.0 10.1 9.8 9.7 9.7 9.8Union Bank 242.40 7.0 7.0 6.7 6.5 6.7 6.6 6.5 5.4 5.6 5.3 5.1 5.2 5.1 5.0 7.3 7.2 7.0 6.7 6.9 6.7 6.5YES Bank 442.40 9.2 9.3 10.9 10.1 9.8 9.4 8.7 6.1 6.0 7.7 7.2 6.9 6.4 5.8 8.3 8.5 10.9 10.1 9.8 9.4 8.7India 11.8 11.7 11.9 12.0 11.7 11.5 11.5 9.8 9.5 9.9 10.0 9.8 9.8 9.9 12.5 12.3 12.7 12.7 12.4 12.2 12.1


UBS 54


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Bank Central Asia 8,800 12.6 11.6 12.8 13.4 14.0 14.5 15.0 10.5 11.0 11.7 12.7 13.3 13.6 14.0 16.6 15.3 16.2 16.9 17.4 17.8 18.2Bank Danamon Indones 5,400 13.2 16.6 15.5 14.8 14.2 13.7 13.3 15.6 18.1 17.5 16.8 16.1 15.3 14.7 21.1 24.0 22.5 21.7 21.0 20.0 19.3BPD Jawa Barat dan Ba 1,050 22.8 18.4 17.3 16.0 14.7 13.6 12.6 11.5 9.9 9.3 9.6 9.9 9.5 9.1 27.1 21.8 20.7 20.0 19.0 18.0 17.1Bank Mandiri 8,250 10.5 12.4 12.8 12.8 13.0 13.0 12.9 9.2 12.3 12.8 12.8 12.8 12.6 12.5 15.5 17.2 17.1 16.8 16.7 16.4 16.1Bank Negara Indonesia 3,700 16.6 15.9 16.1 16.1 16.0 15.7 15.4 13.3 12.6 12.5 12.2 11.8 11.3 11.0 20.9 20.4 20.7 20.6 20.3 19.8 19.4Bank Rakyat Indonesia 7,050 12.0 13.7 15.1 15.6 15.8 15.8 15.8 9.1 10.6 11.7 11.9 12.1 12.1 12.2 15.9 17.8 18.9 18.8 18.8 18.6 18.4Bank Tabungan Negara 1,610 15.8 14.2 16.3 15.5 14.8 14.2 13.7 9.4 8.2 8.7 8.4 8.0 7.6 7.3 17.8 15.8 16.9 16.4 15.7 15.1 14.7PT Bank Tabungan Pen 5,200 22.3 19.5 21.1 22.9 25.0 26.6 27.6 12.2 12.0 13.1 14.6 15.8 16.5 16.9 25.4 22.9 25.4 26.9 28.7 30.1 31.0Indonesia 12.7 13.3 14.1 14.5 14.8 14.9 15.1 10.5 11.7 12.3 12.7 12.9 12.9 13.0 17.2 17.6 18.2 18.3 18.4 18.3 18.3

DGB Financial Group 13,500 11.0 10.8 11.0 11.2 11.4 11.8 11.8 6.7 7.3 7.4 7.5 7.7 7.9 7.9 9.8 10.3 10.5 10.7 10.9 11.3 11.3Hana Financial Group 33,600 9.1 9.4 8.3 8.4 8.5 8.6 8.6 6.7 7.7 5.3 5.4 5.5 5.7 5.7 9.2 10.5 7.5 7.7 7.8 8.0 8.0Industrial Bank of Korea 11,500 8.9 8.9 9.0 8.8 8.9 9.0 9.0 6.3 6.7 6.6 6.6 6.6 6.7 6.7 9.1 10.5 10.4 10.3 10.4 10.6 10.6KB Financial Group 35,650 9.6 10.3 10.8 11.1 11.5 11.9 11.9 7.0 8.1 8.3 8.6 8.9 9.2 9.2 11.9 15.5 15.9 16.4 17.1 17.7 17.7Korea Exchange Bank 7,290 12.2 12.1 11.7 12.0 12.4 12.8 12.8 8.8 8.4 8.1 8.3 8.6 8.9 8.9 14.9 14.2 13.6 14.0 14.5 15.0 15.0BS Financial Group 12,100 10.8 10.7 11.2 11.3 11.6 11.8 11.8 7.1 7.5 7.8 7.9 8.1 8.3 8.3 10.4 11.2 11.8 11.9 12.2 12.4 12.4Shinhan Financial Grou 34,650 8.3 8.9 9.6 9.9 10.3 10.6 10.6 7.5 8.1 8.2 8.4 8.8 9.1 9.1 10.5 11.9 12.4 12.9 13.4 13.9 13.9Woori Finance Holdings 10,150 9.0 8.9 9.5 9.7 10.0 10.4 10.4 5.0 4.8 5.0 5.2 5.4 5.6 5.6 7.4 7.2 7.7 7.9 8.3 8.7 8.7Korea 9.3 9.6 9.9 10.2 10.5 10.8 10.8 7.0 7.7 7.4 7.6 7.9 8.2 8.2 10.7 12.4 12.2 12.5 13.0 13.4 13.4

Alliance Financial Group 4.10 12.4 12.0 12.6 12.6 12.3 12.1 11.8 9.3 9.3 9.2 9.2 8.9 8.7 8.5 13.3 12.6 12.6 12.6 12.3 12.1 11.9AMMB Holdings 6.38 10.2 11.3 11.1 11.0 11.1 11.3 11.5 9.5 10.0 9.8 9.6 9.7 9.8 10.0 10.4 10.7 10.6 10.5 10.7 11.0 11.3CIMB Group Holdings B 7.47 11.4 11.6 11.8 11.5 11.1 10.8 10.6 8.6 8.6 8.6 8.3 8.0 7.7 7.5 8.0 8.7 9.0 9.1 9.0 8.9 8.9Hong Leong Bank 14.66 8.5 11.7 11.9 12.3 12.9 13.3 13.6 5.1 7.2 7.5 7.7 8.1 8.4 8.6 6.1 9.5 10.0 10.5 11.3 11.8 12.2Malayan Banking 9.05 11.9 11.7 10.8 10.2 10.1 10.0 9.9 7.6 7.4 7.0 6.6 6.6 6.5 6.5 10.1 10.4 9.8 9.4 9.4 9.4 9.5Public Bank 15.54 10.7 10.7 10.7 10.7 10.8 10.9 11.0 5.8 6.0 6.1 6.2 6.3 6.5 6.6 7.9 7.9 8.2 8.4 8.7 9.0 9.2RHB Capital 7.50 10.8 12.8 12.8 12.9 12.8 12.8 12.8 7.7 7.5 7.9 7.9 7.9 8.0 8.0 8.4 10.4 10.9 11.4 11.6 12.0 12.3Malaysia 11.2 11.6 11.3 11.1 11.0 10.9 10.9 7.9 8.0 7.8 7.6 7.5 7.4 7.4 9.0 9.5 9.6 9.5 9.6 9.7 9.8

Banco de Oro Universa 71.45 11.3 10.2 14.9 14.7 14.8 15.0 15.2 8.3 8.3 12.1 12.0 12.0 12.1 12.3 11.1 11.3 16.5 16.3 16.4 16.6 16.8Bank of the Philippine Is 89.00 13.6 13.2 14.7 15.4 16.4 17.4 18.4 9.2 10.6 10.7 11.0 11.4 11.9 12.5 16.8 16.0 19.1 19.6 20.6 21.4 22.3Metrobank 99.80 10.6 11.2 12.1 12.6 13.2 13.9 14.8 9.1 10.8 11.1 11.1 11.2 11.4 11.8 13.0 15.7 16.2 16.3 16.5 16.9 17.5Phil. National Bank 88.50 12.8 * * * * * * 11.0 * * * * * * 12.9 * * * * * *Philippines 12.1 11.4 14.5 14.7 15.1 15.7 16.3 8.9 9.4 11.5 11.5 11.7 12.0 12.3 13.3 13.6 17.3 17.4 17.8 18.2 18.8

DBS Group Holdings 14.45 15.1 12.9 13.6 13.6 13.7 13.7 13.8 9.2 8.3 8.3 8.2 8.1 8.0 8.0 11.6 10.9 11.7 11.7 11.8 11.8 12.0OCBC 9.41 16.3 14.5 15.7 15.3 14.9 14.7 14.5 8.2 7.4 7.6 7.4 7.3 7.2 7.1 14.9 13.6 14.2 13.9 13.6 13.5 13.4United Overseas Bank 18.72 15.3 13.5 14.6 14.7 14.9 15.3 16.4 9.0 8.8 9.2 9.0 9.0 9.1 9.2 14.2 12.4 13.8 14.0 14.3 14.8 15.9Singapore 15.6 13.6 14.6 14.5 14.5 14.5 14.9 8.8 8.2 8.4 8.2 8.1 8.1 8.1 13.5 12.3 13.2 13.2 13.2 13.3 13.7


UBS 55


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Cathay Financial Holdin 30.95 9.7 9.4 9.5 9.6 9.8 9.9 10.1 4.7 4.3 4.3 4.3 4.2 4.2 4.1 24.6 22.0 23.7 23.7 23.7 23.9 24.1Fubon Financial Holding 33.00 9.2 9.3 9.8 10.6 11.1 11.6 11.8 6.4 6.5 6.1 6.0 5.8 5.6 5.5 26.1 25.2 24.7 25.2 25.7 26.3 27.1Yuanta Financial Holdin 14.70 7.7 7.8 7.9 8.0 8.0 8.0 8.1 18.3 19.8 19.3 18.3 17.6 16.9 16.2 40.3 43.3 39.9 36.8 35.0 33.4 31.9Taiwan 7.7 7.8 7.9 8.0 8.0 8.0 8.1 18.3 19.8 19.3 18.3 17.6 16.9 16.2 40.3 43.3 39.9 36.8 35.0 33.4 31.9

Bangkok Bank 183.00 12.5 12.2 11.8 11.4 11.2 11.6 12.0 11.8 11.6 11.4 10.9 11.0 11.2 11.5 17.1 16.2 15.4 14.7 14.2 14.5 14.7Bank of Ayudhya 31.00 11.5 11.9 11.5 11.4 11.6 11.9 12.4 11.4 10.8 10.5 10.5 10.7 11.0 11.3 14.3 15.0 15.2 15.0 15.0 15.0 15.4Kasikornbank 187.00 9.4 9.6 10.5 11.1 11.8 12.7 13.4 8.7 9.0 9.0 9.5 10.0 10.7 11.2 11.9 12.2 13.3 14.0 14.6 15.4 16.0Krung Thai Bank 18.40 9.9 8.7 10.2 10.1 10.1 10.4 10.8 7.2 6.6 7.9 8.1 8.3 8.7 9.0 10.8 9.4 11.2 11.2 11.1 11.5 11.9Siam Commercial Bank 162.50 11.6 11.2 10.9 11.0 11.3 11.7 12.5 10.4 9.9 9.9 9.9 10.3 10.8 11.3 14.6 14.8 14.4 14.4 14.5 14.8 15.5TMB Bank 1.86 11.3 11.1 11.5 11.5 11.4 11.6 11.8 8.4 7.3 7.8 7.6 7.5 7.6 7.7 12.4 12.3 13.0 12.9 12.8 13.0 13.3TISCO Financial Group 45.50 11.3 9.9 9.5 9.3 9.3 9.3 9.4 8.6 7.3 7.0 6.8 6.8 6.8 6.8 16.3 13.1 12.2 11.8 11.6 11.5 11.4Thailand 11.0 10.7 10.9 11.0 11.3 11.9 12.5 9.9 9.5 9.6 9.7 10.0 10.5 10.9 13.9 13.7 14.0 14.0 14.2 14.6 15.1

AggregatesGlobal Banks 11.8 12.0 12.4 12.7 13.0 13.3 13.6 7.0 7.0 7.3 7.5 7.6 7.7 7.9 11.2 11.6 12.1 12.4 12.7 13.0 13.4United Kingdom Domestic 13.0 12.7 12.9 13.1 14.3 15.1 15.9 4.1 4.2 4.1 4.3 4.6 4.8 4.9 10.8 12.0 12.1 12.2 13.3 14.1 14.8Europe 12.4 12.6 12.9 13.2 13.6 14.0 14.3 5.5 5.5 5.7 5.9 6.0 6.2 6.3 10.9 11.5 11.5 11.8 12.2 12.5 12.9EMEA 13.5 12.6 12.7 12.7 12.8 12.9 13.1 10.9 10.4 10.3 10.4 10.5 10.6 10.8 14.6 13.5 13.3 13.4 13.5 13.6 13.9Asia (ex-Japan) 10.4 10.6 11.3 11.3 11.3 11.4 11.6 6.9 7.2 7.6 7.7 7.7 7.8 7.9 11.5 11.9 12.7 12.6 12.7 12.7 12.9Asia (ex-Japan, China) 11.8 11.7 12.3 12.3 12.3 12.4 12.5 8.8 9.0 9.2 9.2 9.2 9.3 9.3 13.3 13.8 14.1 14.0 14.0 14.1 14.2Latin America 13.8 13.1 13.8 13.6 13.5 13.5 13.5 8.9 8.7 8.8 8.8 8.8 8.9 9.0 13.9 13.3 14.4 14.3 14.2 14.2 14.1GEM 11.5 11.4 12.0 11.9 11.9 12.0 12.1 7.8 7.9 8.2 8.2 8.3 8.4 8.5 12.4 12.5 13.2 13.1 13.1 13.2 13.3Emerging 11.3 11.2 11.8 11.8 11.8 11.8 11.9 7.8 7.9 8.2 8.2 8.3 8.4 8.5 12.2 12.3 12.9 12.9 12.9 13.0 13.1United States 12.2 12.5 12.8 13.4 13.8 14.1 14.5 9.3 9.5 10.0 10.4 10.5 10.6 10.7 10.8 11.6 12.4 13.1 13.5 13.8 14.1Europe (ex-UK) 12.2 12.7 12.8 13.1 13.4 13.7 13.9 5.6 5.5 5.8 6.0 6.2 6.5 6.7 10.7 11.3 11.1 11.6 12.0 12.5 12.9Aggregates (inc non-Banks)Global Financials 11.9 12.0 12.4 12.8 13.1 13.4 13.7 7.0 7.0 7.3 7.5 7.6 7.7 7.9 11.4 11.7 12.2 12.6 12.9 13.2 13.6United States Financials 12.6 12.8 13.1 13.7 14.1 14.5 14.9 9.0 9.2 9.8 10.1 10.3 10.4 10.5 11.2 12.0 12.8 13.4 13.8 14.1 14.5United States Non-banks 15.9 14.6 15.9 16.4 17.1 17.9 19.0 7.2 7.5 7.5 7.6 7.9 8.2 8.6 14.2 14.9 15.8 16.4 17.0 17.9 18.9

Source: UBS estimates. Note: Aggregates ratios are calculated on a market cap. weighted basis using a "Free Float Factor" to adjust the weighting. Where available, these aggregates have been calculated using factors obtained from MSCI/Factset, and where unavailable, the factors are source UBS. For more information on the factors used and their source, consult the "Price Performance" tables in this publication. * UBS Investment Bank is currently unable to display forecast data on this company.


UBS 56

Table 21: Asset quality

Price(Local) Provisions / Loans (%) NPLs / Loans (%) Reserves / NPAs (%)

30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E



Aozora Bank 254.00 0.21 0.03 0.17 0.19 0.19 0.19 0.20 4.6 4.0 4.1 4.2 4.3 4.2 4.2 77.1 70.4 70.4 70.4 70.4 70.4 70.4Bank of Yokohama 391.00 0.32 0.16 0.13 0.18 0.20 0.20 0.20 2.4 2.3 2.3 2.2 2.2 2.2 2.1 35.9 30.8 30.8 30.8 30.8 30.8 30.8Chiba Bank 492.00 0.14 0.03 0.11 0.12 0.13 0.14 0.15 NA NA NA NA NA NA NA 32.5 24.5 24.5 24.5 24.5 24.5 24.5Fukuoka Financial Grou 325.00 0.19 0.28 0.21 0.21 0.21 0.21 0.21 NA NA NA NA NA NA NA 64.4 64.4 64.4 64.4 64.4 64.4 64.4Mitsubishi UFJ Financia 377.00 0.43 0.24 0.17 0.18 0.19 0.19 0.19 2.2 2.1 2.2 2.2 2.2 2.2 2.2 63.8 63.8 63.8 63.8 63.8 63.8 63.8Mizuho Financial Group 132.00 0.03 0.04 0.07 0.09 0.09 0.09 0.09 1.9 1.9 1.9 1.9 1.9 1.9 1.9 61.9 56.1 56.1 56.1 56.1 56.1 56.1Resona Holdings 345.00 0.24 0.05 0.16 0.16 0.16 0.16 0.16 2.4 2.2 2.3 2.3 2.3 2.2 2.2 66.5 64.9 64.9 64.9 64.9 64.9 64.9Shinsei Bank 140.00 1.44 0.29 0.41 0.64 0.66 0.67 0.69 NA NA NA NA NA NA NA 50.4 50.4 50.4 50.4 50.4 50.4 50.4Shizuoka Bank 815.00 0.15 0.00 0.04 0.07 0.09 0.10 0.10 NA NA NA NA NA NA NA 34.0 31.7 31.7 31.7 31.7 31.7 31.7Sumitomo Mitsui Financ 2,654 0.35 0.20 0.19 0.22 0.22 0.22 0.22 2.6 2.8 2.8 2.8 2.8 2.8 2.8 64.3 54.2 54.2 54.2 54.2 54.2 54.2Sumitomo Mitsui Trust H 250.00 -0.05 0.06 0.06 0.07 0.08 0.10 NA 1.2 1.1 1.1 1.1 1.1 1.1 NA 45.2 67.7 67.7 67.7 67.7 67.7 NASURUGA Bank 1,066 1.12 0.32 0.34 0.35 0.35 0.35 0.35 NA NA NA NA NA NA NA 42.6 59.2 53.0 51.2 51.2 51.2 51.2Japan 0.31 0.16 0.15 0.17 0.18 0.18 0.18 2.3 2.2 2.3 2.3 2.3 2.2 2.3 60.3 57.1 57.0 57.0 57.0 57.0 56.4


UBS 57


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Goldman Sachs Group 117.79 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NAMorgan Stanley 16.87 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NAUS Broker Dealer NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NABank of America Corp. 9.86 3.09 1.44 0.89 0.98 1.14 1.34 1.35 3.3 2.9 2.5 2.1 2.0 1.7 0.4 128.2 121.9 117.0 130.5 129.9 152.7 282.8Citigroup Inc 34.57 4.17 2.09 1.81 1.77 1.63 1.84 1.79 3.3 1.8 1.6 1.6 1.5 1.5 1.1 192.3 258.8 241.3 214.2 185.0 171.3 151.8JPMorgan Chase & Co. 41.08 2.64 1.12 0.66 1.12 1.22 1.46 1.55 2.4 1.5 1.6 1.6 1.6 1.5 1.5 194.9 250.6 224.6 205.6 190.2 192.0 185.9US Universal Banks 3.21 1.50 1.05 1.26 1.31 1.53 1.56 2.9 2.0 1.9 1.7 1.7 1.5 1.1 171.2 217.3 197.8 186.0 171.1 174.7 204.7Bank of New York Mello 23.94 0.03 0.00 -0.04 NA NA NA NA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA NA NA NA NANorthern Trust Corporat 48.02 0.57 0.19 0.10 0.12 0.11 0.13 0.15 1.3 1.1 0.9 0.8 0.6 0.5 0.4 94.4 104.4 115.1 133.9 162.7 201.0 255.3State Street Corporation 44.44 0.22 NA -0.01 NA NA NA NA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA NA NA NA NAUS Trust Banks 0.18 0.05 -0.01 0.12 0.11 0.13 0.15 0.2 0.2 0.2 0.1 0.1 0.1 0.1 94.4 104.4 115.1 133.9 162.7 201.0 255.3BB&T Corporation 28.17 2.47 1.09 0.93 0.86 0.69 0.69 0.71 3.6 2.2 1.3 1.0 0.9 0.7 0.6 49.7 63.4 76.1 89.3 99.4 111.8 126.6PNC Financial Services 56.14 1.62 0.74 0.53 0.47 0.40 0.44 0.59 3.3 2.5 2.0 1.6 1.2 1.0 0.7 82.7 82.1 76.3 83.0 93.5 109.1 140.5Regions Financial Corp 6.67 3.30 1.91 0.32 0.39 0.45 0.62 0.65 NA NA NA NA NA NA 1.1 59.0 47.0 37.9 31.1 29.1 34.3 41.2SunTrust Banks, Inc. 27.15 2.31 1.27 0.97 0.76 0.53 0.50 0.50 NA NA NA NA NA NA 0.5 40.3 39.5 53.4 59.2 67.3 75.4 82.0U.S. Bancorp 32.26 2.22 1.15 0.88 0.75 0.67 0.74 0.79 2.5 1.8 1.2 0.9 0.7 0.6 0.5 71.9 65.5 72.7 79.6 86.9 94.4 106.0Wells Fargo & Company 33.01 2.05 1.03 0.90 0.79 0.66 0.68 0.72 4.1 3.3 3.0 2.3 1.7 1.2 0.9 53.8 46.3 41.0 42.8 53.6 77.1 114.8US Large-Cap. 2.12 1.06 0.85 0.74 0.63 0.66 0.71 3.7 2.8 2.4 1.8 1.4 1.0 0.8 59.6 55.0 53.9 57.9 67.4 84.8 112.6Associated Banc-Corp 12.85 2.89 0.38 0.05 0.35 0.66 0.81 0.82 NA NA NA NA NA NA 1.0 77.1 94.9 103.0 124.4 140.2 155.1 171.4City National Corporatio 48.69 1.52 0.47 0.36 0.24 0.45 0.39 0.47 NA NA NA NA NA NA 0.6 103.5 183.8 217.0 265.4 297.9 308.9 333.0Comerica Incorporated 29.59 1.17 0.37 0.20 0.26 0.42 0.54 0.52 NA NA NA NA NA NA 0.7 73.0 74.0 89.1 106.7 127.9 147.5 163.7Commerce Bancshares 35.78 1.02 0.55 0.26 0.24 0.38 0.44 0.44 NA NA NA NA NA NA 0.3 203.0 196.7 259.2 358.2 411.8 438.6 448.8Fifth Third Bancorp 14.64 1.99 0.53 0.36 0.38 0.65 0.63 0.65 NA NA NA NA NA NA 0.8 121.7 115.4 131.7 148.3 160.4 163.5 168.9FirstMerit Corporation 14.08 1.25 1.00 0.65 0.52 1.10 1.06 0.76 NA NA NA NA NA NA 0.3 92.9 132.8 158.5 175.6 333.2 477.5 539.3Huntington Bancshares 6.17 1.69 0.45 0.38 0.46 0.56 0.71 0.73 NA NA NA NA NA NA 0.8 147.9 166.5 157.2 142.9 129.4 138.7 157.6KeyCorp 8.08 1.17 -0.12 0.40 0.40 0.62 0.63 0.60 NA NA NA NA NA NA 0.8 123.1 119.8 126.2 135.3 136.9 140.7 140.5TCF Financial Corporat 11.88 1.61 1.39 1.66 0.84 0.71 0.81 0.77 NA NA NA NA NA NA 1.7 54.7 59.0 50.1 60.1 69.7 78.0 86.0Umpqua Holdings Corp 11.66 2.04 1.08 0.47 0.46 0.45 0.54 0.54 NA NA NA NA NA NA 0.9 55.1 68.2 83.1 97.5 102.8 106.5 110.4Wintrust Financial Corp 36.79 1.38 1.02 0.70 0.67 0.62 0.55 0.51 NA NA NA NA NA NA 0.7 51.3 52.0 67.4 109.4 130.9 142.0 150.5Zions Bancorporation 20.07 2.28 0.21 0.08 0.19 0.54 0.74 0.77 NA NA NA NA NA NA 4.3 82.2 103.5 118.4 124.2 121.6 128.9 135.2US Mid-Cap. 1.64 0.44 0.38 0.38 0.58 0.64 0.63 NA NA NA NA NA NA 1.1 108.9 119.5 133.0 151.5 167.4 180.6 191.5United States 2.51 1.19 0.84 0.97 0.96 1.09 1.12 2.9 2.1 1.9 1.6 1.4 1.2 0.9 127.2 147.5 132.5 129.8 127.7 138.2 166.4


UBS 58


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E EuropeErste Bank 22.62 1.54 1.70 1.45 1.14 1.00 0.97 0.97 7.6 8.5 9.2 8.6 7.0 6.2 5.8 60.0 61.0 62.9 60.0 60.0 60.0 60.0Raiffeisen Bank Intl 31.67 1.61 1.35 1.02 1.03 0.92 0.88 0.90 9.0 8.6 10.1 9.0 8.0 7.0 7.4 70.0 72.0 67.0 70.0 72.0 72.0 72.0Austria 1.56 1.62 1.34 1.12 0.98 0.95 0.95 7.8 8.5 9.4 8.7 7.2 6.4 6.2 62.0 63.3 63.9 62.5 63.0 63.0 63.0


Commerzbank 1.38 0.74 0.45 0.58 0.71 0.62 0.54 0.52 6.6 6.6 6.5 6.7 6.8 6.9 6.9 46.2 43.7 43.7 44.0 50.3 50.9 51.6Deutsche Bank 33.94 0.38 0.45 0.43 0.45 0.46 0.46 0.44 2.1 2.3 2.7 2.9 3.0 3.1 3.3 39.1 44.1 44.8 48.5 52.1 55.6 58.6Germany 0.43 0.45 0.45 0.49 0.48 0.47 0.45 2.6 3.0 3.2 3.4 3.5 3.7 3.8 40.0 44.0 44.7 47.8 51.8 54.9 57.6

Bank of Ireland 0.11 3.87 1.84 1.82 1.38 0.86 0.75 0.44 14.7 19.8 16.1 12.8 9.6 7.4 6.4 29.9 32.4 44.4 54.1 65.0 82.5 92.4Ireland 3.87 1.84 1.82 1.38 0.86 0.75 0.44 14.7 19.8 16.1 12.8 9.6 7.4 6.4 29.9 32.4 44.4 54.1 65.0 82.5 92.4

Intesa SanPaolo 1.29 0.94 1.32 1.24 1.00 0.97 0.96 0.95 9.3 10.7 11.7 12.2 12.0 11.8 11.5 51.5 52.9 52.5 52.1 52.1 52.1 52.1Unione di Banche Italian 3.00 0.79 0.64 0.78 0.75 0.75 0.75 0.75 6.0 7.3 9.0 9.5 9.2 8.9 8.7 34.9 30.7 28.8 28.8 28.8 28.8 28.8Banco Popolare 1.13 1.16 0.95 1.03 0.87 0.85 0.82 0.80 13.2 14.4 15.8 15.7 15.6 15.6 15.5 28.2 26.5 35.1 35.9 36.0 36.1 36.2Mediobanca 4.25 1.00 1.29 1.33 1.25 1.27 1.27 1.32 1.9 1.9 2.0 1.9 1.9 1.9 1.9 76.9 72.6 72.6 72.6 72.6 72.6 72.6MPS 0.20 0.92 1.21 1.31 0.92 0.88 0.83 0.81 11.2 13.8 16.1 16.7 16.7 16.7 16.7 45.9 46.1 45.5 45.5 45.5 45.5 45.5UniCredit 3.58 1.37 1.33 1.19 1.05 1.03 1.00 0.97 11.5 11.6 11.6 11.5 11.8 12.0 12.2 46.0 46.8 47.5 48.1 48.1 48.1 48.1Italy 1.12 1.24 1.18 1.01 0.98 0.97 0.95 9.9 10.8 11.2 11.5 11.4 11.4 11.4 47.8 47.8 48.7 48.9 48.9 48.9 48.9

Danske Bank 98.35 0.83 0.78 0.75 0.34 0.26 0.25 0.24 5.8 6.3 6.7 7.1 7.4 7.8 8.2 40.2 38.4 36.6 35.0 33.4 31.9 30.4DnB ASA 70.55 0.26 0.28 0.22 0.23 0.22 0.21 0.20 1.7 1.7 1.8 1.8 1.9 1.9 1.9 30.4 27.6 25.1 22.8 20.8 18.9 17.2Swedbank 122.90 0.28 -0.14 0.10 0.10 0.10 0.10 0.09 1.4 1.5 1.6 1.7 1.8 1.8 1.9 51.6 51.6 51.6 51.6 51.6 51.6 51.6Nordea 60.90 0.29 0.23 0.27 0.22 0.16 0.16 0.16 1.4 1.4 1.3 1.3 1.3 1.3 1.3 52.6 52.6 52.6 52.6 52.6 52.6 52.6SEB Group 53.55 0.15 -0.06 0.07 0.07 0.08 0.08 0.07 2.3 2.4 2.3 2.2 2.1 1.9 1.8 64.9 64.9 64.9 64.9 64.9 64.9 64.9Handelsbanken 236.50 0.10 0.05 0.07 0.08 0.08 0.09 0.10 0.7 0.7 0.7 0.7 0.7 0.7 0.7 53.1 53.1 53.1 53.1 53.1 53.1 53.1Nordic 0.31 0.17 0.23 0.17 0.14 0.14 0.14 2.0 2.0 2.1 2.1 2.2 2.2 2.3 49.2 48.8 48.6 48.1 47.6 47.2 46.8

BCP 0.07 1.25 2.65 2.21 1.06 0.99 0.79 0.81 3.1 8.9 11.5 0.1 0.1 0.1 10.9 109.4 54.7 57.5 55.8 71.8 84.2 84.2Banco Espirito Santo SA 0.77 1.01 1.66 2.02 1.38 1.09 0.93 0.79 2.7 2.9 3.8 4.3 4.3 6.9 3.6 123.5 140.2 139.2 143.3 156.1 0.0 206.8BPI 0.81 0.48 1.99 1.10 0.96 0.73 0.59 0.56 1.8 2.6 3.0 3.3 3.3 2.7 4.3 94.3 86.5 98.8 104.9 114.0 142.8 144.6Portugal 1.05 2.10 1.92 1.15 0.97 0.80 0.75 2.8 5.3 7.1 2.2 2.2 2.9 7.1 114.6 100.2 93.6 95.5 109.0 67.6 138.0


UBS 59


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Banco de Sabadell 2.15 1.23 1.46 2.65 0.84 0.68 0.52 0.51 5.9 6.5 9.4 10.6 10.4 9.8 9.2 69.0 48.5 72.1 68.4 77.1 92.9 111.0Banco Popular 0.64 1.64 1.61 6.00 2.30 1.73 1.06 0.91 1.0 7.4 19.6 20.9 21.6 19.8 18.2 365.0 34.5 62.0 66.8 72.5 84.3 97.3Banesto 2.81 1.05 1.51 3.13 1.17 1.06 0.93 0.94 4.5 5.2 6.0 6.6 7.4 6.9 6.4 75.8 51.1 43.9 44.4 50.4 61.0 73.4Bankia 0.72 NA 3.02 6.66 1.05 0.89 0.79 0.69 5.6 7.7 8.7 9.2 8.4 7.2 6.2 62.7 45.0 67.7 76.0 93.0 124.8 154.0Bankinter 3.06 0.60 0.45 1.02 0.75 0.63 0.51 0.39 3.2 3.6 4.6 5.0 4.7 4.2 3.7 37.0 83.8 71.0 68.9 76.4 88.4 101.4BBVA 6.52 1.64 1.37 2.25 1.99 1.87 1.81 1.76 4.6 4.5 4.3 4.2 4.1 4.0 NA 61.6 61.6 61.6 61.6 61.6 61.6 61.6Caixa Bank 2.94 1.15 1.13 1.60 1.24 0.89 0.80 0.70 3.7 5.0 8.7 10.1 9.7 8.8 7.9 70.5 60.1 60.9 60.0 68.4 81.0 95.0Santander 5.91 1.56 1.50 1.78 1.72 1.74 1.78 1.81 3.7 4.1 4.4 4.5 4.8 5.1 5.4 72.7 61.4 69.1 66.4 60.4 54.9 49.9Spain 1.55 1.48 2.17 1.76 1.70 1.66 1.65 4.0 4.5 5.3 5.5 5.6 5.6 6.5 78.8 59.9 66.3 64.8 62.5 61.4 60.7

Credit Suisse Group 21.94 -0.03 0.08 0.09 0.13 0.14 0.15 0.16 0.6 0.4 0.5 0.5 0.5 0.5 0.6 54.6 53.0 48.9 48.6 51.6 55.2 64.8UBS AG 14.50 0.02 0.03 * * * * * 0.0 0.0 * * * * * NA NA * * * * *Switzerland Large -0.01 0.05 0.09 0.13 0.14 0.15 0.16 0.3 0.2 0.5 0.5 0.5 0.5 0.6 54.6 53.0 48.9 48.6 51.6 55.2 64.8Bank Sarasin & Cie AG 27.00 0.14 0.11 0.00 0.02 0.02 0.02 0.02 0.6 0.5 0.4 0.4 0.4 0.4 0.3 21.7 20.6 18.6 19.5 20.4 21.4 22.4EFG International 8.05 -0.05 0.02 0.01 0.01 0.01 0.01 0.01 0.1 0.1 0.1 0.1 0.1 0.1 0.1 390.7 406.4 399.4 391.5 379.5 367.0 354.4GAM Holding Ltd 11.90 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NAJulius Baer Group 31.74 0.14 0.16 0.00 0.09 0.08 0.07 0.06 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA NA NA NA NAPartners Group Holding 202.00 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NAVZ Holding 108.00 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NASwitzerland Wealth & Asset Managers 0.13 0.14 0.00 0.08 0.07 0.06 0.06 0.1 0.1 0.0 0.0 0.0 0.0 0.0 152.1 136.2 136.7 134.8 131.7 128.6 125.3Banque Cantonale Vaud 508.50 0.02 0.07 0.05 0.07 0.08 0.10 0.10 1.4 1.2 1.2 1.2 1.2 1.3 1.3 55.5 50.1 55.0 55.0 55.0 55.0 55.0Liechtensteinische Land 26.55 0.26 0.81 0.28 0.14 0.13 0.13 0.08 2.9 2.8 2.8 2.8 2.8 2.8 2.8 45.6 47.6 46.7 45.8 44.9 44.1 43.2St Galler Kantonalbank 381.75 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.4 0.4 0.4 0.4 0.4 0.4 0.4 202.5 194.1 195.4 188.9 184.2 180.0 180.0Verwaltungs-und Privat 61.95 0.62 0.16 0.36 0.15 0.12 0.09 0.09 0.6 0.4 0.3 0.3 0.3 0.3 0.3 102.6 40.7 131.7 53.8 42.7 32.5 31.0Vontobel 26.50 0.56 0.47 0.36 0.34 0.32 0.31 0.29 0.4 0.4 0.4 0.4 0.4 0.4 0.3 173.3 206.7 1250.0 1250.0 1250.0 1250.0 1250.0Switzerland Small 0.21 0.27 0.14 0.12 0.12 0.12 0.12 1.2 1.1 0.9 0.9 1.0 1.0 1.0 114.2 109.3 314.1 307.6 305.6 303.8 303.6Switzerland 0.01 0.07 0.08 0.12 0.12 0.13 0.13 0.3 0.2 0.4 0.4 0.4 0.4 0.5 62.7 62.3 85.5 84.3 86.4 89.1 96.9

Barclays 246.00 1.34 0.88 0.74 0.64 0.63 0.63 0.62 5.7 4.9 3.9 3.6 3.5 3.3 3.3 51.1 49.7 45.7 40.1 37.1 37.1 35.9HSBC 637.70 1.51 1.28 0.88 0.74 0.77 0.80 0.82 4.8 4.4 3.7 3.5 3.3 3.2 3.0 42.7 42.0 46.6 46.6 46.6 46.6 46.6Lloyds Banking Group 46.50 1.65 1.43 1.07 0.90 0.75 0.66 0.61 3.8 3.8 3.8 3.8 3.8 3.8 3.8 133.4 134.2 138.5 133.6 148.2 140.9 132.8RBS Group 295.20 1.57 1.27 0.90 0.60 0.44 0.42 0.40 0.3 0.3 0.3 0.3 13.0 26.1 26.5 1560.6 1741.1 1831.0 1877.5 44.7 23.0 23.4Standard Chartered 1,455 0.44 0.40 0.45 0.48 0.50 0.50 0.50 1.9 1.6 1.6 1.6 1.6 1.6 1.6 57.8 64.0 65.3 66.8 68.5 70.0 71.3United Kingdom 1.33 1.08 0.81 0.69 0.69 0.69 0.70 4.0 3.6 3.2 3.1 3.6 4.2 4.2 165.8 166.4 155.2 156.7 57.8 56.2 55.5


UBS 60



OTP Bank 4,080 3.65 3.00 3.08 2.71 2.59 2.47 2.41 13.6 16.5 19.5 17.0 14.0 12.0 12.0 74.4 76.7 75.6 75.5 75.0 72.0 72.0Hungary 3.65 3.00 3.08 2.71 2.59 2.47 2.41 13.6 16.5 19.5 17.0 14.0 12.0 12.0 74.4 76.7 75.6 75.5 75.0 72.0 72.0



Bank BPH 40.45 2.88 1.38 * * * * * 10.6 10.7 * * * * * 72.1 75.6 * * * * *Bank Handlowy 98.00 2.06 0.58 * * * * * 11.4 8.9 * * * * * 67.2 77.0 * * * * *Bank Millennium 4.29 0.64 0.45 * * * * * 5.8 4.9 * * * * * 54.1 57.9 * * * * *BRE 316.00 1.14 0.59 * * * * * 5.3 4.6 * * * * * 68.0 66.8 * * * * *ING Bank Slaski 89.05 0.63 0.45 * * * * * 4.9 4.2 * * * * * 61.6 61.1 * * * * *Pekao 157.70 0.76 0.64 * * * * * 7.0 6.6 * * * * * 72.7 73.0 * * * * *PKO BP 34.80 1.51 1.42 * * * * * 8.0 8.0 * * * * * 44.6 48.0 * * * * *Poland 1.24 1.01 NA NA NA NA NA 7.5 7.2 NA NA NA NA NA 57.3 59.7 NA NA NA NA NA

Sberbank 91.41 2.97 -0.02 0.59 1.51 1.49 1.49 1.55 7.3 4.9 4.9 5.2 5.4 5.5 5.9 155.3 162.6 145.4 145.4 145.4 145.4 145.4Vozrozhdenie Bank 565.00 1.98 2.02 1.92 1.77 1.69 1.61 1.39 10.5 7.7 10.0 9.5 9.0 8.5 8.0 92.5 122.6 95.3 101.0 106.4 112.1 116.2VTB 0.05 2.03 0.89 1.60 2.01 1.82 1.81 1.83 8.6 5.4 5.4 5.4 5.4 5.4 5.4 104.2 116.4 113.6 115.8 115.4 114.9 114.5Russia 2.77 0.17 0.73 1.58 1.54 1.53 1.59 7.6 5.0 5.0 5.2 5.4 5.5 5.8 144.2 153.3 140.9 141.3 141.2 141.2 141.1



UBS 61


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Akbank 8.38 1.03 1.00 1.20 1.30 1.40 1.40 1.40 2.2 1.7 1.9 1.8 1.8 1.8 1.8 100.0 92.6 100.0 100.0 100.0 100.0 100.0Garanti Bank 8.48 1.13 1.14 1.05 1.25 1.45 1.50 1.60 3.2 2.1 2.5 2.9 2.7 2.5 2.5 80.8 79.1 75.0 75.0 75.0 75.0 75.0Halkbank 17.30 1.19 0.95 1.10 1.18 1.05 1.00 1.00 3.8 2.9 3.2 3.2 3.2 3.0 3.0 83.3 83.0 83.0 83.0 83.0 83.0 83.0Isbank 5.76 1.95 1.78 1.80 1.60 1.80 1.80 1.80 3.6 2.1 3.4 3.7 2.9 2.7 2.7 100.0 100.0 100.0 100.0 100.0 100.0 100.0Vakifbank 4.33 2.47 1.83 1.85 1.75 1.75 1.76 1.90 5.0 3.6 4.0 4.0 4.0 4.0 4.0 98.8 95.0 97.0 96.0 96.0 96.0 96.0Yapi Kredi Bank 4.71 2.47 1.38 1.70 1.75 1.70 1.70 1.70 3.5 3.1 3.5 3.1 3.0 2.8 2.8 77.3 65.2 70.0 70.0 70.0 70.0 70.0Turkey 1.41 1.22 1.29 1.36 1.45 1.46 1.50 3.2 2.3 2.8 2.9 2.7 2.6 2.6 89.9 86.1 87.0 86.9 86.9 86.9 86.9


UBS 62




Compartamos SAB 19.62 3.55 4.61 5.81 5.81 5.84 5.59 5.52 2.0 2.6 3.0 3.0 3.2 3.4 3.5 145.6 179.4 175.0 175.0 175.0 175.0 175.0Grupo Financiero Bano 74.12 2.10 1.38 1.13 1.14 1.17 1.21 1.24 2.5 1.9 1.8 1.8 1.9 1.9 2.0 123.7 143.1 148.5 149.2 149.8 150.1 150.2Santander Mexico 37.98 4.07 2.81 2.80 2.69 2.71 2.83 2.92 1.7 1.7 1.7 1.8 2.0 2.1 2.3 268.6 210.5 205.0 200.9 196.9 192.9 189.1Mexico 2.44 1.99 2.18 2.15 2.17 2.22 2.27 2.3 2.1 1.8 1.9 2.0 2.1 2.2 128.9 149.9 174.4 173.0 171.6 170.1 168.5

Credicorp Ltd 139.90 1.39 1.39 1.30 1.17 1.04 0.94 0.88 NA NA NA NA NA NA NA 198.2 200.5 192.1 179.9 165.9 157.8 153.1Peru 1.39 1.39 1.30 1.17 1.04 0.94 0.88 NA NA NA NA NA NA NA 198.2 200.5 192.1 179.9 165.9 157.8 153.1


UBS 63


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E AsiaAgricultural Bank of Chi 3.40 0.95 1.21 0.80 0.90 1.00 1.00 1.00 2.0 1.6 1.5 1.7 1.9 2.0 2.0 168.1 263.1 278.4 225.7 187.8 164.0 152.1Bank of Beijing 7.20 0.40 0.67 0.72 0.67 0.69 0.69 0.70 0.7 0.5 0.5 0.6 0.7 0.8 0.8 307.2 446.5 466.9 442.8 429.9 407.4 399.6Bank of China 3.27 0.25 0.32 0.34 0.71 0.67 0.64 0.62 1.1 1.0 1.1 1.4 1.8 2.0 1.9 196.7 220.7 212.7 175.0 142.0 126.8 131.3Bank of Communication 5.68 0.60 0.52 0.59 0.80 0.74 0.66 0.60 1.1 0.9 0.9 1.5 1.6 1.6 1.5 185.8 256.4 261.2 175.5 163.0 166.0 168.5Bank of Nanjing 7.60 0.70 0.81 0.79 0.76 0.76 0.74 0.74 1.0 0.8 0.8 0.8 0.8 0.9 0.9 234.7 324.0 335.4 337.6 349.1 346.3 345.2Bank of Ningbo 8.72 0.40 0.58 0.61 0.63 0.66 0.67 0.69 0.7 0.7 0.8 0.8 0.9 0.9 0.9 196.1 240.7 239.8 256.8 271.0 288.9 299.2China CITIC Bank 4.00 0.45 0.53 0.64 0.85 0.91 0.82 0.82 0.7 0.6 0.8 1.2 1.8 2.0 2.1 213.5 272.3 259.3 188.1 139.5 121.4 120.9China Construction Ban 5.94 0.56 0.59 0.55 0.75 0.78 0.75 0.67 1.1 1.1 1.1 1.6 1.7 1.9 1.9 221.1 241.4 254.7 177.1 160.8 143.3 143.7China Merchants Bank 14.84 0.42 0.59 * * * * * 0.7 0.7 * * * * * 302.4 329.6 * * * * *China Minsheng Bankin 7.60 0.67 0.87 * * * * * 0.8 0.9 * * * * * 230.0 231.4 * * * * *Chongqing Rural Comm 3.56 -0.04 0.64 0.56 1.06 1.06 1.05 1.05 2.4 1.4 1.5 1.9 2.1 2.3 2.4 172.8 265.2 253.2 218.9 202.8 193.3 187.0Hua Xia Bank 8.43 0.89 0.83 0.86 0.80 0.85 0.87 0.90 1.2 0.9 0.9 1.0 1.2 1.3 1.3 209.0 308.2 320.6 301.5 275.8 254.5 264.4Industrial & Commercia 5.23 0.45 0.43 0.46 0.73 0.77 0.73 0.68 1.1 0.9 1.0 1.8 2.1 2.1 2.0 228.2 266.9 261.9 138.5 119.3 118.6 121.6Industrial Bank 12.66 0.31 0.32 * * * * * 0.4 0.4 * * * * * 325.7 385.3 * * * * *Shanghai Pudong Deve 7.46 0.45 0.62 0.65 0.68 0.73 0.73 0.76 0.5 0.4 0.5 0.5 0.6 0.6 0.6 380.6 499.6 470.9 488.6 518.2 528.3 538.4Ping An Bank 12.80 0.39 0.43 0.62 0.54 0.59 0.67 0.70 0.6 0.5 0.7 0.8 0.8 0.9 0.9 271.4 320.7 268.1 264.6 271.3 290.3 308.0China 0.58 0.68 0.58 0.78 0.83 0.81 0.77 1.2 1.0 1.1 1.7 1.9 1.9 1.9 224.0 274.7 270.4 182.6 159.4 149.5 148.3

Bank of China (Hong Ko 23.80 -0.05 0.07 0.07 0.35 0.45 0.45 0.45 0.1 0.1 0.4 1.2 1.3 1.3 1.3 266.6 398.6 89.8 46.8 54.4 67.8 81.7Bank of East Asia 29.90 0.11 0.04 0.13 0.35 0.31 0.28 0.27 0.5 0.4 0.4 1.0 1.1 1.2 1.2 71.7 71.9 62.5 48.2 45.9 39.7 39.2Dah Sing Finan'l 33.15 0.13 0.21 0.26 0.61 0.62 0.62 0.62 0.2 0.4 0.7 0.9 0.9 0.9 0.9 216.9 99.8 67.3 69.0 89.4 111.0 133.7Hang Seng Bank 118.40 0.10 0.09 0.14 0.38 0.40 0.35 0.35 0.4 0.3 0.5 0.9 1.2 1.3 1.3 92.3 105.2 77.2 60.0 61.8 68.5 79.9Wing Hang Bank 77.60 -0.07 0.05 0.10 0.26 0.29 0.29 0.29 0.3 0.3 0.4 0.7 0.9 1.0 1.0 68.1 57.6 58.4 38.2 24.4 19.6 19.7Hong Kong 0.04 0.08 0.11 0.36 0.40 0.38 0.38 0.3 0.3 0.4 1.0 1.2 1.3 1.3 150.1 200.2 78.0 52.0 54.6 61.2 71.0

Axis Bank 1,316 0.95 0.69 0.93 0.98 0.97 0.97 0.97 NA NA NA NA NA NA NA 74.3 73.4 67.9 65.1 90.1 70.8 55.3Bank of Baroda 763.05 0.65 0.89 0.94 0.94 0.93 0.93 0.92 1.4 1.5 2.3 3.0 3.6 4.1 4.6 74.9 65.4 69.1 70.5 71.1 71.4 71.5Bank of India 280.80 0.92 1.16 1.43 1.11 1.00 0.98 0.97 2.2 2.3 2.8 3.1 3.1 3.1 3.2 59.6 38.0 47.2 44.8 42.8 41.1 39.6Federal Bank 481.80 1.78 0.97 0.68 0.68 0.73 0.72 0.72 NA NA NA NA NA NA NA 83.4 84.7 69.7 63.0 61.7 62.0 62.4HDFC Bank 703.65 1.32 0.75 0.77 0.71 0.72 0.72 0.71 NA NA NA NA NA 2.0 2.2 82.5 82.4 51.2 32.0 21.6 14.8 9.6Housing Development F 841.45 0.06 0.06 0.06 0.06 0.06 0.06 0.06 NA NA NA NA NA NA NA 100.0 100.0 100.0 100.0 100.0 97.9 88.2ICICI Bank 1,099 1.01 0.48 0.76 0.76 0.73 0.73 0.73 NA NA NA NA NA NA NA 63.9 60.9 60.4 61.8 63.5 65.6 68.2IndusInd Bank 417.60 0.84 0.57 0.56 0.68 0.55 0.50 0.51 NA NA NA NA NA NA NA 72.6 72.7 52.2 57.6 59.7 61.7 63.6Oriental Bank of Comm 336.90 1.35 1.65 1.21 1.18 1.06 1.04 1.02 NA NA NA NA NA NA NA 51.2 31.3 37.8 51.1 59.5 66.6 72.7Punjab National Bank 785.60 1.08 1.23 1.43 1.32 1.21 1.20 1.20 1.8 2.9 4.9 5.6 6.2 6.4 6.3 53.4 48.9 54.8 60.5 62.6 67.3 73.1Shriram Transport Finan 668.35 2.93 3.68 3.19 2.60 2.44 2.28 2.26 NA NA NA NA NA NA NA 85.9 85.9 85.9 85.9 85.9 85.9 85.9State Bank of India 2,170 1.38 1.49 1.27 1.26 1.10 1.09 1.09 NA NA NA NA NA NA NA 51.2 60.1 55.9 56.9 64.3 71.1 77.3Union Bank 242.40 0.97 1.49 1.15 1.04 0.90 0.91 0.92 2.3 3.0 4.1 4.6 5.1 5.4 5.7 50.2 44.5 52.0 52.1 50.3 49.0 48.0YES Bank 442.40 0.37 0.25 0.43 0.57 0.53 0.43 0.43 NA NA NA NA NA NA NA 88.6 88.0 59.9 61.8 60.7 58.7 57.5India 0.86 0.61 0.63 0.61 0.59 0.58 0.58 1.8 2.5 3.8 4.4 4.9 2.5 2.8 77.7 78.8 69.7 64.5 64.4 61.3 56.6


UBS 64


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Bank Central Asia 8,800 0.25 NA 0.20 0.25 0.25 0.54 0.44 0.6 0.6 0.4 0.4 0.4 0.4 0.4 395.0 290.5 372.2 306.7 266.7 289.0 286.9Bank Danamon Indones 5,400 3.97 2.45 2.62 2.61 2.62 2.73 2.68 3.7 2.6 2.1 1.8 1.5 1.3 1.1 82.3 85.8 93.7 100.8 105.7 117.4 126.2BPD Jawa Barat dan Ba 1,050 1.70 1.01 1.17 1.30 1.39 1.39 1.39 2.1 0.7 1.2 1.2 1.2 1.2 1.2 119.0 271.7 184.9 184.7 184.5 184.3 184.1Bank Mandiri 8,250 1.41 1.08 1.01 1.00 1.14 1.27 1.41 2.4 2.2 1.8 1.5 1.2 1.0 0.9 191.7 174.0 152.8 126.9 106.0 93.5 80.0Bank Negara Indonesia 3,700 2.99 1.69 1.43 1.09 1.15 1.15 1.17 4.3 4.3 3.6 3.3 3.0 2.5 2.1 117.0 100.0 106.2 108.3 110.7 117.2 125.1Bank Rakyat Indonesia 7,050 3.62 2.28 1.02 1.40 1.61 1.83 1.82 2.7 2.5 2.1 1.7 1.5 1.2 1.0 205.4 222.9 217.2 209.0 212.5 233.1 257.9Bank Tabungan Negara 1,610 0.72 0.09 0.11 0.25 0.25 0.25 0.25 3.3 2.7 2.3 2.0 1.7 1.5 1.2 52.4 54.1 58.1 65.4 73.9 83.8 95.3PT Bank Tabungan Pen 5,200 1.92 1.66 1.30 1.54 1.69 1.83 1.99 1.1 0.7 0.6 0.4 0.4 0.3 0.3 127.9 139.2 166.6 189.8 213.0 236.1 259.3Indonesia 1.87 1.73 0.87 0.96 1.05 1.24 1.24 2.1 1.9 1.5 1.3 1.1 1.0 0.8 243.7 209.6 232.8 204.7 188.8 200.4 204.5

DGB Financial Group 13,500 1.39 0.65 0.71 0.73 0.63 0.57 0.54 1.4 1.1 1.2 1.3 1.1 1.0 0.0 129.1 144.4 110.0 99.1 105.3 108.6 108.6Hana Financial Group 33,600 0.75 0.53 0.84 0.79 0.65 0.60 0.59 1.5 1.0 1.0 1.0 0.8 0.7 0.7 113.3 93.8 115.4 123.6 147.8 156.1 156.1Industrial Bank of Korea 11,500 1.43 1.02 0.85 0.89 0.70 0.65 0.62 1.8 1.5 1.6 1.3 1.0 0.9 NA 126.7 117.3 98.5 111.9 131.0 130.6 NAKB Financial Group 35,650 1.57 0.73 0.70 0.77 0.63 0.54 0.53 1.8 1.4 1.6 1.7 1.4 1.2 1.2 119.1 112.3 99.3 88.2 107.0 122.1 122.1Korea Exchange Bank 7,290 0.96 0.86 0.84 0.82 0.66 0.61 0.59 1.3 1.2 1.3 1.2 1.1 1.0 1.0 126.6 92.3 85.1 80.0 75.7 70.7 70.7BS Financial Group 12,100 0.95 0.52 0.64 0.72 0.60 0.53 0.51 1.1 1.0 1.2 1.1 1.0 0.9 NA 147.2 107.9 90.4 91.9 93.4 97.9 NAShinhan Financial Grou 34,650 0.63 0.54 0.77 0.73 0.64 0.60 0.59 1.3 1.2 1.4 1.2 1.0 1.0 1.0 154.3 100.4 96.7 112.8 128.5 137.3 137.3Woori Finance Holdings 10,150 1.45 1.02 0.90 0.98 0.81 0.69 0.68 3.1 1.9 1.7 1.9 1.5 1.3 1.3 77.9 85.5 94.6 87.8 106.6 125.6 125.6Korea 1.11 0.67 0.77 0.78 0.65 0.59 0.57 1.6 1.3 1.4 1.4 1.1 1.0 1.0 128.3 104.4 99.8 102.5 118.9 128.8 130.2





UBS 65


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Cathay Financial Holdin 30.95 NA 0.07 0.03 0.08 0.17 0.12 0.12 0.2 0.2 0.2 0.2 0.2 0.2 0.2 273.8 240.0 328.8 315.8 335.5 330.9 325.8Fubon Financial Holding 33.00 0.11 0.08 -0.07 0.14 0.23 0.12 0.12 0.3 0.2 0.1 0.2 0.3 0.4 0.4 197.3 335.5 469.9 351.4 308.4 254.0 218.0Yuanta Financial Holdin 14.70 -0.05 -0.08 0.08 0.20 0.18 0.08 0.10 0.5 0.2 0.2 0.2 0.2 0.2 0.2 359.1 673.6 673.6 673.6 673.6 673.6 673.6Taiwan -0.05 -0.08 0.08 0.20 0.18 0.08 0.10 0.5 0.2 0.2 0.2 0.2 0.2 0.2 359.1 673.6 673.6 673.6 673.6 673.6 673.6


AggregatesGlobal Banks 1.43 1.05 0.93 0.93 0.90 0.90 0.89 2.9 2.6 2.5 2.4 2.4 2.4 2.3 124.5 134.5 126.6 114.3 101.0 102.3 108.6United Kingdom Domestic 1.49 1.14 0.88 0.72 0.63 0.60 0.57 3.9 3.6 3.1 3.0 5.4 7.8 7.9 399.1 447.6 418.9 423.5 73.3 66.8 63.8Europe 1.02 0.91 0.91 0.78 0.75 0.74 0.73 4.0 3.9 4.1 4.1 4.3 4.6 4.6 103.4 99.8 102.3 102.9 59.4 58.8 59.1EMEA 1.84 1.24 1.40 1.56 1.58 1.58 1.55 6.6 5.5 5.0 4.8 4.6 4.6 4.6 82.7 84.4 87.2 90.3 93.0 95.2 97.4Asia (ex-Japan) 0.64 0.64 0.54 0.68 0.70 0.69 0.67 1.5 1.3 1.3 1.7 1.8 1.8 1.8 187.8 220.3 201.9 149.5 137.7 134.3 134.8Asia (ex-Japan, China) 0.76 0.57 0.49 0.54 0.54 0.55 0.55 2.1 1.7 1.7 1.7 1.6 1.6 1.6 121.4 129.9 116.7 108.4 110.6 115.2 117.9Latin America 5.09 5.20 5.18 4.67 4.20 3.77 3.45 4.5 5.0 4.9 4.7 4.5 4.3 4.1 155.4 143.0 143.9 139.3 133.8 129.2 124.4GEM 1.64 1.56 1.51 1.53 1.46 1.38 1.30 2.8 2.6 2.5 2.7 2.7 2.6 2.6 168.3 189.6 178.0 140.6 131.4 128.2 127.7Emerging 1.74 1.66 1.64 1.65 1.58 1.48 1.40 2.9 2.7 2.7 2.8 2.8 2.7 2.7 171.5 193.1 185.7 146.9 136.9 133.0 131.8United States 2.51 1.19 0.84 0.97 0.96 1.09 1.12 2.9 2.1 1.9 1.6 1.4 1.2 0.9 127.2 147.5 132.5 129.8 127.7 138.2 166.4Europe (ex-UK) 0.83 0.82 0.98 0.85 0.80 0.77 0.76 4.0 4.1 4.8 4.9 4.9 4.9 5.0 63.5 57.9 61.0 60.7 60.7 60.8 61.9Aggregates (inc non-Banks)Global Financials 1.43 1.04 0.93 0.93 0.90 0.90 0.88 2.9 2.5 2.4 2.4 2.4 2.4 2.3 124.8 135.0 127.5 115.0 101.8 103.0 109.1United States Financials 2.51 1.19 0.84 0.97 0.96 1.09 1.12 2.9 2.1 1.9 1.6 1.4 1.2 0.9 127.2 147.5 132.5 129.8 127.7 138.2 166.4United States Non-banks NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Source: UBS estimates. Note: Aggregates ratios are calculated on a market cap. weighted basis using a "Free Float Factor" to adjust the weighting. Where available, these aggregates have been calculated using factors obtained from MSCI/Factset, and where unavailable, the factors are source UBS. * UBS Investment Bank is currently unable to display forecast data on this company.


UBS 66


UBS 67

Appendix 3: Valuations


UBS 68

Table 22: Valuations

Price(Local) UBS Adj. P/E (x) Price / Book (x) UBS Adj. RoE (%)

30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E (1)



Aozora Bank 254.00 9.1 8.8 11.8 10.9 10.9 16.4 16.6 0.54 0.89 0.91 0.76 0.73 0.72 0.71 8.1 10.9 9.5 9.6 9.3 6.0 5.8Bank of Yokohama 391.00 12.4 10.0 9.4 9.4 9.3 8.7 8.4 0.77 0.66 0.62 0.59 0.57 0.54 0.52 6.3 6.8 6.9 6.5 6.3 6.4 6.4Chiba Bank 492.00 12.4 11.1 10.6 10.3 10.0 9.5 9.3 0.76 0.67 0.64 0.61 0.59 0.56 0.53 6.3 6.2 6.0 6.0 5.8 5.9 5.8Fukuoka Financial Grou 325.00 12.5 9.6 11.2 10.5 9.7 8.9 8.3 0.54 0.47 0.46 0.44 0.43 0.41 0.40 4.4 5.1 4.1 4.3 4.5 4.7 4.8Mitsubishi UFJ Financia 377.00 10.6 5.3 8.3 8.3 8.2 7.8 7.7 0.71 0.55 0.54 0.51 0.49 0.47 0.45 6.6 10.8 6.6 6.3 6.2 6.2 6.0Mizuho Financial Group 132.00 8.3 6.6 6.6 9.8 9.5 8.9 8.7 0.84 0.66 0.67 0.65 0.62 0.60 0.56 11.0 10.4 10.8 7.0 6.9 7.0 6.8Resona Holdings 345.00 22.7 5.4 5.0 10.2 9.9 9.4 9.3 2.95 1.13 0.79 0.73 0.68 0.63 0.58 23.2 31.3 24.9 10.4 10.0 9.8 9.2Shinsei Bank 140.00 7.8 32.2 7.6 7.9 7.8 7.8 7.8 0.43 0.43 0.61 0.57 0.53 0.50 0.47 4.5 1.3 8.4 7.4 7.0 6.6 6.3Shizuoka Bank 815.00 13.9 13.7 9.8 12.7 12.4 11.7 11.3 0.73 0.73 0.69 0.65 0.61 0.58 0.55 5.3 5.2 7.2 5.2 5.0 5.1 5.0Sumitomo Mitsui Financ 2,654 8.0 6.4 5.8 8.5 8.3 7.9 7.7 0.74 0.64 0.64 0.61 0.59 0.56 0.53 9.7 9.9 11.6 7.4 7.2 7.3 7.1Sumitomo Mitsui Trust H 250.00 11.5 7.5 9.0 9.4 9.1 8.8 NA 0.81 0.65 0.62 0.59 0.56 0.54 NA 7.0 12.3 6.8 6.4 6.3 6.2 NASURUGA Bank 1,066 +ve 10.7 14.2 13.7 13.3 12.4 12.2 1.03 0.93 1.20 1.12 1.04 0.97 0.91 0.6 8.2 8.8 8.5 8.1 8.2 7.8Japan 9.8 6.4 7.2 9.0 8.8 8.4 8.2 0.76 0.62 0.62 0.59 0.56 0.54 0.51 8.7 11.0 9.6 6.9 6.8 6.7 6.6


UBS 69


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Goldman Sachs Group 117.79 11.8 29.0 9.7 8.6 7.8 7.3 6.7 1.21 0.99 0.82 0.75 0.68 0.63 0.58 11.5 3.6 9.2 9.4 9.5 9.4 9.4Morgan Stanley 16.87 10.3 10.1 +ve 7.7 6.1 5.0 4.4 0.86 0.69 0.55 0.51 0.47 0.43 0.38 8.5 6.6 0.0 6.6 7.6 8.6 8.8US Broker Dealer 11.3 18.7 9.7 8.3 7.2 6.3 5.8 1.09 0.88 0.71 0.65 0.60 0.55 0.50 10.7 4.5 6.3 8.5 8.9 9.2 9.2Bank of America Corp. 9.86 -ve +ve 21.9 9.9 7.9 7.1 6.2 0.70 0.48 0.48 0.46 0.44 0.41 0.39 -1.8 0.0 2.2 4.6 5.6 5.9 6.4Citigroup Inc 34.57 11.3 10.3 11.1 7.3 6.3 5.8 5.2 0.71 0.60 0.53 0.49 0.45 0.41 0.37 6.7 6.4 5.1 7.3 7.7 7.6 7.7JPMorgan Chase & Co. 41.08 10.2 8.8 8.0 7.7 6.8 6.0 5.3 0.94 0.85 0.80 0.73 0.67 0.61 0.56 9.7 10.2 10.6 10.1 10.4 10.8 11.1US Universal Banks 10.6 9.4 10.8 8.1 6.9 6.2 5.5 0.78 0.64 0.60 0.56 0.52 0.48 0.44 4.9 6.2 6.6 7.7 8.3 8.5 8.8Bank of New York Mello 23.94 13.5 12.3 11.6 10.2 9.2 8.0 6.9 1.02 0.89 0.77 0.72 0.68 0.63 0.59 7.8 7.2 6.9 7.4 7.6 8.2 8.8Northern Trust Corporat 48.02 18.7 18.2 16.7 14.5 13.1 11.6 10.3 1.81 1.52 1.52 1.50 1.50 1.50 1.50 10.1 8.6 9.5 10.5 11.5 13.0 14.5State Street Corporation 44.44 12.3 11.2 11.5 10.3 9.2 8.2 7.3 1.13 1.07 0.96 0.89 0.83 0.77 0.71 9.6 9.7 9.1 9.0 9.4 9.7 10.1US Trust Banks 13.7 12.5 12.2 10.8 9.7 8.5 7.5 1.14 1.01 0.91 0.86 0.80 0.75 0.70 8.7 8.3 8.1 8.5 8.9 9.5 10.2BB&T Corporation 28.17 23.5 13.7 10.4 9.2 8.4 7.5 6.5 1.15 1.00 1.03 0.98 0.93 0.90 0.86 5.0 7.6 10.5 11.0 11.5 12.1 13.4PNC Financial Services 56.14 10.0 10.0 9.8 8.2 7.6 7.2 6.7 1.03 0.92 0.83 0.78 0.73 0.69 0.65 11.7 9.6 8.9 9.8 9.9 9.8 9.9Regions Financial Corp 6.67 -ve -ve 9.0 8.9 8.3 7.9 7.0 0.66 0.55 0.62 0.58 0.54 0.51 0.47 -5.5 -3.6 7.3 6.8 6.7 6.6 7.0SunTrust Banks, Inc. 27.15 -ve 22.3 7.6 9.5 8.5 7.5 6.5 0.71 0.65 0.72 0.68 0.64 0.60 0.56 -0.5 3.0 9.7 7.3 7.7 8.2 8.8U.S. Bancorp 32.26 14.0 10.3 11.2 10.4 9.5 8.7 7.9 1.68 1.56 1.74 1.58 1.46 1.34 1.25 12.8 16.0 16.5 15.9 16.0 16.1 16.4Wells Fargo & Company 33.01 12.7 9.9 9.9 9.3 8.5 7.6 6.7 1.26 1.15 1.20 1.11 1.04 0.98 0.92 10.5 12.2 13.1 12.6 12.9 13.4 14.2US Large-Cap. 13.0 10.5 10.0 9.4 8.6 7.8 6.9 1.19 1.09 1.14 1.06 0.99 0.93 0.88 9.6 11.4 12.9 12.5 12.7 13.1 13.7Associated Banc-Corp 12.85 -ve 19.5 13.1 12.3 12.3 11.1 10.1 0.88 0.79 0.75 0.72 0.68 0.65 0.62 -2.1 4.1 5.9 6.0 5.7 6.0 6.3City National Corporatio 48.69 32.7 16.5 12.2 11.7 11.0 8.3 7.0 1.42 1.24 1.11 1.03 0.97 0.89 0.79 4.6 7.8 9.5 9.1 9.1 11.1 11.9Comerica Incorporated 29.59 76.1 15.2 11.0 11.4 9.7 7.3 6.7 1.15 0.92 0.79 0.74 0.68 0.62 0.65 1.6 6.2 7.4 6.7 7.3 9.0 10.2Commerce Bancshares 35.78 15.4 13.7 12.3 12.5 12.2 10.6 9.0 1.59 1.56 1.49 1.40 1.31 1.21 1.08 11.3 12.5 12.3 11.5 11.1 11.8 12.5Fifth Third Bancorp 14.64 40.1 11.1 8.8 8.3 7.9 6.4 5.9 0.98 0.90 0.96 0.87 0.79 0.71 0.67 2.5 9.1 11.8 11.2 10.6 11.8 12.3FirstMerit Corporation 14.08 18.7 15.3 11.1 10.3 7.6 6.8 3.5 1.40 1.07 0.94 1.05 0.95 0.87 0.49 8.2 7.1 8.7 10.1 13.1 13.4 14.9Huntington Bancshares 6.17 64.8 11.3 9.3 9.6 9.4 8.9 7.6 1.07 1.03 0.95 0.88 0.81 0.75 0.74 1.6 9.6 10.9 9.6 9.1 8.9 9.6KeyCorp 8.08 21.6 8.7 9.5 7.3 6.7 6.1 5.8 0.80 0.78 0.74 0.67 0.61 0.55 0.54 3.8 9.2 8.2 9.6 9.6 9.5 9.7TCF Financial Corporat 11.88 15.4 18.7 28.8 10.8 8.6 8.2 7.4 1.48 1.11 1.20 1.11 1.01 0.92 0.83 10.4 6.4 3.8 10.6 12.2 11.8 11.7Umpqua Holdings Corp 11.66 116.8 18.1 12.9 13.0 12.0 9.8 8.0 0.85 0.76 0.75 0.72 0.69 0.66 0.65 0.8 4.3 5.9 5.7 6.0 7.0 8.4Wintrust Financial Corp 36.79 144.3 25.3 17.0 14.3 11.7 10.2 9.1 0.83 0.76 0.97 0.91 0.84 0.77 0.73 0.6 3.8 6.4 7.4 8.3 8.8 8.3Zions Bancorporation 20.07 -ve 19.0 15.7 11.0 9.1 6.8 7.1 0.84 0.82 0.76 0.71 0.67 0.61 0.67 -7.1 4.3 5.0 6.7 7.5 9.4 9.8US Mid-Cap. 31.5 12.7 10.6 9.5 8.7 7.3 6.5 1.02 0.92 0.89 0.83 0.76 0.70 0.67 2.7 8.0 9.1 9.3 9.4 10.2 10.7United States 12.3 10.3 10.6 8.8 7.8 7.0 6.2 0.92 0.79 0.78 0.73 0.68 0.63 0.58 6.6 8.3 9.3 9.7 10.1 10.5 10.9


UBS 70


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E EuropeErste Bank 22.62 14.7 -ve 12.9 9.6 7.4 5.9 5.4 0.96 1.08 0.80 0.76 0.70 0.64 0.59 6.8 -7.5 6.5 8.1 9.8 11.3 11.3Raiffeisen Bank Intl 31.67 7.4 8.1 7.4 8.5 7.4 7.0 6.1 1.03 0.85 0.78 0.73 0.67 0.61 0.56 15.1 10.9 10.9 8.9 9.4 9.1 9.6Austria 12.4 8.1 10.9 9.3 7.4 6.2 5.6 0.98 1.02 0.80 0.75 0.69 0.63 0.58 8.4 -3.6 7.6 8.3 9.7 10.7 10.9


Commerzbank 1.38 5.0 -ve 23.8 18.7 9.2 6.0 5.0 0.62 0.67 0.34 0.33 0.33 0.31 0.30 14.9 -0.6 1.5 1.8 NA NA NADeutsche Bank 33.94 8.2 8.3 9.6 8.9 6.5 4.6 4.5 0.84 0.63 0.55 0.52 0.49 0.45 0.41 10.0 8.1 6.1 6.2 8.0 10.4 9.8Germany 7.6 8.3 10.5 9.6 6.8 4.8 4.5 0.81 0.63 0.51 0.49 0.46 0.42 0.39 10.6 6.7 5.4 5.6 8.0 10.4 9.8

Bank of Ireland 0.11 -ve -ve -ve -ve 8.9 5.1 3.5 0.69 0.64 0.51 0.57 0.53 0.49 0.43 -40.6 -15.3 -14.8 -7.4 5.4 10.1 13.1Ireland NA NA NA NA 8.9 5.1 3.5 0.69 0.64 0.51 0.57 0.53 0.49 0.43 -40.6 -15.3 -14.8 -7.4 5.4 10.1 13.1

Intesa SanPaolo 1.29 11.4 13.3 11.6 7.6 6.9 6.4 5.9 0.56 0.58 0.44 0.42 0.41 0.40 0.38 5.1 4.1 3.8 5.7 6.0 6.3 6.5Unione di Banche Italian 3.00 37.0 24.8 11.6 9.8 7.7 7.0 6.3 0.43 0.44 0.29 0.28 0.28 0.27 0.26 1.2 1.6 2.6 2.9 3.6 3.9 4.2Banco Popolare 1.13 -ve 20.6 10.9 8.3 6.7 5.9 5.3 0.41 0.53 0.36 0.29 0.28 0.27 0.26 0.0 1.9 3.3 3.5 4.3 4.7 5.0Mediobanca 4.25 11.2 12.7 8.5 6.8 6.4 6.1 5.7 0.97 0.66 0.55 0.51 0.48 0.45 0.42 8.5 5.2 6.6 7.8 7.7 7.6 7.6MPS 0.20 15.4 -ve 40.6 12.6 6.8 5.1 4.2 0.45 0.68 0.24 0.23 0.23 0.22 0.21 3.0 -0.3 0.6 1.9 3.4 4.4 5.2UniCredit 3.58 18.5 20.6 18.9 8.2 6.9 5.8 4.9 0.58 0.49 0.39 0.38 0.37 0.36 0.35 3.1 2.1 2.1 4.7 5.5 6.4 7.2Italy 15.1 16.7 13.6 8.0 6.9 6.1 5.4 0.55 0.53 0.40 0.38 0.37 0.36 0.35 3.8 2.8 3.1 5.0 5.6 6.1 6.6

Danske Bank 98.35 25.6 48.0 20.8 8.1 6.2 5.7 3.9 0.90 0.72 0.72 0.68 0.64 0.60 0.28 3.6 1.5 3.5 8.6 NA NA NADnB ASA 70.55 7.9 9.0 8.6 8.6 7.9 6.9 6.4 1.05 1.01 0.90 0.83 0.77 0.73 0.69 13.9 11.4 10.9 10.1 10.2 10.9 11.0Swedbank 122.90 12.5 8.0 9.4 8.7 8.2 7.7 7.4 0.98 1.09 1.28 1.19 1.11 1.04 0.97 8.0 14.2 14.0 14.1 14.0 14.0 13.6Nordea 60.90 11.8 10.9 8.9 8.0 6.5 6.2 5.8 1.29 1.10 0.98 0.91 0.84 0.78 0.72 12.2 10.8 11.7 12.7 13.9 13.6 13.4SEB Group 53.55 15.5 9.5 9.8 8.9 8.0 7.2 6.5 1.05 0.96 1.01 0.95 0.89 0.84 0.79 6.8 10.6 10.3 11.0 11.6 12.1 12.6Handelsbanken 236.50 11.6 9.9 10.9 10.3 9.6 9.1 8.5 1.45 1.28 1.46 1.37 1.28 1.19 1.11 12.9 13.4 13.8 13.7 13.7 13.6 13.5Nordic 12.2 10.6 10.1 8.7 7.6 7.0 6.2 1.13 1.03 1.04 0.97 0.90 0.84 0.67 10.3 10.8 11.3 12.1 13.0 13.1 13.0

BCP 0.07 10.7 -ve -ve 21.8 8.4 4.7 4.6 0.68 0.71 0.36 0.34 0.33 0.32 0.31 8.5 -22.8 -15.8 1.6 4.0 6.9 6.8Banco Espirito Santo SA 0.77 4.8 -ve 21.8 10.6 8.3 6.4 4.8 0.65 0.64 0.44 0.43 0.42 0.41 0.39 8.9 -1.8 2.3 4.1 5.1 6.5 8.2BPI 0.81 8.1 -ve 8.1 12.0 7.3 5.8 4.5 0.73 1.65 0.73 0.69 0.63 0.57 0.50 11.4 -20.3 13.3 5.9 9.1 10.3 11.8Portugal 6.6 NA 13.3 14.3 8.1 5.4 4.7 0.67 0.71 0.43 0.42 0.40 0.38 0.36 9.0 -12.2 -3.7 3.3 5.4 7.4 8.3


UBS 71


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Banco de Sabadell 2.15 7.5 19.5 64.5 19.1 11.2 9.0 9.1 0.84 0.76 0.76 0.74 0.71 0.68 0.68 12.4 4.2 1.5 3.9 6.5 7.8 7.3Banco Popular 0.64 5.8 6.9 -ve 25.9 10.4 7.1 6.7 0.42 0.40 0.70 0.69 0.65 0.58 0.55 7.4 5.7 -25.8 2.7 6.4 8.6 8.5Banesto 2.81 12.1 22.6 -ve 7.6 5.8 4.7 4.7 0.94 0.68 0.35 0.34 0.33 0.31 0.29 7.7 3.0 -15.9 4.5 5.8 6.7 6.3Bankia 0.72 NA -ve -ve 6.6 3.1 2.5 2.0 NA 0.54 0.09 0.09 0.09 0.09 0.08 NA -25.4 -60.8 1.3 2.8 3.4 4.3Bankinter 3.06 16.9 9.7 9.4 8.7 9.0 8.3 7.2 1.05 0.84 0.48 0.46 0.44 0.42 0.39 6.0 8.6 5.5 5.4 4.9 5.1 5.6BBVA 6.52 9.3 11.9 17.8 9.8 9.3 8.8 8.0 1.12 0.79 0.79 0.75 0.76 0.74 0.72 12.5 7.2 4.4 7.8 8.0 8.1 8.7Caixa Bank 2.94 14.2 17.9 74.4 19.3 8.4 7.4 6.5 0.61 0.70 0.67 0.66 0.63 0.61 0.58 4.4 4.0 0.9 3.4 7.7 8.4 9.1Santander 5.91 10.4 14.4 22.4 10.0 9.1 9.1 9.1 1.05 0.85 0.77 0.72 0.70 0.68 0.66 11.2 5.9 3.4 7.5 7.8 7.6 7.4Spain 9.7 13.2 21.3 10.5 9.1 8.7 8.3 0.99 0.78 0.72 0.68 0.67 0.65 0.63 11.3 5.3 1.9 7.1 7.7 7.8 7.8

Credit Suisse Group 21.94 11.2 20.5 14.6 9.3 7.5 6.7 5.8 1.64 1.14 0.80 0.81 0.75 0.69 0.64 14.5 5.8 6.8 9.7 10.7 11.0 11.7UBS AG 14.50 8.1 10.5 * * * * * 1.32 0.98 * * * * * 17.6 10.2 * * * * *Switzerland Large 9.4 13.3 14.6 9.3 7.5 6.7 5.8 1.46 1.05 0.80 0.81 0.75 0.69 0.64 16.0 8.3 6.8 9.7 10.7 11.0 11.7Bank Sarasin & Cie AG 27.00 22.7 21.7 18.4 17.2 14.1 11.8 10.0 1.99 1.75 1.36 1.32 1.26 1.22 1.16 8.7 8.1 7.4 7.8 9.1 10.5 11.8EFG International 8.05 14.6 35.4 10.2 7.8 7.0 6.3 5.4 2.41 2.75 1.26 1.12 1.00 0.90 0.81 10.8 6.1 15.9 15.2 15.1 15.0 15.8GAM Holding Ltd 11.90 13.3 15.6 14.9 11.3 9.5 8.1 6.8 1.07 1.27 1.04 0.86 0.72 0.60 0.49 8.0 7.3 7.0 8.4 8.3 8.1 8.0Julius Baer Group 31.74 15.0 16.1 15.3 13.8 11.6 10.1 9.3 1.65 1.61 1.42 1.33 1.25 1.17 1.08 11.6 10.3 9.4 10.1 11.1 12.0 12.2Partners Group Holding 202.00 16.6 19.7 20.5 18.4 16.1 13.9 12.0 6.50 7.14 7.70 6.59 5.57 4.69 3.93 47.1 37.2 41.5 39.6 38.4 37.5 36.5VZ Holding 108.00 14.7 17.5 16.5 13.9 12.2 10.7 9.4 4.40 4.53 3.71 3.51 2.69 2.31 2.11 32.8 27.7 23.7 25.4 24.4 22.7 22.9Switzerland Wealth & Asset Managers 15.3 17.2 16.0 13.9 11.8 10.2 9.0 1.73 1.80 1.59 1.44 1.30 1.17 1.04 15.9 13.8 15.6 15.9 16.2 16.5 16.5Banque Cantonale Vaud 508.50 13.1 14.1 14.3 13.5 12.8 12.1 11.4 1.23 1.27 1.32 1.30 1.28 1.26 1.22 9.5 9.0 9.2 9.7 10.1 10.4 10.9Liechtensteinische Land 26.55 19.8 +ve 8.4 8.0 7.2 7.3 7.1 1.22 1.20 0.46 0.43 0.41 0.40 0.39 6.2 0.7 5.7 5.8 5.8 5.5 5.5St Galler Kantonalbank 381.75 16.0 15.8 13.5 13.4 13.2 13.1 12.6 1.45 1.29 1.10 1.07 1.04 1.01 0.99 8.1 7.4 7.4 7.2 7.1 6.9 7.1Verwaltungs-und Privat 61.95 -ve 134.7 14.4 7.2 6.7 6.3 5.8 0.74 0.66 0.40 0.39 0.38 0.37 0.36 -0.3 0.5 2.8 5.5 5.7 6.0 6.3Vontobel 26.50 12.9 15.4 12.3 10.6 8.8 7.6 7.0 1.36 1.27 1.11 1.05 0.98 0.91 0.85 10.6 8.3 9.2 10.2 11.5 12.5 12.6Switzerland Small 14.9 16.4 12.9 11.5 10.6 10.0 9.4 1.22 1.17 0.94 0.91 0.88 0.85 0.82 7.8 6.2 8.0 8.5 8.9 9.2 9.5Switzerland 10.0 13.8 14.8 10.6 8.7 7.7 6.8 1.48 1.12 0.96 0.95 0.87 0.81 0.74 15.7 8.9 9.7 11.5 12.2 12.6 13.0

Barclays 246.00 12.6 10.5 7.1 6.6 6.6 6.5 6.3 0.67 0.46 0.49 0.46 0.43 0.41 0.38 6.3 5.3 7.8 8.2 7.7 7.4 7.1HSBC 637.70 13.2 12.7 9.8 10.0 9.0 8.3 7.7 1.26 1.10 1.13 1.08 1.04 0.99 0.95 9.8 9.0 12.0 11.1 11.9 12.3 12.7Lloyds Banking Group 46.50 26.1 15.6 16.8 9.7 7.9 6.3 5.4 0.93 0.57 0.60 0.57 0.56 0.54 0.51 3.6 4.4 4.2 7.1 8.4 10.2 11.2RBS Group 295.20 54.0 42.1 29.3 15.1 8.5 7.2 6.2 0.68 0.53 0.51 0.50 0.48 0.45 0.42 -1.9 -2.5 -8.4 1.7 5.5 6.2 6.8Standard Chartered 1,455 13.3 12.2 10.5 9.5 8.5 7.5 6.9 1.60 1.43 1.27 1.19 1.10 1.01 0.93 13.1 12.2 12.7 13.1 13.6 14.2 14.4United Kingdom 14.7 13.0 10.1 9.4 8.4 7.6 7.0 1.05 0.84 0.86 0.82 0.78 0.74 0.70 8.3 7.9 9.7 10.2 10.9 11.4 11.7


UBS 72



OTP Bank 4,080 11.3 9.1 7.0 5.7 5.2 4.7 4.3 1.16 0.91 0.73 0.66 0.59 0.55 0.50 10.8 10.4 10.8 12.0 12.1 12.2 12.2Hungary 11.3 9.1 7.0 5.7 5.2 4.7 4.3 1.16 0.91 0.73 0.66 0.59 0.55 0.50 10.8 10.4 10.8 12.0 12.1 12.2 12.2



Bank BPH 40.45 -ve 20.5 * * * * * 1.16 1.00 * * * * * -3.1 5.0 * * * * *Bank Handlowy 98.00 13.9 14.7 * * * * * 1.62 1.68 * * * * * 11.9 11.4 * * * * *Bank Millennium 4.29 14.5 12.7 * * * * * 1.36 1.30 * * * * * 9.5 10.8 * * * * *BRE 316.00 15.0 10.9 * * * * * 1.53 1.54 * * * * * 10.9 15.2 * * * * *ING Bank Slaski 89.05 1.4 12.0 * * * * * 0.18 1.64 * * * * * 14.3 14.6 * * * * *Pekao 157.70 17.6 14.2 * * * * * 2.20 1.93 * * * * * 13.1 14.0 * * * * *PKO BP 34.80 15.8 12.8 * * * * * 2.38 2.14 * * * * * 15.4 17.2 * * * * *Poland 12.0 13.2 NA NA NA NA NA 1.58 1.90 NA NA NA NA NA 13.7 15.3 NA NA NA NA NA

Sberbank 91.41 10.3 6.3 5.9 6.4 5.9 5.1 4.4 1.90 1.59 1.28 1.10 0.95 0.82 0.71 20.7 28.1 23.6 18.4 17.2 17.3 17.2Vozrozhdenie Bank 565.00 47.5 14.5 6.8 5.1 3.6 2.8 2.3 1.63 1.25 0.66 0.58 0.50 0.43 0.36 3.5 9.0 10.2 12.1 15.0 16.5 17.2VTB 0.05 15.0 9.7 7.1 5.5 4.3 3.7 3.2 1.58 1.43 0.81 0.73 0.64 0.56 0.49 11.0 15.4 12.0 13.8 15.9 15.9 16.2Russia 11.1 6.8 6.1 6.3 5.6 4.9 4.2 1.82 1.55 1.18 1.02 0.89 0.77 0.67 18.5 25.5 22.0 17.7 17.1 17.1 17.1



UBS 73


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Akbank 8.38 10.4 11.4 11.9 11.2 9.0 7.5 6.8 1.75 1.59 1.64 1.49 1.36 1.22 1.10 18.6 14.1 14.7 13.9 15.9 17.1 NAGaranti Bank 8.48 9.2 9.6 10.7 10.2 8.9 7.2 6.6 1.87 1.66 1.74 1.53 1.35 1.17 1.02 22.3 17.9 17.4 16.0 16.2 17.5 NAHalkbank 17.30 8.2 7.6 9.3 9.2 7.8 6.9 7.1 2.06 1.66 2.04 1.76 1.52 1.33 1.19 28.1 23.8 23.8 20.6 20.9 20.5 17.7Isbank 5.76 8.1 9.4 8.1 8.2 7.4 6.2 5.4 1.46 1.19 1.27 1.14 1.03 0.92 0.83 19.8 13.3 16.6 14.6 14.7 15.7 16.0Vakifbank 4.33 8.6 6.7 8.3 8.4 7.5 7.0 6.8 1.20 0.96 0.96 0.87 0.79 0.72 0.66 14.9 15.1 12.8 10.9 11.1 10.8 10.1Yapi Kredi Bank 4.71 8.4 7.6 10.0 8.8 7.0 6.1 5.5 1.78 1.39 1.40 1.21 1.03 0.88 0.76 23.5 19.7 15.1 14.8 15.8 15.5 NATurkey 9.0 9.2 10.0 9.7 8.2 7.0 6.4 1.72 1.48 1.58 1.40 1.25 1.10 0.98 21.4 17.1 17.4 15.8 16.4 17.2 16.0


UBS 74




Compartamos SAB 19.62 14.8 17.5 16.1 13.5 11.7 10.2 9.1 7.93 4.55 3.85 3.29 2.81 2.41 2.08 38.1 30.0 25.5 26.2 25.8 25.6 24.6Grupo Financiero Bano 74.12 15.3 13.2 15.8 12.1 9.9 8.9 7.7 2.56 1.66 2.14 1.87 1.62 1.41 1.23 15.3 14.6 14.4 16.5 17.5 16.9 17.0Santander Mexico 37.98 NA NA 15.8 13.6 11.8 10.7 9.8 NA NA 2.67 2.43 2.20 2.00 1.81 16.6 15.3 17.6 18.6 19.5 19.5 19.3Mexico 15.2 13.9 15.8 12.8 10.8 9.7 8.6 3.05 1.88 2.43 2.15 1.89 1.67 1.48 20.7 17.5 16.6 18.1 19.0 18.7 18.6

Credicorp Ltd 139.90 13.8 11.2 13.8 11.9 10.3 9.0 8.0 2.77 2.36 2.82 2.42 2.08 1.79 1.55 22.2 22.8 22.0 21.9 21.7 21.3 20.9Peru 13.8 11.2 13.8 11.9 10.3 9.0 8.0 2.77 2.36 2.82 2.42 2.08 1.79 1.55 22.2 22.8 22.0 21.9 21.7 21.3 20.9


UBS 75


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E AsiaAgricultural Bank of Chi 3.40 11.4 8.5 6.0 6.1 5.8 5.2 4.6 2.00 1.59 1.18 1.05 0.93 0.83 0.74 21.4 20.5 21.0 18.1 17.0 17.1 17.2Bank of Beijing 7.20 12.7 7.3 5.5 5.4 4.7 4.1 3.5 2.03 1.30 0.89 0.78 0.69 0.60 0.53 17.0 19.3 17.4 15.5 15.6 15.8 16.0Bank of China 3.27 8.7 6.6 5.5 5.9 5.3 4.8 4.5 1.49 1.13 0.90 0.82 0.74 0.66 0.62 18.0 18.2 17.2 14.5 14.7 14.6 14.5Bank of Communication 5.68 9.8 6.1 5.5 6.6 6.0 5.0 4.6 1.83 1.20 0.90 0.81 0.72 0.65 0.58 20.2 20.5 17.3 12.9 12.7 13.8 13.5Bank of Nanjing 7.60 12.3 8.8 6.0 5.4 4.7 4.1 3.6 1.74 1.30 0.92 0.81 0.72 0.63 0.55 15.0 15.9 16.3 15.9 16.2 16.3 16.6Bank of Ningbo 8.72 14.8 9.9 6.3 5.6 4.8 4.1 3.5 2.43 1.72 1.14 0.97 0.83 0.71 0.61 18.1 18.8 19.6 18.8 18.7 18.6 18.6China CITIC Bank 4.00 8.4 5.4 4.5 4.7 4.4 3.9 3.5 1.50 1.03 0.75 0.66 0.59 0.53 0.47 19.3 20.9 17.9 14.8 14.2 14.4 14.1China Construction Ban 5.94 10.0 7.7 6.2 6.2 5.8 5.2 4.6 2.00 1.61 1.26 1.11 0.98 0.86 0.76 21.5 22.4 22.0 19.2 18.1 17.7 17.5China Merchants Bank 14.84 14.8 9.7 * * * * * 2.76 1.93 * * * * * 22.7 20.3 * * * * *China Minsheng Bankin 7.60 9.8 9.2 * * * * * 1.55 1.24 * * * * * 17.1 15.0 * * * * *Chongqing Rural Comm 3.56 13.3 8.3 5.5 6.0 5.3 4.8 4.3 1.78 1.26 0.85 0.77 0.70 0.63 0.57 18.7 16.9 16.3 13.5 13.8 13.9 13.9Hua Xia Bank 8.43 9.7 7.6 5.2 4.7 4.1 3.6 3.1 1.63 1.21 0.79 0.69 0.61 0.53 0.47 18.2 18.6 16.2 15.7 15.7 15.8 15.9Industrial & Commercia 5.23 10.4 7.6 6.3 6.4 5.9 5.4 5.0 2.14 1.66 1.30 1.15 1.01 0.90 0.81 22.1 23.4 22.4 19.2 18.2 17.6 17.3Industrial Bank 12.66 8.5 5.9 * * * * * 1.80 1.30 * * * * * 24.4 24.6 * * * * *Shanghai Pudong Deve 7.46 11.0 6.6 4.4 4.0 3.6 3.2 2.9 1.71 1.21 0.79 0.68 0.59 0.51 0.45 20.1 20.1 19.7 18.2 17.5 17.1 16.7Ping An Bank 12.80 10.0 6.7 5.0 4.4 3.8 3.4 2.9 1.98 1.16 0.76 0.67 0.58 0.51 0.44 23.3 19.2 16.6 16.0 16.2 16.1 16.3China 10.8 7.9 6.0 6.1 5.7 5.1 4.6 2.05 1.56 1.18 1.04 0.92 0.82 0.73 21.5 21.6 21.4 18.3 17.4 17.2 17.0

Bank of China (Hong Ko 23.80 14.5 14.3 12.8 12.6 11.9 10.9 10.1 1.89 1.79 1.76 1.70 1.61 1.52 1.44 13.8 13.3 14.4 13.7 13.9 14.3 14.6Bank of East Asia 29.90 19.4 18.2 14.6 17.3 14.9 13.0 11.4 1.38 1.31 1.22 1.18 1.13 1.08 1.02 7.9 7.5 8.7 6.9 7.8 8.5 9.2Dah Sing Finan'l 33.15 14.0 14.5 10.2 11.8 11.3 10.8 10.8 0.97 0.73 0.62 0.61 0.59 0.57 0.55 7.2 5.2 6.1 5.2 5.3 5.3 5.2Hang Seng Bank 118.40 14.8 13.7 12.9 15.3 14.0 12.6 11.6 3.07 2.78 2.57 2.47 2.33 2.15 1.97 22.6 21.4 21.1 16.4 17.2 17.7 17.7Wing Hang Bank 77.60 13.9 16.2 13.3 14.5 13.3 11.7 10.4 1.68 1.46 1.21 1.16 1.10 1.03 0.96 13.0 9.8 9.7 8.2 8.6 9.1 9.6Hong Kong 15.3 14.7 13.1 14.4 13.1 11.9 10.9 1.99 1.84 1.73 1.67 1.59 1.49 1.40 15.9 15.0 15.5 13.1 13.6 14.1 14.4

Axis Bank 1,316 16.1 11.2 12.6 10.7 8.4 6.6 4.8 2.83 2.03 2.12 1.84 1.58 1.33 1.10 19.3 20.3 18.1 18.4 20.2 21.9 25.2Bank of Baroda 763.05 7.6 6.6 6.7 5.7 4.4 3.5 2.4 1.54 1.21 1.01 0.89 0.77 0.66 0.54 23.5 20.7 16.2 16.7 18.6 20.3 24.8Bank of India 280.80 9.5 7.8 6.3 4.7 3.7 2.9 2.3 1.36 1.00 0.70 0.63 0.56 0.49 0.42 15.8 14.0 11.7 14.2 16.2 17.8 19.4Federal Bank 481.80 10.7 8.9 9.5 7.9 6.6 5.2 4.1 1.23 1.21 1.29 1.14 1.00 0.87 0.74 12.0 14.4 14.3 15.4 16.2 17.7 19.4HDFC Bank 703.65 25.4 21.5 24.8 19.0 14.9 12.0 9.9 3.93 3.71 4.71 3.95 3.28 2.72 2.24 16.7 18.7 20.5 22.7 24.0 24.5 24.7Housing Development F 841.45 26.4 24.2 26.4 22.0 18.6 16.8 14.5 5.48 5.25 5.19 4.19 3.74 3.34 2.97 21.7 22.7 22.3 21.1 21.3 21.0 21.7ICICI Bank 1,099 22.4 16.5 15.9 13.7 11.5 9.9 8.2 2.05 1.70 1.92 1.73 1.55 1.37 1.20 9.7 11.2 12.6 13.3 14.2 14.7 15.6IndusInd Bank 417.60 18.6 15.7 18.1 14.7 11.8 9.2 7.7 2.65 2.66 3.46 2.88 2.39 1.95 1.61 17.9 18.3 20.8 21.4 22.1 23.4 22.8Oriental Bank of Comm 336.90 7.5 7.7 6.5 5.1 4.2 3.4 3.8 1.11 0.81 0.84 0.77 0.69 0.61 0.54 17.1 10.9 13.4 15.7 17.4 18.8 15.2Punjab National Bank 785.60 8.1 7.0 5.9 4.8 3.6 2.7 2.2 1.67 1.22 0.85 0.74 0.64 0.54 0.46 22.6 19.8 15.3 16.6 18.9 20.0 20.7Shriram Transport Finan 668.35 12.9 11.0 11.0 9.0 7.1 5.6 4.5 3.20 2.29 2.11 1.75 1.45 1.18 0.96 28.2 23.1 20.8 21.3 22.4 23.3 23.8State Bank of India 2,170 20.5 12.2 10.7 9.6 7.5 6.1 5.1 2.60 1.71 1.52 1.35 1.18 1.02 0.88 12.6 15.7 15.1 14.9 16.8 18.0 18.6Union Bank 242.40 8.4 7.9 6.1 4.7 3.7 3.0 2.4 1.33 0.96 0.83 0.74 0.62 0.54 0.47 18.0 13.0 14.2 16.6 18.3 18.9 20.0YES Bank 442.40 14.3 10.9 13.9 11.4 8.6 7.7 7.7 2.66 2.28 2.41 2.04 1.70 1.43 1.23 21.1 23.1 21.1 19.5 21.4 20.0 17.2India 18.8 15.5 16.7 13.8 11.1 9.1 7.3 2.86 2.44 2.63 2.27 1.97 1.70 1.45 17.3 18.6 18.9 19.4 20.5 21.0 21.8


UBS 76


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Bank Central Asia 8,800 17.5 17.5 19.3 15.4 13.9 13.0 10.7 4.22 4.31 4.21 3.43 2.85 2.42 2.03 26.6 27.2 24.0 24.6 22.4 20.2 20.7Bank Danamon Indones 5,400 16.1 15.6 12.5 11.1 9.6 8.9 7.3 2.52 2.03 1.80 1.61 1.43 1.28 1.13 16.8 15.1 15.2 15.3 15.8 15.3 16.6BPD Jawa Barat dan Ba 1,050 13.8 11.8 7.8 7.0 6.4 5.6 4.9 2.79 1.99 1.67 1.51 1.37 1.23 1.10 22.0 17.7 22.8 22.6 22.4 23.1 23.5Bank Mandiri 8,250 12.9 12.7 13.1 11.2 9.4 8.4 7.3 2.92 2.31 2.41 2.08 1.78 1.55 1.34 24.1 22.5 19.9 20.0 20.4 19.6 19.8Bank Negara Indonesia 3,700 10.6 12.7 10.2 8.6 7.8 7.2 5.9 1.32 1.88 1.58 1.39 1.22 1.08 0.94 15.7 15.8 16.7 17.2 16.6 16.0 16.9Bank Rakyat Indonesia 7,050 10.4 10.8 10.6 9.7 8.5 7.3 6.2 3.12 3.02 2.79 2.32 1.93 1.61 1.35 34.3 32.3 29.2 26.0 24.8 24.0 23.8Bank Tabungan Negara 1,610 14.7 11.7 11.5 9.7 8.5 7.4 6.1 2.09 1.79 1.55 1.52 1.35 1.20 1.05 15.4 16.2 15.4 16.5 16.7 17.1 18.5PT Bank Tabungan Pen 5,200 12.0 12.4 14.9 12.6 11.0 9.4 8.3 2.44 3.14 3.91 2.99 2.35 1.88 1.53 27.4 29.0 30.0 26.9 24.0 22.2 20.3Indonesia 13.3 13.5 13.4 11.5 10.1 9.0 7.6 2.91 2.81 2.72 2.31 1.96 1.68 1.44 26.0 25.3 23.3 22.7 21.6 20.4 20.7

DGB Financial Group 13,500 8.6 6.7 6.0 6.2 5.2 4.5 4.5 0.97 0.89 0.70 0.64 0.58 0.52 0.52 12.0 14.2 12.3 10.8 11.7 12.2 11.6Hana Financial Group 33,600 7.1 7.9 3.9 5.7 4.9 4.4 4.4 0.68 0.70 0.50 0.47 0.43 0.40 0.40 9.8 10.0 13.9 8.5 9.1 9.5 9.1Industrial Bank of Korea 11,500 7.5 7.5 5.9 6.0 4.6 4.0 4.0 0.93 0.85 0.55 0.52 0.47 0.43 0.43 13.1 12.3 9.6 8.8 10.7 11.3 10.9KB Financial Group 35,650 +ve 8.0 6.8 6.7 5.6 4.9 4.9 1.09 0.84 0.56 0.53 0.49 0.46 0.46 0.5 11.6 8.6 8.1 9.1 9.7 9.3Korea Exchange Bank 7,290 7.9 3.5 6.2 5.6 4.8 4.3 4.3 1.00 0.68 0.52 0.47 0.43 0.39 0.39 12.9 19.4 8.9 9.0 9.6 9.7 9.3BS Financial Group 12,100 7.1 6.6 6.0 6.3 5.5 4.8 4.8 0.96 0.87 0.71 0.65 0.59 0.54 0.54 14.6 14.8 12.5 10.8 11.4 11.7 11.2Shinhan Financial Grou 34,650 10.2 7.7 7.2 7.3 6.4 5.9 5.9 1.08 0.95 0.65 0.60 0.55 0.51 0.51 11.6 13.3 9.4 8.5 9.0 9.0 8.7Woori Finance Holdings 10,150 9.6 4.7 4.7 6.5 5.2 4.4 4.4 0.82 0.68 0.50 0.47 0.43 0.40 0.40 8.8 14.6 11.1 7.4 8.7 9.4 9.0Korea 8.9 7.0 5.9 6.6 5.6 4.9 4.9 0.98 0.83 0.58 0.54 0.50 0.46 0.46 7.9 12.7 10.2 8.6 9.3 9.7 9.3





UBS 77


30-Nov-12 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E 10 11E 12E 13E 14E 15E 16E Cathay Financial Holdin 30.95 118.6 37.5 22.0 20.7 20.8 18.0 16.9 2.21 2.02 1.38 1.33 1.28 1.23 1.17 2.0 5.2 6.5 6.5 6.3 6.9 7.1Fubon Financial Holding 33.00 15.0 11.0 13.8 13.4 12.8 11.3 10.6 1.41 1.44 1.27 1.20 1.14 1.07 1.01 9.1 13.4 9.5 9.2 9.1 9.7 9.8Yuanta Financial Holdin 14.70 19.1 13.2 21.4 20.1 19.4 17.5 -ve 1.33 1.02 0.94 0.92 0.89 0.87 0.84 7.0 10.0 4.5 4.6 4.7 5.0 -6.4Taiwan 19.1 13.2 21.4 20.1 19.4 17.5 NA 1.33 1.02 0.94 0.92 0.89 0.87 0.84 7.0 10.0 4.5 4.6 4.7 5.0 -6.4


AggregatesGlobal Banks 11.6 10.1 9.6 9.0 8.1 7.3 6.6 1.22 1.04 0.97 0.92 0.86 0.79 0.74 13.0 13.2 13.1 12.9 13.1 13.2 13.3United Kingdom Domestic 18.8 14.3 10.6 8.4 7.3 6.5 6.0 0.74 0.51 0.52 0.50 0.47 0.45 0.42 3.7 3.3 3.5 6.6 7.5 8.0 8.4Europe 11.2 12.1 11.2 9.3 8.0 7.1 6.5 0.97 0.81 0.75 0.71 0.68 0.64 0.60 9.8 7.2 7.7 9.1 10.0 10.5 10.7EMEA 10.9 9.3 8.7 8.2 7.1 6.3 5.6 1.59 1.45 1.29 1.15 1.03 0.92 0.83 16.3 17.5 17.1 15.8 16.1 16.2 16.3Asia (ex-Japan) 11.6 8.9 7.6 7.6 6.9 6.2 5.5 1.90 1.54 1.28 1.15 1.03 0.92 0.84 19.1 19.4 18.9 17.0 16.7 16.7 16.7Asia (ex-Japan, China) 13.5 11.6 11.4 11.0 9.5 8.3 7.4 1.68 1.51 1.43 1.32 1.21 1.10 1.02 14.7 15.9 15.9 15.3 15.8 16.1 16.3Latin America 12.6 10.4 11.1 10.0 8.6 7.4 6.6 2.51 1.96 1.85 1.66 1.47 1.31 1.16 21.9 21.1 18.4 18.0 18.7 18.9 18.9GEM 11.7 9.2 8.2 8.0 7.2 6.4 5.7 1.96 1.60 1.37 1.23 1.10 0.98 0.89 19.3 19.6 18.7 17.1 17.1 17.1 17.2Emerging 11.6 9.0 8.0 7.7 6.9 6.1 5.5 1.99 1.62 1.37 1.22 1.08 0.97 0.87 19.8 20.2 19.3 17.7 17.6 17.6 17.6United States 12.3 10.3 10.6 8.8 7.8 7.0 6.2 0.92 0.79 0.78 0.73 0.68 0.63 0.58 6.6 8.3 9.3 9.7 10.1 10.5 10.9Europe (ex-UK) 9.9 11.6 12.1 9.2 7.8 6.8 6.2 0.93 0.79 0.68 0.65 0.62 0.59 0.54 10.7 6.9 6.2 8.3 9.2 9.7 9.9Aggregates (inc non-Banks)Global Financials 11.7 10.3 9.7 9.0 8.1 7.3 6.6 1.21 1.04 0.96 0.91 0.85 0.79 0.73 12.9 13.0 12.9 12.7 12.9 13.1 13.2United States Financials 12.2 10.9 10.5 8.8 7.7 6.9 6.1 0.94 0.80 0.77 0.72 0.67 0.62 0.58 7.1 7.9 9.0 9.6 10.0 10.3 10.8United States Non-banks 11.3 18.7 9.7 8.3 7.2 6.3 5.8 1.09 0.88 0.71 0.65 0.60 0.55 0.50 10.7 4.5 6.3 8.5 8.9 9.2 9.2

Source: UBS estimates. Note: Aggregates ratios are calculated on a market cap. weighted basis using a "Free Float Factor" to adjust the weighting. Where available, these aggregates have been calculated using factors obtained from MSCI/Factset, and where unavailable, the factors are source UBS. For more information on the factors used and their source, consult the "Price Performance" tables in this publication. (1) UBS adjusted attributable earnings [Attributable income adjusted for goodwill charges and abnormal items] / average equity * UBS Investment Bank is currently unable to display forecast data on this company.


UBS 78

Statement of Risk

Sector forecasts and ratings are subject to developments in the wider economy and the macro environment. Stock prices could be negatively affected by rapid changes in interest rates or a slower-than-expected rebound in the economy, which, among other things, could result in higher loan losses and/or slower loan growth than is currently anticipated.

Analyst Certification

Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers and were prepared in an independent manner, including with respect to UBS, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.


UBS 79

Required Disclosures This report has been prepared by UBS Limited, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS.

For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. Additional information will be made available upon request. UBS Securities Co. Limited is licensed to conduct securities investment consultancy businesses by the China Securities Regulatory Commission.

UBS Investment Research: Global Equity Rating Allocations

UBS 12-Month Rating Rating Category Coverage1 IB Services2

Buy Buy 50% 31%Neutral Hold/Neutral 41% 31%Sell Sell 9% 20%UBS Short-Term Rating Rating Category Coverage3 IB Services4

Buy Buy less than 1% 33%Sell Sell less than 1% 0%

1:Percentage of companies under coverage globally within the 12-month rating category. 2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within the past 12 months. 3:Percentage of companies under coverage globally within the Short-Term rating category. 4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were provided within the past 12 months. Source: UBS. Rating allocations are as of 30 September 2012. UBS Investment Research: Global Equity Rating Definitions

UBS 12-Month Rating Definition Buy FSR is > 6% above the MRA. Neutral FSR is between -6% and 6% of the MRA. Sell FSR is > 6% below the MRA. UBS Short-Term Rating Definition

Buy Buy: Stock price expected to rise within three months from the time the rating was assigned because of a specific catalyst or event.

Sell Sell: Stock price expected to fall within three months from the time the rating was assigned because of a specific catalyst or event.


UBS 80

KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment case. Equity Price Targets have an investment horizon of 12 months. EXCEPTIONS AND SPECIAL CASES UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell: Negative on factors such as structure, management, performance record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece. Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained in the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by a research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if any, follows. UBS Limited: Philip Finch; Peter Carter; John-Paul Crutchley; Alastair Ryan. UBS Securities Asia Limited: Stephen Andrews, CFA. UBS Securities LLC: Brennan Hawken, CPA; Greg Ketron. UBS Securities Japan Co., Ltd.: Shinichi Ina. UBS Securities Australia Ltd: Jonathan Mott. UBS Securities Canada Inc: Peter A. Rozenberg.


UBS 81

Company Disclosures

Company Name Reuters 12-mo rating Short-term rating Price Price date Absa Group16b, 22 ASAJ.J Buy N/A RCnt14,087 04 Dec 2012 African Bank Investments Limited16b ABLJ.J Buy N/A RCnt3,111 04 Dec 2012

Associated Banc-Corp16b ASBC.O Neutral N/A US$12.83 03 Dec 2012 Banco de Sabadell2a, 4a, 16b SABE.MC Sell N/A €2.10 04 Dec 2012 Banco do Brasil16b, 22 BBAS3.SA Sell N/A R$22.06 03 Dec 2012 Bank Negara Indonesia BBNI.JK Buy N/A Rp3,625 04 Dec 2012 Bank of India BOI.BO Sell N/A Rs283.70 04 Dec 2012 Bank of Nova Scotia2a, 2b, 4b, 5a, 5b, 6a,

16b BNS.TO Buy N/A C$55.61 03 Dec 2012

Bank Rakyat Indonesia16b BBRI.JK Buy N/A Rp7,100 04 Dec 2012 BBVA4a, 5a, 16b, 22 BBVA.MC Sell N/A €6.55 04 Dec 2012 BM&F Bovespa BVMF3.SA Buy N/A R$13.15 03 Dec 2012 Capitec Bank Holdings Ltd CPIJ.J Buy N/A RCnt18,554 04 Dec 2012 Cielo SA16b CIEL3.SA Sell N/A R$55.08 03 Dec 2012 Commerzbank4a, 5a, 14, 16b CBKG.DE Sell N/A €1.39 04 Dec 2012 Federal Bank FED.BO Buy N/A Rs483.10 04 Dec 2012 Fifth Third Bancorp6b, 6c, 7, 16b FITB.O Buy N/A US$14.41 03 Dec 2012

Grupo Financiero Banorte4a, 6a, 16b GFNORTEO.MX Buy N/A P76.63 03 Dec 2012

Halkbank HALKB.IS Buy N/A TRY17.50 04 Dec 2012 Halyk Savings Bank HSBKq.L Buy N/A US$7.90 04 Dec 2012 Hana Financial Group2a, 4a 086790.KS Buy N/A Won32,700 04 Dec 2012 Hang Seng Bank5a, 16a, 16b, 22 0011.HK Sell N/A HK$117.00 04 Dec 2012 Hong Kong Exchanges & Clearing2a, 3a, 4a, 5a, 16a 0388.HK Sell N/A HK$123.20 04 Dec 2012

Hong Leong Bank HLBB.KL Sell N/A RM14.68 04 Dec 2012 Intesa SanPaolo2a, 4a, 5a, 16b ISP.MI Buy N/A €1.33 04 Dec 2012 Itau Unibanco Banco Multiplo5a, 13,

16b ITUB4.SA Buy N/A R$33.00 03 Dec 2012

Kasikornbank KBAN.BK Buy N/A Bt187.00 04 Dec 2012 Kazkommertsbank4a KKGByq.L Neutral N/A US$1.91 04 Dec 2012 KeyCorp6b, 6c, 7, 16b KEY.N Buy N/A US$7.99 03 Dec 2012 Komercni Banka as16b BKOM.PR Buy N/A Kc3,880.00 04 Dec 2012 Nordea2a, 4a, 5a, 16b, 22 NDA.ST Buy N/A SKr61.25 04 Dec 2012 OCBC OCBC.SI Buy N/A S$9.47 04 Dec 2012 PNC Financial Services Group, Inc.5a, 6b, 6c, 7, 16b PNC.N Neutral N/A US$55.30 03 Dec 2012

RBS Group2a, 3b, 4a, 5a, 6a, 8, 14, 16b RBS.L Buy N/A 296p 04 Dec 2012 Regions Financial Corp.2a, 4a, 5a, 6a,

6b, 6c, 7, 16b RF.N Neutral N/A US$6.58 03 Dec 2012

Resona Holdings 8308.T Buy N/A ¥344 04 Dec 2012 Santander2a, 3c, 4a, 5a, 16b, 22 SAN.MC Sell N/A €5.93 04 Dec 2012 Sberbank2a, 4a, 5a, 16b SBER.MM Buy N/A RBL91.84 04 Dec 2012 Standard Chartered4a, 14, 16a, 16b STAN.L Buy N/A 1,470p 04 Dec 2012 Sumitomo Mitsui Financial Group2a, 4a, 6a, 16b, 22 8316.T Buy N/A ¥2,652 04 Dec 2012

SunTrust Banks, Inc.5a, 6b, 6c, 7, 16b STI.N Buy N/A US$26.63 03 Dec 2012 Swedbank2a, 4a, 5a, 6a, 16b SWEDa.ST Buy N/A SKr124.60 04 Dec 2012 TD Bank Financial Group2a, 4a, 4b, 5b, 6a, 16b TD.TO Buy N/A C$82.93 03 Dec 2012

TMB Bank TMB.BK Sell N/A Bt1.85 04 Dec 2012 U.S. Bancorp5a, 6b, 6c, 7, 16b USB.N Buy N/A US$32.05 03 Dec 2012 UniCredit2a, 4a, 5a CRDI.MI Buy N/A €3.75 04 Dec 2012 Vakifbank16b VAKBN.IS Sell N/A TRY4.57 04 Dec 2012


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Company Name Reuters 12-mo rating Short-term rating Price Price date VTB2a, 4a, 5a VTBR.MM Buy N/A RBL0.05 04 Dec 2012 Wells Fargo & Company2a, 4a, 5a, 6a,

6b, 6c, 7, 16b, 18, 22 WFC.N Neutral N/A US$32.75 03 Dec 2012

Source: UBS. All prices as of local market close. Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing date 2a. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of

this company/entity or one of its affiliates within the past 12 months. 2b. UBS Securities Canada Inc or an affiliate has acted as manager/co-manager, underwriter or placement agent in regard

to an offering of securities for this company/entity or one of its affiliates within the past 12 months. 3a. UBS is advising the Hong Kong Exchanges and Clearing Ltd on its bid for the London Metal Exchange. 3b. UBS Limited is acting as advisor to Royal Bank of Scotland Group on the sale of part of its UK banking business

comprising certain branches, SME customers and supporting infrastructure 3c. UBS Limited is advising Kredyt Bank in respect of its proposed merger with Bank Zachodni WBK S.A. 4a. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking

services from this company/entity. 4b. Within the past 12 months, UBS Securities Canada Inc or an affiliate has received compensation for investment banking

services from this company/entity. 5a. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services

from this company/entity within the next three months. 5b. UBS Securities Canada Inc or an affiliate expect to receive or intend to seek compensation for investment banking

services from this company/entity within the next three months. 6a. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking

services are being, or have been, provided. 6b. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment

banking securities-related services are being, or have been, provided. 6c. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities

services are being, or have been, provided. 7. Within the past 12 months, UBS Securities LLC has received compensation for products and services other than

investment banking services from this company/entity. 8. The equity analyst covering this company, a member of his or her team, or one of their household members has a long

common stock position in this company. 13. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company`s common equity

securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end).

14. UBS Limited acts as broker to this company. 16a. UBS Securities (Hong Kong) Limited is a market maker in the HK-listed securities of this company. 16b. UBS Securities LLC makes a market in the securities and/or ADRs of this company. 18. The U.S. equity strategist, a member of his team, or one of their household members has a long common stock position

in Wells Fargo & Co. 22. UBS AG, its affiliates or subsidiaries held other significant financial interests in this company/entity as of last month`s end

(or the prior month`s end if this report is dated less than 10 working days after the most recent month`s end). Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report. For a complete set of disclosure statements associated with the companies discussed in this report, including information on valuation and risk, please contact UBS Securities LLC, 1285 Avenue of Americas, New York, NY 10019, USA, Attention: Publishing Administration.


UBS 83

Global Disclaimer This document has been prepared by UBS Limited, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS. This document is for distribution only as may be permitted by law. It is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or would subject UBS to any registration or licensing requirement within such jurisdiction. It is published solely for information purposes; it is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. 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UBS and its affiliates and employees may have long or short positions, trade as principal and buy and sell in instruments or derivatives identified herein; such transactions or positions may be inconsistent with the opinions expressed in this document.


UBS 84

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