Ubs AG 6-K, filed May 7, 2024
Ubs AG (AMUB)
6-K
2024-05-07
For: 2024-03-31
View Original
Added on
July 04, 2026
About this 6-K
Ubs AG filed this 6-K on May 7, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: May 7, 2024
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form
40-
F.
Form 20-F
☒
☐
This Form 6-K consists of the First Quarter 2024 Report of UBS AG, which appears immediately following this
page.
First quarter
Corporate calendar UBS AG
Information about future publication dates is available at
ubs.com/global/en/investor-relations/events/calendar.html
Contacts
General inquiries
ubs.com/contact
Zurich +41-44-234 1111
London +44-207-567 8000
New York +1-212-821 3000
Hong Kong +852-2971 8888
Singapore +65-6495 8000
Investor Relations
UBS’s Investor Relations team
manages relationships with
institutional investors, research
analysts and credit rating agencies.
ubs.com/investors
Zurich +41-44-234 4100
New York +1-212-882 5734
Media Relations
UBS’s Media Relations team manages
relationships with global media and
journalists.
ubs.com/media
Zurich +41-44-234 8500
mediarelations@ubs.com
London +44-20-7567 4714
ubs-media-relations@ubs.com
New York +1-212-882 5858
mediarelations@ubs.com
Hong Kong +852-2971 8200
sh-mediarelations-ap@ubs.com
Imprint
Publisher: UBS AG, Zurich, Switzerland | ubs.com
Language: English
© UBS 2024. The key symbol and UBS are among the registered and unregistered
trademarks of UBS. All rights reserved.
1.
UBS AG
4
6
2.
Business divisions and
Group Items
12
14
16
17
19
19
3.
Risk, capital, liquidity and funding,
and balance sheet
21
26
34
35
4.
Consolidated
financial statements
39
Appendix
69
73
75
76
UBS AG first quarter 2024 report
Terms used in this report, unless the context requires otherwise
“UBS,” “UBS Group,” “UBS Group AG consolidated,” “Group” and “the Group”
UBS Group AG and its consolidated subsidiaries
“UBS AG,” “UBS AG consolidated,” “we,” “us” and “our”
UBS AG and its consolidated subsidiaries
“Credit Suisse AG” and “Credit Suisse AG consolidated”
Credit Suisse AG and its consolidated subsidiaries
“Credit Suisse Group“ and “Credit Suisse Group AG consolidated”
Pre-acquisition Credit Suisse Group
”Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries, Credit Suisse
Services AG and other small former Credit Suisse Group entities now
directly held by UBS Group AG
“UBS Group AG” and “UBS Group AG standalone”
UBS Group AG on a standalone basis
“Credit Suisse Group AG” and “Credit Suisse Group AG standalone”
Credit Suisse Group AG on a standalone basis
“UBS AG standalone”
UBS AG on a standalone basis
“Credit Suisse AG standalone”
Credit Suisse AG on a standalone basis
“UBS Switzerland AG” and “UBS Switzerland AG standalone”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and “UBS Americas Holding LLC consolidated”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e., 1,000,000
“1bn”
One billion, i.e., 1,000,000,000
“1trn”
One trillion, i.e., 1,000,000,000,000
In this report, unless the context requires otherwise, references to any gender shall apply to all genders.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. A number of APMs are reported in UBS’s external reports
(annual, quarterly and other reports). APMs are used to provide a more complete picture of operating performance
and to reflect management’s view of the fundamental drivers of the business results. A definition of each APM, the
method used to calculate it and the information content are presented under “Alternative performance measures”
in the appendix to this report. These APMs may qualify as non-GAAP measures as defined by US Securities and
Exchange Commission (SEC) regulations.
UBS AG first quarter 2024 report
UBS AG consolidated key figures
UBS AG consolidated key figures
As of or for the quarter ended
USD m, except where indicated
31.3.24
31.12.23
31.3.23
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Net profit / (loss) attributable to shareholders
Profitability and growth
1
Return on equity (%)
Return on tangible equity (%)
Return on common equity tier 1 capital (%)
Return on leverage ratio denominator, gross (%)
Cost / income ratio (%)
Net profit growth (%)
Resources
Total assets
Equity attributable to shareholders
Common equity tier 1 capital
2
Risk-weighted assets
2
Common equity tier 1 capital ratio (%)
2
Going concern capital ratio (%)
2
Total loss-absorbing capacity ratio (%)
2
Leverage ratio denominator
2
Common equity tier 1 leverage ratio (%)
2
Liquidity coverage ratio (%)
3
Net stable funding ratio (%)
Other
Invested assets (USD bn)
1,4,5
Personnel (full-time equivalents)
1 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 2 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to
the “Capital management” section of this report for more information. 3 The disclosed ratios represent quarterly averages for the quarters presented and are calculated based on an average of 61 data points in the
first quarter of 2024 and 63 data points in the fourth quarter of 2023. Refer to the “Liquidity and funding management” section of this report for more information. 4 Consists of invested assets for Global Wealth
Management, Asset Management and Personal & Corporate Banking. Refer to “Note 31 Invested assets and net new money” in the “Consolidated financial statements” section of the UBS AG Annual Report 2023,
available under “Annual reporting” at ubs.com/investors, for more information. 5 Starting with the second quarter of 2023, invested assets include invested assets from associates in the Asset Management business
division, to better reflect the business strategy. Comparative figures have been restated to reflect this change.
UBS AG first quarter 2024 report |
UBS AG | Recent developments 4
UBS AG
Management report
Recent developments
Integration of Credit Suisse
We expect to complete the merger of UBS AG and Credit Suisse AG on 31 May 2024, following operational testing
and subject to remaining regulatory approvals. The transition to a single US intermediate holding company is also
planned for the second quarter of 2024 and the merger of Credit Suisse (Schweiz) AG and UBS Switzerland AG
continues to be planned for the third quarter of 2024. Completing the mergers of our significant legal entities is a
critical step in enabling us to unlock the next phase of the cost, capital, funding and tax benefits we expect to
realize in the second half of 2024 and by the end of 2025 and into 2026.
›
Refer to the “Recent developments” section of the UBS Group first quarter 2024 report, available under “Quarterly
reporting” at
ubs.com/investors
, for more information about the integration of Credit Suisse
Regulatory and legal developments
Swiss Federal Council releases its report on systemically important banks
In April 2024, the Swiss Federal Council released its report on banking stability that evaluates the regulation of
systemically important banks. The report includes a comprehensive review of the acquisition of the Credit Suisse
Group and concludes that the existing Swiss too-big-to-fail (TBTF) regime must be further developed and
strengthened. The Swiss Federal Council proposes to introduce a broad package of measures, focused on three
areas: strengthening prevention, strengthening liquidity and expanding the crisis toolkit.
Preventive measures include proposals to strengthen the capital base, to improve resolvability and tighten capital
requirements for global systemically important banks (G-SIBs), including the introduction of forward-looking
elements for institution-specific Pillar 2 capital surcharges and increased capital adequacy requirements for foreign
participations. The Swiss Federal Council also recommended preventive measures related to corporate governance,
such as a senior management regime and stricter regulations regarding bonuses. To strengthen liquidity, the Swiss
Federal Council intends to significantly expand the potential for the Swiss National Bank to provide more liquidity
in a crisis. Furthermore, the Swiss Federal Council reiterated its support for the introduction of a public liquidity
backstop. To expand the crisis toolkit, the Swiss Federal Council proposed measures that aim to minimize legal risks
associated with the execution of resolution measures.
In the first half of 2025, the Swiss Federal Council is expected to present two packages to implement the proposed
measures: one with changes at the ordinance level, which can be adopted by the Swiss Federal Council, and
another, which will be submitted to the Parliament, with proposed legislative amendments. The Swiss Federal
Council has stated that when drafting these two packages it will take into account the findings of the Parliamentary
Investigation Committee concerning the role of the Swiss authorities in the rescue of the Credit Suisse Group. Due
to the broad range of possible outcomes, the impact of the proposals on UBS can be fully assessed only when the
implementation details become clearer.
FINMA publishes ordinances with implementing provisions for the revised Swiss Capital Adequacy Ordinance
In March 2024, the Swiss Financial Market Supervisory Authority (FINMA) published five new ordinances to
implement the final Basel III standards in Switzerland, replacing various existing FINMA circulars, including
ordinances on operational risks and market risks. The ordinances contain the implementing provisions for the Swiss
Federal Council’s revised Capital Adequacy Ordinance for banks (the CAO) and they will enter into force on
1 January 2025.
UBS AG first quarter 2024 report |
UBS AG | Recent developments 5
Shortening the securities settlement cycle to T+1
In the US, a shortened T+1 settlement cycle will apply to securities transactions beginning on 28 May 2024. In April
2024, the UK Accelerated Settlement Taskforce issued a report proposing a phased approach to the adoption of
T+1 settlement and the establishing of a technical working group to review the operational and behavioral changes
required for a T+1 settlement cycle. Recommendations for changes are planned to be made by the end of 2025 to
enable the market to prepare, with the move to T+1 expected to take place before the end of 2027. The UK
government has accepted the recommendations and confirmed it will work with the EU and Switzerland to see if
similar timeframes will be pursued and, therefore, if alignment is possible.
New Retirement Security Rule adopted for US retirement and pension accounts
In April 2024, the US Department of Labor (the DOL) adopted a new Retirement Security Rule, related amendments
to existing rules governing transactions between covered plans and parties in interest, and amendments to the
“qualified professional asset manager” transaction exemption. The Retirement Security Rule expands the scope of
transactions subject to requirements of the Employment Retirement Income Security Act by expanding the
relationships and advice that create a fiduciary relationship between an investment professional and a plan or
beneficiary, particularly in relation to individual retirement accounts (IRAs). The amendments to existing transaction
exemptions generally limit or prohibit the use of those exemptions for transactions involving IRAs, with the intention
of requiring transactions involving IRAs to rely upon an exemption (PTE 2020-2) imposing specific impartiality,
conflict-of-interest and compliance requirements. Global Wealth Management US treats established IRA accounts
as fiduciary relationships in accordance with PTE 2020-2. We are assessing the effect of the changes on our business
with IRA accounts.
In connection with the adoption of the Retirement Security Rule, the DOL also amended PTE 2020-2 to expand the
scope of affiliated persons for which a criminal conviction or determinations of misconduct disqualify an investment
professional from using the exemption and to add a one-year transition period for a newly disqualified investment
professional to transition the related business. The amendments to the qualified professional asset manager
exemption also expand the scope of events that may trigger disqualification and add a similar one-year transition
provision. In each case, the DOL retains the ability to grant an individual exemption from the disqualification.
The Swiss National Bank will raise the minimum reserve requirement for banks
In April 2024, the Swiss National Bank (the SNB) announced that it will raise the minimum reserve requirement for
domestic banks from 2.5% to 4%, and it will therefore amend the National Bank Ordinance as of 1 July 2024. The
SNB further announced that liabilities arising from cancelable customer deposits (excluding tied pension provisions)
will be included in full in the calculation of the minimum reserve requirement, as is the case with the other relevant
liabilities. This revokes the previous exception under which only 20% of these liabilities counted toward the
calculation. Based on preliminary internal assessments, UBS expects a negative impact of USD 70m to USD 80m
per annum on net interest income to result from these changes.
Other developments
Credit Suisse’s wealth management business in Japan
In April 2024, UBS AG and Sumitomo Mitsui Trust Holdings, Inc. (SuMi TRUST Holdings) announced that their
wealth management entity, UBS SuMi TRUST Wealth Management Co., Ltd. (UBS SuMi), will acquire Credit Suisse’s
wealth management business in Japan, including all of Credit Suisse’s client advisors and the assets they manage
in Japan. Following completion, UBS AG and SuMi TRUST Holdings will rebalance their investments in UBS SuMi to
maintain the current ownership structure (UBS AG 51% / SuMi TRUST Holdings 49%). UBS AG will continue to
consolidate the entity. The transaction is expected to close in the fourth quarter of 2024 and it is not expected to
have a material effect on the common equity tier 1 capital of UBS AG.
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 6
UBS AG consolidated performance
Income statement
For the quarter ended
% change from
USD m
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Net interest income
Other net income from financial instruments measured at fair value through profit or loss
Net fee and commission income
Other income
Total revenues
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Comprehensive income
Total comprehensive income
Total comprehensive income attributable to non-controlling interests
Total comprehensive income attributable to shareholders
Integration-related expenses by business division and Group Items
For the quarter ended
USD m
31.3.24
31.12.23
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total integration-related expenses
Results: 1Q24 vs 1Q23
Operating profit before tax decreased by USD 77m, or 5%, to USD 1,379m, reflecting an increase in operating
expenses, partly offset by an increase in total revenues. Operating expenses increased by USD 327m, or 4%, to
USD 7,677m and included total integration-related expenses of USD 523m. Personnel expenses increased by
USD 263m, or 7%, and depreciation, amortization and impairment of non-financial assets increased by USD 62m.
Total revenues increased by USD 264m, or 3%, to USD 9,108m, reflecting a USD 520m increase in net fee and
commission income, which was partly offset by a USD 310m decrease in combined net interest income and other
net income from financial instruments measured at fair value through profit or loss. Other income increased by
USD 54m, or 34%. Net credit loss expenses were USD 52m, compared with USD 38m in the prior-year quarter.
Integration-related expenses primarily included higher personnel expenses, which were mainly due to salaries and
variable compensation, related to the integration of Credit Suisse, higher consulting fees in general and higher
administrative expenses, as well as accelerated depreciation of properties and leasehold improvements in
depreciation, amortization and impairment of non-financial assets.
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 7
Integration-related expenses are defined as expenses that are temporary, incremental and directly related to the
integration of Credit Suisse into UBS, including costs of internal staff and contractors substantially dedicated to
integration activities, retention awards, redundancy costs, incremental expenses from the shortening of useful lives
of property, equipment and software, and impairment charges relating to these assets. Classification as integration-
related expenses does not affect the timing of recognition and measurement of those expenses or the presentation
thereof in the income statement.
Total revenues: 1Q24 vs 1Q23
Net interest income and other net income from financial instruments measured at fair value through profit or loss
Total combined net interest income and other net income from financial instruments measured at fair value through
profit or loss decreased by USD 310m to USD 3,751m, mainly driven by decreases in Global Wealth Management
and the Investment Bank, partly offset by an increase in Personal & Corporate Banking.
Global Wealth Management decreased by USD 241m to USD 1,558m, largely due to lower net interest income,
mainly driven by lower deposit margins, including the effects of shifts to lower-margin products, partly offset by
higher rates and deposit volumes.
The Investment Bank decreased by USD 115m to USD 1,557m. Derivatives & Solutions decreased by USD 169m,
driven by Rates, due to lower levels of both volatility and client activity. This was partly offset by a USD 48m increase
in Global Banking, mainly from higher revenues in Leveraged Capital Markets.
Personal & Corporate Banking increased by USD 71m to USD 904m, largely due to higher net interest income,
mainly driven by higher deposit margins, resulting from higher interest rates, partly offset by shifts to lower-margin
deposit products.
›
Refer to “Note 3 Net interest income” in the “Consolidated financial statements” section of this report for more
information about net interest income
Net interest income and other net income from financial instruments measured at fair value through profit or loss
For the quarter ended
% change from
USD m
31.3.24
31.12.23
1
31.3.23
1
4Q23
1Q23
Net interest income from financial instruments measured at amortized cost and fair value through other
comprehensive income
Net interest income from financial instruments measured at fair value through profit or loss and other
Other net income from financial instruments measured at fair value through profit or loss
Total
Global Wealth Management
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary activity
2
Personal & Corporate Banking
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary activity
2
Asset Management
Investment Bank
3
Global Banking
Global Markets
Non-core and Legacy
Group Items
1 Comparative-period information has been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to “Note 2 Segment reporting” in the
“Consolidated financial statements” section of this report for more information. Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective
adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 2 Mainly includes spread-related income in connection with client-driven transactions, foreign-
currency translation effects and income and expenses from precious metals, which are included in the income statement line Other net income from financial instruments measured at fair value through profit or loss.
The amounts reported on this line are one component of Transaction -based income in the management discussion and analysis in the “Global Wealth Management” and “Personal & Corporate Banking” sections
of this report. 3 Investment Bank information is provided at the business-line level rather than by financial statement reporting line, in order to reflect the underlying business activities, which is consistent with the
structure of the management discussion and analysis in the “Investment Bank” section of this report.
Net fee and commission income
Net fee and commission income increased by USD 520m to USD 5,148m.
Portfolio management and related services and investment fund fees increased by USD 246m and USD 23m,
respectively, driven by Global Wealth Management and Asset Management, respectively, mainly reflecting higher
invested assets resulting from positive market performance.
Net brokerage fees increased by USD 124m to USD 956m, predominantly due to higher revenues in Global Wealth
Management, reflecting higher levels of client activity, particularly in the Americas and Asia Pacific regions, as well
as in Execution Services in the Investment Bank, due to increases in Cash Equities across all regions.
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 8
Underwriting fees increased by USD 75m to USD 224m, largely attributable to a USD 64m increase in debt
underwriting fees in Global Banking in the Investment Bank.
M&A and corporate finance fees increased by USD 56m to USD 234m, mainly due to higher advisory fee revenues
across Global Banking.
›
Refer to “Note 4 Net fee and commission income” in the “Consolidated financial statements” section of this report
for more information
Other income
Other income was USD 209m, compared with USD 155m in the prior-year quarter. The increase was largely due to
a USD 51m increase in shared services costs charged to other subsidiaries of UBS Group AG, mainly related to
secondments revenues received from Credit Suisse entities.
›
Refer to “Note 5 Other income” in the “Consolidated financial statements” section of this report for more
information
Credit loss expense / release: 1Q24 vs 1Q23
Total net credit loss expenses were USD 52m, compared with net credit loss expenses of USD 38m in the prior-year
quarter, reflecting net credit loss expenses of USD 1m related to stage 1 and 2 positions and USD 51m related to
stage 3 positions.
›
Refer to “Note 8 Expected credit loss measurement” in the “Consolidated financial statements” section of this
report for more information
Credit loss expense / (release)
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
Total
For the quarter ended 31.3.24
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
For the quarter ended 31.12.23
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
For the quarter ended 31.3.23
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
Operating expenses: 1Q24 vs 1Q23
Operating expenses
For the quarter ended
% change from
USD m
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Personnel expenses
of which: salaries and variable compensation
of which: variable compensation – financial advisors
General and administrative expenses
of which: net expenses for litigation, regulatory and similar matters
of which: other general and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Total operating expenses
1 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. Also includes expenses related to compensation commitments with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
Personnel expenses
Personnel expenses increased by USD 263m to USD 4,161m and included integration-related expenses. Salaries
and variable compensation increased by USD 265m to USD 3,621m, due to a USD 156m increase in financial advisor
compensation (which reflected higher compensable revenues), as well as higher variable compensation, salary
adjustments and foreign currency effects.
›
Refer to “Note 6 Personnel expenses” in the “Consolidated financial statements” section of this report for more
information
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 9
General and administrative expenses
General and administrative expenses increased by USD 2m to USD 2,985m, which included total integration-related
expenses. Shared services costs charged by other subsidiaries of UBS Group AG increased by USD 548m, mainly
reflecting USD 234m secondment costs for staff from Credit Suisse entities. Consulting, legal and audit fees
increased by USD 92m, with such increase mainly related to an increase in integration-related expenses. These
increases were largely offset due to the prior-year quarter including an expense for provisions of USD 665m related
to the US RMBS litigation matter.
We believe that the industry continues to operate in an environment in which expenses associated with litigation,
regulatory and similar matters will remain elevated for the foreseeable future, and we continue to be exposed to a
number of significant claims and regulatory matters. The outcome of many of these matters, the timing of a
resolution, and the potential effects of resolutions on our future business, financial results or financial condition are
extremely difficult to predict.
›
Refer to “Note 7 General and administrative expenses” in the “Consolidated financial statements” section of this
report for more information
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information about litigation, regulatory and similar matters
›
Refer to the “Regulatory and legal developments” and “Risk factors” sections of the UBS AG Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for more information about litigation, regulatory and
similar matters on a UBS AG consolidated basis
Depreciation, amortization and impairment of non-financial assets
Depreciation, amortization and impairment of non-financial assets increased by USD 62m to USD 531m which
included total integration-related expenses, mainly attributable to accelerated depreciation of right-of-use assets
associated with real estate leases. Depreciation of internally developed software also increased, reflecting a higher
level of capitalized costs, partly offset by lower non-integration-related accelerated depreciation of right-of-use
assets associated with real estate leases.
Tax: 1Q24 vs 1Q23
UBS AG had a net income tax expense of USD 366m in the first quarter of 2024, representing an effective tax rate
of 26.5%, compared with USD 445m in the prior-year quarter, representing an effective tax rate of 30.5%.
The net current tax expense was USD 438m, compared with USD 481m, and primarily related to the taxable profits
of UBS Switzerland AG and other entities.
There was a net deferred tax benefit of USD 72m, compared with USD 37m in the prior-year quarter. This included
an increase in deferred tax asset recognition of USD 122m in respect of UBS AG’s US branch, which was partly
offset by a net expense of USD 50m that mainly related to the amortization of deferred tax assets (DTAs) previously
recognized in relation to tax losses carried forward and deductible temporary differences.
UBS AG’s effective tax rate for the remaining nine months of 2024 may be higher than its structural rate of 23%
if, following its merger with Credit Suisse AG, its net profit includes operating losses of certain entities, reflecting
integration-related expenses and restructuring costs, that do not result in any tax benefits because they cannot be
offset with profits of other group entities and do not result in any DTA recognition. However, its effective tax rate
is expected to decrease toward the structural rate in subsequent years, as such losses decrease, and the amount of
that impact will depend on the amount of those losses.
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 10
Total comprehensive income attributable to shareholders
In the first quarter of 2024, total comprehensive income attributable to shareholders was negative USD 166m,
reflecting net profit of USD 1,006m and other comprehensive income (OCI), net of tax, of negative USD 1,171m.
Foreign currency translation OCI was negative USD 744m, mainly resulting from a weakening of the Swiss franc
and the euro against the US dollar.
OCI related to cash flow hedges was negative USD 467m, mainly reflecting net unrealized losses on US dollar
hedging derivatives resulting from increases in the relevant US dollar long-term interest rates, partly offset by net
losses on hedging instruments that were reclassified from OCI to the income statement.
Defined benefit plan OCI was USD 28m, reflecting net pre-tax OCI related to our non-Swiss plans of USD 46m,
mainly driven by the UK pension plan, partly offset by negative pre-tax OCI in our Swiss pension plan of USD 11m.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial statements” section of this report for
more information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to “Note 20 Fair value measurement” in the “Consolidated financial statements” section of the UBS AG
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about own
credit on financial liabilities designated at fair value
›
Refer to “Note 26 Post-employment benefit plans” in the “Consolidated financial statements” section of the
UBS AG Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about
OCI related to defined benefit plans
Sensitivity to interest rate movements
As of 31 March 2024, we estimated that a parallel shift in yield curves by +100 basis points could lead to a combined
increase in annual net interest income from our banking book of approximately USD 1.0bn in the first year after
such a shift. Of this increase, approximately USD 0.6bn, USD 0.2bn and USD 0.1bn would result from changes in
Swiss franc, US dollar and euro interest rates, respectively. A parallel shift in yield curves by –100 basis points could
lead to a combined decrease in annual net interest income of approximately USD 0.9bn in the first year after such
a shift, showing similar currency contributions as for the aforementioned increase in rates.
These estimates are based on a hypothetical scenario of an immediate change in interest rates, equal across all
currencies and relative to implied forward rates as of 31 March 2024 applied to our banking book. These estimates
further assume no change to balance sheet size and product mix, stable foreign exchange rates, and no specific
management action. These estimates do not represent a forecast of net interest income variability.
›
Refer to the “Risk management and control” section of this report for information about interest rate risk in the
banking book
Key figures and personnel
Below is an overview of selected key figures of UBS AG consolidated. For further information about key figures
related to capital management, refer to the “Capital management” section of this report.
Cost / income ratio: 1Q24 vs 1Q23
The cost / income ratio was 84.3%, compared with 83.1%, mainly reflecting an increase in operating expenses,
partly offset by an increase in total revenues.
Personnel: 1Q24 vs 4Q23
The number of internal and external personnel employed was 54,326 (workforce count) as of 31 March 2024, a
net increase of 401 compared with 31 December 2023. The number of internal personnel employed as of 31 March
2024 was 47,635 (full-time equivalents), a net increase of 45 compared with 31 December 2023. The number of
core external staff was approximately 6,691 (workforce count) as of 31 March 2024, a net increase of approximately
356 compared with 31 December 2023.
UBS AG first quarter 2024 report |
UBS AG | UBS AG consolidated performance 11
Equity, CET1 capital and returns
As of or for the quarter ended
USD m, except where indicated
31.3.24
31.12.23
31.3.23
Net profit
Net profit attributable to shareholders
Equity
Equity attributable to shareholders
Less: goodwill and intangible assets
Tangible equity attributable to shareholders
Less: other CET1 adjustments
CET1 capital
Returns
Return on equity (%)
Return on tangible equity (%)
Return on CET1 capital (%)
Common equity tier 1 capital: 1Q24 vs 4Q23
During the first quarter of 2024, CET1 capital decreased by USD 0.3bn to USD 43.9bn, primarily as the operating
profit before tax of USD 1.4bn was more than offset by negative effects from foreign currency translation of
USD 0.8bn, current tax expenses of USD 0.4bn and dividend accruals of USD 0.4bn.
Return on common equity tier 1 capital: 1Q24 vs 1Q23
The annualized return on CET1 capital was 9.1%, compared with 9.4%, driven by an increase in average CET1
capital, partly offset by higher net profit attributable to shareholders.
Risk-weighted assets: 1Q24 vs 4Q23
During the first quarter of 2024, RWA decreased by USD 5.2bn to USD 328.7bn, driven by decreases of USD 7.3bn
resulting from asset size and other movements and USD 6.7bn resulting from currency effects, partly offset by an
increase of USD 8.8bn from model updates and methodology changes.
Common equity tier 1 capital ratio: 1Q24 vs 4Q23
The CET1 capital ratio increased to 13.3% from 13.2%, reflecting the aforementioned decrease in RWA, partly
offset by the aforementioned decrease in CET1 capital.
Leverage ratio denominator: 1Q24 vs 4Q23
The leverage ratio denominator (the LRD) decreased by USD 25.8bn to USD 1,078.6bn, driven by currency effects
of USD 33.2bn, partly offset by asset size and other movements of USD 7.4bn.
Common equity tier 1 leverage ratio: 1Q24 vs 4Q23
The CET1 leverage ratio increased to 4.1% from 4.0%, largely due to the aforementioned decrease in the LRD.
UBS AG first quarter 2024 report |
Business divisions and Group Items 12
Business divisions and Group
Items
Management report
Our businesses
We report five business divisions in line with IFRS Accounting Standards: Global Wealth Management, Personal &
Corporate Banking, Asset Management, the Investment Bank, and Non-core and Legacy. Non-core and Legacy
includes positions and businesses not aligned with our strategy and policies.
Our Group functions are support and control functions that provide services to the Group. Virtually all costs and
revenues incurred by the support and control functions are allocated to the business divisions, leaving a residual
amount, mainly related to certain Group funding and hedging items, that we refer to as Group Items in our segment
reporting.
Changes to Group Treasury allocations
Starting with the first quarter of 2024, nearly all Group Treasury costs that historically were retained and reported
in Group Items have been allocated to the business divisions. Costs continued to be retained in Group Items include
costs related to hedging and own debt, and deferred tax asset funding costs.
Global Wealth Management
Global Wealth Management
1
As of or for the quarter ended
% change from
USD m, except where indicated
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Financial advisor compensation
3
Invested assets (USD bn)
2
Loans, gross (USD bn)
4
Customer deposits (USD bn)
4
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,5
Advisors (full-time equivalents)
1 Comparative figures have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events
after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 Relates to licensed professionals with the ability to provide
investment advice to clients in the Americas. Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. Also includes expenses related to
compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements. Recruitment loans to financial advisors were USD 1,726m as of 31 March 2024.
4 Loans and Customer deposits in this table include customer brokerage receivables and payables, respectively, which are presented in a separate reporting line on the balance sheet. 5 Refer to the “Risk management
and control” section of this report for more information about (credit-)impaired exposures. Excludes loans to financial advisors.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Global Wealth Management 13
Results: 1Q24 vs 1Q23
Profit before tax decreased by USD 260m, or 22%, to USD 935m, mainly driven by higher operating expenses,
partly offset by higher total revenues.
Total revenues
Total revenues increased by USD 130m, or 3%, to USD 4,918m, with increases in recurring net fee income,
transaction-based income and other income, partly offset by decreases in net interest income.
Net interest income decreased by USD 284m, or 19%, to USD 1,204m, mainly driven by lower deposit margins,
including the effects of shifts to lower-margin products, partly offset by higher rates and deposit volumes.
Recurring net fee income increased by USD 239m, or 10%, to USD 2,693m, primarily driven by positive market
performance.
Transaction-based income increased by USD 143m, or 17%, to USD 986m, mainly driven by higher levels of client
activity, particularly in the Americas and Asia Pacific regions.
Other income increased by USD 31m to USD 35m, largely reflecting an increase in shared services costs charged to
other subsidiaries of UBS Group AG, mainly related to secondments.
Credit loss expense / release
Net credit loss expenses were USD 9m, primarily related to stage 3 positions, compared with net expenses of
USD 15m in the first quarter of 2023.
Operating expenses
Operating expenses increased by USD 397m, or 11%, to USD 3,975m, mostly driven by integration-related
expenses associated with the acquisition of the Credit Suisse Group and higher financial advisor compensation.
Invested assets: 1Q24 vs 4Q23
Invested assets increased by USD 115bn, or 4%, to USD 3,302bn, mainly driven by positive market performance of
USD 114.4bn and net new asset inflows, partly offset by negative foreign currency effects of USD 28.9bn.
Loans: 1Q24 vs 4Q23
Loans decreased by USD 7.7bn to USD 210.6bn, mainly driven by negative foreign currency effects and net new
loan outflows of USD 3.1bn.
Customer deposits: 1Q24 vs 4Q23
Customer deposits decreased by USD 4.1bn to USD 351.2bn, mainly driven by negative foreign currency effects,
partly offset by net new deposit inflows, mainly into fixed-term deposit products.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Personal & Corporate Banking 14
Personal & Corporate Banking
Personal & Corporate Banking – in Swiss francs
1
As of or for the quarter ended
% change from
CHF m, except where indicated
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Net interest margin (bps)
2
Fee and trading income for Corporate & Institutional Clients
2
Investment products for Personal Banking (CHF bn)
2
Net new investment products for Personal Banking (CHF bn)
2
Active Digital Banking clients in Personal Banking (%)
2,3
Active Mobile Banking clients in Personal Banking (%)
2
Active Digital Banking clients in Corporate & Institutional Clients (%)
2
Loans, gross (CHF bn)
Customer deposits (CHF bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
1 Comparative figures have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events
after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 In the first quarter of 2024, 89.1% of clients of Personal
Banking were “activated users” of Digital Banking (i.e., clients who had logged into Digital Banking at least once in the course of their relationship with UBS). 4 Refer to the “Risk management and control” section
of this report for more information about (credit-)impaired exposures.
Results
:
1Q24 vs 1Q23
Profit before tax decreased by CHF 57m, or 10%, to CHF 493m, mainly reflecting higher total operating expenses,
partly offset by higher total revenues.
Total revenues
Total revenues increased by CHF 38m, or 3%, to CHF 1,217m, predominantly reflecting an increase in net interest
income.
Net interest income increased by CHF 30m to CHF 681m, mainly driven by higher deposit margins, resulting from
higher interest rates, partly offset by shifts to lower-margin deposit products.
Recurring net fee income increased by CHF 11m to CHF 221m, including higher revenues from custody and
mandate-based fees.
Transaction-based income decreased by CHF 9m to CHF 300m, mainly driven by lower credit card fees from private
clients.
Other income increased by CHF 4m to CHF 14m, mainly reflecting higher revenues related to our investment in SIX
Group.
Credit loss expense / release
Net credit loss expenses were CHF 9m, primarily related to stage 3 positions, compared with net expenses of
CHF 14m in the first quarter of 2023.
Operating expenses
Operating expenses increased by CHF 101m, or 16%, to CHF 715m, mainly driven by integration-related expenses
associated with the acquisition of the Credit Suisse Group.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Personal & Corporate Banking 15
Personal & Corporate Banking – in US dollars
1
As of or for the quarter ended
% change from
USD m, except where indicated
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Net interest margin (bps)
2
Fee and trading income for Corporate & Institutional Clients
2
Investment products for Personal Banking (USD bn)
2
Net new investment products for Personal Banking (USD bn)
2
Active Digital Banking clients in Personal Banking (%)
2,3
Active Mobile Banking clients in Personal Banking (%)
2
Active Digital Banking clients in Corporate & Institutional Clients (%)
2
Loans, gross (USD bn)
Customer deposits (USD bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
1 Comparative figures have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events
after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 3 In the first quarter of 2024, 89.1% of clients of Personal
Banking were “activated users” of Digital Banking (i.e., clients who had logged into Digital Banking at least once in the course of their relationship with UBS). 4 Refer to the “Risk management and control” section
of this report for more information about (credit-)impaired exposures.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Asset Management 16
Asset Management
Asset Management
1
As of or for the quarter ended
% change from
USD m, except where indicated
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Net management fees
2
Performance fees
Net gain from disposals
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Gross margin on invested assets (bps)
3,4
Information by business line / asset class
Invested assets (USD bn)
3
Equities
Fixed Income
of which: money market
Multi-asset & Solutions
Hedge Fund Businesses
Real Estate & Private Markets
Total invested assets excluding associates
of which: passive strategies
Associates
5
Total invested assets
4
Information by region
Invested assets (USD bn)
3
Americas
Asia Pacific
4
EMEA (excluding Switzerland)
Switzerland
Total invested assets
4
Information by channel
Invested assets (USD bn)
3
Third-party institutional
Third-party wholesale
UBS’s wealth management businesses
Associates
5
Total invested assets
4
1 Comparative figures have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events
after the reporting period. 2 Net management fees include transaction fees, fund administr ation revenues (including net interest and trading income from lending activities and foreign-exchange hedging as part of
the fund services offering), distribution fees, incremental fund-related expenses, gains or losses from seed money and co-investments, funding costs, the negative pass-through impact of third-party performance fees,
and other items that are not Asset Management’s performance fees. 3 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 4 Starting with the
second quarter of 2023, invested assets include invested assets from associates, to better reflect the business strategy. Comparative figures have been restated to reflect this change. 5 The invested assets amounts
reported for associates are prepared in accordance with their local regulatory requirements and practices.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Asset Management 17
Results: 1Q24 vs 1Q23
Profit before tax decreased by USD 45m, or 47%, to USD 50m, primarily due to higher operating expenses.
Total revenues
Total revenues increased by USD 6m, or 1%, to USD 509m, mainly reflecting higher net management fees.
Net management fees increased by USD 8m, or 2%, to USD 487m, as the first quarter of 2023 included negative
pass-through fees, with the corresponding offset in performance fees, and also due to positive market performance
and foreign currency effects, partly offset by continued margin compression.
Performance fees decreased by USD 1m, or 5%, to USD 22m, mainly due to the first quarter of 2023 including the
effect of the aforementioned pass-through fees, almost entirely offset by increases in Hedge Fund Businesses, Fixed
Income and Real Estate & Private Markets.
Operating expenses
Operating expenses increased by USD 51m, or 12%, to USD 459m, mainly reflecting integration-related expenses,
adverse foreign currency effects, and increases in technology expenses and general and administrative expenses.
Invested assets: 1Q24 vs 4Q23
Invested assets increased by USD 54bn, or 4%, to USD 1,276bn, reflecting positive market performance of
USD 56bn and positive net new money of USD 27bn, partly offset by adverse foreign currency effects of USD 30bn.
Excluding money market flows and associates, net new money was USD 17bn.
Investment Bank
Investment Bank
1
As of or for the quarter ended
% change from
USD m, except where indicated
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Advisory
Capital Markets
Global Banking
Execution Services
Derivatives & Solutions
Financing
Global Markets
of which: Equities
of which: Foreign Exchange, Rates and Credit
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Average VaR (1-day, 95% confidence, 5 years of historical data)
1 Comparative figures have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
Comparatives may additionally differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events
after the reporting period. 2 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method.
UBS AG first quarter 2024 report |
Business divisions and Group Items | Investment Bank 18
Results: 1Q24 vs 1Q23
Profit before tax decreased by USD 199m, or 42%, to USD 272m, mainly reflecting higher total operating expenses.
Total revenues
Total revenues increased by USD 27m, or 1%, to USD 2,388m, reflecting higher revenues in Global Banking, partly
offset by lower revenues in Global Markets.
Global Banking
Global Banking revenues increased by USD 130m, or 34%, to USD 514m, as higher Capital Markets revenues were
partly offset by lower Advisory revenues. The overall global fee pool
1,2
increased 18%.
Advisory revenues decreased by USD 6m, or 3%, to USD 165m, mostly due to lower merger and acquisition
transaction revenues, which decreased by USD 8m, or 5%, compared with a 10% decrease in the relevant global
fee pool.
2
Capital Markets revenues increased by USD 136m, or 63%, to USD 349m, mainly due to higher Leveraged Capital
Markets revenues, which increased by USD 97m, or 239%, Debt Capital Markets revenues, which increased by
USD 37m, or 55%, and Equity Capital Markets revenues, which increased by USD 31m, or 57%. The relevant global
fee pools
1,2
Global Markets
Global Markets revenues decreased by USD 102m, or 5%, to USD 1,874m, primarily driven by lower Derivatives &
Solutions revenues, partly offset by higher Execution Services revenues.
Execution Services revenues increased by USD 39m, or 9%, to USD 458m, due to increases in Cash Equities across
all regions.
Derivatives & Solutions revenues decreased by USD 145m, or 14%, to USD 873m, mostly driven by Rates, due to
lower levels of both volatility and client activity.
Financing revenues increased by USD 3m, or 1%, to USD 542m.
Equities
Global Markets Equities revenues increased by USD 51m, or 4%, to USD 1,360m.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues decreased by USD 153m, or 23%, to USD 514m,
primarily driven by lower Rates revenues.
Credit loss expense / release
Net credit loss expenses were USD 32m, compared with net expenses of USD 7m in the first quarter of 2023.
Operating expenses
Operating expenses increased by USD 200m, or 11%, to USD 2,083m, mainly driven by expenses relating to
secondment of Credit Suisse employees and integration-related expenses associated with the acquisition of the
Credit Suisse Group.
1
market movements on loan portfolios; and Debt Capital Markets, excluding revenues related to debt underwriting of UBS instruments.
2
UBS AG first quarter 2024 report |
Business divisions and Group Items | Non-core and Legacy 19
Non-core and Legacy
Non-core and Legacy
1
As of or for the quarter ended
% change from
USD m
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
1 Starting with the third quarter of 2023, Non-core and Legacy represents a separate reportable segment, which includes Non-core and Legacy Portfolio previously reported within Group Functions. Prior periods have
been revised to reflect this presentational change. Additionally, a small amount of exposure of pre-integration UBS business divisions was included in Non-core and Legacy starting with the third quarter of 2023, as
it was assessed as not strategic in light of the acquisition of the Credit Suisse Group.
Results: 1Q24 vs 1Q23
Loss before tax was USD 118m, compared with a loss before tax of USD 676m.
Total revenues
Total revenues decreased by USD 2m, or 9%, to USD 21m, mainly reflecting lower net interest income.
Operating expenses
Operating expenses decreased by USD 561m, or 80%, to USD 138m. The first quarter of 2023 included a
USD 665m increase in provisions related to the US residential mortgage-backed securities litigation matter, which
was settled in the third quarter of 2023. The first quarter of 2024 included integration-related expenses of USD 61m
and an increase in personnel expenses of USD 46m, driven by performance-related expenses.
Group Items
Group Items
1,2
As of or for the quarter ended
% change from
USD m
31.3.24
31.12.23
31.3.23
4Q23
1Q23
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
1 Starting with the third quarter of 2023, Group Functions has been renamed Group Items, and Non-core and Legacy Portfolio, which was previously reported within Group Functions, has been included in Non-core
and Legacy, which represents a separate reportable segment. Prior periods have been revised to reflect these presentational changes. 2 Comparative figures have been restated for changes in Group Treasury
allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of this report for more information. Comparatives may additionally differ due to adjustments following organizational
changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period.
Results: 1Q24 vs 1Q23
Loss before tax was USD 319m, compared with a loss of USD 225m.
Income from Group hedging and own debt, including hedge accounting ineffectiveness, was net negative
USD 150m, compared with net negative income of USD 96m. The results across the periods were driven by mark-
to-market effects on portfolio-level economic hedges due to higher interest rates and cross-currency-basis widening.
In addition, the first quarter of 2024 included higher shared services costs charged by other subsidiaries of
UBS Group AG and higher funding costs related to deferred tax assets.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet 20
Risk, capital, liquidity and
funding, and balance sheet
Management report
Table of contents
21
21
23
24
25
26
28
31
32
34
34
34
34
35
35
35
35
36
37
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 21
Risk management and control
This section provides information about key developments during the reporting period and should be read in
conjunction with the “Risk management and control” section of the UBS AG Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
.
Credit risk
Overall banking products exposure
Overall banking products exposure decreased by USD 40bn to USD 698bn as of 31 March 2024, mainly driven by
a decrease in loans and advances to customers and in amounts due from banks, reflecting negative currency effects
and a reduction in lending to Credit Suisse. Balances at central banks also decreased due to currency effects.
Total net credit loss expenses were USD 52m, reflecting USD 1m net credit loss expenses related to stage 1 and 2
positions and USD 51m net credit loss expenses related to stage 3 positions.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
›
Refer to the “UBS AG consolidated performance” section and “Note 8 Expected credit loss measurement” in the
“Consolidated financial statements” section of this report for more information about credit loss expense / release
Loan underwriting
In the Investment Bank, mandated loan underwriting commitments on a notional basis decreased by USD 0.1bn to
USD 1.9bn as of 31 March 2024. USD 0.1bn of commitments had not yet been distributed as originally planned as
of 31 March 2024.
Loan underwriting exposures are classified as held for trading, with fair values reflecting the market conditions at
the end of the quarter. Credit hedges are in place to help protect against fair value movements in the portfolio.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 22
Banking and traded products exposure in our business divisions and Group Items
31.3.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1,2
Gross exposure
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
4
Total credit-impaired exposure, gross
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
31.12.23
5
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1,2
Gross exposure
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
4
Total credit-impaired exposure, gross
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
customers, other financial assets at amortized cost, guarantees and irrevocable loan commitments. 2 Internal management view of credit risk, which differs in certain respects from IFRS Accounting Standards. 3 As
counterparty risk for traded products is managed at counterparty level, no further split between exposures in the Investment Bank, Non-core and Legacy, and Group Items is provided. 4 Unconditionally revocable
committed credit lines. 5 Comparative figures in this table have been restated for changes in Group Treasury allocations. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of
this report for more information.
Collateralization of Loans and advances to customers
1
Global Wealth Management
Personal & Corporate Banking
USD m, except where indicated
31.3.24
31.12.23
31.3.24
31.12.23
Secured by collateral
Residential real estate
Commercial / industrial real estate
Cash
Equity and debt instruments
Other collateral
2
Subject to guarantees
Uncollateralized and not subject to guarantees
Total loans and advances to customers, gross
Allowances
Total loans and advances to customers, net of allowances
Collateralized loans and advances to customers in % of total loans and advances to customers, gross (%)
1 Collateral arrangements generally incorporate a range of collateral, including cash, securities, real estate and other collateral. UBS AG applies a risk-based approach that generally prioritizes collateral according to
its liquidity profile. 2 Includes but is not limited to life insurance contracts, rights in respect of subscription or capital commitments from fund partners, inventory, gold and other commodities.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 23
Market risk
UBS AG consolidated continued to maintain generally low levels of management value-at-risk (VaR). Average
management VaR (1-day, 95% confidence level) increased marginally to USD 17m from USD 16m in the first quarter
of 2024.
There were no new VaR negative backtesting exceptions in the first quarter of 2024. The number of negative
backtesting exceptions within the most recent 250-business-day window remained at zero. The Swiss Financial
Market Supervisory Authority (FINMA) VaR multiplier derived from backtesting exceptions for market risk risk-
weighted assets was unchanged compared with the prior quarter, at 3.0.
Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of our business divisions and
Group Items, by general market risk type
1
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
2,3
Total as of 31.3.24
Total as of 31.12.23
1 Statistics at individual levels may not be summed to deduce the corresponding aggregate figures. The minima and maxima for each level may occur on different days, and, likewise, the value-at-risk (VaR) for each
business line or risk type, being driven by the extreme loss tail of the corresponding distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the historical
time series, rendering invalid the simple summation of figures to arrive at the aggregate total. 2 The difference between the sum of the standalone VaR for the business divisions and Group Items and the total VaR.
3 As the minima and maxima for different business divisions and Group Items occur on different days, it is not meaningful to calculate a portfolio diversification effect.
Economic value of equity and net interest income sensitivity
The economic value of equity (EVE) sensitivity in UBS AG’s banking book to a parallel shift in yield curves of +1 basis
point was negative USD 28.6m as of 31 March 2024, compared with negative USD 28.1m as of 31 December
2023. This excludes the sensitivity of USD 5.4m from additional tier 1 (AT1) capital instruments (as per specific
FINMA requirements) in contrast to general Basel Committee on Banking Supervision (BCBS) guidance. Exposure in
the banking book of UBS AG increased during the first quarter of 2024, due to interest rate risk hedges of recent
AT1 issuances and a repositioning of the Swiss franc exposure in anticipation of the subsequent Swiss National
Bank rate cut in March 2024.
The majority of UBS AG’s interest rate risk in the banking book is a reflection of the net asset duration that it runs
to offset its modeled sensitivity of net USD 21.7m (31 December 2023: USD 22.4m) assigned to its equity, goodwill
and real estate, with the aim of generating a stable net interest income contribution. Of this, USD 15.0m and
USD 5.7m are attributable to the US dollar and the Swiss franc portfolios, respectively (31 December 2023:
USD 15.8m and USD 5.6m, respectively).
In addition to the aforementioned sensitivity, UBS AG calculates the six interest rate shock scenarios prescribed by
FINMA. The “Parallel up” scenario, assuming all positions were fair valued, was the most severe and would have
resulted in a change in EVE of negative USD 5.4bn, or 9.2%, of UBS AG’s tier 1 capital (31 December 2023:
negative USD 5.3bn, or 9.3%), which is well below the 15% threshold as per the BCBS supervisory outlier test for
high levels of interest rate risk in the banking book.
The immediate effect on our tier 1 capital in the “Parallel up” scenario as of 31 March 2024 would have been a
decrease of approximately USD 0.5bn, or 0.8%, (31 December 2023: USD 0.5bn, or 0.9%), reflecting the fact that
the vast majority of our banking book is accrual accounted or subject to hedge accounting. The “Parallel up”
scenario would subsequently have a positive effect on net interest income, assuming a constant balance sheet.
UBS AG also applies granular internal interest rate shock scenarios to its banking book positions to monitor the
book’s specific risk profile.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 24
Interest rate risk – banking book
31.3.24
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
31.12.23
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
1 Economic value of equity. 2 Rates across all tenors move by ±150 bps for Swiss franc, ±200 bps for euro and US dollar, and ±250 bps for pound sterling. 3 Short-term rates decrease and long-term rates
increase. 4 Short-term rates increase and long-term rates decrease. 5 Short-term rates increase more than long-term rates. 6 Short-term rates decrease more than long-term rates.
Country risk
UBS AG remains watchful of a range of geopolitical developments and political changes in a number of countries,
as well as international tensions arising from the Russia–Ukraine war, conflicts in the Middle East and US–China
trade relations. UBS AG’s direct exposure to Israel is USD 0.1bn and our direct exposure to Gulf Cooperation Council
countries is USD 2.4bn, while direct exposure to Egypt and Jordan is limited, and there is no direct exposure to
Lebanon, Iran, Iraq or Syria. UBS AG’s direct exposure to Russia, Belarus and Ukraine is immaterial, and potential
second-order impacts, such as European energy security, continue to be monitored.
Inflation has abated to some extent in major Western economies, though there are still concerns regarding future
developments, and central banks’ monetary policy is in the spotlight. The potential for “higher-for-longer” interest
rates raises the prospect of a global recession. There are ongoing concerns regarding the property sector in China.
This combination of factors translates into a more uncertain and volatile environment, which increases the risk of
financial market disruption.
UBS AG continues to monitor potential trade policy disputes, as well as economic and political developments in
addition to those mentioned above. We are closely watching elections in a number of key markets in 2024.
UBS AG’s exposure to emerging market countries is 4% of its total country exposure, mainly in Asia.
›
Refer to the “Risk management and control” section of the UBS AG Annual Report 2023, available under “Annual
reporting” at
ubs.com/investors
, for more information
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 25
Non-financial risk
We continue to actively manage the non-financial risks emerging from the acquisition of the Credit Suisse Group,
including the current operation of dual corporate structures, and the scale, pace and complexity of the required
integration activities. These activities continue to be managed via the program run by our Group Integration Office.
The integration of Credit Suisse requires data to be migrated into the UBS environment and we aim to ensure that
we have robust controls to preserve data integrity, quality and availability, to mitigate data migration risks and to
meet regulatory expectations.
Through this period of change, we place an increased focus on maintaining and enhancing our control environment
and continue to cooperate with regulators in relation to the submission and execution of implementation plans to
meet regulatory requirements, including remediation requirements applicable to Credit Suisse AG. In addition, the
Group is closely monitoring non-financial risk indicators, to detect any potential for adverse impacts on the control
environment.
There is an increased risk of cyber-related operational disruption to business activities at our locations and / or those
of third-party suppliers due to operating an enlarged group of entities. This is combined with the increasingly
dynamic threat environment, which is intensified by current geopolitical factors and evidenced by the increased
volumes and sophistication of cyberattacks against financial institutions globally.
Cyberattacks on third-party vendors have affected our operations in the past and continue to be a source of residual
risk to our business. No cyber events occurred in the first quarter of 2024 related to our own infrastructure, or the
infrastructure of any third party, that had material financial or operational effects on us. We remain on heightened
alert to respond to and mitigate elevated cybersecurity and information security threats. Following a post-incident
review of the ION XTP ransomware attack, we are improving our frameworks for managing third parties that
support our important business services and continue with actions to enhance our cyber-risk assessments and
controls over third-party vendors. We continue to invest in improving our technology infrastructure and information
security governance to improve our defense, detection and response capabilities against cyberattacks.
In addition, we are working to enhance our operational resilience to address these heightened risks and to meet
regulatory deadlines through 2026. We are implementing a global framework designed to drive enhancements in
operational resilience across all business divisions and relevant jurisdictions, as well as working with the third parties,
including vendors, that are of critical importance to our operations, to assess their operational resilience against our
standards.
The increasing interest in data-driven advisory processes, and use of artificial intelligence (AI) and machine learning,
is opening up new questions related to the fairness of AI algorithms, data life cycle management, data ethics, data
privacy and security, and records management. In addition, new risks continue to emerge, such as those that result
from the demand from our clients for distributed ledger technology, blockchain-based assets and cryptocurrencies;
however, we currently have limited exposure to such risks, and relevant control frameworks for them are
implemented and reviewed on a regular basis as they evolve.
Competition to find new business opportunities, products and services across the financial services sector, both for
firms and for customers, is increasing, particularly during periods of market volatility and economic uncertainty.
Thus, suitability risk, product selection, cross-divisional service offerings, quality of advice and price transparency
remain areas of heightened focus for UBS and for the industry as a whole.
Evolving environmental, social and governance regulations and major legislation, such as the Consumer Duty
regulation in the United Kingdom, the Swiss Financial Services Act (FIDLEG) in Switzerland, Regulation Best Interest
(Reg BI) in the US and the Markets in Financial Instruments Directive II (MiFID II) in the EU, all significantly affect the
industry and have required adjustments to control processes.
Cross-border risk (including unintended permanent establishment) remains an area of regulatory attention for
global financial institutions, including a focus on market access, such as third-country market access into the
European Economic Area, and taxation of US persons. We maintain a series of controls designed to address these
risks, and we are increasing the number of controls that are automated.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 26
Financial crime, including money laundering, terrorist financing, sanctions violations, fraud, bribery and corruption,
continues to present a major risk, as technological innovation and geopolitical developments increase the
complexity of doing business and heightened regulatory attention continues. Money laundering and financial fraud
techniques are becoming increasingly sophisticated, including growing use of AI, and geopolitical volatility makes
the sanctions landscape more complex. The extensive and continuously evolving sanctions arising from the Russia–
Ukraine war require constant attention to prevent circumvention risks, while the conflicts in the Middle East may
increase terrorist financing risks. An effective financial crime prevention program therefore remains essential for us.
We are focused on strategic enhancements to our global anti-money-laundering (AML), know-your-client (KYC)
and sanctions programs to respond to new and existing regulatory requirements and to respond to developing
threats, as well as alignment of standards and processes as Credit Suisse clients are migrated to UBS platforms.
In the US, UBS AG has been subject to a Consent Order with the Office of the Comptroller of the Currency (the
OCC) since May 2018 relating to our US branch AML and KYC programs. In response, we have introduced
significant improvements to our framework for the purpose of ensuring sustainable remediation of US-relevant
Bank Secrecy Act / AML issues across relevant US legal entities.
Achieving fair outcomes for our clients, upholding market integrity and cultivating the highest standards of
employee conduct are of critical importance to us. We maintain a conduct risk framework across our activities,
which is designed to align our standards and conduct with these objectives and to retain momentum on fostering
a strong culture.
In September 2022, the US Securities and Exchange Commission (the SEC) and the Commodity Futures Trading
Commission (the CFTC) issued settlement orders relating to communications recordkeeping requirements in our US
broker-dealers and our registered swap dealers. In response to identified shortcomings, we are continuing to
implement a global remediation program.
Capital management
The disclosures in this section are provided for UBS AG on a consolidated basis and focus on key developments
during the reporting period and information in accordance with the Basel III framework, as applicable to Swiss
systemically relevant banks (SRBs). They should be read in conjunction with “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS AG Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, which provides more information about relevant capital management
objectives, planning and activities, as well as the Swiss SRB total loss-absorbing capacity framework, on a UBS AG
consolidated basis.
UBS AG has contributed a significant portion of capital to, and provides substantial liquidity to, its subsidiaries.
Many of these subsidiaries are subject to regulations requiring compliance with minimum capital, liquidity and
similar requirements.
›
Refer to the 31 March 2024 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, for more
information about additional regulatory disclosures for UBS Group AG on a consolidated basis, as well as the
significant regulated subsidiaries and sub-groups of UBS Group AG
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 27
Swiss SRB going and gone concern requirements and information
As of 31.3.24
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
1
1
Common equity tier 1 capital
2
of which: minimum capital
of which: buffer capital
of which: countercyclical buffer
Maximum additional tier 1 capital
of which: additional tier 1 capital
of which: additional tier 1 buffer capital
Eligible going concern capital
Total going concern capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
3
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
of which: base requirement including add-ons for market share and LRD
7
7
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible unsecured debt
Total loss-absorbing capacity
Required total loss-absorbing capacity
Eligible total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
1 Includes applicable add-ons of 1.44% for risk-weighted assets (RWA) and 0.50% for leverage ratio denominator (LRD). 2 Our minimum CET1 leverage ratio requirement of 3.5% consists of a 1.5% base
requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement and a 0.25% market share add-on requirement based on our Swiss credit business. 3 Existing outstanding low-trigger
additional tier 1 capital instruments qualify as going concern capital at the UBS AG consolidated level, as agreed with FINMA, until their first call date. As of their first call date, these instruments are eligible to meet
the gone concern requirements. 4 A maximum of 25% of the gone concern requirements can be met with instruments that have a remaining maturity of between one and two years. Once at least 75% of the
minimum gone concern requirement has been met with instruments that have a remaining maturity of greater than two years, all instruments that have a remaining maturity of between one and two years remain
eligible to be included in the total gone concern capital. 5 From 1 January 2023, the resolvability discount on the gone concern capital requirements for systemically important banks (SIBs) has been replaced with
reduced base gone concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical buffer requirements). 6 As of July 2024, FINMA will have the authority to
impose a surcharge of up to 25% of the total going concern capital requirements should obstacles to an SIB’s resolvability be identified in future resolvability assessments. 7 Includes applicable add-ons of 1.08%
for RWA and 0.38% for LRD.
UBS AG, on a consolidated basis, is subject to the going and gone concern requirements of the Swiss Capital
Adequacy Ordinance that include the too-big-to-fail (TBTF) provisions applicable to Swiss SRBs. The table above
provides the risk-weighted asset (RWA)- and leverage ratio denominator (LRD)-based requirements and information
as of 31 March 2024.
UBS AG and UBS Switzerland AG are subject to going and gone concern requirements on a standalone basis.
Additional capital requirements for UBS AG standalone under current requirements
Effective at the time of the merger with Credit Suisse AG, UBS AG standalone will continue to adhere to capital
requirements on a fully applied basis, including risk-weights of 250% and 400% for Swiss and foreign
participations, respectively, and after the removal of the regulatory filter that had been granted to Credit Suisse AG
standalone prior to the merger. A transition to the UBS approach for the treatment of Credit Suisse AG standalone
participations would have reduced CET1 capital by around USD 9bn, using Credit Suisse balances as of 31 March
2023.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 28
Total loss-absorbing capacity
The table below provides Swiss SRB going and gone concern information based on the Swiss SRB framework and
requirements that are discussed under “Capital management” in the “Capital, liquidity and funding, and balance
sheet” section of the UBS AG Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
.
Swiss SRB going and gone concern information
USD m, except where indicated
31.3.24
31.12.23
Eligible going concern capital
Total going concern capital
Total tier 1 capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible unsecured debt
Total loss-absorbing capacity
Total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
of which: common equity tier 1 capital ratio
Gone concern loss-absorbing capacity ratio
Total loss-absorbing capacity ratio
Leverage ratios (%)
Going concern leverage ratio
of which: common equity tier 1 leverage ratio
Gone concern leverage ratio
Total loss-absorbing capacity leverage ratio
Total loss-absorbing capacity and movement
Total loss-absorbing capacity (TLAC) increased by USD 1.8bn to USD 112.8bn in the first quarter of 2024.
Going concern capital and movement
Going concern capital increased by USD 1.4bn to USD 58.1bn. Common equity tier 1 (CET1) capital decreased by
USD 0.3bn to USD 43.9bn, primarily as the operating profit before tax of USD 1.4bn was more than offset by
negative effects from foreign currency translation of USD 0.8bn, current tax expenses of USD 0.4bn and dividend
accruals of USD 0.4bn.
Loss-absorbing additional tier 1 (AT1) capital issued by the Group and on lent to UBS AG increased by USD 1.7bn
to USD 14.2bn, mainly reflecting the issuance of two AT1 capital instruments equivalent to a total of USD 1.5bn.
Following the approval of a minimum amount of conversion capital by UBS Group AG’s shareholders at the 2024
Annual General Meeting, AT1 capital instruments issued from the beginning of the fourth quarter of 2023 are now,
upon the occurrence of a trigger event or a viability event, subject to conversion into UBS Group AG ordinary shares
rather than a write-down.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 29
Gone concern loss-absorbing capacity and movement
Total gone concern loss-absorbing capacity increased by USD 0.3bn to USD 54.8bn and included USD 54.2bn of
TLAC-eligible unsecured debt instruments that were issued by the Group and on lent to UBS AG. The increase of
USD 0.3bn mainly reflected new issuances totaling USD 5.4bn equivalent of TLAC-eligible unsecured debt
instruments, largely offset by the call of USD 2.1bn equivalent of TLAC-eligible unsecured debt instruments, a
USD 1.9bn equivalent of TLAC-eligible unsecured debt instrument that ceased to be eligible as gone concern capital
when UBS Group AG issued a notice of redemption of the instrument in the first quarter of 2024, and negative
impacts from interest rate risk hedge, foreign currency translation and other effects.
›
Refer to “Bondholder information” at
ubs.com/investors
and terms and conditions of capital instruments
Loss-absorbing capacity and leverage ratios
The CET1 capital ratio increased to 13.3% from 13.2%, reflecting a USD 5.2bn decrease in RWA, partly offset by
the aforementioned decrease in CET1 capital.
The CET1 leverage ratio increased to 4.1% from 4.0%, largely due to a USD 25.8bn decrease in the LRD.
The gone concern loss-absorbing capacity ratio increased to 16.7% from 16.3%, mainly due to the aforementioned
decrease in RWA.
The gone concern leverage ratio increased to 5.1% from 4.9%, mainly reflecting the aforementioned decrease in
the LRD.
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 31.12.23
Operating profit / (loss) before tax
Current tax (expense) / benefit
Foreign currency translation effects, before tax
Other
1
Common equity tier 1 capital as of 31.3.24
Loss-absorbing additional tier 1 capital as of 31.12.23
Issuance of high-trigger loss-absorbing additional tier 1 capital
Interest rate risk hedge, foreign currency translation and other effects
Loss-absorbing additional tier 1 capital as of 31.3.24
Total going concern capital as of 31.12.23
Total going concern capital as of 31.3.24
Gone concern loss-absorbing capacity
Tier 2 capital as of 31.12.23
Interest rate risk hedge, foreign currency translation and other effects
Tier 2 capital as of 31.3.24
TLAC-eligible unsecured debt as of 31.12.23
Issuance of TLAC-eligible unsecured debt
Call of TLAC-eligible unsecured debt
Interest rate risk hedge, foreign currency translation and other effects
TLAC-eligible unsecured debt as of 31.3.24
Total gone concern loss-absorbing capacity as of 31.12.23
Total gone concern loss-absorbing capacity as of 31.3.24
Total loss-absorbing capacity
Total loss-absorbing capacity as of 31.12.23
Total loss-absorbing capacity as of 31.3.24
1 Includes dividend accruals for the current year and movements related to other items.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 30
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
31.3.24
31.12.23
Total equity under IFRS Accounting Standards
Equity attributable to non-controlling interests
Defined benefit plans, net of tax
Deferred tax assets recognized for tax loss carry-forwards
Deferred tax assets for unused tax credits
Deferred tax assets on temporary differences, excess over threshold
Goodwill, net of tax
1
Intangible assets, net of tax
Expected losses on advanced internal ratings-based portfolio less provisions
Unrealized (gains) / losses from cash flow hedges, net of tax
Own credit related to (gains) / losses on financial liabilities measured at fair value that existed at the balance sheet date, net of tax
Own credit related to (gains) / losses on derivative financial instruments that existed at the balance sheet date
Prudential valuation adjustments
Accruals for dividends to shareholders for 2023
Other
2
Total common equity tier 1 capital
1 Includes goodwill related to significant investments in financial institutions of USD 19m as of 31 March 2024 (USD 20m as of 31 December 2023) presented on the balance sheet line Investments in associates.
2 Includes dividend accruals for the current year and other items.
Additional information
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our RWA by
USD 14bn and our CET1 capital by USD 1.4bn as of 31 March 2024 (31 December 2023: USD 15bn and USD 1.5bn,
respectively) and decreased our CET1 capital ratio by 15 basis points (31 December 2023: 12 basis points).
Conversely, a 10% appreciation of the US dollar against other currencies would have decreased our RWA by USD
13bn and our CET1 capital by USD 1.2bn (31 December 2023: USD 13bn and USD 1.4bn, respectively) and
increased our CET1 capital ratio by 14 basis points (31 December 2023: 12 basis points).
Leverage ratio denominator
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our LRD by
USD 65bn as of 31 March 2024 (31 December 2023: USD 69bn) and decreased our CET1 leverage ratio by 11 basis
points (31 December 2023: 10 basis points). Conversely, a 10% appreciation of the US dollar against other
currencies would have decreased our LRD by USD 59bn (31 December 2023: USD 62bn) and increased our CET1
leverage ratio by 11 basis points (31 December 2023: 11 basis points).
The aforementioned sensitivities do not consider foreign currency translation effects related to defined benefit plans
other than those related to the currency translation of the net equity of foreign operations.
›
Refer to “Active management of sensitivity to foreign exchange movements” under “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS AG Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
Estimated effect on capital from litigation, regulatory and similar matters subject to provisions and contingent
liabilities
The estimated loss in capital that UBS AG could incur as a result of the risks associated with the matters is described
in “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this report.
UBS AG has employed for this purpose the advanced measurement approach (AMA) methodology that UBS uses
when determining the capital requirements associated with operational risks, based on a 99.9% confidence level
over a 12-month horizon. The methodology takes into consideration UBS and industry experience for the AMA
operational risk categories to which those matters correspond, as well as the external environment affecting risks
of these types, in isolation from other areas. On this basis, the maximum loss in capital that it could incur over a
12-month period as a result of the risks associated with these operational risk categories has been estimated at
USD 4.2bn as of 31 March 2024. This estimate is not related to and does not take into account any provisions
recognized for any of these matters and does not constitute a subjective assessment of the actual exposure in any
of these matters.
›
Refer to “Non-financial risk” in the “Risk management and control” section of the UBS AG Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for more information
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 31
Risk-weighted assets
During the first quarter of 2024, RWA decreased by USD 5.2bn to USD 328.7bn, driven by decreases of USD 7.3bn
resulting from asset size and other movements and USD 6.7bn resulting from currency effects, partly offset by an
increase of USD 8.8bn from model updates and methodology changes.
Movement in risk-weighted assets, by key driver
USD bn
RWA as of
31.12.23
Currency
effects
Model updates
and
methodology
changes
Asset size and
other
1
RWA as of
31.3.24
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
1 Includes the Pillar 3 categories “Asset size,” “Credit quality of counterparties,” “Acquisitions and disposals” and “Other.” For more information, refer to the 31 March 2024 Pillar 3 Report, available under “Pillar 3
disclosures” at ubs.com/investors. 2 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and securitization exposures in the banking book. 3 Non-
counterparty-related risk includes deferred tax assets recognized for temporary differences, property, equipment, software and other items.
Credit and counterparty credit risk
Credit and counterparty credit risk RWA were USD 206.3bn as of 31 March 2024. The decrease of USD 13.8bn
included a decrease related to currency effects of USD 6.4bn.
Asset size and other movements resulted in a USD 6.9bn decrease in RWA.
–
Group Items RWA decreased by USD 4.2bn, mainly reflecting a decrease due to repayment of funding by Credit
Suisse.
–
Global Wealth Management RWA decreased by USD 2.0bn, mainly due to lower RWA from loans.
–
Investment Bank RWA decreased by USD 1.0bn, mainly due to lower RWA from derivatives.
–
Personal & Corporate Banking RWA increased by USD 0.4bn.
–
Non-core and Legacy RWA decreased by USD 0.1bn.
–
Asset Management RWA decreased by USD 0.1bn.
Model updates and methodology changes resulted in an RWA decrease of USD 0.6bn, mainly reflecting an RWA
decrease of USD 1.5bn related to the recalibration of certain multipliers as a result of improvements to models,
partly offset by RWA increases from model updates related to income-producing real estate, derivatives and
securities financing transactions.
›
Refer to “Changes to segment reporting in 2024” in the “UBS business divisions and Group Items” section of the
UBS Group first quarter 2024 report, available under “Quarterly reporting” at
ubs.com/investors
, and “Note 2
Segment reporting” in the “Consolidated financial statements” section of this report for more information about
the realignment of the business divisions and the updates related to allocations from Group Treasury in the first
quarter of 2024
›
Refer to the 31 March 2024 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, for more
information on a UBS Group AG consolidated basis
›
Refer to “Credit risk” in the “Risk management and control” section of this report for more information
Market risk
Market risk RWA increased by USD 4.4bn to USD 19.1bn in the first quarter of 2024, driven by an increase of
USD 4.6bn that stems from the integration of time decay into regulatory VaR and stressed VaR for derivatives with
optionality approved by the Swiss Financial Market Supervisory Authority (FINMA), which was partially offset by an
improvement in the profit and loss representation of derivatives with multiple underlyings. This impact was partially
offset by a decrease of USD 0.2bn from asset size and other movements in Global Markets in the Investment Bank.
The FINMA-agreed temporary measure that was introduced in the fourth quarter of 2022, and scheduled to be
lifted with the implementation of the aforementioned changes, has not yet been removed. The temporary time
decay RWA buffer that was introduced in the third quarter of 2021 has dropped to an immaterial level.
›
Refer to the 31 March 2024 Pillar 3 Report, available under “Pillar 3 disclosures” at
information on a UBS Group AG consolidated basis
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 32
Operational risk
Operational risk RWA increased by USD 4.8bn to USD 81.3bn, driven by a recalibration of the advanced
measurement approach (AMA) model used for the calculation of operational risk capital. Furthermore, in the first
quarter of 2024, we updated the methodology that we use to allocate operational risk RWA to the business divisions
and Group Items. The updated allocation reflects relative changes in financial metrics and operational losses as
observed at year-end 2023.
›
Refer to “Non-financial risk” in the “Risk management and control” section of the UBS AG Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for information about the AMA model
Risk-weighted assets, by business division and Group Items
1
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
Total
RWA
31.3.24
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
31.12.23
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
31.3.24 vs 31.12.23
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
1 From the first quarter of 2024 onward, we have started to further push out risk-weighted assets from Group Items to the business divisions. Prior periods have been restated to reflect these changes. Refer to “Note 2
Segment reporting” in the “Consolidated financial statements” section of this report for more information about the realignment of the business divisions. 2 Includes settlement risk, credit valuation adjustments,
equity and investments in funds exposures in the banking book, and securitization exposures in the banking book. 3 Non-counterparty-related risk includes deferred tax assets recognized for temporary differences
(31 March 2024: USD 11.3bn; 31 December 2023: USD 11.3bn), as well as property, equipment, software and other items (31 March 2024: USD 10.8bn; 31 December 2023: USD 11.4bn).
Leverage ratio denominator
During the first quarter of 2024, the LRD decreased by USD 25.8bn to USD 1,078.6bn, driven by currency effects
of USD 33.2bn, partly offset by asset size and other movements of USD 7.4bn.
Movement in leverage ratio denominator, by key driver
USD bn
LRD as of
31.12.23
Currency
effects
Asset size and
other
LRD as of
31.3.24
On-balance sheet exposures (excluding derivatives and securities financing transactions)
1
Derivatives
Securities financing transactions
Off-balance sheet items
Deduction items
Total
1 The exposures exclude derivative financial instruments, cash collateral receivables on derivative instruments, receivables from securities financing transactions, and margin loans, as well as prime brokerage receivables
and financial assets at fair value not held for trading, both related to securities financing transactions. These exposures are presented separately under Derivatives and Securities financing transactions in this table.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 33
The LRD movements described below exclude currency effects.
On-balance sheet exposures (excluding derivatives and securities financing transactions) decreased by USD 6.5bn,
mainly due to lower lending balances, including a reduction due to repayment of funding by Credit Suisse, partly
offset by higher trading portfolio assets, mainly in the Investment Bank, driven by higher inventory held to hedge
client positions.
Derivative exposures increased by USD 9.0bn, mainly driven by higher exposures in the Investment Bank.
Securities financing transactions increased by USD 4.3bn, mainly due to client-driven increases in the Investment
Bank, partly offset by roll-offs of excess cash re-investments in Group Treasury.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
Leverage ratio denominator, by business division and Group Items
1
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
31.3.24
Total IFRS Accounting Standards assets
Difference in scope of consolidation
Less: derivatives and securities financing transactions
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
31.12.23
Total IFRS Accounting Standards assets
Difference in scope of consolidation
Less: derivatives and securities financing transactions
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
31.3.24 vs 31.12.23
Total IFRS Accounting Standards assets
Difference in scope of consolidation
Less: derivatives and securities financing transactions
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
1 From the first quarter of 2024 onward, we have started to further push out LRD from Group Items to the business divisions. Prior periods have been restated to reflect these changes. Refer to “Note 2 Segment
reporting” in the “Consolidated financial statements” section of this report for more information about the realignment of the business divisions.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 34
Liquidity and funding management
Strategy, objectives and governance
This section provides liquidity and funding management information and should be read in conjunction with
“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the
UBS AG Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, which provides more
information about UBS AG’s strategy, objectives and governance in connection with liquidity and funding
management.
Liquidity coverage ratio
In the first quarter of 2024, the quarterly average liquidity coverage ratio (the LCR) of UBS AG consolidated
increased 1.7 percentage points to 191.4%. The movement in the quarterly average LCR was driven by a decrease
in net cash outflows, partly offset by a decrease in high-quality liquid assets (HQLA). Average net cash outflows
decreased by USD 3.0bn to USD 131.3bn, reflecting higher net inflows from securities financing transactions and
lower outflows from derivatives and loan commitments, partly offset by higher outflows from customer deposits.
Average HQLA decreased by USD 3.5bn to USD 251.0bn, mainly driven by lower cash available due to higher
investments in trading portfolio assets and a decrease in debt issued, as well as shifts into non-HQLA securities
financing transactions. The decrease was partly offset by an increase in cash available resulting from customer
deposits and loan repayments, as well as a reduction in lending to Credit Suisse.
›
Refer to the
31 March 2024 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, and to
“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the
UBS AG Annual Report 2023 for more information about the LCR on a UBS AG consolidated basis
Liquidity coverage ratio
USD bn, except where indicated
Average 1Q24
1
Average 4Q23
1
High-quality liquid assets
Net cash outflows
2
Liquidity coverage ratio (%)
3
1 Calculated based on an average of 61 data points in the first quarter of 2024 and 63 data points in the fourth quarter of 2023. 2 Represents the net cash outflows expected over a stress period of 30 calendar
days. 3 Calculated after the application of haircuts and inflow and outflow rates, as well as, where applicable, caps on Level 2 assets and cash inflows.
Net stable funding ratio
As of 31 March 2024, the net stable funding ratio (the NSFR) of UBS AG consolidated increased 2 percentage points
to 121.6%.
Required stable funding decreased by USD 19.1bn to USD 484.7bn, mainly driven by lower lending assets, primarily
reflecting negative currency effects, and a reduction in lending to Credit Suisse. Available stable funding decreased
by USD 13.3bn to USD 589.3bn, mainly driven by lower customer deposits, predominantly due to negative currency
effects, and lower debt issued.
›
Refer to the 31 March 2024 Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors
, and to
“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the UBS
AG Annual Report 2023 for more information about the NSFR on a UBS AG consolidated basis
Net stable funding ratio
USD bn, except where indicated
31.3.24
31.12.23
Available stable funding
589.3
602.6
Required stable funding
484.7
503.8
Net stable funding ratio (%)
121.6
119.6
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 35
Balance sheet and off-balance sheet
Strategy, objectives and governance
This section provides balance sheet and off-balance sheet information and should be read in conjunction with
“Balance sheet and off-balance sheet” in the “Capital, liquidity and funding, and balance sheet” section of the
UBS AG Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, which provides more
information about the balance sheet and off-balance sheet positions.
Balances disclosed in this report represent quarter-end positions, unless indicated otherwise. Intra-quarter balances
fluctuate in the ordinary course of business and may differ from quarter-end positions.
Balance sheet assets (31 March 2024 vs 31 December 2023)
Total assets were USD 1,116.8bn as of 31 March 2024, a decrease of USD 39.2bn compared with 31 December
2023.
Lending assets decreased by USD 28.7bn, mainly reflecting negative currency effects of approximately USD 16.6bn
and a reduction in lending to Credit Suisse. Cash and balances at central banks decreased by USD 8.4bn, primarily
due to currency effects. Derivatives and cash collateral receivables on derivative instruments decreased by
USD 6.1bn, mainly in Derivatives & Solutions in the Investment Bank, primarily reflecting decreases in foreign
currency contracts, where the contracts in place at the end of March 2024 had lower values compared with the
contracts in place at the end of December 2023, partly offset by an increase in cash collateral receivables on
derivative instruments in Financing in the Investment Bank, due to an increase in client-cleared transactions.
These decreases were partly offset by a USD 5.2bn increase in trading assets, primarily reflecting higher inventory
levels held to hedge client positions, as well as purchases of government and corporate bonds in Derivatives &
Solutions to facilitate client trading activity.
›
Refer to the “Consolidated financial statements” section of this report for more information
Assets
As of
% change from
USD bn
31.3.24
31.12.23
31.12.23
Cash and balances at central banks
Lending
1
Securities financing transactions at amortized cost
Trading assets
Derivatives and cash collateral receivables on derivative instruments
Brokerage receivables
Other financial assets measured at amortized cost
Other financial assets measured at fair value
2
Non-financial assets
Total assets
1 Consists of Loans and advances to customers and Amounts due from banks. 2 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair value through other comprehensive
income.
Balance sheet liabilities (31 March 2024 vs 31 December 2023)
Total liabilities were USD 1,061.4bn as of 31 March 2024, a decrease of USD 39.0bn compared with 31 December
2023.
Customer deposits decreased by USD 19.7bn, predominantly reflecting currency effects. Derivatives and cash
collateral payables on derivative instruments decreased by USD 18.0bn, mainly in Derivatives & Solutions, primarily
reflecting decreases in foreign currency contracts with the same drivers as on the asset side, and a decrease in cash
collateral payables on derivative instruments driven by decreases in derivative financial assets. Debt issued
designated at fair value and long-term debt issued measured at amortized cost decreased by USD 4.5bn, mainly
driven by net redemption of debt issued designated at fair value in Derivatives & Solutions. These decreases were
partly offset by a USD 3.9bn increase in Brokerage payables, mainly in Financing, driven by a decrease in netting
effects.
The “Liabilities, by product and currency” table in this section provides more information about funding sources.
›
Refer to “Bondholder information” at
for more information about capital and senior debt
instruments
›
Refer to the “Consolidated financial statements” section of this report for more information
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 36
Liabilities and equity
As of
% change from
USD bn
31.3.24
31.12.23
31.12.23
Short-term borrowings
1,2
Securities financing transactions at amortized cost
Customer deposits
Funding from UBS Group AG measured at amortized cost
Debt issued designated at fair value and long-term debt issued measured at amortized cost
2
Trading liabilities
Derivatives and cash collateral payables on derivative instruments
Brokerage payables
Other financial liabilities measured at amortized cost
Other financial liabilities designated at fair value
Non-financial liabilities
Total liabilities
Share capital
Share premium
Retained earnings
Other comprehensive income
3
Total equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Consists of short-term debt issued measured at amortized cost and amounts due to banks. 2 The classification of debt issued measured at amortized cost into short-term and long-term is based on original
contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any early redemption features. 3 Excludes other
comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Equity (31 March 2024 vs 31 December 2023)
Equity attributable to shareholders decreased by USD 188m to USD 55,046m as of 31 March 2024.
The decrease of USD 188m was mainly driven by negative total comprehensive income attributable to shareholders
of USD 166m, reflecting net profit of USD 1,006m and negative other comprehensive income (OCI) of USD 1,171m.
OCI mainly included negative OCI related to foreign currency translation of USD 744m and negative cash flow
hedge OCI of USD 467m.
The 2023 dividend distribution to UBS Group AG reduced equity attributable to shareholders by USD 3,000m in
the second quarter of 2024.
›
Refer to the “UBS AG consolidated performance” and “Consolidated financial statements” sections of this report
for more information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
Liabilities, by product and currency
USD equivalent
All currencies
of which: USD
of which: CHF
of which: EUR
USD bn
31.3.24
31.12.23
31.3.24
31.12.23
31.3.24
31.12.23
31.3.24
31.12.23
Short-term borrowings
51.6
54.0
31.3
35.6
4.5
4.3
6.1
5.9
of which: amounts due to banks
19.2
16.7
9.0
8.1
4.1
3.9
1.2
0.7
of which: short-term debt issued
1,2
32.4
37.3
22.3
27.6
0.4
0.3
4.9
5.2
Securities financing transactions at amortized cost
6.8
5.8
6.1
5.1
0.0
0.0
0.3
0.3
Customer deposits
536.0
555.7
238.1
236.4
199.8
216.0
48.7
51.5
of which: demand deposits
137.3
146.2
37.6
36.8
54.4
61.5
23.3
24.7
of which: retail savings / deposits
144.9
152.7
29.6
28.9
111.1
119.2
4.1
4.5
of which: sweep deposits
37.6
41.0
37.6
41.0
0.0
0.0
0.0
0.0
of which: time deposits
216.2
215.8
133.3
129.6
34.2
35.4
21.2
22.3
Funding from UBS Group AG measured at amortized cost
67.9
67.3
46.8
44.6
1.6
2.0
17.4
18.9
Debt issued designated at fair value and long-term debt issued measured at amortized
cost
2
114.3
118.8
70.8
75.2
18.8
18.8
14.4
14.4
Trading liabilities
33.0
31.7
10.2
12.0
1.3
1.0
9.6
8.9
Derivatives and cash collateral payables on derivative instruments
157.6
175.6
129.8
146.7
3.8
4.1
14.2
15.2
Brokerage payables
46.2
42.3
35.4
31.4
0.5
0.7
2.8
2.4
Other financial liabilities measured at amortized cost
13.7
12.7
8.3
7.6
2.1
1.9
1.1
1.0
Other financial liabilities designated at fair value
26.8
27.4
3.6
5.7
0.1
0.1
4.5
4.1
Non-financial liabilities
7.5
9.2
3.0
2.4
1.4
2.0
2.1
2.5
Total liabilities
1,061.4
1,100.4
583.4
602.7
233.8
251.0
121.2
125.0
1 Short-term debt issued consists of certificates of deposit, commercial paper, acceptances and promissory notes, and other money market paper. 2 The classification of debt issued measured at amortized cost into
short-term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any
early redemption features.
UBS AG first quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 37
Off-balance sheet (31 March 2024 vs 31 December 2023)
Guarantees decreased by USD 2.6bn, mainly driven by a decrease in sponsored repo clearing in Group Treasury.
Irrevocable loan commitments increased by USD 1.8bn, mainly in the Investment Bank. Committed unconditionally
revocable credit lines decreased by USD 5.3bn, mainly driven by a decrease in credit lines provided to clients in
Global Banking in the Investment Bank, as well as currency effects. Forward starting reverse repurchase and
securities borrowing agreements decreased by USD 1.6bn, in Group Treasury, reflecting fluctuations in levels of
business division activity in short-dated securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
31.3.24
31.12.23
31.12.23
Guarantees
1,2
Irrevocable loan commitments
1
Committed unconditionally revocable credit lines
Forward starting reverse repurchase and securities borrowing agreements
1 Guarantees and irrevocable loan commitments are shown net of sub-participations. 2 Includes guarantees measured at fair value through profit or loss.
UBS AG first quarter 2024 report |
Consolidated financial statements 38
Consolidated financial
statements
Unaudited
Table of contents
UBS AG interim consolidated financial
statements (unaudited)
39
40
41
42
43
44
1
45
2
46
3
47
4
47
5
47
6
48
7
48
8
54
9
60
10
61
11
62
12
62
13
62
14
63
15
UBS AG first quarter 2024 report |
Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 39
UBS AG interim consolidated
financial statements (unaudited)
Income statement
For the quarter ended
USD m
Note
31.3.24
31.12.23
31.3.23
Interest income from financial instruments measured at amortized cost and fair value through
other comprehensive income
3
Interest expense from financial instruments measured at amortized cost
3
Net interest income from financial instruments measured at fair value through profit or loss and other
3
Net interest income
3
Other net income from financial instruments measured at fair value through profit or loss
Fee and commission income
4
Fee and commission expense
4
Net fee and commission income
4
Other income
5
Total revenues
Credit loss expense / (release)
8
Personnel expenses
6
General and administrative expenses
7
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
UBS AG first quarter 2024 report |
Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 40
Statement of comprehensive income
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Comprehensive income attributable to shareholders
1
Net profit / (loss)
Other comprehensive income that may be reclassified to the income statement
Foreign currency translation
Foreign currency translation movements related to net assets of foreign operations, before tax
Effective portion of changes in fair value of hedging instruments designated as net investment hedges, before tax
Foreign currency translation differences on foreign operations reclassified to the income statement
Effective portion of changes in fair value of hedging instruments designated as net investment hedges reclassified to
the income statement
Income tax relating to foreign currency translations, including the effect of net investment hedges
Subtotal foreign currency translation, net of tax
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
Net realized (gains) / losses reclassified to the income statement from equity
Income tax relating to net unrealized gains / (losses)
Subtotal financial assets measured at fair value through other comprehensive income, net of tax
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax
Net (gains) / losses reclassified to the income statement from equity
Income tax relating to cash flow hedges
Subtotal cash flow hedges, net of tax
Cost of hedging
Cost of hedging, before tax
Income tax relating to cost of hedging
Subtotal cost of hedging, net of tax
Total other comprehensive income that may be reclassified to the income statement, net of tax
Other comprehensive income that will not be reclassified to the income statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
Income tax relating to defined benefit plans
Subtotal defined benefit plans, net of tax
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated at fair value, before tax
Income tax relating to own credit on financial liabilities designated at fair value
Subtotal own credit on financial liabilities designated at fair value, net of tax
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total other comprehensive income
Total comprehensive income attributable to shareholders
Comprehensive income attributable to non-controlling interests
Net profit / (loss)
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total comprehensive income attributable to non-controlling interests
Total comprehensive income
Net profit / (loss)
Other comprehensive income
of which: other comprehensive income that may be reclassified to the income statement
of which: other comprehensive income that will not be reclassified to the income statement
Total comprehensive income
1 Refer to the “UBS AG consolidated performance” section of this report for more information.
UBS AG first quarter 2024 report |
Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 41
Balance sheet
USD m
Note
31.3.24
31.12.23
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
10
Loans and advances to customers
8
Other financial assets measured at amortized cost
11
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
9
of which: assets pledged as collateral that may be sold or repledged by counterparties
Derivative financial instruments
9, 10
Brokerage receivables
9
Financial assets at fair value not held for trading
9
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
9
Investments in associates
Property, equipment and software
Goodwill and intangible assets
Deferred tax assets
Other non-financial assets
11
Total assets
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
10
Customer deposits
Funding from UBS Group AG measured at amortized cost
12
Debt issued measured at amortized cost
14
Other financial liabilities measured at amortized cost
11
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
9
Derivative financial instruments
9, 10
Brokerage payables designated at fair value
9
Debt issued designated at fair value
9, 13
Other financial liabilities designated at fair value
9, 11
Total financial liabilities measured at fair value through profit or loss
Provisions
15
Other non-financial liabilities
11
Total liabilities
Equity
Share capital
Share premium
Retained earnings
Other comprehensive income recognized directly in equity, net of tax
Equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
UBS AG first quarter 2024 report |
Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 42
Statement of changes in equity
USD m
Share
capital and
share
premium
Retained
earnings
OCI recognized
directly in
equity,
net of tax
1
of which:
foreign
currency
translation
of which:
cash flow
hedges
Total equity
attributable to
shareholders
Balance as of 1 January 2024
2
Premium on shares issued and warrants exercised
Tax (expense) / benefit
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
New consolidations / (deconsolidations) and other increases / (decreases)
Total comprehensive income for the period
of which: net profit / (loss)
of which: OCI, net of tax
Balance as of 31 March 2024
2
Non-controlling interests as of 31 March 2024
Total equity as of 31 March 2024
Balance as of 1 January 2023
2
Premium on shares issued and warrants exercised
3
Tax (expense) / benefit
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
New consolidations / (deconsolidations) and other increases / (decreases)
Total comprehensive income for the period
of which: net profit / (loss)
of which: OCI, net of tax
Balance as of 31 March 2023
2
Non-controlling interests as of 31 March 2023
Total equity as of 31 March 2023
1 Excludes other comprehensive income related to defined benefit plans and own credit that is recorded directly in Retained earnings. 2 Excludes non-controlling interests. 3 Includes decreases related to recharges
by UBS Group AG for share-based compensation awards granted to employees of UBS AG or its subsidiaries.
UBS AG first quarter 2024 report |
Consolidated financial statements | UBS AG interim consolidated financial statements (unaudited) 43
Statement of cash flows
Year-to-date
USD m
31.3.24
31.3.23
Cash flow from / (used in) operating activities
Net profit / (loss)
Non-cash items included in net profit and other adjustments:
Depreciation, amortization and impairment of non-financial assets
Credit loss expense / (release)
Share of net (profit) / loss of associates and joint ventures and impairment related to associates
Deferred tax expense / (benefit)
Net loss / (gain) from investing activities
Net loss / (gain) from financing activities
Other net adjustments
1
Net change in operating assets and liabilities:
1
Amounts due from banks and amounts due to banks
Receivables from securities financing transactions measured at amortized cost
Payables from securities financing transactions measured at amortized cost
Cash collateral on derivative instruments
Loans and advances to customers
Customer deposits
Financial assets and liabilities at fair value held for trading and derivative financial instruments
Brokerage receivables and payables
Financial assets at fair value not held for trading and other financial assets and liabilities
Provisions and other non-financial assets and liabilities
Income taxes paid, net of refunds
Net cash flow from / (used in) operating activities
Cash flow from / (used in) investing activities
Purchase of property, equipment and software
Net (purchase) / redemption of financial assets measured at fair value through other comprehensive income
Purchase of debt securities measured at amortized cost
Disposal and redemption of debt securities measured at amortized cost
Net cash flow from / (used in) investing activities
Cash flow from / (used in) financing activities
Net issuance (repayment) of short-term debt measured at amortized cost
Issuance of debt designated at fair value and long-term debt measured at amortized cost
3
Repayment of debt designated at fair value and long-term debt measured at amortized cost
3
Inflows from securities financing transactions measured at amortized cost
4
Net cash flows from other financing activities
Net cash flow from / (used in) financing activities
Total cash flow
Cash and cash equivalents at the beginning of the period
Net cash flow from / (used in) operating, investing and financing activities
Effects of exchange rate differences on cash and cash equivalents
1
Cash and cash equivalents at the end of the period
5
of which: cash and balances at central banks
6
of which: amounts due from banks
6
of which: money market paper
6,7
Additional information
Net cash flow from / (used in) operating activities includes:
Interest received in cash
Interest paid in cash
Dividends on equity investments, investment funds and associates received in cash
8
1 Foreign currency translation and foreign exchange effects on operating assets and liabilities and on cash and cash equivalents are presented within the Other net adjustments line. Does not include foreign currency
hedge effects related to foreign exchange swaps. 2 Mainly reflects a reduction in lending to Credit Suisse. 3 Includes funding from UBS Group AG measured at amortized cost (recognized on the balance sheet in
Funding from UBS Group AG) and measured at fair value (recognized on the balance sheet in Other financial liabilities designated at fair value). 4 Reflects cash flows from securities financing transactions measured
at amortized cost that use UBS debt instruments as the underlying. 5 USD 4,906m and USD 4,137m of Cash and cash equivalents (mainly reflected in Amounts due from banks) were restricted as of 31 March 2024
and 31 March 2023, respectively. The amount as of 31 March 2024 includes cash and cash equivalents pledged to the depositor protection system in Switzerland, following new requirements that became effective
in the fourth quarter of 2023. Refer to “Note 22 Restricted and transferred financial assets” in the “Consolidated financial statements” section of the UBS AG Annual Report 2023 for more information. 6 Includes
only balances with an original maturity of three months or less. 7 Money market paper is included in the balance sheet under Financial assets at fair value not held for trading (31 March 2024: USD 6,854m;
31 March 2023: USD 9,644m), Other financial assets measured at amortized cost (31 March 2024: USD 170m; 31 March 2023: USD 218m), Financial assets measured at fair value through other comprehensive
income (31 March 2024: USD 420m; 31 March 2023: USD 0m) and Financial assets at fair value held for trading (31 March 2024: USD 245m; 31 March 2023: USD 39m). 8 Includes dividends received from
associates reported within Net cash flow from / (used in) investing activities.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 44
Notes to the UBS AG interim consolidated financial
statements (unaudited)
Note 1 Basis of accounting
Basis of preparation
The consolidated financial statements (the financial statements) of UBS AG and its subsidiaries (together, UBS AG)
are prepared in accordance with IFRS Accounting Standards, as issued by the International Accounting Standards
Board (the IASB), and are presented in US dollars. These interim financial statements are prepared in accordance
with IAS 34,
Interim Financial Reporting
.
In preparing these interim financial statements, the same accounting policies and methods of computation have
been applied as in the UBS AG consolidated annual financial statements for the period ended 31 December 2023,
except for the changes described in this Note and changes in segment reporting as set out in Note 2. These interim
financial statements are unaudited and should be read in conjunction with UBS AG’s audited consolidated financial
statements in the UBS AG Annual Report 2023 and the “Management report” sections of this report. In the opinion
of management, all necessary adjustments have been made for a fair presentation of UBS AG’s financial position,
results of operations and cash flows.
Preparation of these interim financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and
liabilities. These estimates and assumptions are based on the best available information. Actual results in the future
could differ from such estimates and differences may be material to the financial statements. Revisions to estimates,
based on regular reviews, are recognized in the period in which they occur. For more information about areas of
estimation uncertainty that are considered to require critical judgment, refer to “Note 1a Material accounting
policies” in the “Consolidated financial statements” section of the UBS AG Annual Report 2023.
Amendments to IAS 12,
Income Taxes
UBS AG has applied for the purposes of these financial statements the exception that was introduced by the
amendments to IAS 12,
Income Taxes
, issued in May 2023 in relation to top-up taxes on income under Global Anti-
Base Erosion Rules that have been imposed under legislation that has been enacted or substantively enacted to
implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development.
The exception requires that deferred tax assets and deferred tax liabilities be neither recognized nor disclosed in
respect of such top-up taxes.
Other amendments to IFRS Accounting Standards
A number of minor amendments to IFRS Accounting Standards became effective from 1 January 2024 and have
had no material effect on UBS AG.
IFRS 18,
Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued a new standard, IFRS 18,
Presentation and Disclosure in Financial Statements,
replaces IAS 1,
Presentation of Financial Statements
. The main changes introduced by IFRS 18 relate to:
–
the structure of income statements;
–
new disclosure requirements for management performance measures (MPMs); and
–
enhanced guidance on aggregation / disaggregation of information on the face of financial statements and in
the notes thereto.
IFRS 18 will be effective from 1 January 2027 and will also apply to comparative information. UBS AG will first apply
these new requirements in the Annual Report 2027 and, for interim reporting, in the first quarter 2027 interim
report. UBS AG is assessing the impact of the new requirements on its reporting, but expects limited impact. UBS AG
will take the opportunity to refine the grouping of items in the primary financial statements and in the notes thereto
based on new principles of aggregation and disaggregation in IFRS 18.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 45
Note 1 Basis of accounting (continued)
Currency translation rates
The following table shows the rates of the main currencies used to translate the financial information of UBS AG’s
operations with a functional currency other than the US dollar into US dollars.
Closing exchange rate
Average rate
1
As of
For the quarter ended
31.3.24
31.12.23
31.3.23
31.3.24
31.12.23
31.3.23
1 CHF
1 EUR
1 GBP
100 JPY
1 Monthly income statement items of operations with a functional currency other than the US dollar are translated into US dollars using month-end rates. Disclosed average rates for a quarter represent an average of
three month-end rates, weighted according to the income and expense volumes of all operations of UBS AG with the same functional currency for each month. Weighted average rates for individual business divisions
may deviate from the weighted average rates for UBS AG.
Note 2 Segment reporting
As part of the continued refinement of UBS AG’s reporting structure and organizational setup, in the first quarter
of 2024 certain changes to Group Treasury allocations were made with an impact on segment reporting for
UBS AG’s business divisions and Group Items. Prior-period information has been adjusted for comparability.
UBS AG has allocated to the business divisions nearly all Group Treasury costs that historically were retained and
reported in Group Items. Costs continued to be retained in Group Items include costs related to hedging and own
debt, and deferred tax asset funding costs. In parallel with these changes, UBS AG has increased the allocation of
balance sheet resources from Group Treasury to the business divisions.
Following the changes outlined above, prior-period information for the first quarter of 2023 has been restated,
resulting in decreases in Operating profit / (loss) before tax of USD 4m for Global Wealth Management, USD 1m
for Personal & Corporate Banking and USD 11m for Group Items, and increases in Operating profit / (loss) before
tax of USD 1m for Asset Management and USD 16m for the Investment Bank, with no change to Non-core and
Legacy.
Prior-period information as of 31 December 2023 has also been restated, resulting in increases of Total assets of
USD 35.6bn in Global Wealth Management, USD 26.9bn in Personal & Corporate Banking and USD 21.4bn in the
Investment Bank, with a corresponding decrease of assets of USD 83.9bn in Group Items.
These changes had no effect on the reported results or financial position of UBS AG.
›
Refer to the “Management report” sections of this report and the “Consolidated financial statements” section of
the UBS AG Annual Report 2023 for more information about UBS AG’s business divisions
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 46
Note 2 Segment reporting (continued)
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
UBS AG
For the quarter ended 31 March 2024
Net interest income
Non-interest income
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
As of 31 March 2024
Total assets
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
UBS AG
For the quarter ended 31 March 2023
1
Net interest income
Non-interest income
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
As of 31 December 2023
1
Total assets
1 Comparative-period information has been restated for Group Treasury allocations.
Note 3 Net interest income
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Interest income from loans and deposits
1
Interest income from securities financing transactions measured at amortized cost
2
Interest income from other financial instruments measured at amortized cost
Interest income from debt instruments measured at fair value through other comprehensive income
Interest income from derivative instruments designated as cash flow hedges
Total interest income from financial instruments measured at amortized cost and fair value through other comprehensive income
Interest expense on loans and deposits
3
Interest expense on securities financing transactions measured at amortized cost
4
Interest expense on debt issued
Interest expense on lease liabilities
Total interest expense from financial instruments measured at amortized cost
Total net interest income from financial instruments measured at amortized cost and fair value through other comprehensive
income
Net interest income from financial instruments measured at fair value through profit or loss and other
Total net interest income
1 Consists of interest income from cash and balances at central banks, amounts due from banks, and cash collateral receivables on derivative instruments, as well as negative interest on amounts due to banks, customer
deposits, and cash collateral payables on derivative instruments. 2 Includes interest income on receivables from securities financing transactions and negative interest, including fees, on payables from securities
financing transactions. 3 Consists of interest expense on amounts due to banks, cash collateral payables on derivative instruments, customer deposits, and funding from UBS Group AG, as well as negative interest on
cash and balances at central banks, amounts due from banks, and cash collateral receivables on derivative instruments. 4 Includes interest expense on payables from securities financing transactions and negative
interest, including fees, on receivables from securities financing transactions.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 47
Note 4 Net fee and commission income
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Underwriting fees
M&A and corporate finance fees
Brokerage fees
Investment fund fees
Portfolio management and related services
Other
Total fee and commission income
1
of which: recurring
of which: transaction-based
of which: performance-based
Fee and commission expense
Net fee and commission income
1 Reflects third-party fee and commission income for the first quarter of 2024 of USD 3,506m for Global Wealth Management (fourth quarter of 2023: USD 3,197m; first quarter of 2023: USD 3,145m), USD 490m
for Personal & Corporate Banking (fourth quarter of 2023: USD 459m; first quarter of 2023: USD 449m), USD 671m for Asset Management (fourth quarter of 2023: USD 684m; first quarter of 2023: USD 687m),
USD 940m for the Investment Bank (fourth quarter of 2023: USD 876m; first quarter of 2023: USD 791m), negative USD 3m for Group Items (fourth quarter of 2023: USD 2m; first quarter of 2023: USD 3m) and
USD 3m for Non-core and Legacy (fourth quarter of 2023: USD 2m; first quarter of 2023: USD 0m).
Note 5 Other income
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Associates, joint ventures and subsidiaries
Net gains / (losses) from acquisitions and disposals of subsidiaries
1
Share of net profits of associates and joint ventures
2
Total
Income from properties
3
Income from shared services provided to UBS Group AG or its subsidiaries
Other
Total other income
1 Includes foreign exchange gains / (losses) reclassified from other comprehensive income related to the disposal or closure of foreign operations. 2 Includes a USD 255m share of proportionate impairment losses
reflected in the SIX Group profit and loss, of which USD 191m reported in Personal and Corporate Banking and USD 64m reported in Global Wealth Management. 3 Includes rent received from third parties.
Note 6 Personnel expenses
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Salaries and variable compensation
1
of which: variable compensation – financial advisors
2
Contractors
Social security
Post-employment benefit plans
Other personnel expenses
Total personnel expenses
1 Includes role-based allowances. 2 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. Also includes expenses related to
compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 48
Note 7 General and administrative expenses
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Outsourcing costs
Technology costs
Consulting, legal and audit fees
Real estate and logistics costs
Market data services
Marketing and communication
Travel and entertainment
Litigation, regulatory and similar matters
1
Other
of which: shared services costs charged by UBS Group AG or its subsidiaries
Total general and administrative expenses
1 Reflects the net increase in provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to Note 15b for more information.
Note 8 Expected credit loss measurement
a) Credit loss expense / release
Total net credit loss expenses in the first quarter of 2024 were USD 52m, reflecting USD 1m net credit loss expenses
related to stage 1 and 2 positions and USD 51m net credit loss expenses related to stage 3 positions.
Stage 1 and 2 net expenses included scenario-related net releases of USD 8m and net expenses of USD 9m from
book quality and size changes.
Stage 3 net credit loss expenses were USD 51m, driven by net expenses of USD 22m in the Investment Bank and
USD 22m in Personal & Corporate Banking on various corporate lending positions.
Credit loss expense / (release)
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group
Items
Total
For the quarter ended 31.3.24
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
For the quarter ended 31.12.23
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
For the quarter ended 31.3.23
Stages 1 and 2
Stage 3
Total credit loss expense / (release)
b) Changes to ECL models, scenarios, scenario weights and post-model adjustments
Scenarios and weights
The expected credit loss (ECL) scenarios, along with their related macroeconomic factors and market data, were
reviewed in light of the economic and political conditions prevailing in the first quarter of 2024 through a series of
governance meetings, with input and feedback from UBS Risk and Finance experts across the business divisions and
regions.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 49
Note 8 Expected credit loss measurement (continued)
UBS kept scenarios and scenario weights in line with those applied for the 2023 annual reporting. The baseline
scenario was updated with the latest macroeconomic forecasts as of 31 March 2024. The assumptions on a
calendar-year basis are included in the table below and imply a more optimistic outlook for the US and Switzerland
for 2024. The outlook for the US for 2025 is marginally less optimistic, while that for Switzerland is unchanged.
The mild debt crisis scenario and the stagflationary geopolitical crisis scenario were updated based on the latest
market data, but the assumptions remained broadly unchanged. Refer to the table below.
Post-model adjustments
Total stage 1 and 2 allowances and provisions amounted to USD 556m as of 31 March 2024 and included post-
model adjustments of USD 125m (31 December 2023: USD 133m). Post-model adjustments are intended to cover
for uncertainty levels, including the geopolitical situation.
Comparison of shock factors
Baseline
Key parameters
2023
2024
2025
Real GDP growth (annual percentage change)
US
Eurozone
Switzerland
Unemployment rate (%, annual average)
US
Eurozone
Switzerland
Fixed income: 10-year government bonds (%, Q4)
USD
EUR
CHF
Real estate (annual percentage change, Q4)
US
Eurozone
Switzerland
Economic scenarios and weights applied
Assigned weights in %
ECL scenario
31.3.24
31.12.23
31.3.23
Baseline
Mild debt crisis
–
Stagflationary geopolitical crisis
Global crisis
–
–
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 50
Note 8 Expected credit loss measurement (continued)
c) ECL-relevant balance sheet and off-balance sheet positions including ECL allowances and provisions
The following tables provide information about financial instruments and certain non-financial instruments that are
subject to ECL requirements. For amortized-cost instruments, the carrying amount represents the maximum
exposure to credit risk, taking into account the allowance for credit losses. Financial assets measured at fair value
through other comprehensive income (FVOCI) are also subject to ECL; however, unlike amortized-cost instruments,
the allowance for credit losses for FVOCI instruments does not reduce the carrying amount of these financial assets.
Instead, the carrying amount of financial assets measured at FVOCI represents the maximum exposure to credit risk.
In addition to recognized financial assets, certain off-balance sheet financial instruments and other credit lines are
also subject to ECL. The maximum exposure to credit risk for off-balance sheet financial instruments is calculated
based on the maximum contractual amounts.
USD m
31.3.24
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
Amounts due from banks
2
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
of which: Private clients with mortgages
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
Other financial assets measured at amortized cost
of which: Loans to financial advisors
Total financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive income
Total on-balance sheet financial assets in scope of ECL requirements
Total exposure
ECL provisions
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Guarantees
of which: Large corporate clients
of which: SME clients
of which: Financial intermediaries and hedge funds
of which: Lombard
of which: Commodity trade finance
Irrevocable loan commitments
of which: Large corporate clients
Forward starting reverse repurchase and securities borrowing agreements
Unconditionally revocable loan commitments
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
Irrevocable committed prolongation of existing loans
Total off-balance sheet financial instruments and other credit lines
Total allowances and provisions
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes USD 0bn against Credit Suisse AG.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 51
Note 8 Expected credit loss measurement (continued)
USD m
31.12.23
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
Amounts due from banks
2
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
of which: Private clients with mortgages
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
Other financial assets measured at amortized cost
of which: Loans to financial advisors
Total financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive income
Total on-balance sheet financial assets in scope of ECL requirements
Total exposure
ECL provisions
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Guarantees
of which: Large corporate clients
of which: SME clients
of which: Financial intermediaries and hedge funds
of which: Lombard
of which: Commodity trade finance
Irrevocable loan commitments
of which: Large corporate clients
Forward starting reverse repurchase and securities borrowing agreements
Unconditionally revocable loan commitments
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
Irrevocable committed prolongation of existing loans
Total off-balance sheet financial instruments and other credit lines
Total allowances and provisions
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes USD 14.8bn against Credit Suisse AG.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 52
Note 8 Expected credit loss measurement (continued)
The table below provides information about the ECL gross exposure and the ECL coverage ratio for UBS AG’s core
loan portfolios (i.e.,
Loans and advances to customers
) and relevant off-balance sheet
exposures.
Cash and balances at central banks
,
Amounts due from banks
,
Receivables from securities financing
transactions
,
Cash collateral receivables on derivative instruments
Financial assets measured at fair value through
other comprehensive income
ECL coverage ratios are calculated by dividing ECL allowances and provisions by the gross carrying amount of the
related exposures.
Coverage ratios for core loan portfolio
31.3.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other assets measured at amortized cost. 2 Excludes Forward starting reverse repurchase
and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 53
Note 8 Expected credit loss measurement (continued)
Coverage ratios for core loan portfolio
31.12.23
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other assets measured at amortized cost. 2 Excludes Forward starting reverse repurchase
and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 54
Note 9 Fair value measurement
a) Fair value hierarchy
The fair value hierarchy classification of financial and non-financial assets and liabilities measured at fair value is
summarized in the table below.
During the first three months of 2024, assets and liabilities that were transferred from Level 2 to Level 1, or from
Level 1 to Level 2, and were held for the entire reporting period were not material.
Determination of fair values from quoted market prices or valuation techniques
1
31.3.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value on a recurring basis
Financial assets at fair value held for trading
of which: Equity instruments
of which: Government bills / bonds
of which: Investment fund units
of which: Corporate and municipal bonds
of which: Loans
of which: Asset-backed securities
Derivative financial instruments
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
Brokerage receivables
Financial assets at fair value not held for trading
of which: Financial assets for unit-linked investment contracts
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Loans
of which: Securities financing transactions
of which: Auction rate securities
of which: Investment fund units
of which: Equity instruments
Financial assets measured at fair value through other comprehensive income on a recurring basis
Financial assets measured at fair value through other comprehensive income
of which: Commercial paper and certificates of deposit
of which: Corporate and municipal bonds
Non-financial assets measured at fair value on a recurring basis
Precious metals and other physical commodities
Non-financial assets measured at fair value on a non-recurring basis
Other non-financial assets
2
Total assets measured at fair value
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 55
Note 9 Fair value measurement (continued)
Determination of fair values from quoted market prices or valuation techniques (continued)
1
31.3.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial liabilities measured at fair value on a recurring basis
Financial liabilities at fair value held for trading
25,042
7,781
192
33,015
25,451
6,110
151
31,712
of which: Equity instruments
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Investment fund units
Derivative financial instruments
961
120,203
4,475
125,639
716
136,833
3,158
140,707
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
Financial liabilities designated at fair value on a recurring basis
Brokerage payables designated at fair value
0
46,249
0
46,249
0
42,275
0
42,275
Debt issued designated at fair value
0
75,584
7,367
82,951
0
78,509
7,832
86,341
Other financial liabilities designated at fair value
0
24,717
2,076
26,794
0
25,069
2,297
27,366
of which: Financial liabilities related to unit-linked investment contracts
of which: Securities financing transactions
of which: Funding from UBS Group AG
of which: Over-the-counter debt instruments and others
Total liabilities measured at fair value
26,004
274,534
14,111
314,648
26,167
288,796
13,438
328,401
1 Bifurcated embedded derivatives are presented on the same balance sheet lines as their host contracts and are not included in this table. The fair value of these derivatives was not material for the periods presented.
2 Other non-financial assets primarily consist of properties and other non-current assets held for sale, which are measured at the lower of their net carrying amount or fair value less costs to sell.
b) Valuation adjustments
The table below summarizes the changes in deferred day-1 profit or loss reserves during the relevant period.
Deferred day-1 profit or loss is generally released into
Other net income from financial instruments measured at fair
value through profit or loss
observable or when the transaction is closed out.
Deferred day-1 profit or loss reserves
For the quarter ended
USD m
31.3.24
31.12.23
31.3.23
Reserve balance at the beginning of the period
Profit / (loss) deferred on new transactions
(Profit) / loss recognized in the income statement
Foreign currency translation
Reserve balance at the end of the period
The table below summarizes other valuation adjustment reserves recognized on the balance sheet.
Other valuation adjustment reserves on the balance sheet
As of
USD m
31.3.24
31.12.23
Own credit adjustments on financial liabilities designated at fair value
of which: debt issued designated at fair value
of which: other financial liabilities designated at fair value
Credit valuation adjustments
1
Funding and debit valuation adjustments
Other valuation adjustments
of which: liquidity
of which: model uncertainty
1 Amount does not include reserves against defaulted counterparties.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 56
Note 9 Fair value measurement (continued)
c) Level 3 instruments: valuation techniques and inputs
The table below presents material Level 3 assets and liabilities, together with the valuation techniques used to
measure fair value, as well as the inputs used in a given valuation technique that are considered significant as of
31 March 2024 and unobservable, and a range of values for those unobservable inputs.
The range of values represents the highest- and lowest-level inputs used in the valuation techniques. Therefore, the
range does not reflect the level of uncertainty regarding a particular input or an assessment of the reasonableness of
UBS AG’s estimates and assumptions, but rather the different underlying characteristics of the relevant assets and
liabilities held by UBS AG.
The significant unobservable inputs disclosed in the table below are consistent with those included in “Note 20 Fair
value measurement” in the “Consolidated financial statements” section of the UBS AG Annual Report 2023.
Valuation techniques and inputs used in the fair value measurement of Level 3 assets and liabilities
Fair value
Significant unobservable
input(s)
1
Range of inputs
Assets
Liabilities
Valuation technique(s)
31.3.24
31.12.23
USD bn
31.3.24
31.12.23
31.3.24
31.12.23
low
high
weighted
average
2
low
high
weighted
average
2
unit
1
Financial assets and liabilities at fair value held for trading and Financial assets at fair value not held for trading
Corporate and municipal
bonds
0.7
0.9
0.1
0.1
Relative value to
market comparable
Bond price equivalent
8
100
86
9
114
93
points
Discounted expected
cash flows
Discount margin
486
486
491
491
basis
points
Traded loans, loans
measured at fair value, loan
commitments and
guarantees
2.1
2.3
0.0
0.0
Relative value to
market comparable
Loan price equivalent
5
100
98
6
101
98
points
Discounted expected
cash flows
Credit spread
275
275
275
200
275
252
basis
points
Market comparable
and securitization
model
Credit spread
122
1,803
310
162
1,849
318
basis
points
Auction rate securities
1.2
1.2
Discounted expected
cash flows
Credit spread
135
208
151
135
205
150
basis
points
Investment fund units
3
0.3
0.2
0.0
0.0
Relative value to
market comparable
Net asset value
Equity instruments
3
1.3
1.2
0.1
0.1
Relative value to
market comparable
Price
Debt issued designated at
fair value
4
7.4
7.8
Other financial liabilities
designated at fair value
2.1
2.3
Discounted expected
cash flows
Funding spread
106
201
51
201
basis
points
Derivative financial instruments
Interest rate
0.3
0.3
0.2
0.1
Option model
Volatility of interest rates
77
87
84
112
basis
points
Credit
0.3
0.3
0.2
0.3
Discounted expected
cash flows
Credit spreads
7
304
1
306
basis
points
Bond price equivalent
1
106
2
242
points
Equity / index
0.7
0.7
4.0
2.7
Option model
Equity dividend yields
0
14
0
14
%
Volatility of equity stocks,
equity and other indices
4
103
4
104
%
Equity-to-FX correlation
70
70
%
Equity-to-equity
correlation
13
99
13
100
%
1 The ranges of significant unobservable inputs are represented in points, percentages and basis points. Points are a percentage of par (e.g., 100 points would be 100% of par). 2 Weighted averages are provided
for most non-derivative financial instruments and were calculated by weighting inputs based on the fair values of the respective instruments. Weighted averages are not provided for inputs related to Other financial
liabilities designated at fair value and Derivative financial instruments, as this would not be meaningful. 3 The range of inputs is not disclosed, as there is a dispersion of values given the diverse nature of the
investments. 4 Debt issued designated at fair value primarily consists of UBS AG structured notes, which include variable maturity notes with various equity and foreign exchange underlying risks, as well as rates-
linked and credit-linked notes, all of which have embedded derivative parameters that are considered to be unobservable. The equivalent derivative instrument parameters are presented in the respective derivative
financial instruments lines in this table.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 57
Note 9 Fair value measurement (continued)
d) Level 3 instruments: sensitivity to changes in unobservable input assumptions
The table below summarizes those financial assets and liabilities classified as Level 3 for which a change in one or
more of the unobservable inputs to reflect reasonably possible alternative assumptions would change fair value
significantly, and the estimated effect thereof.
The sensitivity data shown below presents an estimation of valuation uncertainty based on reasonably possible
alternative values for Level 3 inputs at the balance sheet date and does not represent the estimated effect of stress
scenarios. Typically, these financial assets and liabilities are sensitive to a combination of inputs from Levels 1–3.
Although well-defined interdependencies may exist between Level 1 / 2 parameters and Level 3 parameters (e.g.,
between interest rates, which are generally Level 1 or Level 2, and prepayments, which are generally Level 3), these
have not been incorporated in the table. Furthermore, direct interrelationships between the Level 3 parameters are
not a significant element of the valuation uncertainty.
Sensitivity of fair value measurements to changes in unobservable input assumptions
1
31.3.24
31.12.23
USD m
Favorable
changes
Unfavorable
changes
Favorable
changes
Unfavorable
changes
Traded loans, loans measured at fair value, loan commitments and guarantees
Securities financing transactions
Auction rate securities
Asset-backed securities
Equity instruments
Interest rate derivatives, net
Credit derivatives, net
Foreign exchange derivatives, net
Equity / index derivatives, net
Other
Total
1 Sensitivity of issued and over-the-counter debt instruments is reported with the equivalent derivative or Other.
e) Level 3 instruments: movements during the period
The table below presents additional information about material Level 3 assets and liabilities measured at fair value
on a recurring basis. Level 3 assets and liabilities may be hedged with instruments classified as Level 1 or Level 2 in
the fair value hierarchy and, as a result, realized and unrealized gains and losses included in the table may not
include the effect of related hedging activity. Furthermore, the realized and unrealized gains and losses presented
in the table are not limited solely to those arising from Level 3 inputs, as valuations are generally derived from both
observable and unobservable parameters.
Assets and liabilities transferred into or out of Level 3 are presented as if those assets or liabilities had been
transferred on 1 January 2024.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 58
Note 9 Fair value measurement (continued)
Movements of Level 3 instruments
USD bn
Balance at
the
beginning
of the
period
Net gains /
losses
included in
compre-
hensive
income
1
of which:
related to
instruments
held at the
end of the
period
Purchases
Sales
Issuances
Settlements
Transfers
into
Level 3
Transfers
out of
Level 3
Foreign
currency
translation
Balance
at the
end
of the
period
For the three months ended 31 March 2024
2
Financial assets at fair value held for trading
of which: Equity instruments
0.0
of which: Corporate and municipal bonds
0.0
0.0
of which: Loans
Derivative financial instruments – assets
0.0
0.0
of which: Interest rate
0.0
0.0
0.0
of which: Equity / index
0.0
0.0
of which: Credit
0.0
0.0
Financial assets at fair value not held for trading
0.0
of which: Loans
0.0
0.0
0.0
of which: Auction rate securities
0.0
0.0
0.0
0.0
0.0
0.0
0.0
of which: Equity instruments
0.0
0.0
Derivative financial instruments – liabilities
0.0
0.0
of which: Interest rate
0.0
0.0
of which: Equity / index
0.0
0.0
of which: Credit
0.0
0.0
Debt issued designated at fair value
0.0
0.0
Other financial liabilities designated at fair value
0.0
0.0
For the three months ended 31 March 2023
Financial assets at fair value held for trading
0.0
of which: Investment fund units
0.0
0.0
of which: Corporate and municipal bonds
0.0
0.0
of which: Loans
0.0
Derivative financial instruments – assets
0.0
0.0
of which: Interest rate
0.0
0.0
0.0
of which: Equity / index
0.0
0.0
of which: Credit
0.0
0.0
0.0
Financial assets at fair value not held for trading
0.0
0.0
of which: Loans
0.0
0.0
0.0
of which: Auction rate securities
0.0
0.0
0.0
0.0
0.0
0.0
of which: Equity instruments
0.0
0.0
0.0
Derivative financial instruments – liabilities
0.0
0.0
of which: Interest rate
0.0
0.0
0.0
of which: Equity / index
0.0
0.0
of which: Credit
0.0
0.0
Debt issued designated at fair value
0.0
0.0
Other financial liabilities designated at fair value
0.0
0.0
0.0
1 Net gains / losses included in comprehensive income are recognized in Net interest income and Other net income from financial instruments measured at fair value through profit or loss in the Income statement,
and also in Gains / (losses) from own credit on financial liabilities designated at fair value, before tax in the Statement of comprehensive income. 2 Total Level 3 assets as of 31 March 2024 were USD 7.1bn
(31 December 2023: USD 7.2bn). Total Level 3 liabilities as of 31 March 2024 were USD 14.1bn (31 December 2023: USD 13.4bn).
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 59
Note 9 Fair value measurement (continued)
f) Financial instruments not measured at fair value
The table below reflects the estimated fair values of financial instruments not measured at fair value. Valuation
principles applied when determining fair value estimates for financial instruments not measured at fair value are
consistent with those described in “Note 20 Fair value measurement” in the “Consolidated financial statements”
section of the UBS AG Annual Report 2023.
Financial instruments not measured at fair value
31.3.24
31.12.23
USD bn
Carrying
amount
Fair value
Carrying
amount
Fair value
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Funding from UBS Group AG measured at amortized cost
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
1
1 Excludes lease liabilities.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 60
Note 10
Derivative instruments
a) Derivative instruments
As of 31.3.24, USD bn
Derivative
financial
assets
Derivative
financial
liabilities
Notional values
related to derivative
financial assets and
liabilities
1
Other
notional
values
2
Derivative financial instruments
Interest rate
Credit derivatives
Foreign exchange
Equity / index
Commodities
Other
3
0.8
0.7
152
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
Further netting potential not recognized on the balance sheet
5
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Total derivative financial instruments, after consideration of further netting potential
As of 31.12.23, USD bn
Derivative financial instruments
Interest rate
Credit derivatives
Foreign exchange
Equity / index
Commodities
Other
3
0.3
0.4
86
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
Further netting potential not recognized on the balance sheet
5
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Total derivative financial instruments, after consideration of further netting potential
1 In cases where derivative financial instruments are presented on a net basis on the balance sheet, the respective notional values of the netted derivative financial instruments are still presented on a gross basis.
Notional amounts of client-cleared ETD and OTC transactions through central clearing counterparties are not disclosed, as they have a significantly different risk profile. 2 Other notional values relate to derivatives
that are cleared through either a central counterparty or an exchange. The fair value of these derivatives is presented on the balance sheet net of the corresponding cash margin under Cash collateral receivables on
derivative instruments and Cash collateral payables on derivative instruments and was not material for all periods presented. 3 Includes mainly Loan commitments measured at FVTPL, as well as unsettled purchases
and sales of non-derivative financial instruments, for which the changes in the fair value between trade date and settlement date are recognized as derivative financial instruments. 4 Financial assets and liabilities
are presented net on the balance sheet if UBS AG has the unconditional and legally enforceable right to offset the recognized amounts, both in the normal course of business and in the event of default, bankruptcy
or insolvency of UBS AG or its counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 5 Reflects the netting potential in accordance with enforceable
master netting and similar arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 21 Offsetting financial assets and financial liabilities” in the “Consolidated
financial statements” section of the UBS AG Annual Report 2023 for more information.
b) Cash collateral on derivative instruments
USD bn
Receivables
31.3.24
Payables
31.3.24
Receivables
31.12.23
Payables
31.12.23
Cash collateral on derivative instruments, based on netting under IFRS Accounting Standards
1
Further netting potential not recognized on the balance sheet
2
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Cash collateral on derivative instruments, after consideration of further netting potential
1 Financial assets and liabilities are presented net on the balance sheet if UBS AG has the unconditional and legally enforceable right to offset the recognized amounts, both in the normal course of business and in
the event of default, bankruptcy or insolvency of UBS AG or its counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 2 Reflects the netting potential
in accordance with enforceable master netting and similar arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 21 Offsetting financial assets and financial
liabilities” in the “Consolidated financial statements” section of the UBS AG Annual Report 2023 for more information.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 61
Note
11
Other assets and liabilities
a) Other financial assets measured at amortized cost
USD m
31.3.24
31.12.23
Debt securities
Loans to financial advisors
Fee- and commission-related receivables
Finance lease receivables
Settlement and clearing accounts
Accrued interest income
Other
1
Total other financial assets measured at amortized cost
1 Predominantly includes cash collateral provided to exchanges and clearing houses to secure securities trading activity through those counterparties.
b) Other non-financial assets
USD m
31.3.24
31.12.23
Precious metals and other physical commodities
Deposits and collateral provided in connection with litigation, regulatory and similar matters
1
Prepaid expenses
VAT, withholding tax and other tax receivables
Properties and other non-current assets held for sale
Other
Total other non-financial assets
1 Refer to Note 15 for more information.
c) Other financial liabilities measured at amortized cost
USD m
31.3.24
31.12.23
Other accrued expenses
Accrued interest expenses
Settlement and clearing accounts
Lease liabilities
Other
Total other financial liabilities measured at amortized cost
d) Other financial liabilities designated at fair value
USD m
31.3.24
31.12.23
Financial liabilities related to unit-linked investment contracts
Securities financing transactions
Over-the-counter debt instruments and other
Funding from UBS Group AG
1
Total other financial liabilities designated at fair value
1 The Funding from UBS Group AG consists of subordinated debt of UBS AG and its subsidiaries toward UBS Group AG. Subordinated debt consists of unsecured debt obligations that are contractually subordinated
in right of payment to all other present and future non-subordinated obligations of the respective issuing entity.
e) Other non-financial liabilities
USD m
31.3.24
31.12.23
Compensation-related liabilities
Current tax liabilities
Deferred tax liabilities
VAT, withholding tax and other tax payables
Deferred income
Other
Total other non-financial liabilities
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 62
Note
12
Funding from UBS Group AG measured at amortized cost
USD m
31.3.24
31.12.23
Debt contributing to total loss-absorbing capacity (TLAC)
Debt eligible as high-trigger loss-absorbing additional tier 1 capital instruments
Debt eligible as low-trigger loss-absorbing additional tier 1 capital instruments
Other
1
Total funding from UBS Group AG measured at amortized cost
2,3
1 Includes debt not eligible as TLAC having a residual maturity of less than one year and high-trigger loss-absorbing additional tier 1 capital instruments that ceased to be eligible when UBS Group AG issued notice
of redemption. 2 Consists of subordinated debt of UBS AG and its subsidiaries toward UBS Group AG. Subordinated debt consists of unsecured debt obligations that are contractually subordinated in right of payment
to all other present and future non-subordinated obligations of the respective issuing entity. All instruments contributing to TLAC are subordinated since 1.1.2020. 3 UBS AG has also recognized funding from UBS
Group AG that is designated at fair value. Refer to Note 11d for more information.
Note
13
Debt issued designated at fair value
USD m
31.3.24
31.12.23
Issued debt instruments
Equity-linked
1
Rates-linked
Credit-linked
Fixed-rate
Commodity-linked
Other
Total debt issued designated at fair value
2
1 Includes investment fund unit-linked instruments issued. 2 As of 31 March 2024, 100% of Total debt issued designated at fair value was unsecured.
Note
14
Debt issued measured at amortized cost
USD m
31.3.24
31.12.23
Short-term debt
1
Senior unsecured debt
Covered bonds
Subordinated debt
of which: eligible as non-Basel III-compliant tier 2 capital instruments
Debt issued through the Swiss central mortgage institutions
Long-term debt
2
Total debt issued measured at amortized cost
3,4
1 Debt with an original contractual maturity of less than one year, includes mainly certificates of deposit and commercial paper. 2 Debt with an original contractual maturity greater than or equal to one year. The
classification of debt issued into short-term and long -term does not consider any early redemption features. 3 Net of bifurcated embedded derivatives, the fair value of which was not material for the periods
presented. 4 Except for Covered bonds and Debt issued through the Swiss central mortgage institutions, 100% of the balance was unsecured as of 31 March 2024.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 63
Note 15 Provisions and contingent liabilities
a) Provisions
The table below presents an overview of total provisions.
USD m
31.3.24
31.12.23
Provisions other than provisions for expected credit losses
Provisions for expected credit losses
1
Total provisions
1 Refer to Note 8c for more information about ECL provisions recognized for off-balance sheet financial instruments and credit lines.
The table below presents additional information for provisions other than provisions for expected credit losses.
USD m
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total
Balance as of 31 December 2023
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 31 March 2024
1 Consists of provisions for losses resulting from legal, liability and compliance risks. 2 Consists of USD 137m of provisions for onerous contracts related to real estate as of 31 March 2024 (31 December 2023: USD
146m) and USD 59m of personnel-related restructuring provisions as of 31 March 2024 (31 December 2023: USD 64m). 3 Mainly includes provisions for reinstatement costs with respect to leased properties.
4 Mainly includes provisions related to employee benefits and operational risks.
Information about provisions and contingent liabilities in respect of litigation, regulatory and similar matters, as a
class, is included in Note 15b. There are no material contingent liabilities associated with the other classes of
provisions.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 64
Note 15 Provisions and contingent liabilities (continued)
b) Litigation, regulatory and similar matters
UBS operates in a legal and regulatory environment that exposes it to significant litigation and similar risks arising
from disputes and regulatory proceedings. As a result, UBS is involved in various disputes and legal proceedings,
including litigation, arbitration, and regulatory and criminal investigations. “UBS,” “we” and “our”, for purposes
of this Note, refer to UBS AG and / or one or more of its subsidiaries, as applicable.
Such matters are subject to many uncertainties, and the outcome and the timing of resolution are often difficult to
predict, particularly in the earlier stages of a case. There are also situations where UBS may enter into a settlement
agreement. This may occur in order to avoid the expense, management distraction or reputational implications of
continuing to contest liability, even for those matters for which UBS believes it should be exonerated. The
uncertainties inherent in all such matters affect the amount and timing of any potential outflows for both matters
with respect to which provisions have been established and other contingent liabilities. UBS makes provisions for
such matters brought against it when, in the opinion of management after seeking legal advice, it is more likely
than not that UBS has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required, and the amount can be reliably estimated. Where these factors are otherwise
satisfied, a provision may be established for claims that have not yet been asserted against UBS, but are nevertheless
expected to be, based on UBS’s experience with similar asserted claims. If any of those conditions is not met, such
matters result in contingent liabilities. If the amount of an obligation cannot be reliably estimated, a liability exists
that is not recognized even if an outflow of resources is probable. Accordingly, no provision is established even if
the potential outflow of resources with respect to such matters could be significant. Developments relating to a
matter that occur after the relevant reporting period, but prior to the issuance of financial statements, which affect
management’s assessment of the provision for such matter (because, for example, the developments provide
evidence of conditions that existed at the end of the reporting period), are adjusting events after the reporting
period under IAS 10 and must be recognized in the financial statements for the reporting period.
Specific litigation, regulatory and other matters are described below, including all such matters that management
considers to be material and others that management believes to be of significance to UBS due to potential
financial, reputational and other effects. The amount of damages claimed, the size of a transaction or other
information is provided where available and appropriate in order to assist users in considering the magnitude of
potential exposures.
In the case of certain matters below, we state that we have established a provision, and for the other matters, we
make no such statement. When we make this statement and we expect disclosure of the amount of a provision to
prejudice seriously our position with other parties in the matter because it would reveal what UBS believes to be
the probable and reliably estimable outflow, we do not disclose that amount. In some cases we are subject to
confidentiality obligations that preclude such disclosure. With respect to the matters for which we do not state
whether we have established a provision, either: (a) we have not established a provision, in which case the matter
is treated as a contingent liability under the applicable accounting standard; or (b) we have established a provision
but expect disclosure of that fact to prejudice seriously our position with other parties in the matter because it
would reveal the fact that UBS believes an outflow of resources to be probable and reliably estimable.
With respect to certain litigation, regulatory and similar matters for which we have established provisions, we are
able to estimate the expected timing of outflows. However, the aggregate amount of the expected outflows for
those matters for which we are able to estimate expected timing is immaterial relative to our current and expected
levels of liquidity over the relevant time periods.
The aggregate amount provisioned for litigation, regulatory and similar matters as a class is disclosed in the
“Provisions” table in Note 15a above. It is not practicable to provide an aggregate estimate of liability for our
litigation, regulatory and similar matters as a class of contingent liabilities. Doing so would require UBS to provide
speculative legal assessments as to claims and proceedings that involve unique fact patterns or novel legal theories,
that have not yet been initiated or are at early stages of adjudication, or as to which alleged damages have not
been quantified by the claimants. Although UBS therefore cannot provide a numerical estimate of the future losses
that could arise from litigation, regulatory and similar matters, UBS believes that the aggregate amount of possible
future losses from this class that are more than remote substantially exceeds the level of current provisions.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 65
Note 15 Provisions and contingent liabilities (continued)
Litigation, regulatory and similar matters may also result in non-monetary penalties and consequences. A guilty plea
to, or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may
require UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory
authorities to limit, suspend or terminate licenses and regulatory authorizations, and may permit financial market
utilities to limit, suspend or terminate UBS’s participation in such utilities. Failure to obtain such waivers, or any
limitation, suspension or termination of licenses, authorizations or participations, could have material consequences
for UBS.
The risk of loss associated with litigation, regulatory and similar matters is a component of operational risk for
purposes of determining capital requirements. Information concerning our capital requirements and the calculation
of operational risk for this purpose is included in the “Capital management” section of this report.
Provisions for litigation, regulatory and similar matters by business division and in Group Items
1
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-
core and
Legacy
Group Items
UBS AG
Balance as of 31 December 2023
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 31 March 2024
1 Provisions, if any, for the matters described in item 2 of this Note are recorded in Global Wealth Management, and provisions, if any, for the matters described in item 1 and 4 of this Note are allocated between
Global Wealth Management and Personal & Corporate Banking. Provisions, if any, for the matters described in item 3 are allocated between the Investment Bank and Group Items.
1. Inquiries regarding cross-border wealth management businesses
Tax and regulatory authorities in a number of countries have made inquiries, served requests for information or
examined employees located in their respective jurisdictions relating to the cross-border wealth management
services provided by UBS and other financial institutions.
Since 2013, UBS (France) S.A., UBS AG and certain former employees have been under investigation in France in
relation to UBS’s cross-border business with French clients. In connection with this investigation, the investigating
judges ordered UBS AG to provide bail (“
caution
”) of EUR 1.1bn.
In 2019, the court of first instance returned a verdict finding UBS AG guilty of unlawful solicitation of clients on
French territory and aggravated laundering of the proceeds of tax fraud, and UBS (France) S.A. guilty of aiding and
abetting unlawful solicitation and of laundering the proceeds of tax fraud. The court imposed fines aggregating
EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of civil damages to the French state. A trial
in the Paris Court of Appeal took place in March 2021. In December 2021, the Court of Appeal found UBS AG
guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. The court ordered a fine of
EUR 3.75m, the confiscation of EUR 1bn, and awarded civil damages to the French state of EUR 800m. UBS
appealed the decision to the French Supreme Court. The Supreme Court rendered its judgment on 15 November
2023. It upheld the Court of Appeal‘s decision regarding unlawful solicitation and aggravated laundering of the
proceeds of tax fraud, but overturned the confiscation of EUR 1bn, the penalty of EUR 3.75m and the EUR 800m
of civil damages awarded to the French state. The case has been remanded to the Court of Appeal for a retrial
regarding these overturned elements. The French state has reimbursed the EUR 800m of civil damages to UBS AG.
Our balance sheet at 31 March 2024 reflected a provision in an amount that UBS believes to be appropriate under
the applicable accounting standard. As in the case of other matters for which we have established provisions, the
future outflow of resources in respect of such matters cannot be determined with certainty based on currently
available information and accordingly may ultimately prove to be substantially greater (or may be less) than the
provision that we have recognized
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 66
Note 15 Provisions and contingent liabilities (continued)
2. Madoff
In relation to the Bernard L. Madoff Investment Securities LLC (BMIS) investment fraud, UBS AG, UBS (Luxembourg)
S.A. (now UBS Europe SE, Luxembourg branch) and certain other UBS subsidiaries have been subject to inquiries
by a number of regulators, including the Swiss Financial Market Supervisory Authority (FINMA) and the Luxembourg
Commission de Surveillance du Secteur Financier. Those inquiries concerned two third-party funds established
under Luxembourg law, substantially all assets of which were with BMIS, as well as certain funds established in
offshore jurisdictions with either direct or indirect exposure to BMIS. These funds faced severe losses, and the
Luxembourg funds are in liquidation. The documentation establishing both funds identifies UBS entities in various
roles, including custodian, administrator, manager, distributor and promoter, and indicates that UBS employees
serve as board members.
In 2009 and 2010, the liquidators of the two Luxembourg funds filed claims against UBS entities, non-UBS entities
and certain individuals, including current and former UBS employees, seeking amounts totaling approximately
EUR 2.1bn, which includes amounts that the funds may be held liable to pay the trustee for the liquidation of BMIS
(BMIS Trustee).
A large number of alleged beneficiaries have filed claims against UBS entities (and non-UBS entities) for purported
losses relating to the Madoff fraud. The majority of these cases have been filed in Luxembourg, where decisions
that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and
the Luxembourg Supreme Court has dismissed a further appeal in one of the test cases.
In the US, the BMIS Trustee filed claims against UBS entities, among others, in relation to the two Luxembourg
funds and one of the offshore funds. The total amount claimed against all defendants in these actions was not less
than USD 2bn. In 2014, the US Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions
dismissing all claims except those for the recovery of approximately USD 125m of payments alleged to be fraudulent
conveyances and preference payments. In 2016, the bankruptcy court dismissed these claims against the UBS
entities. In 2019, the Court of Appeals reversed the dismissal of the BMIS Trustee’s remaining claims, and the US
Supreme Court subsequently denied a petition seeking review of the Court of Appeals’ decision. The case has been
remanded to the Bankruptcy Court for further proceedings.
3. Foreign exchange, LIBOR and benchmark rates, and other trading practices
Foreign exchange-related regulatory matters:
concerning possible manipulation of foreign exchange markets and precious metals prices. As a result of these
investigations, UBS entered into resolutions with Swiss, US and United Kingdom regulators and the European
Commission. UBS was granted conditional immunity by the Antitrust Division of the DOJ and by authorities in other
jurisdictions in connection with potential competition law violations relating to foreign exchange and precious
metals businesses.
Foreign exchange-related civil litigation:
in other jurisdictions against UBS and other banks on behalf of putative classes of persons who engaged in foreign
currency transactions with any of the defendant banks. UBS has resolved US federal court class actions relating to
foreign currency transactions with the defendant banks and persons who transacted in foreign exchange futures
contracts and options on such futures under a settlement agreement that provides for UBS to pay an aggregate of
USD 141m and provide cooperation to the settlement classes. Certain class members have excluded themselves
from that settlement and have filed individual actions in US and English courts against UBS and other banks, alleging
violations of US and European competition laws and unjust enrichment. UBS and the other banks have resolved
those individual matters.
In 2015, a putative class action was filed in federal court against UBS and numerous other banks on behalf of
persons and businesses in the US who directly purchased foreign currency from the defendants and alleged co-
conspirators for their own end use. In 2022, the court denied plaintiffs’ motion for class certification. In March
2023, the court granted defendants’ summary judgment motion, dismissing the case. Plaintiffs have appealed.
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 67
Note 15 Provisions and contingent liabilities (continued)
LIBOR and other benchmark-related regulatory matters:
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain times. UBS reached settlements or otherwise concluded investigations relating to benchmark interest rates
with the investigating authorities. UBS was granted conditional leniency or conditional immunity from authorities
in certain jurisdictions, including the Antitrust Division of the DOJ and the Swiss Competition Commission (WEKO),
in connection with potential antitrust or competition law violations related to certain rates. However, UBS has not
reached a final settlement with WEKO, as the Secretariat of WEKO has asserted that UBS does not qualify for full
immunity.
LIBOR and other benchmark-related civil litigation:
in the federal courts in New York against UBS and numerous other banks on behalf of parties who transacted in
certain interest rate benchmark-based derivatives. Also pending in the US and in other jurisdictions are a number
of other actions asserting losses related to various products whose interest rates were linked to LIBOR and other
benchmarks, including adjustable rate mortgages, preferred and debt securities, bonds pledged as collateral, loans,
depository accounts, investments and other interest-bearing instruments. The complaints allege manipulation,
through various means, of certain benchmark interest rates, including USD LIBOR, Euroyen TIBOR, Yen LIBOR,
EURIBOR, CHF LIBOR, GBP LIBOR and seek unspecified compensatory and other damages under varying legal
theories.
USD LIBOR class and individual actions in the US:
In 2013 and 2015, the district court in the USD LIBOR actions
dismissed, in whole or in part, certain plaintiffs’ antitrust claims, federal racketeering claims, Commodity Exchange
Act claims, and state common law claims, and again dismissed the antitrust claims in 2016 following an appeal. In
2021, the Second Circuit affirmed the district court’s dismissal in part and reversed in part and remanded to the
district court for further proceedings. The Second Circuit, among other things, held that there was personal
jurisdiction over UBS and other foreign defendants. Separately, in 2018, the Second Circuit reversed in part the
district court’s 2015 decision dismissing certain individual plaintiffs’ claims and certain of these actions are now
proceeding. In April 2024, UBS and the remaining defendants in one of the putative class actions, the USD Exchange
action, reached a settlement in principle, subject to court approval. The USD Exchange action sought recovery on
behalf of persons who transacted in Eurodollar futures and options on Eurodollar futures on exchanges between
2005 and May 2010. In 2020, an individual action was filed in the Northern District of California against UBS and
numerous other banks alleging that the defendants conspired to fix the interest rate used as the basis for loans to
consumers by jointly setting the USD LIBOR rate and monopolized the market for LIBOR-based consumer loans and
credit cards. In September 2022, the court granted defendants’ motion to dismiss the complaint in its entirety, while
allowing plaintiffs the opportunity to file an amended complaint. Plaintiffs filed an amended complaint in October
2022, and defendants moved to dismiss the amended complaint. In October 2023, the court dismissed the
amended complaint with prejudice. In January 2024, plaintiffs appealed the dismissal to the Ninth Circuit Court of
Appeals. Defendants filed their response to the appeal in March 2024.
Other benchmark class actions in the US:
Yen LIBOR / Euroyen TIBOR
standing grounds. In 2020, the appeals court reversed the dismissal and, subsequently, plaintiffs in that action filed
an amended complaint focused on Yen LIBOR. In 2022, the court granted UBS’s motion for reconsideration and
dismissed the case against UBS. The dismissal of the case against UBS could be appealed following the disposition
of the case against the remaining defendant in the district court.
CHF LIBOR
Plaintiffs filed an amended complaint, and the court granted a renewed motion to dismiss in 2019. Plaintiffs
appealed. In 2021, the Second Circuit granted the parties’ joint motion to vacate the dismissal and remand the case
for further proceedings. Plaintiffs filed a third amended complaint in November 2022 and defendants moved to
dismiss the amended complaint in January 2023.
EURIBOR
defendants for lack of personal jurisdiction. Plaintiffs have appealed.
GBP LIBOR
UBS AG first quarter 2024 report |
Consolidated financial statements | Notes to the UBS AG interim consolidated financial statements (unaudited) 68
Note 15 Provisions and contingent liabilities (continued)
Government bonds:
banks on behalf of persons who participated in markets for US Treasury securities since 2007. A consolidated
complaint was filed in 2017 in the US District Court for the Southern District of New York alleging that the banks
colluded with respect to, and manipulated prices of, US Treasury securities sold at auction and in the secondary
market and asserting claims under the antitrust laws and for unjust enrichment. Defendants’ motions to dismiss
the consolidated complaint were granted in 2021. Plaintiffs filed an amended complaint, which defendants moved
to dismiss later in 2021. In March 2022, the court granted defendants’ motion to dismiss that complaint, and in
February 2024, the Second Circuit affirmed the district court’s dismissal. Similar class actions have been filed
concerning European government bonds and other government bonds.
In 2021, the European Commission issued a decision finding that UBS and six other banks breached European
Union antitrust rules in 2007–2011 relating to European government bonds. The European Commission fined UBS
EUR 172m. UBS is appealing the amount of the fine.
With respect to additional matters and jurisdictions not encompassed by the settlements and orders referred to
above, our balance sheet at 31 March 2024 reflected a provision in an amount that UBS believes to be appropriate
under the applicable accounting standard. As in the case of other matters for which we have established provisions,
the future outflow of resources in respect of such matters cannot be determined with certainty based on currently
available information and accordingly may ultimately prove to be substantially greater (or may be less) than the
provision that we have recognized.
4. Swiss retrocessions
The Federal Supreme Court of Switzerland ruled in 2012, in a test case against UBS, that distribution fees paid to
a firm for distributing third-party and intra-group investment funds and structured products must be disclosed and
surrendered to clients who have entered into a discretionary mandate agreement with the firm, absent a valid
waiver. FINMA issued a supervisory note to all Swiss banks in response to the Supreme Court decision. UBS has met
the FINMA requirements and has notified all potentially affected clients.
The Supreme Court decision has resulted, and continues to result, in a number of client requests for UBS to disclose
and potentially surrender retrocessions. Client requests are assessed on a case-by-case basis. Considerations taken
into account when assessing these cases include, among other things, the existence of a discretionary mandate and
whether or not the client documentation contained a valid waiver with respect to distribution fees.
Our balance sheet at 31 March 2024 reflected a provision with respect to matters described in this item 4 in an
amount that UBS believes to be appropriate under the applicable accounting standard. The ultimate exposure will
depend on client requests and the resolution thereof, factors that are difficult to predict and assess. Hence, as in
the case of other matters for which we have established provisions, the future outflow of resources in respect of
such matters cannot be determined with certainty based on currently available information and accordingly may
ultimately prove to be substantially greater (or may be less) than the provision that we have recognized.
UBS AG first quarter 2024 report |
Appendix 69
Appendix
Alternative performance measures
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. A number of APMs are reported in the discussion of the
financial and operating performance of the external reports (annual, quarterly and other reports). APMs are used
to provide a more complete picture of operating performance and to reflect management’s view of the fundamental
drivers of the business results. A definition of each APM, the method used to calculate it and the information
content are presented in alphabetical order in the table below. These APMs may qualify as non-GAAP measures as
defined by US Securities and Exchange Commission (SEC) regulations.
APM label
Calculation
Information content
Active Digital Banking clients in
Corporate & Institutional Clients (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships or legal
entities operated by Corporate & Institutional Clients,
excluding clients that do not have an account, mono-
product clients and clients that have defaulted on
loans or credit facilities. At the end of each month,
any client that has logged on at least once in that
month is determined to be “active” (a log-in time
stamp is allocated to all business relationship numbers
or per legal entity in a digital banking contract).
This measure provides information about the
proportion of active Digital Banking clients in the total
number of UBS clients (within the aforementioned
meaning) which are serviced by Corporate &
Institutional Clients.
Active Digital Banking clients in
Personal Banking (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships operated
by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account,
clients domiciled outside Switzerland and clients who
have defaulted on loans or credit facilities. At the end
of each month, any client that has logged on at least
once in that month is determined to be “active” (a
log-in time stamp is allocated to all business
relationship numbers in a digital banking contract).
This measure provides information about the
proportion of active Digital Banking clients in the total
number of UBS clients (within the aforementioned
meaning) who are serviced by Personal Banking.
Active Mobile Banking clients in
Personal Banking (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships operated
by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account,
clients domiciled outside Switzerland and clients who
have defaulted on loans or credit facilities. At the end
of each month, any client that has logged on via the
mobile app at least once in that month is determined
to be “active” (a log-in time stamp is allocated to all
business relationship numbers in a digital banking
contract).
This measure provides information about the
proportion of active Mobile Banking clients in the
total number of UBS clients (within the
aforementioned meaning) who are serviced by
Personal Banking.
Cost / income ratio (%)
Calculated as operating expenses divided by total
revenues.
This measure provides information about the
efficiency of the business by comparing operating
expenses with gross income.
Fee and trading income for Corporate &
Institutional Clients (USD and CHF)
– Personal & Corporate Banking
Calculated as the total of recurring net fee and
transaction-based income for Corporate &
Institutional Clients.
This measure provides information about the amount
of fee and trading income for Corporate &
Institutional Clients.
UBS AG first quarter 2024 report |
Appendix 70
APM label
Calculation
Information content
Fee-generating assets (USD)
– Global Wealth Management
Calculated as the sum of discretionary and
nondiscretionary wealth management portfolios
(mandate volume) and assets where generated
revenues are predominantly of a recurring nature, i.e.,
mainly investment, mutual, hedge and private-market
funds where we have a distribution agreement,
including client commitments into closed-ended
private-market funds from the date that recurring
fees are charged. Assets related to our Global
Financial Intermediaries business are excluded, as are
assets of sanctioned clients.
This measure provides information about the volume
of invested assets that create a revenue stream,
whether as a result of the nature of the contractual
relationship with clients or through the fee structure
of the asset. An increase in the level of fee-generating
assets results in an increase in the associated revenue
stream. Assets of sanctioned clients are excluded from
fee-generating assets.
Fee-pool-comparable revenues (USD)
– the Investment Bank
Calculated as the total of revenues from: merger-and-
acquisition-related transactions; Equity Capital
Markets, excluding derivatives; Leveraged Capital
Markets, excluding the impact of mark-to-market
movements on loan portfolios; and Debt Capital
Markets, excluding revenues related to debt
underwriting of UBS instruments.
This measure provides information about the amount
of revenues in the Investment Bank that are
comparable with the relevant global fee pools.
Gross margin on invested assets (bps)
– Asset Management
Calculated as total revenues (annualized as applicable)
divided by average invested assets.
This measure provides information about the total
revenues of the business in relation to invested assets.
Impaired loan portfolio as a percentage
of total loan portfolio, gross (%)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as impaired loan portfolio divided by total
gross loan portfolio.
This measure provides information about the
proportion of impaired loan portfolio in the total gross
loan portfolio.
Integration-related expenses (USD)
Generally include costs of internal staff and
contractors substantially dedicated to integration
activities, retention awards, redundancy costs,
incremental expenses from the shortening of useful
lives of property, equipment and software, and
impairment charges relating to these assets.
Classification as integration-related expenses does not
affect the timing of recognition and measurement of
those expenses or the presentation thereof in the
income statement. Integration-related expenses
incurred by Credit Suisse also included expenses
associated with restructuring programs that existed
prior to the acquisition.
This measure provides information about expenses
that are temporary, incremental and directly related to
the integration of Credit Suisse into UBS.
Invested assets (USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management
Calculated as the sum of managed fund assets,
managed institutional assets, discretionary and
advisory wealth management portfolios, fiduciary
deposits, time deposits, savings accounts, and wealth
management securities or brokerage accounts.
This measure provides information about the volume
of client assets managed by or deposited with UBS for
investment purposes.
Investment products for Personal
Banking (USD and CHF)
– Personal & Corporate Banking
Calculated as the sum of investment funds (including
UBS Vitainvest third-pillar pension funds, as well as
money market funds), mandates and third-party life
insurance operated in Personal Banking.
This measure provides information about the volume
of investment funds (including UBS Vitainvest third-
pillar pension funds, as well as money market funds),
mandates and third-party life insurance operated in
Personal Banking.
Net interest margin (bps)
– Personal & Corporate Banking
Calculated as net interest income (annualized as
applicable) divided by average loans.
This measure provides information about the
profitability of the business by calculating the
difference between the price charged for lending and
the cost of funding, relative to loan value.
Net new assets (USD)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period, plus interest and dividends.
Excluded from the calculation are movements due to
market performance, foreign exchange translation,
fees, and the effects on invested assets of strategic
decisions by UBS to exit markets or services.
This measure provides information about the
development of invested assets during a specific
period as a result of net new asset flows, plus the
effect of interest and dividends.
Net new assets growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable),
plus interest and dividends, divided by total invested
assets at the beginning of the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new asset flows.
UBS AG first quarter 2024 report |
Appendix 71
APM label
Calculation
Information content
Net new fee-generating assets (USD)
– Global Wealth Management
Calculated as the net amount of fee-generating asset
inflows and outflows, including dividend and interest
inflows into mandates and outflows from mandate
fees paid by clients during a specific period. Excluded
from the calculation are the effects on fee-generating
assets of strategic decisions by UBS to exit markets or
services.
This measure provides information about the
development of fee-generating assets during a
specific period as a result of net flows, excluding
movements due to market performance and foreign
exchange translation, as well as the effects on fee-
generating assets of strategic decisions by UBS to exit
markets or services.
Net new investment products for
Personal Banking (USD and CHF)
– Personal & Corporate Banking
Calculated as the net amount of inflows and outflows
of investment products during a specific period.
This measure provides information about the
development of investment products during a specific
period as a result of net new investment product
flows.
Net new money (USD)
– Global Wealth Management,
Asset Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period. Excluded from the calculation
are movements due to market performance, foreign
exchange translation, dividends, interest and fees, as
well as the effects on invested assets of strategic
decisions by UBS to exit markets or services. Net new
money is not measured for Personal & Corporate
Banking.
This measure provides information about the
development of invested assets during a specific
period as a result of net new money flows.
Net new money growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable)
divided by total invested assets at the beginning of
the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new money flows.
Net profit growth (%)
Calculated as the change in net profit attributable to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
This measure provides information about profit
growth since the comparison period.
Operating expenses (underlying)
(USD)
Calculated by adjusting operating expenses as
reported in accordance with IFRS Accounting
Standards for items that management believes are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of the
UBS Group first quarter 2024 report for more
information
This measure provides information about the amount
of operating expenses, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Operating profit / (loss) before tax
(underlying) (USD)
Calculated by adjusting operating profit / (loss) before
tax as reported in accordance with IFRS Accounting
Standards for items that management believes are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of the
UBS Group first quarter 2024 report for more
information
This measure provides information about the amount
of operating profit / (loss) before tax, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
Pre-tax profit growth (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period.
This measure provides information about pre-tax
profit growth since the comparison period.
Pre-tax profit growth (underlying) (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period. Net profit before tax attributable
to shareholders from continuing operations excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about pre-tax
profit growth since the comparison period, while
excluding items that management believes are not
representative of the underlying performance of the
businesses.
Recurring net fee income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of fees for services provided on
an ongoing basis, such as portfolio management fees,
asset-based investment fund fees and custody fees,
which are generated on client assets, and
administrative fees for accounts.
This measure provides information about the amount
of recurring net fee income.
Return on attributed equity (%)
Calculated as annualized business division operating
profit before tax divided by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity.
UBS AG first quarter 2024 report |
Appendix 72
APM label
Calculation
Information content
Return on common equity tier 1
capital (%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity tier 1
capital.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital.
Return on equity (%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders.
This measure provides information about the
profitability of the business in relation to equity.
Return on leverage ratio denominator,
gross (%)
Calculated as annualized total revenues divided by
average leverage ratio denominator.
This measure provides information about the revenues
of the business in relation to the leverage ratio
denominator.
Return on tangible equity (%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders less average goodwill and intangible
assets.
This measure provides information about the
profitability of the business in relation to tangible
equity.
Tangible book value per share
(USD)
Calculated as equity attributable to shareholders less
goodwill and intangible assets divided by the number
of shares outstanding.
This measure provides information about tangible net
assets on a per-share basis.
Total book value per share
(USD)
Calculated as equity attributable to shareholders
divided by the number of shares outstanding.
This measure provides information about net assets
on a per-share basis.
Total revenues (underlying)
(USD)
Calculated by adjusting total revenues as reported in
accordance with IFRS
Accounting Standards for items
that management believes are not representative of
the underlying performance of the businesses.
›
Refer to the “Group performance” section of the
UBS Group first quarter 2024 report for more
information
This measure provides information about the amount
of total revenues, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Transaction-based income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of the non-recurring portion of
net fee and commission income, mainly composed of
brokerage and transaction-based investment fund
fees, and credit card fees, as well as fees for payment
and foreign-exchange transactions, together with
other net income from financial instruments
measured at fair value through profit or loss.
This measure provides information about the amount
of the non-recurring portion of net fee and
commission income, together with other net income
from financial instruments measured at fair value
through profit or loss.
Underlying cost / income ratio (%)
Calculated as underlying operating expenses (as
defined above) divided by underlying total revenues
(as defined above).
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues, while excluding items
that management believes are not representative of
the underlying performance of the businesses.
Underlying net profit growth (%)
Calculated as the change in net profit attributable to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period. Net profit
attributable to shareholders from continuing
operations excludes items that management believes
are not representative of the underlying performance
of the businesses and also excludes related tax
impact.
This measure provides information about profit
growth since the comparison period, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
Underlying return on attributed equity
(%)
Calculated as annualized underlying business division
operating profit before tax (as defined above) divided
by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on common equity
tier 1 capital (%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity tier 1
capital. Net profit attributable to shareholders
excludes items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on tangible equity
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders less average goodwill and intangible
assets. Net profit attributable to shareholders excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to tangible
equity, while excluding items that management
believes are not representative of the underlying
performance of the businesses.
This is a general list of the APMs used in our financial reporting. Not all of the APMs listed above may appear in
this particular report.
UBS AG first quarter 2024 report |
Appendix 73
Abbreviations frequently used in our financial reports
A
ABS asset-backed securities
AG Aktiengesellschaft
AGM Annual General Meeting of
shareholders
A-IRB advanced internal ratings-
based
AIV alternative investment
vehicle
ALCO Asset and Liability
Committee
AMA advanced measurement
approach
AML anti-money laundering
AoA Articles of Association
APM alternative performance
measure
ARR alternative reference rate
ARS auction rate securities
ASF available stable funding
AT1 additional tier 1
AuM assets under management
B
BCBS Basel Committee on
Banking Supervision
BIS Bank for International
Settlements
BoD Board of Directors
C
CAO Capital Adequacy
Ordinance
CCAR Comprehensive Capital
Analysis and Review
CCF credit conversion factor
CCP central counterparty
CCR counterparty credit risk
CCRC Corporate Culture and
Responsibility Committee
CDS credit default swap
CEA Commodity Exchange Act
CEO Chief Executive Officer
CET1 common equity tier 1
CFO Chief Financial Officer
CGU cash-generating unit
CHF Swiss franc
CIO Chief Investment Office
C&ORC Compliance & Operational
Risk Control
CRM credit risk mitigation (credit
risk) or comprehensive risk
measure (market risk)
CST combined stress test
CUSIP Committee on Uniform
Security Identification
Procedures
CVA credit valuation adjustment
D
DBO defined benefit obligation
DCCP Deferred Contingent
Capital Plan
DE&I diversity, equity and
inclusion
DFAST Dodd–Frank Act Stress Test
DM discount margin
DOJ US Department of Justice
DTA deferred tax asset
DVA debit valuation adjustment
E
EAD exposure at default
EB Executive Board
EC European Commission
ECB European Central Bank
ECL expected credit loss
EGM Extraordinary General
Meeting of shareholders
EIR effective interest rate
EL expected loss
EMEA Europe, Middle East and
Africa
EOP Equity Ownership Plan
EPS earnings per share
ESG environmental, social and
governance
ESR environmental and social
risk
ETD exchange-traded derivatives
ETF exchange-traded fund
EU European Union
EUR euro
EURIBOR Euro Interbank Offered Rate
EVE economic value of equity
EY Ernst & Young Ltd
F
FA financial advisor
FCA UK Financial Conduct
Authority
FDIC Federal Deposit Insurance
Corporation
FINMA Swiss Financial Market
Supervisory Authority
FMIA Swiss Financial Market
Infrastructure Act
FSB Financial Stability Board
FTA Swiss Federal Tax
Administration
FVA funding valuation
adjustment
FVOCI fair value through other
comprehensive income
FVTPL fair value through profit or
loss
FX foreign exchange
G
GAAP generally accepted
accounting principles
GBP pound sterling
GCRG Group Compliance,
Regulatory & Governance
GDP gross domestic product
GEB Group Executive Board
GHG greenhouse gas
GIA Group Internal Audit
GRI Global Reporting Initiative
G-SIB global systemically
important bank
H
HQLA
high-quality liquid assets
I
IAS International Accounting
Standards
IASB International Accounting
Standards Board
IBOR interbank offered rate
IFRIC International Financial
Reporting Interpretations
Committee
IFRS Accounting Standards
Accounting issued by the IASB
Standards
IRB internal ratings-based
IRRBB interest rate risk in the
banking book
ISDA International Swaps and
Derivatives Association
ISIN International Securities
Identification Number
UBS AG first quarter 2024 report |
Appendix 74
Abbreviations frequently used in our financial reports (continued)
K
KRT Key Risk Taker
L
LAS liquidity-adjusted stress
LCR liquidity coverage ratio
LGD loss given default
LIBOR London Interbank Offered
Rate
LLC limited liability company
LoD lines of defense
LRD leverage ratio denominator
LTIP Long-Term Incentive Plan
LTV loan-to-value
M
M&A mergers and acquisitions
MRT Material Risk Taker
N
NII net interest income
NSFR net stable funding ratio
NYSE New York Stock Exchange
O
OCA own credit adjustment
OCI other comprehensive
income
OECD Organisation for Economic
Co-operation and
Development
OTC over-the-counter
P
PCI purchased credit impaired
PD probability of default
PIT point in time
PPA purchase price allocation
P&L profit or loss
Q
QCCP Qualifying central
counterparty
R
RBC risk-based capital
RbM risk-based monitoring
REIT real estate investment trust
RMBS residential mortgage-
backed securities
RniV risks not in VaR
RoCET1 return on CET1 capital
RoU right-of-use
rTSR relative total shareholder
return
RWA risk-weighted assets
S
SA standardized approach or
société anonyme
SA-CCR standardized approach for
counterparty credit risk
SAR Special Administrative
Region of the People’s
Republic of China
SDG Sustainable Development
Goal
SEC US Securities and Exchange
Commission
SFT securities financing
transaction
SI sustainable investing or
sustainable investment
SIBOR Singapore Interbank
Offered Rate
SICR significant increase in credit
risk
SIX SIX Swiss Exchange
SME small and medium-sized
entities
SMF Senior Management
Function
SNB Swiss National Bank
SOR Singapore Swap Offer Rate
SPPI solely payments of principal
and interest
SRB systemically relevant bank
SRM specific risk measure
SVaR stressed value-at-risk
T
TBTF too big to fail
TCFD Task Force on Climate-
related Financial Disclosures
TIBOR Tokyo Interbank Offered
Rate
TLAC total loss-absorbing capacity
TTC through the cycle
U
USD US dollar
V
VaR value-at-risk
VAT
value added tax
This is a general list of the abbreviations frequently used in our financial reporting. Not all of the listed abbreviations
may appear in this particular report.
UBS AG first quarter 2024 report |
Appendix 75
Information sources
Reporting publications
Annual publications
UBS AG Annual Report
: Published in English, this report provides descriptions of: the UBS AG (consolidated)
performance; the strategy and performance of the business divisions and Group Items; risk, treasury and capital
management; corporate governance; and financial information, including the financial statements.
Compensation Report
: This report discusses the compensation framework and provides information about
compensation for the Board of Directors and the Group Executive Board members. It is available in English and
German (
“Vergütungsbericht
”) and represents a component of the UBS Group Annual Report.
Sustainability Report
: Published in English, the Sustainability Report provides disclosures on environmental, social
and governance topics related to the UBS Group. It also provides certain disclosures related to diversity, equity and
inclusion.
Quarterly publications
Quarterly financial report
: This report provides an update on performance and strategy (where applicable) for the
respective quarter. It is available in English.
The annual and quarterly publications are available in .pdf and online formats at
ubs.com/investors
, under “Financial
information.” Starting with the Annual Report 2022, printed copies, in any language, of the aforementioned annual
publications are no longer provided.
Other information
Website
The “Investor Relations” website at
ubs.com/investors
news releases; financial information, including results-related filings with the US Securities and Exchange
Commission (the SEC); information for shareholders, including UBS share price charts, as well as data and dividend
information, and for bondholders; the corporate calendar; and presentations by management for investors and
financial analysts. Information is available online in English, with some information also available in German.
Results presentations
Quarterly results presentations are webcast live. Recordings of most presentations can be downloaded from
ubs.com/presentations
.
Messaging service
Email alerts to news about UBS can be subscribed for under “UBS News Alert” at
ubs.com/global/en/investor-
relations/contact/investor-services.html
. Messages are sent in English, German, French or Italian, with an option to
select theme preferences for such alerts.
Form 20-F and other submissions to the US Securities and Exchange Commission
UBS files periodic reports with and submits other information to the SEC. Principal among these filings is the annual
report on Form 20-F, filed pursuant to the US Securities Exchange Act of 1934. The filing of Form 20-F is structured
as a wraparound document. Most sections of the filing can be satisfied by referring to the UBS AG Annual Report.
However, there is a small amount of additional information in Form 20-F that is not presented elsewhere and is
particularly targeted at readers in the US. Readers are encouraged to refer to this additional disclosure. Any
document that filed with the SEC is available on the SEC’s website:
sec.gov
. Refer to
ubs.com/investors
information.
UBS AG first quarter 2024 report |
Appendix 76
Cautionary statement regarding forward-looking statements |
not limited to management’s outlook for UBS’s financial performance, statements relating to the anticipated effect of transactions and strategic initiatives on
UBS’s business and future development and goals or intentions to achieve climate, sustainability and other social objectives. While these forward-looking
statements represent UBS’s judgments, expectations and objectives concerning the matters described, a number of risks, uncertainties and other important
factors could cause actual developments and results to differ materially from UBS’s expectations. In particular, terrorist activity and conflicts in the Middle East,
as well as the continuing Russia–Ukraine war, may have significant impacts on global markets, exacerbate global inflationary pressures, and slow global growth.
In addition, the ongoing conflicts may continue to cause significant population displacement, and lead to shortages of vital commodities, including energy
shortages and food insecurity outside the areas immediately involved in armed conflict. Governmental responses to the armed conflicts, including, with respect
to the Russia–Ukraine war, coordinated successive sets of sanctions on Russia and Belarus, and Russian and Belarusian entities and nationals, and the uncertainty
as to whether the ongoing conflicts will widen and intensify, may continue to have significant adverse effects on the market and macroeconomic conditions,
including in ways that cannot be anticipated. UBS’s acquisition of the Credit Suisse Group has materially changed our outlook and strategic direction and
introduced new operational challenges. The integration of the Credit Suisse entities into the UBS structure is expected to take between three and five years and
presents significant risks, including the risks that UBS Group AG may be unable to achieve the cost reductions and other benefits contemplated by the transaction.
This creates significantly greater uncertainty about forward-looking statements. Other factors that may affect our performance and ability to achieve our plans,
outlook and other objectives also include, but are not limited to: (i) the degree to which UBS is successful in the execution of its strategic plans, including its cost
reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA) and leverage ratio denominator (LRD), liquidity coverage ratio
and other financial resources, including changes in RWA assets and liabilities arising from higher market volatility and the size of the combined Group; (ii) the
degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions, including as a result of
the acquisition of the Credit Suisse Group; (iii) increased inflation and interest rate volatility in major markets; (iv) developments in the macroeconomic climate
and in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, currency exchange rates,
deterioration or slow recovery in residential and commercial real estate markets, the effects of economic conditions, including increasing inflationary pressures,
market developments, increasing geopolitical tensions, and changes to national trade policies on the financial position or creditworthiness of UBS’s clients and
counterparties, as well as on client sentiment and levels of activity; (v) changes in the availability of capital and funding, including any adverse changes in UBS’s
credit spreads and credit ratings of UBS, Credit Suisse, sovereign issuers, structured credit products or credit-related exposures, as well as availability and cost of
funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC), in particular in light of the acquisition of the Credit Suisse Group;
(vi) changes in central bank policies or the implementation of financial legislation and regulation in Switzerland, the US, the UK, the EU and other financial centers
that have imposed, or resulted in, or may do so in the future, more stringent or entity-specific capital, TLAC, leverage ratio, net stable funding ratio, liquidity and
funding requirements, heightened operational resilience requirements, incremental tax requirements, additional levies, limitations on permitted activities,
constraints on remuneration, constraints on transfers of capital and liquidity and sharing of operational costs across the Group or other measures, and the effect
these will or would have on UBS’s business activities; (vii) UBS’s ability to successfully implement resolvability and related regulatory requirements and the potential
need to make further changes to the legal structure or booking model of UBS in response to legal and regulatory requirements and any additional requirements
due to its acquisition of the Credit Suisse Group, or other developments; (viii) UBS’s ability to maintain and improve its systems and controls for complying with
sanctions in a timely manner and for the detection and prevention of money laundering to meet evolving regulatory requirements and expectations, in particular
in current geopolitical turmoil; (ix) the uncertainty arising from domestic stresses in certain major economies; (x) changes in UBS’s competitive position, including
whether differences in regulatory capital and other requirements among the major financial centers adversely affect UBS’s ability to compete in certain lines of
business; (xi) changes in the standards of conduct applicable to our businesses that may result from new regulations or new enforcement of existing standards,
including measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (xii) the
liability to which UBS may be exposed, or possible constraints or sanctions that regulatory authorities might impose on UBS, due to litigation, contractual claims
and regulatory investigations, including the potential for disqualification from certain businesses, potentially large fines or monetary penalties, or the loss of
licenses or privileges as a result of regulatory or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the
operational risk component of our RWA, including as a result of its acquisition of the Credit Suisse Group, as well as the amount of capital available for return
to shareholders; (xiii) the effects on UBS’s business, in particular cross-border banking, of sanctions, tax or regulatory developments and of possible changes in
UBS’s policies and practices; (xiv) UBS’s ability to retain and attract the employees necessary to generate revenues and to manage, support and control its
businesses, which may be affected by competitive factors; (xv) changes in accounting or tax standards or policies, and determinations or interpretations affecting
the recognition of gain or loss, the valuation of goodwill, the recognition of deferred tax assets and other matters; (xvi) UBS’s ability to implement new
technologies and business methods, including digital services and technologies, and ability to successfully compete with both existing and new financial service
providers, some of which may not be regulated to the same extent; (xvii) limitations on the effectiveness of UBS’s internal processes for risk management, risk
control, measurement and modeling, and of financial models generally; (xviii) the occurrence of operational failures, such as fraud, misconduct, unauthorized
trading, financial crime, cyberattacks, data leakage and systems failures, the risk of which is increased with cyberattack threats from both nation states and non-
nation-state actors targeting financial institutions; (xix) restrictions on the ability of UBS Group AG and UBS AG to make payments or distributions, including due
to restrictions on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by
FINMA or the regulators of UBS’s operations in other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation
proceedings; (xx) the degree to which changes in regulation, capital or legal structure, financial results or other factors may affect UBS’s ability to maintain its
stated capital return objective; (xxi) uncertainty over the scope of actions that may be required by UBS, governments and others for UBS to achieve goals relating
to climate, environmental and social matters, as well as the evolving nature of underlying science and industry and the possibility of conflict between different
governmental standards and regulatory regimes; (xxii) the ability of UBS to access capital markets; (xxiii) the ability of UBS to successfully recover from a disaster
or other business continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, conflict (e.g., the Russia–Ukraine war), pandemic, security
breach, cyberattack, power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term
disruptions such as the COVID-19 (coronavirus) pandemic; (xxiv) the level of success in the absorption of Credit Suisse, in the integration of the two groups and
their businesses, and in the execution of the planned strategy regarding cost reduction and divestment of any non-core assets, the existing assets and liabilities
of Credit Suisse, the level of resulting impairments and write-downs, the effect of the consummation of the integration on the operational results, share price
and credit rating of UBS – delays, difficulties, or failure in closing the transaction may cause market disruption and challenges for UBS to maintain business,
contractual and operational relationships; and (xxv) the effect that these or other factors or unanticipated events, including media reports and speculations, may
have on our reputation and the additional consequences that this may have on our business and performance. The sequence in which the factors above are
presented is not indicative of their likelihood of occurrence or the potential magnitude of their consequences. Our business and financial performance could be
affected by other factors identified in our past and future filings and reports, including those filed with the US Securities and Exchange Commission (the SEC).
More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including the UBS Group AG
and UBS AG Annual Reports on Form 20- F for the year ended 31 December 2023. UBS is not under any obligation to (and expressly disclaims any obligation to)
update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
Rounding |
disclosed in text and tables are calculated on the basis of unrounded figures. Absolute changes between reporting periods disclosed in the text, which can be
derived from numbers presented in related tables, are calculated on a rounded basis.
Tables |
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Values
that are zero on a rounded basis can be either negative or positive on an actual basis.
Websites |
of any such websites into this report.
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
ubs.com
This Form 6-K is hereby incorporated by reference into (1) the registration statement of UBS AG on Form F-3
(Registration Number 333-263376), and into each prospectus outstanding under any of the foregoing registration
statements, (2) any outstanding offering circular or similar document issued or authorized by UBS AG that
incorporates by reference any Forms 6-K of UBS AG that are incorporated into its registration statements filed with
the SEC, and (3) the base prospectus of Corporate Asset Backed Corporation (“CABCO”) dated June 23, 2004
(Registration Number 333-111572), the Form 8-K of CABCO filed and dated June 23, 2004 (SEC File Number 001-
13444), and the Prospectus Supplements relating to the CABCO Series 2004-101 Trust dated May 10, 2004 and May
17, 2004 (Registration Number 033-91744 and 033-91744-05).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
UBS AG
By: /s/ Sergio Ermotti
_
Name: Sergio Ermotti
Title: President of the Executive Board
By: /s/ Todd Tuckner
_
Name: Todd Tuckner
Title: Chief Financial Officer
By: /s/ Steffen Henrich
______________
Name: Steffen Henrich
Title: Controller
Date: May 7, 2024