6-K
UBS AG (AMUB)
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: October 30, 2025
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
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 registrants file or will file annual
reports under cover of Form
20-F or Form 40-
F.
Form 20-F
☒
Form 40-F
☐
This Form 6-K consists of the transcripts of the 3Q25 Earnings call remarks
and Analyst Q&A, which
appear immediately following this page.
1
Third quarter 2025 results
29 October 2025
Speeches by
Sergio P.
Ermotti
, Group Chief Executive Officer,
and
Todd
Tuckner
,
Group Chief Financial
Officer
Including analyst
Q&A session
Transcript.
Numbers for slides refer to the third quarter 2025 results presentation.
Materials and a webcast
replay are available at
www.ubs.com/investors
Sergio P.
Ermotti
Slide 3: Key messages
Thank you, Sarah and good morning,
everyone.
The power of our
unique business model,
diversified global footprint
and balance sheet for
all seasons was evident
once again in our excellent
performance this quarter. Regardless of how you measure our
third-quarter results, we
delivered strong returns
driven by significant
momentum in our core
businesses and disciplined execution on
our
strategic priorities.
Invested assets
reached nearly
7 trillion
across the
Group, supported
by robust flows
in Global
Wealth Management
and also Asset
Management, where
we surpassed
two trillion
in invested
assets for
the first time.
In APAC, invested
assets across our asset gathering businesses now exceed
one trillion, and this quarter’s exceptionally strong flows
underscore our
position as
the region’s
largest global
wealth manager.
The build-up
of our
investment banking
capabilities in areas of strategic importance supported our outperformance
of industry fee pools, and is consistent
with our ambition to increase market share. We also saw healthy private and institutional client activity across the
globe. In
Switzerland, our
clients continue
to benefit
from UBS’s
unique global
footprint and
capabilities as
we
supported businesses and households with around 40 billion Swiss francs of loans granted or renewed during the
quarter.
I am particularly pleased that we achieved all
of this while further advancing on our
integration efforts.
Over two-thirds
of client accounts
in Switzerland, more
than seven hundred
thousand, have now
been migrated
onto UBS platforms. We have substantially completed the migration of personal banking clients, and commenced
corporate and institutional client
transfers. We are
encouraged to see improved
satisfaction from clients who
are
now on the UBS platform, and we remain on track to complete the final
migrations by the end of the first quarter
next
year.
The
integration
of
Asset
Management
is
also
substantially
completed,
allowing
us
to
fully
focus
on
opportunities to drive efficient growth.
Across
the
group,
we
continue
to
streamline
our
operations.
We
are
nearly
halfway
through
our
application
decommissioning roadmap, and we
have shut down 60% of legacy
servers and processed around 40 petabytes
of
2
data. This keeps us well positioned to deliver
on our gross cost savings ambition by the end of 2026.
Our recent employee survey highlighted what in my view is one of the most important markers of our integration
progress. Sentiment across
UBS and former
Credit Suisse colleagues
is now equally
positive and well
above industry
benchmarks, further validating our efforts to create a common
culture and vision across the organization.
I am
also pleased
that we
resolved significant
legacy litigation
related to
Credit Suisse’s
RMBS matter
and UBS’s
legacy cross-border matter in France in the best interests of our
shareholders.
All of this progress and business
momentum further reinforces our
capital strength and confidence
in our ability to
execute on our capital return plans as we continue
to deliver on our 2025 objectives for dividends
and buybacks.
As previously
communicated,
we will
provide more
detail on
our plans
for 2026
with our
full-year results
in February.
Our priorities
extend beyond
staying close
to our
clients and
successfully completing
the integration.
We also
remain
committed to strategically investing across our platform to position UBS for sustainable
growth.
Earlier this week,
we filed
our application
for a
national bank
charter in
the U.S.
and we
expect approval
in 2026
– a
pivotal milestone
in our multi-year strategy to improve the breadth and depth of our
client offering, and setting the stage for long-
term value creation.
At the
same time,
we are
advancing our
A.I. capabilities.
We
now have
340 live
A.I. use
cases across
the bank
increasing resilience and building the foundation
to enhance the client
experience, and deliver meaningful
gains in
efficiency and productivity.
With respect to the
ongoing political process on
banking regulation in Switzerland,
as you saw
at the end of
the
quarter, we submitted our response to the Capital Adequacy Ordinance consultation. We will do the same for the
ongoing consultation on capital requirements related to foreign subsidiaries
before it ends in early January.
Looking to
the fourth
quarter,
with valuations
elevated across
most asset
classes, investors
remain engaged
but
increasingly
focused
on
managing
downside
risks,
which
is
also
evident
in
periodic
headline-driven
spikes
in
volatility. Against this backdrop, transactional activity
and our deal pipelines
remain healthy, though sentiment can
shift
quickly
as
confidence
in
the
outlook
is
tested
and
seasonal
effects
come
into
play.
Furthermore,
macro
uncertainties along with
a strong Swiss franc
and higher US
tariffs are clouding the
outlook for the
Swiss economy,
and a prolonged US government shutdown may
delay capital market activities.
Summing up, I am very pleased with our strong results this quarter,
and I am extremely thankful to my colleagues
for their
continued dedication and
focus amid
ongoing macroeconomic and
regulatory uncertainty.
We will
stay
very focused on executing on our strategic priorities while we remain a
trusted partner in the communities where
we live and work, and position UBS for long-term
value creation for all stakeholders.
With that, I hand over to Todd.
3
Todd
Tuckner
Slide 5 – 3Q25 profitability driven by strong revenue growth and positive operating
leverage
Thank you Sergio, and good morning
everyone.
Throughout my remarks, I’ll refer
to underlying results in US dollars
and make year-over-year
comparisons, unless
stated otherwise.
In the third
quarter we delivered
reported net profit
of 2.5
billion, up 74%,
and earnings
per share of
76 cents. Our
underlying pre-tax
profit was
3.6 billion,
up 50%,
on 5%
revenue growth,
and our
return on
CET1 capital
was
16.3%.
Included in
our underlying
performance are
net litigation
reserve releases
of 668
million, primarily
driven by
the
resolution of legal matters related to Credit Suisse’s RMBS business and
UBS’s legacy cross-border case in France.
Excluding litigation, our return
on CET1 capital
was 12.7% as
we grew pre
-tax profits by
26% across the
Group
and by 19% in our core divisions.
Slide 6 – Net profit 2.5bn with underlying PBT growth in all businesses
Moving to slide 6.
This quarter’s strong financial
performance is once again proof
of the enduring advantages
of
our platform. We saw broad-based client momentum in constructive markets and disciplined execution across the
franchise.
On a reported
basis, our pre-tax
profit was 2.8
billion with 561
million of revenue
adjustments and 1.3 billion
of
integration-related expenses.
Our tax expense in 3Q was 341 million, representing
an effective tax rate of 12%, supported by
the net litigation
releases. In the fourth
quarter, we expect our tax
rate to normalize,
resulting in a low
double digit effective
tax rate
for full year 2025. This excludes any effect from revaluing our DTAs as part of the year-end planning process.
Slide 7 – Achieved 10bn of gross cost saves, on track to
deliver on ~13bn target
Turning to our cost update on slide 7.
In the third quarter,
we continued to deliver on our
cost reduction program as we
make steady progress in
right-
sizing our technology estate, streamlining functions,
and reducing third-party spend.
These efforts translated into 900
million of incremental gross
run-rate cost saves in 3Q,
with the cumulative total
reaching the 10-billion mark one quarter ahead of
schedule.
Compared to our 2022 baseline, we nominally decreased our overall cost
base by around 13%, or by 24% when
excluding variable compensation, litigation and currency effects.
On this basis our
conversion rate of gross-to-net
saves is 77%.
Similarly,
integration
costs
this
quarter
are
indicative
of
the
scale
and
intensity
of
the
ongoing
Swiss
platform
migration effort. We
expect moderately
lower levels
of costs-to-achieve
in the fourth
quarter as the
program enters
its final stretch, with completion early next year, after which these change-related expenses
will taper further.
4
Our
integration costs
to date
also
reflect
the
additional opportunities
we’ve identified
along the
way
to realize
further efficiencies,
accelerate benefit capture
and, in
select cases,
drive incremental
revenues. We’ll
update you
next
quarter
on
our
2026
integration
cost
budget
and
the
gross
cost
saves
we
expect
to
deliver
as
we
sunset
integration at the end of next year.
As in
prior years,
we expect more
modest gross
and net
saves in
the fourth
quarter as a
result of
our continued
focus on the
Swiss platform migration and
a seasonal uptick
in select non-personnel
items, notably the
UK bank
levy.
Slide 8 – Our balance sheet for all seasons
is a key pillar of our strategy
Turning
to slide 8.
As of the end
of September,
our balance sheet for all
seasons consisted of 1.6 trillion
in total
assets, down 38 billion versus the end of
the second quarter.
Loan balances
remained broadly
stable at
666 billion,
with around
92% secured
by collateral.
Mortgages accounted
for 58%
of the
total, with
average loan-to-values
of about
50%, while
Lombard lending
represented
a
further
24%.
Credit-impaired exposures
in our
lending book
remained stable
quarter-on-quarter at 90
basis points,
while the
cost
of
risk
decreased
by
4
basis
points.
Group
credit
loss
expense
was
102
million,
mainly
relating
to
non-
performing positions in our Swiss business.
Our tangible
book value
per share
grew sequentially
by 2%
to 26
dollars and
54 cents,
primarily from
our net
profit,
which was partly offset by share repurchases.
Overall, we continue
to operate with
a highly fortified
and resilient balance sheet
with total loss absorbing
capacity
of 199 billion, a net stable funding ratio of
120% and an LCR of 182%.
We
were
active
issuers
during
the
quarter,
capitalizing
on
particularly
favorable
market
conditions.
We
placed
around 3 billion in AT1s and over 7 billion in
HoldCo, both at attractive levels,
enhancing our funding position
and
reducing financing needs for
next year. Looking ahead, we’ll remain focused on
further strengthening our funding
profile as market conditions allow.
Slide 9 – Strong profitability reinforces our capital strength
Turning
to capital on slide 9.
Our CET1 capital ratio at the
end of September was 14.8% and
our CET1 leverage
ratio
was
4.6%,
both
up
quarter-over-quarter
and
above
our
target
levels
of
around
14%
and
above
4%,
respectively.
Looking ahead, we expect our year-end
2025 CET1 capital ratio to decrease sequentially,
driven by an accrual for
intended
share
repurchases
in
2026,
as
well
as
the
full-year
2025
dividend. The
amount
of
the
accrual will
be
informed by our ongoing strategic planning process and remains subject to the
continued successful execution of
the
Swiss
platform
migration
as
well
as
visibility
on
the
shape
and
timing
of
future
capital
requirements
in
Switzerland.
Turning to UBS AG. The parent bank’s standalone CET1
capital ratio was roughly unchanged
at 13.3%.
Similar to
last quarter,
we continued to pace intercompany dividend
accruals to maintain prudent capital buffers
and offset
the FX-driven headwind on leverage ratios across Group entities. While we maintain our intention to operate UBS
AG’s standalone CET1
capital ratio between
12 and a half
and 13%, we’d
expect the Parent Bank
to remain above
the upper end of the target range particularly
if dollar-Swiss stays near current levels.
5
Slide 10 – Global Wealth Management
Turning to our business divisions, and starting on slide 10 with Global Wealth Management.
In
a
constructive
macro
environment,
GWM
delivered
a
pre-tax
profit
of
1.8
billion.
Excluding
litigation,
profit
before tax was 1.6 billion, up 21% year-over-year,
with APAC, the Americas and EMEA
all delivering double-digit
profit growth.
Asia
Pacific
was
a
standout
with
pre-tax
profit
up
48%,
driven
by
16
percentage
points
of
positive
operating
leverage.
With the
platform migration
work
largely
behind
us
in
the
region,
the
team
is
now
fully
focused
on
delivering
for
clients
and
growing
the
franchise.
We’re
building
on
our
distinctive
advantages
in
scale,
global
connectivity
and
cross-divisional
capabilities.
That’s
evident
in
this
quarter’s
strong
flow
momentum,
top-line
expansion, and disciplined cost management.
Americas pre-tax
profits grew by
26%, reflecting
another quarter
of strong revenue
growth across all
revenue lines,
and positive operating
leverage that lifted
pre-tax margins
to 13.4%. Transactional
revenues continue to
benefit
from
the
sustained
momentum
of
GWM’s
collaboration
with
the
Investment
Bank,
where
jointly
developed
capabilities and
solutions are
resonating with
advisors and
deepening relationships
with clients.
The Americas
team
also made further progress enhancing its banking platform
to support ongoing net interest income expansion.
Excluding litigation,
EMEA delivered
a 13%
increase in
pre-tax profit,
driven by
higher transactional revenues
as
clients actively
hedged equity
and
US dollar
exposures. On
the same
basis,
in our
Swiss wealth
business, profit
before tax
decreased by
3%, as
NII headwinds from
Swiss franc
interest rates
offset strong
recurring fees,
while
transactional activity was somewhat softer than
in other wealth regions.
Onto flows. GWM’s invested assets
increased by 4% sequentially
to 4.7 trillion from
favorable market conditions
and strong asset flows.
In the third quarter, we delivered net new assets of 38 billion, representing a 3.3% annualized growth rate.
The quarterly
performance was
driven by
exceptional inflows
in Asia
Pacific, which
alone contributed
38 billion.
This included
a small
number of
sizeable flows
linked to
strategic holdings,
as well
as strong
client momentum
across the region. EMEA and Switzerland also contributed
positive net new assets of 6 and 3 billion,
respectively.
Net
new
assets
in
the
Americas
were
negative
9
billion,
primarily
reflecting
advisor
movement
following
the
structural changes we introduced last year,
including to the compensation grid, as part of the
franchise’s broader
realignment.
Importantly,
the
strategic
reset
is
already
driving
improvements
in
the
region’s
pre-tax
margins
and
operating
leverage, thereby
unlocking investment
capacity to
further enhance
the platform's
capabilities and
solutions to
help
advisors grow their books and better serve clients.
Looking ahead, we expect turnover to moderate, supported by a healthy recruiting
pipeline and a record number
of advisors choosing to stay and ultimately
retire at UBS.
Net
new
fee
generating
assets
in
the
quarter
were
9
billion,
supported
by
sustained
demand
for
discretionary
mandates, including our SMA solution in the US, and MyWay
in our Swiss and international franchises, as well as
our
advisory
offerings.
Regionally,
NNFGA
growth
was
especially
strong
in
APAC
and
EMEA,
with
annualized
growth rates of 8 and 6%, respectively.
At the same
time, net new
deposit outflows
of 9 billion
largely reflect the
reversal of dynamics
observed in the
prior
quarter.
While
the
uneven
market
backdrop
in
2Q
prompted
clients
to
tactically
reposition
towards
liquidity
solutions,
in
the
third
quarter
clients
actively
redeployed
capital
into
investment
and
trading
solutions
on
our
platform.
6
Client re-leveraging continued for
the third consecutive quarter,
driving positive net new
loans across all
regions.
In 3Q net new lending was 3.5 billion, largely
driven by Lombard and mortgages in Switzerland
and the Americas.
Turning to revenues, which increased by 7%.
Recurring net fee income grew by 7% to 3.5 billion supported
by positive market performance and over
55 billion
in net new fee-generating
assets over the past
12 months. Transaction-based income rose 11%
to 1.3 billion, with
notable strength across structured products and cash equities.
Net interest income of 1.6 billion was up 3% year-over-year and up 5% quarter-over-quarter,
with the sequential
trend reflecting a favorable mix
shift towards transactional deposits,
as well as lower
funding costs. Looking
ahead
to 4Q,
we expect
net interest
income to
be broadly
stable sequentially
as modest
growth in lending
balances should
largely offset headwinds from lower rates.
Operating expenses
in GWM
were down
1%, and
were lower
by 2%
when looking
through variable
compensation,
litigation and currency effects.
Slide 11 – Personal & Corporate Banking (CHF)
Turning to Personal and Corporate Banking on slide 11, where my comments
will refer to Swiss francs.
P&C delivered a
third quarter pre-tax
profit of 668
million, up
1% or down
3% excluding
litigation, a
resilient result
given the Swiss macro backdrop of zero interest rates, a stronger Swiss franc, and
trade uncertainty.
Importantly,
these results were
achieved during the most
operationally intensive phase of
our integration efforts,
demonstrating
disciplined
execution
and
client
focus
while
the
team
continues
to
advance
the
client
platform
migration in the Swiss booking center.
Revenues across recurring net fee and transaction-based
income were up 2%.
In Personal
Banking, the
migration of
Credit Suisse
client
accounts onto
UBS’s platform
is already
supporting
positive
revenue
momentum
through
deeper
client
engagement
and
adoption
of
our
discretionary
solutions.
Personal
Banking transactional
revenues increased by 10%
and recurring fee income
was up 6%
alongside positive
net new
client assets.
In our Corporate and Institutional
Client business, non-NII revenues rose
modestly year-over-year despite the Swiss
operating
environment.
Growth
in
corporate
finance
revenues
more
than
offset
softer
FX
hedging
and
export
finance activity, reflecting currency and trade-policy effects, respectively.
Net interest income decreased by 9% year-on-year. Sequentially,
Swiss franc NII increased by 1%, driven by lower
funding costs and
deposit pricing measures
offsetting the impact of
the 25-basis point
rate cut announced
in June.
For the fourth quarter, we expect NII to be broadly flat sequentially, both in Swiss franc and US dollar terms.
Turning to credit
loss expense. CLE in the third quarter was 58 million on an average loan portfolio of 248 billion,
translating to
a 9
basis point
cost of
risk, down
5 basis
points sequentially.
This included
Stage 3
charges of
56
million largely driven by
a small number of
positions in our corporate
loan book.
For the fourth quarter, we expect
CLE to be around 80 million, reflecting continuing global macro uncertainties
that are also affecting Switzerland.
Operating expenses
declined by
8% this
quarter, or 6% excluding
litigation, underscoring
continued cost
discipline,
with further synergies to come once the
Swiss client migration is completed.
7
Slide 12 – Asset Management
Moving to slide 12. Asset Management delivered a pre-tax profit of 282 million, up 19% year-on-year.
Excluding
net gains on disposals, AM’s profits before tax was up
70% on 5% higher revenues.
Performance fees in the quarter nearly doubled
to 87 million, supported by strong Hedge Fund
results.
Net management fees were stable at 755 million
reflecting higher balances and favorable currency effects, which
were offset by industry-wide headwinds from clients shifting into
lower-margin products over the past year.
Invested
assets
in
the
quarter
grew
by
5%
sequentially,
surpassing
the
2
trillion
mark
for
the
first
time.
With
integration now substantially complete, Asset Management is well placed to leverage its broader
scale, enhanced
product offering and improved efficiency to drive sustained value creation.
Net
new money
was 18
billion, a
3.7% growth
rate, with
positive flows
across all
asset classes,
with particular
strength in strategic
growth segments, including
6 billion in
ETFs and 4
billion in U.S.
SMAs. Flows were
also strong
in Unified
Global Alternatives where
Asset Management’s
new client
commitments in
the third
quarter reached
nearly 2
billion alongside
8 billion
from Global
Wealth Management
clients. Overall,
assets invested
in UGA
reached
317 billion, up 4% quarter-over-quarter.
Operating
expenses
declined
by
12%
year-on-year
reflecting
execution
on
AM’s
commitment
to
improving
operating efficiency.
Slide 13 – Investment Bank
On to the IB on slide 13.
Our Investment Bank
delivered a
very strong
third quarter,
with pre-tax
profit of 787
million - more
than double
year-on-year.
While maintaining its capital discipline, the
IB generated a return on attributed equity
of 17%.
These results highlight the strategic value of
our investments in expanding our global
reach and strengthening our
talent, technology and capabilities. At the same time, the IB’s
close partnership with Global Wealth Management
continues to drive increased client activity and revenues, particularly through jointly delivered structured solutions,
a key differentiator in serving our wealth clients.
Across the franchise, we saw broad-based regional
momentum driving revenues up by 23% to 3
billion, with the
highest third quarter revenues in both Global Banking and
Global Markets.
APAC
was again
a standout,
posting its
best quarter
on record,
with strength
across the
franchise, as
our deep
regional
coverage and
scale
allowed
us
to
capture
elevated
market
activity
and
reinforce
the
region’s
strategic
importance to
the Group.
We’re
also pleased
that our
strength in
APAC
was recognized
by Euromoney,
which
named us Best Investment Bank in Asia.
Banking revenues reached 844 million, a 52% increase
year-on-year,
with each region outpacing the fee pool and
delivering top-line
growth in excess
of 40%. In
Advisory, revenues increased by 47%
led by M&A
delivering its
best
quarter on
record. Capital
Markets was
55% higher,
as LCM
fees nearly
doubled, led
by outperformance in
the
Americas and EMEA,
and ECM revenues
grew by
one and
a half times,
driven by the
pronounced uptick in
IPOs
and Convertible activity.
For
the
fourth
quarter,
we
expect
Banking
activity
to
normalize
from
Q3’s
exceptional
levels.
In
addition
to
seasonality factors,
our guidance
reflects both
transactions brought
forward into
the third
quarter and
potential
timing effects from the US government shut-down
delaying capital markets activities.
8
Looking further
ahead, our
strong pipeline
positions us well
to deliver
on our
medium term
objectives, provided
market conditions remain constructive into next year.
Supported by
high equity
volumes and
sustained client
activity, Global Markets revenues
rose by 14%
to 2.2 billion,
despite a
strong prior-year
comparative and
more normalized
levels of
volatility,
showcasing the
strength of
our
Equities and
FX businesses. Equities
revenues increased
by 15%,
with Cash
Equities reaching
a new
high, as
we
capitalized on our strongest
market share to date.
In Financing, top line
growth of 33% was
supported by Prime
Brokerage
delivering
record-level
revenues
and
client
balances.
FRC
increased
by
13%,
with
growth
across
all
products.
For the fourth quarter,
we expect more
normalized levels of transactional volumes in
Global Markets, particularly
when
compared
to
the
especially
strong
prior-year
period,
which
was
supported
by
unusually
elevated
market
activity ahead of the U.S. administration transition.
For the IB overall, operating expenses rose by 7%,
largely driven by increases in personnel expenses.
Slide 14 – Non-core and Legacy
On slide 14, Non-core and Legacy’s pre-tax profit was 102 million with
negative revenues of 42 million.
Within revenues, funding costs of around 100 million were partly offset by gains from
position exits in securitized
products and macro. Operating expenses in the quarter were negative 149 million driven by net litigation releases
of 440
million. Excluding
litigation, expenses
were
down 56%
year-on-year and
18% sequentially,
as the
team
continues to make strong progress in driving out costs.
Slide 15 – NCL run-down continuing at pace
Onto slide 15.
Since the second quarter of 2023, NCL has reduced its non-operational
risk RWAs by almost 90%,
including additional reductions
of 2
billion this
quarter,
freeing up
over 7
billion of
capital for
the Group
life-to-
date.
The
wind-down efforts
expertly executed
by
the team
over the
past several
quarters have
not
only significantly
strengthened our capital and risk position, but have
also reduced the divisional cost base by nearly 75%.
As of the end of September,
NCL had closed 94% of the 14 thousand books it started with and decommissioned
65%
of
its
IT
applications,
further
reducing
operational
complexity,
and
driving
its
strong
cost
reduction
performance.
Slide 16 – Continuing to make progress towards our 2026 exit rate
targets
To
conclude, the third
quarter marks another
step forward in
our integration agenda.
We addressed
legacy risks
and
advanced the
client
migration
in
the
Swiss
booking center,
all
while
continuing
to
drive
profitable
growth
across our core franchises by staying close to clients.
The
quarter’s
strong
financial
performance
lifted
our
nine-month
underlying
return
on
CET1
capital
to
14%.
Excluding litigation and normalizing
for taxes, our return was
11% – above our full year guidance
of around 10%.
We look forward to
updating you on our expectations for 2026
when we present our fourth quarter
results early
next year.
With that, let’s open up for
questions.
9
Analyst Q&A (CEO
and CFO)
Giulia Aurora Miotto, Morgan Stanley
Good morning. Thank you for taking my
questions. I have two. The first one,
it seems clear that UBS is already
ahead of I guess the plan. Two examples. Cost-income and asset management 66%
against the plan of below
70%, non-core delivering ahead of expectations.
So why wait for Q4 before upgrading the guidance?
And then secondly, different topic, First Brands. I didn't see any comment this morning
but there has been
extensive press coverage about the 500 million hit
on the asset management client asset
side. So, could I please
have your comments on this issue? Have you seen
outflows on the back of it? Is this impacting
your sale of UBS
O'Connor? Yeah. Any comments on this issue please. Thank you.
Todd
Tuckner
Thanks, Giulia, for the questions and good
morning. So thanks for recognizing
our progress on our plan. You're
asking why wait to update the guidance?
Well, clearly it's – as we go through our year-end planning process
which is ongoing and really critical for us, that will
inform how we think about 2026 in terms of
the things I
mentioned in my prepared comments, for example, around
integration, budgets also, our gross run rate cost
saves that we expect to generate, but also the
outlook for each of the divisions, specifically around things
like NII
in our asset gathering businesses and credit loss
expenses in our Swiss business. So the planning
process is
ongoing and that's the reason that we would seek
to update our guidance in the
fourth quarter.
On the First Brands topic, so to be clear, UBS does not have balance sheet exposure
to First Brands and only a
small number of funds are effective [
Edit: affected
]. I mean obviously it's always unfortunate
when clients
generate losses. That said, it's important
to note that the most affected funds were targeted at
sophisticated
investors and had clear risk disclosures. No investment
guidelines were breached. It's also important to note that
we've moved swiftly to inform clients of the
potential performance impact and as
a priority we're taking steps to
protect clients' interests and maximize recovery through the complex bankruptcy
process.
You also asked Giulia about O'Connor.
As previously announced, we continue to progress with the sale
of the
O'Connor hedge fund business to Cantor Fitzgerald
and we're working closely together towards a first close.
Giulia Aurora Miotto, Morgan Stanley
Thanks.
10
Kian Abouhossein, JP Morgan
Yes, thanks for taking my questions. The first one is regarding Wealth Management Americas. You applied for
the National Charter. Can you talk about the benefits of the charter and also talk
about net new asset outlook
post the outflows in the third quarter that we saw
in NA and advisor attrition going forward, how
we should
think about that?
And the second question is just coming back
to the AT1 document on CS and in particular point six, where you
talk about the write-down, how it was handled.
And I recall from our conversations and public statement by
the
previous CEO at that time that the AT1 write-down was a prerequisite or was done before or precondition of
the
takeover of Credit Suisse. So, it sounded like two
separate steps, whereas if I read number six, it sounds
it was all
done in one go, i.e., there was no separation, so to
say. And I am just trying to understand was this a separate
step or not in terms of writing down the
AT1 and subsequent offer of UBS and CS.
Todd
Tuckner
Thanks, Kian, for your question. So first on
the National Charter, as Sergio mentioned, we just applied for the
license just earlier in the week. The expectation
there is to broaden our banking capabilities. As I've said
many
times in the past, expanding NII as a percentage of revenues in
the US business is one of our key strategic
priorities to narrow the pre-tax margin gap to peers. We think the
National Charter, once we receive it, will
enable us to serve our clients on a more comprehensive
basis. It will enable us to offer a suite of services on par
with other banks in the US, including checking
and savings accounts, as well as an
expanded set of lending
products.
But it's also important to emphasize, as I said
also in my prepared comments, Kian, that we're very focused
on
expanding NII in our Wealth US business well before, and we're taking
steps to do that. We've had our fourth
consecutive quarter of lending growth in the US business
and we believe that our differentiated and specialized
lending shelf is increasingly resonating with advisors and
clients.
In terms of the NNA outlook for the US, as
you mentioned and of course as I mentioned
during my comments,
the changes that we introduced last year, including vis-à-vis the compensation framework,
has led to some near-
term advisor movement, but importantly, is lifting pre-tax margins and most importantly, enabling us to reinvest
in the platform to help advisors grow their books
and better serve clients. Looking ahead, while
I do expect some
lag effect from the movement that we've seen into next
year, we do see turnover tapering and that's supported
by a healthy recruiting pipeline, and as I mentioned
on the call in my comments, a record number of advisors
choosing to stay and retire at UBS.
On your second question regarding point six, I think it's
important here, just as we laid out, to indicate and really
what the most important part of this FAQ six is, is that the write-down
of the AT1 instruments was an integral
part of the rescue package and that rescue transaction.
So that the entirety of the rescue package or rescue
transaction included things that we touched on
in the paragraph above, which is quite critical,
the PLB, the
emergency liquidity facilities that were extended, very
importantly the Swiss government's guarantee
or loss
protection agreement against losses in Credit Suisse's Non-core positions, of
course, and our willingness to step
in. And the write-down of the AT1 instruments was an integral part of the
overall rescue transaction. So,
hopefully, that addresses your question.
Kian Abouhossein, JP Morgan
Just quickly one follow-up on the advisor side.
Is there any time frame you could give us where advisors should
be
flattening out in terms of turnover?
Not exactly, but is there a time frame of first half, second half of next year?
And just follow-up very briefly, was the transaction two transactions of the acquisition,
or was it all done in one
transaction, i.e., the FINMA measures and subsequent
takeover?
11
Todd
Tuckner
So, Kian, just to follow up on the first point,
look, as I mentioned, we're seeing turnover tapering
and so we're
encouraged by the trends. Next quarter I'll come out
with our net new asset guidance for the division
overall and
can offer more color on how I see the FA movement having an impact on our NNA expectations
for 2026.
And on the, look, on your follow-up question,
the AT1 instruments, as I mentioned, was an integral part of the
rescue transaction. It was part and parcel of the requirements that were necessary
to inform UBS to come in and
acquire Credit Suisse. So that's everything we want to say
about the AT1 write-down.
Kian Abouhossein, JP Morgan
Understood. Very helpful, thank you.
Todd
Tuckner
Sure.
Jeremy Sigee, BNP Paribas
Morning. Thanks very much. First
question on Asia. Phenomenal flows in the
quarter and it sounded like it was a
bit of a mix of slightly one-off but also slightly underlying
pickup. I just wondered if you could expand on
that. Is
this something that you expect to see sustained
strength? Is this the beginning of a trend of improving flows
from Asia?
And then the second question, very specifically
on the dividend accruals from UBS AG to the
Group. I'm not sure
if you mentioned it. I think first half, it was
about 8 billion that you'd accrued to dividend
up. I wonder if you can
give us an updated number at the nine-month
stage. Thank you.
12
Todd
Tuckner
Yeah, thanks Jeremy.
So just quickly on the second one, so, in 3Q
at this point, we did not accrue any additional
dividends at UBS AG for upstream, which went to
my comment about pacing over time
the level of intercompany
dividends upstreamed to Group to manage some of the FX-driven
headwinds around the leverage ratios across
Group entities. I would just comment that we did pay
the 6.5 billion, the second tranche of the 13
billion that we
accrued in the prior year just after the quarter
in terms of the upstream from the Parent Bank to Group.
On your first question in terms of Asia flows and
drivers, first, thanks for recognizing the strong performance.
I'm
very pleased with how the unit in Asia is
performing. When I look at the quarter, for sure, there was a
constructive backdrop. Clients were quite engaged for
sure in terms of their willingness to engage, whether
it
was to hedge downside risks or still ride what
they saw was positive momentum
in markets. For sure, we were
seeing more APAC for APAC. So China, China Tech,
also the US remains strong – strong traction from a US
investment standpoint and pretty broad based, that's
what we were seeing as well. But just in terms of what
the
team is delivering, really as I commented, a lot of post-integration
momentum. So the teams are now together
in
one platform and really demonstrating what the unit
can do. So while the performance in the
quarter was
exceptional, my expectation for the team
is that they remain engaged with clients and we continue
to perform
very well in the region. I would also call out, as I've
said in the past that what we were missing a
little bit over the
last couple of years from a macro perspective was monetization
coming from ECM-type activities, particularly
IPOs. We know that the region is quite hot at the moment
and that portends upside for us as we go forward
in
terms of flows in APAC.
Jeremy Sigee, BNP Paribas
Great, thank you.
Flora Bocahut, Barclays
Yes, thank you. Good morning. I wanted to ask you a question on the comment
you made in the report around
your willingness to appeal the AT1 ruling. I just wanted to understand
why you as UBS would appeal, because to
my knowledge, this was only the FINMA
so far. So, do you feel like you're potentially liable in this case? Why
would you become a party and appeal on
your side as well?
And the second question is regarding the cost. You're obviously well advanced on the client migration in
Switzerland. This is supposed to lead to
the IT decommissioning next year and the
cost-income ratio boost. Did
you ever provide actually a number, an absolute number, in dollar-billion of how much of a boost this would be
to your cost base? Thank you.
13
Todd
Tuckner
Thank you. Thanks, Flora. So on the appeal which
we announced today in terms of our
intention alongside
FINMA, I think it's important to understand
that Credit Suisse requested to join the proceeding as a party before
the closing of the legal merger with UBS.
And then UBS became a party to the proceeding
in June of 2023 and
has succeeded to Credit Suisse as a result of the acquisition.
Now, why is that helpful? It's in our interest to be a
party in order to ensure that our perspective on the relevant facts
relating to the acquisition is considered by the
court, as well, and this is important, to safeguard
the credibility of AT1 instruments for the key role that they play
in bank recovery and resolution. Now, being a party in the proceedings does not increase our potential
legal
exposure, but we do feel that it's important that we
participate to bring to bear the best possible
outcome.
On your cost question, I think you were asking about
the contribution of technology, if I got you right, in terms of
the bridge to 13 billion from where we are now. So we reported that we have now reached the 10 billion
mark in
terms of gross run rate cost saves. So we have 3 billion
that we expect to convert a significant part
to net saves
over the course of 2026 and drive to our underlying
cost-income ratio target by the end of 2026.
Now my
expectation is, when I look out and of course
we're fine-tuning this as part of the ongoing year-end planning
process, but my expectation as I look out over the last
five quarters is that technology will make up
a bit more
than a third, let's say, close to 40% of the gross run rate cost saves of that residual 3 billion and headcount
capacity is sort of a similar level, with the balance
being third-party costs and real estate. And from a divisional
perspective, I expect two-thirds of that benefit to inure
to Global Wealth Management and P&C, split two-third,
one-third, with the balance inuring to Non-core and the other
core businesses.
Flora Bocahut, Barclays
Very helpful, thank you.
Stefan Stalmann, Autonomous Research
Good morning. Thank you very much
for taking my questions. I would like to
come back to the point on the AT1
write-down. You said what you also said in the FAQ document that being a party in the proceedings does not
increase our potential legal liability and in our view there should
be no liability in this matter. On which basis are
you exactly saying that? I mean, you are a party of this
process, isn't it? Do you actually have an indemnity
by the
government to compensate for
any damages that may arise out of this case?
And the second question, relatively broad question on what
you see in your US business. Is there any evidence
that the US banks are changing their competitive
behavior on the back of their additional
degrees of freedom
from a regulatory capital side, in particular, in Wealth Management? Thank you.
14
Todd
Tuckner
Thanks. Thank you Stefan for your questions.
So in terms of on which basis we've made
the conclusions, we're
acting on legal advice, naturally. Of course, as an accounting matter we can say
that we don't believe there is a
liability and therefore if there's no liability, there's no basis to provide. And our belief is based on the fact that we
believe the write-down was in accordance with the
contractual terms of the AT1 instruments and the applicable
law and that FINMA's decree was lawful. So that
was the basis of our conclusion. And no, we
don't have an
indemnity from the Swiss government.
In terms of the question on US competitive
dynamics, which I guess comes off the back of
the US banks
indicating that they have additional capital
and dry powder in that sense. Is that
changing the competitive
dynamics? Look, all we can do is control what we
can control. In terms of what's in the US, I've
been clear on
what we're doing from a US wealth perspective, been
clear on what we're doing in terms of driving additional
IB
penetration and market share in the US and the steps
we're taking and the success that we're having. I would say
that if we're talking about balance sheet expansion
that some of our peers may be able
to, and of course I can't
comment or speculate, but may be able
to bring to bear on the business. All I can
do is recognize that our
Investment Bank year-on-year has broadly flat balance
sheet consumption, RWAs are broadly flat in the IB and yet
they've driven revenue increases in – well into the double
digits. So, we continue to focus on our capital-light
strategy and execute appropriately.
Stefan Stalmann, Autonomous Research
Many thanks. Very helpful.
Joseph Dickerson, Jefferies
Hi, excuse me, I've got a couple of questions
and then just a clarification. If I look at
your Global Wealth
Management unit, so if I take GWM and I
isolate the business you call Global, over
the past four quarters that's
produced about 1.1 billion of pre-tax loss. Could you discuss
what that is? And if there – if you could effectively
get that to breakeven, or sell it off, which I suppose is
complicated, there's quite an uplift to your Group pre-tax.
So I'm just wondering what is in Global, what's
the strategy there, et cetera?
And then for Q4 on the buyback, are you – how would
you think about effectively accruing for that? Would
it be
whatever you plan to conditionally buy back
or would it be part of the year or your
full-year buyback? I guess,
how to think about that.
And then my point of clarification is on
this AT1 matter,
which is, is it not a fact that when you acquired
Credit
Suisse it had no outstanding AT1 instruments? Thank you.
15
Todd
Tuckner
Thanks, Joseph, for your questions. I may
want clarification on the last one. Again, just
to be clear on what you
were asking before I respond to it. But on the others, quickly. In terms of what's in divisional items
in GWM,
that's the integration expenses largely driving
that performance that you see in that
item. So we don't attribute
that to the units, but just have that overall captured
in GWM. So those are all the things that are effectively the
cost to achieve, the cost saves, that we'll ultimately
bring to bear and drive down its cost-income
ratio further.
In terms of Q4 and the buyback accrual,
as I said, our expectation at the moment
is that whatever we determine
to be the level of share buybacks that we are either committed,
or intend to do in 2026, we will accrue
in our
capital in the fourth quarter, which is in line with the capital adequacy ordinance
rules in Switzerland. So, that'll
be that. Of course, the ultimate level of what
we determine is subject to all the things
that I mentioned on the
call, our ongoing planning process, continued successful
integration steps, particularly with the Swiss
platform.
And then, as well, whether there's more visibility or any
further visibility around the shape and timing of the
capital rules here in Switzerland. So, all that will
inform what we come out and say we're intending
to do in the
fourth quarter, and that will inform the accrual. In addition, of course, our full year
2025 dividend will also be
accrued in the capital.
Now, can I just ask you just to, if you wouldn't mind, restating the last
question?
Joseph Dickerson, Jefferies
Yeah, I just wanted to clarify that at the time that you acquired Credit Suisse, at that point Credit Suisse
had no
outstanding AT1 instruments.
Todd
Tuckner
That is correct.
Joseph Dickerson, Jefferies
Thank you.
Anke Reingen, RBC
Hi. Yeah, thank you for taking my questions. The first is just a follow-up question
on Joe's question about the
buyback. I guess previously you said when you published
your opinion paper that with full year results you
don't
expect full visibility on the regulation. I guess, nothing
has really changed on that aspect. And then, I guess,
would you be able to sort of like announce
another buyback in the course of the
year once you have more
clarity? Or would that be basically excluded
by your sort of like approach to buybacks in 2026?
And then secondly, can you talk a bit about the integration of the Swiss operations,
how that's been going? I
guess, there have been some press articles about some system
failures. Would you think that's due to the
integration, or is it just sort of like part of the normal
business? And I think you had some quite attractive
deposit
rates out there. Are they basically part of your Q4 NII
guidance? Thank you very much.
16
Sergio P.
Ermotti
Thank you for the question, Anke. So I think that
– let me maybe remind what I mentioned in the last
few
quarters, as we were answering the question on capital
returns, that our capital return policies,
and particularly
around share buyback, will not be a stop-and-go policy. So, as you heard from Todd, we're going to complete
our current outstanding share buyback plan and at year-end,
all things being equal, we expect to accrue for
share
buyback to be executed during 2026. The
size of the share buyback will be determined
as we complete our
process and as we have more visibility, both on how the integration is progressing and also on any potential
developments on the capital requirements topic in Switzerland.
But, yes, we're going to have a share buyback in
2026, all things being equal.
So yeah, let's – on the integration side, Todd you may chime in. But, I would say that of
course when you go
through such an enormous – we have been migrating
40 petabytes of data, migrating 700,000 clients
out of 1.2
million clients. So I think that's – what we try
to do is always try to make it as smooth as possible
for everybody. I
would say that so far the vast majority of the clients
that are now part of the UBS platform are happy about
the
migration. Of course, you always have some
people not being happy. Like, if I ask you to move from iOS
telephone to an Android or the other way around. The
first couple of days, maybe you are not so pleased.
But, I
don't think that we have any major issues here. Actually
things are going pretty well and we are now very
focused on completing that. So the rest of deposit
outflows, I think that was more...
Todd
Tuckner
Yeah. Sergio, thanks. Just to pick up – agreed. So, just to pick up on Sergio's point, any system
issue is unrelated
to the client migration. In terms of – you asked,
sort of, maybe a broader question or maybe a more specific
question, but I'll answer it. The most important
thing to remember is that we're managing our net
interest
income, Anke, in an environment of zero interest rates. So I think
it's fair to say that the balance sheet
dynamics
play quite an important role in enhancing the NII as
best as we can. And you can even see that
a bit in the
quarter-on-quarter this quarter. So we're pricing to be competitive in the market since where we want high
value, or deposits of high funding value. But,
I wouldn't call out anything unusual about
what we're doing other
than to enhance our NII wherever possible.
Anke Reingen, RBC
Thank you.
17
Chris Hallam, Goldman Sachs
Morning. Just two quick follow-ups really from me left.
First, you mentioned that you expect to receive approval
for the national bank charter in 2026. From the point
of that approval, how do you see the timeline and
the
quantum for the PBT margin improvement in US wealth?
Just I would assume that that's additive to the
FY26
RoCET1 exit rate. So just any color there would be
super helpful.
And then second, you also flagged that a prolonged
US Government shutdown may
delay US capital markets
activities in the fourth quarter. Could you just give us a sense of materiality on that?
I guess, if we assume that
the Q2 accounts deadline is missed for potential
listings, how that may impact the IB numbers
for 4Q for you?
Thank you.
Todd
Tuckner
Thanks for your questions. So, look, on the –
I think the important thing on the national
charter in terms of when
we get it and what it means. First of
all, it's been priced into our longer-term plan since it's been something
that
we have been intending to do. I think it's
important to understand that, and as I mentioned
in response to an
earlier question, we're very focused on building out
our NII and banking capabilities in the
US now and the
national charter is a natural add-on to that.
This is not just a wait for that and then
it's going to be
transformational, but rather it's going to be
part of an evolution. And it's going to –
obviously, if we want our
clients, the great majority of whom are doing their banking
with other banks, our peers largely in the US
and we
want to have those clients start to bank with
us, that's going to take time. So, but
we can't do it until we have
the charter, the charter,
the license approved. So, that's going to enhance
things. But I would just say it's going
to take time. We'll keep you up and give you color
as to expectations, but right now, from where I sit, that's
something where I'm much more focused on ensuring
that we're doing the right things to drive NII expansion
now and to use the charter as an enhancement
to that.
In terms of the US government shutdown,
very difficult to frame that in a materiality context.
We just wanted to
flag it as a potential headwind given that
if, at some point, if the IPO calendar really does get
delayed across the
street, it'll have ultimately an impact on ECM revenues.
Potentially even on other capital markets revenues.
So we
just wanted to flag it as a risk factor that
we see, but very difficult to frame in terms of materiality
at this point.
Chris Hallam, Goldman Sachs
Okay, thanks very much.
Andrew Coombs, Citi
Morning. If I could have one on litigation
and one on net interest income. On litigation,
if I look at note 14 in
your accounts, you do talk about ATA with respect to terrorist attacks in Iraq. You also talk about Madoff and
Luxembourg fund reports. I'm sure you've seen the events
with BNP Paribas with respect to Sudan and more
recently seen HSBC and the Luxembourg court
ruling on cash restitution on Madoff. So, is there any points of
comparison that you would make, any similarities
versus differences to the outstanding cases that you have
and
flag in note 14 in your accounts?
And then completely separately, net interest income trajectory. You
obviously had good growth in Q3, better
than anticipated. Largely seems to be due to
the deposit mix and pricing. But you're then
guiding to stable net
interest income in Q4 again. So, is there an additional
headwind coming through that you're foreseeing in Q4? Is
it just a function of Fed rates? What are the moving
parts that mean that you are slightly more conservative
on
your Q4 guide versus the experience in Q3?
Thank you.
18
Todd
Tuckner
Yeah, thanks, Andy.
So on the second question in terms of
NII and the outlook. I mean, first, just to maybe
unpack it, from a P&C perspective, I think there it's pretty clear that
notwithstanding the point I made to Anke
around balance sheet management, the NII is going to
be difficult to move out of this sort of flat trajectory
with
interest rates not having anywhere to go at this point.
When they move, as I've said, given the positive
convexity
in the curve, whether rates move up or down,
that will benefit
us in P&C NII.
In wealth, it's always, the dynamics with rates
going down, are always somewhat difficult to model because
of
the impact. Of course, we are still pushing to see continued
re-leveraging. So we've had our third quarter of re-
leveraging. So that's a positive trend that can help.
Also as rates tick down low enough, then
you start to see
even re-leveraging take a much more significant uptick just given
interest in the carry trade. But we're not yet
seeing that at the levels at the moment. Of course,
as well as rates go down, then you have
some mix shift
dynamics that have been favorable but are also difficult to
call, especially given the rate levels we're at.
So, we think that we'll continue to manage the
downward pressure on NII from lower rates. Rates are already
very low on half of our balance sheet, just
given euro and Swissie [Edit:
Swiss franc
]. And as dollars come down
that'll have some downward pressure on deposit NIM, but we'll continue
to manage everything and naturally as
NII is only a quarter of GWM's revenues, of course,
potentially a lower rate environment also portends
favorable
things around transactional activity and even potentially
recurring fees.
Look, on your litigation questions, broadly, we’re first of all not going to comment on other firms'
cases, and do
read acrosses and comment whether on ATA or on Madoff. So, we have our disclosure in the litigation note and I
would just direct you to read and form your own conclusions.
But we're not going to speculate on what we
don't
know about other institutions' legal cases.
19
Benjamin Goy, Deutsche Bank
Yes. Hi, good morning. Two
questions from me. So first it looks like you didn't
upstream capital out of your New
York or Credit Suisse international entities this quarter, but last year you did a significant one in Q4. So should we
expect something similar this year? Maybe you
can share some color on that.
And then secondly, asset quality remains rock solid. At least in the US disclosure we see that your exposure to
non-deposit-taking financial institutions is quite
low. But any additional details of exposures to private credit,
private equity and hedge funds will be appreciated.
And potentially also broader thoughts on the credit concerns
in the market outside of single cases. Thank
you.
Todd
Tuckner
Thanks, Benjamin. So in terms of upstreaming capital
from our subsidiaries, in particular, the UK subsidiary where
I've guided in the past still expectation over
the rest of this year into next year. We don't control the timing, but
what we control is continuing to derisk the balance
sheet. And, but ultimately the timing to
upstream requires
regulatory approval, so we don't control that, but I'm still expecting
that the UK – the capital repatriations from
the UK will happen over the near to midterm.
In the US, and I've mentioned in the past, our
expectation is to
reduce the capital ratio to levels that were pre-CS levels of CET1
capital. You could see this quarter still elevated
with a two-handle in terms of CET1. We're working as
well to reduce, reduce the capital levels there, and that
will also result in there being upstream of capital from the US to the Parent Bank.
I will give more color next
quarter on the expectations around what I see for
the full year 2026, at this stage, but we continue
to work to
upstream as much as we can as a function of derisking
the balance sheet from the CS acquisition.
And on the second question in terms of NBFIs,
look, I'm very comfortable with our on-balance
sheet exposure
from a credit standpoint. I think that's pretty clear, if you take from me my updates each quarter on where our
balance sheet is, what it consists of, cost of
risk. Our NBFI counterparties are largely investment
grade, strong
protection in terms of collateralized positions. So,
I have no concerns about the broader credit environment
impacting on UBS at this stage. I'm seeing nothing
that would suggest any issues beyond what
I report regularly
on, which is in our Swiss environment, just working
through the back book from the Credit Suisse acquisition
that we've been doing and bringing to you
all my thoughts around the impact, say, of the ongoing and emerging
trade policy effects on whether the back or the front
book in the Swiss business. So those are the things
that I
think are relevant and we'll continue to focus on. And
see no broader stress in the credit market that I would,
particularly in the private credit market, that I would
call out.
Benjamin Goy, Deutsche Bank
Good to hear. Thank you.
20
Amit Goel, Mediobanca
Hi. Thank you. Two questions from me, just follow-ups really. But, one, so just on the, coming back to the US
Wealth piece, I just really wanted to understand – I appreciate you'll
give more guidance with full year but with
then the changes to the grid to try and get
a bit more attention and to kind of stabilize the
flows, could we see
the operating margin then again kind of
decline a little bit before you look to get that
improving again?
And then secondly, just on the PCB business then, I guess, in the comments then,
so the deposit – the net new
deposit outflow reflected some balance sheet optimization,
but I was a bit confused about then why
there would
be some slightly more favorable deposit offerings then being
made. So just wanted to understand that
a bit
better. And essentially with the outlook being a bit more cloudy for Switzerland, just curious
how you're seeing
the balance sheet development there going into next
year. Thank you.
Todd
Tuckner
Yes, Amit. So, maybe just taking your second question first. So on the balance sheet,
we continue to, and we
disclose that, continue to extend significant
levels of credit to clients here in Switzerland, CHF40 billion, very
focused on that.
In terms of how we're thinking about the balance sheet,
the balance sheet is critical for us in our
Swiss business,
as I mentioned. One, to just manage the franchise
now, particularly post, as we move into a post-integration
state, we're going to lean in more and more on the balance sheet to
help our clients and to drive NII even if
the
rates are not helping. So, the dynamics here in Switzerland
around balance sheet remain quite important to
us
and ensuring that we're seen as a trusted lender to
our counterparties is quite critical to us and
is why we talk
about the level of credit that we're extending or rolling over on a
regular basis to show the levels that we're
maintaining here in the Swiss market.
In terms, just quickly, on the outflow as part of the optimization, I think it's important
to understand that we're
also looking to maximize funding value around
our deposits, and that's pretty critical how we price
and how we
term out deposits. In particular, is important, just to also manage some, across the
Group, some of the FX-driven
headwinds I've touched on that make leverage
more constraining. So, just important, it's just a tool
we're using
across the Group to improve or increase funding value along our deposits and
just to ensure that we're
maximizing it in that respect.
You asked about the US Wealth business and the changes to the grid and the impacts.
I've mentioned the
impacts. In terms of the outlook on the
pre-tax margin from the changes, if I isolate the pre-tax margin
effects
from the changes that we've made, they're pre-tax margin accretive and they're
helpful, they're supportive. And
that's not just what's happened life to date,
but also as we model out what we might
see. Naturally, we're
working quite hard to ensure that the outflows taper, as I've said. We'll see some lag effect is likely, just given the
movement that we've seen, and given the
time that it takes before advisors are off our platform. But we're, that,
remains a focus for us so that I would say is pre-tax margin
accretive in the way we see it. And, therefore, the
changes to the grid that we made, by the
way, this most recent year that we announced, do not go backwards.
They are incentivizing growth and they're resonating really well. The things that
we have introduced are
resonating well with advisors. So, we don't see that
going backwards, though, because some of the
things that
we had changed in the year before were not things that
we reinstated.
Amit Goel, Mediobanca
Okay, thank you.
Sarah Mackey
I think we have no further questions. So thank
you, everyone, for joining and asking questions
and we look
forward to updating you with our fourth quarter results
in February. Thank you.
21
Cautionary statement
regarding forward-looking statements
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This document contains
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly
caused this report to be signed on their behalf by the undersigned, thereunto
duly authorized.
UBS Group AG
By:
/s/ David Kelly
_
Name:
David Kelly
Title:
Managing Director
By:
/s/ Ella Copetti-Campi
_
Name:
Ella Copetti-Campi
Title:
Executive Director
UBS AG
By:
/s/ David Kelly
_
Name:
David Kelly
Title:
Managing Director
By:
/s/ Ella Copetti-Campi
_
Name:
Ella Copetti-Campi
Title:
Executive Director
Date:
October 30, 2025