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: April 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 1Q25 Earnings call remarks
and Analyst Q&A, which
appear immediately following this page.
1
First quarter 2025 results
30 April 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
first 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.
Our strong
results in
the first
quarter demonstrate
once again
our ability
to deliver
for stakeholders
in different
market conditions.
The
quarter
was
characterized
by
a
substantial
shift
in
investor
sentiment
and
growth
expectations,
alongside
periods of
significant market volatility.
This dampened the
positive seasonal effect
we typically
experience at the
start of
the year,
and tempered
the bullish
outlook the
market had
coming out
of 2024,
and into
the first
few
weeks of January.
Against this backdrop, these results reflect the power
and scale of our diversified global
franchise, our unwavering
commitment to
clients, disciplined
cost management
and the
substantial
progress made
in integrating
Credit Suisse.
All this is underpinned by a balance sheet for all
seasons.
First-quarter net profit reached
1.7 billion, and our underlying
return on CET1 capital stood
at 11.3%, supported
by positive operating leverage in our core businesses.
Net new
inflows onto our
asset-gathering platform were
robust, including
32 billion
in net
new assets in
Global
Wealth
Management
and
7
billion
net
new
money
in
Asset
Management.
Although
we
haven’t
seen
a
major
strategic shift in asset allocation,
the breadth and depth of
our advice and global
capabilities helped clients protect
their wealth and navigate the market volatility.
We saw significant
demand for mandate solutions, structured
products and Alternatives, including new offerings
within
our
Unified
Global
Alternatives
unit,
where
total
assets
reached
nearly
300
billion.
For
our
clients
in
Switzerland, we
kept delivering
on our
commitment to
be a
reliable partner.
During the
quarter,
we granted
or
renewed 40 billion Swiss francs of loans.
In the
Investment Bank,
we continue
to execute
on our
capital-light strategy. The
investments we
made in
our areas
of strategic importance
allowed us
to win further
market share. Global
Markets achieved
its best quarter
on record.
In Global Banking, we outperformed
the fee pools in M&A and
ECM, despite a challenging
market backdrop. I am
also pleased to see that we are building on our
already-healthy pipeline.
2
As the
second quarter
kicked off,
the unveiling
of significant
changes to
tariffs on
trading partners
by the
U.S.
administration
increased
uncertainty and
market
volatility,
while
in
some
days,
trading
volumes
exceeded
their
Covid-era peak by around 30%.
I am
especially pleased by
the way
our colleagues were
able to
intensify their engagement with
institutional and
private clients during this period. The investments we’ve made to
reinforce our infrastructure are
paying off, with
our operations proving stable and resilient as we facilitate
client activity across asset classes.
Looking ahead,
the economic
path forward
is particularly
unpredictable, and
the range
of possible
outcomes is
wide. The prospect of
higher tariffs on global
trade presents a material risk
to global growth and
inflation. While
we are encouraged that negotiations are ongoing, a prolonged period of discussions
and speculation will come at
a cost. Uncertainty is
likely to affect
sentiment and lead businesses
and investors to delay
important decisions on
strategy, capital allocation and investment.
In
this
environment,
we
expect
financial
markets
to
remain
sensitive
to
new
developments,
both
positive
and
negative, which
are likely
to lead
to further
spikes in
volatility.
In light
of this,
we are
unwavering in
serving our
clients, executing on our growth strategy and following
through on our integration plans.
On that, over the
course of the first
quarter, we finalized our preparations to migrate
more than one million
clients
in Switzerland onto UBS
platforms and continued
to integrate 95 petabytes
of data. We moved a
small pilot group
of clients at the start of April and we are on track to complete the first
main wave of migrations by the end of the
second quarter.
We are
pleased with
our progress
in Non-core
and Legacy
as we
continue to
reduce the
complexity of
our operations
through
book closures
and the
decommissioning of
applications. Moreover,
our active
wind-down efforts
have
proven so
effective that
we have
been able
to upgrade
our credit
and market
risk-weighted asset
ambitions for
2025 and 2026.
Our CET1 capital ratio
stands in line with
our guidance at
14.3%. This, combined
with the substantial de-risking
of
the acquisition and our highly capital-generative strategy, gives us confidence in our ability to deliver on our 2025
capital return
objectives. These
remain
contingent on
maintaining a
CET1 capital
ratio
of around
14% and
the
absence of material,
immediate changes
to the current
capital regime. Our
capital strength also
supports our
ability
to deploy investments that reinforce our leadership across the globe
and position UBS for the future.
We are working to further enhance our client offering and capabilities to improve profitability in the Americas. At
the same time, we are building on our status as the number-one wealth manager in APAC by scaling our offering
in the
fastest growing
markets
across the
region, while
reinforcing our
leadership position
in EMEA
and Switzerland.
As
highlighted
in
February,
technology
investments
are
a
key
enabler
for
growth.
We
are
encouraged
by
our
development
and
adoption
of
generative
A.I.
solutions
as
we
empower
our
colleagues
with
tools
to
improve
productivity and deliver tailored solutions to clients.
In closing,
we are
pleased with
our strong
performance this
quarter and
continue to
operate from
a position
of
strength. But
we are
not complacent,
as we
are only
around two-thirds
of the
way to
restoring UBS’s
pre-acquisition
levels of profitability.
In that sense, the
next phase of the
integration is especially important to
harvesting the full
benefits
of
the
acquisition
for
our
clients
and
shareholders,
and
delivering
on
our
long-term
ambitions.
In
the
meantime, we are staying focused on
what we can control: serving our
clients, delivering on our financial targets
and continuing to act as an engine of economic
growth in the communities we serve.
With that, I hand over to Todd.
3
Todd
Tuckner
Slide 5 – 1Q25 profitability driven by positive operating
leverage in core business divisions
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.
During the
first quarter of
2025 our core
businesses grew their
combined pre-tax profitability
by 15% on
strong
positive operating
leverage. Overall,
our Group
profit before
tax was
2.6 billion,
down 1%
year-on-year.
Group
revenues were broadly flat
at 12 billion and
up 6% across
our core franchises. Operating
expenses were also
stable
at 9.2 billion,
as we continued
to successfully reduce
our non-production-related costs
across the Group, offsetting
higher financial advisor and variable compensation
accruals in the quarter.
Our EPS was 51 cents and we delivered an 11.3%
return on CET1 capital and a cost/income
ratio of 77.4%.
Slide 6 – 1Q25 demonstrates the strength of our diversified
business model
As
illustrated on
slide 6,
this
quarter’s underlying
performance demonstrates
the
strength
of
our
franchise and
diversified business model, particularly in challenging
and complex markets.
By supporting
clients in
ways that
differentiate UBS,
while maintaining
a sharp
focus on
cost and
resource efficiency,
each of Global
Wealth Management, Asset Management
and the Investment Bank
achieved double-digit pre-tax
growth,
absorbing
net
interest
income
headwinds
that
in
particular
weighed
on
our
Personal
and
Corporate
Banking business. Our Non-core and Legacy
unit delivered a strong first quarter, although short of the exceptional
results of last year’s 1Q.
On a reported basis, our pre-tax profit of 2.1 billion included
700 million of revenue adjustments from acquisition-
related effects and 1.1 billion of integration expenses.
Our effective tax rate in
the quarter was 20%.
For 2Q, we expect a
tax rate of around zero
due to a capital-neutral
tax
credit
from
further
legal
entity
streamlining
in
the
US
and
from
other
planning
measures
related
to
the
integration. We continue to expect our full-year 2025 effective tax rate to be around 20%, with a second-half tax
rate of around 30% influenced by NCL’s reported pre-tax performance.
Slide 7 – Achieved 65% of gross cost save ambition, on
track to ~13bn by year-end 2026
Turning to our cost update on slide 7.
In the first three months of 2025, we achieved an additional 900 million in gross run-rate cost saves, bringing the
cumulative total since the end of 2022 to
8.4 billion, or around 65% of our total gross cost save ambition.
By quarter-end,
we had
nominally decreased
our overall
cost base
by around
10% from
our 2022
baseline. Yet
looking-through variable compensation and litigation, and neutralizing for
currency effects, we delivered
an even
greater net reduction in underlying
expenses, exceeding 20%.
As a result, more than
50% of our cumulative
gross
cost saves have translated into net saves
that benefit our run-rate.
The overall employee
count fell sequentially
by 2%, to
126 thousand, and
by around 20%
from our 2022
baseline.
4
As
I’ve
highlighted in
the past,
one
of the
keys to
meeting our
target cost-income
ratio
by
the end
of 2026
is
shutting down legacy Credit Suisse technology applications and
infrastructure. To
date, we’ve retired over a
third
each of
these applications,
computer servers
and data
centers that
are
targeted in
our plans
for decommission.
These actions have
generated more than
700 million in technology
cost saves, with
Non-core and Legacy’s balance
sheet reduction a key driver of this progress.
We expect that most of the remaining 4.5 billion in gross saves required to achieve our 13 billion target will come
from
reductions
in
technology,
staffing
and
vendor
costs. As
an
example of
what’s to
come
in
the
technology
context is
a run-rate
cost save
of 800
million related
to Credit
Suisse’s legacy
applications in
the Swiss
booking
center, which we’ll decommission after the completion of the client account migration
in 2026.
Slide 8 – Our balance sheet for all seasons
is a key pillar of our strategy
Turning
to slide
- As
of the
end of
the first
quarter,
our balance
sheet for
all seasons
consisted of
1-and-a-half
trillion in total assets, with around 615 billion in loan balances, 745 billion in
deposits, and a loan-to-deposit ratio
of 80%.
The strength of our balance sheet is not just an essential component of our strategy, but a competitive advantage
and source of confidence for our clients, especially during
times of uncertainty.
A
fundamental
driver
of
our
balance
sheet
strength
is
our
credit
book.
93%
of
our
lending
positions
are
collateralized, with 57% of the total balance
consisting of mortgages where the average LTV is 50%.
At
the
end
of
March,
our
lending
book
reflected
credit-impaired
exposures
of
1%,
unchanged
from
the
prior
quarter.
The cost
of risk
decreased
to 7
basis points
as we
recorded
Group
credit
loss expenses
of 100
million,
reflecting
121
million
of
net
charges
on
credit-impaired
positions
and
21
million
of
net
releases
across
our
performing
portfolio.
The
net
releases
were
due
to
our
recalibration
of
the
expected
credit
loss
scenarios
and
rebalancing of the factor weights.
Onto liquidity
and funding.
In the
quarter,
we made
strong
progress
on our
2025 funding
plan, already
having
completed
our
AT1
issuances intended
in
2025,
in
addition
to
having issued
3
billion
in
HoldCo
debt.
I
would
highlight that our
funding stability is
underscored by the
balanced currency
mix across
our assets and
diversified
sources of long-term funding and deposits.
Our average LCR was 181%, and remained around this level throughout
April’s volatile markets.
5
Slide 9 – Maintaining a strong capital position with
CET1 capital ratio at 14.3%
Turning to capital on slide 9. Our CET1 capital ratio at the end of March was 14.3%.
As a result
of our continued progress
with the integration, coupled
with strong financial
performance in the first
quarter,
it
is
now our
intention to
execute on
all
of
our
2025
capital return
ambitions announced
in
February.
Consequently,
our CET1 capital not only accounts
for the 500 million in
shares repurchased during the
first three
months of the year, but it also reflects the
accrual of the remaining 2
and a half billion
share buyback we intend
to
execute through the rest of 2025, of which 500 million
in the second quarter.
Risk-weighted assets fell by 15
billion sequentially,
driven by lower asset size
and the implementation of the
final
Basel III standards, which ultimately resulted in a net reduction of
9 billion in RWA.
This revised amount
reflects further infrastructure
and data quality improvements
finalized during the
quarter,
as
well as the effects
of additional mitigation and de-risking actions we
took across various credit,
counterparty and
market risk categories.
After receiving regulatory
approval, the final
operational risk-weighted
asset level also
came
in around 2 billion lower
than our February estimate. Netted within the
overall reduction, FRTB led to an
increase
of 6 billion, mainly related to the Investment Bank.
At the same
time, despite
the offsetting
effects of mitigating
actions, our
leverage ratio
denominator was
42 billion
higher sequentially, resulting in a CET1 leverage ratio of 4.4%.
The uplift
in LRD
was driven
by an
increase of
29 billion
from derivatives
exposures now
calculated under
the revised
Basel
III
standardized
approach
for
counterparty credit
risk.
With FX
accounting for
a
27
billion
increase
in
the
quarter, these factors more than offset asset size reductions of 13 billion.
A word on parent capital
and Group equity
double leverage.
As of the
end of March, our
parent bank’s standalone
CET1 capital
ratio on
a fully
applied basis
is expected
to be
12.9%, within
our target
range. The
sequential reduction
reflects
an
accrual
for
dividends
intended
to
be
paid
in
2026.
Over
the
next
few
quarters,
the
parent
bank’s
dividend-paying capacity is
expected to be supported
by both dividends and capital
repatriations from subsidiaries.
In addition, earlier
this month, as
expected UBS AG
paid a 6.5
billion ordinary dividend to
our holding company.
Taking
into account capital returns
to shareholders completed
or anticipated during the
first half of
the year,
we
expect the
Group’s equity
double leverage
ratio to
improve to
around 110%
by the
time we
publish our
Group
stand-alone accounts at the end of the second
quarter.
These actions
are consistent
with our
intention to
restore the
Group’s equity
double leverage
ratio towards
pre-
acquisition levels over the next several quarters.
Slide 10 – Global Wealth Management
Turning to our business divisions, and starting with Global Wealth Management on
slide 10.
GWM’s
pre-tax
profit
was
1.5
billion,
up
21%
year-over-year
as
revenue
growth
outpaced
expenses
by
5
percentage
points.
This
translated
to
a
year-over-year
improvement
in
GWM’s
cost-income
ratio
of
over
3
percentage points to 75%.
6
In
Asia,
with
our
integration
efforts
now
largely
complete,
we’re
well-positioned
to
deliver
our
full
range
of
capabilities to
our clients.
Notably, our APAC franchise drove excellent
PBT growth of
36%, on 14
points of
positive
operating jaws and a
pre-tax margin of over
40%. In the Americas,
where we’re executing on
our growth plans,
we delivered
PBT growth
of more
than 40%
and a
pre-tax margin
of 12%. In
addition, each
of our
Switzerland
and EMEA regions grew profits by 7% in the quarter.
You
can find
additional regional
details, including
a breakdown
of revenue
lines, credit
loss
expenses, net
new
deposits,
and
customer deposit
balances, as
well
as comparatives
across
our
four
wealth regions,
in
our
newly
enhanced disclosure in the quarterly report and on page
22 in the appendix to this presentation.
Onto flows. GWM invested assets increased by 1%
sequentially with favorable currency effects and positive asset
flows offsetting negative
market performance.
Net new assets
in the quarter
reached 32 billion,
representing a 3%
annualized growth
rate with
growth
in
all
regions, led
by
the Americas,
where
strong
same store
performance
supported NNA of
20 billion. Our
flow performance again
this quarter reflects
the actions I’ve
highlighted in the
past regarding
balance sheet optimization
that support higher
pre-tax margins
and returns
on attributed
equity,
but at times come at the expense of net new
assets.
For example,
we again
successfully managed
the roll-off
of preferential
fixed term
deposits associated
with our
2023 win-back campaign.
Of the
54 billion
in deposits maturing
in 1Q,
as in
prior periods we
converted around
85% into more profitable liquidity and investment solutions. But some less profitable flows left
the platform. You
can see
the clear
improvement we’ve
achieved in
enhancing profitability
from these
balance sheet
actions in
GWM’s
revenue over RWA ratio, which has grown 2 points year over year, and has reattained pre-acquisition levels.
Further evidence of clients seeking our market-leading advice and solutions and helping drive sustainable revenue
growth
is
underscored
by
our
net
new
fee
generating
asset
performance
of
27
billion
in
the
quarter,
a
6%
annualized growth rate. We
saw continued momentum in discretionary mandates, including SMAs
in the US and
our signature
MyWay
solution, delivered
through our
Swiss and
international platforms. MyWay
mandates have
grown to 20 billion, up almost 80% from the prior year
quarter.
NNFGA growth was especially strong in our
APAC franchise at an
annualized growth rate of 10%, with mandate
penetration at its highest level on record.
Looking ahead to the second quarter,
while maturing fixed-term deposits are becoming a
less material headwind
to flows,
seasonal US tax-related
outflows in the
high single-digit billion
range, elevated as
a result
of last year’s
strong market performance, are expected to weigh on GWM’s
2Q net new assets.
I would also
highlight that
we saw a
modest pick-up
in lending across
the wealth
business, with
client re-leveraging
supported by a lower rate environment. Net new
loans were 2.2 billion, driven by Lombard lending in
APAC.
Turning
to revenues. GWM’s
top line increased
by 6%, driven
by elevated client engagement, increased
solution
take-up by clients seeking diversification across geographies
and asset classes, and higher average-asset
levels.
Recurring net fee income increased
by 8% to 3.3
billion from positive
market performance and over 70
billion in
net new
fee-generating
assets over
the past
12 months.
Margins continued
to hold
up sequentially
and are
expected
to
remain
around
these
levels, especially
as
recently
migrated clients
and
those remaining
on
the Credit
Suisse
platform now have access to the full breadth of our
CIO value chain-led capabilities and solutions.
7
Transaction-based income increased
by 15%
to 1.4
billion, in
a market
environment where
our franchise’s
enduring
advantages set us
apart. Without a major
shift in asset
allocation during the
quarter,
clients nevertheless actively
repositioned portfolios,
benefitting from
our investments in
capabilities, solutions, and
unified teams.
This drove
double-digit growth across Structured Products and Cash Equities, with Wealth Planning and Life Insurance up by
more
than 50%.
Alternatives were
up 40%,
fueled by
the joint
Unified Global
Alternatives initiative
with Asset
Management.
Regionally,
we saw
a continuation
of transactional
growth spanning
the wealth
franchise, led
by APAC
and the
Americas, where transactional revenues increased by 28% and
16%, respectively.
Net interest income at 1.5 billion was
down 4% year-over-year
and 7% quarter-over-quarter,
with the sequential
trend reflecting a lower day count
and headwinds from declining rates in Swiss
franc and euro, partially offset by
ongoing balance sheet optimization efforts.
Of the
sequential decline,
1 percentage
point reflects
a change
to our
client segmentation
approach between
GWM
and P&C
that we
implemented in
February,
but was
not included
in our
guidance. This
change led
to a
shift of
some affluent clients from GWM to
P&C, including loan balances
of 8 billion. Despite the
modest effect on NII, we
ultimately decided
to not
restate our
accounts for
this transfer,
given the
immaterial impact
to the
P&L of
both
divisions overall.
Now
to
our
NII
outlook.
For
the
second
quarter
of
2025,
we
expect
GWM’s
net
interest
income
to
decrease
sequentially by a low-single
digit percentage, despite day
count helping, primarily
from lower Swiss franc and
euro
rates after the March cuts. We also expect a seasonal decline in client
deposits following April tax payments in the
US,
although
there
could
be
upside
should
clients
maintain
a
more
defensive
posture
amid
ongoing
market
uncertainty, driving higher sweep and account balances.
For full year 2025, we continue to expect
GWM’s net interest income to decrease by a low single-digit
percentage
compared to 2024.
Underlying operating expenses were up
by 1%, with lower
personnel and support costs offset
by higher variable
compensation tied to
revenues. Looking through variable
compensation, litigation
and currency effects, costs
were
down 5% year-over-year.
Slide 11 – Personal & Corporate Banking (CHF)
Turning to Personal & Corporate Banking on slide 11, where my comments will
refer to Swiss francs.
P&C delivered first
quarter pre-tax profit of
597 million, down
23% as lower
interest rates led
to an 18%
reduction
in net interest income.
Recurring net fee income increased
by 3% driven by record
volumes of investment products in
Personal Banking,
supported by strong
sales momentum,
including a 12%
annualized growth rate
in net new
investment flows
in the
first quarter.
Transaction-based
revenues decreased by
2% as strong
performance in Personal Banking was
more
than offset by the effect of lower corporate finance activity
amid softer economic conditions.
Sequentially,
NII decreased by 7%
largely reflecting the effects
of the SNB’s 50-basis
point rate cut announced in
December and a lower
day count, partly offset
by the effect
of the client
segmentation shift between GWM and
P&C that I
mentioned earlier,
which provided a
1-percentage-point quarter-on-quarter uplift to
P&C. To
mitigate
the effects
of lower
rates, we adjusted
deposit pricing on
select products
and continued optimizing
our banking
book.
8
Looking to the second quarter, we see a sequential
decrease in the low single-digit percentage
range for P&C’s NII
in Swiss francs, which translates to
a sequential mid single-digit percentage increase
in US dollar terms, based on
current FX rates. The outlook is driven by last month’s SNB 25-basis point
rate cut, despite day count helping, and
the latest change to the SNB’s threshold factor
for remunerating sight deposits.
For full year 2025, we continue to expect an NII decline
of around 10% versus 2024 in Swiss francs, translating to
a more modest reduction on a US dollar basis.
Credit loss
expense was 48
million, an 8
basis point cost
of risk
on an
average loan
portfolio of 245
billion. This
included Stage 3 charges of 54 million, again
predominantly from Credit Suisse exposures.
Reflecting on
developing macroeconomic
events, we
currently
assess that
exposures
to our
more
tariff-exposed
corporate clients within our Swiss credit book are well-contained. On this basis, for
full-year 2025, we continue to
expect P&C’s CLE to be around 350 million.
This said, we’re closely monitoring US trade policy developments and their first- and second-order impacts on
our
Swiss
loan
exposures,
thereby
intending
to
update
our
credit
loss
expectations
and
allowances
as
and
when
appropriate.
P&C’s operating expenses in the quarter were 1.1 billion,
down 4%.
Slide 12 – Asset Management
Moving to slide
- Asset
Management drove a
pre-tax profit of
208 million,
up 15% year-on-year, with
disciplined
cost management more than compensating for lower
revenues.
Net management
fees declined
by 4%,
as the
effect of
higher average
invested assets
was more
than offset
by
margin compression from
clients having rotated
into lower-margin
products over recent
periods. This said,
we’re
gaining traction
in delivering
differentiated and higher
margin products,
including in
our Credit Investments
Group,
and in UGA, which saw strong net new commitments
in the quarter and invested asset growth of
13% compared
to a year ago.
Performance fees were 30
million, in line with
the prior year, and with higher revenues
from our credit capabilities.
Net
new
money
was
positive
7
billion,
with
strong
flows
in
money
market and
active
fixed
income, as
well
as
sustained demand for SMAs, which saw
inflows of 4.5 billion this quarter.
Operating expenses
were
10%
lower as
Asset
Management re
-tools for
growth
by
continuing
to
make strong
progress in streamlining its infrastructure and operating model.
9
Slide 13 – Investment Bank
On to slide 13 and the Investment Bank.
In the IB
we delivered pre-tax
profit of 696
million, up 72%,
and a return
on attributed equity
of 16%, all
while
absorbing incremental RWA from the implementation of the final Basel
III FRTB rules.
Revenues increased by 24% to 3 billion, driven by
Global Markets, which posted its best quarter
on record.
Banking revenues decreased
by 4% to
564 million, broadly
in line with
the fee pool.
While the market
environment
weighed
on
our
Banking
results
across
products
and
regions,
and
despite
growing
economic
uncertainty,
our
pipeline
continues
to
build.
We
remained
top
10
in
announced
M&A
and
saw
continued
momentum
in
our
mandated deal book.
In
Advisory,
top-line growth
was
17%,
while Capital
Markets
revenues
declined by
13%,
mainly
due
to
softer
sponsor
activity.
In
the
Americas,
the
mix
within
the
LCM
fee
pool
shifted
towards
corporates
and
away
from
sponsors, where we’re
more concentrated.
In ECM, although
the 1% revenue
decrease outperformed
the fee
pool,
we remain focused on our pipeline build, which is expected
to yield meaningful returns over the medium-term.
Regionally, APAC
grew its overall Banking revenues
by over 70% compared to
the prior year quarter and
delivered
its best first quarter on record in M&A.
Revenues in Markets increased by 32% to 2.5 billion. Against a market backdrop of elevated activity and volatility
in Equities and FX,
where our IB is
more concentrated, we capitalized on the
enhanced capabilities acquired with
Credit Suisse and our multi-year investments in technology.
We saw increases across all regions, with the Americas, APAC and Switzerland each delivering their best quarterly
performance on record.
Equities revenues reached a new
high, driven by Equity
Derivatives, with increases across all
regions and supported
by Cash Equities and Prime Brokerage. FRC increased by 27%,
primarily driven by FX.
Operating expenses rose by 14%, largely reflecting increases in personnel
expenses.
Slide 14 – Non-core and Legacy
On slide 14, Non-core and Legacy’s pre-tax loss was 200 million
with 284 million in revenues.
Funding costs
of around
130 million
were more
than offset
by revenues
from position
exits, particularly
in structured
products.
This
included
the
expected
gain
of
around
100
million
from
closing
the
sale
of
Credit
Suisse’s
US
mortgage servicing company announced last year,
which also eliminates run rate
costs of around 100
million per
annum.
Operating
expenses
were
down
38%
year-on-year
and
12%
sequentially,
as
NCL
continues
to
make
excellent
progress in driving out costs.
10
For the remainder
of the
year, we expect NCL
to generate
an underlying
pre-tax loss, excluding
litigation, of
around
1.7 billion,
including revenues
of around
negative 300
million, mainly
from funding
costs. Revenues
from carry,
continued
exits
and
remaining
fair
value
positions
are
expected
to
net
around
zero,
and
underlying
operating
expenses should average around 450 million per
quarter.
While the
current environment
may slow
the pace
of exits,
it is
unlikely to
materially affect
the financial
performance
of our
NCL portfolio.
As examples,
hedges in
the macro
book, and
the nature of
our now
much smaller
credit book,
render the valuation of both portfolios less susceptible
to market volatility.
Slide 15 – NCL run down continuing at pace
Now onto Slide
- Since the
second quarter of
2023, Non-core and
Legacy has freed
up almost 7
billion of capital,
reduced its cost base by over 60% and closed 74%
of the 14 thousand books they started
with.
As of the end of March, risk-weighted
assets in NCL were 7
billion lower than in the
prior quarter, as position exits
across securitized
products, credit
and macro
more than
offset the
inflationary effects
of the
final Basel
III standards.
Again this quarter, the
skillful expertise of the NCL team has kept us well ahead of our de-risking schedule. Given
this accelerated progress, we’re upgrading our ambitions and now aim to drive NCL’s credit and market risk RWA
below 8 billion by the end of 2025, and to around
4 billion by the end of 2026.
While
we
expect
the
reduction
in
balance
sheet
to
continue
to
contribute
to
NCL’s
cost
performance,
as
I’ve
highlighted in the
past, further savings
from technology,
real estate
and resolving ongoing
litigation matters will
take longer to achieve. This underpins our 2026
exit-rate cost guidance I offered last quarter.
With that, let’s open for questions.
11
Analyst Q&A (CEO
and CFO)
Jeremy Sigee, Exane BNP Paribas
Good morning. Thanks very much.
Firstly, just a basic one. The fact that you're accruing the whole of the 2025
share buyback suggests that you intend to do that
almost regardless of what the draft rules look like when
they’re published in June. Is that a fair interpretation?
And then my second question is a bit broader. Could you talk about how your wealth
management clients in
different regions are reacting in April post the tariffs in the US? Are they doing more with the bank or less
with
the bank? What are their risk appetites? If you could
talk about that, that would be great. Thank you.
Sergio P.
Ermotti
Thank you, Jeremy. No, it is not a fair representation considering what I said, that our language hasn't
changed
and we said, very clearly that we are accruing based
on what we know and we see today, based on our strong
performance, based on our strong capital position.
That, of course, all of this is subject to
us continuing to
develop, well, in terms of financial targets,
the integration, and as we pointed out,
any material and immediate
change in the regulatory regime.
So, in respect of the activity in April, I can only say that
of course, we had a, as I mentioned in my remarks,
we
saw a huge spike in client activity and volatility
in the first couple of weeks in the first
few days of April. So,
even achieving a 30% increase compared to the peak
of COVID times, which is quite exceptional.
But it's fair
to say that if you look at the last 10 days or
so, there is a fatigue coming in. You'd see it also in financial
markets. I think that markets are stabilizing around current levels across many
asset classes and it's much more
of a wait-and-see attitude and so in that sense
it's a more normalized environment.
Jeremy Sigee, Exane BNP Paribas
Thank you.
Giulia Aurora Miotto, Morgan Stanley
Yes. Hi. Good morning and thank you for taking my question. So, the first one,
I was surprised to hear that
there is re-leveraging in Asia. That's quite a positive development.
And I was wondering if that has carried
through also in April or was it only a Q1 phenomenon,
and then got shutdown by the tariff discussion.
And then the second question instead, of course,
I have to ask on capital, and May is the
next catalyst there, or
at least we will learn something there. Is there any development
that you can share with us in terms of what
to
expect, and what will go under government
ordinance, what will be put to parliament, yeah,
any updated
thoughts would be helpful. Thank you.
12
Sergio P.
Ermotti
Let me pick up the second one, and Todd will pick up the first question. There are no developments other
than
the updated timeline for the announcement
of the proposal that are now seen, are going to come in during
the first week
[edit: weeks]
of June. So, we don't know what's the
content of this proposal in terms of – also, if
there is any split between ordinance or legislative process. So, we
are in a wait-and-see and we will see like
everybody in five to six weeks' time.
Todd
Tuckner
And Giulia, I'd say it's helpful to step back
and look at the bigger picture here, on the lending question.
I mean,
clearly for GWM, one of our strategic imperatives
is to grow lending, albeit selectively and profitably. And as a
driver of enhanced relationship revenues for clients, so
we're pleased with the developments that we saw
in
1Q. I mean, we can't speculate on where things
are going to move given the current environment for sure. But
we're pleased with the 1Q performance, and that
still remains a strategic focus for us.
Giulia Aurora Miotto, Morgan Stanley
Thank you.
Kian Abouhossein, JPMorgan
Yes. Thanks for taking my questions. I wanted to come back to US wealth management.
If you could maybe
run – you clearly have done some strategic changes
around the US wealth management business, both
on
compensation, but also incentives, et cetera.
And if I look on a year-end basis versus
now, you have reductions
in advisers. I just wanted to see where should we
think adviser numbers to go to in US wealth.
And how should
we think around the net new flows but also impact
in that respect because you made some statements
in the
last quarter that could be a deterioration, but
also in terms of improvement in pre-tax margin. So, a bit
more of
a holistic approach around the changes that you have
done and the impact.
And then secondly, just coming back to the Federal Council report, can you just take
a step back and just give
your current views around your positioning against other
banks, but also potential offsets that you can think
about in order to offset some kind of additional capital requirement, even
in big picture terms, if you could talk
about that?
Todd
Tuckner
Hi, Kian. So, on the wealth one, let's zoom out
a bit and just reiterate that we're executing at pace on our
plans and our strategy. You
know, clearly,
quarter-on-quarter, we could see volatility. But this said, we're
looking at our ambition to achieve, as you know, a structural mid-teen
pre-tax margin. And we look at that as
a two to three-year journey.
As we zoom in, the question on really our platforms
and advisers, first, I'd say our platform is stable.
There's
been a broad support for our strategy, which is intended to better align advisor incentives
with the strategic
goals of the firm. That's evidenced by the very
strong same-store net new money we've seen, perhaps
the
strongest net new money we've seen over many
quarters in the first quarter.
13
In terms of the head count, I would just say
that our recruiting pipeline is robust. There is some attrition
that
one can expect. And in fact, we're observing across the
industry, given the market dynamics of 2024 versus the
beginning of 2025 and the outlook that would
create some movement across the industry in terms
of advisory
repositioning. But nothing I would highlight in
our own platform.
Sergio P.
Ermotti
Kian, before I answer the question, can you specify
what do you mean by positioning versus
other banks?
Kian Abouhossein, JPMorgan
Yes, Sergio. I left it open on purpose, just to see, leaving the floor open to some
extent.
Sergio P.
Ermotti
Okay.
Kian Abouhossein, JPMorgan
To
see what – yeah, what you can tell us and
your thoughts about it, because it is clearly a
very open question.
It's very difficult for us to look through as well.
Sergio P.
Ermotti
But you know, Kian, the call is scheduled to and at 10:30, so I'm
not so sure I have so much time to go through
that. So, but so the issue is very clear that,
when I look at the regulatory framework in Switzerland,
it's one of
the most demanding. And particularly after
we fully implemented Basel III, I think that
in terms of relative
game, that we are comfortable at, that we have a strong
and demanding regime. That capital and strength is
one of our key pillars.
Having said that, we all know that there is a point
in time in which too much is not necessarily
positive. And
therefore that's the only consideration I can say when
we speak about relative terms. So, because at the
end of
the day, as we always say,
we are not only competing in terms of return on capital,
but we are also competing
for capital. And therefore, having an attractive, sustainable
business that also delivers appropriate return is
a
key element on judging and balancing any
regulatory regime. That's
what I can say.
So, in respect of set of measures, the set of measures can only be decided
and analyzed when you know what
is the outcome. And so, we will need to assess
exactly what the proposal is in terms of
impact and timing.
Kian Abouhossein, JPMorgan
And Sergio, just very quickly, do you expect enough clarity to assess with that report?
Sergio P.
Ermotti
I hope, I don't expect.
Kian Abouhossein, JPMorgan Securities
Okay. Thank you.
14
Stefan Stalmann, Bernstein Autonomous
Hi. Good morning. Thank you very
much for taking my questions. I have two on
capital, please. The first one
on the parent bank, the fully loaded CET1 ratio was I think
down by about 60 basis points during
the quarter.
Was there anything particular to highlight that happened during the
quarter?
And the second one, a bit more, let's say, strategic. The risk density in the group has actually come
down quite
a bit. And it's now a bit below 31%. And
I think the hope was always in a way that
Basel IV would kind of lift
this risk density towards 35%, where it doesn't matter
anymore whether leverage or risk-weighted assets drive
your capital requirement. But now it's 31%, it looks like
you're quite deeply constrained by leverage, not risk
weighted-assets going forward. Do you expect this to
change at all from what you can see? And if not, does
it
have any impact on the way that you run
your capital management going forward?
Todd
Tuckner
Thanks. Thanks, Stefan, for those questions.
I appreciate you bringing those up. So, first on the
capital, the
parent bank quarter-on-quarter reduction, as I mentioned in my comments
comes from the accrual of a
dividend that we expect to pay in 2026
in relation to 2025, overall earnings of the
parent bank. So, it's a
dividend accrual that effectively drove the capital ratio
within our guidance.
On the second one, it's a very good spot
on your point about risk density coming
in. You know,
I would say,
you're also right where I would say more constrained by leverage than
risk weighting. But remember that we
set our CET1 capital ratio on a risk-weighted
basis as our key target. So, in that sense,
that becomes for us
binding unless truly leverage becomes binding.
But to answer your question about what you
can do about it or what the cause was or
is I would say that, you
see how we've been able to really drive down RWA because of the technical
nature of it, in the way we've
been able to manage down work…also work
to get approvals on models, on methodology, on data quality, on
all the issues, the coverage of external
ratings, all the things that have helped
us drive down.
I think the leverage ratio, unfortunately, is just more simple, less fertile ground for optimization.
And so, you
saw, as I commented that we had the SACCR increase, whereas on RWA we had a more fertile ground to
optimize. So, I think your observation is correct, but I
don't see it this time given we intend to
operate with a
CET1 capital ratio of around 14%, which for us is binding,
even though you're right, leverage is – we have
less
cushion on the leverage side than we do
on the risk-weighted side going....
Nothing is changing as we move
forward. That's the way we're thinking about it.
Stefan Stalmann, Bernstein Autonomous
Okay. Thank you very much.
Benjamin Goy, Deutsche Bank
Yes. Hi. Good morning. Two
questions, please, from my side. First on your India
partnership, maybe you can
comment a bit more broader on the onshore, offshore dynamics we should expect
in emerging markets going
forward, even in a large market like India, you have to
do a partnership.
15
And then secondly, markets are now pricing in again, negative rates in Switzerland. Just
wondering, short-
term, any impact or, below zero, if there's not much like an incremental negative impact. The longer-term
question is the 50% cost to income ratio target
in your Swiss business was, I assume done or
based on a more
positive interest rate outlook and how do you intend
to achieve that or is more due to come out on
the cost
side? The longer-term question is the 50% cost to income ratio target
in your Swiss business was, I assume
done or based on a more positive interest rate outlook
and how do you intend to achieve that or
more due to
come out on the cost side? Thank you.
Todd
Tuckner
Yeah. Hi Benjamin, let me address the second question. So, on your observation regarding the market pricing
and negative rates, as we indicate in our interest rate
sensitivity and as I've commented before, we certainly
see
convexity in the movement of rates either
down or up, in the sense that whether rates
move into negative
territory or move up, that would be accretive to our
net interest income in our P&C business. So, in that
sense
to the extent that is priced in and to the extent
that actually happens, we see upside in our
NII.
You asked about the expectation on the cost/income ratio targets that we have
by the end of 2026. I would
say it's we continue to execute against that
expectation. That is our expectation at
this stage. Not changing
that given interest rate expectations at this point in time.
Sergio P.
Ermotti
So, on India I think that we see a secular trend developing
for the Indian market domestically and but
also at
the same time, we see also an opportunity
for India residents booking business outside.
And looking at our
current setup, we saw that, we decided that the best
way to pursue the next phase of growth and growth
opportunities in India for us was to partner
with the only fully independent asset
gatherer in India. And so
through that, through the combination of us buying a
stake, but also bringing our current business into 360,
we can now leverage for the future.
So, we see very good prospects across the board in terms of
not only sharing our best practice globally, but
also learning on the domestic markets.
And we'll take it from there. So, I think that we are very optimistic
about the long-term potential growth in India.
Benjamin Goy, Deutsche Bank
Thank you.
Amit Goel, Mediobanca
Hi. Thank you. And maybe just more of a follow-up
question, but just the remarks earlier about the equity
double leverage and kind of looking to get
down to the 110% at Q2. And then continue
to bring it back to
pre-acquisition levels in the quarters after. I'm still kind of curious, why? What drives the
pace of that, and kind
of, what's the cost or what's the consequence
if you were to stay at 110%? Because let's say
if the group were
to have less leverage at the parent bank level, what
would stop the group having a bit more leverage at the
group? And what would be the consequence, or what
is the benefit of bringing that down from 110% to say
105% or 100%? So, that's the question there.
16
And then just on the PCB business, again
I appreciate the response on if rates, for example, if they
were to go
negative, et cetera, the convexity. I'm just wondering what you're thinking about volumes
there given the
exchange rate movement. Any color would be
helpful. Thank you.
Todd
Tuckner
Thanks, Amit. So, on the first, your question
in terms of the consequence of a higher one or
the benefit of the
lower one for sure, the way we look at it is a lower
one, which is to say our pre-acquisition levels, the
way
we've historically operated. One is more prudent.
It's aligned with our strategy. And third, it just offers far more
flexibility. So, if you operate at a higher level and then you hit any stress, then you've effectively sold
your
buffer,
and so that's the reason why it's prudent to operate
at the levels that Sergio and I have been
highlighting over the last quarter or two, since
I raised the topic last quarter.
In terms of P&C volumes. As we look, we look
forward, I would say, at this point, the outlook on lending is
flattish for now in terms of volumes and ways
that if that is a mitigant for sure, the balance sheet
optimization
that they've done, that the business has done on
the asset side, has driven profitability, return on attributed
equity, revenue over RWA, accretion, appreciation. So, I would say that's the main focus on the lending side.
Deposit outlook is also relatively flattish, maybe some
short-term moderate down a bit in a very competitive
market and we're not chasing where we're seeing competitors buying
deposits at much higher rates to protect
their loan books. So, our deposit outlook is stable,
I would say. But again, there we have adjusted deposit
pricing on select products to help. But at the end
of the day, as I've said before, certainly the biggest help
would be rates either moving down or up
from a sort of a zero perimeter as that would really be the most
accretive from a NII perspective in the P&C business.
Amit Goel, Mediobanca
Thank you.
Andrew Coombs, Citigroup
Hi. Good morning. I have two follow-ups,
please. One on capital and one on GWM
NII. On capital, coming all
the way back to Jeremy's first question, you've taken
a change in approach. You've fully accrued for the
buyback rather than taking the capital impact
as and when you execute. And can I just
ask what was the
rationale for doing this? And is this something
you envisage doing going forward, as well?
And the second question on GWM NII, and I think
at the full year results, you talked about Q1 being
down
low- to mid-single digits sequentially. You've ended up down 7%. And you said that 1 percentage point of that
was due to the re-segmentation. But nonetheless, it looks
a little bit worse than your original guidance.
So,
perhaps you could explain why it came in
slightly worse than you initially expected?
And then more broadly, your full year guidance for GWM NII is unchanged. But it was previously predicated
on
the second half being flattish versus the first
half. Are you now seeing a slight recovery in the second
half?
Sergio P.
Ermotti
So, thank you, Andrew. So, on capital, again, I think that's, the main driver
here is to also manage our ratio in
respect of our guidance. And by doing the accruals,
we basically take it closer to our “around 14%.” But
most
importantly, I think that's the real factor that has changed is that we moved from having an ambition
to having
an intention to.
17
I mean, this is all still subject to the conditions
we always set in terms of financial performance.
And also, no
material and immediate change in the regulatory framework.
But it's clear that now we have – because of
the
results and the progress we are making in the integration, and everything
that we can control, we feel
comfortable that this is the way to go.
So, you can always expect that as soon as we
feel that there is a change between ambition and intention,
also,
from a accounting standpoint of view, we will accrue in a prudent manner
which we believe is also more
prudent – that kind of reserve, then in order to then execute
on capital return plans.
Todd
Tuckner
And Andrew, on the second question. Yeah, the reason I gave some color on the segmentation change is, is
just to explain a bit of the delta. But with
that explained, you kind of get into the
mid-single-digit range, which
is where we've guided into 1Q sequentially from 4Q.
In terms of the outlook, going forward, you're right. I mean,
I'm reaffirming the full year NII guidance for
GWM. I see the loan outlook to be, again,
dependent on the rate environment, but the loan
outlook to be
positive, also dependent on the macroeconomic environment.
But that right now, until we see any drastic
change, the loan outlook has been accretive on the
NII in terms of the rest of the year for GWM.
And also, the deposit outlook is helping as well,
again, subject to macroeconomic developments.
But we also
see some of the preferential FTD headwinds tapering.
And so ultimately this is contributing as well to
deposit
margins increasing. So, for those reasons, I've kept the
guidance stable for the full year. And as I said, offered
the explain to sort of move into the Q1
guidance range.
Andrew Coombs, Citigroup
That's great. Thank you, both.
Chris Hallam, Goldman Sachs
Yeah. Good morning, everybody. Thank you for taking my questions. You
mentioned in the prepared remarks
the LCM fee pool shifted towards corporates and away
from sponsors. Any insights you can share on your
discussions with the sponsor community more broadly, how do you expect them to act in the coming quarters
based on the operating backdrop we see today? And
maybe at what point would you consider reassessing
the
banking revenue ambition for 2026? I guess, in light
of the slower activity levels year to date?
And then second, I just want to come back on
this risk of an immediate and material change
to the regulatory
regime. So, I appreciate the processes is maybe less clear than it
was, the range of outcomes has probably
widened, but has the risk of immediacy also
increased? It feels as though, if anything stuff is being pushed
to
the right a little bit, and obviously there hopefully would
be still some kind of phase in period, one
would
assume, so just any thoughts on that.
Thank you.
Sergio P.
Ermotti
Well, look, I think that generally speaking it's… On
a year-on-year basis, the drop in the sponsor-related activity
was more important, but I would say that in general, the
sponsors are also like everybody on a wait and see
attitude. A lot of transactions are on hold. They are not
necessarily being canceled. Of course, if you look
at, to
some extent the view levels of funding and spreads
and credit markets may put some transaction at,
in
question. But, generally speaking the sense
is that people are waiting to see if the situation clarifies
in the next
couple of months and then they're going to go
into executing on plans for either
add-on acquisitions or
disposals, IPOs. So, I think that the most
important issue that we see right now is
that the pipeline of potential
transaction is still healthy and building up. So,
we don't see a stop on that.
18
So, coming to your question, I think that when
we would change our outlook for the
over-the-cycle and
ambitions on the top line is going to be
when, if, we have a material change
in the market conditions and in
the prospect for the growth of banking businesses in the industry. Our intention to be a relative winner out
of
it by gaining share of wallet remains unchanged. So, if
we have to change our revenue assumptions, we're
definitely not going to change our market
share ambitions to improve and monetize on the investments
we did
on the platform in the last 24 months.
In respect of the second one, I mean, look, it's
just prudent – we are not in control of this process. We don't
know what's coming out. And so, we can't
rule out anything in terms of the materiality
of the change, and the
timing. Therefore, you have to interpret this language more as a prudent way
to highlight that we are – that
that's a possibility, that doesn't necessarily reflect what we expect or don't expect.
Chris Hallam,
Goldman Sachs
Okay. Thanks, Sergio.
Piers Brown, HSBC
Yeah. Good morning. I've got two. One on FRC, so up 27% year-on-year. It's much stronger print than a lot of
your peers. And I'm just wondering, is that
business mix related? You've mentioned the strength of FX, or do
you feel that you're still winning back market share in
that business?
And then the second question, sorry to come
back on capital again, but you did say
in the fourth quarter that
you had further subsidiary repatriations potentially
in the pipeline. I think you mentioned $5 billion
from CSI
and maybe something more coming out of the IHC.
Can you give an update on progress on both of those
fronts? Thanks.
Todd
Tuckner
Hi, Piers. So, on the first question, yeah, the
pickup in FRC year-on-year was driven by FX where we're strong,
concentrated. You know we had… it was a difficult quarter, I think for those that are more in rates and credit.
And we're, as you know, under concentrated there, so we didn't have that impact,
so we benefited from
where we were well indexed in the FRC segment.
On the capital question, in terms of
an update, yes, you recall correctly that there remains additional capital
to
be repatriated out of some of the foreign subs, in particular
the UK one. And a bit more as well in the US.
We're going through the normal process with the regulators to approve the release of their capital,
which is to
say that we continue to work down the portfolios,
largely non-core and legacy portfolios, in those
entities. And
as we continue to make progress and that capital is indeed excess,
including from a supervisory standpoint,
under their conservative lens, they'll give us
the – they’ll signal the okay and then we'll repatriate
that, over the
course of the next several quarters.
Piers Brown, HSBC
All right. That's great. Thank you.
Sergio P.
Ermotti
Thank you. So, there are no more questions. So, thank you for calling
in and for your questions. And the IR
team is at your disposal for any follow-ups.
So have a nice day. Thank you.
19
Cautionary statement
regarding forward-looking statements
|
This document contains
statements that
constitute “forward-looking
statements”, including
but 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, the global economy may suffer
significant adverse
effects from increasing political tensions between world
powers, changes to international
trade policies, including those related
to tariffs and trade barriers, and
ongoing conflicts
in the Middle
East, as well
as the continuing
Russia–Ukraine war. UBS’s
acquisition of the
Credit Suisse
Group has materially
changed its
outlook
and strategic direction and introduced
new operational challenges. The integration of the
Credit Suisse entities into the
UBS structure is expected to
continue
through 2026 and presents significant
operational and execution risk, including the
risks that UBS may be
unable to achieve the cost
reductions and business
benefits contemplated by
the transaction, that
it may incur
higher costs to
execute the integration
of Credit Suisse
and that the
acquired business may
have
greater risks
or liabilities
than expected.
Following the
failure of
Credit Suisse,
Switzerland is
considering significant
changes to
its capital,
resolution and
regulatory
regime, which,
if proposed
and adopted,
may significantly
increase our
capital requirements
or impose
other costs
on UBS.
These factors
create greater
uncertainty
about forward-looking statements. Other factors that may affect UBS’s
performance and ability to achieve its 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; (iii) 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,
residential and commercial real
estate markets, general economic conditions, 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, as well as availability and cost of funding to
meet requirements for debt
eligible for total loss-absorbing capacity (TLAC);
(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 the
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 its
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 its RWA; (xiii) 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; (xiv) 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; (xv) UBS’s
ability to
implement new technologies and
business methods, including
digital
services, artificial intelligence and other 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; (xvi) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and
modeling, and
of
financial models
generally; (xvii)
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 persistently high levels of cyberattack
threats; (xviii) restrictions on the ability
of UBS Group AG, UBS AG and regulated
subsidiaries of 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; (xix) 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; (xx) 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;
(xxi) the ability
of UBS to
access capital markets;
(xxii) 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, pandemic, security breach, cyberattack, power loss, telecommunications failure or
other natural or
man-made event; and (xxiii) the effect that these or other factors or unanticipated
events, including media reports and speculations, may have on its reputation
and the additional consequences
that this may have on
its 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. UBS’s
business and financial performance could
be affected by
other factors
identified in its 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 2024. 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.
© UBS 2025. The key symbol and UBS are among
the registered and unregistered trademarks of UBS. All rights
reserved
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:
April 30, 2025