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: February 4, 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
Fourth Quarter 2024
Report of UBS
Group AG, which
appears immediately following
this page.
UBS
Group
Fourth quarter
2024 report
Corporate calendar UBS Group
Publication of the Annual Report 2024:
Monday, 17 March 2025
Publication of the Sustainability Report 2024:
Monday, 17 March 2025
Annual General Meeting 2025:
Thursday, 10 April 2025
Publication of the first quarter 2025 report:
Wednesday, 30 April 2025
Publication of the second quarter 2025 report:
Wednesday, 30 July 2025
Information about future publication dates is also
available at
ubs.com/global/en/investor-relations/events/calendar.html
Contacts
Switchboards
For all general inquiries
ubs.com/contact
Zurich +41-44-234 1111
London +44-207-567
8000
New York +1-212-821 3000
Hong Kong +852-2971 8888
Singapore +65-6495 8000
Investor Relations
UBS’s Investor Relations team manages
relationships with institutional investors,
research analysts and credit rating agencies.
ubs.com/investors
Zurich +41-44-234 4100
New York +1-212-882 5734
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UBS’s Media Relations team manages
relationships with global media and
journalists.
ubs.com/media
Zurich +41-44-234 8500
mediarelations@ubs.com
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ubs-media-relations@ubs.com
New York +1-212-882 5858
mediarelations@ubs.com
Hong Kong +852-2971 8200
sh-mediarelations-ap@ubs.com
Office of the Group Company Secretary
The Group Company Secretary handles
inquiries directed to the Chairman or to
other members of the Board of Directors.
UBS Group AG, Office of the Group
Company Secretary
PO Box, CH-8098 Zurich, Switzerland
sh-company-secretary@ubs.com
Zurich +41-44-235 6652
Shareholder Services
UBS’s Shareholder Services team, a unit
of the Group Company Secretary’s office,
manages relationships with shareholders
and the registration of UBS Group AG
registered shares.
UBS Group AG, Shareholder Services
PO Box, CH-8098 Zurich, Switzerland
sh-shareholder-services@ubs.com
Zurich +41-44-235 6652
US Transfer Agent
For global registered share-related
inquiries in the US.
Computershare Trust Company NA
PO Box 43006
Providence, RI, 02940-3006, USA
Shareholder online inquiries:
www.computershare.com/us/
investor-inquiries
Shareholder website:
computershare.com/investor
Calls from the US
+1-866-305-9566
Calls from outside the US
+1-781-575-2623
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+1-800-231-5469
TDD for foreign shareholders
+1-201-680-6610
Imprint
Publisher: UBS Group AG, Zurich, Switzerland | ubs.com
Language: English
© UBS 2025. The key symbol and UBS are among
the registered and unregistered
trademarks of UBS. All rights reserved.
1.
UBS
Group
4
Recent developments
8
Group performance
2.
UBS business divisions
and Group Items
19
Global Wealth Management
22
Personal & Corporate Banking
25
Asset Management
27
Investment Bank
29
Non-core and Legacy
30
Group Items
3.
Risk, capital, liquidity and funding,
and balance sheet
32
Risk management and control
37
Capital management
46
Liquidity and funding management
47
Balance sheet and off-balance sheet
49
Share information and earnings per share
4.
Consolidated
financial information
51
UBS Group AG interim consolidated
financial information (unaudited)
Appendix
65
Alternative performance measures
69
Abbreviations frequently used in
our financial reports
71
Information sources
72
Cautionary statement
UBS Group fourth quarter 2024 report
2
Terms used in this report, unless the context requires otherwise
“UBS”, “UBS Group”, “UBS Group
AG consolidated”, “Group”, “we”,
“us” and “our”
UBS Group AG and its consolidated subsidiaries
“UBS AG” and “UBS
AG consolidated”
UBS AG and its consolidated subsidiaries
“Credit Suisse AG”
Credit Suisse AG and its consolidated subsidiaries
before the merger
with UBS AG
“Credit Suisse Group“
Pre-acquisition Credit Suisse Group
”Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries
before the merger
with UBS AG, Credit Suisse Services
AG, and other small former
Credit Suisse Group entities now directly held by UBS Group
AG
“UBS Group AG” and “UBS
Group AG standalone”
UBS Group AG on a standalone basis
“UBS AG standalone”
UBS AG on a standalone basis
“UBS Switzerland AG” and “UBS
Switzerland AG standalone”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and
“UBS Americas Holding LLC consolidated”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e. 1,000,000
“1bn”
One billion, i.e. 1,000,000,000
“1trn”
One trillion, i.e. 1,000,000,000,000
In this report, unless the context requires otherwise,
references to any gender shall apply to all genders.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or
future financial performance,
financial position
or cash
flows other
than a
financial measure
defined or
specified in
the applicable
recognized
accounting standards
or
in other
applicable regulations.
We
report
a
number of
APMs
in
the discussion
of
the
financial and
operating performance
of the
Group, our
business divisions
and Group
Items. We
use APMs
to provide
a
more
complete
picture of
our
operating performance
and
to
reflect
management’s view
of
the
fundamental
drivers
of
our
business
results. A
definition
of
each
APM,
the
method
used
to
calculate
it
and
the
information
content are presented
under “Alternative performance measures”
in the
appendix to this
report. Our APMs
may
qualify
as
non-GAAP
measures
as
defined
by
US
Securities
and
Exchange
Commission
(SEC)
regulations.
Our
underlying results are APMs and are non-GAAP
financial measures.
›
Refer to the “Group performance” section of this report and to “Alternative performance measures” in the
appendix to this report for additional information about underlying results
Comparability
Comparative information in this report is presented
as follows.
Profit and
loss information for
all quarters
covered by
this report
and for
2024 is
based entirely
on consolidated
data following
the acquisition
of the
Credit Suisse
Group. Comparative
information for
2023 includes
seven months
(June to December 2023) of post-acquisition consolidated data
and five months of UBS Group
data only (January
to May 2023).
All balance sheet information presented in this
report includes only post-acquisition consolidated
information.
UBS Group fourth quarter 2024 report
3
Our key figures
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Group results
Total revenues
11,635
12,334
10,855
48,611
40,834
Negative goodwill
27,264
Credit loss expense / (release)
229
121
136
551
1,037
Operating expenses
10,359
10,283
11,470
41,239
38,806
Operating profit / (loss) before tax
1,047
1,929
(751)
6,821
28,255
Net profit / (loss) attributable to shareholders
770
1,425
(279)
5,085
27,366
Diluted earnings per share (USD)
2
0.23
0.43
(0.09)
1.52
8.30
Profitability and growth
3,4
Return on equity (%)
3.6
6.7
(1.3)
6.0
36.9
Return on tangible equity (%)
3.9
7.3
(1.4)
6.5
40.8
Underlying return on tangible equity (%)
5
6.6
9.0
4.8
8.5
4.1
Return on common equity tier 1 capital (%)
4.2
7.6
(1.4)
6.7
41.8
Underlying return on common equity tier 1 capital (%)
5
7.2
9.4
4.8
8.7
4.2
Return on leverage ratio denominator, gross (%)
3.0
3.1
2.6
3.0
2.9
Cost / income ratio (%)
6
89.0
83.4
105.7
84.8
95.0
Underlying cost / income ratio (%)
5,6
81.9
78.5
93.0
79.5
87.2
Effective tax rate (%)
25.6
26.0
n.m.
7
24.6
3.1
Net profit growth (%)
n.m.
n.m.
n.m.
(81.4)
258.7
Resources
3
Total assets
1,565,028
1,623,941
1,716,924
1,565,028
1,716,924
Equity attributable to shareholders
85,079
87,025
85,624
85,079
85,624
Common equity tier 1 capital
8
71,367
74,213
78,002
71,367
78,002
Risk-weighted assets
8
498,538
519,363
546,505
498,538
546,505
Common equity tier 1 capital ratio (%)
8
14.3
14.3
14.3
14.3
14.3
Going concern capital ratio (%)
8
17.6
17.5
16.8
17.6
16.8
Total loss-absorbing capacity ratio (%)
8
37.2
37.5
36.4
37.2
36.4
Leverage ratio denominator
8
1,519,477
1,608,341
1,695,403
1,519,477
1,695,403
Common equity tier 1 leverage ratio (%)
8
4.7
4.6
4.6
4.7
4.6
Liquidity coverage ratio (%)
9
188.4
199.2
215.7
188.4
215.7
Net stable funding ratio (%)
125.5
126.9
124.7
125.5
124.7
Other
Invested assets (USD bn)
4,10
6,087
6,199
5,714
6,087
5,714
Personnel (full-time equivalents)
108,648
109,396
112,842
108,648
112,842
Market capitalization
2,11
105,719
106,528
107,355
105,719
107,355
Total book value per share (USD)
2
26.80
27.32
26.68
26.80
26.68
Tangible book value per share (USD)
2
24.63
25.10
24.34
24.63
24.34
Credit-impaired lending assets as a percentage of total lending
assets, gross (%)
4
1.0
0.9
0.8
1.0
0.8
Cost of credit risk (bps)
4
15
8
8
9
19
1 Comparative-period information has
been revised. Refer to
“Note 2 Accounting for
the acquisition of
the Credit Suisse Group”
in the “Consolidated
financial statements” section
of the UBS Group
third quarter
2024 report, available under “Quarterly
reporting” at ubs.com/investors,
for more information.
2 Refer to the “Share information
and earnings per share” section
of this report for more information.
3 Refer to
the “Recent developments” section of this report for
more information about targets and ambitions.
4 Refer to “Alternative
performance measures” in the appendix to this report
for the definition and calculation
method.
5 Refer to the “Group performance” section of
this report for more information about underlying
results.
6 Negative goodwill is not used in the
calculation as it is presented in a separate
reporting line
and is not part of total revenues.
7 The effective tax rate for the fourth quarter of 2023 is not a meaningful measure, due to the distortive
effect of current unbenefited tax losses at the former Credit Suisse entities.
8 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to the “Capital management” section of this report for more information.
9 The disclosed ratios represent quarterly averages
for the quarters presented and are calculated based on an average of 64 data points
in the fourth quarter of 2024, 65 data points in the third quarter of 2024
and 63 data points in the fourth quarter of 2023. Refer
to the “Liquidity and funding management” section of this report for
more information.
10 Consists of invested assets for Global Wealth Management, Asset Management (including invested assets from associates)
and Personal
& Corporate
Banking. Refer
to “Note
32 Invested
assets and
net new
money” in
the “Consolidated
financial statements”
section of
the UBS
Group Annual
Report 2023,
available under
“Annual
reporting” at ubs.com/investors, for more information.
11 The calculation of market capitalization reflects total shares issued multiplied by the
share price at the end of the period.
UBS Group fourth quarter 2024 report |
UBS Group | Recent developments
4
UBS Group
Management report
Recent developments
Integration of Credit Suisse
We
continue to
make progress
related
to the
integration of
Credit
Suisse,
and we
are
on
track to
substantially
complete
the
integration
by
the
end
of
2026.
Our
current
focus
remains
on
client
account
migrations
and
infrastructure decommissioning.
In the fourth quarter of
2024, we completed the migration of our
Global Wealth Management client accounts in
Luxembourg, Hong
Kong,
Singapore
and
Japan
to
UBS
platforms.
We
expect the
Swiss
business
migrations
to
commence in the second quarter of 2025.
Our
Non-core
and
Legacy
business
division
has
achieved
a
52%
reduction
in
risk-weighted
assets
(RWA)
at
31 December 2024, well ahead of our original
plan. As a result, we have updated our ambition
and aim to reduce
Non-core and Legacy
RWA to around
USD 29bn by the
end of 2025
and around USD 22bn
by the end
of 2026.
We also expect Non-core and Legacy to incur an underlying loss before tax of around USD 2.2bn in 2025 and less
than USD 1bn by the end of 2026 (exit rate),
both excluding litigation.
In the fourth quarter of 2024, we realized an additional USD 0.7bn in gross cost savings, for a total
of USD 3.4bn
in
2024.
Cumulative
gross
cost
savings
at
the
end
of
2024
amounted
to
USD 7.5bn
compared
with
the
2022
combined cost base of
UBS and Credit Suisse.
This represents around
58% of our ambition
of around USD 13bn
in
annualized exit rate gross cost savings by the
end of 2026.
In
October
2024, UBS
entered into
an
agreement to
sell
to American
Express Swiss
Holdings GmbH
(American
Express) its
50% interest
in Swisscard
AECS GmbH
(Swisscard), a
joint venture
in Switzerland
between UBS
and
American Express,
subject to certain
closing conditions.
Also in October
2024, UBS entered
into an agreement
with
Swisscard
to
transition
the
Credit
Suisse-branded
card
portfolios
to
UBS.
In
January
2025,
UBS
completed
the
purchase of the
card portfolios, with
the actual client
migration expected to
take place over
the following quarters.
The two transactions will
result in similar
profit and loss
effects over the
course of 2025
and, therefore, on a
net
basis are not expected to have a material impact for UBS. In the fourth quarter of 2024,
UBS recorded an expense
of USD 41m in connection with the termination
of the Swisscard joint venture.
Targets, ambitions and strategy update
We are maintaining our targets and ambitions for the
Group and our businesses as announced in 2024.
We aim to deliver,
by the end of 2026:
–
an underlying return on common equity tier 1
capital (RoCET1) of around 15% (exit
rate);
–
an underlying cost / income ratio of less than
70% (exit rate); and
–
exit rate
gross cost
savings of
around USD 13bn
by the
end of
2026 compared
with the
2022 combined
cost
base of UBS and Credit Suisse.
Our capital guidance remains unchanged,
we aim to maintain:
–
a common equity tier 1 (CET1) capital ratio of
around 14%; and
–
a CET1 leverage ratio of greater than 4.0%.
As we
complete the
execution of
the integration,
including cost
and capital
efficiency measures,
we believe
our
scale and
client franchises
will position
us to
sustainably drive
higher returns.
We therefore aim
to deliver
a reported
RoCET1 of around 18% in 2028. Our targets and ambitions are based
on our Group target of around 14% CET1
capital ratio and the existing Swiss capital regime.
Our business division ambitions
–
Global Wealth Management: surpass USD 5trn of invested assets by 2028, with around USD 100bn of net new
assets in 2025,
building to around
USD 200bn annually by 2028,
and an underlying
cost / income ratio of less
than 70% by the end of 2026 (exit rate).
UBS Group fourth quarter 2024 report |
UBS Group | Recent developments
5
–
Personal & Corporate Banking:
an underlying cost / income
ratio of less than 50%
by the end of 2026
(exit rate)
and an underlying return on attributed equity
of around 19% in the medium term.
–
Asset Management: an underlying cost /
income ratio of less than 70% by the end
of 2026 (exit rate).
–
The
Investment
Bank:
an
underlying
return
on
attributed
equity
of
around
15%
through
the
cycle,
while
operating with no more than 25% of the
Group’s RWA.
–
Non-core
and
Legacy:
an
underlying
loss
before
tax
of
less
than
USD 1bn
(exit
rate),
underlying
operating
expenses of around USD 0.8bn (exit
rate), both excluding litigation,
and around USD 22bn RWA all
by the end
of 2026.
An integral
part of
our growth
plans is
to improve
profitability across
our Americas
wealth business,
which manages
USD 2.1trn in invested assets and is a key
pillar of our strategy and value
proposition to clients. We are executing
on our targeted investments to enhance and build out our multi-disciplinary coverage model of the ultra high
net
worth client segment and increase penetration of
the high-net worth and core
affluent segments to further drive
scale. These growth
initiatives will be
supported by
investments in our
banking capabilities
with the aim
to enhance
our offering while
working towards obtaining a
National Charter. We are
also increasing technology
investments
and transforming
how we
approach them
by focusing
on delivering
new and
advanced digital
capabilities in
a more
dynamic and modular fashion. Finally, we remain disciplined
on costs and have already taken actions to streamline
our organizational structure to drive operating
leverage.
Capital returns
For the 2024 financial
year, the Board of
Directors plans to propose
a dividend to UBS
Group AG shareholders of
USD 0.90 per share.
Subject to approval
at the Annual
General Meeting, scheduled
for 10 April 2025,
the dividend
will be
paid on
17 April 2025
to shareholders
of record
on 16 April
- The
ex-dividend date
will be
15 April
2025 on
the SIX
Swiss Exchange and
16 April 2025
on the
New York
Stock Exchange.
We remain
committed to
progressive dividends and
are accruing for
an increase of
around 10% in
the ordinary dividend
per share for
the
2025 financial year.
In the fourth
quarter of 2024,
we completed our
planned USD 1bn of share
repurchases. We plan
to repurchase
USD 1bn of
shares in
the first
half of
- We
aim to
repurchase up
to an
additional USD 2bn of
shares in
the
second half
of 2025
and are
maintaining our
ambition for
share repurchases
in 2026
to exceed
full year
2022 levels.
Our share repurchases will be consistent with maintaining our CET1 capital ratio target of around 14%,
achieving
our
financial
targets
and
the
absence
of
material
and
immediate
changes
to
the
current
capital
regime
in
Switzerland.
Regulatory and legal developments
Developments related to the final Basel III implementation
In Switzerland, the
amendments to the
Capital Adequacy Ordinance
that incorporate the
final Basel III standards
into Swiss law entered into force on 1 January
- The adoption of the final
Basel III standards led to a USD 1bn
increase in the
UBS Group’s RWA,
resulting in a minimal
impact on the CET1
capital ratio. The USD 1bn
increase
was
primarily
driven
by
a
USD 7bn
increase
in
market
risk
RWA
and
a
USD 3bn
increase
in
credit
valuation
adjustments-related RWA resulting from the implementation of the Fundamental Review of the Trading Book (the
FRTB) framework,
largely offset by a
USD 7bn reduction in operational
risk RWA and a USD 1bn
reduction in credit
risk RWA. These changes do
not take into account the
impact of the output floor. The output floor, which is being
phased in until 2028, is currently not binding for the
UBS Group.
In the EU, the
final Basel III requirements
became applicable
as of 1 January
2025, except for
the market risk
capital
requirements, the implementation of which has been delayed until at least 1 January 2026. The overall impact on
UBS is limited.
In
January
2025,
the
UK
Prudential
Regulatory
Authority
(the
PRA)
announced
that
it
has
postponed
the
implementation of the final Basel III standards
until 1 January 2027, citing the need
for greater clarity on US plans.
In its announcement, the
PRA left open the
possibility of further postponement.
The date for
the full phase-in of
the output floor continues
to be 1 January 2030. The overall impact on
UBS is expected to be limited.
In the
US, both
the timing
and content
of a
re-proposal of
the July
2023 draft
version of
the final
Basel III rules
remain
uncertain.
The
change
in
administration
is
likely
to
slow
publication
of
a
re-proposal
of
implementing
regulation.
UBS Group fourth quarter 2024 report |
UBS Group | Recent developments
6
Swiss parliamentary investigation committee
releases its report
In December 2024,
the Swiss parliamentary
investigation committee
(
Parlamentarische Untersuchungskommission
,
the PUK)
published its
report that
examined the
authorities’ role
and actions
in the
context of
the Credit
Suisse
crisis. The
PUK identified
a need
for improvement
and action
at both
the enforcement
and legislative
levels and
made recommendations regarding potential improvements to the crisis toolkit.
In the
first half
of 2025,
the Swiss
Federal Council
is expected
to present
two packages
to implement
measures
aiming
to
further
develop
and
strengthen
the
Swiss
too-big-to-fail
regime,
which
will
be
followed
by
a
public
consultation period. The packages are expected to be
based on the Swiss Federal Council’s report
on systemically
important banks that was
published in April 2024.
Overall, the Swiss Federal
Council agreed with the
findings of
the PUK,
which will also
be considered when
drafting the aforementioned
measures.
Due to
the broad range
of
possible outcomes,
the impact
of the
proposals on
UBS
can
be
assessed only
when the
implementation details
become clearer.
FINMA publishes new circular on nature-related
financial risks
In December 2024, the Swiss Financial Market Supervisory Authority (FINMA) published a
new circular,
applicable
to banks and
insurers, on the
management of climate-
and other nature-related financial
risks. The circular sets
out
provisions
for
governance
and
institution-wide
risk
management,
as
well
as
provisions
for
risk
identification,
materiality assessment and scenario analysis regarding
climate- and nature-related financial
risks. Implementation
will be guided by international frameworks and standards, including the Basel Committee on Banking Supervision
Principles for
the effective
management and
supervision of
climate-related financial
risks. The
circular will enter
into
force on 1 January 2026
and will initially apply
exclusively to climate-related financial risks.
From 1 January 2028,
the circular
will apply to
all nature-related
financial risks. UBS
is assessing the
impact of the
requirements, which
will be addressed in a multi-year implementation plan.
Swiss Federal Council adopts the Climate Protection
Ordinance
In
November
2024,
the
Swiss
Federal
Council
adopted
the
Climate
Protection
Ordinance
to
the
Climate
and
Innovation
Act.
The
ordinance
entered
into
force
on
1 January
2025,
and
it
introduces,
among
other
matters,
measures to
support financial
flows contributing
to achieving
the Swiss
climate targets.
The main
instrument to
measure
progress
made by
the
financial
sector
toward this
goal
will
continue to
be
the
voluntary climate
tests
conducted
by
the
Swiss
Federal
Office
for
the
Environment.
UBS
participates
in
the
bi-annual
climate
tests
conducted by the Swiss authorities.
Swiss Federal Council reviews the Ordinance
on Climate Disclosures
In
December 2024,
the Swiss
Federal
Council launched
a
consultation on
amending the
Ordinance
on
Climate
Disclosures, proposing
to meet the
obligation to report
on climate-related
matters by applying
an internationally
recognized
standard
or the
sustainability reporting
standard
used in
the
EU. The
draft proposal
also establishes
minimum requirements for transition plans for
financial flows that describe the planned path
to a net-zero target
by
2050.
The
consultation
will
last
until
March
2025,
and
the
amended
Ordinance
on
Climate
Disclosures
is
expected to enter into force on
1 January 2026. UBS is within the
scope of the new requirements, with the
impact
on UBS dependent on the final ordinance.
European Commission announces an intention
to streamline and simplify sustainability regulations
In
November 2024,
the European
Commission announced
an
intention to
streamline
and
simplify sustainability
regulations, including
the Taxonomy Regulation,
the Corporate
Sustainability
Reporting Directive
and the
Corporate
Sustainability Due
Diligence Directive.
The
impact
on
UBS
can
be
assessed
only
when
the
details
have
become
clearer.
UK regulators consult on changes to the remuneration
rules
In
November
2024,
the
PRA
and
the
Financial
Conduct
Authority
published
a
consultation
on
changes
to
remuneration rules for senior management functions and material risk takers. The consultation covers
changes to
several
aspects of
the PRA
remuneration
rulebook, including
the reduction
of the
seven-year minimum
deferral
period to
five years
for senior
managers and
allowing deferred
remuneration awards
to vest
on a
pro rata
basis
from the time of award. UBS is reviewing the proposals.
UBS Group fourth quarter 2024 report |
UBS Group | Recent developments
7
EU revises the European Market Infrastructure
Regulation
In November 2024, the EU
finalized changes to the existing
European Market Infrastructure Regulation
(the EMIR),
with
the
changes
entering
into
force
in
December
2024.
The
revised
EMIR
rules
require
relevant
EU
market
participants to hold
active accounts at
EU Central Counterparties
and to
clear a representative
portion of certain
derivative contracts within the EU, effective June 2025. Other changes include enhanced transparency on clearing
services to
clients, new
clearing threshold
calculation
methodology and
new rules
on initial
margin model
validation.
The impact
of the
revised EMIR
on UBS
and its
in-scope clients
will depend
on the
final design
of the
technical
implementation standards, which are expected to be published
later in 2025.
Developments related to shortening the standard
settlement cycle for securities transactions
In November
2024, the
European Securities
and Markets
Authority published
a report on
shortening the
settlement
cycle for securities transactions from two business days (T+2) to one business
day (T+1) in the EU. The transition is
recommended to occur
on 11 October 2027 across
all relevant instruments.
The transition is
largely aligned with
the UK Accelerated Settlement Taskforce’s
report from March 2024,
which states that a respective transition to
a
T+1
settlement
cycle
should
take
place
no
later
than
31 December
2027,
in
alignment
with
other
European
jurisdictions,
including
the
EU
and
Switzerland.
In
January
2025,
the
Swiss
Securities
Post-Trade
Council
recommended
that
the
transition
to
a
T+1
settlement
cycle
for
the
domestic
markets
in
Switzerland
and
Liechtenstein should occur
in October 2027, in alignment
with the EU. In the
US, a shortened T+1
settlement cycle
has applied to securities transactions since May 2024.
UBS implemented the required enhancements based on the
US rules and will prepare
for further implementation according to the
evolving rules and market practice in other
jurisdictions.
Early adoption of SAB 122,
which rescinds SAB 121
In January 2025,
the US Securities
and Exchange Commission
(the SEC) issued Staff
Accounting Bulletin (SAB)
122,
which rescinded SAB 121,
Accounting for obligations
to safeguard crypto-assets
an entity holds for
platform users
.
UBS has
early adopted SAB
122 and
has applied it
retrospectively as
the standard
requires. Amounts
that would
have
been
recognized
as
liabilities,
with
corresponding
assets,
under
SAB
121
were
not
material
to
UBS,
and
adoption of SAB 122 also has not had a material
impact.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
8
Group performance
Income statement
For the quarter ended
% change from
For the year ended
USD m
31.12.24
30.9.24
31.12.23
3Q24
4Q23
31.12.24
31.12.23
1
Net interest income
1,838
1,794
2,095
2
(12)
7,108
7,297
Other net income from financial instruments measured
at fair value through profit or loss
3,144
3,681
3,158
(15)
0
14,690
11,583
Net fee and commission income
6,598
6,517
5,780
1
14
26,138
21,570
Other income
56
341
(179)
(84)
675
384
Total revenues
11,635
12,334
10,855
(6)
7
48,611
40,834
Negative goodwill
27,264
Credit loss expense / (release)
229
121
136
89
68
551
1,037
Personnel expenses
6,361
6,889
7,061
(8)
(10)
27,318
24,899
General and administrative expenses
3,004
2,389
2,999
26
0
10,124
10,156
Depreciation, amortization and impairment of non-financial
assets
994
1,006
1,409
(1)
(29)
3,798
3,750
Operating expenses
10,359
10,283
11,470
1
(10)
41,239
38,806
Operating profit / (loss) before tax
1,047
1,929
(751)
(46)
6,821
28,255
Tax expense / (benefit)
268
502
(473)
(47)
1,675
873
Net profit / (loss)
779
1,428
(278)
(45)
5,146
27,382
Net profit / (loss) attributable to non-controlling interests
9
3
1
185
60
16
Net profit / (loss) attributable to shareholders
770
1,425
(279)
(46)
5,085
27,366
Comprehensive income
Total comprehensive income
(1,878)
3,910
2,695
3,401
28,374
Total comprehensive income attributable to non-controlling interests
(27)
27
18
13
22
Total comprehensive income attributable to shareholders
(1,851)
3,883
2,677
3,388
28,352
1 Comparative-period information
as previously reported
in the 2023 Annual
Report has been revised
to reflect measurement period
adjustments impacting negative
goodwill. Refer to “Note
2 Accounting for
the
acquisition of the Credit Suisse Group” in the “Consolidated
financial statements” section of the UBS Group third quarter
2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information
about the relevant adjustments.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
9
Selected financial information of the business divisions and Group Items
For the quarter ended 31.12.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
6,121
2,245
766
2,749
(58)
(188)
11,635
of which: PPA effects and other integration items
1
200
258
202
(4)
656
of which: loss related to an investment in an associate
(21)
(59)
(80)
Total revenues (underlying)
5,942
2,047
766
2,547
(58)
(184)
11,059
Credit loss expense / (release)
(14)
175
0
63
6
0
229
Operating expenses as reported
5,268
1,476
639
2,207
858
(88)
10,359
of which: integration-related expenses and PPA effects
2
460
209
96
174
317
(1)
1,255
of which: items related to the Swisscard transactions
3
41
41
Operating expenses (underlying)
4,808
1,226
543
2,032
541
(88)
9,062
Operating profit / (loss) before tax as reported
867
595
128
479
(923)
(100)
1,047
Operating profit / (loss) before tax (underlying)
1,147
646
224
452
(606)
(96)
1,768
For the quarter ended 30.9.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
6,199
2,394
873
2,645
262
(39)
12,334
of which: PPA effects and other integration items
1
224
278
185
(25)
662
Total revenues (underlying)
5,975
2,116
873
2,461
262
(14)
11,672
Credit loss expense / (release)
2
83
0
9
28
0
121
Operating expenses as reported
5,112
1,465
722
2,231
837
(84)
10,283
of which: integration-related expenses and PPA effects
2
419
198
86
156
270
(11)
1,119
Operating expenses (underlying)
4,693
1,267
636
2,076
567
(74)
9,165
Operating profit / (loss) before tax as reported
1,085
846
151
405
(603)
45
1,929
Operating profit / (loss) before tax (underlying)
1,280
766
237
377
(333)
60
2,386
For the quarter ended 31.12.23
4
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
5,554
2,083
825
2,141
145
107
10,855
of which: PPA effects and other integration items
1
349
306
277
12
944
of which: loss related to an investment in an associate
(190)
(317)
(508)
Total revenues (underlying)
5,395
2,094
825
1,864
145
95
10,419
Credit loss expense / (release)
(8)
85
(1)
48
15
(2)
136
Operating expenses as reported
5,282
1,398
704
2,283
1,787
16
11,470
of which: integration-related expenses and PPA effects
2
502
187
64
167
750
109
1,780
of which: acquisition-related costs
(1)
(1)
Operating expenses (underlying)
4,780
1,210
639
2,116
1,037
(92)
9,690
Operating profit / (loss) before tax as reported
280
601
122
(190)
(1,657)
93
(751)
Operating profit / (loss) before tax (underlying)
624
800
186
(300)
(907)
189
592
1 Includes accretion of PPA
adjustments on financial instruments and other
PPA effects, as well
as temporary and incremental items directly
related to the integration.
2 Includes temporary, incremental
operating
expenses directly related to the integration, as
well as amortization of newly recognized
intangibles resulting from the acquisition of
the Credit Suisse Group.
3 Represents the termination fee to American Express
related to the expected sale in 2025 of our 50% holding in Swisscard.
4 Comparative-period information has been restated for changes in business division perimeters, Group Treasury
allocations and Non-core and
Legacy cost allocations, resulting in decreases in Operating profit / (loss) before tax of USD 101m for Global Wealth Management, USD 187m for Personal & Corporate Banking and USD 21m for the Investment Bank
and increases in Operating profit / (loss) before tax of USD 233m for Group
Items, USD 69m for Non-core and Legacy and USD 7m for
Asset Management. Refer to “Note 3 Segment reporting” in the “Consolidated
financial statements” section of the UBS Group third quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors,
for more information about the relevant changes.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
10
Selected financial information of the business divisions and Group Items (continued)
For the year ended 31.12.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
24,516
9,334
3,182
10,948
1,605
(975)
48,611
of which: PPA effects and other integration items
1
891
1,038
989
(41)
2,877
of which: loss related to an investment in an associate
(21)
(59)
(80)
Total revenues (underlying)
23,646
8,355
3,182
9,958
1,605
(933)
45,814
Credit loss expense / (release)
(16)
404
(1)
97
69
(2)
551
Operating expenses as reported
20,608
5,741
2,663
8,934
3,512
(220)
41,239
of which: integration-related expenses and PPA effects
2
1,807
749
351
717
1,154
(12)
4,766
of which: items related to the Swisscard transactions
3
41
41
Operating expenses (underlying)
18,802
4,951
2,312
8,217
2,359
(208)
36,432
Operating profit / (loss) before tax as reported
3,924
3,189
520
1,917
(1,976)
(752)
6,821
Operating profit / (loss) before tax (underlying)
4,860
3,000
871
1,644
(822)
(723)
8,831
For the year ended 31.12.23
4,5
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Negative
goodwill
Total
Total revenues as reported
21,556
7,687
2,686
8,703
697
(495)
40,834
of which: PPA effects and other integration items
1
923
783
583
(9)
2,280
of which: loss related to an investment in an associate
(190)
(317)
(508)
Total revenues (underlying)
20,823
7,222
2,686
8,120
697
(486)
39,062
Negative goodwill
27,264
27,264
Credit loss expense / (release)
166
482
0
190
193
6
1,037
Operating expenses as reported
17,945
4,394
2,353
8,585
5,091
438
38,806
of which: integration-related expenses and PPA effects
2
1,018
398
205
697
1,775
451
4,543
of which: acquisition-related costs
202
202
Operating expenses (underlying)
16,927
3,996
2,149
7,889
3,316
(215)
34,061
Operating profit / (loss) before tax as reported
3,445
2,811
332
(72)
(4,587)
(938)
27,264
28,255
Operating profit / (loss) before tax (underlying)
3,730
2,744
537
42
(2,812)
(277)
3,963
1 Includes accretion of PPA
adjustments on financial instruments and other
PPA effects, as well
as temporary and incremental items directly
related to the integration.
2 Includes temporary, incremental
operating
expenses directly related to the integration, as
well as amortization of newly recognized
intangibles resulting from the acquisition
of the Credit Suisse Group.
3 Represents the termination fee to American Express
related to the expected sale in 2025 of our 50% holding in Swisscard.
4 Comparative-period information has been restated for changes in business division perimeters, Group Treasury allocations and Non-core and
Legacy cost allocations, resulting in decreases in Operating profit / (loss) before tax of USD 144m for Global Wealth Management, USD 337m for Personal & Corporate Banking and USD 28m for the Investment Bank
and increases in Operating profit / (loss) before tax of USD
341m for Group Items, USD 154m for Non-core and Legacy and USD 14m
for Asset Management. Refer to “Note 3 Segment reporting” in
the “Consolidated
financial statements”
section of
the UBS
Group third
quarter 2024
report, available
under “Quarterly
reporting” at
ubs.com/investors,
for more
information about
the relevant
changes.
5 Comparative-period
information as previously reported in the 2023 Annual
Report has been revised to reflect measurement
period adjustments impacting negative goodwill. Refer to
“Note 2 Accounting for the acquisition of the
Credit
Suisse Group” in
the “Consolidated financial
statements” section of
the UBS Group
third quarter 2024
report, available under
“Quarterly reporting” at
ubs.com/investors, for
more information about
the relevant
adjustments.
Integration-related expenses, by business division and Group Items
For the quarter ended
For the year ended
USD m
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Global Wealth Management
458
420
500
1,845
1,013
Personal & Corporate Banking
183
172
161
654
338
Asset Management
96
86
64
351
205
Investment Bank
174
156
167
717
697
Non-core and Legacy
317
270
750
1,154
1,775
Group Items
6
21
109
36
451
Total integration-related expenses
1,233
1,124
1,751
4,757
4,478
of which: total revenues
6
35
0
104
0
of which: operating expenses
1,227
1,090
1,751
4,653
4,478
of which: personnel expenses
599
561
794
2,541
2,192
of which: general and administrative expenses
484
415
455
1,681
1,436
of which: depreciation, amortization and impairment of non-financial
assets
144
113
503
430
850
1 Comparative-period information has been restated for changes in business division perimeters, Group
Treasury allocations and Non-core and Legacy cost allocations.
Refer to “Note 3 Segment reporting” in the
“Consolidated financial statements” section of the UBS Group third quarter 2024 report, available under “Quarterly reporting” at
ubs.com/investors, for more information about the relevant changes.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
11
Underlying results
In addition to
reporting our
results in accordance
with IFRS
Accounting Standards,
we report underlying
results that
exclude items of profit or loss that management believes
are not representative of the underlying performance.
In
the
fourth
quarter
of
2024,
underlying
revenues
exclude
purchase
price
allocation
(PPA)
effects
and
other
integration
items,
as
well
as
a
loss
related
to
an
investment
in
an
associate.
PPA
effects
mainly
consist
of
PPA
adjustments on
financial instruments
measured at
amortized cost,
including off-balance
sheet positions,
arising
from the
acquisition of
the Credit
Suisse Group.
Accretion
of PPA
adjustments on
financial instruments
is accelerated
when the related
financial instrument is
derecognized before its
contractual maturity. No
adjustment is made
for
accretion of PPA on financial instruments
within Non-core and Legacy,
due to the nature of its business model.
In
the
fourth
quarter
of
2024,
underlying
expenses
exclude
integration-related
expenses
that
are
temporary,
incremental and directly
related to the
integration of Credit
Suisse into
UBS, including costs
of internal
staff and
contractors
substantially
dedicated
to
integration
activities,
retention
awards,
redundancy
costs,
incremental
expenses from
the shortening
of useful lives
of property,
equipment and software,
and impairment charges
relating
to
these
assets.
Classification
as
integration-related
expenses
does
not
affect
the
timing
of
recognition
and
measurement
of
those
expenses
or
the
presentation
thereof
in
the
income
statement.
Underlying
operating
expenses also exclude items related to the Swisscard
transactions.
Results: 4Q24 vs 4Q23
Reported operating profit before tax was
USD 1,047m, compared with an operating
loss before tax of USD 751m,
reflecting
lower
operating
expenses
and
an
increase
in
total
revenues,
partly
offset
by
higher
net
credit
loss
expenses. Total revenues increased
by USD 780m, or 7%,
to USD 11,635m, and included
a decrease of USD 288m
in accretion impacts resulting
from PPA adjustments
on financial instruments
and other PPA effects.
The increase in
total revenues was
driven by an USD 818m
increase in net
fee and commission
income and a USD 235m
change in
other income,
partly offset
by a
USD 271m decrease in
net interest
income and
other net
income from
financial
instruments measured at fair value through
profit or loss. Operating expenses decreased
by USD 1,111m, or 10%,
to USD 10,359m
and included
a USD 524m
decrease in
integration-related expenses.
The decrease
in operating
expenses
was
mainly
driven
by
a
USD 700m
decrease
in
personnel
expenses
and
a
USD 415m
decrease
in
depreciation, amortization
and impairment of
non-financial assets,
while general and
administrative expenses
were
broadly unchanged.
Net credit loss expenses were USD 229m, compared with USD 136m in the
fourth quarter of
2023.
Underlying results 4Q24 vs 4Q23
Underlying revenues
for the fourth
quarter of 2024
excluded PPA
effects and
other integration
items of USD
656m,
as well
as USD 80m
of losses
related to
an investment
in an
associate.
Underlying operating
expenses excluded
USD 1,255m of
integration-related
expenses and
PPA effects,
as well
as a
USD 41m expense
related to
the Swisscard
transactions.
On an underlying
basis, profit
before tax
increased by
USD 1,176m to
USD 1,768m, reflecting
a USD 640m
increase
in total revenues
and a USD
628m decrease
in operating
expenses,
partly offset
by a USD
93m increase
in net credit
loss expenses.
Total revenues: 4Q24 vs 4Q23
Net interest income and other net income
from financial instruments measured at
fair value through profit or loss
Total combined net
interest income
and other
net income
from financial
instruments
measured at
fair value
through
profit or loss decreased by USD 271m to USD 4,982m and included a decrease of USD 151m in accretion impacts
resulting from PPA adjustments on financial instruments and other PPA effects.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
12
Net interest income and other net income from financial instruments measured at fair value through profit or loss
For the quarter ended
% change from
For the year ended
USD m
31.12.24
30.9.24
31.12.23
1
3Q24
4Q23
31.12.24
31.12.23
1
Net interest income from financial instruments measured
at amortized cost and fair
value through other comprehensive income
(55)
(256)
597
(79)
47
3,527
Net interest income from financial instruments measured
at fair value through profit or
loss and other
1,893
2,050
1,498
(8)
26
7,061
3,770
Other net income from financial instruments measured
at fair value through profit or
loss
3,144
3,681
3,158
(15)
0
14,690
11,583
Total
4,982
5,476
5,253
(9)
(5)
21,798
18,880
Global Wealth Management
2,217
2,232
2,268
(1)
(2)
9,031
8,484
of which: net interest income
1,849
1,811
1,871
2
(1)
7,358
7,082
of which: transaction-based income from foreign exchange and other
intermediary
activity
2
368
421
397
(13)
(7)
1,673
1,402
Personal & Corporate Banking
1,572
1,638
1,704
(4)
(8)
6,479
5,539
of which: net interest income
1,362
1,429
1,510
(5)
(10)
5,650
4,878
of which: transaction-based income from foreign exchange and other
intermediary
activity
2
209
210
194
0
8
829
661
Asset Management
(5)
21
10
16
(5)
Investment Bank
1,555
1,518
982
2
58
6,164
5,055
Non-core and Legacy
(153)
98
(25)
502
1,163
321
Group Items
(202)
(32)
315
525
(1,054)
(513)
1 Comparative-period information
has been restated
for changes in
business division perimeters,
Group Treasury
allocations and Non-core
and Legacy cost
allocations. Refer to
“Note 3 Segment
reporting” in the
“Consolidated financial statements”
section of the
UBS Group third
quarter 2024 report,
available under
“Quarterly reporting” at
ubs.com/investors, for
more information about
the relevant changes.
2 Mainly
includes spread-related income in connection with client-driven transactions, foreign currency translation effects and income and expenses from precious metals,
which are included in the income statement line Other
net income from financial instruments measured at
fair value through profit or loss.
The amounts reported on this line
are one component of Transaction
-based income in the management discussion and
analysis in
the “Global Wealth Management” and “Personal & Corporate Banking” sections of this report.
Global
Wealth
Management decreased
by
USD 51m
to
USD 2,217m,
which
included
a
USD 129m
decrease
in
accretion of
PPA adjustments on
financial instruments
and other
PPA effects. Excluding
the aforementioned
effects,
net interest income increased, largely
driven by improved deposit margins from
repricing actions, lower effects of
liquidity and funding costs,
and higher loan revenues, mainly as a result of higher loan margins.
There was also an
increase in transaction-based income, mainly driven
by higher levels of client activity.
Personal &
Corporate Banking
decreased by USD 132m to
USD 1,572m, which
included a
USD 32m
decrease in
accretion of PPA
adjustments on
financial instruments
and other PPA
effects. Excluding
the aforementioned
effects,
net interest income decreased, mainly due to
lower deposit margins resulting from both lower reinvestment rates
and clients shifting to lower-margin deposit products.
The Investment Bank
increased by USD 573m
to USD 1,555m, including
a USD 26m increase
in accretion of
PPA
adjustments on financial
instruments and
other PPA effects.
The overall increase
was mainly due
to higher revenues
in
Financing,
with
increases
across
all
products,
led
by
Equity
Financing.
In
addition,
there
was
an
increase
in
Derivatives &
Solutions revenues,
reflecting increases
across all
products,
mostly driven
by Foreign
Exchange and
Equity
Derivatives, as
well
as
an
increase
in
Global
Banking,
mainly
from
higher revenues
across
Public
Capital
Markets,
primarily driven by Leveraged Capital Markets.
Non-core and
Legacy
was
negative
USD 153m compared
with
negative
USD 25m in
the
fourth
quarter
of
2023,
mainly due to lower net interest income as a result of portfolio reductions
and also due to lower trading revenues,
mainly reflecting
lower gains
on disposals
compared with
the fourth
quarter of
- These
decreases were
partly
offset by lower funding costs.
Group
Items
was
negative
USD 202m
compared
with
positive
USD 315m
in
the
fourth
quarter
of
2023.
This
included the
income from
Group hedging
and own debt,
including hedge
accounting ineffectiveness,
within Group
Treasury. Revenues
in the
fourth quarter
of 2024
were driven
by mark-to-market
effects on
own credit
and portfolio-
level economic hedges.
›
Refer to the relevant business division commentary in the “UBS business divisions and Group Items” section of this
report for more information about business-division-specific revenues
Net fee and commission income
Net fee and commission income
increased by USD 818m
to USD 6,598m and included a
decrease of USD 137m
in
accretion of
PPA adjustments
on financial
instruments and
other PPA effects,
predominantly in
the Investment
Bank.
Net brokerage
fees increased
by USD 478m
to USD 1,081m,
reflecting an
increase across
all regions
in Cash
Equities
in Execution Services
in the Investment Bank,
as well as an
increase in Global Wealth
Management that was
due to
higher levels of client activity, particularly in
the Asia Pacific and Americas regions.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
13
Fees from portfolio management and related services
increased by USD 119m to USD 3,085m, predominantly
due
to higher revenues in Global Wealth Management,
mainly as a result of positive market performance.
Investment fund
fees increased
by USD 356m
to USD 1,579m,
largely due
to higher
revenues in
Global Wealth
Management, reflecting positive market performance, partly offset by
lower revenues in Asset Management. The
decrease in Asset Management was due to continued margin compression, the impact of exits from non-strategic
businesses and negative foreign currency effects
largely offset by positive market performance.
Other income
Other income was USD 56m, compared with negative USD 179m
in the fourth quarter of 2023. The increase was
mainly due
to a
loss of
USD 80m related
to an
investment in
an associate,
compared with
a loss
of USD 508m
related to an investment in an associate recognized
in the fourth quarter of 2023. The fourth
quarter of 2024 also
included a
loss of
USD 40m relating
to insurance and
similar contracts, compared
with gains
of USD 41m
in the
fourth quarter of
- The insurance
and similar contracts
are hedged with derivative
instruments, with offsetting
gains and
losses in
the income
statement within
Other net
income from
financial instruments
measured at
fair value
through profit or loss.
Credit loss expense / release: 4Q24 vs
4Q23
Total net
credit loss
expenses in the
fourth quarter of
2024 were
USD 229m, reflecting net
releases of USD 21m
related to performing positions and net expenses
of USD 250m
on credit-impaired positions. Credit loss expenses
were USD 136m
in the fourth quarter of
2023.
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
Total
For the quarter ended 31.12.24
Global Wealth Management
(26)
12
0
(14)
Personal & Corporate Banking
(24)
199
0
175
Asset Management
0
0
0
0
Investment Bank
32
31
0
63
Non-core and Legacy
(2)
5
3
6
Group Items
(1)
0
0
0
Total
(21)
247
3
229
For the quarter ended 30.9.24
Global Wealth Management
(11)
12
1
2
Personal & Corporate Banking
(10)
94
0
83
Asset Management
0
0
0
0
Investment Bank
9
0
0
9
Non-core and Legacy
(2)
0
30
28
Group Items
0
0
0
0
Total
(15)
106
30
121
For the quarter ended 31.12.23
1
Global Wealth Management
(12)
3
0
(8)
Personal & Corporate Banking
(14)
95
4
85
Asset Management
0
0
0
(1)
Investment Bank
(13)
60
1
48
Non-core and Legacy
(1)
25
(9)
15
Group Items
(2)
0
0
(2)
Total
(43)
183
(4)
136
1 Comparative-period information
has been restated
for changes in business
division perimeters. Refer
to “Changes to segment
reporting in 2024”
in the “UBS business
divisions and Group
Items” section of
the
UBS Group first quarter 2024 report, available
under “Quarterly reporting” at ubs.com/investors,
and “Note 3 Segment reporting” in
the “Consolidated financial statements” section of
the UBS Group third quarter
2024 report, available under “Quarterly reporting” at ubs.com/investors, for
more information.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
14
Operating expenses: 4Q24 vs 4Q23
Operating expenses
For the quarter ended
% change from
For the year ended
USD m
31.12.24
30.9.24
31.12.23
3Q24
4Q23
31.12.24
31.12.23
Personnel expenses
6,361
6,889
7,061
(8)
(10)
27,318
24,899
of which: salaries and variable compensation
5,321
5,805
5,728
(8)
(7)
23,047
20,842
of which: variable compensation – financial advisors
1
1,400
1,335
1,176
5
19
5,293
4,549
General and administrative expenses
3,004
2,389
2,999
26
0
10,124
10,156
of which: net expenses for litigation, regulatory and similar
matters
99
(69)
8
(128)
809
Depreciation, amortization and impairment of non-financial
assets
994
1,006
1,409
(1)
(29)
3,798
3,750
Total operating expenses
10,359
10,283
11,470
1
(10)
41,239
38,806
1 Consists of cash and deferred compensation
awards and is based on compensable revenues
and firm tenure using a formulaic
approach. Also includes expenses related to compensation commitments
with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
Personnel expenses
Personnel
expenses decreased
by
USD 700m
to
USD 6,361m. Salaries
and
variable
compensation decreased
by
USD 407m, mainly
as a
result of
a smaller
workforce, lower
accruals for
performance awards
and lower
integration-
related expenses, partly
offset by a
USD 224m increase in
financial advisor compensation, which reflected
higher
compensable revenues.
In addition,
post-employment benefit
plans decreased
by USD 248m,
largely due
to the
fourth quarter
of 2023
including an
increase in
the pension
plan obligation
of the
Swiss pension
plan of
Credit
Suisse following
the decision
to align
the scheme
to that
of UBS.
Personnel expenses
included a
USD 195m decrease
in integration-related expenses, which was mainly
due to the aforementioned pension scheme alignment.
General and administrative expenses
General
and
administrative
expenses
increased
by
USD 5m
to
USD 3,004m,
including
a
USD 28m
increase
in
integration-related expenses,
which was
mainly attributable
to higher
outsourcing and
marketing costs,
partly offset
by lower consulting,
legal and audit
fees, as well
as lower real
estate and logistics costs.
In addition, there
was a
USD 41m
expense
related
to
the
Swisscard
transactions.
Excluding
integration-related
expenses
and
the
aforementioned
expense
related
to
the
Swisscard
transactions,
underlying
general
and
administrative
expenses
decreased, mainly
due to
a USD 65m
decrease in
outsourcing costs
and also
due to
the fourth
quarter of
2023
including a charge of USD 60m for the
special assessment by the US Federal
Deposit Insurance Corporation, partly
offset by an increase of USD 92m in expenses for litigation, regulatory and
similar matters.
›
Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for
more information about litigation, regulatory and similar matters
›
Refer to the “Regulatory and legal developments” and “Risk factors” sections of the UBS Group Annual Report
2023, available under “Annual reporting” at
ubs.com/investors
, for more information about litigation, regulatory
and similar matters
Depreciation, amortization and impairment of
non-financial assets
Depreciation, amortization
and impairment
of non-financial
assets decreased
by USD 415m
to USD 994m,
primarily
due to
a USD 359m
decrease in
integration-related expenses.
The decrease
was largely
as a
result of
the fourth
quarter of 2023
including higher impairment and accelerated depreciation
associated with real estate leases.
Tax: 4Q24 vs 4Q23
The Group had a
net income tax expense
of USD 268m in the
fourth quarter of
2024, compared with
a tax benefit
of USD 473m in the prior-year quarter.
The current tax expense
was USD 1,015m, which included
USD 354m that primarily related to the
taxable profits
of UBS Switzerland AG and other entities
and USD 661m that mainly
related to US corporate alternative
minimum
tax, with an
equivalent net deferred tax
benefit for deferred tax
assets (DTAs) recognized in
respect of tax credits
carried forward.
There was a
net deferred tax benefit
of USD 747m, which
reflected the aforementioned
net deferred tax
benefit of
USD 661m and a
net benefit of USD 244m
related to revaluations of
DTAs for certain
entities in connection with
our business planning
process, partly offset
by a
net deferred tax
expense of USD 158m
that primarily related
to
the amortization of DTAs previously recognized in
relation to tax losses carried forward and
deductible temporary
differences.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
15
The
Group’s
effective
tax
rate
for
the
quarter
was
25.6%,
although
it
would
have
been
48.9%
without
the
aforementioned deferred
tax benefit from
DTA revaluations. This
is higher than
the Group’s structural
rate of 23%,
mainly because
the Group’s
net profit
includes operating
losses of
certain entities,
mostly reflecting
integration-
related expenses,
including restructuring
costs, that did not
result in any tax
benefits because they
cannot be offset
with profits of other entities in the Group and
did not result in any DTA recognition.
We expect that the 2025 full-
year effective tax rate
for the UBS Group
will be materially less
than the structural rate
of 23%,
due to projected
tax planning benefits.
Total comprehensive income attributable
to shareholders
In the fourth quarter
of 2024, total
comprehensive income attributable
to shareholders was
negative USD 1,851m,
reflecting a net profit of USD 770m and other comprehensive income
(OCI), net of tax, of negative USD 2,622m.
Foreign
currency translation
OCI
was
negative
USD 1,835m, mainly
resulting
from the
strengthening of
the
US
dollar against the Swiss franc and the euro.
OCI
related
to
cash
flow
hedges
was
negative
USD 785m, mainly
reflecting
net
unrealized
losses
on
US
dollar
hedging derivatives resulting from increases
in the relevant US dollar long-term interest
rates.
OCI
related to
cost of
hedging was
negative USD
98m, mainly
driven by
a
widening and
steepening of
the US
dollar / euro cross-currency basis which resulted
in mark-to-market losses on the cross-currency
swaps.
OCI related to
own credit on
financial liabilities
designated at fair
value was USD
144m, primarily due
to the impact
of time decay on the portfolio.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial information” section of this report
for more information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to “Note 21 Fair value measurement” in the “Consolidated financial statements” section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about own
credit on financial liabilities designated at fair value
Sensitivity to interest rate movements
As of
31 December 2024, it
is estimated
that a
parallel shift
in yield
curves by
+100 basis
points could lead
to a
combined increase in
annual net interest
income from our
banking book of
approximately USD 1.2bn in
the first
year after
such a
shift. Of
this increase,
approximately USD 0.7bn, USD 0.3bn
and USD 0.1bn
would result
from
changes in Swiss franc, US dollar and euro
interest rates, respectively.
A parallel shift in yield
curves by –100 basis points
could lead to a combined
increase in annual net
interest income
of approximately
USD 0.6bn. Of this increase, approximately USD 1.1bn would result from changes in Swiss franc
interest rates,
driven by both
contractual and
assumed flooring
benefits under
negative interest
rates. US dollar
and
euro interest rates would lead to an offsetting
decrease of USD 0.4bn and USD 0.1bn, respectively.
These estimates
are based
on a
hypothetical scenario
of an
immediate change
in interest
rates, equal
across all
currencies
and
relative
to
implied
forward
rates
as
of
31 December
2024
applied
to
our
banking
book.
These
estimates further assume no change to balance sheet size and product mix, stable foreign exchange rates, and no
specific management action. These estimates do
not represent net interest income forecasts.
›
Refer to the “Risk management and control” section of this report for information about interest rate risk in the
banking book
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
16
Key figures and personnel
Below is
an overview
of selected
key figures
of the
Group. For
further information
about key
figures related
to
capital management, refer to the “Capital management”
section of this report.
Cost / income ratio: 4Q24 vs 4Q23
The cost / income
ratio was
89.0%, compared
with 105.7%,
and on
an underlying
basis the
cost / income ratio
was 81.9%, compared with 93.0%.
Both of these decreases were
a result of lower operating
expenses and higher
total revenues.
Personnel: 4Q24 vs 3Q24
The number of
internal and
external personnel
employed was
128,983 (workforce
count) as of
31 December 2024,
a net
decrease of
2,694 compared
with 30 September
- The
number of
internal personnel
employed as
of
31 December 2024
was 108,648
(full-time equivalents),
a net decrease
of 748 compared
with 30 September
2024.
The number of
external staff
was approximately 20,335
(workforce count)
as of 31
December 2024,
a net decrease
of approximately 1,946 compared with 30 September
2024.
Equity, CET1 capital and returns
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Net profit
Net profit / (loss) attributable to shareholders
770
1,425
(279)
5,085
27,366
Equity
Equity attributable to shareholders
85,079
87,025
85,624
85,079
85,624
less: goodwill and intangible assets
6,887
7,048
7,515
6,887
7,515
Tangible equity attributable to shareholders
78,192
79,976
78,109
78,192
78,109
less: other CET1 adjustments
6,825
5,763
107
6,825
107
CET1 capital
71,367
74,213
78,002
71,367
78,002
Returns
Return on equity (%)
3.6
6.7
(1.3)
6.0
36.9
Return on tangible equity (%)
3.9
7.3
(1.4)
6.5
40.8
Underlying return on tangible equity (%)
6.6
9.0
4.8
8.5
4.1
Return on CET1 capital (%)
4.2
7.6
(1.4)
6.7
41.8
Underlying return on CET1 capital (%)
7.2
9.4
4.8
8.7
4.2
1 Comparative-period information
has been revised.
Refer to “Note 2
Accounting for the acquisition
of the Credit Suisse
Group” in the
“Consolidated financial statements”
section of the UBS
Group third quarter
2024 report, available under “Quarterly reporting” at ubs.com/investors, for
more information.
Common equity tier 1 capital: 4Q24 vs 3Q24
During
the
fourth
quarter
of
2024,
our
common
equity
tier 1
(CET1)
capital
decreased
by
USD 2.8bn
to
USD 71.4bn,
mainly
as
operating
profit
before
tax
of
USD 1.0bn
was
more
than
offset
by
foreign
currency
translation
losses
of
USD 1.8bn,
current
tax
expenses
of
USD 1.0bn,
dividend
accruals
of
USD 0.9bn
and
a
USD 0.2bn
decrease
in
eligible
deferred
tax
assets
on
temporary
differences.
Share
repurchases
of
USD 0.3bn
carried out in
the fourth quarter
of 2024 under
our 2024 share
repurchase program did not
affect our CET1
capital
position,
as
there
was
an
equal
reduction
in
the
capital
reserve
for
potential share
repurchases.
The
remaining
capital reserve for potential share repurchases was fully utilized during the fourth
quarter of 2024.
Return on common equity tier 1 capital: 4Q24
vs 4Q23
The annualized return on CET1 capital was 4.2%, compared with negative 1.4%, driven by net profit attributable
to
shareholders
compared
with
a
loss
attributable
to
shareholders
in
the
fourth
quarter
of 2023,
as
well
as
a
decrease in
average CET1
capital. On
an underlying
basis the
return on
CET1 capital
was 7.2%,
compared with
4.8%, driven by
an increase in
net profit attributable
to shareholders, as
well as a
decrease in average
CET1 capital.
Risk-weighted assets: 4Q24 vs 3Q24
During
the
fourth
quarter
of
2024,
RWA
decreased
by
USD 20.8bn
to
USD 498.5bn,
driven
by
a
USD 14.6bn
decrease in currency
effects, as well
as a USD 6.6bn
decrease resulting from
asset size
and other movements,
partly
offset by an increase of USD 0.4bn resulting from model updates and methodology
changes.
Common equity tier 1 capital ratio: 4Q24 vs 3Q24
Our CET1 capital ratio
was broadly unchanged at
14.3%,
as a USD 2.8bn decrease
in CET1 capital
was offset by
the aforementioned decrease in RWA.
UBS Group fourth quarter 2024 report |
UBS Group | Group performance
17
Leverage ratio denominator: 4Q24 vs 3Q24
The leverage ratio denominator (the LRD) decreased by USD 88.9bn to USD 1,519.5bn, driven by currency effects
of USD 68.9bn,
as well as asset size and other movements
of USD 20.0bn.
Common equity tier 1 leverage ratio: 4Q24
vs 3Q24
Our CET1 leverage ratio increased to 4.7% from
4.6%,
reflecting the aforementioned decrease in the LRD,
partly
offset by a USD 2.8bn decrease in CET1 capital.
Outlook
Investor sentiment remained
positive in
the fourth
quarter of 2024,
driving strong institutional
and private client
activity supported by a constructive
market backdrop that reflected
an increase in investors’ risk
appetite following
the results of the US presidential election.
Constructive market
conditions have
continued into
the first
quarter of
2025 sustained
by the
greater optimism
regarding growth prospects
in the US. However,
investor behavior may
be affected by the
clouded macroeconomic
outlook outside the US, increased uncertainties around global trade, inflation and central bank policies, as well as
geopolitics, including the
upcoming elections
in Germany. We
see the markets
as remaining particularly
sensitive to
new developments, positive or negative,
leading to potential spikes in volatility across
all asset classes.
In the first quarter, we expect a
low-to-mid single digit percentage sequential
decline in net interest income
(NII) in
Global Wealth
Management and
around a
10% sequential
decline in
Personal &
Corporate Banking’s
NII, measured
in
Swiss
francs.
Higher
asset
levels
are
expected
to
support
recurring
fee
income
across
our
asset-gathering
businesses. As
we progress
our integration
plans integration-related
expenses are
expected to
be around
USD 1.1bn
and accretion of PPA effects to contribute around
USD 0.5bn to the Group’s total revenues.
We
remain
focused
on
supporting
clients
with
advice
and
solutions
and
continue
to
execute
on
our
priorities,
investing
in
people,
products,
and
capabilities
to
drive
sustainable
long-term
value
for
our
stakeholders
while
maintaining a balance sheet for all seasons.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items
18
UBS business divisions and
Group Items
Management report
Our businesses
We report
five business
divisions, each
of which
qualifies as
an operating
segment pursuant
to IFRS
Accounting
Standards: Global Wealth Management,
Personal & Corporate Banking,
Asset Management, the Investment
Bank,
and Non-core
and Legacy.
Non-core and
Legacy includes
positions and
businesses not
aligned with
our strategy
and policies. Those
consist of the
assets and liabilities
reported as part
of the
former Capital Release
Unit (Credit
Suisse) and certain
assets and liabilities
of the former
Investment Bank (Credit
Suisse), the former
Corporate Center
(Credit Suisse) and other former Credit Suisse business divisions. Non-core and Legacy also includes the remaining
assets and
liabilities of
UBS’s Non-core
and Legacy
Portfolio, previously
reported in
Group Functions
(which has
been renamed
Group Items),
and smaller
amounts of
assets and
liabilities of
UBS’s business
divisions that
have been
assessed as not strategic in light of the acquisition
of the Credit Suisse Group.
Our Group functions
are support and
control functions that
provide services to
the Group. Virtually
all costs and
revenues incurred
by the
support and
control functions
are allocated
to the
business divisions,
leaving a
residual
amount, mainly
related to
certain Group
funding and
hedging items,
that we
refer to
as Group
Items in
our segment
reporting.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Global
Wealth Management
19
Global Wealth Management
Global Wealth Management
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Net interest income
1,849
1,811
1,871
2
(1)
7,358
7,082
Recurring net fee income
3
3,262
3,235
2,900
1
12
12,625
10,988
Transaction-based income
3
1,041
1,144
955
(9)
9
4,503
3,623
Other income
(32)
10
(172)
(82)
31
(137)
Total revenues
6,121
6,199
5,554
(1)
10
24,516
21,556
Credit loss expense / (release)
(14)
2
(8)
73
(16)
166
Operating expenses
5,268
5,112
5,282
3
0
20,608
17,945
Business division operating profit / (loss) before tax
867
1,085
280
(20)
210
3,924
3,445
Underlying results
Total revenues as reported
6,121
6,199
5,554
(1)
10
24,516
21,556
of which: PPA effects and other integration items
4
200
224
349
(11)
(43)
891
923
of which: PPA effects recognized in net interest income
192
221
321
(13)
(40)
910
873
of which: PPA effects and other integration items recognized in transaction-based income
8
3
28
134
(72)
(19)
49
of which: loss related to an investment in an associate
(21)
(190)
(89)
(21)
(190)
Total revenues (underlying)
3
5,942
5,975
5,395
(1)
10
23,646
20,823
Credit loss expense / (release)
(14)
2
(8)
73
(16)
166
Operating expenses as reported
5,268
5,112
5,282
3
0
20,608
17,945
of which: integration-related expenses and PPA effects
3,5
460
419
502
10
(8)
1,807
1,018
Operating expenses (underlying)
3
4,808
4,693
4,780
2
1
18,802
16,927
of which: expenses for litigation, regulatory and similar matters
100
18
49
465
107
147
122
Business division operating profit / (loss) before tax as reported
867
1,085
280
(20)
210
3,924
3,445
Business division operating profit / (loss) before tax (underlying)
3
1,147
1,280
624
(10)
84
4,860
3,730
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
209.8
17.2
(73.5)
13.9
(30.8)
Cost / income ratio (%)
3
86.1
82.5
95.1
84.1
83.2
Average attributed equity (USD bn)
6
33.6
33.5
33.3
0
1
33.3
29.3
Return on attributed equity (%)
3,6
10.3
13.0
3.4
11.8
11.8
Financial advisor compensation
7
1,400
1,335
1,176
5
19
5,292
4,548
Net new fee-generating assets (USD bn)
3
13.3
14.6
(3.4)
61.7
Fee-generating assets (USD bn)
3
1,816
1,858
1,661
(2)
9
1,816
1,661
Net new assets (USD bn)
3
17.7
24.7
20.1
96.7
128.3
Invested assets (USD bn)
3
4,182
4,259
3,922
(2)
7
4,182
3,922
Loans, gross (USD bn)
8
300.5
311.5
322.1
(4)
(7)
300.5
322.1
Customer deposits (USD bn)
8
470.1
481.9
485.0
(2)
(3)
470.1
485.0
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,9
0.4
0.4
0.5
0.4
0.5
Advisors (full-time equivalents)
9,803
9,897
10,469
(1)
(6)
9,803
10,469
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
84.0
29.9
(41.1)
30.3
(21.6)
Cost / income ratio (%)
3
80.9
78.5
88.6
79.5
81.3
Return on attributed equity (%)
3,6
13.6
15.3
7.5
14.6
12.7
1 Comparatives may differ due to adjustments
following organizational changes, restatements
due to the retrospective adoption
of new accounting standards or changes
in accounting policies, and events
after the
reporting period.
2 Comparative figures have been restated for changes in business division
perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, resulting in decreases in operating profit
before tax of USD
101m for the quarter ended 31
December 2023 and USD
144m for the year ended 31
December 2023. Refer to “Note 3 Segment
reporting” in the “Consolidated financial statements”
section of
the UBS Group third quarter 2024 report, available under
“Quarterly reporting” at ubs.com/investors, for more information about the relevant changes. Certain comparative figures have also been restated
for changes
in the equity attribution
framework. Refer to
“Changes to segment
reporting in 2024” in
the “UBS business divisions
and Group Items”
section and the “Equity
attribution” section of the
UBS Group first quarter
2024 report, available
under “Quarterly reporting”
at ubs.com/investors,
for more information
about the relevant
changes.
3 Refer to “Alternative
performance measures” in
the appendix to
this report for
the
definition and
calculation method.
We started
to report
fee-generating assets
and net
new fee-generating
assets on
a consolidated
basis, including
Credit Suisse
data, from
the fourth
quarter of
2023 onward.
4 Includes accretion of PPA adjustments
on financial instruments and other PPA
effects, as well as temporary
and incremental items directly related to
the integration.
5 Includes temporary, incremental
operating
expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group.
6 Refer to the “Equity attribution” section of this report
for more information about the equity attribution framework.
7 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas.
Consists of cash and deferred compensation
awards and is based on compensable revenues and firm tenure using a
formulaic approach. Also includes expenses related to compensation commitments with financial advisors entered into
at the time of recruitment
that are subject to vesting requirements. Recruitment loans to financial advisors were USD 1,683m as of 31 December 2024.
8 Loans and Customer deposits in this table include customer brokerage receivables and
payables, respectively,
which are
presented in
separate reporting
lines on
the balance sheet.
9 Refer to
the “Risk management
and control”
section of
this report for
more information
about (credit-)impaired
exposures. Excludes loans to financial advisors.
Results: 4Q24 vs 4Q23
Profit
before
tax
increased
by
USD 587m,
or
210%,
to
USD 867m,
mainly
driven
by
higher
total
revenues.
Underlying
profit
before
tax
was
USD 1,147m,
an
increase
of
84%,
after
excluding
from
operating
expenses
USD 460m of
integration-related expenses
and
purchase price
allocation (PPA)
effects,
and
also excluding
from
total revenues USD 200m of PPA effects and a loss of USD 21m related to an investment in an associate.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Global
Wealth Management
20
Total revenues
Total revenues increased by USD 567m,
or 10%,
to USD 6,121m,
largely driven
by higher
recurring net fee
income,
a decrease
in negative other
income and
higher transaction-based income. Total
revenues included
a USD 149m
decrease in PPA effects. It also included a loss of USD 21m related to an investment in an
associate.
Excluding PPA
effects of
USD 200m and
the aforementioned
loss, underlying
total revenues
were
USD 5,942m, an
increase of
10%.
Net interest
income decreased
by USD 22m,
or 1%,
to USD 1,849m
and included
a USD 129m
decrease in
accretion
of PPA
adjustments on financial instruments
and other PPA
effects. The remaining
variance was largely
driven by
improved
deposit
margins
from
repricing
actions,
lower
effects
of
liquidity
and
funding
costs,
and
higher
loan
revenues, mainly as a
result of higher loan margins.
Excluding accretion and other effects, underlying net
interest
income was USD 1,657m, an increase of 7%.
Recurring
net
fee
income
increased
by
USD 362m,
or
12%,
to
USD 3,262m,
mainly
driven
by
positive
market
performance.
Transaction-based income increased by USD 86m, or 9%, to
USD 1,041m, mainly driven by higher levels of
client
activity,
particularly
in
the
Asia
Pacific
and
Americas
regions.
Transaction-based
income
included
a
USD 20m
decrease in accretion of
PPA adjustments on financial instruments
and other PPA effects.
Excluding accretion and
other effects, underlying transaction-based income
was USD 1,034m, an increase of 12%.
Other income was negative
USD 32m, compared with other income
of negative USD 172m. Other
income in the
fourth quarter of
2024 included a
loss of
USD 21m related to
an investment in
an associate, compared
with the
loss of USD 190m recognized in
the fourth quarter of 2023.
Excluding the aforementioned loss, underlying other
income in the fourth quarter of 2024 was negative
USD 11m.
Credit loss expense / release
Net credit loss releases were USD 14m, compared with net credit
loss releases of USD 8m in the fourth quarter of
2023.
Operating expenses
Operating
expenses
decreased
by
USD 14m
to
USD 5,268m,
and
included
a
USD 42m
decrease
in
integration-
related
expenses.
The
remaining
variance
was
mainly due
to
the
fourth
quarter
of
2023
including
a
charge of
USD 60m for the special assessment by the US Federal Deposit Insurance Corporation (the FDIC).
These decreases
were
partly
offset
by
higher
underlying
personnel
expenses,
which
resulted
from
higher
financial
advisor
compensation,
reflecting increases in compensable
revenues, and an increase
in provisions for litigation,
regulatory
and similar
matters. Excluding
integration-related expenses
and PPA
effects of
USD 460m, underlying
operating
expenses were USD 4,808m, broadly stable year over year.
Invested assets: 4Q24 vs 3Q24
Invested
assets
decreased
by
USD 77bn
to
USD 4,182bn, mainly
driven
by
negative
foreign
currency
effects
of
USD 76.0bn, negative
market performance
of USD 8.3bn
and by
reclassification of
USD 8.3bn of
certain Credit
Suisse client
assets from
invested assets
to custody-only
assets, partly
offset by
net new
asset inflows
of USD 17.7bn.
Loans: 4Q24 vs 3Q24
Loans decreased by USD 11.0bn to USD 300.5bn, mainly driven by negative foreign currency effects and negative
net new loans of USD 0.8bn.
Customer deposits: 4Q24 vs 3Q24
Customer deposits decreased by USD 11.8bn to USD 470.1bn, mainly driven by negative foreign currency effects,
partly offset by net new deposits
of USD 2.7bn.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Global
Wealth Management
21
Regional breakdown of performance measures
As of or for the quarter ended 31.12.24
USD bn, except where indicated
Americas
1
Switzerland
EMEA
Asia Pacific
Global
2
Global Wealth
Management
Total revenues (USD m)
2,937
1,004
1,150
842
188
6,121
Operating profit / (loss) before tax (USD m)
214
375
296
271
(289)
867
Operating profit / (loss) before tax (underlying) (USD m)
3
214
375
296
271
(9)
1,147
Cost / income ratio (%)
3
92.4
64.0
75.2
67.5
86.1
Cost / income ratio (underlying) (%)
3
92.4
64.0
75.2
67.5
80.9
Loans, gross
97.6
4
102.9
57.4
41.5
1.0
300.5
Net new loans
1.1
(1.0)
(0.5)
(0.2)
(0.1)
(0.8)
Net new fee-generating assets
3
18.1
(3.5)
(5.3)
4.1
(0.1)
13.3
Fee-generating assets
3
1,062
217
364
172
1
1,816
Net new assets
3
13.7
4.5
1.4
(1.2)
(0.7)
17.7
Net new assets growth rate (%)
3
2.6
2.3
0.8
(0.7)
1.7
Invested assets
3
2,109
749
655
665
5
4,182
Advisors (full-time equivalents)
5,968
1,311
1,520
924
79
9,803
1 Including the following business units: United States
and Canada; and Latin America.
2 Includes minor functions, which
are not included in the four regions
individually presented in this table,
and also includes
impacts from accretion of
PPA adjustments on
financial instruments and other
PPA effects
and integration-related expenses.
3 Refer to “Alternative
performance measures” in the
appendix to this report
for the
definition and calculation method.
4 Loans include customer brokerage receivables,
which are presented in a separate reporting line on the balance sheet.
Regional comments 4Q24 vs 4Q23, except where
indicated
Americas
Profit
before
tax
increased
by
USD 129m
to
USD 214m
and
included
an
increase
in
provisions
for
litigation,
regulatory
and
similar
matters. In
addition,
the
fourth
quarter
of
2023
included
the
aforementioned
charge of
USD 60m for the
special assessment
by the FDIC.
Total revenues increased by USD 362m,
or 14%, to
USD 2,937m,
mainly driven by higher recurring net fee income and transaction-based
income, partly offset by lower net interest
income. The cost / income
ratio decreased
to 92.4%
from 96.7%.
Loans increased
1% compared
with the third
quarter of
2024, to
USD 97.6bn, mainly
reflecting positive
net new
loans of
USD 1.1bn. Net
new asset
inflows were
USD 13.7bn.
Switzerland
Profit
before
tax
increased
by
USD 71m
to
USD 375m.
Total
revenues
increased
by
USD 29m,
or
3%,
to
USD 1,004m, mostly driven
by higher transaction-based
income, net interest income
and recurring net fee
income.
The cost / income ratio decreased
to 64.0% from 69.1%.
Loans decreased 8% compared with
the third quarter of
2024,
to USD 102.9bn,
mainly reflecting
negative foreign
currency
effects
and USD 1.0bn
of negative
net new
loans. Net new asset inflows were USD 4.5bn.
EMEA
Profit
before
tax
increased
by
USD 115m
to
USD 296m.
Total
revenues
increased
by
USD 46m,
or
4%,
to
USD 1,150m, mainly
driven by
higher net
interest income
and recurring
net fee
income. The
cost / income ratio
decreased to 75.2% from 83.8%. Loans decreased 4% compared with the third quarter of 2024, to USD 57.4bn,
mainly driven by
negative foreign
currency effects and
USD 0.5bn of negative
net new
loans. Net new
asset inflows
were USD 1.4bn.
Asia Pacific
Profit
before
tax
increased
by
USD 211m
to
USD 271m.
Total
revenues
increased
by
USD 107m,
or
15%,
to
USD 842m,
mainly
driven
by
increases
in
transaction-based
income,
net
interest
income
and
recurring
net
fee
income. The cost / income ratio
decreased to 67.5%
from 92.3%. Loans
decreased 3% compared
with the third
quarter of 2024,
to USD 41.5bn, mainly
driven by negative
foreign currency effects and
USD 0.2bn of negative
net
new loans. Net new asset outflows were USD 1.2bn.
Global
Operating loss before tax
was USD 289m, mainly including USD 460m
of the aforementioned integration-related
expenses and
PPA
effects in
operating expenses,
partly offset
by the
aforementioned USD 200m
related to
PPA
effects and a loss of USD 21m related to an investment
in an associate in total revenues.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items |
Personal & Corporate Banking
22
Personal & Corporate Banking
Personal & Corporate Banking – in Swiss francs
1
As of or for the quarter ended
% change from
As of or for the year
ended
CHF m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Net interest income
1,204
1,227
1,320
(2)
(9)
4,987
4,350
Recurring net fee income
3
357
363
332
(1)
8
1,425
1,137
Transaction-based income
3
471
439
431
7
9
1,821
1,591
Other income
(49)
29
(251)
(81)
7
(198)
Total revenues
1,983
2,056
1,832
(4)
8
8,241
6,880
Credit loss expense / (release)
155
71
74
118
110
357
433
Operating expenses
1,305
1,258
1,222
4
7
5,070
3,919
Business division operating profit / (loss) before tax
524
728
537
(28)
(2)
2,814
2,528
Underlying results
Total revenues as reported
1,983
2,056
1,832
(4)
8
8,241
6,880
of which: PPA effects and other integration items
4
227
239
267
(5)
(15)
915
692
of which: PPA effects recognized in net interest income
209
219
235
(4)
(11)
841
609
of which: PPA effects and other integration items recognized in transaction-based income
18
20
31
(11)
(42)
74
83
of which: loss related to an investment in an associate
(54)
(267)
(80)
(54)
(267)
Total revenues (underlying)
3
1,810
1,818
1,833
0
(1)
7,379
6,455
Credit loss expense / (release)
155
71
74
118
110
357
433
Operating expenses as reported
1,305
1,258
1,222
4
7
5,070
3,919
of which: integration-related expenses and PPA effects
3,5
185
170
162
8
14
662
350
of which: items related to the Swisscard transactions
6
37
37
Operating expenses (underlying)
3
1,083
1,088
1,060
0
2
4,371
3,569
of which: expenses for litigation, regulatory and similar matters
0
0
0
1
(8)
Business division operating profit / (loss) before tax as reported
524
728
537
(28)
(2)
2,814
2,528
Business division operating profit / (loss) before tax (underlying)
3
572
659
699
(13)
(18)
2,651
2,453
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
(2.4)
(14.3)
6.5
11.3
46.4
Cost / income ratio (%)
3
65.8
61.2
66.7
61.5
57.0
Average attributed equity (CHF bn)
7
18.6
18.9
19.3
(1)
(3)
19.0
15.1
Return on attributed equity (%)
3,7
11.2
15.4
11.1
14.8
16.7
Net interest margin (bps)
3
198
199
209
201
204
Loans, gross (CHF bn)
242.3
244.2
251.8
(1)
(4)
242.3
251.8
Customer deposits (CHF bn)
254.1
252.3
257.8
1
(1)
254.1
257.8
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,8
1.3
1.2
1.0
1.3
1.0
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
(18.2)
(6.8)
38.8
8.1
42.1
Cost / income ratio (%)
3
59.8
59.9
57.8
59.2
55.3
Return on attributed equity (%)
3,7
12.3
13.9
14.5
13.9
16.3
1 Comparatives may differ due to
adjustments following organizational changes,
restatements due to the retrospective
adoption of new accounting standards
or changes in accounting policies,
and events after the
reporting period.
2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, resulting in decreases in operating profit
before tax of CHF
164m for the quarter ended
31
December 2023 and CHF
296m for the year ended
31
December 2023. Refer to “Note
3 Segment reporting” in the
“Consolidated financial statements” section
of
the UBS Group third quarter 2024 report, available under “Quarterly reporting”
at ubs.com/investors, for more information about the relevant changes. Certain comparative figures have also been restated for changes
in the equity attribution framework. Refer to “Changes to segment reporting in
2024” in the “UBS business divisions and Group Items” section and the
“Equity attribution” section of the UBS Group first quarter 2024
report, available under “Quarterly reporting” at ubs.com/investors,
for more information about the relevant changes.
3 Refer to “Alternative
performance measures” in the appendix to this report for the
definition
and calculation method.
4 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental items directly
related to the integration.
5 Includes temporary,
incremental operating expenses directly related to the integration, as well as amortization of newly
recognized intangibles resulting from the acquisition of the Credit Suisse Group.
6 Represents the termination fee
to American Express related
to the expected sale
in 2025 of our
50% holding in Swisscard.
7
Refer to the “Equity
attribution” section of this
report for more information
about the equity attribution
framework.
8 Refer to the “Risk management and control” section of this report for more information about (credit-)impaired exposures.
Results
:
4Q24 vs 4Q23
Profit before tax decreased by CHF
13m, or 2%, to
CHF 524m, reflecting higher
operating expenses and
net credit
loss expenses,
partly offset
by higher
total revenues.
Underlying profit
before tax
was CHF 572m,
a decrease
of
18%,
after
excluding
from
total
revenues
CHF 227m
of
purchase
price
allocation
(PPA)
effects
and
a
loss
of
CHF 54m related to an investment
in an associate, and also excluding
from operating expenses integration-related
expenses and PPA effects of CHF 185m
and a CHF 37m expense related to the Swisscard transactions.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items |
Personal & Corporate Banking
23
Total revenues
Total
revenues
increased
by
CHF 151m,
or
8%,
to
CHF 1,983m, largely
reflecting
a
decrease
in
negative other
income,
partly
offset
by
lower
net
interest
income.
The
change
in
total
revenues
was
also
due
to
a
CHF 40m
decrease
in
PPA
effects.
Total
revenues
included
a
loss
of
CHF 54m
related
to
an
investment
in
an
associate.
Excluding PPA
effects of CHF 227m and
the aforementioned loss, underlying total
revenues were CHF 1,810m, a
decrease of 1%.
Net interest
income decreased
by CHF 116m,
or 9%,
to CHF 1,204m,
and included
a CHF 26m
decrease
in accretion
of PPA
adjustments on
financial instruments
and other
PPA effects.
The remaining
decrease was
mainly due
to lower
deposit margins,
resulting from
both lower
reinvestment
rates and
clients shifting
to lower-margin
deposit products.
Excluding accretion and other effects, underlying
net interest income was CHF 994m, a
decrease of 8%.
Recurring net fee income increased by
CHF 25m, or 8%, to CHF 357m,
mainly due to higher investment product
levels, reflecting positive market performance
and net new inflows. Recurring
net fee income in the fourth quarter
of 2024 was impacted by a
reclassification of recurring net fee income to
transaction-based income as a result of
aligning the Credit Suisse presentation to that of
UBS.
Transaction-based
income
increased
by
CHF 40m,
or
9%,
to
CHF 471m,
mainly
reflecting
the
aforementioned
reclassification
of
recurring net
fee
income
to
transaction-based income,
as
well
as
higher
client
activity
levels.
Transaction-based
income
also
included
a
CHF 13m
decrease
of
accretion
of
PPA
adjustments
on
financial
instruments and other
PPA effects. Excluding
accretion and other
effects, underlying transaction-based
income was
CHF 453m, an increase of 13%.
Other income was
negative CHF 49m,
compared with other
income of negative
CHF 251m in the
fourth quarter
of
2023.
Other
income
in
the
fourth
quarter
of
2024
included
a
loss
of
CHF 54m
related
to
an
investment in
an
associate, compared
with a
loss of
CHF 267m
related to
an investment
in an
associate recognized
in the
fourth
quarter of 2023.
Excluding the aforementioned
loss, underlying other
income in the
fourth quarter of
2024 was
CHF 5m.
Credit loss expense / release
Net credit
loss expenses
were CHF 155m,
mainly reflecting
net credit
loss expenses
of CHF 177m
on credit-impaired
positions
primarily
in
the
legacy
Credit
Suisse
corporate
loan
book,
partly
offset
by
net
credit
loss
releases
of
CHF 22m related to performing positions. These
compared with net credit loss expenses of CHF 74m
in the fourth
quarter of 2023.
Operating expenses
Operating expenses
increased by
CHF 83m, or
7%, to
CHF 1,305m
and included
a CHF 23m
increase in
integration-
related expenses.
Operating expenses in
the fourth quarter
of 2024 also
included a
CHF 37m expense related
to
the Swisscard
transactions.
Excluding integration-related
expenses and
PPA
effects of
CHF 185m, as
well as
the
aforementioned expense of CHF 37m, underlying operating expenses were CHF 1,083m, broadly stable year over
year.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items |
Personal & Corporate Banking
24
Personal & Corporate Banking – in US dollars
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Net interest income
1,362
1,429
1,510
(5)
(10)
5,650
4,878
Recurring net fee income
3
404
422
379
(4)
7
1,614
1,272
Transaction-based income
3
532
510
492
4
8
2,061
1,779
Other income
(53)
33
(299)
(82)
10
(241)
Total revenues
2,245
2,394
2,083
(6)
8
9,334
7,687
Credit loss expense / (release)
175
83
85
111
107
404
482
Operating expenses
1,476
1,465
1,398
1
6
5,741
4,394
Business division operating profit / (loss) before tax
595
846
601
(30)
(1)
3,189
2,811
Underlying results
Total revenues as reported
2,245
2,394
2,083
(6)
8
9,334
7,687
of which: PPA effects and other integration items
4
258
278
306
(7)
(16)
1,038
783
of which: PPA effects recognized in net interest income
237
255
270
(7)
(12)
954
688
of which: PPA effects and other integration items recognized in transaction-based income
20
23
36
(14)
(44)
84
94
of which: loss related to an investment in an associate
(59)
(317)
(81)
(59)
(317)
Total revenues (underlying)
3
2,047
2,116
2,094
(3)
(2)
8,355
7,222
Credit loss expense / (release)
175
83
85
111
107
404
482
Operating expenses as reported
1,476
1,465
1,398
1
6
5,741
4,394
of which: integration-related expenses and PPA effects
3,5
209
198
187
6
12
749
398
of which: items related to the Swisscard transactions
6
41
41
Operating expenses (underlying)
3
1,226
1,267
1,210
(3)
1
4,951
3,996
of which: expenses for litigation, regulatory and similar matters
0
0
0
1
(9)
Business division operating profit / (loss) before tax as reported
595
846
601
(30)
(1)
3,189
2,811
Business division operating profit / (loss) before tax (underlying)
3
646
766
800
(16)
(19)
3,000
2,744
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
(1.0)
(11.6)
13.7
13.4
55.2
Cost / income ratio (%)
3
65.7
61.2
67.1
61.5
57.2
Average attributed equity (USD bn)
7
21.3
21.8
21.8
(2)
(2)
21.6
16.8
Return on attributed equity (%)
3,7
11.2
15.5
11.0
14.8
16.7
Net interest margin (bps)
3
196
202
209
200
206
Loans, gross (USD bn)
266.9
288.4
299.2
(7)
(11)
266.9
299.2
Customer deposits (USD bn)
279.9
297.9
306.2
(6)
(9)
279.9
306.2
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,8
1.3
1.2
1.0
1.3
1.0
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
(19.2)
(4.1)
51.2
9.3
51.5
Cost / income ratio (%)
3
59.9
59.9
57.8
59.3
55.3
Return on attributed equity (%)
3,7
12.1
14.1
14.7
13.9
16.3
1 Comparatives may differ due to
adjustments following organizational changes,
restatements due to the retrospective
adoption of new accounting standards
or changes in accounting policies,
and events after the
reporting period.
2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, resulting in decreases in operating profit
before tax of USD
187m for the quarter ended
31
December 2023 and USD
337m for the year ended
31
December 2023. Refer to “Note 3
Segment reporting” in the “Consolidated
financial statements” section of
the UBS Group third quarter 2024 report, available under “Quarterly reporting”
at ubs.com/investors, for more information about the relevant changes. Certain comparative figures have also been restated for changes
in the equity attribution framework. Refer to “Changes to segment reporting in
2024” in the “UBS business divisions and Group Items” section and the
“Equity attribution” section of the UBS Group first quarter 2024
report, available under “Quarterly reporting” at ubs.com/investors,
for more information about the relevant changes.
3 Refer to “Alternative
performance measures” in the appendix to this report for the
definition
and calculation method.
4 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental items
directly related to the integration.
5 Includes temporary,
incremental operating expenses directly related to the integration, as well as amortization of newly
recognized intangibles resulting from the acquisition of the Credit Suisse Group.
6 Represents the termination fee
to American Express related
to the expected sale
in 2025 of our
50% holding in Swisscard.
7
Refer to the “Equity
attribution” section of this
report for more information
about the equity attribution
framework.
8 Refer to the “Risk management and control” section of this report for more information about (credit-)impaired exposures.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Asset
Management
25
Asset Management
Asset Management
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Net management fees
3
709
755
745
(6)
(5)
2,921
2,554
Performance fees
44
46
52
(3)
(15)
149
104
Net gain from disposals
13
72
27
(82)
(53)
113
27
Total revenues
766
873
825
(12)
(7)
3,182
2,686
Credit loss expense / (release)
0
0
(1)
(1)
0
Operating expenses
639
722
704
(12)
(9)
2,663
2,353
Business division operating profit / (loss) before tax
128
151
122
(15)
5
520
332
Underlying results
Total revenues as reported
766
873
825
(12)
(7)
3,182
2,686
Total revenues (underlying)
4
766
873
825
(12)
(7)
3,182
2,686
Credit loss expense / (release)
0
0
(1)
(1)
0
Operating expenses as reported
639
722
704
(12)
(9)
2,663
2,353
of which: integration-related expenses
4
96
86
64
11
49
351
205
Operating expenses (underlying)
4
543
636
639
(15)
(15)
2,312
2,149
of which: expenses for litigation, regulatory and similar matters
1
6
6
7
8
Business division operating profit / (loss) before tax as reported
128
151
122
(15)
5
520
332
Business division operating profit / (loss) before tax (underlying)
4
224
237
186
(6)
20
871
537
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
4
5.2
309.1
(1.9)
56.3
(76.2)
Cost / income ratio (%)
4
83.3
82.7
85.3
83.7
87.6
Average attributed equity (USD bn)
5
2.8
2.7
2.6
5
10
2.7
2.3
Return on attributed equity (%)
4,5
18.0
22.4
18.8
19.2
14.1
Gross margin on invested assets (bps)
4
17
20
21
18
19
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
4
20.3
45.5
50.2
62.2
(2.4)
Cost / income ratio (%)
4
70.8
72.8
77.5
72.7
80.0
Return on attributed equity (%)
4,5
31.5
35.2
28.7
32.1
22.8
Information by business line / asset
class
Net new money (USD bn)
4
Equities
30.5
(4.9)
(6.4)
20.7
(4.0)
Fixed Income
4.1
5.3
(5.6)
18.0
17.8
of which: money market
4.3
4.7
1.4
18.5
22.3
Multi-asset & Solutions
(0.5)
(0.6)
0.9
(1.5)
2.2
Hedge Fund Businesses
(2.8)
(0.5)
(1.6)
(3.5)
(4.2)
Real Estate & Private Markets
(0.9)
0.7
0.3
0.1
2.7
Total net new money excluding associates
30.4
0.0
(12.4)
33.8
14.6
of which: net new money excluding money market
26.2
(4.8)
(13.8)
15.4
(7.7)
Associates
6
3.0
2.0
0.1
10.8
1.1
Total net new money
33.4
2.0
(12.2)
44.6
15.7
Invested assets (USD bn)
4
Equities
755
747
644
1
17
755
644
Fixed Income
464
471
445
(1)
4
464
445
of which: money market
157
153
134
3
18
157
134
Multi-asset & Solutions
268
285
274
(6)
(2)
268
274
Hedge Fund Businesses
58
60
57
(3)
3
58
57
Real Estate & Private Markets
143
152
156
(6)
(8)
143
156
Total invested assets excluding associates
1,689
1,714
1,577
(1)
7
1,689
1,577
of which: passive strategies
807
806
715
0
13
807
715
Associates
6
84
83
72
1
16
84
72
Total invested assets
1,773
1,797
1,649
(1)
7
1,773
1,649
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Asset
Management
26
Asset Management (continued)
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Information by region
Invested assets (USD bn)
4
Americas
443
438
402
1
10
443
402
Asia Pacific
7
224
229
211
(2)
6
224
211
EMEA (excluding Switzerland)
435
403
354
8
23
435
354
Switzerland
670
728
682
(8)
(2)
670
682
Total invested assets
1,773
1,797
1,649
(1)
7
1,773
1,649
Information by channel
Invested assets (USD bn)
4
Third-party institutional
1,008
1,010
939
0
7
1,008
939
Third-party wholesale
169
182
177
(7)
(4)
169
177
UBS’s wealth management businesses
512
522
461
(2)
11
512
461
Associates
6
84
83
72
1
16
84
72
Total invested assets
1,773
1,797
1,649
(1)
7
1,773
1,649
1 Comparatives may differ due to adjustments
following organizational changes, restatements
due to the retrospective adoption of
new accounting standards or changes in
accounting policies, and events
after the
reporting period.
2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, resulting in increases in operating profit
before tax of USD
7m for the quarter ended 31
December 2023 and USD
14m for the year ended 31
December 2023. Refer to “Note 3
Segment reporting” in the “Consolidated financial
statements” section of the
UBS Group third quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information about the relevant changes.
Certain comparative figures have also been restated for changes in
the equity attribution framework. Refer to “Changes to segment reporting in 2024” in the “UBS
business divisions and Group Items” section and the “Equity attribution” section of the UBS Group first
quarter 2024
report, available under “Quarterly reporting”
at ubs.com/investors,
for more information about the relevant
changes.
3 Net management fees include transaction
fees, fund administration
revenues (including net
interest and trading income from lending activities
and foreign-exchange hedging as part of the fund
services offering), distribution fees, incremental
fund-related expenses, gains or losses from
seed money and co-
investments, funding costs, the
negative pass-through impact of third-party
performance fees, and other items
that are not Asset Management’s
performance fees.
4 Refer to “Alternative
performance measures”
in the appendix to this report for the definition and calculation method.
5 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
6 The invested assets
and net new money amounts reported for associates are prepared in accordance with their local regulatory requirements and practices.
7 Includes invested assets from associates.
Results: 4Q24 vs 4Q23
Profit before tax increased by USD 6m, or 5%, to USD 128m, reflecting lower operating expenses,
partly offset by
a decrease in total revenues.
Profit before tax in the fourth quarter of 2024 included net
gains of USD 13m on the
sale of our shareholding in Credit Suisse Investment Partners,
compared with net gains on sale of USD 27m in the
fourth quarter of 2023,
which predominantly related
to the completion of
the sale of a majority
stake in UBS Hana
Asset
Management Co.,
Ltd.
Underlying
profit
before tax
was
USD 224m,
an
increase of
20%, after
excluding
integration-related expenses of USD 96m.
Total revenues
Total revenues decreased by USD 59m,
or 7%, to
USD 766m, mostly
due to lower
net management
fees and lower
net gains on the aforementioned sales.
Net
management fees
decreased by
USD 36m, or
5%, to
USD 709m, with
continued margin
compression,
the
impact of exits
from non-strategic businesses
and negative
foreign currency
effects largely offset
by positive market
performance.
Performance fees decreased
by USD 8m, or 15%,
to USD 44m, mostly due
to the fourth quarter
of 2023 including
the final distribution of fees from
a legacy fund. The remaining variance
was due to decreases in Fixed
Income and
Real Estate & Private Markets, partly offset
by increases in Hedge Fund Businesses.
Operating expenses
Operating expenses
decreased by
USD 65m, or
9%, to
USD 639m, mainly
reflecting lower
personnel expenses,
and
included a USD 32m increase in integration-related expenses. Excluding
integration-related expenses of USD 96m,
underlying operating expenses were USD 543m, a decrease
of 15%.
Invested assets: 4Q24 vs 3Q24
Invested
assets
decreased
by
USD 24bn
to
USD 1,773bn,
mainly
reflecting
negative
foreign
currency
effects
of
USD 72bn, partly offset by
net new money of USD
33bn and positive market
performance of USD 16bn. Excluding
money market flows and associates, net
new money was USD 26bn, driven
by a USD 39bn institutional inflow in
passive equities.
UBS Group fourth quarter 2024 report
|
UBS business divisions and Group Items | Investment
Bank
27
Investment Bank
Investment Bank
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Advisory
260
220
191
18
36
907
751
Capital Markets
612
516
649
19
(6)
2,547
1,668
Global Banking
872
736
840
19
4
3,454
2,418
Execution Services
3
471
440
351
7
34
1,719
1,354
Derivatives & Solutions
3
683
964
507
(29)
35
3,478
2,951
Financing
723
506
442
43
64
2,297
1,980
Global Markets
1,877
1,910
1,301
(2)
44
7,494
6,285
of which: Equities
1,448
1,432
1,006
1
44
5,588
4,550
of which: Foreign Exchange, Rates and Credit
429
477
295
(10)
45
1,906
1,735
Total revenues
2,749
2,645
2,141
4
28
10,948
8,703
Credit loss expense / (release)
63
9
48
638
32
97
190
Operating expenses
2,207
2,231
2,283
(1)
(3)
8,934
8,585
Business division operating profit / (loss) before tax
479
405
(190)
18
1,917
(72)
Underlying results
Total revenues as reported
2,749
2,645
2,141
4
28
10,948
8,703
of which: PPA effects
4
202
185
277
10
(27)
989
583
of which: PPA effects recognized in Global Banking revenue line
197
180
275
9
(28)
972
580
Total revenues (underlying)
5
2,547
2,461
1,864
3
37
9,958
8,120
Credit loss expense / (release)
63
9
48
638
32
97
190
Operating expenses as reported
2,207
2,231
2,283
(1)
(3)
8,934
8,585
of which: integration-related expenses
5
174
156
167
12
4
717
697
Operating expenses (underlying)
5
2,032
2,076
2,116
(2)
(4)
8,217
7,889
of which: expenses for litigation, regulatory and similar matters
12
(1)
13
(12)
9
78
Business division operating profit / (loss) before tax as reported
479
405
(190)
18
1,917
(72)
Business division operating profit / (loss) before tax (underlying)
5
452
377
(300)
20
1,644
42
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
n.m.
n.m.
Cost / income ratio (%)
5
80.3
84.4
106.6
81.6
98.6
Average attributed equity (USD bn)
6
17.3
17.0
16.8
1
3
17.1
15.9
Return on attributed equity (%)
5,6
11.1
9.5
(4.5)
11.2
(0.5)
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
n.m.
(97.9)
Cost / income ratio (%)
5
79.8
84.4
113.5
82.5
97.1
Return on attributed equity (%)
5,6
10.5
8.8
(7.1)
9.6
0.3
1 Comparatives may differ due to
adjustments following organizational changes,
restatements due to the retrospective
adoption of new accounting standards
or changes in accounting policies,
and events after the
reporting period.
2 Comparative figures have been restated for changes in business division
perimeters, Group Treasury
allocations and Non-core and Legacy cost allocations, resulting
in increases in operating loss
before tax of USD
21m for the quarter ended 31
December 2023 and USD
28m for the year ended 31
December 2023. Refer to “Note 3 Segment reporting” in the “Consolidated
financial statements” section of the
UBS Group third quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information about the relevant
changes. Certain comparative figures have also been restated for changes in
the equity attribution framework. Refer to “Changes to segment reporting in 2024”
in the “UBS business divisions and Group Items” section and the “Equity
attribution” section of the UBS Group first quarter 2024
report, available
under “Quarterly
reporting” at
ubs.com/investors,
for more
information about
the relevant
changes.
3 Comparative
figures for
the quarter
ended 31
December 2023
and for
the year
ended
31 December 2023 have been
restated as a result
of the shift of the
foreign exchange products that
are traded over electronic
platforms from Execution
Services to Derivatives &
Solutions. The
restatement had no
effect on total Global Markets revenues.
4 Includes accretion of PPA adjustments on financial
instruments and other PPA effects.
5 Refer to “Alternative performance
measures” in the appendix to this report for
the definition and calculation method.
6 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
UBS Group fourth quarter 2024 report
|
UBS business divisions and Group Items | Investment
Bank
28
Results: 4Q24 vs 4Q23
Profit before
tax was
USD 479m, compared
with a
loss before
tax of
USD 190m in
the fourth
quarter of
2023,
mainly due
to higher
total revenues and
lower operating expenses.
Underlying profit
before tax
was USD 452m,
after excluding
USD 202m
of purchase
price allocation
(PPA) effects
and USD 174m
of integration-related
expenses.
Total revenues
Total revenues increased by
USD 608m, or
28%, to
USD 2,749m, due
to higher
Global Markets
and Global
Banking
revenues, and
included a
USD 75m decrease
in PPA
effects. Underlying
total revenues,
excluding PPA
effects of
USD 202m, were USD 2,547m, an increase of 37%.
Global Banking
Global Banking revenues increased
by USD 32m, or 4%,
to USD 872m, despite a USD 78m
decrease in accretion
of PPA
adjustments on
financial instruments
and other
PPA
effects.
Excluding such
accretion and
other effects,
underlying Global Banking revenues increased by USD 109m,
or 19%.
Advisory revenues
increased by
USD 69m, or
36%, to
USD 260m, mainly
due to
higher merger
and acquisition
transaction revenues, which increased by
USD 63m, or 41%.
Capital Markets revenues decreased
by USD 37m to USD 612m,
including a USD 78m decrease
in accretion of PPA
adjustments on financial instruments
and other PPA effects. Excluding
such accretion and other effects,
underlying
Capital Markets revenues increased by USD 40m,
or 11%, primarily driven by Leveraged Capital
Markets.
Global Markets
Global Markets revenues
increased by USD 576m,
or 44%, to
USD 1,877m, driven
by higher Financing,
Derivatives
& Solutions and Execution Services revenues.
Execution
Services
revenues
increased
by
USD 120m,
or
34%,
to
USD 471m,
mainly
due
to
increases
in
Cash
Equities across all regions.
Derivatives &
Solutions revenues
increased by
USD 176m, or
35%, to
USD 683m, with
increases across
all products,
mostly driven by Foreign Exchange and Equity
Derivatives.
Financing revenues
increased by
USD 281m, or
64%, to
USD 723m, with
increases across
all products,
led by
Equity
Financing.
Equities
Global
Markets
Equities
revenues
increased
by
USD 442m,
or
44%,
to
USD 1,448m,
driven
by
increases
in
all
products, led by Financing and Cash Equities.
Foreign Exchange, Rates and Credit
Global
Markets
Foreign
Exchange,
Rates
and
Credit
revenues
increased
by
USD 134m,
or
45%,
to
USD 429m,
driven by increases in all products, led by Foreign Exchange.
Credit loss expense / release
Net credit loss expenses increased by USD 15m
to USD 63m.
Operating expenses
Operating
expenses
decreased
by
USD 76m,
or
3%,
to
USD 2,207m,
largely
due
to
a
decrease
in
personnel
expenses.
Operating expenses included a USD 7m increase
in integration-related expenses. Excluding integration-
related expenses of
USD 174m,
underlying operating
expenses were USD 2,032m,
a decrease of USD 84m,
or 4%.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Non-core
and Legacy
29
Non-core and Legacy
Non-core and Legacy
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Total revenues
(58)
262
145
1,605
697
Credit loss expense / (release)
6
28
15
(77)
(57)
69
193
Operating expenses
858
837
1,787
3
(52)
3,512
5,091
Operating profit / (loss) before tax
(923)
(603)
(1,657)
53
(44)
(1,976)
(4,587)
Underlying results
Total revenues as reported
(58)
262
145
1,605
697
Total revenues (underlying)
3
(58)
262
145
1,605
697
Credit loss expense / (release)
6
28
15
(77)
(57)
69
193
Operating expenses as reported
858
837
1,787
3
(52)
3,512
5,091
of which: integration-related expenses
3
317
270
750
17
(58)
1,154
1,775
Operating expenses (underlying)
3
541
567
1,037
(5)
(48)
2,359
3,316
of which: expenses for litigation, regulatory and similar matters
(20)
(91)
(33)
(78)
(39)
(300)
637
Operating profit / (loss) before tax as reported
(923)
(603)
(1,657)
53
(44)
(1,976)
(4,587)
Operating profit / (loss) before tax (underlying)
3
(606)
(333)
(907)
82
(33)
(822)
(2,812)
Performance measures and other information
Average attributed equity (USD bn)
4
8.7
8.5
9.5
2
(8)
9.5
6.0
Risk-weighted assets (USD bn)
41.4
44.8
74.0
(8)
(44)
41.4
74.0
Leverage ratio denominator (USD bn)
53.5
69.0
168.5
(22)
(68)
53.5
168.5
1 Comparatives may differ due to adjustments
following organizational changes, restatements
due to the retrospective adoption
of new accounting standards or changes
in accounting policies, and events
after the
reporting period.
2 Comparative figures have been restated for changes in business division perimeters, Group Treasury
allocations and Non-core and Legacy cost allocations, resulting in decreases in operating loss
before tax of USD
69m for the quarter ended 31
December 2023 and USD
154m for the year ended 31
December 2023. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of the
UBS Group third quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information about the relevant changes.
Certain comparative figures have also been restated for changes in
the equity attribution framework. Refer to “Changes to segment reporting in 2024” in the “UBS
business divisions and Group Items” section and the “Equity attribution” section of the UBS Group first
quarter 2024
report, available under “Quarterly reporting” at ubs.com/investors,
for more information about the relevant changes.
3 Refer to “Alternative performance
measures” in the appendix to this report for the definition
and calculation method.
4 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
Composition of Non-core and Legacy
USD bn
RWA
Total assets
LRD
31.12.24
30.9.24
31.12.24
30.9.24
31.12.24
30.9.24
Exposure category
Equities
0.9
1.0
2.6
4.5
2.0
4.2
Macro
4.4
4.7
26.3
33.6
10.2
14.4
Loans
2.8
4.4
3.2
4.3
4.0
6.0
Securitized products
5.2
6.4
7.4
7.8
8.8
10.4
Credit
0.3
0.4
0.2
0.2
0.2
0.7
High-quality liquid assets
27.2
31.7
27.2
31.7
Operational risk
27.1
27.1
Other
0.7
0.8
1.4
3.0
1.1
1.6
Total
41.4
44.8
68.3
85.1
53.5
69.0
Results: 4Q24 vs 4Q23
Loss before
tax was
USD 923m, compared
with a
loss before
tax of
USD 1,657m in
the fourth
quarter of
2023.
Underlying
loss
before
tax was
USD 606m,
a
decrease
of
33%,
after
excluding
integration-related expenses
of
USD 317m.
Total revenues
Total revenues were negative USD 58m,
compared with total
revenues of USD 145m
in the fourth
quarter of
2023,
mainly due to lower net interest income as a result
of portfolio reductions and also due to lower trading
revenues,
mainly reflecting lower gains on disposals compared with the fourth quarter
of 2023. These decreases were partly
offset by lower funding costs.
UBS Group fourth quarter 2024 report |
UBS business divisions and Group Items | Non-core
and Legacy
30
Credit loss expense / release
Net credit loss expenses decreased by USD 9m to USD 6m and mainly reflected
net credit loss expenses on credit-
impaired positions with a small number of corporate
counterparties.
Operating expenses
Operating
expenses
decreased
by
USD 929m,
or
52%,
to
USD 858m,
mainly
due
to
a
USD 433m
decrease
in
integration-related expenses, which included a
decrease in real
estate expenses,
and also due
to lower personnel
expenses
and
technology
expenses.
Excluding
integration-related expenses
of
USD 317m,
underlying
operating
expenses in the fourth quarter of 2024 were USD 541m,
a decrease of 48%.
Risk-weighted assets and leverage ratio denominator:
4Q24 vs 3Q24
Risk-weighted assets (RWA)
decreased by USD 3.4bn
to USD 41.4bn,
and the leverage
ratio denominator (the
LRD)
decreased
by
USD 15.5bn
to
USD 53.5bn.
The
active
unwinding
of
Non-core
and
Legacy
assets
resulted
in
a
decrease in RWA, mainly related to the loan
and securitized product portfolios, and a decrease in the LRD, mainly
driven by the changes in the high-quality
liquid asset, macro,
equity and loan portfolios.
Group Items
Group Items
1
As of or for the quarter ended
% change from
As of or for the year
ended
USD m
31.12.24
30.9.24
31.12.23
2
3Q24
4Q23
31.12.24
31.12.23
2
Results
Total revenues
(188)
(39)
107
382
(975)
(495)
Credit loss expense / (release)
0
0
(2)
(2)
6
Operating expenses
(88)
(84)
16
5
(220)
438
Operating profit / (loss) before tax
(100)
45
93
(752)
(938)
Underlying results
Total revenues as reported
(188)
(39)
107
382
(975)
(495)
of which: PPA effects and other integration items
3
(4)
(25)
12
(82)
(41)
(9)
Total revenues (underlying)
4
(184)
(14)
95
(933)
(486)
Credit loss expense / (release)
0
0
(2)
(2)
6
Operating expenses as reported
(88)
(84)
16
5
(220)
438
of which: integration-related expenses
4
(1)
(11)
109
(95)
(12)
451
of which: acquisition-related costs
(1)
202
Operating expenses (underlying)
4
(88)
(74)
(92)
19
(5)
(208)
(215)
of which: expenses for litigation, regulatory and similar matters
6
0
(28)
9
(27)
Operating profit / (loss) before tax as reported
(100)
45
93
(752)
(938)
Operating profit / (loss) before tax (underlying)
4
(96)
60
189
(723)
(277)
1 Comparatives may differ due to adjustments
following organizational changes, restatements
due to the retrospective adoption of
new accounting standards or changes in
accounting policies, and events
after the
reporting period.
2 Comparative figures have
been restated for changes in
business division perimeters, Group
Treasury allocations and
Non-core and Legacy cost
allocations, resulting in an
increase in operating
profit before tax of USD
233m for the quarter ended 31
December 2023 and a decrease in operating
loss before tax of USD
341m for the year ended 31
December 2023. Refer to “Note 3 Segment reporting”
in the
“Consolidated financial
statements” section
of the
UBS Group
third quarter
2024 report,
available
under “Quarterly
reporting” at
ubs.com/investors,
for more
information about
the relevant
changes.
Certain
comparative figures have also been restated for changes
in the equity attribution framework. Refer to “Changes
to segment reporting in 2024” in the “UBS
business divisions and Group Items” section and
the “Equity
attribution” section of the UBS Group first quarter 2024 report, available under
“Quarterly reporting” at ubs.com/investors, for more information about the relevant changes.
3 Includes accretion of PPA adjustments
on financial instruments and other PPA
effects, as well as temporary
and incremental items directly related to
the integration.
4 Refer to “Alternative
performance measures” in the appendix to
this report for the
definition and calculation method.
Results: 4Q24 vs 4Q23
Loss before
tax was
USD 100m, compared
with a
profit before
tax of
USD 93m. Underlying loss
before tax
was
USD 96m, after
excluding from
total revenues
negative USD 4m
of purchase
price allocation
(PPA) effects and
other
integration items
and also
excluding from
operating expenses
negative USD 1m
of integration-related
expenses.
This
compared
with
an
underlying
profit
before
tax
of
USD 189m,
after
excluding
from
operating
expenses
USD 108m of
integration-related expenses
and
acquisition-related costs
and
also
excluding from
total
revenues
USD 12m of PPA effects and other integration items.
Income from Group hedging and own debt, including hedge accounting ineffectiveness, decreased by USD 258m
to net
USD 10m, compared
with net
income of
USD 268m. The
net income
in the
fourth quarter
of
2024 was
driven by mark-to-market effects on own credit
and portfolio-level economic hedges.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet
31
Risk, capital, liquidity and
funding, and balance sheet
Management report
Table of contents
32
Risk management and control
32
Credit risk
34
Market risk
36
Country risk
36
Non-financial risk
37
Capital management
39
Total
loss-absorbing capacity
42
Risk-weighted assets
44
Leverage ratio denominator
45
Equity attribution
46
Liquidity and funding management
46
Strategy, objectives and governance
46
Liquidity coverage ratio
46
Net stable funding ratio
47
Balance sheet and off-balance sheet
47
Balance sheet assets
47
Balance sheet liabilities
48
Equity
48
Off-balance sheet
49
Share information and earnings per share
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
32
Risk management and control
This
section
provides
information
about
key
developments
during
the
reporting
period
and
should
be
read
in
conjunction with
the “Risk
management and
control” section
of the
UBS Group
Annual Report
2023, available
under “Annual
reporting” at
ubs.com/investors
, and
the “Recent
developments” section of
this report
for more
information about the integration of Credit
Suisse.
Credit risk
Overall banking products exposure
Overall banking
products exposure
decreased by
USD 63bn to
USD 1,002bn as
of 31 December
2024, primarily
reflecting currency effects and negative net new loans in Personal &
Corporate Banking.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
›
Refer to the “Group performance” section of this report for more information about credit loss expense / release
Overall traded products exposure
Overall traded products exposure increased by
USD 6bn to USD 66bn as of
31 December 2024, primarily
driven by
an increase in
over-the-counter derivatives exposure in
the Investment Bank
due to new transactions
and market
movements.
Loan underwriting
In the Investment Bank, mandated loan underwriting
commitments on a notional basis increased by USD 0.3bn
to
USD 4.6bn as of 31 December
2024, driven by new mandates,
partly offset by deal syndications
and cancellations.
As of 31 December 2024, USD 0.2bn of these commitments had not been distributed as originally planned. As of
31 December 2024, Non-core and Legacy had no loan
underwriting commitments.
Loan underwriting exposures
in the Investment
Bank are classified
as held for
trading, with
fair values reflecting
the
market conditions
at the
end of
the quarter.
Credit hedges
are in place
to help
protect against
fair value
movements
in the portfolio.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
33
Banking and traded products exposure in the business divisions and Group Items
31.12.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products exposure, gross
1,2
452,053
424,994
1,530
72,964
33,150
17,478
1,002,169
of which: loans and advances to customers (on-balance sheet)
295,856
266,869
9
17,497
1,163
551
581,944
of which: guarantees and irrevocable loan commitments (off-balance
sheet)
18,978
46,986
5
34,516
2,211
17,164
119,859
Committed unconditionally revocable credit lines
3
79,460
65,749
0
452
4
0
145,665
Traded products exposure, gross
2,4
14,900
5,034
0
46,076
66,009
of which: over-the-counter derivatives
11,705
4,594
0
17,371
33,670
of which: securities financing transactions
186
0
0
18,352
18,538
of which: exchange-traded derivatives
3,009
440
0
10,353
13,802
Total credit-impaired exposure, gross
1,397
3,714
0
595
930
0
6,637
of which: stage 3
1,324
3,358
0
549
69
0
5,300
of which: PCI
73
356
0
46
861
0
1,337
Total allowances and provisions for expected credit losses
292
1,512
0
379
318
6
2,507
of which: stage 1
97
269
0
110
4
6
487
of which: stage 2
68
247
0
142
2
0
459
of which: stage 3
121
960
0
124
48
0
1,253
of which: PCI
7
36
0
2
264
0
309
30.9.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products exposure, gross
1,2
471,513
449,650
1,671
88,207
33,493
20,529
1,065,063
of which: loans and advances to customers (on-balance sheet)
306,747
288,387
14
18,503
1,758
2,308
617,718
of which: guarantees and irrevocable loan commitments (off-balance sheet)
19,348
47,158
10
34,539
2,922
17,977
121,955
Committed unconditionally revocable credit lines
3
73,443
76,620
0
3,018
4
0
153,085
Traded products exposure, gross
2,4
14,834
4,258
0
40,420
59,512
of which: over-the-counter derivatives
10,877
3,681
0
9,585
24,143
of which: securities financing transactions
205
0
0
18,696
18,901
of which: exchange-traded derivatives
3,752
577
0
12,139
16,468
Total credit-impaired exposure, gross
1,442
3,695
0
398
1,098
0
6,633
of which: stage 3
1,327
3,316
0
351
163
0
5,157
of which: PCI
115
379
0
47
935
0
1,475
Total allowances and provisions for expected credit losses
317
1,393
0
328
385
7
2,431
of which: stage 1
125
319
0
122
6
7
579
of which: stage 2
69
265
0
99
3
0
436
of which: stage 3
118
807
0
106
116
0
1,147
of which: PCI
5
2
0
2
261
0
269
1 IFRS 9 gross exposure
for banking products includes
the following financial instruments
in scope of expected
credit loss measurement: balances
at central banks,
amounts due from banks,
loans and advances
to
customers, other
financial assets at
amortized cost,
guarantees and
irrevocable loan commitments.
2 Internal management
view of credit
risk, which
differs in certain
respects from
IFRS Accounting
Standards.
3 Commitments that can be canceled by UBS at any time but expose UBS to credit risk if the client has the ability to draw the facility before UBS can take action. These commitments are subject to expected credit loss
requirements.
4 As counterparty risk for traded products is managed at counterparty level, no further split between exposures in the Investment
Bank, Non-core and Legacy, and Group Items is provided.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
34
Market risk
The UBS
Group excluding
certain legacy
Credit Suisse components
continued to maintain
generally low levels
of
management value-at-risk
(VaR). Average management
VaR (1-day, 95% confidence level) decreased marginally
to
USD 11m from USD 12m in
the fourth quarter of
- There were no new
negative backtesting exceptions
in the
fourth quarter of 2024.
The number of negative backtesting
exceptions within the most recent
250-business-day
window remained at zero.
Average
management VaR
(1-day,
98%
confidence level)
of
the
legacy
Credit
Suisse
components decreased
to
USD 6m from USD 11m in the fourth quarter of 2024,
driven by continued strategic migration of positions to
UBS
and reductions
in Non-core
and Legacy.
In the
fourth quarter
of 2024,
the aforementioned
legacy Credit
Suisse
components
had
one
new
negative
backtesting
exception,
driven
by
Non-core
and
Legacy.
Of
the
previously
reported backtesting exceptions,
one backtesting exception is no
longer in the 250-business-day window,
and one
backtesting
exception,
related
to
exit
cost
reserves,
no
longer
counts
toward
the
total
number
of
negative
backtesting exceptions
relevant for
the capital
multiplier.
As a
result, the
number of
negative backtesting
exceptions
within the most recent 250-business-day window decreased
to three from four.
As the number of
negative backtesting exceptions for both
the UBS Group excluding
certain legacy Credit Suisse
components and
the aforementioned
legacy Credit
Suisse components
remained below
five, the
Swiss Financial
Market Supervisory Authority (FINMA) VaR multiplier derived from negative backtesting exceptions for market risk
risk-weighted assets was unchanged compared
with the prior quarter, at 3.0.
Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of the business divisions and Group Items
excluding certain legacy Credit Suisse components, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
1
2
1
2
0
2
2
0
0
Personal & Corporate Banking
0
0
0
0
0
0
0
0
0
Asset Management
0
0
0
0
0
0
0
0
0
Investment Bank
3
15
10
10
2
14
8
4
6
Non-core and Legacy
1
1
1
1
0
1
1
0
0
Group Items
5
12
6
6
1
5
3
1
0
Diversification effect
3,4
(8)
(7)
(1)
(5)
(4)
(1)
0
Total as of 31.12.24
5
17
11
11
2
17
10
4
6
Total as of 30.9.24
7
19
15
12
3
16
10
4
5
Management value-at-risk (1-day, 98% confidence, 2 years of historical data) of certain legacy Credit Suisse
components of the business divisions and Group Items, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
1
1
1
1
1
0
0
0
0
Personal & Corporate Banking
0
0
0
0
0
0
0
0
0
Asset Management
0
0
0
0
0
0
0
0
0
Investment Bank
1
3
1
2
1
0
1
0
0
Non-core and Legacy
4
8
4
6
1
2
5
0
0
Group Items
0
0
0
0
0
0
0
0
0
Diversification effect
3,4
(1)
(1)
(1)
0
(1)
0
0
Total as of 31.12.24
5
9
5
6
2
3
5
1
0
Total as of 30.9.24
9
14
9
11
4
4
9
1
0
1 Legacy Credit
Suisse components not
included in the
UBS Group
management VaR
predominantly reflect the
portfolio in Non-core
and Legacy.
These positions
continue to be
managed on legacy
Credit Suisse
infrastructure based on legacy
Credit Suisse management VaR
methodology until full migration
of these positions to
UBS infrastructure or liquidation
of the positions. This
process is ongoing, and the
management
VaR of the legacy Credit Suisse components is expected to continue decreasing over
time.
2 Statistics at individual levels may not be summed
to deduce the corresponding aggregate figures. The minima and maxima
for each level
may occur on
different days,
and, likewise,
the VaR
for each business
line or risk
type, being
driven by the
extreme loss tail
of the corresponding
distribution of simulated
profits and losses
for that
business line or risk type, may well be driven by different days in the historical time series, rendering invalid the simple summation of figures to arrive at the aggregate total.
3 The difference between the sum of the
standalone VaR for the business divisions and Group Items and the total VaR.
4 As the minima and maxima for different business divisions and Group Items occur on different days,
it is not meaningful to calculate
a portfolio diversification effect.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
35
Economic value of equity and net interest income
sensitivity
The economic value of equity
(EVE) sensitivity in the UBS
Group banking book to a
+1-basis-point parallel shift in
yield
curves
was
negative
USD 37.3m
as
of
31 December
2024,
compared
with
negative
USD 37.2m
as
of
30 September 2024. This excluded
the sensitivity of USD 5.5m from additional tier 1 (AT1)
capital instruments (as
per specific FINMA requirements)
in contrast to general
Basel Committee on
Banking Supervision (BCBS)
guidance.
The majority of our interest rate risk in the banking book was a reflection of the net asset duration that we ran to
offset our modeled
sensitivity of
net USD 29.4m
(30 September 2024:
USD 28.0m) assigned
to our equity,
goodwill
and
real
estate,
with
the aim
of
generating
a
stable
net
interest
income
contribution. Of
this,
USD 17.1m and
USD 10.6m were
attributable to
the US dollar
and
the Swiss
franc portfolios,
respectively,
(30 September 2024:
USD 17.2m and USD 9.0m, respectively).
In addition to
the aforementioned
sensitivity, we
calculate the
six interest
rate shock
scenarios prescribed
by FINMA.
The “Parallel
up” scenario,
assuming all
positions were
measured at
fair value,
was the
most severe
and would
have
resulted in
a change in
EVE of negative
USD 6.7bn, or 7.6%,
of our
tier 1 capital
(30 September 2024: negative
USD 6.8bn, or 7.5%),
which is well
below the 15%
threshold set in
the BCBS supervisory
outlier test for
high levels
of interest rate risk in the banking book.
The immediate effect on our tier 1 capital in the “Parallel up” scenario as of 31 December 2024 would have been
a decrease of
approximately USD 0.9bn,
or 1.0%, (30 September 2024:
USD 0.7bn, or 0.8%), reflecting
the fact
that the vast majority of our banking book is accrual accounted or subject to hedge accounting.
The “Parallel up”
scenario would subsequently have a positive effect
on net interest income, assuming a constant
balance sheet.
As the overall interest rate risk sensitivity shows a greater
impact from slower asset repricing compared with faster
liabilities repricing, the “Parallel
down“ scenario was the
most beneficial and would
have resulted in
a change in
EVE of positive USD 7.2bn (30 September 2024: positive USD 7.3bn) and a small positive immediate effect on our
tier 1 capital.
›
Refer to “Interest rate risk in the banking book” in the “Risk management and control”
section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about the
management of interest rate risk in the banking book
›
Refer to “Sensitivity to interest rate movements” in the “Group performance” section of this report for more
information about the effects of increases in interest rates on the net interest income of our banking book
Interest rate risk – banking book
31.12.24
USD m
Effect on EVE
1
– FINMA
Effect on EVE
1
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
(10.5)
(1.4)
(0.3)
(24.6)
(0.5)
(37.3)
5.5
(31.7)
Parallel up
2
(1,509.7)
(263.7)
(65.5)
(4,758.9)
(95.6)
(6,693.4)
1,000.4
(5,693.0)
Parallel down
2
1,643.9
295.9
76.2
5,068.6
101.1
7,185.8
(1,173.0)
6,012.8
Steepener
3
(749.1)
(10.4)
(12.7)
(1,255.4)
(9.7)
(2,037.3)
168.0
(1,869.3)
Flattener
4
464.0
(33.3)
(0.2)
161.0
(10.5)
581.0
61.0
642.1
Short-term up
5
(149.4)
(112.2)
(22.8)
(1,820.7)
(46.1)
(2,151.1)
484.4
(1,666.7)
Short-term down
6
132.6
112.2
23.3
1,931.8
46.6
2,246.5
(504.4)
1,742.2
30.9.24
USD m
Effect on EVE
1
– FINMA
Effect on EVE
1
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
(8.8)
(1.3)
(0.2)
(26.4)
(0.4)
(37.2)
6.1
(31.1)
Parallel up
2
(1,262.3)
(258.0)
(43.1)
(5,123.1)
(102.4)
(6,788.9)
1,100.8
(5,688.1)
Parallel down
2
1,382.8
272.4
63.9
5,450.8
94.4
7,264.2
(1,295.4)
5,968.8
Steepener
3
(548.7)
(14.2)
(12.0)
(1,328.7)
(15.5)
(1,919.2)
198.2
(1,721.0)
Flattener
4
303.5
(28.3)
4.0
155.7
(7.4)
427.4
53.2
480.5
Short-term up
5
(188.9)
(104.4)
(13.8)
(1,974.3)
(43.5)
(2,325.0)
521.3
(1,803.7)
Short-term down
6
186.8
102.9
13.2
2,088.0
44.5
2,435.4
(542.6)
1,892.8
1 Economic value
of equity.
2 Rates across all
tenors move by ±150
bps for Swiss
franc, ±200 bps for
euro and US
dollar, and
±250 bps for pound
sterling.
3 Short-term rates
decrease and long-term rates
increase.
4 Short-term rates increase and long-term rates decrease.
5 Short-term rates increase more than long-term rates.
6 Short-term rates decrease more than long-term rates.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
36
Country risk
We remain
watchful of
a range
of geopolitical
developments and
political changes
in a
number of
countries, as
well as international tensions arising from
the Russia–Ukraine war and
global trade relations,
and we continue to
monitor conflicts
in the
Middle East.
As of
31 December
2024, our
direct exposure
to Israel
was less
than USD 0.5bn
and our
direct exposure
to Gulf
Cooperation Council countries
was less
than USD 5bn,
while direct
exposure to
Egypt and Jordan was
limited, and there
was no direct
exposure to Iran, Iraq,
Lebanon or Syria.
Our direct exposure
to
Russia
as
of
31 December
2024
was
less
than
USD 0.5bn,
and
our
direct
exposure
to
Belarus
and
Ukraine
remained immaterial.
Potential second-order
impacts, such as
European energy security, continue to
be monitored.
Inflation has abated
to some extent
in major Western
economies, although there
are still concerns
regarding future
developments, and central banks’ monetary
policies are in the spotlight. In
China, stress in the property sector
and
strained local
government finances
continue to
have an
adverse impact
on economic
growth, raising
the risk
of
financial instability. This
combination of factors
translates into
a more
uncertain and volatile
environment, which
increases the risk of financial market disruption.
We continue to monitor
potential trade policy
disputes, as well as
economic and political
developments in addition
to those
mentioned above. As
of 31 December
2024, our
exposure to
emerging-market countries was
less than
10% of our total country exposure and mainly to
certain countries in Asia.
›
Refer to the “Risk management and control” section of the UBS Group Annual Report 2024, which will be available
as of 17 March 2025 under “Annual reporting” at
ubs.com/investors
, for more information
Non-financial risk
Compliance risk
Achieving
fair
outcomes
for
our
clients,
upholding
market
integrity
and
cultivating
the
highest
standards
of
employee conduct
are
of critical
importance to
us,
therefore
we maintain
a
conduct risk
framework across
our
activities, which is designed to align our standards and
conduct with these objectives and to retain momentum
on
fostering a strong culture.
Suitability risk,
product selection,
cross-divisional service
offerings, quality
of advice
and price
transparency continue
to be
areas of
heightened focus for
UBS and
for the
industry as a
whole. Cross-border
risk (including
the risk
of
unintended
permanent
establishment)
remains
an
area
of
regulatory
attention
for
global
financial
institutions,
including a
focus on
market access,
such as
third-country market
access into
the European
Economic Area.
We
maintain
a
series
of
controls designed
to
address
these
risks,
and
we
are
increasing the
number
of
automated
controls, thereby increasing overall control coverage.
Reputational
risk,
regulatory
fragmentation
related
to
environmental,
social
and
governance
topics,
and
the
elevated risk of greenwashing arising from our service offering,
disclosures and commitments remain key risks for
2025.
Financial crime risk
Financial crime, including
money laundering, terrorist
financing, sanctions violations,
fraud, bribery and
corruption,
presents a major risk, as technological innovation and geopolitical developments increase the complexity of doing
business and heightened regulatory attention continues.
An effective financial crime prevention
program therefore remains essential,
and we continue to focus on
strategic
enhancements
to
our
global
anti-money-laundering
(AML),
know-your-client
and
sanctions
programs.
Money
laundering and
financial fraud techniques
are becoming increasingly
sophisticated, and
geopolitical volatility
makes
the sanctions landscape more
complex. The extensive and
continuously evolving sanctions arising
from the Russia–
Ukraine war
require constant
attention to
prevent circumvention
risks, while
conflicts in
the Middle
East may
further
increase terrorist-financing risks.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Risk management and control
37
Operational risk
There is an
increased risk
of cyber-related operational
disruption to
business activities
at our
locations and / or
those
of third-party
suppliers due
to the
Group operating
a more
complex set
of legal
entities since
the acquisition
of
Credit Suisse and the increasingly
dynamic threat environment, which is
intensified by current geopolitical factors
and evidenced by continuing high
volumes of, and the
increasing sophistication of, cyberattacks against financial
institutions globally and on third-party service providers.
The
increasing
interest
in
data-driven
advisory
processes
and
the
use
of
artificial
intelligence
(AI)
and
machine
learning are opening up new questions related
to the fairness of AI
algorithms, data life-cycle management, data
ethics, data privacy and security, and records
management.
We remain on
heightened alert to
respond to and
mitigate elevated cyber-
and information-security threats, and
we continue to invest in improving our technology infrastructure and information-security governance to improve
our
defense,
detection
and
response
capabilities
against
attacks.
In
addition,
we
are
implementing
a
global
framework
designed
to
drive
enhancements
in
operational
resilience
across
all
business
divisions
and
relevant
jurisdictions,
as
well
as
working
with
the
third-party
service
providers
that
are
of
critical
importance
to
our
operations to assess their operational resilience
against our standards.
Legal entity
integration, including
that of
existing Credit
Suisse businesses,
and the
closing of
legacy businesses
introduce operational
complexity and
the risk
that businesses
in wind-down
are not
effectively managed.
These
risks continue
to be
carefully monitored
in addition
to the
delivery of
consolidated financial
and regulatory
reporting
submissions.
Capital management
The
disclosures
in
this
section
are
provided
for
UBS Group AG
on
a
consolidated
basis
and
focus
on
key
developments during
the reporting
period and
information in
accordance with
the Basel III
framework, as
applicable
to Swiss systemically relevant banks (SRBs).
They should be read in conjunction
with “Capital management” in the
“Capital, liquidity and funding,
and balance sheet” section
of the UBS Group
Annual Report 2023, available
under
“Annual
reporting”
at
ubs.com/investors
,
which
provides
more
information
about
our
capital
management
objectives, planning and activities, as
well as the Swiss SRB total loss-absorbing capacity
(TLAC) framework.
UBS Group AG
is
a
holding
company
and
conducts
substantially
all
of
its
operations
through
UBS AG
and
subsidiaries thereof. UBS Group AG and UBS AG contribute a significant portion of their respective capital to, and
provide substantial
liquidity to,
such subsidiaries.
Many of
these subsidiaries
are subject
to regulations
requiring
compliance with minimum capital, liquidity
and similar requirements.
›
Refer to the 31 December 2024 Pillar 3 Report, which will be available as of 17 March 2025 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about additional regulatory disclosures for UBS Group AG
on a consolidated basis, as well as the significant regulated subsidiaries and sub-groups of UBS Group AG
›
Refer to the UBS AG Annual Report 2024, which will be available as of 17 March 2025 under “Annual reporting” at
ubs.com/investors
, for more information about capital and other regulatory information for UBS AG consolidated,
in accordance with the Basel III framework, as applicable to Swiss SRBs
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
38
We
are
subject
to
the
going
and
gone
concern requirements
of
the
Swiss
Capital
Adequacy Ordinance,
which
include the too-big-to-fail
(TBTF) provisions applicable
to Swiss
SRBs. The
table below provides
the risk-weighted
asset (RWA)-
and leverage ratio denominator
(LRD)-based requirements and information as
of 31 December 2024.
Swiss SRB going and gone concern requirements and information
As of 31.12.24
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
14.82
1
73,898
5.00
1
75,974
Common equity tier 1 capital
10.52
52,461
3.50
2
53,182
of which: minimum capital
4.50
22,434
1.50
22,792
of which: buffer capital
5.50
27,420
2.00
30,390
of which: countercyclical buffer
0.52
2,607
Maximum additional tier 1 capital
4.30
21,437
1.50
22,792
of which: additional tier 1 capital
3.50
17,449
1.50
22,792
of which: additional tier 1 buffer capital
0.80
3,988
Eligible going concern capital
Total going concern capital
17.60
87,739
5.77
87,739
Common equity tier 1 capital
14.32
71,367
4.70
71,367
Total loss-absorbing additional tier 1 capital
3
3.28
16,372
1.08
16,372
of which: high-trigger loss-absorbing additional tier 1 capital
3.03
15,126
1.00
15,126
of which: low-trigger loss-absorbing additional tier 1 capital
0.25
1,245
0.08
1,245
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
10.73
7
53,468
3.75
7
56,980
of which: base requirement including add-ons for market share and LRD
10.73
53,468
3.75
56,980
Eligible gone concern capital
Total gone concern loss-absorbing capacity
19.59
97,655
6.43
97,655
Total tier 2 capital
0.04
207
0.01
207
of which: non-Basel III-compliant tier 2 capital
0.04
207
0.01
207
TLAC-eligible senior unsecured debt
19.55
97,449
6.41
97,449
Total loss-absorbing capacity
Required total loss-absorbing capacity
25.55
127,366
8.75
132,954
Eligible total loss-absorbing capacity
37.19
185,394
12.20
185,394
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
498,538
Leverage ratio denominator
1,519,477
1 Includes
applicable add-ons
of 1.44%
for risk-weighted
assets (RWA)
and 0.50%
for leverage
ratio denominator
(LRD).
2 Our
minimum CET1
leverage ratio
requirement of
3.50% consists
of a
1.5% base
requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement
and a 0.25% market share add-on requirement
based on our Swiss credit business.
3 Includes outstanding low-trigger loss-
absorbing additional tier 1 capital
instruments, which are
available under the Swiss
SRB framework to
meet the going concern
requirements until their first
call date. As of
their first call date,
these instruments are
eligible to meet the gone concern requirements.
4 A maximum of 25% of the gone concern
requirements can be met with instruments
that have a remaining maturity of between
one and two years. Once
at least
75% of the minimum gone concern requirement has been met with instruments that have a remaining maturity of greater than two years, all instruments that have a remaining maturity of between one and two years
remain eligible to be included in the total gone concern capital.
5 From 1 January 2023, the resolvability discount on the gone concern capital requirements for systemically important banks (SIBs) has been
replaced
with reduced base
gone concern
capital requirements
equivalent to
75% of the
total going concern
requirements (excluding
countercyclical buffer
requirements).
6 As of
July 2024,
the Swiss
Financial Market
Supervisory Authority
(FINMA) has
the authority
to impose
a surcharge
of up
to 25%
of the
total going
concern capital
requirements should
obstacles to
an SIB’s
resolvability be
identified in
future resolvability
assessments.
7 Includes applicable add-ons of 1.08% for RWA and 0.38% for LRD.
Additional capital requirements for UBS
Group AG consolidated under current
requirements
As a result of the acquisition of the Credit Suisse
Group in 2023, the capital add-ons for market share
and LRD for
UBS Group AG consolidated will increase
commensurate with the higher
market share and LRD of the Group
after
the acquisition.
We currently
estimate that this
will add
around USD 10bn
to the
Group’s tier 1
capital requirement,
when fully phased
in. The phase-in of
the increased capital
requirements will commence
from the end of
2025 and
will be completed by the beginning of 2030,
at the latest.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
39
Total loss-absorbing capacity
The table below provides Swiss SRB going and gone concern information based on the Swiss SRB
framework and
requirements that are discussed under “Capital management” in the “Capital, liquidity and funding, and
balance
sheet” section of the UBS Group Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
.
Swiss SRB going and gone concern information
USD m, except where indicated
31.12.24
30.9.24
31.12.23
Eligible going concern capital
Total going concern capital
87,739
91,024
91,894
Total tier 1 capital
87,739
91,024
91,894
Common equity tier 1 capital
71,367
74,213
78,002
Total loss-absorbing additional tier 1 capital
16,372
16,810
13,892
of which: high-trigger loss-absorbing additional tier 1 capital
15,126
15,572
12,678
of which: low-trigger loss-absorbing additional tier 1 capital
1,245
1,239
1,214
Eligible gone concern capital
Total gone concern loss-absorbing capacity
97,655
103,882
107,106
Total tier 2 capital
207
289
538
of which: non-Basel III-compliant tier 2 capital
207
289
538
TLAC-eligible senior unsecured debt
97,449
103,593
106,567
Total loss-absorbing capacity
Total loss-absorbing capacity
185,394
194,906
199,000
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
498,538
519,363
546,505
Leverage ratio denominator
1,519,477
1,608,341
1,695,403
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
17.6
17.5
16.8
of which: common equity tier 1 capital ratio
14.3
14.3
14.3
Gone concern loss-absorbing capacity ratio
19.6
20.0
19.6
Total loss-absorbing capacity ratio
37.2
37.5
36.4
Leverage ratios (%)
Going concern leverage ratio
5.8
5.7
5.4
of which: common equity tier 1 leverage ratio
4.7
4.6
4.6
Gone concern leverage ratio
6.4
6.5
6.3
Total loss-absorbing capacity leverage ratio
12.2
12.1
11.7
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
40
Total loss-absorbing capacity and movement
Our TLAC decreased by USD 9.5bn to USD 185.4bn
in the fourth quarter of 2024.
Going concern capital and movement
Our
going
concern
capital
decreased
by
USD 3.3bn
to
USD 87.7bn.
Our
common
equity
tier 1
(CET1)
capital
decreased by USD 2.8bn to USD 71.4bn, mainly as
operating profit before tax of USD 1.0bn was more than
offset
by
foreign
currency
translation
losses
of
USD 1.8bn,
current
tax
expenses
of
USD 1.0bn,
dividend
accruals
of
USD 0.9bn and a USD 0.2bn
decrease in eligible deferred
tax assets on
temporary differences. Share
repurchases
of USD 0.3bn carried out
in the fourth quarter of
2024 under our 2024
share repurchase program
did not affect
our CET1 capital
position,
as there
was an
equal reduction in
the capital reserve
for potential share
repurchases.
The remaining capital reserve for potential share repurchases was fully utilized during
the fourth quarter of 2024.
Our
loss-absorbing
additional
tier 1
(AT1)
capital
decreased
by
USD 0.4bn
to
USD 16.4bn,
primarily
reflecting
negative impacts from interest rate risk hedge, foreign
currency translation and other effects.
Following the approval of a maximum amount of conversion capital by UBS Group AG’s shareholders at the 2024
Annual General
Meeting, AT1
capital instruments
issued from
the beginning
of the
fourth quarter
of 2023
are,
upon the
occurrence of
a trigger event
or a
viability event,
subject to
conversion into
UBS Group AG
ordinary shares
rather than a
write-down. AT1 capital instruments
issued prior to
the fourth quarter of
2023 remain subject to
a
write-down.
Gone concern loss-absorbing capacity and movement
Our total gone concern loss-absorbing
capacity decreased by USD 6.2bn to USD
97.7bn and included USD 97.4bn
of
TLAC-eligible
senior
unsecured
debt
instruments.
The
decrease
of
USD 6.2bn
mainly
reflected
a
USD 1.6bn
equivalent of
TLAC-eligible senior
unsecured debt
instrument that
ceased to
be eligible
as gone
concern capital
when we issued
a notice
of redemption
of the
instrument in
the fourth
quarter of 2024
and a
USD 0.1bn tier 2
instrument ceasing
to be
eligible as
gone concern
capital as
it entered
the final
year before
maturity,
as well
as
negative impacts from
interest rate risk
hedge, foreign currency
translation and other effects.
These effects were
partly offset by new issuances of TLAC-eligible senior
unsecured debt instruments totaling USD 0.2bn.
›
Refer to “Bondholder information” at
ubs.com/investors
for more information about the eligibility of capital and
senior unsecured debt instruments and about key features and terms and conditions of capital instruments
Loss-absorbing capacity and leverage ratios
Our CET1 capital ratio was broadly unchanged at
14.3%,
as a USD 2.8bn decrease in CET1 capital was
offset by a
USD 20.8bn decrease in RWA.
Our CET1 leverage ratio
increased to 4.7% from
4.6%, reflecting an USD
88.9bn decrease in the
LRD,
partly offset
by a USD 2.8bn decrease in CET1 capital.
Our going concern capital ratio increased to 17.6% from
17.5%, reflecting the aforementioned decrease in RWA,
partly offset by a decrease in going concern capital
of USD 3.3bn.
Our going
concern leverage
ratio increased
to 5.8%
from 5.7%,
reflecting the
aforementioned decrease
in the
LRD, partly offset by a decrease in going concern
capital of USD 3.3bn.
Our
gone
concern
loss-absorbing
capacity
ratio
decreased
to
19.6%
from
20.0%,
due
to
a
decrease
in
gone
concern loss-absorbing capacity of USD 6.2bn,
partly offset by the aforementioned decrease
in RWA.
Our gone concern leverage
ratio decreased to 6.4%
from 6.5%, due to
a decrease in gone
concern loss-absorbing
capacity of USD 6.2bn,
partly offset by the aforementioned decrease in the
LRD.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
41
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 30.9.24
74,213
Operating profit / (loss) before tax
1,047
Current tax (expense) / benefit
(1,015)
Foreign currency translation effects, before tax
(1,837)
Share repurchase program
(300)
Capital reserve for potential share repurchases
301
Eligible deferred tax assets on temporary differences (incl. excess
over threshold)
(187)
Other
1
(856)
Common equity tier 1 capital as of 31.12.24
71,367
Loss-absorbing additional tier 1 capital as of 30.9.24
16,810
Interest rate risk hedge, foreign currency translation and other effects
(439)
Loss-absorbing additional tier 1 capital as of 31.12.24
16,372
Total going concern capital as of 30.9.24
91,024
Total going concern capital as of 31.12.24
87,739
Gone concern loss-absorbing capacity
Tier 2 capital as of 30.9.24
289
Debt no longer eligible as gone concern loss-absorbing capacity
due to residual tenor falling to below one year
(77)
Interest rate risk hedge, foreign currency translation and other effects
(6)
Tier 2 capital as of 31.12.24
207
TLAC-eligible unsecured debt as of 30.9.24
103,593
Issuance of TLAC-eligible senior unsecured debt
200
Call of TLAC-eligible senior unsecured debt
(1,552)
Interest rate risk hedge, foreign currency translation and other effects
(4,792)
TLAC-eligible unsecured debt as of 31.12.24
97,449
Total gone concern loss-absorbing capacity as of 30.9.24
103,882
Total gone concern loss-absorbing capacity as of 31.12.24
97,655
Total loss-absorbing capacity
Total loss-absorbing capacity as of 30.9.24
194,906
Total loss-absorbing capacity as of 31.12.24
185,394
1 Includes dividend accruals for 2024 (negative USD 0.9bn) and movements related to other items.
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
31.12.24
30.9.24
31.12.23
Total equity under IFRS Accounting Standards
85,574
87,589
86,156
Equity attributable to non-controlling interests
(494)
(564)
(531)
Defined benefit plans, net of tax
(833)
(883)
(965)
Deferred tax assets recognized for tax loss carry-forwards
(2,288)
(2,681)
(3,039)
Deferred tax assets for unused tax credits
(688)
(238)
(97)
Deferred tax assets on temporary differences, excess over threshold
(803)
Goodwill, net of tax
1
(5,702)
(5,752)
(5,750)
Intangible assets, net of tax
(702)
(788)
(894)
Compensation-related components (not recognized in net profit)
(2,800)
(2,432)
(2,186)
Expected losses on advanced internal ratings-based portfolio less provisions
(568)
(665)
(713)
Unrealized (gains) / losses from cash flow hedges, net of tax
2,585
1,830
3,109
Own credit related to (gains) / losses on financial liabilities
measured at fair value that existed at the balance sheet date, net of tax
1,178
1,359
1,291
Own credit related to (gains) / losses on derivative financial instruments
that existed at the balance sheet date
(62)
(72)
(89)
Prudential valuation adjustments
(167)
(217)
(368)
Accruals for dividends to shareholders for 2023
(2,240)
Capital reserve for potential share repurchases
(301)
Transitional CET1 capital PPA adjustments, net of tax
4,316
Other
(2,860)
2
(1,970)
2
3
Total common equity tier 1 capital
71,367
74,213
78,002
1 Includes goodwill related to significant investments in financial institutions of USD 19m as of 31 December 2024 (USD 20m as of 30 September 2024,
USD 20m as of 31 December 2023) presented on the balance
sheet line Investments in associates.
2 Includes dividend accruals for 2024 and other items.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
42
Additional information
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our RWA by
USD 22bn
and
our
CET1
capital
by
USD 2.4bn
as
of
31 December
2024
(30
September
2024:
USD 24bn
and
USD 2.4bn, respectively)
and decreased
our CET1
capital ratio
by 14 basis
points (30
September 2024:
18 basis
points). Conversely, a 10% appreciation of the US
dollar against other currencies would have decreased our RWA
by USD 20bn
and our
CET1 capital
by USD 2.2bn
(30 September
2024: USD 21bn
and USD 2.2bn,
respectively)
and increased our CET1 capital ratio by 14 basis points
(30 September 2024: 18 basis points).
Leverage ratio denominator
We estimate that a
10% depreciation of the
US dollar against other
currencies would have increased
our LRD by
USD 97bn as of
31 December 2024 (30 September 2024:
USD 109bn) and decreased our
CET1 leverage ratio by
13 basis points
(30 September
2024:
15 basis points).
Conversely,
a
10%
appreciation of
the US
dollar against
other currencies would have decreased our LRD by USD 88bn (30 September 2024: USD 99bn) and increased
our
CET1 leverage ratio by 14 basis points (30 September
2024: 16 basis points).
The aforementioned
sensitivities do
not consider
foreign currency
translation effects
related to
defined benefit
plans
other than those related to the currency
translation of the net equity of foreign operations.
›
Refer to “Active management of sensitivity to foreign exchange movements” under “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
Risk-weighted assets
During
the
fourth
quarter
of
2024,
RWA
decreased
by
USD 20.8bn
to
USD 498.5bn,
driven
by
a
USD 14.6bn
decrease in currency
effects,
as well as a
USD 6.6bn decrease
resulting from asset
size and other
movements, partly
offset by an increase of USD 0.4bn resulting
from model updates and methodology
changes.
Movement in risk-weighted assets, by key driver
USD bn
RWA as of
30.9.24
Currency
effects
Model updates
and
methodology
changes
Asset size and
other
1
RWA as of
31.12.24
Credit and counterparty credit risk
2
314.1
(13.6)
0.3
(8.6)
292.2
Non-counterparty-related risk
3
34.8
(1.0)
(0.1)
33.7
Market risk
25.0
0.1
2.1
27.2
Operational risk
145.4
145.4
Total
519.4
(14.6)
0.4
(6.6)
498.5
1 Includes the
Pillar 3 categories
“Asset
size”, “Credit quality
of counterparties”, “Acquisitions
and disposals”
and “Other”.
For more
information, refer
to the 31
December 2024
Pillar 3 Report,
which will be
available as
of 17 March
2025 under
“Pillar 3 disclosures”
at ubs.com/investors.
2 Includes settlement
risk, credit valuation
adjustments, equity
and investments
in funds
exposures in
the banking
book, and
securitization exposures in the banking book.
3 Non-counterparty-related risk includes deferred tax assets recognized for temporary differences,
property, equipment, software and other items.
Credit and counterparty credit risk
Credit
and
counterparty
credit
risk
RWA
decreased
by
USD
21.9bn
to
USD 292.2bn
as
of
31 December
2024,
reflecting
a
USD 13.6bn decrease
in currency
effects,
as well
as
an
USD 8.6bn decrease
in asset
size
and other
movements.
Asset size and other movements by business
division and Group Items:
–
Investment Bank RWA decreased by USD 4.0bn,
mainly due to lower RWA from loans and
loan commitments.
–
Non-core and
Legacy RWA
decreased by
USD 2.7bn,
mainly driven
by our
actions to
actively unwind
the portfolio,
in addition to the natural roll-off.
–
Personal & Corporate Banking RWA decreased
by USD 1.8bn, mainly driven by negative
net new loans.
–
Group Items RWA decreased by USD 0.2bn.
–
Asset Management RWA increased by USD 0.2bn.
–
Global Wealth Management RWA were unchanged.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
43
Model
updates
and
methodology
changes
resulted
in
an
RWA
increase
of
USD
0.3bn.
Increases
related
to
a
USD 1.2bn
regulatory
add-on
for
derivatives
and
USD 0.8bn
from
the
harmonization
of
models
following
the
migration
of
Credit
Suisse
portfolios
to
UBS
models,
as
well
as
various
smaller
model
updates
amounting
to
USD 0.6bn,
were
largely
offset
by
USD 2.3bn
resulting
from
the
phase-out
of
certain
multipliers
following
improvements to the models.
›
Refer to the 31 December 2024 Pillar 3 Report, which will be available as of 17 March 2025 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information
›
Refer to “Credit risk” in the “Risk management and control” section of this report for more information
Market risk
Market risk RWA
increased by USD 2.2bn
to USD 27.2bn in
the fourth quarter
of 2024,
driven by an
increase of
USD 2.1bn from asset size
and other movements in
the Investment Bank’s Global
Markets business,
partially offset
by updates from the monthly risks-not-in-VaR assessment
and de-risking within Non-core and Legacy.
›
Refer to the 31 December 2024 Pillar 3 Report, which will be available as of 17 March 2025 under “Pillar 3
disclosures” at
ubs.com/investors,
for more information
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information
Operational risk
Operational risk RWA were unchanged at
USD 145.4bn.
›
Refer to “Non-financial risk” in the “Risk management and control” section of the UBS Group Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for information about the advanced measurement
approach (AMA) which has been used to measure Group operational risk exposure and calculate operational risk
regulatory capital
›
Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for
more information about historical loss cases considered in the AMA
Outlook
The adoption of
the final Basel III standards
in January 2025 led
to a USD 1bn increase
in the UBS
Group’s RWA,
resulting in a minimal
impact on the CET1 capital
ratio. The USD 1bn increase was
primarily driven by a
USD 7bn
increase in
market risk
RWA and
a USD 3bn
increase in
credit valuation
adjustments-related RWA resulting
from
the
implementation of
the Fundamental
Review
of
the
Trading
Book
(the
FRTB)
framework,
largely
offset by
a
USD 7bn reduction
in operational
risk RWA
and a USD
1bn reduction
in credit risk
RWA. These
changes do
not take
into account the impact of the output floor. The output floor, which is being phased in until 2028, is currently not
binding for the UBS Group.
In addition
to the
impact of
the final
Basel III standards,
we expect
that model
updates will
result in
an RWA
increase
of around USD 3bn
in 2025, primarily
as a result
of the migration
of Credit Suisse
portfolios to UBS
models. The
extent and
timing of
RWA changes
may vary
as model
updates are
completed and
receive regulatory
approval,
along with changes in the composition of
the relevant portfolios.
Furthermore,
we expect exposures
in Non-core and Legacy
to reduce as
a result of maturities
and active unwinding
of positions, mitigating the impact from the
FRTB.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
44
Risk-weighted assets, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Manage-
ment
Investment
Bank
Non-core and
Legacy
Group
Items
Total
RWA
31.12.24
Credit and counterparty credit risk
1
93.6
120.6
7.2
56.2
10.7
3.9
292.2
Non-counterparty-related risk
2
6.4
2.9
0.7
3.6
1.5
18.7
33.7
Market risk
2.7
0.2
0.0
22.1
2.2
0.0
27.2
Operational risk
63.2
19.3
7.2
24.4
27.1
4.2
145.4
Total
165.8
143.0
15.1
106.4
41.4
26.8
498.5
30.9.24
Credit and counterparty credit risk
1
95.0
129.5
7.2
63.8
13.6
5.2
314.1
Non-counterparty-related risk
2
6.8
3.1
0.7
3.8
1.7
18.8
34.8
Market risk
1.9
0.4
0.0
20.2
2.5
0.0
25.0
Operational risk
63.2
19.3
7.2
24.4
27.1
4.2
145.4
Total
166.8
152.3
15.1
112.2
44.8
28.1
519.4
31.12.24 vs 30.9.24
Credit and counterparty credit risk
1
(1.4)
(8.9)
0.0
(7.5)
(2.9)
(1.3)
(21.9)
Non-counterparty-related risk
2
(0.4)
(0.2)
0.0
(0.2)
(0.2)
(0.1)
(1.1)
Market risk
0.8
(0.2)
0.0
1.9
(0.3)
0.0
2.2
Operational risk
Total
(1.0)
(9.3)
0.0
(5.7)
(3.4)
(1.4)
(20.8)
1 Includes settlement risk, credit valuation adjustments,
equity and investments in funds exposures in
the banking book, and securitization exposures in the
banking book.
2 Non-counterparty-related risk includes
deferred tax assets
recognized for temporary differences (31
December 2024: USD 18.1bn; 30 September
2024: USD 18.0bn), as
well as property, equipment, software
and other items
(31 December 2024: USD 15.7bn;
30 September 2024: USD 16.8bn).
Leverage ratio denominator
During the fourth
quarter of
2024, the LRD
decreased by
USD 88.9bn to
USD 1,519.5bn, driven
by currency
effects
of USD 68.9bn,
as well as asset size and other movements
of USD 20.0bn.
Movement in leverage ratio denominator, by key driver
USD bn
LRD as of
30.9.24
Currency
effects
Asset size and
other
LRD as of
31.12.24
On-balance sheet exposures (excluding derivatives and securities
financing transactions)
1
1,241.6
(55.2)
(34.2)
1,152.2
Derivatives
1
133.7
(5.3)
3.6
132.0
Securities financing transactions
171.7
(5.9)
11.3
177.1
Off-balance sheet items
72.4
(2.7)
0.1
69.8
Deduction items
(11.0)
0.1
(0.7)
(11.6)
Total
1,608.3
(68.9)
(20.0)
1,519.5
1 Reports prior to this fourth quarter of 2024
report had included certain exposures related to derivative cash collateral in
On-balance exposures. From the fourth quarter of 2024 onward, we have refined the approach
to include these exposures in derivatives, which had no bottom-line impact on total LRD.
The comparative period has not been restated.
The LRD movements described below exclude
currency effects.
On-balance sheet exposures
(excluding derivatives and
securities financing transactions)
decreased by USD 34.2bn,
mainly due to
decreases in cash
and balances at
central banks, as
well as lending
balances due to
negative net new
loans in Personal & Corporate Banking. There were also decreases in other
financial assets measured at fair value,
reflecting disposals
of high-quality
liquid asset
portfolio securities
and
of trading
assets due
to
decreases
in
the
inventory held
in the
Investment
Bank to
hedge client
positions, as
well as
Non-core and
Legacy unwinding
activities.
Derivative
exposures
increased
by
USD 3.6bn,
mainly
due
to
market-driven
movements
on
foreign
currency
contracts in the Investment Bank, partly offset
by lower trading volumes, mainly in Non-core
and Legacy.
Securities
financing transactions
increased by
USD 11.3bn,
mainly
reflecting
higher
cash
reinvestment
in
Group
Treasury.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Capital management
45
Outlook
The adoption
of the final
Basel III standards in
January 2025
led to a
low single-digit
percentage increase in
the UBS
Group’s LRD, reducing the CET1 leverage ratio by around 10 basis points.
Leverage ratio denominator, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
31.12.24
On-balance sheet exposures
1
480.0
398.4
5.4
211.8
40.3
16.2
1,152.2
Derivatives
1
11.9
5.6
0.0
104.6
9.5
0.4
132.0
Securities financing transactions
71.6
44.8
0.1
59.2
2.3
(0.9)
177.1
Off-balance sheet items
18.4
30.9
0.1
18.2
1.8
0.2
69.8
Items deducted from Swiss SRB tier 1 capital
(5.3)
(0.9)
(1.2)
(0.4)
(0.4)
(3.4)
(11.6)
Total
576.6
478.9
4.5
393.5
53.5
12.5
1,519.5
30.9.24
On-balance sheet exposures
1
504.9
429.2
5.7
238.8
46.0
17.0
1,241.6
Derivatives
1
10.8
3.3
0.0
106.0
13.4
0.1
133.7
Securities financing transactions
66.3
45.3
0.0
52.6
7.5
0.0
171.7
Off-balance sheet items
18.6
32.3
0.1
18.6
2.5
0.2
72.4
Items deducted from Swiss SRB tier 1 capital
(5.4)
(1.0)
(1.2)
(0.4)
(0.5)
(2.5)
(11.0)
Total
595.2
509.0
4.7
415.6
69.0
14.8
1,608.3
31.12.24 vs 30.9.24
On-balance sheet exposures
(24.9)
(30.7)
(0.3)
(27.0)
(5.7)
(0.8)
(89.4)
Derivatives
1.0
2.4
0.0
(1.5)
(3.9)
0.3
(1.7)
Securities financing transactions
5.3
(0.5)
0.1
6.6
(5.2)
(0.9)
5.4
Off-balance sheet items
(0.2)
(1.4)
0.0
(0.3)
(0.7)
0.0
(2.6)
Items deducted from Swiss SRB tier 1 capital
0.1
0.1
0.0
0.0
0.1
(0.9)
(0.6)
Total
(18.7)
(30.1)
(0.2)
(22.2)
(15.5)
(2.3)
(88.9)
1 Reports prior to this fourth quarter
of 2024 report had included certain exposures related
to derivative cash collateral in On-balance exposures. From the fourth quarter of
2024 onward, we have refined the approach
to include these exposures in derivatives, which had no bottom-line impact on total LRD.
The comparative period has not been restated.
Equity attribution
Under our equity attribution
framework, tangible equity
is attributed based on
equally weighted average
RWA and
average LRD, which both include resource allocations from our Group functions to the business divisions. Average
RWA and LRD are converted
to CET1 capital equivalents
using target capital ratios.
If the attributed tangible equity
calculated under the weighted-driver approach is less than
the CET1 capital equivalent of risk-based capital (RBC)
for any business division,
the CET1 capital equivalent of RBC is used
as a floor for that business division.
In addition to
tangible equity,
we allocate equity
to the business
divisions to
support goodwill
and intangible
assets.
We
also
allocate
to
the
business
divisions
attributed
equity
related
to
CET1
capital
deduction
items
that
are
attributable to divisional activities, such as compensation-related components or expected losses on the advanced
internal ratings-based portfolio less provisions. We attribute all remaining capital deduction items to Group Items.
Those
primarily
include
equity
related
to
deferred
tax
assets,
accruals
for
shareholder
returns,
and
unrealized
gains / losses from cash flow hedges.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about movements in
equity attributable to shareholders
Average attributed equity
For the quarter ended
For the year ended
USD bn
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Global Wealth Management
33.6
33.5
33.3
33.3
29.3
Personal & Corporate Banking
21.3
21.8
21.8
21.6
16.8
Asset Management
2.8
2.7
2.6
2.7
2.3
Investment Bank
17.3
17.0
16.8
17.1
15.9
Non-core and Legacy
8.7
8.5
9.5
9.5
6.0
Group Items
2
2.3
1.8
0.5
1.1
3.8
Average equity attributed to business divisions and Group Items
86.1
85.4
84.4
85.2
74.2
1 Comparative figures have been restated
to reflect the changes to the
equity attribution framework. Refer
to the “Equity attribution” section of
the UBS Group first quarter
2024 report, available under
“Quarterly
reporting” at ubs.com/investors,
for more information.
2 Includes average attributed equity
related to capital deduction items
for deferred tax assets,
accruals for shareholder returns and
unrealized gains / losses
from cash flow hedges.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Liquidity and funding management
46
Liquidity and funding management
Strategy, objectives and governance
This
section
provides
liquidity
and
funding
management
information
and
should
be
read
in
conjunction
with
“Liquidity and funding
management” in
the “Capital,
liquidity and funding,
and balance sheet”
section of the
UBS
Group
Annual
Report
2023,
available
under
“Annual
reporting”
at
ubs.com/investors
,
which
provides
more
information
about
the
Group’s
strategy,
objectives
and
governance
in
connection
with
liquidity
and
funding
management.
Liquidity coverage ratio
The
quarterly average
liquidity coverage
ratio
(the LCR)
of the
UBS
Group
decreased 10.8 percentage
points to
188.4%, remaining
above the
prudential requirement
communicated by
the Swiss
Financial Market
Supervisory
Authority (FINMA). The movement in the quarterly average LCR was primarily driven
by a decrease in high-quality
liquid assets (HQLA) of
USD 29.1bn to USD 331.5bn,
mainly reflecting lower
cash available, driven
by a decrease in
customer
deposits,
lower debt
issued
measured at
amortized cost
and
lower short-term
borrowings, as
well
as
funding
of
trading
assets.
The
aforementioned
decrease
in
HQLA
was
partly
offset
by
a
decrease
in
net
cash
outflows of USD 5.0bn to USD 176.0bn, reflecting lower net outflows from derivatives and debt issued measured
at amortized cost,
partly offset by higher outflows from customer
deposits.
›
Refer to the
31 December 2024 Pillar 3 Report, which will be available as of 17 March 2025 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the LCR
Liquidity coverage ratio
USD bn, except where indicated
Average 4Q24
1
Average 3Q24
1
High-quality liquid assets
331.5
360.6
Net cash outflows
2
176.0
181.1
Liquidity coverage ratio (%)
3
188.4
199.2
1 Calculated based on an average of 64
data points in the fourth quarter of 2024 and 65
data points in the third quarter of 2024.
2 Represents the net cash outflows expected over a stress period
of 30 calendar
days.
3 Calculated after the application of haircuts and inflow and outflow rates, as well as,
where applicable, caps on Level 2 assets and cash inflows.
Net stable funding ratio
As of
31 December 2024,
the net
stable funding
ratio (the
NSFR) of
the UBS
Group decreased
1.3 percentage
points
to 125.5%, remaining above the prudential
requirement communicated by FINMA.
Available
stable
funding decreased
by
USD 47.5bn to
USD 856.8bn, mainly
driven
by
lower
customer deposits,
largely driven by currency effects, lower regulatory
capital and lower debt issued.
Required stable funding decreased by USD 30.3bn to USD 682.5bn, mainly
reflecting lower lending assets, which
were also largely driven by currency effects.
›
Refer to the 31 December 2024 Pillar 3 Report, which will be available as of 17 March 2025 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the NSFR
Net stable funding ratio
USD bn, except where indicated
31.12.24
30.9.24
Available stable funding
856.8
904.3
Required stable funding
682.5
712.8
Net stable funding ratio (%)
125.5
126.9
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Balance sheet and off-balance sheet
47
Balance sheet and off-balance sheet
This
section
provides
balance
sheet
and
off-balance sheet
information
and
should
be
read
in
conjunction
with
“Balance sheet
and off-balance
sheet” in
the “Capital,
liquidity and
funding, and
balance sheet”
section of
the
UBS Group
Annual Report
2023, available
under “Annual reporting”
at
ubs.com/investors
, which
provides more
information about the balance sheet and off-balance
sheet positions.
Balances disclosed in this
report represent quarter-end
positions, unless indicated
otherwise. Intra-quarter balances
fluctuate in the ordinary course of business
and may differ from quarter-end positions.
Balance sheet assets (31 December 2024
vs 30 September 2024)
Total assets
were USD 1,565.0bn
as of
31 December 2024,
a decrease
of USD 58.9bn
compared with
30 September
2024, largely reflecting currency effects as
a result of the appreciation of the US dollar.
Lending assets
decreased by
USD 38.6bn, primarily
reflecting currency
effects of
approximately USD 31.3bn
and
negative net new loans
in Personal &
Corporate Banking. Other financial
assets measured at fair
value decreased
by USD 33.9bn,
mainly reflecting
disposals
of high-quality
liquid asset
(HQLA) portfolio
securities.
Cash and
balances
at central
banks
decreased by
USD 20.0bn, mainly
due
to net
investment in
securities financing
transactions at
amortized cost, currency effects and lower brokerage payables, partly offset by inflows
from the disposal of HQLA
portfolio securities.
Trading assets decreased
by USD 12.9bn, primarily driven
by a decrease in inventory
held in the
Investment Bank to hedge client positions,
as well as Non-core and Legacy unwinding
activities.
These decreases were partly offset by a USD 26.2bn
increase in securities financing transactions at
amortized cost,
mainly reflecting
higher cash
reinvestment in
Group Treasury.
Derivatives and
cash collateral
receivables on
derivative
instruments increased by USD 23.2bn,
predominantly in Derivatives &
Solutions in the
Investment Bank, primarily
reflecting market-driven increases in foreign
currency contracts.
Assets
As of
% change from
USD bn
31.12.24
30.9.24
30.9.24
Cash and balances at central banks
223.3
243.3
(8)
Lending
1
598.9
637.5
(6)
Securities financing transactions at amortized cost
118.3
92.1
28
Trading assets
159.1
172.0
(8)
Derivatives and cash collateral receivables on derivative instruments
229.5
206.3
11
Brokerage receivables
25.9
24.7
5
Other financial assets measured at amortized cost
58.8
61.2
(4)
Other financial assets measured at fair value
2
97.7
131.6
(26)
Non-financial assets
53.6
55.4
(3)
Total assets
1,565.0
1,623.9
(4)
1 Consists of Loans and advances to customers and Amounts due from banks.
2 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair
value through other comprehensive
income.
Balance sheet liabilities (31 December 2024
vs 30 September 2024)
Total
liabilities
were
USD 1,479.5bn
as
of
31 December
2024,
a
decrease
of
USD 56.9bn
compared
with
30 September 2024, largely reflecting currency
effects as a result of the appreciation of the
US dollar.
Customer deposits decreased by USD 30.2bn,
predominantly driven by currency effects.
Debt issued designated at
fair
value
and
long-term
debt
issued
measured
at
amortized
cost
decreased
by
USD 13.9bn,
mainly
driven
by
currency
effects
and
net
redemptions.
Short-term borrowings
decreased
by
USD 8.0bn, mainly
driven
by
lower
amounts due to
banks as well
as net maturities
of commercial paper and
certificates of deposit, mainly
in Group
Treasury. Other financial liabilities designated at fair value decreased by USD 6.6bn, mainly driven by a decrease in
securities financing transactions.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Balance sheet and off-balance sheet
48
These decreases
were partly
offset by
an USD 8.0bn
increase in
Derivatives and
cash collateral
payables on
derivative
instruments,
mainly reflecting the same drivers as on the asset
side.
›
Refer to “Bondholder information” at
ubs.com/investors
for more information about capital and senior debt
instruments
›
Refer to the “Consolidated financial information” section of this report for more information
Liabilities and equity
As of
% change from
USD bn
31.12.24
30.9.24
30.9.24
Short-term borrowings
1,2
53.9
61.9
(13)
Securities financing transactions at amortized cost
14.8
16.4
(9)
Customer deposits
745.8
776.0
(4)
Debt issued designated at fair value and long-term debt issued measured
at amortized cost
2
291.6
305.5
(5)
Trading liabilities
35.2
36.4
(3)
Derivatives and cash collateral payables on derivative instruments
216.1
208.1
4
Brokerage payables
49.0
52.4
(6)
Other financial liabilities measured at amortized cost
21.0
21.2
(1)
Other financial liabilities designated at fair value
28.7
35.3
(19)
Non-financial liabilities
23.2
23.2
0
Total liabilities
1,479.5
1,536.4
(4)
Share capital
0.3
0.3
0
Share premium
12.0
11.8
2
Treasury shares
(6.4)
(6.1)
6
Retained earnings
78.0
77.2
1
Other comprehensive income
3
1.1
3.8
(71)
Total equity attributable to shareholders
85.1
87.0
(2)
Equity attributable to non-controlling interests
0.5
0.6
(12)
Total equity
85.6
87.6
(2)
Total liabilities and equity
1,565.0
1,623.9
(4)
1 Consists of short-term debt issued measured at amortized cost and amounts due to banks, which includes amounts due to central banks.
2 The classification of debt issued measured at amortized cost into short-
term and long-term is based
on original contractual
maturity and therefore long-term
debt also includes debt
with a remaining time
to maturity of less
than one year.
This classification does
not consider any
early
redemption features.
3 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Equity (31 December 2024 vs 30 September
2024)
Equity attributable to shareholders decreased
by USD 1,946m to USD 85,079m as of
31 December 2024.
The
net
decrease
of
USD 1,946m
was
mainly
driven
by
negative
total
comprehensive
income
attributable
to
shareholders of USD 1,851m,
reflecting a net profit of
USD 770m and negative other
comprehensive income (OCI)
of
USD 2,622m.
OCI
mainly
included
negative
OCI
related
to
foreign
currency
translation
of
USD 1,835m
and
negative cash flow hedge OCI of USD 785m. In addition, net treasury share activity reduced equity by USD 318m,
predominantly due to the repurchasing of USD 300m
of shares under our 2024 share repurchase
program.
›
Refer to the “Group performance” and “Consolidated financial information” sections of this report for more
information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to the “Share information and earnings per share”
section of this report for more information about our
share repurchase programs
Off-balance sheet (31 December 2024 vs
30 September 2024)
Committed
unconditionally revocable
credit
lines
decreased
by
USD 7.4bn,
driven
by
currency
effects.
Forward
starting reverse repurchase and securities borrowing agreements increased by USD
8.8bn, reflecting an increase in
levels of business division activity in short-dated
securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
31.12.24
30.9.24
30.9.24
Guarantees
1,2
38.4
39.6
(3)
Irrevocable loan commitments
1
79.6
80.5
(1)
Committed unconditionally revocable credit lines
145.7
153.1
(5)
Forward starting reverse repurchase and securities borrowing agreements
24.9
16.1
55
1 Guarantees and irrevocable loan commitments are shown net of sub-participations.
2 Includes guarantees measured at fair value through profit or loss.
UBS Group fourth quarter 2024 report |
Risk, capital, liquidity and funding, and balance
sheet | Share information and earnings per share
49
Share information and earnings per share
UBS Group AG
shares
are
listed
on
the
SIX
Swiss
Exchange
(SIX).
They
are
also
listed
on
the
New
York
Stock
Exchange (the NYSE) as global registered shares. Each share has
a nominal value of USD 0.10. Shares issued were
unchanged in the fourth quarter of 2024 compared
with the third quarter of 2024.
We held
287m shares
as of
31 December 2024,
of which
153m shares
had been
acquired under
our 2022
and
2024 share repurchase
programs
for cancellation
purposes. The
remaining 134m
shares are primarily
held to hedge
our share delivery obligations related to employee
share-based compensation and participation
plans.
Treasury
shares
held
increased by
11m
shares
in
the
fourth
quarter
of
2024.
This
mainly
reflected 9.5m
shares
repurchased under our 2024 program.
Shares
acquired
under
our
2024
program
totaled
33m
as
of
31 December
2024
for
a
total
acquisition
cost
of
USD 1,000m (CHF 871m).
We plan to
repurchase USD 1bn
of shares in
the first
half of 2025.
We aim to
repurchase
up
to
an
additional USD 2bn
of
shares
in
the
second half
of 2025
and
are
maintaining our
ambition for
share
repurchases in 2026 to exceed full year 2022 levels. Our share repurchase levels will be subject to maintaining our
CET1 capital
ratio target
of around
14%, achieving
our financial
targets and
the absence
of material
and immediate
changes to the current capital regime
in Switzerland.
Shares acquired
under our
2022 program
totaled 121m
as of
31 December 2024
for a
total acquisition
cost of
USD 2,277m (CHF 2,138m). This program concluded
on 28 March 2024, and the 121m shares repurchased
under
this program will be canceled by means of a
capital reduction, subject to approval by the shareholders at a future
Annual General Meeting.
›
Refer to the “Equity, CET1 capital and returns” table in the “Group performance” section of this report
for more
information about equity attributable to shareholders and tangible equity attributable to shareholders
As of or for the quarter ended
As of or for the year ended
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Basic and diluted earnings (USD m)
Net profit / (loss) attributable to shareholders for basic
EPS
770
1,425
(279)
5,085
27,366
less: (profit) / loss on own equity derivative contracts
0
0
0
0
0
Net profit / (loss) attributable to shareholders for diluted
EPS
770
1,424
(279)
5,085
27,366
.
Weighted average shares outstanding
Weighted average shares outstanding for basic EPS
2
3,179,446,604
3,196,573,895
3,225,500,133
3,198,481,827
3,152,579,449
Effect of dilutive potential shares resulting from notional
employee shares, in-the-money
options and warrants outstanding
3
156,592,019
147,480,584
123,601
4
152,630,143
143,416,753
Weighted average shares outstanding for diluted EPS
3,336,038,623
3,344,054,479
3,225,623,734
3,351,111,970
3,295,996,202
.
Earnings per share (USD)
Basic
0.24
0.45
(0.09)
1.59
8.68
Diluted
0.23
0.43
(0.09)
1.52
8.30
.
Shares outstanding and potentially dilutive instruments
Shares issued
3,462,087,722
3,462,087,722
3,462,087,722
3,462,087,722
3,462,087,722
Treasury shares
5
287,262,471
276,381,209
253,233,437
287,262,471
253,233,437
of which: related to the 2022 share repurchase program
120,506,008
120,506,008
120,506,008
120,506,008
120,506,008
of which: related to the 2024 share repurchase program
32,962,298
23,479,400
32,962,298
Shares outstanding
3,174,825,251
3,185,706,513
3,208,854,285
3,174,825,251
3,208,854,285
Potentially dilutive instruments
6
14,127,377
13,561,823
163,417,391
4
14,124,877
5,638,817
.
Other key figures
Total book value per share (USD)
26.80
27.32
26.68
26.80
26.68
Tangible book value per share (USD)
24.63
25.10
24.34
24.63
24.34
Share price (USD)
7
30.54
30.77
31.01
30.54
31.01
Market capitalization (USD m)
8
105,719
106,528
107,355
105,719
107,355
1 Comparative-period information
has been revised. Refer
to “Note 2 Accounting
for the acquisition of
the Credit Suisse Group”
in the “Consolidated financial
statements” section of the
UBS Group third
quarter
2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information.
2 The weighted average shares outstanding for basic earnings per share (EPS) are calculated by taking the number of
shares at the beginning of the period, adjusted by the number of shares acquired or issued during the period, multiplied by a time-weighted factor for the period outstanding. As a result, balances are affected
by the
timing of acquisitions and issuances during the period.
3 The weighted average number of shares for notional employee
awards with performance conditions reflects all potentially dilutive shares that are expected
to vest under the terms of the awards.
4 Due to the net loss in the fourth quarter of 2023, 155,065,831 weighted average potential shares from unvested notional share awards were not included in the calculation
of diluted EPS as
they were not dilutive
for the quarter ended
31 December 2023. Such
shares are only
taken into account
for the diluted EPS
calculation when their
conversion to ordinary shares
would decrease
earnings per share or increase the loss per share,
in accordance with IAS 33, Earnings per Share.
5 Based on a settlement date view.
6 Reflects potential shares that could dilute basic EPS in
the future but were
not dilutive for any of the periods presented. Mainly
includes equity-based awards subject to absolute
and relative performance conditions and equity derivative
contracts. For the quarter
ended 31 December 2023,
it also includes 155,065,831 weighted average potential shares from unvested notional share awards
that were not included in the calculation of diluted EPS as they were not dilutive.
7 Represents the share price
as listed on the SIX Swiss Exchange,
translated to US dollars using the closing exchange
rate as of the respective date.
8 The calculation of market
capitalization reflects total shares issued multiplied by
the share
price at the end of the period.
Ticker symbols UBS Group AG
Security identification codes
Trading exchange
SIX / NYSE
Bloomberg
Reuters
ISIN
CH0244767585
SIX Swiss Exchange
UBSG
UBSG SW
UBSG.S
Valoren
24 476 758
New York Stock Exchange
UBS
UBS UN
UBS.N
CUSIP
CINS H42097 10 7
UBS Group fourth quarter 2024 report |
Consolidated financial information
50
Consolidated financial
information
Unaudited
Information
in
this
section
is
presented
for
UBS
Group
AG
and
its
subsidiaries
(together,
the
Group)
on
a
consolidated basis unless
otherwise specified and
is presented in US dollars.
In preparing this financial
information,
the same
accounting policies
and methods
of computation
have been
applied as
in the
UBS Group
AG consolidated
annual Financial Statements
for the period ended
31 December 2023, except
for the changes described
in “Note 1
Basis of accounting”
in the “Consolidated
financial statements”
section of the first,
second and third quarter
2024
reports.
The
financial
information
presented
is
unaudited
and
does
not
constitute
an
interim
financial
report
prepared in accordance
with IAS 34,
Interim Financial Reporting
. The UBS Group
AG Annual Report 2024, which
will be published
on 17 March 2025,
will incorporate
the full financial
statements prepared in
accordance with
IFRS
Accounting Standards for the 2024 financial year.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
51
UBS Group AG interim consolidated financial
information (unaudited)
Income statement
For the quarter ended
For the year ended
USD m
31.12.24
30.9.24
31.12.23
31.12.24
31.12.23
1
Interest income from financial instruments measured at
amortized cost and fair value through
other comprehensive income
7,829
8,766
10,036
35,994
31,743
Interest expense from financial instruments measured at
amortized cost
(7,884)
(9,022)
(9,440)
(35,947)
(28,216)
Net interest income from financial instruments measured
at fair value through profit or loss and other
1,893
2,050
1,498
7,061
3,770
Net interest income
1,838
1,794
2,095
7,108
7,297
Other net income from financial instruments measured
at fair value through profit or loss
3,144
3,681
3,158
14,690
11,583
Fee and commission income
7,269
7,170
6,409
28,730
23,766
Fee and commission expense
(671)
(653)
(629)
(2,592)
(2,195)
Net fee and commission income
6,598
6,517
5,780
26,138
21,570
Other income
56
341
(179)
675
384
Total revenues
11,635
12,334
10,855
48,611
40,834
Negative goodwill
27,264
Credit loss expense / (release)
229
121
136
551
1,037
Personnel expenses
6,361
6,889
7,061
27,318
24,899
General and administrative expenses
3,004
2,389
2,999
10,124
10,156
Depreciation, amortization and impairment of non-financial
assets
994
1,006
1,409
3,798
3,750
Operating expenses
10,359
10,283
11,470
41,239
38,806
Operating profit / (loss) before tax
1,047
1,929
(751)
6,821
28,255
Tax expense / (benefit)
268
502
(473)
1,675
873
Net profit / (loss)
779
1,428
(278)
5,146
27,382
Net profit / (loss) attributable to non-controlling interests
9
3
1
60
16
Net profit / (loss) attributable to shareholders
770
1,425
(279)
5,085
27,366
Earnings per share (USD)
Basic
0.24
0.45
(0.09)
1.59
8.68
Diluted
0.23
0.43
(0.09)
1.52
8.30
1 Comparative-period information as
previously reported in the
2023 Annual Report has
been revised to reflect measurement
period adjustments impacting negative
goodwill. Refer to Note 2
in the “Consolidated
financial statements” section of the UBS Group third quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors,
for more information about the relevant adjustments.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
52
Statement of comprehensive income
For the quarter ended
For the year ended
USD m
31.12.24
30.9.24
31.12.23
31.12.24
31.12.23
1
Comprehensive income attributable to shareholders
2
Net profit / (loss)
770
1,425
(279)
5,085
27,366
Other comprehensive income that may be reclassified to the income
statement
Foreign currency translation
Foreign currency translation movements related to net assets of foreign operations, before tax
(3,388)
2,404
4,197
(4,726)
3,762
Effective portion of changes in fair value of hedging instruments
designated as net investment hedges, before tax
1,565
(1,081)
(2,620)
2,957
(2,320)
Foreign currency translation differences on foreign operations reclassified to the
income statement
20
2
60
24
58
Effective portion of changes in fair value of hedging instruments
designated as net investment hedges reclassified
to
the income statement
(34)
0
(25)
(33)
(28)
Income tax relating to foreign currency translations, including the effect of
net investment hedges
2
9
(15)
24
(17)
Subtotal foreign currency translation, net of tax
(1,835)
1,333
1,597
(1,754)
1,456
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
(1)
2
8
1
7
Net realized (gains) / losses reclassified to the income statement
from equity
0
0
(4)
0
(3)
Income tax relating to net unrealized gains / (losses)
0
0
0
0
0
Subtotal financial assets measured at fair value through other comprehensive
income, net of tax
(1)
2
3
1
4
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated
as cash flow hedges, before tax
(1,366)
1,579
1,803
(1,450)
(323)
Net (gains) / losses reclassified to the income statement from
equity
400
388
566
2,000
1,905
Income tax relating to cash flow hedges
181
(374)
(399)
(69)
(308)
Subtotal cash flow hedges, net of tax
(785)
1,593
1,970
481
1,275
Cost of hedging
Cost of hedging, before tax
(98)
(19)
(24)
(146)
(19)
Income tax relating to cost of hedging
0
0
0
0
0
Subtotal cost of hedging, net of tax
(98)
(19)
(24)
(146)
(19)
Total other comprehensive income that may be reclassified to the income statement, net
of tax
(2,719)
2,910
3,546
(1,417)
2,715
Other comprehensive income that will not be reclassified to the income
statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
(68)
(138)
164
(307)
110
Income tax relating to defined benefit plans
22
10
(33)
45
(70)
Subtotal defined benefit plans, net of tax
(46)
(128)
131
(261)
40
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated
at fair value, before tax
145
(317)
(731)
(10)
(1,850)
Income tax relating to own credit on financial liabilities designated
at fair value
(2)
(6)
10
(9)
82
Subtotal own credit on financial liabilities designated at
fair value, net of tax
144
(323)
(721)
(19)
(1,769)
Total other comprehensive income that will not be reclassified to the income statement,
net of tax
98
(451)
(591)
(280)
(1,729)
Total other comprehensive income
(2,622)
2,459
2,956
(1,698)
986
Total comprehensive income attributable to shareholders
(1,851)
3,883
2,677
3,388
28,352
Comprehensive income attributable to non-controlling
interests
Net profit / (loss)
9
3
1
60
16
Total other comprehensive income that will not be reclassified to the income statement,
net of tax
(35)
24
17
(47)
5
Total comprehensive income attributable to non-controlling interests
(27)
27
18
13
22
Total comprehensive income
Net profit / (loss)
779
1,428
(278)
5,146
27,382
Other comprehensive income
(2,657)
2,482
2,973
(1,744)
991
of which: other comprehensive income that may be reclassified
to the income statement
(2,719)
2,910
3,546
(1,417)
2,715
of which: other comprehensive income that will not be reclassified
to the income statement
62
(428)
(573)
(327)
(1,723)
Total comprehensive income
(1,878)
3,910
2,695
3,401
28,374
1 Comparative-period information as
previously reported in the
2023 Annual Report has
been revised to reflect measurement
period adjustments impacting negative
goodwill. Refer to Note 2
in the “Consolidated
financial statements” section of the UBS
Group third quarter 2024 report,
available under “Quarterly reporting” at
ubs.com/investors, for
more information about the relevant
adjustments.
2 Refer to the “Group
performance” section of this report for more information.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
53
Balance sheet
USD m
31.12.24
30.9.24
31.12.23
1
Assets
Cash and balances at central banks
223,329
243,261
314,060
Amounts due from banks
18,903
21,716
21,146
Receivables from securities financing transactions measured at amortized
cost
118,301
92,104
99,039
Cash collateral receivables on derivative instruments
43,959
47,209
50,082
Loans and advances to customers
579,967
615,820
639,669
Other financial assets measured at amortized cost
58,835
61,169
65,455
Total financial assets measured at amortized cost
1,043,293
1,081,280
1,189,451
Financial assets at fair value held for trading
159,065
171,983
169,633
Derivative financial instruments
185,551
159,068
176,084
Brokerage receivables
25,858
24,656
21,037
Financial assets at fair value not held for trading
95,472
129,416
104,018
Total financial assets measured at fair value through profit or loss
465,947
485,124
470,773
Financial assets measured at fair value through other comprehensive income
2,195
2,179
2,233
Investments in associates
2,306
2,484
2,373
Property, equipment and software
15,498
16,571
17,849
Goodwill and intangible assets
6,887
7,048
7,515
Deferred tax assets
11,134
10,254
10,682
Other non-financial assets
17,766
19,002
16,049
Total assets
1,565,028
1,623,941
1,716,924
Liabilities
Amounts due to banks
23,347
28,058
70,962
Payables from securities financing transactions measured at amortized cost
14,833
16,374
14,394
Cash collateral payables on derivative instruments
35,490
33,757
41,582
Customer deposits
745,777
775,994
792,029
Debt issued measured at amortized cost
214,219
227,168
237,817
Other financial liabilities measured at amortized cost
21,033
21,171
20,851
Total financial liabilities measured at amortized cost
1,054,698
1,102,523
1,177,633
Financial liabilities at fair value held for trading
35,247
36,437
34,159
Derivative financial instruments
180,636
174,296
192,181
Brokerage payables designated at fair value
49,023
52,403
42,522
Debt issued designated at fair value
107,909
112,218
128,289
Other financial liabilities designated at fair value
28,699
35,256
29,484
Total financial liabilities measured at fair value through profit or loss
401,514
410,610
426,635
Provisions and contingent liabilities
8,409
9,245
12,412
Other non-financial liabilities
14,834
13,974
14,089
Total liabilities
1,479,454
1,536,352
1,630,769
Equity
Share capital
346
346
346
Share premium
12,012
11,755
13,216
Treasury shares
(6,402)
(6,051)
(4,796)
Retained earnings
78,035
77,197
74,397
Other comprehensive income recognized directly in equity, net of tax
1,088
3,777
2,462
Equity attributable to shareholders
85,079
87,025
85,624
Equity attributable to non-controlling interests
494
564
531
Total equity
85,574
87,589
86,156
Total liabilities and equity
1,565,028
1,623,941
1,716,924
1 Comparative-period
information has
been revised.
Refer to
Note 2
in the
“Consolidated financial
statements” section
of the
UBS Group
third quarter
2024 report,
available under
“Quarterly reporting”
at
ubs.com/investors, for more information.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
54
Provisions and contingent liabilities
a) Provisions and contingent liabilities
The table below presents an overview of total provisions
and contingent liabilities.
USD m
31.12.24
30.9.24
31.12.23
1
Provisions related to expected credit losses (IFRS 9,
Financial Instruments
)
320
310
350
Provisions related to Credit Suisse loan commitments (IFRS
3,
Business Combinations
)
997
1,230
1,924
Provisions related to litigation, regulatory and similar matters
(IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
3,602
3,842
4,020
Acquisition-related contingent liabilities related to litigation,
regulatory and similar matters (IFRS 3,
Business Combinations
)
2,122
2,430
3,993
Restructuring, real-estate and other provisions (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
1,368
1,433
2,123
Total provisions and contingent liabilities
8,409
9,245
12,412
1 Comparative-period information
has been
revised.
Refer to
Note 2
in the
“Consolidated financial
statements” section
of the
UBS Group
third quarter
2024 report,
available under
“Quarterly reporting”
at
ubs.com/investors, for more information.
The table below presents additional information for provisions under IAS 37,
Provisions, Contingent Liabilities and
Contingent Assets
.
USD m
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total
Balance as of 31 December 2023
4,020
741
259
1,123
6,144
Balance as of 30 September 2024
3,842
865
245
324
5,275
Increase in provisions recognized in the income statement
173
301
12
70
555
Release of provisions recognized in the income statement
(7)
(107)
(1)
(51)
(166)
Reclassifications
216
5
0
0
0
216
Provisions used in conformity with designated purpose
(510)
(200)
(7)
(9)
(725)
Foreign currency translation and other movements
(112)
(46)
(9)
(18)
(185)
Balance as of 31 December 2024
3,602
813
240
315
4,969
1 Consists of provisions for losses resulting
from legal, liability and compliance
risks.
2 Includes USD 383m of provisions
for onerous contracts related to
real estate as of 31 December 2024
(30 September 2024:
USD 482m; 31 December 2023: USD 448m), USD 334m of personnel-related
restructuring provisions as of 31 December 2024 (30 September 2024:
USD 322m; 31 December 2023: USD 294m) and onerous contracts
related to technology.
3 Mainly includes provisions for reinstatement
costs with respect to leased properties.
4 Mainly includes provisions related to
employee benefits and operational risks.
5 Mainly includes
reclassifications from IFRS 3 contingent liabilities to IAS 37 provisions.
Information about provisions and
contingent liabilities in respect of
litigation, regulatory and similar matters,
as a
class, is
included in
part b).
There are
no material
contingent
liabilities associated
with the
other classes
of provisions.
b) Litigation, regulatory and similar matters
The Group operates in
a legal and regulatory
environment that exposes it to
significant litigation and similar risks
arising from disputes
and regulatory proceedings. As
a result,
UBS (which for
purposes of this
Note may
refer to
UBS
Group
AG
and
/
or
one
or
more
of
its
subsidiaries, as
applicable)
is
involved
in
various
disputes
and
legal
proceedings, including litigation, arbitration,
and regulatory and criminal investigations.
Such matters are subject
to many uncertainties,
and the outcome and the
timing of resolution are
often difficult to
predict,
particularly in
the
earlier
stages
of
a
case.
There
are
also
situations
where
the Group
may
enter into
a
settlement
agreement.
This
may
occur
in
order
to
avoid
the
expense,
management
distraction
or
reputational
implications of
continuing to
contest liability,
even
for those
matters for
which
the Group
believes it
should be
exonerated. The uncertainties inherent in all such matters affect the amount and timing of any potential outflows
for both matters
with respect to
which provisions have
been established and
other contingent liabilities.
The Group
makes
provisions
for
such
matters
brought
against
it
when,
in
the
opinion
of
management
after
seeking legal
advice, it
is more
likely than
not that
the Group
has a
present legal
or constructive obligation
as a
result of
past
events, it
is probable
that an
outflow of
resources will
be required,
and the
amount can
be reliably
estimated. Where
these factors
are
otherwise satisfied,
a
provision may
be
established for
claims that
have
not
yet been
asserted
against the
Group, but
are nevertheless
expected to
be, based
on
the Group’s
experience with
similar asserted
claims.
If
any
of
those
conditions
is
not
met,
such
matters
result
in
contingent
liabilities.
If
the
amount
of
an
obligation cannot
be reliably
estimated, a
liability exists
that is
not recognized
even if
an outflow
of resources
is
probable. Accordingly, no
provision is
established even if
the potential
outflow of resources
with respect
to such
matters could be significant. Developments relating to a matter that occur after the relevant reporting period, but
prior
to
the
issuance
of
financial
statements, which
affect
management’s assessment
of
the
provision
for
such
matter
(because,
for
example,
the
developments provide
evidence of
conditions that
existed
at
the
end
of
the
reporting
period),
are
adjusting
events
after
the
reporting period
under
IAS
10
and
must
be
recognized in
the
financial statements for the reporting period.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
55
Provisions and contingent liabilities
(continued)
Specific litigation, regulatory and other matters are
described below, including all such matters that
management
considers to be material and others that management believes to be of significance to the Group due to potential
financial,
reputational
and
other
effects.
The
amount
of
damages
claimed,
the
size
of
a
transaction
or
other
information is
provided where
available and
appropriate in order
to assist
users in
considering the
magnitude of
potential exposures.
In the case of certain matters below, we state that we have established a provision, and for the other matters, we
make no such statement. When we
make this statement and we expect
disclosure of the amount of a provision
to
prejudice seriously our
position with other
parties in the
matter because it
would reveal what
UBS believes to
be
the
probable
and
reliably estimable
outflow, we
do
not
disclose
that amount.
In
some
cases we
are
subject to
confidentiality obligations
that preclude
such disclosure.
With respect
to the
matters for
which we
do not
state
whether we have
established a provision,
either: (a) we
have not established
a provision; or
(b) we have
established
a provision
but expect
disclosure of
that fact
to prejudice
seriously our
position with
other parties
in the
matter
because it would reveal the fact that
UBS believes an outflow of resources to be probable
and reliably estimable.
With respect to certain litigation, regulatory
and similar matters for which we
have established provisions, we are
able to
estimate the expected
timing of outflows.
However, the aggregate
amount of the
expected outflows for
those matters for which we
are able to estimate expected
timing is immaterial relative to
our current and expected
levels of liquidity over the relevant time periods.
The
aggregate
amount
provisioned
for
litigation,
regulatory
and
similar
matters
as
a
class
is
disclosed
in
the
“Provisions”
table
in
part
a)
above.
UBS
provides
below
an
estimate
of
the
aggregate
liability
for
its
litigation,
regulatory and
similar matters
as a
class of
contingent liabilities.
Estimates of
contingent liabilities
are inherently
imprecise and
uncertain as
these
estimates require UBS
to
make speculative
legal assessments
as
to claims
and
proceedings that involve
unique fact patterns
or novel legal
theories, that have
not yet been
initiated or are
at early
stages of
adjudication, or
as to
which
alleged damages
have
not been
quantified by
the claimants.
Taking into
account these uncertainties
and the other factors
described herein, UBS
estimates the future losses
that could arise
from litigation,
regulatory and
similar matters
disclosed below
for which
an estimate
is possible,
that are
not covered
by existing
provisions (including
acquisition-related contingent
liabilities established
under IFRS
3 in connection
with
the acquisition of Credit Suisse), are in the range
of USD 0bn to USD 1.9bn.
Litigation, regulatory
and similar
matters may
also result
in non-monetary
penalties and
consequences. A
guilty plea
to, or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may
require UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory
authorities to limit, suspend or terminate
licenses and regulatory authorizations, and may
permit financial market
utilities to
limit, suspend
or terminate
UBS’s participation
in such
utilities. Failure
to obtain
such waivers,
or any
limitation, suspension
or termination
of licenses,
authorizations or
participations, could
have material
consequences
for UBS.
The
amounts
shown
in
the
table
below
reflect
the
provisions
recorded
under
IFRS
Accounting
Standards.
In
connection with
the acquisition
of Credit
Suisse, UBS
Group AG
additionally has
reflected in
its purchase
accounting
under IFRS
3 a
valuation adjustment
reflecting an
estimate of
outflows relating
to contingent
liabilities for
all present
obligations included in
the scope
of the
acquisition at fair
value upon
closing, even
if it
is not
probable that the
contingent
liability
will
result
in
an
outflow
of
resources,
significantly
decreasing
the
recognition
threshold
for
litigation
liabilities
beyond
those
that
generally apply
under
IFRS
Accounting Standards.
The
IFRS
3
acquisition-
related
contingent
liabilities
of
USD 2.1bn
at
31 December
2024
reflect
a
decrease
of
USD 0.3bn
from
30 September 2024 as a
result of reclassifications
to provisions under IAS
37 and releases upon
resolution of the
relevant matter.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
56
Provisions and contingent liabilities
(continued)
Provisions for litigation, regulatory and similar matters,
by business division and in Group Items
1
USD m
Global Wealth
Manage-
ment
Personal &
Corporate
Banking
Asset
Manage-
ment
Investment
Bank
Non-core
and Legacy
Group Items
UBS Group
Balance as of 31 December 2023
1,235
157
15
294
2,186
134
4,020
Balance as of 30 September 2024
1,247
157
2
283
2,018
135
3,842
Increase in provisions recognized in the income statement
103
0
1
12
49
8
173
Release of provisions recognized in the income statement
(3)
0
0
0
(2)
(2)
(7)
Reclassifications
2
17
0
0
0
199
0
216
Provisions used in conformity with designated purpose
(15)
0
(2)
(17)
(474)
(2)
(510)
Foreign currency translation and other movements
(78)
(11)
0
(12)
(11)
0
(112)
Balance as of 31 December 2024
1,271
147
1
266
1,779
139
3,602
1 Provisions, if any,
for the matters
described in items
2 and 10
of this disclosure
are recorded in
Global Wealth Management.
Provisions, if any,
for the matters
described in items
5, 6, 7,
8, 9, 11
and 13 of this
disclosure are recorded
in Non-core and
Legacy. Provisions,
if any,
for the matter
described in item
14 of this
disclosure are recorded
in Group
Items. Provisions,
if any,
for the matters
described in item
1 of this
disclosure are allocated between Global Wealth Management,
Personal & Corporate Banking and Non-core
and Legacy. Provisions, if
any, for the matters described in
item 3 of this disclosure are allocated between
the Investment Bank,
Non-core and Legacy
and Group Items.
Provisions, if
any, for
the matters described
in item 4
of this disclosure
are allocated between
Global Wealth Management
and Personal
& Corporate
Banking. Provisions, if any,
for the matters described
in item 12 of this
disclosure are allocated between
the Investment Bank and Non-core
and Legacy.
2 Mainly includes reclassifications from
IFRS 3 contingent
liabilities to IAS 37 provisions.
- Inquiries regarding cross-border wealth management
businesses
Tax
and regulatory
authorities in
a number
of countries
have made
inquiries, served
requests for
information or
examined
employees
located
in
their
respective
jurisdictions
relating
to
the
cross-border
wealth
management
services provided by
UBS and
other financial
institutions. Credit Suisse
offices in various
locations, including
the UK,
the Netherlands, France and
Belgium, have been contacted
by regulatory and law enforcement
authorities seeking
records and information
concerning investigations
into Credit
Suisse’s historical
private banking
services on a
cross-
border basis and
in part through
its local branches
and banks.
The UK and
French aspects of
these issues have
been
closed. UBS is continuing to cooperate with
the authorities.
Since 2013, UBS
(France) S.A., UBS AG
and certain former employees
have been under investigation in
France in
relation to UBS’s cross-border business with French
clients. In connection with this investigation, the investigating
judges ordered UBS AG to provide bail (“
caution
”) of EUR 1.1bn.
In 2019,
the court of
first instance
returned a verdict
finding UBS AG
guilty of
unlawful solicitation of
clients on
French territory and aggravated
laundering of the proceeds
of tax fraud, and UBS
(France) S.A. guilty of aiding
and
abetting unlawful
solicitation and
of laundering
the proceeds
of tax
fraud. The
court imposed
fines aggregating
EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of civil
damages to the French state. A trial
in the
Paris Court
of Appeal
took place
in March
- In
December 2021,
the Court
of Appeal
found UBS AG
guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. The court ordered a fine of
EUR
3.75m,
the
confiscation
of
EUR 1bn,
and
awarded
civil
damages
to
the
French
state
of
EUR 800m.
UBS
appealed the decision to
the French Supreme Court. The
Supreme Court rendered its judgment
on 15 November
- It
upheld the
Court of
Appeal’s decision
regarding unlawful solicitation
and aggravated
laundering of the
proceeds of tax fraud, but overturned
the confiscation of EUR 1bn, the penalty of EUR 3.75m
and the EUR 800m
of civil
damages awarded
to the
French state.
The case
has been
remanded to
the Court
of Appeal
for a
retrial
regarding these overturned elements.
The French state has reimbursed the
EUR 800m of civil damages
to UBS AG.
In
May
2014,
Credit
Suisse
entered
into
settlement
agreements
with
the
SEC,
Federal
Reserve
and
New
York
Department of Financial Services and entered
into an agreement with the US Department
of Justice (DOJ) to plead
guilty to
conspiring to
aid and
abet US
taxpayers in
filing false
tax returns
(2014 Plea
Agreement). Credit
Suisse
continued to report
to and cooperate
with US authorities
in accordance with its
obligations under the
2014 Plea
Agreement,
including by conducting
a review of cross-border
services provided by
Credit Suisse. In this
connection,
Credit Suisse provided
information to US
authorities regarding potentially undeclared US
assets held by
clients at
Credit Suisse.
UBS continues to cooperate with the ongoing
investigation by the DOJ.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
57
Provisions and contingent liabilities
(continued)
Our balance
sheet at 31 December
2024 reflected
a provision in
an amount
that UBS
believes to
be appropriate
under the
applicable accounting
standard. As
in the
case of
other matters
for which
we have
established provisions,
the future outflow of resources in respect of such matters
cannot be determined with certainty based on currently
available information
and accordingly
may ultimately
prove to
be substantially
greater (or
may be
less) than
the
provision that we have recognized.
- Madoff
In relation to
the Bernard
L. Madoff Investment
Securities LLC
(BMIS) investment
fraud, UBS AG,
UBS (Luxembourg)
S.A. (now UBS
Europe SE, Luxembourg
branch) and certain
other UBS subsidiaries have
been subject to
inquiries
by a
number of
regulators, including
the Swiss
Financial Market
Supervisory Authority
(FINMA) and
the Luxembourg
Commission
de
Surveillance
du
Secteur
Financier.
Those
inquiries
concerned
two
third-party
funds
established
under Luxembourg
law,
substantially all
assets of
which were
with BMIS,
as well
as certain
funds established
in
offshore
jurisdictions
with
either
direct
or
indirect
exposure
to
BMIS.
These
funds
faced
severe
losses,
and
the
Luxembourg funds are in liquidation. The documentation establishing both funds identifies UBS entities in various
roles,
including custodian,
administrator,
manager,
distributor and
promoter,
and indicates
that UBS
employees
serve as board members.
In 2009 and 2010, the liquidators
of the two Luxembourg funds
filed claims against UBS entities,
non-UBS entities
and
certain
individuals,
including
current
and
former
UBS
employees,
seeking
amounts
totaling
approximately
EUR 2.1bn, which includes
amounts that the
funds may be
held liable to
pay the trustee
for the liquidation
of BMIS
(BMIS Trustee).
A large number of alleged beneficiaries have filed claims
against UBS entities (and non-UBS entities) for purported
losses relating to
the Madoff fraud.
The majority of
these cases have
been filed in
Luxembourg, where decisions
that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and
the Luxembourg Supreme Court has dismissed
a further appeal in one of the test
cases.
In the
US, the
BMIS Trustee
filed claims
against UBS
entities, among
others, in
relation to
the two
Luxembourg
funds and one of
the offshore funds. The
total amount claimed against
all defendants in
these actions was
not less
than USD 2bn. In
2014, the US
Supreme Court rejected
the BMIS Trustee’s
motion for leave
to appeal decisions,
dismissing all
claims against
UBS defendants
except those
for the
recovery of
approximately USD 125m
of payments
alleged to be
fraudulent conveyances
and preference
payments. Similar
claims have
been filed against
Credit Suisse
entities seeking to recover
redemption payments. In
2016, the bankruptcy
court dismissed these
claims against the
UBS entities and
most of
the Credit
Suisse entities.
In 2019, the
Court of Appeals
reversed the
dismissal of
the BMIS
Trustee’s remaining claims. The case has been
remanded to the Bankruptcy Court
for further proceedings.
- Foreign exchange, LIBOR and benchmark rates,
and other trading practices
Foreign-exchange-related regulatory matters:
Beginning in 2013, numerous authorities commenced investigations
concerning possible
manipulation of
foreign
exchange markets
and
precious
metals prices.
As
a
result
of these
investigations, UBS entered into resolutions with Swiss, US and UK regulators
and the European Commission. UBS
was granted conditional immunity
by the Antitrust Division
of the DOJ
and by authorities
in other jurisdictions
in
connection with potential competition law violations relating to foreign exchange and precious metals businesses.
In December
2021, the
European Commission
issued a
decision imposing
a fine
of EUR 83.3m
on Credit
Suisse
entities based on findings of anticompetitive practices in the foreign exchange market. Credit Suisse has appealed
the decision to the European General Court.
UBS received leniency and accordingly no fine was assessed.
Foreign-exchange-related civil litigation:
Putative class actions have been filed since 2013 in US federal courts and
in
other
jurisdictions
against
UBS,
Credit
Suisse
and
other
banks
on
behalf
of
putative
classes
of
persons
who
engaged in foreign
currency transactions with
any of the defendant
banks. UBS and
Credit Suisse have resolved
US
federal
court class
actions relating
to foreign
currency transactions
with the
defendant banks
and persons
who
transacted in
foreign exchange
futures contracts
and options
on such
futures. Certain
class members
have excluded
themselves from
that settlement
and filed individual
actions in
US and English
courts against
UBS, Credit Suisse
and
other banks, alleging
violations of US
and European competition
laws and unjust
enrichment. UBS, Credit
Suisse
and the other
banks have resolved
those individual matters. Credit
Suisse and UBS,
together with other
financial
institutions, were named in
a consolidated putative
class action in
Israel, which made
allegations similar to those
made in the actions pursued in other jurisdictions. In April 2022,
Credit Suisse entered into an agreement to settle
all claims in
this action. In
February 2024, UBS
entered into
an agreement to
settle all
claims in
this action. Both
settlements remain subject to court approval.
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Provisions and contingent liabilities
(continued)
A putative class action was filed in federal court against UBS and numerous other banks on behalf of persons and
businesses in the US who directly purchased foreign currency from the defendants
and alleged co-conspirators for
their own end use. In May 2024, the Second
Circuit upheld the district court’s dismissal of
the case.
LIBOR and other benchmark-related regulatory
matters:
Numerous government agencies conducted investigations
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain
times.
UBS
and
Credit
Suisse
reached
settlements
or
otherwise
concluded
investigations
relating
to
benchmark interest
rates with
the investigating
authorities. UBS
was granted
conditional leniency
or conditional
immunity
from
authorities
in
certain
jurisdictions,
including
the
Antitrust
Division
of
the
DOJ
and
the
Swiss
Competition Commission (WEKO), in
connection with potential
antitrust or competition
law violations related
to
certain rates.
However, UBS
has not
reached a
final settlement
with WEKO,
as the
Secretariat of
WEKO has
asserted
that UBS does not qualify for full immunity.
LIBOR and
other benchmark-related
civil litigation:
A number
of putative
class actions
and other
actions are
pending
in the federal
courts in New
York against UBS
and numerous other banks
on behalf of
parties who transacted in
certain interest rate benchmark-based derivatives. Also
pending in the US
and in other jurisdictions are
a number
of other
actions asserting losses
related to
various products whose
interest rates were
linked to
LIBOR and other
benchmarks, including
adjustable rate
mortgages, preferred
and debt securities,
bonds pledged
as collateral, loans,
depository
accounts,
investments
and
other
interest-bearing
instruments.
The
complaints
allege
manipulation,
through various
means, of
certain benchmark
interest rates,
including USD LIBOR,
Yen LIBOR,
EURIBOR, CHF LIBOR,
and GBP LIBOR and seek unspecified compensatory
and other damages under various legal
theories.
USD LIBOR class and individual actions in the
US:
Beginning in 2013, putative class actions
were filed in US federal
district courts
(and subsequently
consolidated in
the US
District Court
for the Southern
District of New
York (SDNY))
by plaintiffs who
engaged in over-the-counter
instruments, exchange-traded
Eurodollar futures and
options, bonds
or
loans
that
referenced
USD LIBOR.
The
complaints
allege
violations
of
antitrust
law
and
the
Commodities
Exchange Act, as well breach
of contract and unjust enrichment.
Following various rulings by the
district court and
the Second Circuit dismissing certain of
the causes of action and allowing others
to proceed, one class action with
respect
to
transactions
in
over-the-counter
instruments
and
several
actions
brought
by
individual
plaintiffs
are
proceeding in the district court.
UBS and Credit Suisse
have entered into settlement agreements in
respect of the
class actions relating
to exchange-traded
instruments, bonds
and loans. These
settlements have
received final court
approval and
the actions
have been
dismissed as
to UBS
and Credit
Suisse. In
addition, an
individual action
was
filed in the
Northern District of California
against UBS, Credit Suisse
and numerous other banks
alleging that the
defendants conspired to fix
the interest rate used as
the basis for loans to
consumers by jointly setting
the USD ICE
LIBOR rate and monopolized
the market for LIBOR-based
consumer loans and credit
cards. The court dismissed
the
initial
complaint
and
subsequently
dismissed
an
amended
complaint
with
prejudice.
In
January
2024,
plaintiffs
appealed the dismissal to the Ninth Circuit
Court of Appeals,
which affirmed the dismissal in November
2024.
Other benchmark
class actions
in the
US:
The Yen
LIBOR/Euroyen TIBOR,
EURIBOR and
GBP LIBOR
actions
have
been dismissed.
Plaintiffs have appealed the dismissals.
In November 2022, defendants have moved to dismiss the
complaint in the CHF LIBOR action. In
2023, the court
approved a settlement by Credit Suisse of the
claims against it in this matter.
Government bonds:
In 2021,
the European
Commission issued
a decision
finding that
UBS and
six other
banks
breached European
Union antitrust
rules between
2007 and
2011 relating
to European
government bonds. The
European Commission
fined UBS EUR 172m.
UBS has appealed
the amount of
the fine.
Also in 2021,
the European
Commission
issued
a
decision
finding
that
Credit
Suisse
and
four
other
banks
had
breached
European
Union
antitrust
rules
relating
to
supra-sovereign,
sovereign
and
agency
bonds
denominated
in
USD.
The
European
Commission fined Credit Suisse EUR 11.9m,
which amount was confirmed on appeal.
Credit Suisse, together with other financial institutions, was named in two Canadian putative class actions, which
allege that
defendants conspired to
fix the
prices of
supranational, sub-sovereign and
agency bonds sold
to and
purchased
from
investors
in
the
secondary market.
One
action
was
dismissed
against
Credit
Suisse
in
February
- In October
2022, Credit Suisse
entered into
an agreement
to settle all
claims in the
second action,
which was
approved by the court in November 2024.
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Provisions and contingent liabilities
(continued)
Credit default
swap auction
litigation
– In
June 2021,
Credit Suisse,
along with
other banks
and entities,
was named
in a
putative class
action complaint
filed in
the US
District Court
for the
District of
New Mexico
alleging manipulation
of credit default swap (CDS) final auction prices. Defendants filed a motion to enforce a previous CDS class action
settlement in the SDNY. In January 2024,
the SDNY ruled that, to the extent
claims in the New Mexico action arise
from conduct prior to 30 June 2014,
those claims are barred by the
SDNY settlement. The plaintiffs have
appealed
the SDNY decision.
With respect
to additional
matters and
jurisdictions not
encompassed by
the settlements
and orders
referred to
above,
UBS’s
balance
sheet
at
31
December
2024
reflected
a
provision
in
an
amount
that
UBS
believes
to
be
appropriate under
the applicable
accounting standard.
As in
the case
of other
matters for
which we
have established
provisions, the future outflow
of resources in respect
of such matters
cannot be determined with
certainty based
on currently available information and
accordingly may ultimately prove to
be substantially greater (or may be
less)
than the provision that we have recognized.
- Swiss retrocessions
The Federal Supreme Court of Switzerland ruled in 2012, in
a test case against UBS, that distribution fees paid
to
a firm for distributing third-party
and intra-group investment funds
and structured products must be disclosed
and
surrendered
to
clients
who have
entered
into
a
discretionary
mandate agreement
with
the
firm,
absent a
valid
waiver. FINMA issued a
supervisory note
to all Swiss
banks in response
to the Supreme
Court decision.
UBS has
met
the FINMA requirements and has notified all potentially
affected clients.
The Supreme Court
decision has resulted,
and continues to
result, in a
number of client
requests to disclose
and
potentially surrender retrocessions. Client requests are assessed on a case-by-case
basis. Considerations taken into
account when
assessing these
cases include,
among other
things, the
existence of
a discretionary
mandate and
whether or not the client documentation contained
a valid waiver with respect to distribution
fees.
UBS’s balance sheet at 31 December 2024 reflected a provision with respect to matters described in this item 4 in
an amount that UBS
believes to be
appropriate under the applicable accounting standard.
The ultimate exposure
will depend on client requests and the resolution thereof, factors that are difficult to predict and assess. Hence, as
in the case of other
matters for which we have
established provisions, the
future outflow of resources
in respect of
such matters
cannot be
determined with certainty
based on
currently available information
and accordingly may
ultimately prove to be substantially greater (or
may be less) than the provision that we have
recognized.
- Mortgage-related matters
Government and
regulatory
related matters
:
DOJ RMBS
settlement
– In January
2017, Credit Suisse
Securities (USA)
LLC
(CSS
LLC)
and
its
current
and
former
US
subsidiaries
and
US
affiliates
reached
a
settlement
with
the
US
Department of
Justice (DOJ)
related to
its legacy
Residential
Mortgage-Backed
Securities (RMBS)
business, a
business
conducted through
- The
settlement resolved
potential civil
claims by
the DOJ
related to certain
of those
Credit
Suisse entities’
packaging, marketing,
structuring, arrangement,
underwriting, issuance
and sale
of RMBS.
Pursuant
to the terms of the
settlement a civil monetary penalty was paid
to the DOJ in
January 2017. The settlement also
required
the
Credit
Suisse
entities
to
provide
certain
levels
of
consumer
relief
measures,
including
affordable
housing
payments
and
loan
forgiveness,
and
the
DOJ
and
Credit
Suisse
agreed
to
the
appointment
of
an
independent
monitor
to
oversee
the
completion
of
the
consumer
relief
requirements
of
the
settlement.
UBS
continues
to
evaluate
its
approach
toward
satisfying
the
remaining
consumer
relief
obligations.
The
aggregate
amount of the consumer relief obligation increased after 2021 by 5% per annum of the outstanding amount due
until these obligations are settled. The monitor
publishes reports periodically on these consumer relief matters.
Civil litigation:
Repurchase litigations
– Credit
Suisse affiliates
are defendants
in various
civil litigation
matters related
to their roles as issuer, sponsor, depositor, underwriter and/or servicer of RMBS transactions. These cases currently
include
repurchase
actions
by
RMBS
trusts
and/or
trustees,
in
which
plaintiffs
generally
allege
breached
representations and
warranties
in
respect of
mortgage loans
and
failure
to
repurchase such
mortgage loans
as
required
under
the
applicable
agreements. The
amounts disclosed
below
do
not
reflect
actual
realized
plaintiff
losses to
date. Unless
otherwise stated,
these amounts
reflect
the original
unpaid principal
balance amounts
as
alleged in these actions.
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Provisions and contingent liabilities
(continued)
DLJ Mortgage Capital, Inc. (DLJ) is a defendant
in New York State court in five actions:
An action brought by Asset
Backed
Securities
Corporation
Home
Equity
Loan
Trust,
Series
2006-HE7
alleges
damages
of
not
less
than
USD 374m.
In
December 2023,
the
court granted
in
part
DLJ’s
motion
to
dismiss, dismissing
with
prejudice all
notice-based
claims;
the
parties
have
appealed.
An
action
by
Home
Equity
Asset
Trust,
Series
2006-8,
alleges
damages of not
less than
USD 436m. An action
by Home
Equity Asset Trust
2007-1 alleges damages
of not
less
than USD 420m.
Following a
non-jury trial,
the court
issued a
decision in
December 2024
that the
plaintiff had
established breaches
of representations
and warranties
relating to 210
of the 783
loans at issue.
The court
deferred
decision as to
damages, which will
either be agreed
upon by the
parties or briefed
for further decision
by the court.
An action
by Home
Equity Asset Trust
2007-2 alleges damages
of not
less than
USD 495m. An
action by
CSMC
Asset-Backed Trust 2007-NC1 does not allege
a damages amount.
- ATA litigation
Since November 2014, a
series of lawsuits have
been filed against a
number of banks, including
Credit Suisse, in
the US District Court
for the Eastern District of
New York
(EDNY) and the SDNY
alleging claims under the
United
States Anti-Terrorism
Act (ATA)
and the Justice
Against Sponsors of Terrorism
Act. The plaintiffs
in each of
these
lawsuits are, or are relatives of, victims of various terrorist
attacks in Iraq and allege a conspiracy
and/or aiding and
abetting based on allegations that various
international financial institutions, including the defendants, agreed to
alter,
falsify or omit
information from payment
messages that involved
Iranian parties for
the express
purpose of
concealing the
Iranian parties’ financial
activities and transactions
from detection
by US
authorities. The lawsuits
allege that
this conduct
has made
it possible
for Iran
to transfer
funds to
Hezbollah and
other terrorist
organizations
actively engaged
in harming
US military
personnel and
civilians. In
January 2023,
the United
States Court
of Appeals
for the Second Circuit affirmed a September 2019 ruling by the EDNY granting defendants’ motion to dismiss the
first
filed
lawsuit.
In
October
2023,
the
United
States
Supreme
Court
denied
plaintiffs’
petition
for
a
writ
of
certiorari.
In February 2024, plaintiffs filed a
motion to vacate the judgment in the
first filed lawsuit. Of the other
seven cases, four
are stayed, including
one that was
dismissed as to
Credit Suisse and
most of the
bank defendants
prior to entry of the stay, and in three cases plaintiffs have filed amended complaints.
- Customer account matters
Several
clients
have
claimed
that
a
former
relationship
manager
in
Switzerland
had
exceeded
his
investment
authority
in
the
management of
their
portfolios, resulting
in
excessive concentrations
of
certain
exposures
and
investment losses. Credit
Suisse AG has
investigated the claims,
as well as
transactions among the
clients. Credit
Suisse AG filed a criminal complaint against the former relationship manager with the Geneva Prosecutor’s Office
upon which the
prosecutor initiated
a criminal investigation.
Several clients of
the former relationship
manager also
filed criminal complaints with the
Geneva Prosecutor’s Office. In
February 2018, the former relationship manager
was sentenced to five years
in prison by the Geneva criminal
court for fraud, forgery
and criminal mismanagement
and ordered
to pay
damages of
approximately USD 130m. On
appeal, the Criminal
Court of
Appeals of
Geneva
and, subsequently, the Swiss Federal Supreme Court upheld the main findings of the
Geneva criminal court.
Civil lawsuits have
been initiated against Credit
Suisse AG and
/ or certain
affiliates in various jurisdictions,
based
on the findings established in the criminal
proceedings against the former relationship
manager.
In Singapore,
in a
civil lawsuit
against Credit
Suisse Trust
Limited, the
Singapore International Commercial
Court
issued a judgment
finding for
the plaintiffs and,
in September 2023,
the court awarded
damages of USD 742.73m,
excluding post-judgment
interest. This
figure does
not exclude
potential overlap
with the
Bermuda proceedings
against Credit Suisse Life (Bermuda)
Ltd., described below, and the
court ordered the parties to
ensure that there
shall be no double
recovery in relation to
this award and the
Bermuda proceedings.
On appeal from this
judgment,
in
July
2024,
the court
ordered some
changes to
the calculation
of
damages and
directed the
parties to
agree
adjustments to
the award.
The court
ordered a
revised award
of USD 461m,
including interest
and costs,
in October
2024.
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Provisions and contingent liabilities
(continued)
In Bermuda, in the civil
lawsuit brought against Credit Suisse Life
(Bermuda) Ltd., the Supreme Court of Bermuda
issued a
judgment finding for
the plaintiff
and awarded
damages of
USD 607.35m to the
plaintiff. Credit Suisse
Life (Bermuda) Ltd.
appealed the decision
and in June
2023, the Bermuda
Court of Appeal
confirmed the award
issued by the
Supreme Court of Bermuda
and the finding that
Credit Suisse Life (Bermuda)
Ltd. had breached
its
contractual
and
fiduciary
duties,
but
overturning
the
finding
that
Credit
Suisse
Life
(Bermuda)
Ltd.
had
made
fraudulent misrepresentations. In
March 2024,
the Bermuda
Court of
Appeal granted
a motion
by Credit
Suisse
Life (Bermuda) Ltd. for leave to appeal the judgment
to the Judicial Committee of the Privy
Council and the notice
of such appeal was filed.
The Court of Appeal also ordered
that the current stay continue pending determination
of the
appeal on
the condition
that the
damages awarded
remain within
the escrow
account plus
interest calculated
at the Bermuda statutory rate of
3.5%. In December 2023, USD 75m
was released from the escrow account and
paid to plaintiffs.
In
Switzerland,
civil
lawsuits
have
been
commenced
against
Credit
Suisse AG
in
the
Court
of
First
Instance
of
Geneva, with statements of claim served in March
2023 and March 2024.
- Mozambique matter
Credit
Suisse
was
subject to
investigations by
regulatory
and
enforcement
authorities, as
well as
civil
litigation,
regarding certain Credit
Suisse entities’
arrangement of
loan financing
to Mozambique
state enterprises,
Proindicus
S.A. and Empresa Moçambicana de Atum
S.A. (EMATUM), a
distribution to private investors of loan
participation
notes (LPN) related
to the EMATUM
financing in September
2013, and certain
Credit Suisse
entities’ subsequent
role in arranging the exchange
of those LPNs for
Eurobonds issued by the Republic
of Mozambique. In 2019,
three
former Credit Suisse employees pleaded guilty in the EDNY to accepting improper personal benefits in connection
with financing transactions carried out with
two Mozambique state enterprises.
In
October 2021,
Credit
Suisse reached
settlements with
the DOJ,
the US
Securities and
Exchange Commission
(SEC), the
UK Financial
Conduct Authority
(FCA) and
FINMA to
resolve inquiries
by these
agencies, including
findings
that Credit
Suisse failed
to appropriately
organize and
conduct its
business with
due skill
and care,
and manage
risks. Credit
Suisse Group
AG entered
into a
three-year Deferred
Prosecution Agreement
(DPA) with
the DOJ
in
connection with the criminal information
charging Credit Suisse Group AG
with conspiracy to commit wire
fraud
and Credit
Suisse Securities
(Europe) Limited
(CSSEL) entered
into a
Plea Agreement
and pleaded
guilty to
one count
of conspiracy to
violate the US
federal wire fraud
statute. Under the
terms of the
DPA, UBS Group
AG (as successor
to Credit Suisse Group
AG) continued compliance enhancement and remediation efforts agreed
by Credit Suisse,
and undertake additional measures as
outlined in the DPA.
In January 2025, as
permitted under the terms of
the
DPA, the DOJ elected to extend the term of
the DPA by one year.
- ETN-related litigation
XIV litigation:
Since March 2018, three class action complaints
were filed in the SDNY on behalf
of a putative class
of purchasers
of VelocityShares
Daily Inverse
VIX Short-Term
Exchange Traded
Notes linked
to the
S&P 500
VIX
Short-Term
Futures
Index
(XIV
ETNs).
The
complaints have
been
consolidated and
asserts
claims
against
Credit
Suisse
for
violations
of
various
anti-fraud
and
anti-manipulation provisions
of
US
securities
laws
arising
from
a
decline in the value of XIV ETNs in February 2018. On appeal from an order of the SDNY dismissing all claims, the
Second Circuit issued an
order that reinstated a
portion of the
claims. In decisions
in March 2023 and
March 2024,
the court
denied class
certification for
two of
the three
classes proposed
by plaintiffs
and certified
the third
proposed
class.
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Provisions and contingent liabilities
(continued)
- Bulgarian former clients matter
In December 2020, the Swiss Office
of the Attorney General brought charges against Credit
Suisse AG and other
parties concerning the diligence and controls applied to a historical relationship with Bulgarian former clients
who
are
alleged to
have laundered
funds through
Credit
Suisse AG
accounts. In
June 2022,
following a
trial, Credit
Suisse AG was convicted in the Swiss Federal Criminal Court of certain historical organizational
inadequacies in its
anti-money-laundering framework
and ordered to pay a
fine of CHF 2m. In
addition, the court seized
certain client
assets in the amount of approximately
CHF 12m and ordered Credit Suisse AG to pay
a compensatory claim in the
amount of approximately CHF 19m.
Credit Suisse AG appealed
the decision to the
Swiss Federal Court of
Appeals.
Following the
merger of
UBS AG
and Credit
Suisse AG,
UBS AG
confirmed the
appeal. In
November 2024,
the
court issued a judgment that
acquitted UBS AG and annulled
the fine and compensatory
claim ordered by the first
instance court. The court of appeal’s judgment
may be appealed to the Swiss Federal Supreme
Court.
- Supply chain finance funds
Credit
Suisse
has
received
requests
for
documents and
information in
connection with
inquiries, investigations,
enforcement and other
actions relating to
the supply chain finance
funds (SCFFs) matter by
FINMA, the FCA and
other regulatory and governmental agencies.
In
February
2023,
FINMA
announced
the
conclusion
of
its
enforcement
proceedings
against
Credit
Suisse
in
connection with the
SCFFs matter. In
its order, FINMA reported
that Credit Suisse
had seriously breached
applicable
Swiss supervisory
laws in
this context
with regard
to risk
management and
appropriate operational
structures. While
FINMA
recognized
that
Credit
Suisse
had
already
taken
extensive
organizational
measures
to
strengthen
its
governance
and
control
processes,
FINMA
ordered
certain
additional
remedial
measures.
These
include
a
requirement that
Credit Suisse
documents the
responsibilities
of approximately
600 of
its highest-ranking
managers.
This
measure
has
been
made
applicable
to
UBS
Group.
FINMA
has
also
separately
opened
four
enforcement
proceedings against former managers of Credit
Suisse.
In May 2023,
FINMA opened
an enforcement
proceeding against
Credit Suisse in
order to confirm
compliance with
supervisory requirements in response
to inquiries from FINMA’s
enforcement division in
the SCFFs matter.
FINMA
has closed
the enforcement
proceeding, finding
that Credit
Suisse breached
its cooperation
obligations with
FINMA
Enforcement. FINMA refrained from ordering
any remedial measures as it did not
find similar issues with UBS.
In
December
2024,
the
Luxembourg
Commission
de
Surveillance
du
Secteur
Financier
(CSSF)
concluded
its
investigation.
The CSSF identified non-compliance with several obligations under Luxembourg law and imposed a
sanction of EUR 250,000.
The Attorney
General of
the Canton
of Zurich
has initiated
a criminal
procedure in
connection with
the SCFFs
matter
and several fund investors have joined the procedure as interested parties. Certain former and active Credit Suisse
employees, among others, have been named as accused persons, but Credit Suisse itself was not made a party to
the proceeding.
Certain civil actions have
been filed by fund investors
and other parties against
Credit Suisse and/or certain
officers
and directors in various
jurisdictions, which make allegations including mis-selling
and breaches of duties
of care,
diligence and
other fiduciary
duties. In June
2024, the
Credit Suisse
SCFFs made
a
voluntary offer
to the
SCFFs
investors to
redeem all
outstanding fund
units. The
offer expired
on
31 July 2024,
and
fund
units representing
around 92%
of the
SCFFs’ net
asset value
were tendered
in the
offer and
accepted. Fund
units accepted
in the
offer were redeemed at 90% of the net asset
value determined on 25 February 2021, net of any payments made
by the relevant
fund to the
fund investors
since that
time. Investors
whose units
were redeemed
released any
claims
they may have had against the SCFFs, Credit Suisse
or UBS. The offer was funded by UBS through the purchase
of
units of feeder sub-funds.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
63
Provisions and contingent liabilities
(continued)
- Archegos
Credit
Suisse
and
UBS
have
received
requests
for
documents
and
information
in
connection
with
inquiries,
investigations
and/or
actions
relating
to
their
relationships
with
Archegos
Capital
Management
(Archegos),
including from FINMA
(assisted by a
third party
appointed by FINMA),
the DOJ, the
SEC, the US
Federal Reserve,
the
US
Commodity
Futures
Trading
Commission
(CFTC),
the
US
Senate
Banking
Committee,
the
Prudential
Regulation Authority (PRA),
the FCA,
the WEKO,
the Hong
Kong Competition Commission
and other
regulatory
and governmental agencies. UBS is cooperating with the authorities in these matters. In July 2023, CSI and CSSEL
entered into a settlement agreement
with the PRA providing for
the resolution of the PRA’s
investigation. Also in
July 2023, FINMA
issued a decree
ordering remedial measures
and the Federal
Reserve Board issued
an Order
to
Cease and Desist. Under the terms of the order,
Credit Suisse paid a civil money penalty and agreed to undertake
certain remedial
measures relating
to counterparty
credit risk
management, liquidity
risk management
and non-
financial risk management, as well as enhancements to board oversight and governance. UBS Group, as
the legal
successor to Credit Suisse Group AG,
is a party to the FINMA
decree and Federal Reserve Board
Cease and Desist
Order.
Civil
actions
relating
to
Credit
Suisse’s
relationship with
Archegos
have
been
filed
against
Credit
Suisse
and/or
certain officers and directors, including claims
for breaches of fiduciary duties.
- Credit Suisse financial disclosures
Credit Suisse
Group AG
and certain
directors, officers
and executives
have been
named in
securities class action
complaints pending
in the SDNY. These complaints,
filed on behalf
of purchasers of
Credit Suisse shares, additional
tier 1 capital
notes, and
other securities
in 2023,
allege that
defendants made
misleading statements
regarding:
(i) customer
outflows
in
late
2022;
(ii) the
adequacy
of
Credit
Suisse’s
financial
reporting
controls;
and
(iii) the
adequacy
of
Credit
Suisse’s
risk
management
processes,
and
include
allegations
relating
to
Credit
Suisse
Group AG’s merger with
UBS Group AG. Many
of the actions
have been consolidated,
and a motion
to dismiss has
been
filed
and
remains
pending.
One
additional
action,
filed
in
October
2023,
has
been
stayed
pending
a
determination on whether it should be consolidated
with the earlier actions.
Credit Suisse has received requests for documents and information from regulatory and governmental agencies in
connection with inquiries,
investigations and/or actions
relating to
these matters, as
well as
for other statements
regarding Credit Suisse’s financial condition,
including from the SEC, the DOJ
and FINMA. UBS is cooperating with
the authorities in these matters.
- Merger-related litigation
Certain Credit
Suisse Group AG
affiliates and certain
directors, officers
and executives have
been named in
class
action complaints pending in
the SDNY.
One complaint, brought
on behalf of
Credit Suisse shareholders,
alleges
breaches of fiduciary duty under Swiss law and
civil RICO claims under US federal law. In February 2024, the
court
granted
defendants’
motions
to
dismiss
the
civil
RICO
claims
and
conditionally
dismissed
the
Swiss
law
claims
pending defendants’ acceptance of
jurisdiction in Switzerland. In
March 2024, having
received consents to
Swiss
jurisdiction from all defendants served with the complaint, the
court dismissed the Swiss law claims against those
defendants. Additional
complaints, brought
on behalf
of holders
of Credit
Suisse additional
tier 1 capital
notes (AT1
noteholders) allege breaches of
fiduciary duty under Swiss
law, arising
from a series
of scandals and
misconduct,
which
led
to
Credit
Suisse
Group
AG’s
merger
with
UBS
Group
AG,
causing
losses
to
shareholders
and
AT1
noteholders. Motions to dismiss these complaints were granted in March 2024 and
September 2024 on the basis
that
Switzerland
is
the
most
appropriate
forum
for
litigation.
Plaintiff
in
one
of
these
cases
has
appealed
the
dismissal.
UBS Group fourth quarter 2024 report |
Consolidated financial information | UBS Group
AG interim consolidated financial information
(unaudited)
64
Currency translation rates
The
following table
shows the
rates of
the main
currencies used
to translate
the financial
information of
UBS’s
operations with a functional currency other
than the US dollar into US dollars.
Closing exchange rate
Average rate
1
As of
For the quarter ended
Year-to-date
31.12.24
30.9.24
31.12.23
31.12.24
30.9.24
31.12.23
31.12.24
31.12.23
1 CHF
1.10
1.18
1.19
1.13
1.17
1.13
1.13
1.12
1 EUR
1.04
1.11
1.10
1.06
1.10
1.08
1.08
1.08
1 GBP
1.25
1.34
1.28
1.27
1.31
1.25
1.28
1.25
100 JPY
0.63
0.69
0.71
0.65
0.68
0.68
0.66
0.70
1 Monthly income statement items of operations
with a functional currency other than
the US dollar are translated into
US dollars using month-end rates.
Disclosed average rates for a
quarter or a year represent an
average of three month-end rates
or an average of twelve month-end
rates, respectively,
weighted according to the income and
expense volumes of all operations
of the Group with the same functional
currency for
each month. Weighted average rates for individual business divisions may deviate from the weighted averag
e
rates for the Group.
UBS Group fourth quarter 2024 report |
Appendix
65
Appendix
Alternative performance measures
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or
future financial performance,
financial position
or cash
flows other
than a
financial measure
defined or
specified in
the applicable
recognized
accounting standards or in
other applicable regulations. A
number of APMs
are reported in
the discussion of
the
financial and operating performance of
the external reports (annual, quarterly
and other reports). APMs
are used
to provide
a more
complete
picture of
operating
performance and
to reflect
management’s
view of
the fundamental
drivers
of
the
business
results. A
definition
of
each
APM,
the
method
used
to
calculate
it
and
the
information
content are presented in alphabetical order
in the table below. These APMs may
qualify as non-GAAP measures as
defined by US Securities and Exchange Commission
(SEC) regulations.
APM label
Calculation
Information content
Cost / income ratio (%)
Calculated as operating expenses divided by
total
revenues.
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues.
Cost of credit risk (bps)
Calculated as total credit loss expense / (release)
(annualized as applicable) divided by the average
balance of lending assets for the reporting period,
expressed in basis points. Lending assets include
the
gross amounts of Amounts due from banks and
Loans and advances to customers.
This measure provides information about the total
credit loss expense / (release) incurred in relation to
the average balance of gross lending assets for the
period.
Credit-impaired lending assets as a
percentage of total lending assets,
gross (%)
Calculated as credit-impaired lending assets divided
by total lending assets. Lending assets includes
the
gross amounts of Amounts due from banks and
Loans and advances to customers. Credit-impaired
lending assets refers to the sum of stage 3 and
purchased credit-impaired positions.
This measure provides information about the
proportion of credit-impaired lending assets in the
overall portfolio of gross lending assets.
Fee-generating assets (USD)
– Global Wealth Management
Calculated as the sum of discretionary and
nondiscretionary wealth management portfolios
(mandate volume) and assets where generated
revenues are predominantly of a recurring nature, i.e.
mainly investment, mutual, hedge and private-market
funds where we have a distribution agreement,
including client commitments into closed-ended
private-market funds from the date that recurring
fees are charged. Assets related to our Global
Financial Intermediaries business are excluded, as
are
assets of sanctioned clients.
This measure provides information about the volume
of invested assets that create a revenue stream,
whether as a result of the nature of the contractual
relationship with clients or through the fee structure
of the asset. An increase in the level of fee-generating
assets results in an increase in the associated revenue
stream. Assets of sanctioned clients are excluded from
fee-generating assets.
Gross margin on invested assets (bps)
– Asset Management
Calculated as total revenues (annualized as applicable)
divided by average invested assets.
This measure provides information about the total
revenues of the business in relation to invested assets.
Impaired loan portfolio as a percentage
of total loan portfolio, gross (%)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as impaired loan portfolio divided by
total
gross loan portfolio.
This measure provides information about the
proportion of impaired loan portfolio in the total gross
loan portfolio.
Integration-related expenses (USD)
Generally include costs of internal staff
and
contractors substantially dedicated to integration
activities, retention awards, redundancy costs,
incremental expenses from the shortening of useful
lives of property, equipment and software, and
impairment charges relating to these assets.
Classification as integration-related expenses does
not
affect the timing of recognition and measurement of
those expenses or the presentation thereof in the
income statement. Integration-related expenses
incurred by Credit Suisse also included expenses
associated with restructuring programs that existed
prior to the acquisition.
This measure provides information about expenses
that are temporary, incremental and directly related to
the integration of Credit Suisse into UBS.
UBS Group fourth quarter 2024 report |
Appendix
66
APM label
Calculation
Information content
Invested assets (USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management
Calculated as the sum of managed fund
assets,
managed institutional assets, discretionary and
advisory wealth management portfolios, fiduciary
deposits, time deposits, savings accounts,
and wealth
management securities or brokerage accounts.
This measure provides information about the volume
of client assets managed by or deposited with
UBS for
investment purposes.
Net interest margin (bps)
– Personal & Corporate Banking
Calculated as net interest income (annualized
as
applicable) divided by average loans.
This measure provides information about the
profitability of the business by calculating the
difference between the price charged for lending and
the cost of funding, relative to loan value.
Net new assets (USD)
– Global Wealth Management
Calculated as the net amount of inflows and
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period, plus interest and dividends.
Excluded from the calculation are movements due to
market performance, foreign exchange translation,
fees, and the effects on invested assets of strategic
decisions by UBS to exit markets or services.
This measure provides information about the
development of invested assets during a
specific
period as a result of net new asset flows, plus the
effect of interest and dividends.
Net new assets growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable),
plus interest and dividends, divided by total invested
assets at the beginning of the period.
This measure provides information about the growth
of invested assets during a specific period
as a result
of net new asset flows.
Net new fee-generating assets (USD)
– Global Wealth Management
Calculated as the net amount of fee-generating
asset
inflows and outflows, including dividend
and interest
inflows into mandates and outflows from mandate
fees paid by clients during a specific period.
Excluded
from the calculation are the effects on fee-generating
assets of strategic decisions by UBS to exit
markets or
services.
This measure provides information about the
development of fee-generating assets during
a
specific period as a result of net flows, excluding
movements due to market performance and
foreign
exchange translation, as well as the effects on fee-
generating assets of strategic decisions by UBS
to exit
markets or services.
Net new money (USD)
– Global Wealth Management,
Asset Management
Calculated as the net amount of inflows and
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period. Excluded from the calculation
are movements due to market performance, foreign
exchange translation, dividends, interest and fees,
as
well as the effects on invested assets of strategic
decisions by UBS to exit markets
or services. Net new
money is not measured for Personal & Corporate
Banking.
This measure provides information about the
development of invested assets during a specific
period as a result of net new money flows.
Net profit growth (%)
Calculated as the change in net profit attributable
to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
This measure provides information about profit
growth since the comparison period.
Operating expenses (underlying)
(USD)
Calculated by adjusting operating expenses
as
reported in accordance with IFRS Accounting
Standards for items that management believes
are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating expenses, while excluding items
that
management believes are not representative of the
underlying performance of the businesses.
Operating profit / (loss) before tax
(underlying) (USD)
Calculated by adjusting operating profit / (loss) before
tax as reported in accordance with IFRS Accounting
Standards for items that management believes
are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating profit / (loss) before tax, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
Pre-tax profit growth (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period.
This measure provides information about pre-tax
profit growth since the comparison period.
UBS Group fourth quarter 2024 report |
Appendix
67
APM label
Calculation
Information content
Pre-tax profit growth (underlying) (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period. Net profit before tax attributable
to shareholders from continuing operations excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about pre-tax
profit growth since the comparison period, while
excluding items that management believes
are not
representative of the underlying performance of the
businesses.
Recurring net fee income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of fees for services provided
on
an ongoing basis, such as portfolio management
fees,
asset-based investment fund fees and custody
fees,
which are generated on client assets, and
administrative fees for accounts.
This measure provides information about the amount
of recurring net fee income.
Return on attributed equity
1
(%)
Calculated as annualized business division
operating
profit before tax divided by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity.
Return on common equity tier 1
capital
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity
tier 1
capital.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital.
Return on equity
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
to
shareholders.
This measure provides information about the
profitability of the business in relation to equity.
Return on leverage ratio denominator,
gross
1
(%)
Calculated as annualized total revenues divided by
average leverage ratio denominator.
This measure provides information about the revenues
of the business in relation to the leverage ratio
denominator.
Return on tangible equity
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
to
shareholders less average goodwill and intangible
assets.
This measure provides information about the
profitability of the business in relation to tangible
equity.
Tangible book value per share
(USD)
Calculated as equity attributable to shareholders less
goodwill and intangible assets divided by the
number
of shares outstanding.
This measure provides information about tangible net
assets on a per-share basis.
Total book value per share
(USD)
Calculated as equity attributable to shareholders
divided by the number of shares outstanding.
This measure provides information about net assets
on a per-share basis.
Total revenues (underlying)
(USD)
Calculated by adjusting total revenues as reported in
accordance with IFRS Accounting Standards for items
that management believes are not representative of
the underlying performance of the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of total revenues, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Transaction-based income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of the non-recurring portion
of
net fee and commission income, mainly composed
of
brokerage and transaction-based investment fund
fees, and credit card fees, as well as fees for payment
and foreign-exchange transactions, together with
other net income from financial instruments
measured at fair value through profit or loss.
This measure provides information about the amount
of the non-recurring portion of net fee and
commission income, together with other net
income
from financial instruments measured at fair value
through profit or loss.
Underlying cost / income ratio (%)
Calculated as underlying operating expenses
(as
defined above) divided by underlying total
revenues
(as defined above).
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues, while excluding items
that management believes are not representative of
the underlying performance of the businesses.
Underlying net profit growth (%)
Calculated as the change in net profit attributable
to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
Net profit
attributable to shareholders from continuing
operations excludes items that management
believes
are not representative of the underlying performance
of the businesses and also excludes related tax
impact.
This measure provides information about profit
growth since the comparison period, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
UBS Group fourth quarter 2024 report |
Appendix
68
APM label
Calculation
Information content
Underlying return on attributed equity
1
(%)
Calculated as annualized underlying business
division
operating profit before tax (as defined above) divided
by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on common equity
tier 1 capital
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity
tier 1
capital. Net profit attributable to shareholders
excludes items that management believes
are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on tangible equity
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
to
shareholders less average goodwill and intangible
assets. Net profit attributable to shareholders excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to tangible
equity, while excluding items that management
believes are not representative of the underlying
performance of the businesses.
1
Profit or loss information for each
of the fourth quarter of 2024,
the third quarter of 2024
and the fourth quarter of 2023
is based entirely on consolidated
data following the acquisition of
the Credit Suisse Group
and for the purpose of the calculation of return
measures has been annualized by multiplying such by four. Profit or loss information for 2024 is based
entirely on consolidated data following the acquisition of the Credit
Suisse Group. Profit or loss information for 2023 includes seven months (June to December 2023) of post
-acquisition consolidated data and five months of UBS Group data only (January to May 2023).
This is
a general list
of the APMs
used in our
financial reporting. Not
all of
the APMs listed
above may appear
in
this particular report.
Information related to underlying return on common equity tier 1 (CET1) capital and underlying return on tangible
equity (%)
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.24
30.9.24
31.12.23
1
31.12.24
31.12.23
1
Underlying operating profit / (loss) before tax
1,768
2,386
592
8,831
3,963
Underlying tax expense / (benefit)
456
619
(329)
2,162
1,194
Net profit / (loss) attributable to non-controlling interests
9
3
1
60
16
Underlying net profit / (loss) attributable to shareholders
1,303
1,763
920
6,609
2,753
Underlying net profit / (loss) attributable to shareholders, annualized
5,211
7,054
3,681
6,609
2,753
Tangible equity
78,192
79,976
78,109
78,192
78,109
Average tangible equity
79,084
78,173
76,956
77,973
67,133
CET1 capital
71,367
74,213
78,002
71,367
78,002
Average CET1 capital
72,790
75,158
77,464
75,666
65,461
Underlying return on tangible equity (%)
6.6
9.0
4.8
8.5
4.1
Underlying return on common equity tier 1 capital (%)
7.2
9.4
4.8
8.7
4.2
1 Comparative-period information
has been revised.
Refer to “Note 2
Accounting for the acquisition
of the Credit Suisse
Group” in the
“Consolidated financial statements”
section of the UBS
Group third quarter
2024 report, available under “Quarterly reporting” at ubs.com/investors, for
more information.
UBS Group fourth quarter 2024 report |
Appendix
69
Abbreviations frequently used in our financial reports
A
ABS
asset-backed securities
AG
Aktiengesellschaft
AGM
Annual General Meeting of
shareholders
AI
artificial intelligence
A-IRB
advanced internal ratings-
based
AIV
alternative investment
vehicle
ALCO
Asset and Liability
Committee
AMA
advanced measurement
approach
AML
anti-money laundering
AoA
Articles of Association
APM
alternative performance
measure
ARR
alternative reference rate
ARS
auction rate securities
ASF
available stable funding
AT1
additional tier 1
AuM
assets under management
B
BCBS
Basel Committee on
Banking Supervision
BIS
Bank for International
Settlements
BoD
Board of Directors
C
CAO
Capital Adequacy
Ordinance
CCAR
Comprehensive Capital
Analysis and Review
CCF
credit conversion factor
CCP
central counterparty
CCR
counterparty credit risk
CCRC
Corporate Culture and
Responsibility Committee
CDS
credit default swap
CEA
Commodity Exchange Act
CEO
Chief Executive Officer
CET1
common equity tier 1
CFO
Chief Financial Officer
CGU
cash-generating unit
CHF
Swiss franc
CIO
Chief Investment Office
C&ORC
Compliance & Operational
Risk Control
CRM
credit risk mitigation (credit
risk) or comprehensive risk
measure (market risk)
CST
combined stress test
CUSIP
Committee on Uniform
Security Identification
Procedures
CVA
credit valuation adjustment
D
DBO
defined benefit obligation
DCCP
Deferred Contingent
Capital Plan
DE&I
diversity, equity and
inclusion
DFAST
Dodd–Frank Act Stress Test
DM
discount margin
DOJ
US Department of Justice
DTA
deferred tax asset
DVA
debit valuation adjustment
E
EAD
exposure at default
EB
Executive Board
EC
European Commission
ECB
European Central Bank
ECL
expected credit loss
EGM
Extraordinary General
Meeting of shareholders
EIR
effective interest rate
EL
expected loss
EMEA
Europe, Middle East and
Africa
EOP
Equity Ownership Plan
EPS
earnings per share
ESG
environmental, social and
governance
ESR
environmental and social
risk
ETD
exchange-traded derivatives
ETF
exchange-traded fund
EU
European Union
EUR
euro
EURIBOR
Euro Interbank Offered Rate
EVE
economic value of equity
EY
Ernst & Young Ltd
F
FA
financial advisor
FCA
UK Financial Conduct
Authority
FDIC
Federal Deposit Insurance
Corporation
FINMA
Swiss Financial Market
Supervisory Authority
FMIA
Swiss Financial Market
Infrastructure Act
FSB
Financial Stability Board
FTA
Swiss Federal Tax
Administration
FVA
funding valuation
adjustment
FVOCI
fair value through other
comprehensive income
FVTPL
fair value through profit or
loss
FX
foreign exchange
G
GAAP
generally accepted
accounting principles
GBP
pound sterling
GCRG
Group Compliance,
Regulatory & Governance
GDP
gross domestic product
GEB
Group Executive Board
GHG
greenhouse gas
GIA
Group Internal Audit
GRI
Global Reporting Initiative
G-SIB
global systemically
important bank
H
HQLA
high-quality liquid assets
I
IAS
International Accounting
Standards
IASB
International Accounting
Standards Board
IBOR
interbank offered rate
IFRIC
International Financial
Reporting Interpretations
Committee
IFRS
accounting standards
Accounting
issued by the IASB
Standards
IRB
internal ratings-based
IRRBB
interest rate risk in the
banking book
ISDA
International Swaps and
Derivatives Association
ISIN
International Securities
Identification Number
UBS Group fourth quarter 2024 report |
Appendix
70
Abbreviations frequently used in our financial reports (continued)
K
KRT
Key Risk Taker
L
LAS
liquidity-adjusted stress
LCR
liquidity coverage ratio
LGD
loss given default
LIBOR
London Interbank Offered
Rate
LLC
limited liability company
LoD
lines of defense
LRD
leverage ratio denominator
LTIP
Long-Term
Incentive Plan
LTV
loan-to-value
M
M&A
mergers and acquisitions
MRT
Material Risk Taker
N
NII
net interest income
NSFR
net stable funding ratio
NYSE
New York Stock Exchange
O
OCA
own credit adjustment
OCI
other comprehensive
income
OECD
Organisation for Economic
Co-operation and
Development
OTC
over-the-counter
P
PCI
purchased credit impaired
PD
probability of default
PIT
point in time
P&L
profit or loss
PPA
purchase price allocation
Q
QCCP
qualifying central
counterparty
R
RBC
risk-based capital
RbM
risk-based monitoring
REIT
real estate investment trust
RMBS
residential mortgage-
backed securities
RniV
risks not in VaR
RoCET1
return on CET1 capital
RoU
right-of-use
rTSR
relative total shareholder
return
RWA
risk-weighted assets
S
SA
standardized approach or
société anonyme
SA-CCR
standardized approach for
counterparty credit risk
SAR
Special Administrative
Region of the People’s
Republic of China
SDG
Sustainable Development
Goal
SEC
US Securities and Exchange
Commission
SFT
securities financing
transaction
SI
sustainable investing or
sustainable investment
SIBOR
Singapore Interbank
Offered Rate
SICR
significant increase in credit
risk
SIX
SIX Swiss Exchange
SME
small and medium-sized
entities
SMF
Senior Management
Function
SNB
Swiss National Bank
SOR
Singapore Swap Offer Rate
SPPI
solely payments of principal
and interest
SRB
systemically relevant bank
SRM
specific risk measure
SVaR
stressed value-at-risk
T
TBTF
too big to fail
TCFD
Task
Force on Climate-
related Financial Disclosures
TIBOR
Tokyo
Interbank Offered
Rate
TLAC
total loss-absorbing capacity
TTC
through the cycle
U
USD
US dollar
V
VaR
value-at-risk
VAT
value added tax
This is a
general list
of the
abbreviations frequently
used in
our financial
reporting. Not
all of the
listed abbreviations
may appear in this particular report.
UBS Group fourth quarter 2024 report |
Appendix
71
Information sources
Reporting publications
Annual publications
UBS
Group
Annual
Report
:
Published
in
English,
this
report
provides
descriptions
of:
the
Group
strategy
and
performance; the
strategy and
performance of
the business
divisions and
Group Items;
risk, treasury
and capital
management; corporate
governance;
the compensation
framework, including
information about
compensation for
the Board of Directors and the Group Executive Board members; and financial information, including the financial
statements.
“Auszug aus
dem Geschäftsbericht
”: This publication
provides a German
translation of
selected sections
of the UBS
Group Annual Report.
Compensation
Report
:
This
report
discusses
the
compensation
framework
and
provides
information
about
compensation for
the Board
of Directors
and the
Group Executive
Board members.
It is
available in
English and
German (
“Vergütungsbericht
”) and represents a component of the UBS
Group Annual Report.
Sustainability Report
: Published
in English,
the Sustainability Report
provides disclosures on
environmental, social
and governance topics related to the UBS Group.
It also provides certain disclosures related to diversity,
equity and
inclusion.
Quarterly publications
Quarterly financial report
: This report provides an
update on performance and strategy (where
applicable) for the
respective quarter. It is available in English.
The annual
and quarterly
publications
are available
in .pdf
and online
formats
at
ubs.com/investors
, under
“Financial
information”.
Printed copies, in any language, of the aforementioned
annual publications are no longer provided.
Other information
Website
The “Investor
Relations” website
at
ubs.com/investors
provides the
following information
about UBS:
results-related
news
releases;
financial
information,
including
results-related
filings
with
the
US
Securities
and
Exchange
Commission
(the
SEC);
information
for
shareholders,
including
UBS
dividend
and
share
repurchase
program
information, and for bondholders, including rating agencies reports; the corporate calendar; and presentations by
management for investors and financial analysts. Information is available online in English, with some information
also available in German.
Results presentations
Quarterly
results
presentations
are
webcast
live.
Recordings
of
most
presentations
can
be
downloaded
from
ubs.com/presentations
.
Messaging service
alerts
to
news
about
UBS
can
be
subscribed
for
under
“UBS
News
Alert”
at
ubs.com/global/en/investor-
relations/contact/investor-services.html
. Messages are sent in English, German, French or Italian, with an option to
select theme preferences for such alerts.
Form 20-F and other submissions to the US
Securities and Exchange Commission
UBS files periodic
reports with
and submits
other information
to the
SEC. Principal
among these
filings is the
annual
report on Form 20-F,
filed pursuant to
the US Securities
Exchange Act of 1934.
The filing of
Form 20-F is structured
as a wraparound document. Most sections of the filing can be
satisfied by referring to the UBS Group AG Annual
Report. However, there is
a small amount
of additional information in
Form 20-F that is
not presented elsewhere
and is particularly targeted at readers in the US. Readers are encouraged to refer to this additional disclosure. Any
document that filed
with the SEC
is available on
the SEC’s website:
sec.gov
. Refer to
ubs.com/investors
for more
information.
UBS Group fourth quarter 2024 report |
Appendix
72
Cautionary statement
regarding forward-looking statements
|
This report 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 be negatively affected
by
shifting political circumstances, including
increased tension between world powers,
conflicts in the Middle East,
as well as the continuing Russia–Ukraine
war. In
addition, the
ongoing conflicts
may continue
to cause
significant population
displacement, and
lead to shortages
of vital commodities,
including energy
shortages
and food
insecurity outside
the areas
immediately involved
in armed
conflict. Governmental
responses to
the armed
conflicts, including
successive sets
of sanctions
on Russia and
Belarus, and Russian
and Belarusian entities
and nationals, and
the uncertainty
as to whether
the ongoing conflicts
will further widen
and intensify,
may have significant adverse effects on
the market and macroeconomic conditions,
including in ways that cannot
be anticipated. UBS’s acquisition of the
Credit
Suisse Group has materially changed 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;
(xi) 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
- UBS is not
under any obligation to
(and expressly disclaims
any obligation to) update or alter its forward-looking
statements, whether as a result of new information,
future events, or otherwise.
Rounding |
Numbers presented throughout this report may not add up
precisely to the totals provided in the tables and text.
Percentages and percent changes
disclosed in text and tables are
calculated on the basis of unrounded
figures. Absolute changes between reporting periods disclosed in
the text, which can be
derived from numbers presented in related tables, are calculated on
a rounded basis.
Tables |
Within tables, blank fields generally indicate non-applicability or that presentation of any content would not be meaningful, or that information is not
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis.
Values
that are zero on a rounded basis can be either negative
or positive on an actual basis.
Websites |
In this report, any
website addresses are provided
solely for information
and are not intended
to be active links.
UBS is not incorporating
the contents
of any such websites into this report.
UBS Group AG
PO Box
CH-8098 Zurich
ubs.com
This
Form
6-K
is
hereby
incorporated
by
reference
into
(1)
each
of
the
registration
statements
on
Form
F-3
(Registration Numbers
333-263376 and
333-278934), and
on Form
S-8 (Registration
Numbers 333-200634;
333-
200635;
333-200641;
333-200665;
333-215254;
333-215255;
333-228653;
333-230312;
333-249143
and
333-
272975), and
into each
prospectus outstanding
under any
of the
foregoing registration
statements, (2)
any outstanding
offering circular or similar document issued
or authorized by UBS AG that incorporates by
reference any Forms 6-
K of UBS AG that are
incorporated into its registration
statements filed with the SEC,
and (3) the base prospectus
of
Corporate Asset Backed
Corporation (“CABCO”)
dated June 23,
2004 (Registration
Number 333-111572), the Form
8-K
of
CABCO
filed
and
dated
June
23,
2004
(SEC
File
Number
001-13444),
and
the
Prospectus
Supplements
relating to
the CABCO
Series 2004-101
Trust
dated May
10, 2004
and May
17, 2004
(Registration Number
033-
91744 and 033-91744-05).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this
report to be signed on their behalf by the undersigned, thereunto duly
authorized.
UBS Group AG
By:
/s/
Sergio Ermotti
___
Name:
Sergio Ermotti
Title:
Group Chief Executive Officer
By:
/s/ Todd Tuckner
_
Name:
Todd Tuckner
Title:
Group Chief Financial Officer
By:
/s/ Steffen Henrich
____________
Name:
Steffen Henrich
Title:
Group Controller
UBS AG
By:
/s/
Sergio Ermotti
_
Name:
Sergio Ermotti
Title:
President of the Executive Board
By:
/s/ Todd Tuckner
_
Name:
Todd Tuckner
Title:
Chief Financial Officer
By:
/s/ Steffen Henrich
_____________
Name:
Steffen Henrich
Title:
Controller
Date:
February 4, 2025