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: July 31,
2025
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrants file or will file annual
reports under cover of Form
20-F or Form 40-
F.
Form 20-F
☒
Form 40-F
☐
This Form 6-K consists of the transcripts of the 2Q25 Earnings call remarks
and Analyst Q&A, which
appear immediately following this page.
1
Second quarter 2025 results
30 July 2025
Speeches by
Sergio P.
Ermotti
, Group Chief Executive Officer,
and
Todd
Tuckner
,
Group Chief Financial
Officer
Including analyst
Q&A session
Transcript.
Numbers
for slides
refer to
the second
quarter
2025 results
presentation.
Materials
and a
webcast
replay are available at
www.ubs.com/investors
Sergio P.
Ermotti
Slide 3: Key messages
Thank you, Sarah and good morning,
everyone.
We sustained robust momentum
during a quarter
that started with extreme
volatility by staying close
to our clients
and successfully executing the first wave
of our Swiss client account migrations,
a critical phase of our integration.
This drove strong quarterly results which contributed to a first half
underlying return on CET1 capital of 13.3%.
These results highlight the power
of our differentiated business model and
our diversified global footprint.
Both of
which are
reinforced by
our balance
sheet for
all seasons
and our
disciplined efforts
to steadily
improve risk-adjusted
returns since the Credit Suisse acquisition.
Our clients
continue to
value the
breadth of
our advice
and global
capabilities. Our
invested assets
reached 6.6
trillion and
private and
institutional client
activity was
robust across
all our
regions. Global
Wealth Management
continued to attract
flows into our
discretionary solutions,
and we are
encouraged by
another quarter
of improving
demand for loans. We’ve made significant progress in migrating portfolios and streamlining
our fund shelf within
Asset Management, positioning us to substantially
complete the integration of this business by year-end.
These efforts are unlocking the benefits of
greater scale and enhanced capabilities, particularly within our Unified
Global Alternatives
unit, where
we have
attracted 18
billion in
client commitments
year-to-date.
Invested assets
now exceed 300 billion and this momentum
reinforces our standing as a top player in alternatives.
2
In Switzerland, we remain steadfast in our commitment to act as a reliable partner for the Swiss economy. During
the quarter, we
granted or
renewed 40
billion Swiss
francs of
loans as
we facilitated
client activity
and also
partnered
with our clients in their activities across the globe.
Meanwhile, the Investment Bank delivered a record second quarter
in Global Markets. This reflects the strength of
our Equities franchise,
where we are benefitting
from market share
gains. It also
highlights the value
of our leading
FX business,
where our
expertise helps
our institutional
clients and
Swiss corporate
clients navigate
market volatility.
In Global Banking, while I am encouraged by the continued strengthening
of our deal pipeline, client execution of
strategic plans was
delayed once
again this
quarter due
to ongoing
market uncertainties related
to international
trade and economic policies.
Looking
into
the
third
quarter,
we
continue
to
prioritize
the
needs
of
our
clients
while
further
advancing
our
integration efforts.
As we
continue to
see strong
market performance in
risk assets
combined with
a weak
U.S.
dollar, investor sentiment remains broadly
constructive, albeit tempered by ongoing uncertainties and a degree of
news fatigue. Having said that, clients are ready to deploy capital as soon as conviction
around the macro outlook
strengthens.
Moving to the
integration, we remain on
track to
[Edit: be]
substantially complete by
the end of 2026.
Recently we
completed the migration
of Credit
Suisse client accounts
booked outside Switzerland.
We have
also now moved
400,000 client
accounts booked
in
Switzerland from
the Credit
Suisse platform,
with minimal
disruption and
a
positive response. We
are on track
to migrate around 500,000
clients more through,
by the end
of this year and
the balance
of the
migration is
set to
be completed
by the
end of
the first
quarter 2026.
At the
same time,
we
further simplified
our operations across the organization and made
good progress in our active wind-down efforts
in Non-core and Legacy, particularly around costs.
This
also supports
our
strong
capital position,
with a
CET1 capital
ratio of
14.4%. This
is
allowing us
to follow
through
on our
2025 capital
return objectives
as we
accrue for
a double
digit increase
in our
dividend and
are
executing on our share
buyback plans. As
we said in June,
we will communicate
our 2026 capital
return plans with
our fourth-quarter
and full-year
results in February. As
importantly, our continued
momentum is
generating capital,
enabling us to strategically invest across the globe
to support our clients and position UBS for
the future.
We
remain
focused on
our targeted
investments in
the Americas
to support
our financial
advisors and
improve
profitability. At the same
time, we
aim to
further leverage
our position
as the
number one
wealth manager
in APAC
to drive growth, while reinforcing our leadership in EMEA and Switzerland.
Supporting these
objectives is
a consistent
investment in
infrastructure and
A.I. to
increase resilience,
enhance client
service and support our employees. Following the rollout of
our in-house assistant Red and the implementation of
55,000 Microsoft Co-pilot
licenses, we saw
four times as
many GenAI prompts
this quarter compared
to the fourth
quarter of last year. Building on this, we
are now extending access to Co-pilot so that all of our employees will be
able to integrate A.I. into their daily workflow. We will continue to invest in our global capabilities to capitalize
on
the benefits
of our diversified
business model
and global
footprint. This
remains a critical
priority as we
look beyond
the integration and prepare for long-term success.
Of
course,
one
critical
point
defining
our
future
will
be
the
outcome
of
the
ongoing
debate
on
regulation
in
Switzerland. As
this is
the first
time I
am talking
to you
since the
publication of
the Swiss
Federal Council’s
proposals
on June 6th, let me start by reiterating a few points.
For over a decade,
UBS has delivered enduring
value to all its stakeholders,
including Switzerland and
its taxpayers,
through
a
sustainable business
model
and a
balance sheet
for all
seasons. This
is
underpinned by
a
robust
risk
management culture alongside
a strong governance
framework. We have
done this while
implementing regulatory
requirements with rigor. This is why it is our obligation to contribute to the ongoing debate with facts
and data.
3
In principle, we support most of the proposals as long as they are consistent
with the Swiss Federal Council’s aims
of being targeted,
proportionate and internationally
aligned. However, the proposed changes
to the capital
regime
do not meet
those criteria and
are even more extreme
when you consider
Switzerland’s finalization
of Basel III
rules
well ahead of other jurisdictions.
The proposals
fail to
recognize
that UBS
has had
a consistently
strong
capital position,
business model
and risk
management
framework,
and
the
fact
that
UBS
has
not
relied
on
regulatory
concessions
or
overly
aggressive
valuations of
foreign participations.
Further, it disregards the
significant diversification
value our
foreign subsidiaries
provide to all
of our stakeholders,
including our
clients in
Switzerland. We
are strong thanks
to our global
footprint.
Not in spite of it.
In addition, the
proposal at ordinance
level only consumes
surplus capital
and cosmetically
reduces the Group
CET1
ratio. This would underrepresent the
true capital strength of the
firm on an absolute basis
and relative to peers. As
we said in June,
after including the impact of
integrating Credit Suisse and
applying the current progressive
add-
ons, UBS would be required to hold 42 billion of additional
capital.
While I
have no
doubt that
our highly
capital generative
business model
would allow
us to
meet these
requirements
over time, they would clearly impact our return
on tangible equity,
which I believe will become the more
relevant
return measure.
Theories that we can easily absorb or mitigate these capital increases and operate with a Group CET1 capital ratio
only slightly above peers do not reflect reality. No matter how CET1 capital ratios are presented, the proposals still
result in an increase of around 24 billion in capital at the parent bank. Of course we will evaluate all potential and
appropriate
measures
to
address
negative
effects
for
our
shareholders,
but
any
mitigation
strategies,
even
if
feasible, would
come at
a significant
cost. This
is not
just our
view; the
expert opinions
commissioned by
the Federal
Council also highlighted the significant risks
these proposals present for Switzerland.
We are finalizing
our assessment
of all
twenty-two
proposals, including
capital, liquidity, resolution
and governance,
for submission
to the
public consultation
process which
concludes at
the end
of September.
As soon
as we
are
ready,
we also intend to provide a public explanation of
our positions on some of the most relevant aspects.
Based on
the fact
that we
are
already operating
with a
robust capital
buffer and
we expect
no changes
before
2027,
we
maintain
our
2026
underlying
exit
rate
targets
of
a
return
on
CET1
capital
of
around
15%
and
a
cost/income ratio of
less than 70%.
We will
provide an
update on
our longer-term return
targets as soon
as we
have more visibility on timing and outcome from the ongoing
political process.
In
the
meantime, I
am
confident that
we
can
continue
to
deliver
on
what’s within
our
control:
serving
clients,
completing the integration, supporting all
the communities where we live and work and positioning
UBS for long-
term success for the benefit of all stakeholders.
So
summing
up,
I
am
very
pleased
with
our
performance
in
the
quarter,
and
I
am
enormously
proud
of
my
colleagues for their continued dedication in
a complex and uncertain environment.
With that, I hand over to Todd.
4
Todd
Tuckner
Slide 5 – 2Q25 profitability driven by strong core revenue growth and positive jaws
Thank you Sergio, and good morning
everyone.
Throughout my remarks, I’ll refer
to underlying results in US
dollars and make year-over-year
comparisons, unless
stated otherwise.
Total
group profit before
tax in the second
quarter came in at
2.7 billion, a 30% increase
compared to the same
period last
year, with our
core businesses
growing their
combined pre-tax
profits by
25%. Group
revenues increased
by 4% to 11.5 billion and were
up by 8% across our
core franchises, while operating expenses decreased by
3%
to 8.7 billion, as we continue to drive
cost synergies across the group.
Included in our performance is a
litigation
reserve net release
of 427 million relating to the
settlement announced in May in connection with
Credit Suisse’s
legacy US cross-border business.
Our reported
EPS was
72 cents
and we
delivered a
15.3% return
on CET1
capital and
a cost/income
ratio of
75.4%.
Slide 6 – Net profit 2.4bn while integration continues
at pace
Moving to slide 6. We delivered another quarter of strong financial performance,
as clients turned to us for advice
and solutions to navigate a volatile and uncertain
market environment.
In Wealth Management and the Investment Bank,
we grew pre-tax profits by 24 and 28%, respectively, offsetting
net interest income headwinds in our Swiss
business, while continuing to make strong progress reducing our
non-
core portfolio.
In Group Items, our
year-on-year comparative also benefitted from marks on hedge
positions and
own credit that affected the prior-year period.
On a reported basis, our pre-tax profit of 2.2 billion included
565 million of revenue adjustments from acquisition-
related effects and 1.1 billion of integration expenses.
In the
quarter,
we recorded
a tax
benefit of
209 million mainly
from recognizing
additional DTAs
related to
the
integration of Credit Suisse. We continue to expect our full-year 2025
effective tax rate to be around 20%, with a
higher second-half tax rate influenced by our
non-core unit’s pre-tax results, including integration costs.
Slide 7 – Achieved 70% of gross cost save ambition, on
track to achieve end-2026 target
Turning to our cost update on slide 7.
Over the second
quarter, we delivered 700 million
of incremental
gross run-rate cost
saves, bringing
the cumulative
total since the end of 2022 to 9.1 billion, or
around 70% of our total gross cost save ambition.
The overall employee
count fell sequentially
by 2%, to
124 thousand, and by
around 21% from
our 2022 baseline.
By
quarter-end,
we
nominally decreased
our
overall cost
base
by
around
11% compared
to 2022.
Even
more
impressively,
over this
same period
we’ve reduced
our operating
expenses by
22%
when adjusting
for variable
compensation and litigation, and
neutralizing
for currency effects.
On this basis
our gross-to-net save
conversion
rate is 80%.
5
Slide 8 – Our balance sheet for all seasons
is a key pillar of our strategy
Turning
to slide 8.
As of the end of
the second quarter,
our balance sheet for all
seasons consisted of 1.7 trillion
in total assets, up 127 billion versus the end
of the first quarter.
On a deposit base of 800 billion, our loan-to-deposit
ratio was 81%, up 1 percentage point sequentially.
At the end of June, our lending book
reflected credit-impaired exposures of 0.9%, down
sequentially by 10 basis
points.
The cost of risk increased
to 10 basis points as we recorded
Group CLE of 163 million.
This reflected net
charges of 38 million
across our
performing portfolio and
125 million on credit-impaired
positions, largely driven
by our Swiss business.
Our
tangible
equity
in
the
quarter
increased
by
[
Edit
:
to]
82 billion,
mainly
driven
by
FX
translation
OCI
and
2.4 billion in net profit.
This was partly offset by shareholder distributions
of 3 billion related to the 2024
dividend
and 0.7 billion for share repurchases.
Our tangible book value as of
quarter-end was 25
dollars and 95 cents per
share, reflecting a sequential increase
of 3%.
Overall, we continue
to operate with
a highly fortified
and resilient balance sheet
with total loss absorbing
capacity
of 191 billion, a net stable funding ratio of
122% and an LCR of 182%.
Slide 9 – Maintaining a strong capital position
Turning
to capital on
slide 9.
Our CET1 capital
ratio at the
end of June
was 14.4% and
our CET1 leverage ratio
was 4.4%.
Our common equity tier 1 capital in the
quarter increased by 4 billion principally due to
earnings accretion and FX.
As a
reminder,
the full
3 billion share
buyback planned
for 2025,
including the
2 billion
expected in
the second
half, was already reflected in our capital position at the end of
the first quarter.
Risk-weighted assets rose by 21 billion sequentially,
predominantly driven by FX, with 3 billion from asset growth.
I would note that we presently operate unconstrained by the output floor,
which during 2025 is equal to 60% of
RWAs determined under the standardized approach. We are undertaking measures to minimize the impact as the
output floor gradually increases to 72.5% of standardized
RWAs by 2028.
Our leverage ratio denominator
grew by 97 billion quarter-on-quarter, with over
90% of the uplift
due to currency
translation.
UBS AG’s standalone CET1 capital ratio for 2Q was 13.2%, up from 12.9% in the prior
quarter.
The higher ratio
is mainly
due to
an increase
in CET1
capital, primarily
reflecting its
Swiss subsidiary’s
annual dividend
payment,
partly offset
by an
additional dividend
accrual in
the parent
bank’s own
accounts.
This brought
UBS AG’s
total
dividend accrual for the
first half of 2025 to
8 billion and comes on top
of the 6.5 billion accrued
at the end of last
year. The parent bank now expects to distribute this 6.5 billion to the holding company
before the end of 2025.
I
would
highlight
that
in
managing
leverage
ratios
across
Group
entities,
we
may
pace
intercompany
dividend
accruals to
maintain prudent
capital buffers
and offset
the FX-driven
headwind on
leverage ratios
across Group
entities.
While
we maintain
our intention
to operate
UBS AG
standalone CET1
capital ratio
between 12.5
and
13%, we’d expect the Parent Bank to remain above the upper end of the target range as long as dollar weakness
persists.
6
Slide 10 – Global Wealth Management
Turning
to our
business divisions, and
starting on slide
10 with Global
Wealth Management, which
continues to
deliver strong
net new
assets, support
clients with
diversified and
differentiated solutions,
and drive
higher revenues
on capital deployed.
GWM’s pre-tax profit was 1.4 billion,
up 24% as revenue growth outpaced
expenses by 5 percentage points.
This
translated to a year-over-year improvement in GWM’s cost/income ratio of almost
4 percentage points to 77%.
One of GWM’s enduring advantages
is its unrivaled regional breadth. This enables
us to deliver global connectivity
to our clients
at a time
when wealth is increasingly
mobile and investment capital
is rotating across
geographies,
sectors and asset classes.
As illustrated in our regional disclosure on page
20, all regions delivered double digit profit growth, led by notable
strength in the
Americas and
EMEA.
In the
Americas, our
franchise delivered
improvements across
all revenue
lines,
driving profit
growth
of 48%
and a
pre-tax margin
of 12.4%,
while remaining
focused on
the execution
of its
strategic plan.
In EMEA, profit before tax
increased by 30%, driven
by strong transaction-based
revenues, coupled
with higher
recurring fees
and continued
cost discipline.
APAC
grew its
profits by
12%, driven
by double-digit
growth
in
both
transactional
and
recurring
fees,
and
supported
by
sustained sales
momentum
across
net
new
assets, mandates and deposits.
Profitability in our Swiss wealth business rose by 10% on
strong revenue growth.
Onto flows.
GWM’s invested
assets increased
by 7%
sequentially from
favorable market
conditions, FX
and positive
asset flows.
With
55 billion
of
net
new
assets
accumulated
year-to-date,
our
performance
reflects
continued
strong
client
momentum and broad-based contributions across regions.
In the second quarter,
we generated 23 billion of net
new assets, representing a
growth rate of 2.2%,
or 3.2% excluding 11 billion of seasonal
tax-related outflows in
the Americas.
Our net new
asset performance
this quarter
also reflects
continued progress in
managing the
roll-off of preferential
fixed-term deposits linked to our 2023 win-back
campaign, which is now largely completed.
This
campaign
played
a
critical
role
in
restoring
confidence
and
stability
in
the
Credit
Suisse
wealth
franchise
following
the
acquisition,
as
well
as
successfully
winning-back
client
assets.
Over
the
past
12
months,
GWM
expertly managed
to
retain
over 80%
of
maturing preferential
fixed-term deposits
on
our
platform,
converting
these investments into higher margin solutions,
including mandates.
Net new
fee generating
assets in
the quarter
were 8 billion
with positive
flows across
all regions.
Client engagement
continues to
deepen, reflected
in the
rising penetration
of fee-generating
assets across
the division
and by
sustained
momentum in
our
CIO-led signature
solutions.
At
the same
time, the
uneven market
backdrop
in
the quarter
prompted the rebalancing of portfolios towards liquidity solutions, as clients deferred new investment allocations.
As a result, we recorded 9 billion in net
new deposit inflows in the
quarter, enhancing our capacity to capture fee-
generating assets when confidence and visibility
improve.
Net new
loans in
the quarter
were
positive at
3.4 billion, driven
by EMEA
and the
Americas. Our
differentiated
partnership between Wealth and
the IB in
delivering tailored lending solutions is
a key driver
of loan growth
and
revenue momentum.
Turning to revenues, which increased by 6%.
7
Recurring net fee income grew by 8% to 3.4 billion supported
by positive market performance and over
60 billion
in net new fee-generating assets over the past
12 months.
Transaction-based
income
was
up
by
11%
to
1.2 billion,
underscoring
strong
client
engagement
despite
the
moderating effects
of the
quarter’s V-shaped
market dynamics
on investor
sentiment. Amid
heightened market
turbulence, clients took
advantage of short-term
market opportunities
to reposition tactically.
This was particularly
evident in our investment fund and cash equity
offerings, where revenues increased by 27 and 17%, respectively.
As we entered the
third quarter,
risk assets continued to appreciate supporting portfolio
rebalancing and broadly
constructive
investor
sentiment.
This
said,
with
volatility
returning
to
more
typical
levels
and
seasonal
patterns
normalizing, we expect growth in transactional activity in GWM to moderate relative
to the third quarter of 2024
when elevated volatility had a more pronounced impact
on client engagement and transaction volumes.
Net interest
income at
1.6 billion was
down 2%
year-over-year and
up 1%
quarter-over-quarter, with the
sequential
trend reflecting FX tailwinds and higher current account balances, partly offset by the effects of lower Swiss franc
and euro deposit rates.
Looking ahead, we expect NII to hold steady sequentially as support from a higher day count and currency effects
will be largely offset by lower deposit rates. For full year 2025, we continue to expect GWM’s net interest income
to decrease by a low single-digit percentage compared to 2024.
Underlying operating
expenses were up
by 1%, with
lower personnel
and support
costs more than
offset by higher
variable compensation tied to
revenues.
Looking through variable
compensation, litigation and
currency effects,
costs were down 5% year-over-yea
r.
Slide 11 – Personal & Corporate Banking (CHF)
Turning to Personal and Corporate Banking on slide 11, where my comments
will refer to Swiss francs.
P&C delivered
a second
quarter pre-tax
profit of
557 million, down
14%, driven
by an
11% reduction
in net
interest
income.
While the current
zero interest rate
environment in Switzerland in
many respects is driving
the narrative for P&C,
the business is positioning itself
for profitable growth once
rate headwinds subside and
the intensive Swiss client
platform migration work is complete. This is evidenced by growth
across net new investment products, loans and
deposits, all while momentum in acquiring new
clients in the affluent and corporate space is accelerating.
Non-NII
revenues
were
down
3%,
despite
a
resilient
performance
in
our
Personal
Banking
business.
On
the
corporate
side,
in
addition to
headwinds
from
currency
translation, the
sharp
dollar
drop
and
the
widening
of
dollar-Swiss
interest
rate
spreads
caused
revenues
from
corporate
FX
hedging activity
to
slow,
while
trade and
export finance activity also reduced. This was partly
offset by higher revenues in corporate finance.
Sequentially,
NII
in
Swiss
francs
decreased
by
2%
largely
reflecting
the
effects
of
the
25-basis
point
rate
cut
announced in March, which was partly offset by targeted
deposit pricing measures and lower funding costs.
With the SNB policy rate
now at zero following the additional cut
in June, as noted previously, rate movements up
or down are
expected to benefit our net
interest income.
This said, the implied forward
curve has flattened over
the last few months, suggesting
the current rate environment
could persist for some time, broadly
keeping Swiss
franc NII
at current
levels through
the rest
of the
year.
In US
dollar terms
at current
FX, this
translates to
a sequential
low single-digit
percentage increase in
3Q and
a mid-single
digit percentage
decline year-on-year for
full year
2025.
8
Turning to credit loss
expense. CLE
in the second
quarter was
91 million on
an average
loan portfolio
of 249 billion,
translating to
a
15 basis
point cost
of risk,
up
7
basis points
sequentially but
marginally down
over the
last
12
months.
This included Stage 3 charges of 74 million
mainly on smaller non-performing positions.
Operating expenses in
the quarter were
down 5% as
the team remains focused
on deflating its
cost base while
the
Swiss client migration work remains ongoing.
Slide 12 – Asset Management
Moving to slide 12.
Asset Management profit before
tax was 216 million, down
5% year-on-year,
reflecting the
absence of
a gain
from disposal
that contributed
to the
prior year
quarter.
Excluding
that gain,
Asset Management’s
pre-tax profits were up 8% on 4% higher revenues.
2Q
marks
the
fifth
consecutive
quarter
that
the
business
delivered
pre-tax
profits
exceeding
200 million
–
a
testament to the business’s
strategic retooling and disciplined
execution. This consistency, achieved despite
secular
headwinds and
the integration,
underscores its
agility in
adapting to
evolving market
dynamics and
its ability
to
drive positive operating
leverage in a
transitional environment.
This positions Asset
Management well for
future
growth.
Net management fees increased by 3%,
primarily driven by FX and higher
average invested assets, which
together
outweighed the
effects of
margin compression
from clients
having rotated
into lower-margin
products over
the
past
year.
Performance
fees
were
39 million,
up
over
a
third
year-over-year,
mainly
driven
by
our
hedge
fund
businesses.
Net new money was negative
2 billion, primarily as outflows from Fixed
Income and Multi-Assets more than
offset
flows into ETFs, SMAs and money markets.
Our
investments
in
ETFs
are
yielding
results,
with
4
billion
of
inflows
in
the
second
quarter.
We
also
recently
launched our first active ETF,
offering access to our
Credit Investments Group –
a leading platform specializing in
non-investment-grade credit and
multi-credit solutions.
Our Unified Global
Alternatives unit delivered
1.5 billion
of institutional and wholesale new client
commitments, which came alongside 7 billion in
Wealth Management.
Operating expenses were 3% higher, or down 1%, excluding FX.
Slide 13 – Investment Bank
On to slide 13 and the Investment Bank.
In the IB we delivered
a profit before tax of
526 million, up 28%, and
a pre-tax return on equity
of 11.5%, leading
to a first-half pre-tax RoE of 13.6%.
Revenues increased by 13% to 2.8 billion, a record second quarter, driven by Global Markets.
Banking revenues decreased by 22% to 521 million, largely
reflecting the effects of macroeconomic uncertainties
affecting clients’ strategic decisions, especially in the
first part of the
quarter.
In Advisory,
revenues decreased by
19% despite growth in M&A in the Americas and EMEA,
where we outperformed the fee pools.
9
Capital Markets revenues declined
by 24%, driven by
LCM and reflecting
a continuing trend
from 1Q as
the mix
within the
LCM fee
pool in
the Americas
has shifted
towards corporates
and away
from sponsors,
where we’re
more concentrated.
Also weighing on our performance this quarter was a
markdown on a now largely de-risked
LCM
underwriting
position.
This,
together
with
a
markdown
on
hedging
positions,
drove
a
total
65-million
headwind in the quarter. ECM grew by 45%, reflecting the benefits of
targeted investments and pipeline
strength
as IPO activity began to recover.
APAC was the standout regional contributor.
Looking ahead, we remain encouraged by improved market sentiment and by the strength of
our pipeline, which
continues to build
and is expected
to support
our growth ambitions
in Banking
over the
coming quarters,
assuming
a constructive backdrop.
Revenues in Markets increased
by 26% to 2.3 billion,
tracking the exceptional
levels of volatility experienced
at the
start of the
quarter.
The dynamic trading
environment and elevated
client activity levels
in Equities and
FX were
once
again particularly
supportive of
our strategic
positioning and
business mix,
boosting our
ability to
capture
growth and market share.
Equities revenues were 20%
higher than the prior-year
quarter,
driven by a record
2Q
across Cash
Equities, Equity Derivatives,
and Financing.
In Financing,
top line
growth of
27% was
supported by
Prime Brokerage delivering record
-level revenues and
client balances.
FRC increased by
41%, primarily driven by
FX delivering its
best second quarter,
up 52%.
Notably,
our leading FX
trading capabilities helped
us to
capture
client demand for hedging products amid FX volatility
in the quarter.
Looking ahead,
we expect
our
markets performance
in
3Q to
reflect
seasonality and
more
normalized levels
of
trading activity and volatility, both sequentially and versus the prior year quarter.
Operating expenses rose by 7%, largely reflecting increases in personnel expenses and currency effects. Excluding
FX, costs were up 4%.
Slide 14 – Non-core and Legacy
On slide 14, Non-core and Legacy’s pre-tax profit was 1 million with negative
revenues of 83 million.
Funding costs of around 120 million were partly offset by revenues from position exits in securitized products and
credit.
Operating expenses
in
the quarter
were
negative 83 million
driven
by
the litigation
release
I
mentioned earlier.
Excluding litigation,
costs were
down 46%
year-on-year and
25% sequentially,
as the
team continues
to make
strong progress in driving out costs.
For the
second half
of the
year, we expect
NCL to
generate an
underlying pre-tax
loss excluding
litigation, of
around
1 billion,
including
negative
revenues
of
around
200 million,
mainly
from
funding
costs.
Revenues
from
carry,
continued
exits
and
remaining
fair
value
positions
are
expected
to
net
around
zero,
and
underlying
operating
expenses, given the ongoing strong progress, should now average
around 400 million per quarter.
Slide 15 – NCL run down continuing at pace
Onto slide 15.
Since the second
quarter of 2023,
NCL has
reduced its
non-operational risk RWAs
by over 80%,
including by another 1 billion this quarter, in total freeing up over 7 billion of capital for
the Group.
In addition to significantly strengthening our capital and risk position, the wind-down efforts expertly executed by
the team over the past several quarters have
led to a reduction of the divisional cost base by over
two-thirds.
Also, as of
the end of
June, NCL
closed 83%
of the
14 thousand books
they started
with and decommissioned
over
half of its IT applications.
10
Slide 16 – Continuing to make progress towards our 2026 exit rate
targets
To
sum up, with an underlying return on CET1 for the first half of the year of 13.3%
and strong execution across
key
integration
milestones,
we
remain
firmly
on
track
to
achieve
our
financial
targets
by
the
end
of
2026:
an
underlying return on CET1 capital of around 15% and
an underlying cost/income ratio of less than 70%.
With that, let’s open up for
questions.
11
Analyst Q&A (CEO
and CFO)
Kian Abouhossein, JPMorgan
Yes.
Thank you
for taking
my questions.
The first
question is
related to
the parent
bank, UBS
AG, where
you
gave us the number of
14.5 billion dollars of accruals.
Also clearly understand the
special dividend reserve of 6.5
billion, I'm just wondering the
8 billion accrual that
is remaining, so to
say,
can you discuss that
part and what
you will do with this part in terms of
distribution, double leverage or any other usage?
And the second question is
related to Wealth
Management US, Americas, you have advisors
down quarter-on-
quarter, can you please talk about where you are in the process of the improvement in pretax margin in Wealth
Management in the US
and the initial
thinking and thoughts post
the adjustment of advisor
incentives? Thank
you.
Todd
Tuckner
Hi, Kian.
Thanks for
the questions.
Regarding the
8 billion
you highlighted,
which is
our 1H25
accruals at
the
parent bank, the expectation
is that they'll be
upstreamed, hence the accrual. And
we will – our
expectation is
that our equity double leverage ratio
which we’ll print in the
parent in the group
accounts in the coming days,
will be sub 110% at the end
of 2Q and with what we intend to
pay up in the second half of
the year,
which is
the 6.5
billion I
highlighted in my
comments, the equity
double leverage ratio
group will
be sub
105% by the
end of the year
and moving towards
the targets that
we set out, which
is to align
with an equity
double leverage
ratio of around 100%, which is where we were pre-Credit Suisse.
In terms of Wealth
Management US and in your comments,
thank you for recognizing the
improvement in the
pretax margin and your question around advisors.
So first, we are making progress improving the pretax margin
in the business.
As I've said in
the past, we have
the array of initiatives
that we reset strategically
and announced
in
4Q
and we're
chipping away
and
making strong
progress.
You
know,
in
terms of
the FA
point,
look, our
platform
in
the
US
remains
highly
attractive
for
advisors
as
we
continue
to
invest
in
technology
and
as
I've
highlighted before,
the
availability of
best-in-class CIO
insight and
joint teaming
with
the Investment
Bank
is
giving us a competitive advantage. And we're also
seeing that our platform, Kian, remains
a compelling source
of asset and profit growth for
advisors who are aligned to our strategy and
that's evidenced by the exceptional
same-store net new money growth we've seen in the first half, which is substantially
above levels in each of the
last three years.
I'd also
highlight that
90% of
our FAs are
up in
T12 production.
But in
terms of
headcount, look,
the second
quarter
is typically seasonally more active in terms
of FA moves across the street and the changes we've introduced,
which
I
think
you
were
referring
to
and
which
I've
highlighted
previously,
means
that
we
could
see
some
continued
movement across firms and to the independent channel. Having said that, we're actively recruiting and we're also
seeing more FAs commit to stay and retire
at UBS than at any time since we've introduced this retention program
several years ago.
Kian Abouhossein, JPMorgan
Thank you.
12
Anke Reingen, RBC
Thank you very
much for taking
my questions.
The first
is on the
output floor, you mentioned that
you're looking
into your ability to
mitigate the currently around
48 billion of RWAs.
Can you talk a
bit more potentially
about
the magnitude you think you can mitigate?
And then secondly, sorry,
on the FX derivatives point,
can you sort of try to size the
matter for us as much as
it's
possible and did Q2 already see some impact of
potential compensations? Thank you very
much.
Todd
Tuckner
Hi,
Anke.
Thanks
for
the
questions.
On
the
output
floors,
you
know,
I
mentioned
in
my
comments,
we're
operating unconstrained
presently. You're
asking about where
we see the
potential for the
output floor to
cause
an increase in the RWAs we operate
with. So we are hard at work
in developing mitigants
to address the output
floor wherever possible. And, it's way too
early to us to prejudge where we'll come
out but we'll keep posted in
our disclosures and in my
comments from time to time to
talk about the progress
that we're making. But it's
a
clear focus for us and we still obviously have the better part
of the next two years to continue to make progress
in that respect.
On the
FX matter, our
comments
previously in
this is
that we've
completed a
comprehensive review
of this
matter,
we've determined that a
very small number of clients, fewer
than 200 in just a few locations
in Switzerland who
had
exposure
to
a
product
outside
our
standard
asset
allocation
framework or
their
particular individual
risk
capacity, experienced losses mainly arising from US tariff related market
volatility in April at the
beginning of the
quarter.
But
from
the
outset,
we've
taken
the
matter
very
seriously
and
where
appropriate,
we've
reached
agreements with
affected clients.
The financial
impact from
these agreements
is substantially
captured in
our
second quarter results.
Anke Reingen, RBC
Thank you.
Chris Hallam, Goldman Sachs
Yeah.
Good
morning, everybody.
Just
two
quick
questions.
So,
first
of
all,
what are
your
latest
expectations
regarding the deduction elements of the capital proposals, including
whether or not they may get wrapped
into
the broader
legislative package,
i.e., taken
out the
ordinance? Do
you expect
to have
sufficient clarity
on any
potential phasing or delays in time
to be able to calibrate the
2026 distribution ambitions later or I guess,
early
next year with the fourth quarter results?
And then secondly,
just sort on
the longer term,
I guess, slide
26, the bar
chart, it's a pretty
powerful image, I
just, I wonder when you show
that to people who you're engaging
with in this topic, what's
their response, you
know, how
receptive are
they to understanding
the longer run
competitive impact on the
business from these
proposals rather than the nearer term recalibration of the rules
per se? Thank you.
13
Sergio P.
Ermotti
Thank you. Well, first of all, I think that, as I
mentioned before, we're going to see exactly how things play out.
Honestly, I don't think we have a clear insight here on what's going to happen. The
economic committee of the
Upper House will also have to opine on this proposal to basically put everything into one package. Then it's still
very open if
the parliament will follow
the recommendation, should also
the Upper House Committee
propose
any change. So that really remains something that is not predictable, is not in our control. I think that's
the only
thing I
can say
is that,
as I
mentioned, that
we will
now finalize
our assessment
of the
proposals and
try to
identify
how
potential
positive
strengths
of
the
proposal,
but
also
its
weaknesses, but
also
making
sure
that
people
understand that capital goes with liquidity and goes with
recovery and resolution and should also
somehow be
related to
the business model
that a
bank is
pursuing. So in
that sense,
trying to
have a
comprehensive set of
facts before coming to a decision would be probably a good
way to handle the problem. But, you know,
this is
a political problem and a political
process, we fully respect what's going
on and our aim is simply
to contribute
to
the
debate. So
as
I
said early
on
in
September,
most likely
we
will
be
able
to comment
on
this
proposals
publicly.
In respect
of this
chart, yes,
thanks for
highlighting this, because
unfortunately,
you know,
we also
saw some
other graphic
representation of
what the
new regime
would mean
and they
were confusing
a little
bit capital
requirement with the actual level of capital held by
other banks under-representing the impact in
relative terms
to us. This, we feel,
is the best way to
fully highlight what I
think is important –
it’s minimum requirement versus
minimum requirement. If a bank decides to have a buffer
above its minimum requirement, it is its own decision,
they
may
have
their
own
idiosyncratic
reasons,
but
the
binding
constraints
for
all
of
us
is
always
minimum
requirement.
Therefore,
here
you
have
a
clear
picture,
so
the average
is
11.5%, sorry
10.9% and
when you
compare it to the de-facto minimum proposal of 19%, it tells
you the story.
Chris Hallam, Goldman Sachs
Okay. Thank you.
Giulia Aurora Miotto, Morgan Stanley
Good morning. Thank you for taking my
questions. I have two on capital again. So
I know that you want to run
with a
double leverage
of 100%,
which makes
sense. But
if these
capital proposals
were to
go ahead
as it
is
currently written,
which completely removes
any subsidiary double
leverage, would you
consider running with
higher levels of double leverage between
group and parent?
And then
secondly,
the stress
test results
in the
US, you
know,
showed an
improvement year-on-year and
the
capital requirement
should come
down, could
you give
us
an
update of
how much
capital do
you
expect to
upstream from the US? I think you said vaguely that you were expecting some upstreaming, but I don't know if
you can quantify that. Thank you.
Sergio P.
Ermotti
Let me take that,
quickly, because somehow the technicalities
as we say, you know, we are running
our business
and our capital plan and capital returns as communicated
in the past. So, we are going to take down the equity
double leverage ratio at group level, as Todd
just mentioned, to around 100%, which is where we were before
the acquisition
pending the
finalization of
these proposals.
If and
when these proposals
are fully
adopted, we
will need to then understand exactly how to mitigate and how to act. But it's now premature to talk about one
item without knowing the entire
package. So this is
the only thing I
can tell you so
we're not going
to engage
into mitigation, remediation,
you know, whatever you
want to call
it before we know
exactly what the
final rules
are. So, Todd,
maybe you want to take that.
14
Todd
Tuckner
Sure. Thanks, Sergio.
Hi, Giulia. On
the second, appreciate
you bringing that up,
let me unpack
it a little
bit in
terms of
the US
stress tests
just to
ensure clarity
here. So
first thing
I'd say
is that,
look, the
lower drawdown
from
the
stress
tests
that
were
published,
highlights
for
me,
our
improved
strength
and
resilience
in
the
US
intermediate holding
company, including the
profitability prospects
that it
has. Secondly, I'd say
that those
DFAST
results happen to align with our
own internal capital assessment in terms of direction
of travel, which is to say,
we too are seeing improvement.
And it's also important
to remember that our internal
assessment governs
if it's
higher than the Fed's CCAR
results. I would also
mention that we manage with
appropriate buffers to support
growth and also align with supervisory expectations,
that's an important point.
The next point I
would just highlight
is that the lower
capital ratio we're working
towards, you know, has always
been part of our planning
assumptions at the end of
2023, including repatriating additional
capital as a result of
integrating
Credit
Suisse
and
otherwise
driving
greater
profitability.
And
so
all
this
is
allowing
for
capital
repatriation upside, but
all that is
factored into our
planning from the
beginning as we
see an opportunity
for
the capital ratio
to move down
and for us
to upstream capital
as a result.
And just I
would make one
other point,
just about
the current
ratio, because
sometimes this
gets overlooked
and of
course the
current ratio
that will
print in our Pillar 3 at around
20% is on a trajectory down since Credit
Suisse and it was, you know,
as high as
27%. But one point
that we shouldn't lose sight
of is that the
capital ratio in the
US is structurally higher than
the equivalent
ratio under Swiss
banking law,
primarily due
to the
absence of
things like
capital consumed by
operational risks, dividend accruals and lower
DTA threshold,
so the Swiss SRB
equivalent ratio could be 5
to 8
percentage points lower. So that's also important
to keep in mind when
looking like-for-like at our US ratio,
say,
versus other ratios within the group.
Giulia Aurora Miotto, Morgan Stanley
Thank you.
Can I
just follow-up?
So if
I understand
what Sergio
said correctly,
it's premature
to comment
on
mitigating
actions
and
you
will
only
comment
on
them
when
we
have
clarity
on
the
proposals,
but
in
my
understanding it will take quite a while to get clarity on the proposal, potentially a
couple of years or so, is that
the timeline we should expect? Thanks.
Sergio P.
Ermotti
Yeah.
But if
it takes
a couple
of years,
it means
the new
regulation is
not enforced,
so we
would not
have to
implement it.
So we're
not going
to front-run
any new
capital regime, that's
clear. So we will
wait and
see exactly
what it is and when it
happens, we will then take the
appropriate time to phase in whatever
will be phased in.
So we
do expect,
it has
already been
communicated, that any
changes will
be done
with an
appropriate time
frame that allows
the bank to
manage the process
smoothly.
So I think
that's the reason
why I don't
think it's
necessary for us to start to comment on single
measures.
Giulia Aurora Miotto, Morgan Stanley
Clear. Thank you.
15
Jeremy Sigee, Exane BNP Paribas
Good
morning. Thank
you.
Just
a
clarification,
please,
on
the
double
leverage
question,
the
UBS
Group
AG
standalone, because it
looks to
me that
it’s down
to 108%
at first
half and
if I
add in
the 6.5
billion dividend
that's coming, it
would actually be
below 100%. Are
there any contra,
any offsets to
that that I
need to think
about? Because
it looks
to me
like that
dividend fully
eliminates the
double leverage
even before you
then receive
more dividends that you're accruing this year. So that would be helpful to clarify.
And then secondly, a question moving to Wealth Management, just really on conditions in Asia and what client
behavior you're seeing,
because it
looks to me
that the
flow number was
very good
but the revenues
were a little
bit softer. So I just wondered if you could describe how Asian clients are behaving in this environment.
Todd
Tuckner
Hi, Jeremy.
Thanks for your questions.
So on the double
leverage, just to reiterate
my comments earlier,
so we
expect that the double leverage
ratio will be around 109% at
the end of 2Q. As I
mentioned, we will pay up
the
6.5 billion from
parent bank to
group in the
second half of the
year and that would
bring the double leverage
ratio to around 103% because we still, you have to account for share repurchases both
on the first and second
trading line
as well
that offsets
the upstream
dividends, so
you get to
a level that,
as I
mentioned, was
sub 105%,
but to be more precise 103%.
In terms of your second question, yeah, I appreciate you bringing that up, I mean, we're
seeing sustained client
momentum in APAC, the
business is doing very well across all the metrics. I think in Asia,
in particular,
some of
the
comments
that
I
was
making
in
my
prepared
remarks
about,
you
know,
there
being
somewhat
some
rebalancing
of
portfolios,
some
more
tactical
repositioning
of
portfolios,
which
is
to
say
that,
you
know,
potentially a
little bit
sideline sentiment.
It's hard
to obviously
characterize, you
know,
sophisticated investors
across that mass geography in one sentence but,
you know, if I had to, you know, I would say that there is a bit
of a wait-and-see
just given some
of the uncertainty in
the environment, in the
macro environment and certainly
with
trade
policies
and
what's
happening
in
the
States
and
obviously,
that's
a
big
determinant
of
investor
sentiment in APAC.
We have seen mobility,
you know, away from
the US to an extent, you know,
I don't want
to overemphasize
that, but
we have
seen that.
So we're
seeing some
of the
macro trends
playing out
in particular.
But the activity was robust but you
can expect that, you know,
once there is more certainty priced in
and more
conviction around markets normalizing that, you
know, that business is poised to really capitalize.
Jeremy Sigee, Exane BNP Paribas
That's great. Thank you.
Amit Goel, Mediobanca
Hi. Thank you. So two
questions from me. One, just to clarify, I think the comment
earlier in terms of the parent
bank CET1 ratio that whilst
dollar weakness persists, you would
look to remain above the top
end of the 12.5%
to 13% ratio. So I just
wanted to understand why or what
exactly drives that and so
when you think, or at what
level of dollar weakness or strength would mean
that you could be back into that range?
16
And then secondly, I guess,
a broader question again
on kind of
strategy, I mean, just it would
be good, actually,
if we could get a bit more color or it'd be helpful if we get
more color in terms of the synergies between the US
Wealth business
and the
rest of
the group. I
mean, obviously, there's a
lot of
commentary about
how the
breadth
of the business is helpful, because I guess what I'm just curious about or wondering is, you know,
whilst clearly
it's core
and it's
part of the
group, you
know, how
you would react
if, for example,
there was
a credible,
you
know, unsolicited bid
for that
business. You know, how you
would be
able to
explain to
investors and
the market
why,
that remains core and why it's synergistic. If you could give a bit more color in terms of the synergies with
the IB, Asset Management, et cetera.
Thank you.
Todd
Tuckner
So just quickly on the first one, yeah, just to
unpack the dynamics there. So with the FX volatility we saw in the
quarter,
to be
specific dollar
weakness that
as you
saw in
or heard
in my
commentary,
even just
group
level
around
LRD, where
LRD was,
you
know,
up
over 100
billion
and most
of that
was due
to FX.
We
have that
dynamic in many
of our subsidiaries
as well,
including UBS
AG. And so
it made
its Tier
1 leverage
marginally more
constraining this quarter,
it needed to
be managed just
given the, you
know, if
you think
about the ratio,
just
with the leverage rate, the leverage ratio denominator
being so massively impacted by FX. So that's why I made
the comment about pacing intercompany dividend accruals with the thought being that we could have actually
accrued more of
a dividend at
the parent bank
in Q2, if
not constrained a bit
more, marginally constrained on
the leverage side. So,
you know, that's the dynamic that
was driving why the
parent bank CET1 on a
standalone
basis drifted above
13%. And
my comment
about sort
of managing at
above or operating
above the target
level,
i.e.,
where
it
is
now
or
in
that
vicinity
is
a
result
of
the
fact
that,
we
would
continue
to
see
leverage
being
marginally constraining at current FX, say 0.80 dollar-Swiss
levels.
You
asked what levels would that change?
I think it's fair to
say that everything that we
talk about in terms of
target levels is
done on a
planning basis. And
so if you
go back to
the end of
last year,
when we finalized our
three-year plan, including 2026
operating plan, you know, dollar-Swiss
was around 0.90, so, you
know, 10% or
12% stronger from
a dollar perspective and
so, you know,
that's an assumption you
could think about
sort of
getting back to
our planning levels
in managing what
we think would
be the appropriate time
to move back
into
the target range of capital.
Sergio P.
Ermotti
So thank you for the
second question. So
I think that, you know, as I
mentioned before, it's one
of the strengths
for UBS
is to
have both
in terms
of businesses,
but also
a regional
footprint, a
diversified business
model. So
when I
look at
our US
operation, I
think that
it's fair
to say
that in
Wealth Management we
are not
yet there
where we should be in terms
of profitability but as you
could see from the recent
developments, we are tackling
the issue, we
are convinced
that in the
medium term
we will
be able to
achieve a
double-digit, a
mid-teens return
on pretax profit margins. And that being then
a base to go to a higher and
notwithstanding the fact that we
do
recognize that on a like-for-like
basis it’s going to be very difficult for us to
close the gap to our peers – but we
can narrow
the gap
substantially.
Particularly when
you look
at the
wealth management
operation in
the US,
basically
the
FA-based
business
model
compared
on
a
like-for-like
to
other
peers
which
are
benefiting
from
ancillary activities
around their Wealth Management business, which contributes
to a higher margin.
So in a nutshell, what I want to say is that when I look at kind of mid-teens, high-teens pretax profit margins as
part of our
diversified business
model, as part
of what
is the global,
the leading
franchise in Wealth
Management
globally
in
terms
of
diversification,
I
see
only
value
creation
for
our
shareholders.
This
is
a
highly
profitable
business. By
the way,
the US
operation benefits
from this
status as
being an
international player
with strong
capabilities, international capabilities that we bring to our
US clients. We are
sharing cost of the CIO,
sharing, I
mean, cost
of coming
up with
best products
and research
and so
on and
so forth.
So we
also have
synergies
within Wealth
Management. So, you
know,
that's the
reason why
this is
a strategic,
important component of
our strategy.
17
Now
in
respect
of
your
second
question,
you
will
appreciate
that
I
am
not
going
to
go
into
speculations or
commenting even remotely on hypothetical approaches
or situations.
Amit Goel, Mediobanca
Yeah. Thank you.
Benjamin Goy, Deutsche Bank
Yes.
Good morning and
two questions to
follow-up. One is
on the cost
base where your
underlying cost base
continues to track
down now
just about 36
billion, just
wondering what
is the outlook
here and how
much more
we should expect in the second half as you probably
keep on decommissioning?
And then
secondly,
net interest
income in
GWM was
stable in
the second
quarter and
now you
also guide to
broadly flat
in Q3.
Is this not
a trough
or you
want to see
how the Fed
cuts potentially more
later on and
this
could impact net interest income going forward, or is volume
growth strong enough? Thank you.
Todd
Tuckner
Hi, Benjamin. Thanks for your questions. First on the cost base, and thanks for recognizing the
achievement to-
date. You
know, we still
have a ways to go,
even though we're, of
course, 70% in and around
9 billion of the
13 billion. The 4 billion
that we have to go
on constant FX, you know,
is going to be kind
of split half-and-half
between technology
as you
mentioned, so
decommissioning of
our tech
stack is
going to
be critical
and the
other
half would be people related, capacity related or driving the, getting the additional 4 billion of gross cost saves.
So what you
should expect in
terms of gross
is that we're
going to stay
focused on achieving this
additional 4
billion, it's not a straight line, as we
said many times in many quarters, that the tech decommissioning can only
happen after the
Swiss client migration
process is complete
around the end of
1Q26 and then
that process starts
there, so you can expect that really in the second half of 2026, we'll see
a fair bit of the cost base come out on
the tech
side and
related capacity
freed up
as a
result. So,
and then
in terms
of what
that means
from a
net
perspective, of
course,
you know,
we're
going to
stay focused
on
delivering an
underlying cost
income ratio
below 70%, as we've consistently said and that's
going to be the driver of the net outcome.
On the NII outlook in Wealth, I
mean, I mentioned that it's flattish with higher loan volumes we see and
higher
SBLs
offset
by
lower
deposit
rates
and
volumes
as
we're
deploying
some
of
the
dry
powder
into
investment
solutions on our platform. We see sweep balances and current accounts
broadly stable. On the volume side, we
see NNL, net new
loans, expected uptick
in each of the
next couple of quarters,
so we're looking at
a 4% annual
growth rate in NNL for, you know,
for the business, so we're broadly optimistic there. Again, this is all based
on
expectations around rates.
We're pricing in two
25 basis point
rate cuts by
the Fed over
the course of the
second
half of
the year, let's
see, where
that comes
in but
that's also,
you know,
impacting
on the
balance sheet
dynamics
as the way we look at it. So in terms of just troughing, I would say, look, on the basis of what we see here, you
know,
we
see
moderate
upside in
2026
but
of
course,
it's
too
early
to
call
that and
we'll
come back
as we
approach 4Q and give you know more specificity around the 2026 outlook.
Benjamin Goy, Deutsche Bank
Perfect. Okay. Thank you.
18
Sergio P.
Ermotti
So thank you. This was the last question. As
I mentioned, we are now working on finalizing our response to
the
proposals.
As
soon
as
we
are
ready
to
go,
you
know,
probably
towards
the
end
of
August,
early
part
of
September,
we will organize
a public event
in order to
basically explain our
position that we will
submit in the
public consultation. So in the meantime,
enjoy the rest of the summer and thanks for
calling in. Thank you.
19
Cautionary statement
regarding forward-looking statements
|
This document contains
statements that
constitute “forward-looking
statements”, including
but not limited to management’s outlook for
UBS’s financial performance, statements relating to the anticipated effect
of transactions and strategic initiatives
on UBS’s
business and future
development and goals
or intentions to
achieve climate, sustainability
and other social
objectives. While these
forward-looking
statements represent
UBS’s judgments,
expectations and
objectives concerning the
matters described,
a number
of risks,
uncertainties and
other important
factors could cause actual
developments and results to
differ materially from UBS’s expectations.
In particular, the global economy may suffer
significant adverse
effects from increasing political tensions between world
powers, changes to international
trade policies, including those related to
tariffs and trade barriers, and
ongoing conflicts
in the Middle
East, as well
as the continuing
Russia–Ukraine war. UBS’s
acquisition of the
Credit Suisse
Group has materially
changed its
outlook
and strategic direction and introduced
new operational challenges. The integration of the
Credit Suisse entities into the
UBS structure is expected
to continue
through 2026 and presents significant
operational and execution risk, including the
risks that UBS may be
unable to achieve the cost
reductions and business
benefits contemplated by
the transaction, that
it may incur
higher costs to
execute the integration
of Credit Suisse
and that the
acquired business may
have
greater risks
or liabilities
than expected.
Following the
failure of
Credit Suisse,
Switzerland is
considering significant
changes to
its capital,
resolution and
regulatory
regime, which, if adopted,
would 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 including heightened requirements and
expectations due to its acquisition of the Credit Suisse Group;
(viii) UBS’s ability to
maintain and improve
its systems and
controls for complying
with sanctions in
a timely manner
and for
the detection and
prevention of
money laundering to meet evolving regulatory
requirements and expectations, in particular in
the current geopolitical turmoil;
(ix) the uncertainty arising from
domestic stresses
in certain
major economies;
(x) changes in
UBS’s competitive
position, including
whether differences
in regulatory
capital and
other requirements
among the major financial centers adversely affect UBS’s
ability to compete in certain lines of business; (xi) changes
in the standards of conduct applicable to its
businesses that
may result
from new
regulations or
new enforcement
of existing
standards, including
measures to
impose new
and enhanced
duties when
interacting with customers and in
the execution and handling of
customer transactions; (xii) the
liability to which UBS may
be exposed, or possible constraints
or
sanctions
that
regulatory
authorities
might
impose
on
UBS,
due
to
litigation,
contractual
claims
and
regulatory
investigations, including
the
potential
for
disqualification from
certain businesses,
potentially large
fines or
monetary penalties,
or the
loss of
licenses or
privileges as
a
result of
regulatory or
other
governmental sanctions, as well
as the effect that litigation, regulatory
and similar matters have on the
operational risk component of its
RWA; (xiii) UBS’s ability
to retain and attract the
employees necessary to generate revenues and to manage,
support and control its businesses, which may
be affected by competitive
factors; (xiv) changes in accounting or tax standards or policies, and determinations or interpretations affecting the recognition of gain or loss, the valuation of
goodwill, the
recognition of deferred
tax assets and
other matters; (xv) UBS’s
ability to
implement new technologies
and business methods,
including digital
services, artificial intelligence and other technologies, and ability to successfully compete with both existing and new financial service providers, some of which
may not be regulated to the same extent; (xvi) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and
modeling, and
of
financial models
generally; (xvii) the
occurrence of
operational failures,
such as
fraud, misconduct,
unauthorized trading,
financial crime,
cyberattacks, data leakage and systems failures, the risk of which is increased with persistently high levels of cyberattack threats;
(xviii) restrictions on the ability
of UBS Group AG, UBS AG and regulated
subsidiaries of UBS AG to make
payments or distributions, including
due to restrictions on the ability
of its subsidiaries
to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by FINMA or the regulators of UBS’s operations in
other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation proceedings; (xix) the degree to which changes
in regulation, capital or
legal structure, financial results
or other factors may
affect UBS’s ability
to maintain its stated
capital return objective; (xx) uncertainty
over the scope of actions that may be required by UBS, governments and others for UBS to achieve goals relating to climate, environmental and social matters,
as well as
the evolving nature
of underlying science and
industry and the increasing
divergence
among
regulatory regimes; (xxi) the
ability of UBS
to access
capital markets; (xxii)
the ability of
UBS to successfully
recover from a disaster
or other business
continuity problem due
to a hurricane,
flood, earthquake, terrorist
attack, war,
conflict, pandemic, security breach, cyberattack, power loss, telecommunications failure or other natural or
man-made event; and (xxiii) the effect
that these or other factors or unanticipated events, including media reports and speculations, may have on its reputation and the additional consequences that
this may have on its business and performance. The sequence in which the factors above are presented is not indicative of their likelihood of occurrence or the
potential magnitude of their consequences. UBS’s business and financial performance could be affected by other factors identified in its past and
future filings
and reports,
including those
filed with
the US
Securities and
Exchange Commission
(the SEC).
More detailed
information about
those factors
is set
forth in
documents furnished by UBS and filings
made by UBS with the SEC, including the
UBS Group AG and UBS AG Annual Reports
on Form 20-F for the year ended
31 December 2024. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a
result of new information, future events, or otherwise.
© UBS 2025. The key symbol and UBS are among
the registered and unregistered trademarks of UBS. All rights
reserved
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly
caused this report to be signed on their behalf by the undersigned, thereunto
duly authorized.
UBS Group AG
By:
/s/ David Kelly
_
Name:
David Kelly
Title:
Managing Director
By:
/s/ Ella Copetti-Campi
_
Name:
Ella Copetti-Campi
Title:
Executive Director
UBS AG
By:
/s/ David Kelly
_
Name:
David Kelly
Title:
Managing Director
By:
/s/ Ella Copetti-Campi
_
Name:
Ella Copetti-Campi
Title:
Executive Director
Date:
July 31, 2025