UBS Group AG 6-K, filed Feb 6, 2024
UBS Group AG (UBS)
6-K
2024-02-06
For: 2023-12-31
View Original
Added on
July 04, 2026
About this 6-K
UBS Group AG filed this 6-K on February 6, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: February 6, 2024
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
Credit Suisse AG
(Registrant's Name)
Paradeplatz 8, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-33434
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
☒
☐
This Form 6-K consists of the Fourth Quarter 2023 Report of UBS Group AG, which appears immediately following
this page.
Fourth
quarter
2023
report
Corporate calendar UBS Group AG
Publication of the Annual Report 2023: Thursday, 28 March 2024
Publication of the Sustainability Report 2023: Thursday, 28 March 2024
Annual General Meeting 2024: Wednesday, 24 April 2024
Publication of the first quarter 2024 report: Tuesday, 7 May 2024
Publication of the second quarter 2024 report: Wednesday, 31 July 2024
Publication dates of future quarterly and annual reports and results are made available as
part of the corporate calendar of UBS Group AG at
ubs.com/investors
.
Contacts
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relationships with institutional investors,
research analysts and credit rating agencies.
ubs.com/investors
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relationships with global media and
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ubs.com/media
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mediarelations@ubs.com
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mediarelations@ubs.com
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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
P.O. Box, CH-8098 Zurich, Switzerland
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Zurich +41-44-235 6652
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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
P.O. Box, CH-8098 Zurich, Switzerland
sh-shareholder-services@ubs.com
Zurich +41-44-235 6652
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For global registered share-related
inquiries in the US.
Computershare Trust Company NA
P.O. Box 43006
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Shareholder online inquiries:
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Imprint
Publisher: UBS Group AG, Zurich, Switzerland | ubs.com
Language: English
© UBS 2024. The key symbol and UBS are among the registered and unregistered
trademarks of UBS. All rights reserved.
1.
UBS
Group
4
9
2.
UBS business divisions
and Group Items
20
23
25
27
29
30
3.
Risk, capital, liquidity and funding,
and balance sheet
32
38
46
47
49
4.
Consolidated
financial information
52
Appendix
73
78
80
81
UBS Group fourth quarter 2023 report
Terms used in this report, unless the context requires otherwise
“UBS,” “UBS Group,” “UBS Group AG consolidated,” “Group,” “the Group,” “we,” “us” and “our”
UBS Group AG and its consolidated subsidiaries
“Pre-acquisition UBS”
UBS before the acquisition of the Credit Suisse Group
“UBS AG” and “UBS AG consolidated”
UBS AG and its consolidated subsidiaries
“Credit Suisse AG” and “Credit Suisse AG consolidated”
Credit Suisse AG and its consolidated subsidiaries
“Credit Suisse Group“ and “Credit Suisse Group AG consolidated”
Credit Suisse Group before the acquisition by UBS
”Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries, Credit Suisse
Services AG, and other small former Credit Suisse Group entities
now directly held by UBS Group AG
“UBS Group AG” and “UBS Group AG standalone”
UBS Group AG on a standalone basis
“Credit Suisse Group AG” and “Credit Suisse Group AG standalone”
Credit Suisse Group AG on a standalone basis
“UBS AG standalone”
UBS AG on a standalone basis
“Credit Suisse AG standalone”
Credit Suisse AG on a standalone basis
“UBS Switzerland AG” and “UBS Switzerland AG standalone”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and “UBS Americas Holding LLC consolidated”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e., 1,000,000
“1bn”
One billion, i.e., 1,000,000,000
“1trn”
One trillion, i.e., 1,000,000,000,000
In this report, unless the context requires otherwise, references to any gender shall apply to all genders.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. 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 the fourth and third quarters of 2023 is presented on a consolidated basis, including
for each quarter Credit Suisse data for three months. Information for the prior-year quarters includes pre-acquisition
UBS data only. Year-to-date information for 2023 includes seven months (from June to December, inclusive) of
Credit Suisse data. Comparative year-to-date information for 2022 includes pre-acquisition UBS data only.
Balance sheet information as at 31 December 2023 and 30 September 2023 includes UBS and Credit Suisse
consolidated information. Prior balance sheet dates reflect pre-acquisition UBS information only.
UBS Group fourth quarter 2023 report
Our key figures
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Group results
Total revenues
Negative goodwill
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Net profit / (loss) attributable to shareholders
Diluted earnings per share (USD)
2
Profitability and growth
3,4,5
Return on equity (%)
Return on tangible equity (%)
Underlying return on tangible equity (%)
Return on common equity tier 1 capital (%)
Underlying return on common equity tier 1 capital (%)
Return on leverage ratio denominator, gross (%)
Cost / income ratio (%)
6
Underlying cost / income ratio (%)
6
Effective tax rate (%)
n.m.
7
n.m.
7
Net profit growth (%)
n.m.
n.m.
Resources
3
Total assets
Equity attributable to shareholders
Common equity tier 1 capital
8
Risk-weighted assets
8
Common equity tier 1 capital ratio (%)
8
Going concern capital ratio (%)
8
Total loss-absorbing capacity ratio (%)
8
Leverage ratio denominator
8
Common equity tier 1 leverage ratio (%)
8
Liquidity coverage ratio (%)
9
Net stable funding ratio (%)
Other
Invested assets (USD bn)
4,10,11
Personnel (full-time equivalents)
Market capitalization
2,12
Total book value per share (USD)
2
Tangible book value per share (USD)
2
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report 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 the updated targets,
guidance and ambitions. 4 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 5 Profit or loss information for each of the fourth quarter of 2023
and the third quarter of 2023 is presented on a consolidated basis, including for each quarter Credit Suisse data for three months, and for the purpose of the calculation of return measures, has been annualized
multiplying such by four. Profit or loss information for 2023 includes seven months (June to December 2023, inclusive) of Credit Suisse data for the year-to-date return measure. 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 and third quarters 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 63 data points in the fourth quarter of 2023, 63 data points in
the third quarter of 2023 and 63 data points in the fourth quarter of 2022. 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 and Personal & Corporate Banking. Refer to “Note 31 Invested assets and net new money” in the “Consolidated financial statements” section of the Annual Report 2022
for more information. 11 Starting with the second quarter of 2023, invested assets include invested assets from associates in the Asset Management business division, to better reflect the business strategy.
Comparative figures have been restated to reflect this change. 12 In the second quarter of 2023, the calculation of market capitalization was amended to reflect total shares issued multiplied by the share price at
the end of the period. The calculation was previously based on total shares outstanding multiplied by the share price at the end of the period. Market capitalization has been increased by USD 7.8bn as of 31 December
2022 as a result.
UBS Group fourth quarter 2023 report |
UBS Group | Recent developments 4
UBS Group
Management report
Recent developments
Integration of Credit Suisse
We continue to execute on our integration plans, working toward the substantial completion of the integration by
the end of 2026. We achieved around USD 4bn in exit rate gross cost savings as of year-end 2023 compared to the
full year 2022 for UBS and the Credit Suisse Group combined. Our strategy for the wind down of Non-core and
Legacy led to reductions of USD 6bn in risk-weighted assets (RWA), the three quarters of which came from active
unwinds, and USD 19bn in LRD in the fourth quarter.
Legal structure integration
In December 2023, the Board of Directors of UBS Group AG (the BoD) approved the merger of UBS AG and Credit
Suisse AG, and both entities entered into a definitive merger agreement. The completion of the merger is subject
to regulatory approvals and is expected to occur by the end of the second quarter of 2024. We also expect to
complete the transition to a single US intermediate holding company in the second quarter of 2024 and the planned
merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG in the third quarter of 2024.
Completing the mergers of our significant legal entities is a critical step in enabling us to unlock the next phase of
the cost, capital and funding synergies we expect to realize in 2025 and 2026. These significant-legal-entity mergers
are a pre-requisite for the first wave of client migrations and will allow us to begin streamlining and
decommissioning legacy Credit Suisse platforms in the second half of 2024.
Updated targets, guidance and ambitions
Based on our execution of the integration of Credit Suisse to date and the completion of our business planning
process, we have updated our performance targets and capital guidance for the Group. We have also set ambitions
for each of the business divisions that collectively are building blocks toward achieving our targets.
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 approximately USD 13bn by the end of 2026 compared to full year 2022 for UBS
and Credit Suisse combined. Gross cost savings will create capacity to reinvest for growth and to enhance the
resilience of our infrastructure.
We confirm our capital guidance and 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 deliver higher returns. We therefore aim to deliver a
reported RoCET1 of around 18% in 2028.
We expect Group RWA to be around USD 510bn by the end of 2026, assuming constant foreign exchange rates,
including an estimated USD 25bn day-1 increase for the finalization of Basel III in 2025 (of which USD 10bn in Non-
core and Legacy) and an increase of around USD 10bn in our core businesses from the alignment of Credit Suisse
to UBS risk models. We expect to offset these increases with RWA reductions in Non-core and Legacy, with the
remaining portfolio there representing around 5% of Group RWA at the end of 2026. We also expect business-led
actions to optimize returns on RWA in our core businesses to result in a further decrease in RWA around USD 15bn.
UBS Group fourth quarter 2023 report |
UBS Group | Recent developments 5
Business division ambitions
Our business divisions aim to achieve the following.
–
Global Wealth Management: surpass USD 5trn of invested assets over the next five years, with around
USD 100bn of net new assets annually through 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).
–
Personal & Corporate Banking: an underlying cost / income ratio of less than 50% by the end of 2026 (exit rate).
–
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 approximately 15% through the cycle, while
operating with no more than 25% of the Group’s RWA.
–
Non-core and Legacy: an underlying profit-before-tax loss of less than USD 1bn (exit rate), underlying costs of
less than USD 1bn (exit rate), and a share of around 5% of Group RWA, all by the end of 2026.
Capital returns
For 2023, the Board of Directors plans to propose a dividend to UBS Group AG shareholders of USD 0.70 per share.
Subject to approval at the Annual General Meeting, scheduled for 24 April 2024, the dividend will be paid on 3 May
2024 to shareholders of record on 2 May 2024. The ex-dividend date will be 30 April 2024. We remain committed
to progressive increase in dividends and are accruing for a mid-teens percentage increase in the dividend per share
for the 2024 financial year.
In 2023, we bought back USD 1.3bn of shares before we announced the acquisition of the Credit Suisse Group. In
2024, we plan to repurchase up to USD 1bn of our shares commencing after the completion of the merger of UBS
AG and Credit Suisse AG. Our ambition is for share repurchases to exceed our pre-acquisition levels by 2026.
Regulatory and legal developments
Swiss Federal Council adopts amendments to the Capital Adequacy Ordinance
In November 2023, the Swiss Federal Council adopted amendments to the Capital Adequacy Ordinance (the CAO)
for banks to incorporate the final Basel III standards adopted by the Basel Committee on Banking Supervision (the
BCBS) in Swiss law. The amended CAO will enter into force on 1 January 2025. The final degree of alignment
between the Swiss implementation and those in other jurisdictions remains still uncertain at this stage. Although
EU legislators target implementation by January 2025, the implementation timelines in the UK and the US have
been delayed until July 2025. The Swiss Federal Department of Finance will inform the Swiss Federal Council about
the status of international implementation by the end of July 2024, at the latest. We currently estimate that the
revised Basel III framework would lead to a further net increase in risk-weighted assets of approximately USD 25bn,
of which USD 10bn in Non-core and Legacy. This estimate is based on static balances, before taking into account
mitigating actions, as well as not reflecting the impact of the output floor, which is phased in over time.
Revisions to the Swiss Liquidity Ordinance
The too-big-to-fail (TBTF) liquidity requirements communicated by the Swiss Financial Market Supervisory Authority
(FINMA) in the third quarter of 2023 became effective on 1 January 2024. The affected legal entities of the UBS
Group are compliant with these requirements.
Financial Stability Board updates list of global systemically important banks
In November 2023, the Financial Stability Board (the FSB) published the 2023 list of global systemically important
banks (G-SIBs). UBS has been moved from Bucket 1 to Bucket 2, corresponding to an increased FSB common equity
tier 1 capital surcharge requirement of 1.5% from 1.0%, effective from 1 January 2025. Credit Suisse has been
removed from the list. As UBS is subject to higher requirements under the Swiss CAO, the change does not affect
the capital requirements applicable to UBS.
UBS Group fourth quarter 2023 report |
UBS Group | Recent developments 6
Implementation of global minimum taxation in Switzerland
In June 2023, the Swiss electorate voted in favor of the introduction of a minimum corporate tax rate of 15%
applicable to companies with a consolidated turnover of more than EUR 750m, as stipulated by the Global Anti-
Base Erosion Model Rules (Pillar Two) of the Organisation for Economic Co-operation and Development. In
December 2023, the Swiss Federal Council decided on a partial adoption in Switzerland, by way of an ordinance,
and, as a result, a domestic minimum top-up tax regime became effective from 1 January 2024, ensuring a Swiss
local minimal tax burden of at least 15%. Switzerland will not implement any top-up tax regime in 2024 with
respect to non-Swiss taxation below 15%. The Swiss Federal Council will further observe international
developments and decide at a later stage if and when any top-up tax with respect to non-Swiss taxation below
15% will be introduced in Switzerland. UBS does not expect the implementation of global minimum taxation in
Switzerland to materially impact its effective tax rate.
Swiss Federal Council implements statutory anchoring of stock exchange protective measures
In November 2023, the Swiss Federal Council adopted an amendment to the Financial Market Infrastructure Act
that enacts a measure aimed at protecting the Swiss stock exchange infrastructure into Swiss law with effect from
1 January 2024. This ruling followed the EU’s decision to withdraw equivalence for the Swiss stock exchange
regulation in 2019. The protective measure enables EU firms to trade Swiss shares on the Swiss trading venues,
even without EU equivalence. In the event of equivalence recognition by the EU, the measure may be deactivated
at any time.
Switzerland and the UK sign a mutual recognition agreement for financial services
In December 2023, the Swiss Confederation and the UK signed a mutual recognition agreement (the MRA) for
financial services to facilitate cross-border financial activities. The MRA is supplemented by measures to enhance
supervisory cooperation and coordination. The MRA envisages a memorandum of understanding between FINMA
and the Bank of England on resolution arrangements, and it is expected to enable Swiss banks to provide cross-
border investment services to high net worth UK-domiciled clients and to allow UK and Swiss over-the-counter
derivatives counterparties to choose whether to rely on Swiss or UK risk mitigation rules (except for physically settled
foreign exchange swaps and forwards). The agreement is expected to apply from 2026, depending on the
completion of parliamentary approval in both countries.
Swiss Federal Council launches a new version of the Swiss Climate Scores
In December 2023, the Swiss Federal Council announced that it intends to further improve climate transparency
for financial products and to further develop the voluntary Swiss Climate Scores (the SCS), which were introduced
in 2022. The SCS provide investors with information about the extent to which their financial investments are
compatible with climate goals. The updated SCS, which will apply from 1 January 2025, will continue to prescribe
disclosures by financial institutions on climate alignment and climate change mitigation characteristics of financial
products and will newly prescribe disclosure of exposures to renewable energy. UBS has committed to the voluntary
use of the SCS.
US Federal Deposit Insurance Corporation approves a special assessment to recover losses incurred by the Deposit
Insurance Fund
In November 2023, the US Federal Deposit Insurance Corporation (the FDIC) approved a final rule to implement a
special assessment to recover losses incurred by the Deposit Insurance Fund in connection with the failures of Silicon
Valley Bank and Signature Bank in March 2023. The assessment is based on the estimated uninsured deposits of
each depositary institution at year-end 2022. The assessment will be collected over an eight-quarter period starting
in January 2024. UBS Bank USA has recorded a charge for the full amount of its estimated assessment of USD 60m
in the fourth quarter of 2023.
US banking agencies issue climate risk management principles
In October 2023, the Federal Reserve Board (the FRB), the Office of the Comptroller of the Currency (the OCC) and
the FDIC approved guidance on the principles for climate-related financial risk management. The final principles
describe how climate-related risks can be addressed in the management of traditional financial risks. The principles
cover six areas: governance; policies, procedures and limits; strategic planning; risk management; data, risk
measurement and reporting; and scenario analysis. The guidance applies to our US-based operations. UBS is
evaluating the guidance to ensure the principles are addressed by Group practices.
UBS Group fourth quarter 2023 report |
UBS Group | Recent developments 7
US banking agencies adopt amendments to Community Reinvestment Act regulations
In October 2023, the FRB, the FDIC and the OCC adopted revisions to their regulations implementing the
Community Reinvestment Act (the CRA). The CRA encourages banks to meet the credit needs of the communities
in which they do business, with a focus on low- and moderate-income communities. The final rule would implement
separate evaluations for retail lending, retail services and products, community development financing, and
community development services for banks with over USD 2bn in total assets. For large banks with over USD 10bn
in total assets, the evaluation of retail services and products will cover digital delivery systems. The final rule also
updates requirements on the reporting of exposures. The rule has an implementation date of 1 April 2024, with
additional phase-in periods for general provisions and reporting that extend out to April 2027. UBS Bank USA
expects a modest level of increased monitoring and reporting requirements.
Developments related to shortening the standard settlement cycle for securities transactions
US securities markets will transition to one business day after the trade date (T+1) settlement of most transactions
in May 2024. In October 2023, the European Securities and Market Authority (ESMA) launched a call for evidence
on shortening the standard settlement cycle for securities transactions from two business days after the trade date
(T+2) to T+1. ESMA aims to perform an assessment of the costs and benefits linked to the potential reduction of
the securities settlement cycle in the EU and intends to submit the results of its assessment to the European
Commission and publish a final report in the fourth quarter of 2024, at the latest. The UK Treasury has also
established an Accelerated Settlement Taskforce to consider whether the UK should follow the US and transition
to a T+1 settlement. The UK task force is expected to publish its findings by early 2024, with further work being
planned during 2024. UBS is implementing and testing required enhancements based on the US rules and will
prepare for further implementation according to the evolving rules and market practice in the UK, the EU and
Switzerland.
Other developments
Changes to the Pension Fund of Credit Suisse in Switzerland
In December 2023, the Board of Trustees of the Pension Fund of Credit Suisse decided to align its Swiss pension
scheme to that of the Pension Fund of UBS, effective as of 1 January 2027.
On that date, the Swiss defined benefit pension plan of the Credit Suisse Pension Fund will adopt the plan rules of
the UBS Pension Fund. The retirement capital savings plan based on Article 1e of the Ordinance on Occupational
retirement, Survivors’ and Disability Pension Plans will remain in place as of this date but will be closed for further
contributions.
In accordance with International Financial Reporting Standards, these decisions and related mitigating measures led
to an increase in UBS’s pension obligations in Switzerland resulting in a one-time pre-tax loss of USD 245m (CHF
207m) and an offsetting gain in other comprehensive income in the fourth quarter of 2023 with no impact on
equity and CET1 capital.
Sale of UBS Hana Asset Management Co., Ltd.
In October 2023, we completed the sale of our 51% stake in UBS Hana Asset Management Co., Ltd. to Hana
Securities and recorded a pre-tax gain on sale of USD 23m (net of a foreign currency translation loss) in Asset
Management in the fourth quarter of 2023.
Sale of Brazilian real estate fund management business in 2024
In December 2023, we signed an agreement to sell our Brazilian real estate fund management business, Credit
Suisse Hedging-Griffo Real Estate, to Patria Investments for up to BRL 650m (approximately USD 130m). After the
sale, we will continue to offer Patria’s funds to our wealth management clients in Brazil. The transaction is subject
to the approval of the investors in the relevant funds and customary anti-trust approvals.
Changes to the Board of Directors
On 12 January 2024, the BoD announced that it intends to nominate Gail Kelly for election to the Board at the
Annual General Meeting on 24 April 2024. Dieter Wemmer will not stand for re-election after eight years of Board
membership.
UBS Group fourth quarter 2023 report |
UBS Group | Recent developments 8
Changes to the Group Executive Board
On 24 January 2024, UBS Group AG announced that Aleksandar Ivanovic will join the Group Executive Board (the
GEB) as President Asset Management and Beatriz Martin Jimenez will become the GEB Lead for Sustainability and
Impact in addition to her existing responsibilities. They are succeeding Suni Harford, who is retiring from the firm.
The changes are effective from 1 March 2024.
Material weaknesses in the Credit Suisse Group’s internal control over financial reporting
As previously disclosed, UBS Group, UBS AG and Credit Suisse AG are subject to requirements under the Sarbanes–
Oxley Act of 2002 with respect to financial reporting. This requires us to perform system and process evaluation
and testing of internal controls over financial reporting to enable management to assess the effectiveness of our
internal controls. Credit Suisse Group disclosed material weaknesses in its internal controls over financial reporting
for the periods ended 31 December 2022 and 2021. A material weakness is a deficiency or a combination of
deficiencies in internal controls over financial reporting such that there is a reasonable possibility that a material
misstatement of a registrant’s financial statements will not be prevented or detected on a timely basis. Evaluation
of the impacts of the material weaknesses identified in Credit Suisse’s internal control over financial reporting will
form part of our annual assessment, which will be disclosed as part of our Annual Report 2023.
Purchase price adjustments arising from the acquisition of the Credit Suisse Group
UBS accounted for the acquisition as a business combination under IFRS 3, Business Combinations, applying the
acquisition method of accounting. After establishing the initial purchase price allocation as published in the UBS
Group second quarter 2023 report, we are required for the subsequent 12-month period to monitor developments
that may suggest that the fair values established as of the acquisition balance sheet date (31 May 2023) could be
different. Fair value adjustments are accounted for retrospectively with previously reported financial information
revised as of the acquisition date.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 9
Group performance
Income statement
For the quarter ended
% change from
For the year ended
USD m
31.12.23
30.9.23
1
31.12.22
3Q23
4Q22
31.12.23
31.12.22
Net interest income
Other net income from financial instruments measured at fair value through profit or loss
Net fee and commission income
Other income
Total revenues
Negative goodwill
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Comprehensive income
Total comprehensive income
Total comprehensive income attributable to non-controlling interests
Total comprehensive income attributable to shareholders
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 10
Selected financial information of our business divisions and Group Items
For the quarter ended 31.12.23
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments and
other effects
of which: losses related to investment in SIX Group
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
of which: acquisition-related costs
of which: amortization from newly recognized intangibles resulting from
the acquisition of the Credit Suisse Group
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
For the quarter ended 30.9.23 revised
1
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments and
other effects
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
of which: acquisition-related costs
of which: amortization from newly recognized intangibles resulting from
the acquisition of the Credit Suisse Group
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
For the quarter ended 31.12.22
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: gain from sales of real estate
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 11
Selected financial information of our business divisions and Group Items
For the year ended 31.12.23
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
of which: accretion of PPA adjustments on financial
instruments and other effects
of which: losses related to investment in SIX Group
Total revenues (underlying)
Negative goodwill
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
of which: acquisition-related costs
of which: amortization from newly recognized intangibles
resulting from the acquisition of the Credit Suisse Group
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
For the year ended 31.12.22
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: net gain from disposals
of which: gains from sales of subsidiary and business
of which: losses in the first quarter of 2022 from
transactions with Russian counterparties
of which: litigation settlement
of which: gain from sales of real estate
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
Integration-related expenses by business division and Group Items
For the quarter ended
For the year
ended
USD m
31.12.23
30.9.23
31.12.23
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total net integration-related expenses
of which: personnel expenses
of which: general and administrative expenses
of which: depreciation, amortization and impairment of non-financial assets
Underlying results
In addition to reporting our results in accordance with International Financial Reporting Standards (IFRS), 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 2023, underlying revenues exclude accretion of purchase price allocation (PPA) adjustments
on financial instruments measured at amortized cost, including off-balance sheet positions, and other related
effects, arising from the acquisition of the Credit Suisse Group. Accretion of PPA adjustments on financial
instruments is accelerated when the related financial instrument is terminated or disposed of before its contractual
maturity. Underlying revenues also exclude losses relating to our investment in SIX Group.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 12
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. Integration-related expenses incurred by Credit Suisse also included expenses
associated with restructuring programs that existed prior to the acquisition.
Acquisition-related costs consist of costs directly attributable to the acquisition of the Credit Suisse Group and
mainly include consulting and legal fees.
Results: 4Q23 vs 4Q22
Reported operating loss before tax was USD 751m, compared with an operating profit before tax of USD 1,937m,
primarily reflecting higher operating expenses and a net credit loss expense of USD 136m, compared with USD 7m
in the fourth quarter of 2022, partly offset by an increase in total revenues. Operating expenses increased by
USD 5,385m, or 88%, to USD 11,470m, largely due to the consolidation of Credit Suisse expenses of USD 4,100m,
and included total integration-related expenses of USD 1,751m. Excluding the aforementioned effects, personnel
expenses increased, reflecting salary adjustments, higher variable compensation and foreign currency effects.
General and administrative expenses increased mainly due to higher technology costs, as well as an expense of
USD 60m for the US Federal Deposit Insurance Corporation special deposit insurance assessment, relating to the
2023 failures of Silicon Valley Bank and Signature Bank.
Total revenues increased by USD 2,826m, or 35%, to USD 10,855m, largely due to the consolidation of Credit
Suisse revenues of USD 2,942m, which included USD 925m of accretion impacts resulting from PPA adjustments
on financial instruments and other effects. Total combined net interest income and other net income from financial
instruments measured at fair value through profit or loss increased by USD 1,789m, with an increase of USD 1,879m
attributable to the consolidation of Credit Suisse. Net fee and commission income increased by USD 1,421m, mainly
attributable to a larger invested assets base, following the acquisition of the Credit Suisse Group, which contributed
USD 1,070m of this increase. This was partly offset by other income of negative USD 179m compared with positive
USD 206m in the fourth quarter of 2022, largely due to losses of USD 508m relating to our investment in SIX
Group, which reflect UBS’s share of impairments taken by SIX Group on its investment in Worldline and on goodwill
related to its subsidiary, BME.
Underlying results 4Q23 vs 4Q22
Underlying results for the fourth quarter of 2023 exclude USD 944m of accretion impacts resulting from PPA
adjustments on financial instruments and other effects, as well as losses of USD 508m from our investment in SIX
Group, from total revenues. We also excluded integration-related expenses of USD 1,751m, amortization from
newly recognized intangibles resulting from the acquisition of the Credit Suisse Group of USD 29m, and a reversal
of acquisition-related costs of USD 1m from operating expenses.
On an underlying basis, profit before tax decreased by USD 1,277m, or 68%, to USD 592m, reflecting a
USD 3,605m increase in underlying operating expenses and a USD 129m increase in credit loss expenses, partly
offset by a USD 2,458m increase in underlying total revenues.
Total revenues: 4Q23 vs 4Q22
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 increased by USD 1,789m to USD 5,253m, mainly driven by the consolidation of USD 1,879m of Credit
Suisse revenues, and included USD 571m of accretion from PPA adjustments on financial instruments and other
effects.
Personal & Corporate Banking net interest income increased by USD 1,089m to USD 1,722m, largely attributable
to the consolidation of USD 932m of Credit Suisse net interest income, and included USD 373m of accretion of PPA
adjustments on financial instruments and other effects. The remaining increase was mainly driven by higher deposit
margins, which resulted from higher interest rates, partly offset by lower deposit fees. Excluding accretion effects,
underlying net interest income was USD 1,349m.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 13
Global Wealth Management net interest income increased by USD 373m, to USD 1,872m, largely attributable to
the consolidation of Credit Suisse net interest income, and included USD 261m of accretion of PPA adjustments on
financial instruments and other effects, and the effects of higher deposit margins, resulting from higher interest
rates, partly offset by shifts to lower-margin deposit products. Excluding accretion effects, underlying net interest
income was USD 1,611m.
›
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 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
31.12.23
30.9.23
1
31.12.22
3Q23
4Q22
31.12.23
31.12.22
Net interest income from financial instruments measured at amortized cost and fair value
through other comprehensive income
Net interest income from financial instruments measured at fair value through profit or loss
and other
Other net income from financial instruments measured at fair value through profit or loss
Total
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
Net fee and commission income
Net fee and commission income increased by USD 1,421m to USD 5,780m, which included USD 353m of accretion
resulting from PPA adjustments in financial instruments.
Fees for portfolio management and related services increased by USD 845m to USD 2,966m, largely attributable to
the consolidation of USD 662m of Credit Suisse revenues, as well as positive market performance.
Other fee and commission income increased by USD 654m to USD 1,081m, largely attributable to the consolidation
of USD 603m of Credit Suisse revenues, which included USD 353m of accretion resulting from PPA adjustments in
financial instruments.
Other income
Other income was negative USD 179m, compared with positive USD 206m in the fourth quarter of 2022. The
decrease was largely due to USD 508m losses relating to our investment in SIX Group. These losses reflected UBS’s
share of impairments taken by SIX Group on its investment in Worldline and on goodwill related to its subsidiary,
BME. The decrease was partly offset by income of USD 75m relating to mortgage-servicing rights and USD 41m
relating to insurance and similar contracts acquired as part of the Credit Suisse Group. 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.
included a gain of USD 68m from the sale of real estate in Group Items and a USD 41m gain in Global Wealth
Management on the sale of our US alternative investments administration business.
Credit loss expense / release: 4Q23 vs 4Q22
Total net credit loss expenses in the fourth quarter of 2023 were USD 136m, compared with net credit loss expenses
of USD 7m in the prior-year quarter, reflecting net releases of USD 43m related to performing positions, and net
expenses of USD 180m on credit-impaired positions.
›
Refer to the “Risk management and control” section of this report for expected credit loss (ECL) allowances by
business division as of 31 December 2023 and to the “Consolidated financial statements” section of the UBS
Group AG Annual Report 2023, which will be available as of 28 March 2024 under “Annual reporting” at
ubs.com/investors
, for detailed disclosures about ECL exposures, allowances, coverage ratios, underlying scenarios,
scenario assumptions and post-model adjustments
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 14
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
Total
For the quarter ended 31.12.23
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 30.9.23
1
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 31.12.22
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Group Items
Total
1 Certain prior-period figures as of or for the quarter ended 30 September 2023 have been revised due to effects of measurement period adjustments in relation to the acquisition of the Credit Suisse Group. Refer to
“Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
Operating expenses: 4Q23 vs 4Q22
Operating expenses
For the quarter ended
% change from
For the year ended
USD m
31.12.23
30.9.23
1
31.12.22
3Q23
4Q22
31.12.23
31.12.22
Personnel expenses
of which: salaries and variable compensation
of which: variable compensation – financial advisors
2
General and administrative expenses
of which: net expenses for litigation, regulatory and similar matters
of which: other general and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Total operating expenses
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
2 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. It also includes expenses related to compensation commitments with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
Personnel expenses
Personnel expenses increased by USD 2,939m to USD 7,061m, mainly due to the consolidation of Credit Suisse
expenses of USD 2,349m, and included integration-related expenses of USD 794m covering post-employment
benefit plans, awards granted to employees to support retention and operational stability, severance expenses, and
the alignment of Credit Suisse processes to the UBS variable compensation framework. Salaries and variable
compensation increased by USD 2,250m, due to the aforementioned effects, and also due to salary adjustments,
higher variable compensation, and foreign currency effects. Associated social security costs also increased by USD
221m. Pension and other post-employment benefit plans increased by USD 375m, largely driven by an increase in
the pension plan obligation of the Swiss pension plan of Credit Suisse following the decision to align the Swiss
pension scheme to that of UBS, which resulted in a pre-tax loss of USD 245m (CHF 207m) in the fourth quarter of
2023 and an offsetting gain in other comprehensive income due to the asset ceiling.
›
Refer to the “Recent developments” section of this report for more information about the pension scheme changes
in the Swiss pension plan of Credit Suisse
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 15
General and administrative expenses
General and administrative expenses increased by USD 1,579m to USD 2,999m, largely due to the consolidation of
Credit Suisse expenses of USD 963m, as well as higher technology and outsourcing costs, and included total
integration-related expenses of USD 455m, mainly from higher consulting and real estate costs. UBS recorded bank
levy expenses of USD 75m, reflecting an increase of USD 34m compared with the prior-year quarter, as well as an
expense of USD 60m for the US Federal Deposit Insurance Corporation special deposit insurance assessment
relating to the 2023 failures of Silicon Valley Bank and Signature Bank.
We believe that the industry continues to operate in an environment in which expenses associated with litigation,
regulatory and similar matters will remain elevated for the foreseeable future, and we continue to be exposed to a
number of significant claims and regulatory matters. The outcome of many of these matters, the timing of a
resolution, and the potential effects of resolutions on our future business, financial results or financial condition are
extremely difficult to predict.
›
Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for
more information about litigation, regulatory and similar matters
›
Refer to “Regulatory and legal developments” in the Annual Report 2022 and “Risks relating to UBS” filed on Form
6-K together with the UBS Group second quarter 2023 report for more information
Depreciation, amortization and impairment of non-financial assets
Depreciation, amortization and impairment of non-financial assets increased by USD 866m to USD 1,409m, largely
due to the consolidation of Credit Suisse expenses of USD 789m and included total integration-related expenses of
USD 503m, mainly attributable to impairment and accelerated depreciation of right-of-use assets associated with
real estate leases. Excluding the aforementioned effects, depreciation of internally developed software increased
by USD 34m, reflecting a higher level of capitalized costs.
Tax: 4Q23 vs 4Q22
The Group had a net income tax benefit of USD 473m for the fourth quarter of 2023, compared with a net income
tax expense of USD 280m for the prior-year quarter. The net current tax expense was USD 69m, compared with
USD 349m. This included current tax expenses of USD 375m relating to the taxable profits of UBS Switzerland AG
and other entities, which were mostly offset by benefits in respect of decreases in accruals for US taxes, including
USD 152m that primarily related to state and local taxes and USD 154m that related to corporate alternative
minimum tax (CAMT).
There was a net deferred tax benefit of USD 542m, compared with a benefit of USD 69m in the prior-year quarter.
This included benefits of USD 591m in respect of remeasurements of deferred tax assets (DTAs), which included
USD 457m in respect of DTA revaluations for certain entities in connection with our business planning process and
USD 134m in respect of an increase in DTAs that resulted from an increase in the expected value of future tax
deductions for deferred compensation awards, due to an increase in the Group’s share price during the quarter.
These benefits were partly offset by a net expense of USD 49m that included USD 154m related to a decrease in
DTAs in respect of CAMT credits carried forward, partly offset by a benefit of USD 105m that mainly related to a
decrease in DTA amortization that was previously recognized in the year.
If the aforementioned benefits of USD 591m in respect of remeasurements of DTAs and USD 152m in respect of
the reversal of the current tax expense accrual that primarily related to state and local taxes are excluded, the Group
would have had a tax expense of USD 270m in relation to its pre-tax loss for the quarter. This is because that loss
includes operating losses of certain entities, reflecting integration-related expenses and 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. The Group’s tax expense for 2024 may be similarly impacted if further such operating
losses are incurred.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 16
Total comprehensive income attributable to shareholders
In the fourth quarter of 2023, total comprehensive income attributable to shareholders was USD 2,677m, reflecting
a net loss of USD 279m and other comprehensive income (OCI), net of tax, of USD 2,956m.
OCI related to cash flow hedges was USD 1,970m, mainly reflecting net unrealized gains on US dollar hedging
derivatives resulting from significant decreases in the relevant US dollar long-term interest rates.
Foreign currency translation OCI was USD 1,597m, mainly resulting from a significant strengthening of the Swiss
franc and the euro against the US dollar.
Defined benefit plan OCI was USD 131m, mainly reflecting pre-tax OCI gains in the Credit Suisse Swiss pension
plan of USD 231m. This largely reflected an increase in the pension plan obligation of the Swiss pension plan of
Credit Suisse following the decision to align the Swiss pension scheme to that of UBS, which resulted in a pre-tax
loss of USD 245m (CHF 207m) in the fourth quarter of 2023 and an offsetting gain in OCI due to the asset ceiling.
The OCI gains related to the Swiss pension plan of Credit Suisse were partly offset by pre-tax OCI losses related to
the UBS non-Swiss pension plans of USD 116m.
OCI related to own credit on financial liabilities designated at fair value was negative USD 721m, primarily due to
a tightening of our own credit spreads.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial information” section of this report
for more information
›
Refer to “Reconciliation of IFRS equity 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 “Recent developments” section of this report for more information about the pension scheme changes
in the Swiss pension plan of Credit Suisse
›
Refer to “Note 20 Fair value measurement” in the “Consolidated financial statements” section of the Annual Report
2022 for more information about own credit on financial liabilities designated at fair value
Sensitivity to interest rate movements
As of 31 December 2023, we estimated that a parallel shift in yield curves by +100 basis points could lead to a
combined increase in annual net interest income from our banking book of approximately USD 1.8bn in the first
year after such a shift. Of this increase, approximately USD 1.1bn, USD 0.4bn and USD 0.1bn would result from
changes in Swiss franc, US dollar and euro interest rates, respectively. A parallel shift in yield curves by –100 basis
points could lead to a combined decrease in annual net interest income of approximately USD 1.9bn in the first
year after such a shift, showing similar currency contributions as for the aforementioned increase in rates.
These estimates are based on a hypothetical scenario of an immediate change in interest rates, equal across all
currencies and relative to implied forward rates as of 31 December 2023 applied to our banking book. These
estimates further assume no change to balance sheet size and product mix, stable foreign exchange rates, and no
specific management action. These estimates do not represent a forecast of net interest income variability.
›
Refer to the “Risk management and control” section of this report for information about interest rate risk in the
banking book
Key figures and personnel
Below is an overview of selected key figures of the Group. For further information about key figures related to
capital management, refer to the “Capital management” section of this report.
Cost / income ratio: 4Q23 vs 4Q22
The cost / income ratio was 105.7%, compared with 75.8%, mainly reflecting an increase in operating expenses,
partly offset by an increase in total revenues. The operating loss incurred by Credit Suisse entities is reflected in the
overall increase of the ratio for the UBS Group. On an underlying basis, the cost / income ratio was 93.0%,
compared with 76.4%, mainly reflecting an increase in operating expenses on an underlying basis, partly offset by
an increase in total revenues on an underlying basis.
Personnel: 4Q23 vs 3Q23
The number of personnel employed was 138,462 (workforce count) as of 31 December 2023, a net decrease of
4,336 compared with 30 September 2023. The number of internal personnel employed as of 31 December 2023
was 112,842 (full-time equivalents), a net decrease of 3,139 compared with 30 September 2023. The number of
external staff was approximately 25,619 (workforce count), a net decrease of approximately 1,198 compared with
30 September 2023.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 17
Equity, CET1 capital and returns
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Net profit
Net profit / (loss) attributable to shareholders
Equity
Equity attributable to shareholders
Less: goodwill and intangible assets
Tangible equity attributable to shareholders
Less: other CET1 deductions
CET1 capital
Returns
Return on equity (%)
Return on tangible equity (%)
Underlying return on tangible equity (%)
Return on CET1 capital (%)
Underlying return on CET1 capital (%)
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
Common equity tier 1 capital: 4Q23 vs 3Q23
During the fourth quarter of 2023, our common equity tier 1 (CET1) capital increased by USD 0.7bn to USD 79.3bn,
mainly as the operating loss before tax of USD 0.8bn, dividend accruals of USD 0.8bn, compensation- and own
share-related capital components of USD 0.6bn and amortization of transitional CET1 PPA adjustments (interest
rate and own credit) of USD 0.3bn were more than offset by USD 1.6bn of positive effects from foreign currency
translation and a USD 1.5bn increase in eligible DTAs on temporary differences. Previously unrecognized DTAs on
temporary differences were recognized primarily in connection with our business planning process and an election
to capitalize compensation-related costs for US tax purposes.
Return on CET1 capital: 4Q23 vs 4Q22
The annualized return on CET1 capital was negative 1.4%, compared with positive 14.7%, driven by a loss
attributable to shareholders compared with a profit in the prior-year quarter and the impact of an increase in
average CET1 capital. On an underlying basis, the return on CET1 capital was 4.7%, compared with 14.1%.
Risk-weighted assets: 4Q23 vs 3Q23
Risk-weighted assets (RWA) were unchanged at USD 546.5bn, primarily as decreases of USD 15.1bn due to asset
size and other movements and USD 0.5bn due to model updates were offset by increases of USD 14.8bn due to
currency effects and USD 0.7bn due to methodology and policy changes
.
Common equity tier 1 capital ratio: 4Q23 vs 3Q23
Our CET1 capital ratio increased to 14.5% from 14.4%, reflecting the aforementioned increase in CET1 capital.
Leverage ratio denominator: 4Q23 vs 3Q23
The leverage ratio denominator (the LRD) increased by USD 79.6bn to USD 1,695.4bn, driven by currency effects
of USD 68.4bn and asset size and other movements of USD 11.1bn.
Common equity tier 1 leverage ratio: 4Q23 vs 3Q23
Our CET1 leverage ratio decreased to 4.7% from 4.9%, reflecting a USD 79.6bn increase in the LRD, partly offset
by a USD 0.7bn increase in CET1 capital.
Going concern leverage ratio: 4Q23 vs 3Q23
Our going concern leverage ratio decreased to 5.5% from 5.7%, reflecting the aforementioned increase in the
LRD, partly offset by an increase in going concern capital of USD 1.6bn.
UBS Group fourth quarter 2023 report |
UBS Group | Group performance 18
Outlook
Central banks are widely expected to lower short-term interest rates in 2024. The timing and magnitude of such
cuts are still highly uncertain, given the ongoing debate around the pace of inflation converging with central bank
targets. In addition, ongoing geopolitical tensions, including the conflicts in the Middle East and Eastern Europe,
may impact supply chains and inflation, with consequences for the macroeconomic outlook and market volatility.
Notwithstanding the challenges mentioned above, we continue to execute on our strategy and integration plans
at pace, and we will actively reduce non-core assets and costs. In the first quarter of 2024, we expect revenues to
be positively influenced by seasonal factors, such as higher client activity levels compared with the fourth quarter
of 2023. We also expect the Investment Bank to return to profitability, due to improving market activity, a growing
banking pipeline and advanced progress on the integration. We expect NII for Personal & Corporate Banking and
Global Wealth Management combined, and in US dollar terms, to be roughly flat sequentially in the first quarter,
with higher rates broadly offsetting the residual effects of deposit mix shifts and the initial impact of financial
resource optimization. These factors are expected to result in substantial sequential improvement in reported net
profit in the first quarter, including around USD 1bn of integration-related expenses and around USD 0.7bn of pull
to par and other purchase price allocation (PPA) accretion effects.
Our focus remains on helping clients navigate challenging market environments to manage the inherent risks and
opportunities while continuing to grow our invested assets and delivering on our financial targets.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Global Wealth Management 19
UBS business divisions and
Group Items
Management report
We started to report five business divisions in line with International Financial Reporting Standards (IFRS) in the third
quarter of 2023: Global Wealth Management, Personal & Corporate Banking, Asset Management, the Investment
Bank, and Non-core and Legacy. At the same time, Group Functions was renamed Group Items and excludes UBS’s
former Non-core and Legacy Portfolio and includes certain of the assets and liabilities of the former Credit Suisse
Corporate Center.
Information for the fourth quarter of 2022 represents the results of UBS Group operations prior to the acquisition
of the Credit Suisse Group, but is presented in line with the new business division structure. As we execute on our
integration plans, it is expected that allocation methodologies for profit and loss and balance sheet to the business
divisions and into Group Items will continue to be reviewed and refined.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Global Wealth Management 20
Global Wealth Management
Global Wealth Management
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: gains from sales of subsidiary and business
of which: accretion of PPA adjustments on financial instruments and other effects
of which: losses related to investment in SIX Group
Total revenues (underlying)
2
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
2
Operating expenses (underlying)
2
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
2
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Average attributed equity (USD bn)
3
Return on attributed equity (%)
2,3
Financial advisor compensation
4
Net new fee-generating assets (USD bn)
2
Fee-generating assets (USD bn)
2
Net new assets (USD bn)
2
Invested assets (USD bn)
2
Loans, gross (USD bn)
5
Customer deposits (USD bn)
5
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,6
Advisors (full-time equivalents)
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
1 Information reflects Global Wealth Management as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively. 2 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, starting with the fourth quarter of
2023. 3 Refer to the “Capital management” section of the UBS Group first quarter 2023 report for more information about the equity attribution framework. 4 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. It 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 1,754m as of 31
December 2023. 5 Loans and Customer deposits in this table include customer brokerage receivables and payables, respectively, which are presented in a separate reporting line on the balance sheet. 6 Refer to
the “Risk management and control” section of this report for more information about (credit-)impaired exposures. Excludes loans to financial advisors.
Results: 4Q23 vs 4Q22
Profit before tax decreased by USD 677m, or 64%, to USD 381m, mainly driven by higher operating expenses,
partly offset by higher total revenues, which included the impact from the acquisition of the Credit Suisse Group.
Excluding USD 284m of accretion of purchase price allocation (PPA) adjustments on financial instruments and other
effects, losses of USD 190m related to our investment in SIX Group and integration-related expenses of USD 490m,
underlying profit before tax was USD 778m.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Global Wealth Management 21
Total revenues
Total revenues increased by USD 843m, or 18%, to USD 5,444m, mainly due to the consolidation of Credit Suisse
revenues, and included USD 284m of accretion of PPA adjustments on financial instruments and other effects. The
increase was partly offset by the aforementioned losses of USD 190m. Excluding accretion effects and the
aforementioned losses, underlying total revenues were USD 5,351m.
Net interest income increased by USD 373m, or 25%, to USD 1,872m, largely attributable to the consolidation of
Credit Suisse net interest income, and included USD 261m of accretion of PPA adjustments on financial instruments
and other effects, and the effects of higher deposit margins, resulting from higher interest rates, partly offset by
shifts to lower-margin deposit products. Excluding accretion effects, underlying net interest income was
USD 1,611m.
Recurring net fee income increased by USD 419m, or 17%, to USD 2,818m, attributable to the consolidation of
Credit Suisse recurring net fee income, as well as positive market performance.
Transaction-based income increased by USD 269m, or 41%, to USD 927m, largely attributable to the consolidation
of Credit Suisse transaction-based income, and included USD 23m of accretion of PPA adjustments on financial
instruments and other effects, as well as higher levels of client activity. Excluding accretion effects, underlying
transaction-based income was USD 904m.
Other income was negative USD 172m, compared with positive other income of USD 45m, largely due to the losses
of USD 190m related to our investment in SIX Group. The fourth quarter of 2022 included a USD 41m gain from
the sale of our US alternative investments administration business. Excluding the aforementioned losses related to
our investment, underlying other income was positive USD 18m.
Credit loss expense / release
Net credit loss releases were USD 7m, compared with net expenses of USD 3m in the fourth quarter of 2022.
Operating expenses
Operating expenses increased by USD 1,530m, or 43%, to USD 5,070m, largely due to the consolidation of Credit
Suisse expenses, integration-related expenses and higher financial advisor variable compensation. In addition, the
fourth quarter of 2023 included a charge of USD 60m for the special assessment by the US Federal Deposit
Insurance Corporation (the FDIC) to recover losses incurred by the Deposit Insurance Fund in connection with the
failures of Silicon Valley Bank and Signature Bank. Excluding integration-related expenses of USD 490m, underlying
operating expenses were USD 4,580m.
Net new assets introduction
In the fourth quarter of 2023, we introduced net new assets as a new performance measure, to increase
comparability with our peers. The new measure is determined as the net amount of inflows and outflows of invested
assets, plus interest and dividends. Excluded are movements due to market performance, foreign exchange
translation, and fees, as well as the effects on invested assets of strategic decisions by UBS to exit markets or
services. We will continue to disclose net new money in our Annual Reports.
Invested assets: 4Q23 vs 3Q23
Invested assets increased by USD 233bn, or 6%, to USD 3,850bn, mainly driven by positive market performance
(excluding the aforementioned interest and dividends, which are now included in net new assets) of USD 167bn,
positive foreign currency effects of USD 59bn and net new asset inflows of USD 21.8bn.
Loans: 4Q23 vs 3Q23
Loans increased by USD 1.4bn to USD 284.3bn, driven by positive foreign currency effects, partly offset by net new
loan outflows of USD 6.9bn.
Customer deposits: 4Q23 vs 3Q23
Customer deposits increased by USD 27.0bn to USD 466.9bn, mainly driven by net inflows into fixed-term and
savings deposit products and positive foreign currency effects, partly offset by continued shifts into money market
funds and US-government securities.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Global Wealth Management 22
Regional breakdown of performance measures
As of or for the quarter ended 31.12.23
USD bn, except where indicated
Americas
1
Switzerland
2
EMEA
2
Asia Pacific
2
Global
3
Global Wealth
Management
Total revenues (USD m)
Operating profit / (loss) before tax (USD m)
Operating profit / (loss) before tax (underlying) (USD m)
4
Cost / income ratio (%)
4
Cost / income ratio (underlying) (%)
4
Loans, gross
5
Net new loans
Net new fee-generating assets
4
Fee-generating assets
4
Net new assets
4
Net new assets growth rate (%)
4
Invested assets
4
Advisors (full-time equivalents)
1 Including the following business units: United States and Canada; and Latin America. 2 In the third quarter of 2023, the invested assets of Global Financial Intermediaries were transferred from EMEA and Asia
Pacific to the Switzerland region, to better align it to the management structure. These changes were applied prospectively and had no impact on previous quarters. 3 Includes minor functions, which are not included
in the four regions individually presented in this table, and also includes impacts from accretion of purchase price allocation adjustments on financial instruments and other effects and integration-related expenses.
4 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 5 Loans include customer brokerage receivables, which are presented in a separate reporting
line on the balance sheet.
Regional comments 4Q23 vs 4Q22, except where indicated
Americas
Profit before tax decreased by USD 273m to USD 102m. Total revenues decreased by USD 53m, or 2%, to
USD 2,587m, driven by lower net interest income and other income, partly offset by the consolidation of Credit
Suisse revenues and higher transaction-based income. In addition, the fourth quarter of 2023 included the
aforementioned charge of USD 60m for the special assessment by the FDIC. The cost / income ratio increased to
96.1% from 85.9%. Loans decreased 2% compared with the third quarter of 2023, to USD 97.3bn, mainly
reflecting USD 3.2bn of net new loan outflows. Net new asset inflows were USD 13.4bn.
Switzerland
Profit before tax increased by USD 169m to USD 341m. Total revenues increased by USD 404m, or 92%, to
USD 844m, driven by the consolidation of Credit Suisse revenues, as well as the transfer of the Global Financial
Intermediaries business to the Switzerland region. The cost / income ratio increased to 60.1% from 59.8%. Loans
increased 7% compared with the third quarter of 2023, to USD 76.9bn, mainly driven by positive foreign currency
effects. Net new asset inflows were USD 1.0bn.
EMEA
Profit before tax decreased by USD 93m to USD 238m. Total revenues increased by USD 222m, or 24%, to
USD 1,150m, largely driven by the consolidation of Credit Suisse revenues, partly offset by the transfer of the Global
Financial Intermediaries business to the Switzerland region. The cost / income ratio increased to 79.3% from 64.3%.
Loans were stable compared with the third quarter of 2023, at USD 63.4bn, as positive foreign currency effects
were almost entirely offset by USD 1.1bn of net new loan outflows. Net new asset outflows were USD 5.7bn.
Asia Pacific
Profit before tax decreased by USD 81m to USD 97m. Total revenues increased by USD 177m, or 30%, to
USD 763m, mainly driven by the consolidation of Credit Suisse revenues, partly offset by lower net interest income.
The cost / income ratio increased to 87.7% from 69.7%. Loans decreased 3% compared with the third quarter of
2023, to USD 45.8bn, mostly reflecting USD 2.5bn of net new loan outflows. Net new asset inflows were
USD 13.5bn.
Global
Loss before tax was USD 396m, mainly due to USD 490m of integration-related expenses and the losses of
USD 190m related to our investment in SIX Group, partly offset by USD 284m of accretion of PPA adjustments on
financial instruments and other effects.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Personal & Corporate Banking 23
Personal & Corporate Banking
Personal & Corporate Banking – in Swiss francs
As of or for the quarter ended
% change from
As of or for the year
ended
CHF m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments and other effects
of which: losses related to investment in SIX Group
Total revenues (underlying)
2
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
2
of which: amortization from newly recognized intangibles resulting from the acquisition of
the Credit Suisse Group
Operating expenses (underlying)
2
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
2
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Average attributed equity (CHF bn)
3
Return on attributed equity (%)
2,3
Loans, gross (CHF bn)
Customer deposits (CHF bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
1 Information reflects Personal & Corporate Banking as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively. 2 Refer to “Alternative performance measures” in the appendix to this
report for the definition and calculation method. 3 Refer to the “Capital management” section of the UBS Group first quarter 2023 report for more information about the equity attribution framework. 4 Refer to
the “Risk management and control” section of this report for more information about (credit-)impaired exposures.
Results
:
4Q23 vs 4Q22
Profit before tax increased by CHF 197m, or 39%, to CHF 701m, mainly due to the acquisition of the Credit Suisse
Group. Underlying profit before tax was CHF 794m, after excluding CHF 362m of accretion of purchase price
allocation (PPA) adjustments on financial instruments and other effects, losses of CHF 267m related to our
investment in SIX Group, integration-related expenses of CHF 163m and CHF 25m of amortization from newly
recognized intangibles resulting from the acquisition of the Credit Suisse Group.
Total revenues
Total revenues increased by CHF 1,057m, or 98%, to CHF 2,136m, mainly due to the consolidation of Credit Suisse
revenues, and included CHF 362m of accretion of PPA adjustments on financial instruments and other effects, with
the underlying increase largely reflecting increases across almost all business income lines, predominantly in net
interest income, partly offset by the aforementioned losses of CHF 267m in other income. Excluding the
aforementioned accretion effects and losses, underlying total revenues were CHF 2,042m.
Net interest income increased by CHF 902m, or 150%, to CHF 1,505m, largely attributable to the consolidation of
Credit Suisse net interest income, and included CHF 326m of accretion of PPA adjustments on financial instruments
and other effects, with the remaining increase mainly driven by higher deposit margins, resulting from higher
interest rates, partly offset by lower deposit fees. Excluding accretion effects, underlying net interest income was
CHF 1,179m.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Personal & Corporate Banking 24
Recurring net fee income increased by CHF 228m, or 118%, to CHF 421m, mainly attributable to the consolidation
of Credit Suisse recurring net fee income, with the remaining increase including higher revenues related to custody
assets and mandates, reflecting higher average volumes of underlying assets.
Transaction-based income increased by CHF 158m, or 59%, to CHF 427m, largely attributable to the consolidation
of Credit Suisse transaction-based income, and included CHF 36m of accretion of PPA adjustments on financial
instruments and other effects. Excluding accretion effects, underlying transaction-based income was CHF 391m.
Other income was negative CHF 217m, compared with positive other income of CHF 13m, mostly reflecting the
losses of CHF 267m related to our investment in SIX Group.
Credit loss expense / release
Net credit loss expenses were CHF 72m, primarily related to stage 3 positions, compared with net releases of
CHF 3m in the fourth quarter of 2022.
Operating expenses
Operating expenses increased by CHF 785m, or 136%, to CHF 1,363m, largely due to the consolidation of Credit
Suisse expenses, with the remaining increase mostly reflecting integration-related expenses. Excluding integration-
related expenses of CHF 163m and CHF 25m of amortization from newly recognized intangibles resulting from the
acquisition of the Credit Suisse Group, underlying operating expenses were CHF 1,175m.
Personal & Corporate Banking – in US dollars
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Net interest income
Recurring net fee income
2
Transaction-based income
2
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments and other effects
of which: losses related to investment in SIX Group
Total revenues (underlying)
2
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
2
of which: amortization from newly recognized intangibles resulting from the acquisition of
the Credit Suisse Group
Operating expenses (underlying)
2
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
2
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Average attributed equity (USD bn)
3
Return on attributed equity (%)
2,3
Loans, gross (USD bn)
Customer deposits (USD bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
1 Information reflects Personal & Corporate Banking as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively. 2 Refer to “Alternative performance measures” in the appendix to this
report for the definition and calculation method. 3 Refer to the “Capital management” section of the UBS Group first quarter 2023 report for more information about the equity attribution framework. 4 Refer to
the “Risk management and control” section of this report for more information about (credit-)impaired exposures.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Asset Management 25
Asset Management
Asset Management
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Net management fees
2
Performance fees
Net gain from disposals
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: net gain from disposals
3
Total revenues (underlying)
4
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
4
Operating expenses (underlying)
4
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
4
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
4
Cost / income ratio (%)
4
Average attributed equity (USD bn)
5
Return on attributed equity (%)
4,5
Gross margin on invested assets (bps)
4,6
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
4
Cost / income ratio (%)
4
Information by business line / asset class
Net new money (USD bn)
4
Equities
Fixed Income
of which: money market
Multi-asset & Solutions
Hedge Fund Businesses
Real Estate & Private Markets
Total net new money excluding associates
of which: net new money excluding money market
Associates
7
Total net new money
6
Invested assets (USD bn)
4
Equities
Fixed Income
of which: money market
Multi-asset & Solutions
Hedge Fund Businesses
Real Estate & Private Markets
Total invested assets excluding associates
of which: passive strategies
Associates
7
Total invested assets
6
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Asset Management 26
Asset Management (continued)
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Information by region
Invested assets (USD bn)
4
Americas
Asia Pacific
6
Europe, Middle East and Africa (excluding Switzerland)
Switzerland
Total invested assets
6
Information by channel
Invested assets (USD bn)
4
Third-party institutional
Third-party wholesale
UBS’s wealth management businesses
Associates
7
Total invested assets
6
1 Information reflects Asset Management as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively. 2 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. 3 Only includes items that are
deemed material. 4 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 5 Refer to the “Capital management” section of the UBS Group first
quarter 2023 report for more information about the equity attribution framework. 6 Starting with the second quarter of 2023, net new money and invested assets include net new money and invested assets from
associates, to better reflect the business strategy. Comparative figures have been restated to reflect this change. 7 The invested assets and net new money amounts reported for associates are prepared in accordance
with their local regulatory requirements and practices.
Results: 4Q23 vs 4Q22
Profit before tax decreased by USD 9m, or 7%, to USD 115m, mainly due to the acquisition of the Credit Suisse
Group. Excluding integration-related expenses of USD 66m, underlying profit before tax was USD 180m.
Total revenues
Total revenues increased by USD 310m, or 63%, to USD 805m, reflecting the consolidation of Credit Suisse
revenues and net gains on sale of USD 27m, mainly from the completion of the sale of a majority stake in UBS
Hana Asset Management Co., Ltd.
Net management fees increased by USD 254m, or 54%, to USD 725m, largely attributable to the consolidation of
Credit Suisse net management fees and also due to positive foreign currency effects and market performance,
partly offset by continued margin compression.
Performance fees increased by USD 28m, or 118%, to USD 52m, mainly attributable to the consolidation of Credit
Suisse performance fees and also due to an increase in Hedge Fund Businesses, partly offset by a decrease in Real
Estate & Private Markets.
Operating expenses
Operating expenses increased by USD 319m, or 86%, to USD 691m, mainly reflecting the consolidation of Credit
Suisse expenses. The increase was also due to integration-related expenses, increases in personnel expenses,
adverse foreign currency effects and increases in technology expenses. Excluding integration-related expenses of
USD 66m, underlying operating expenses were USD 625m.
Invested assets: 4Q23 vs 3Q23
Invested assets increased by USD 90bn to USD 1,649bn, reflecting positive market performance of USD 66bn and
positive foreign currency effects of USD 61bn, partly offset by negative net new money of USD 12bn and a decrease
of USD 24bn related to divestments, primarily the sale of UBS Hana Asset Management Co., Ltd. Excluding money
market flows and associates, net new money was negative USD 14bn.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Investment Bank 27
Investment Bank
Investment Bank
As of or for the quarter ended
% change from
As of or for the year
ended
USD m, except where indicated
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Advisory
Capital Markets
Global Banking
Execution Services
Derivatives & Solutions
Financing
Global Markets
of which: Equities
of which: Foreign Exchange, Rates and Credit
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments
of which: losses in the first quarter of 2022 from transactions with Russian counterparties
Total revenues (underlying)
2
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
2
Operating expenses (underlying)
2
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
2
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
Average attributed equity (USD bn)
3
Return on attributed equity (%)
2,3
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
Cost / income ratio (%)
2
1 Information reflects the Investment Bank as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively. 2 Refer to “Alternative performance measures” in the appendix to this report for
the definition and calculation method. 3 Refer to the “Capital management” section of the UBS Group first quarter 2023 report for more information about the equity attribution framework.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Investment Bank 28
Results: 4Q23 vs 4Q22
Loss before tax was USD 169m, compared with profit before tax of USD 112m, mainly due to higher operating
expenses associated with the acquisition of the Credit Suisse Group, which included integration-related expenses,
partly offset by higher total revenues. Excluding USD 277m of accretion of purchase price allocation (PPA)
adjustments on financial instruments and integration-related expenses of USD 166m, underlying loss before tax
was USD 280m.
Total revenues
Total revenues increased by USD 457m, or 27%, to USD 2,139m, mainly due to the consolidation of Credit Suisse
revenues, and included the aforementioned USD 277m of accretion effects. Underlying total revenues increased,
largely driven by higher Global Banking revenues, partly offset by lower Global Markets revenues. Excluding the
aforementioned accretion effects, underlying total revenues were USD 1,861m.
Global Banking
Global Banking revenues increased by USD 505m, or 152%, to USD 836m, largely attributable to the consolidation
of Credit Suisse revenues, and included USD 275m of accretion effects. Excluding the accretion effects, underlying
Global Banking revenues increased by USD 230m, or 69%. The relevant market fee pool
1,2
decreased 7%.
Advisory revenues increased by USD 18m, or 11%, to USD 190m, mainly due to higher merger and acquisition
transaction revenues, which increased by USD 19m, or 14%. The relevant global fee pool
1,2
decreased 14%.
Capital Markets revenues increased by USD 487m, or 305%, to USD 646m, mainly attributable to the
aforementioned USD 275m of accretion effects. Excluding the accretion effects, underlying Capital Markets
revenues increased by USD 212m, or 133%, due to increases across Leveraged Capital Markets, Debt Capital
Markets and Equity Capital Markets, with fee-pool-comparable revenues in all products outperforming the relevant
global fee pools.
1,2
Global Markets
Global Markets revenues decreased by USD 48m, or 4%, to USD 1,303m, primarily driven by lower Derivatives &
Solutions revenues, offset by higher Execution Services revenues.
Execution Services revenues increased by USD 43m, or 11%, to USD 414m, with increases across Cash Equities and
higher revenues from foreign exchange products that are traded over electronic platforms.
Derivatives & Solutions revenues decreased by USD 95m, or 18%, to USD 446m, mostly driven by Rates and Foreign
Exchange, due to lower levels of both volatility and client activity, partly offset by higher Equity Derivatives revenues.
Financing revenues increased by USD 4m, or 1%, to USD 442m.
Equities
Global Markets Equities revenues increased by USD 122m, or 14%, to USD 1,005m, mainly driven by higher Equity
Derivatives revenues.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues decreased by USD 171m, or 36%, to USD 297m,
primarily driven by lower Rates and Foreign Exchange revenues.
Credit loss expense / release
Net credit loss expenses were USD 48m, primarily related to stage 3 positions, compared with USD 8m in the fourth
quarter of 2022.
Operating expenses
Operating expenses increased by USD 697m, or 45%, to USD 2,260m, largely due to integration-related expenses,
the consolidation of Credit Suisse expenses, higher variable compensation recognized in the quarter and higher
technology expenses. Excluding integration-related expenses of USD 166m, underlying operating expenses were
USD 2,094m.
1
UBS fee-pool-comparable revenues consist of revenues from: merger-and-acquisition-related transactions; Equity Capital Markets, excluding derivatives; Leveraged Capital Markets, excluding the impact of mark-to-
market movements on loan portfolios; and Debt Capital Markets, excluding revenues related to debt underwriting of UBS instruments.
2
Source: Dealogic, as of 29 December 2023.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Non-core and Legacy 29
Non-core and Legacy
Non-core and Legacy
As of or for the quarter ended
% change from
As of or for the year
ended
USD m
31.12.23
30.9.23
1
31.12.22
2
3Q23
4Q22
31.12.23
31.12.22
2
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: litigation settlement
Total revenues (underlying)
3
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
3
Operating expenses (underlying)
3
of which: expenses for litigation, regulatory and similar matters
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
3
Performance measures and other information
Average attributed equity
4
Risk-weighted assets (USD bn)
Leverage ratio denominator (USD bn)
1 Information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information. 2 Information reflects
Non-core and Legacy Portfolio as reported in Group Functions in the fourth quarter of 2022 and the twelve months of 2022, respectively. 3 Refer to “Alternative performance measures” in the appendix to this
report for the definition and calculation method. 4 Refer to the “Capital management” section of the UBS Group first quarter 2023 report for more information about the equity attribution framework.
Composition of Non-core and Legacy
1
USD bn
RWA
Total assets
LRD
31.12.23
30.9.23
31.12.23
30.9.23
31.12.23
30.9.23
Exposure category
Equities
Macro
Loans
Securitized products
Credit
High-quality liquid assets
Operational risk
Other
Total
1 During the fourth quarter, we have revised allocations and aligned methodologies across UBS and Credit Suisse.
Results: 4Q23 vs 4Q22
Loss before tax was USD 1,726m, compared with profit before tax of USD 33m. Excluding integration-related
expenses of USD 749m, underlying loss before tax was USD 977m.
Total revenues
Total revenues increased by USD 109m to USD 162m, mainly due to the transfer of assets and liabilities into Non-
core and Legacy following the acquisition of the Credit Suisse Group. Revenues were mainly driven by net gains
from position marks and unwinds.
Credit loss expense / release
Net credit loss expenses were USD 15m, mainly related to incremental provisions that reflected a further
deterioration in credit risk across the lending book of Non-core and Legacy, compared with net expenses of USD 0m
in the fourth quarter of 2022.
UBS Group fourth quarter 2023 report |
UBS business divisions and Group Items | Non-core and Legacy 30
Operating expenses
Operating expenses were USD 1,873m, compared with USD 21m, mainly driven by the acquisition of the Credit
Suisse Group, and included integration-related expenses of USD 749m. Integration-related expenses included real
estate impairments and personnel costs. Excluding integration-related expenses, underlying operating expenses
were USD 1,124m.
Risk-weighted assets and leverage ratio denominator: 4Q23 vs 3Q23
Risk-weighted assets decreased by USD 5.5bn, or 7%, to USD 72.0bn, mainly driven by an accelerated roll-off
arising from our actions to actively unwind the portfolio, in addition to the natural roll-off. The leverage ratio
denominator decreased by USD 19.3bn, or 12%, to USD 137.1bn, driven by business reductions across all asset
classes and lower high-quality liquid assets.
Group Items
Group Items
As of or for the quarter ended
% change from
As of or for the year
ended
USD m
31.12.23
30.9.23
31.12.22
1
3Q23
4Q22
31.12.23
31.12.22
1
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: accretion of PPA adjustments on financial instruments
of which: gain from sales of real estate
Total revenues (underlying)
2
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
2
of which: acquisition-related costs
Operating expenses (underlying)
2
of which: expenses for litigation, regulatory and similar matters
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
2
1 Information reflects Group Functions as reported in the fourth quarter of 2022 and the twelve months of 2022, respectively, excluding Non-core and Legacy Portfolio. 2 Refer to “Alternative performance measures”
in the appendix to this report for the definition and calculation method.
Results: 4Q23 vs 4Q22
Loss before tax was USD 140m, compared with a gain of USD 81m, mainly due to the acquisition of the Credit
Suisse Group. Excluding net USD 92m of integration- and acquisition-related expenses and USD 32m of accretion
of purchase price allocation adjustments on financial instruments, underlying loss before tax was USD 17m,
compared with an underlying gain of USD 13m, excluding a gain of USD 68m from the sale of real estate.
In addition, the fourth quarter of 2023 included a USD 32m increase in funding costs related to deferred tax assets.
Income from Group hedging and own debt, including hedge accounting ineffectiveness, was net positive
USD 268m, compared with net positive income of USD 129m. The results in the prior-year quarter were driven by
mark-to-market effects on portfolio-level economic hedges due to rising interest rates and cross-currency-basis
widening. The increase of USD 139m year-on-year predominantly results from the acquisition of the Credit Suisse
Group.
Income related to centralized Group Treasury risk management was negative USD 58m, compared with positive
USD 5m.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet 31
Risk, capital, liquidity and
funding, and balance sheet
Management report
Table of contents
32
32
34
35
36
38
40
43
45
46
46
46
47
47
47
48
48
49
49
UBS Group fourth quarter 2023 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 Annual Report 2022 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 increased by USD 80bn to USD 1,180bn as of 31 December 2023, driven by
increased balances at central banks and, to a lesser extent, by increased loans and advances to customers in Personal
& Corporate Banking, reflecting currency effects.
Total net credit loss expenses in the fourth quarter of 2023 were USD 136m, reflecting net releases of USD 43m
related to performing positions and net expenses of USD 180m on credit-impaired positions.
›
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
Loan underwriting
In the Investment Bank, mandated loan underwriting commitments on a notional basis decreased by USD 0.7bn to
USD 2.1bn as of 31 December 2023, driven by distribution and syndication activities partially offset by new deals.
In Non-core and Legacy, exposure decreased by USD 0.4bn to USD 1.0bn, mainly due to de-risking via commitment
reductions and syndication of remaining legacy positions. As of 31 December 2023, USD 50m and USD 1.0bn of
commitments in the Investment Bank and in Non-core and Legacy, respectively, had not been distributed as
originally planned.
Loan underwriting exposures are classified as held for trading, with fair values reflecting the market conditions at
the end of the quarter. Credit hedges are in place to help protect against fair value movements in the portfolio.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 33
Banking and traded products exposure in our business divisions and Group Items
31.12.23
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1
Gross exposure
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3,4
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
5
Total credit-impaired exposure, gross
of which: stage 3
of which: PCI
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
of which: PCI
30.9.23
6
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1
Gross exposure
7
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3,4
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
5
Total credit-impaired exposure, gross
of which: stage 3
of which: PCI
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
of which: PCI
1 IFRS 9 gross exposure for banking products includes the following financial assets in scope of expected credit loss measurement: balances at central banks, loans and advances to 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. 3 As counterparty risk for
traded products is managed at counterparty level, no further split between exposures in the Investment Bank, Non-core and Legacy, and Group Items is provided. 4 Credit Suisse traded products are presented before
reflection of the impact of the purchase price allocation performed under IFRS 3, Business Combinations, following the acquisition of the Credit Suisse Group by UBS. The acquisition date adjustment is less than USD
1bn and, if applied, would lead to a reduction in our reported traded products exposure. 5 Unconditionally revocable committed credit lines. 6 Comparative-period information has been revised. Refer to “Accounting
for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information. 7 The segment allocation of the gross banking products exposure has been
revised to reflect an allocation of high-quality liquid assets from Group Items to the business divisions for the Credit Suisse sub-group, with no impact on total gross exposure for the UBS Group. Comparative information
as of 30 September 2023 has been amended to reflect this change, resulting in an increase to gross exposure in Global Wealth Management of USD 14.4bn, in Personal & Corporate Banking of USD 24.2bn, in the
Investment Bank of USD 4.0bn and in Non-core and Legacy of USD 31.4bn, with an offsetting effect in Group Items.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 34
Market risk
The UBS Group excluding Credit Suisse continued to maintain generally low levels of management value-at-risk
(VaR). Average management VaR (1-day, 95% confidence level) decreased marginally from USD 17m to USD 16m
at the end of the fourth quarter of 2023. There were no new VaR negative backtesting exceptions in the fourth
quarter of 2023. The number of negative backtesting exceptions within the most recent 250-business-day window
remained at zero.
Credit Suisse’s average management VaR (1-day, 98% confidence level) decreased from USD 27m to USD 23m at
the end of the fourth quarter of 2023, driven by continued strategic migration of positions to UBS and de-risking
within Non-core and Legacy. In the fourth quarter of 2023, Credit Suisse had one backtesting exception, driven by
fair value adjustments to certain positions in the trading inventory as a result of an increase in exit cost reserves.
The Swiss Financial Market Supervisory Authority (FINMA) VaR multiplier derived from backtesting exceptions for
market risk risk-weighted assets was unchanged compared with the prior quarter, at 3.0, for both the UBS Group
excluding Credit Suisse and Credit Suisse.
Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of our business divisions and Group Items
excluding Credit Suisse components by general market risk type
1
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
2,3
Total as of 31.12.23
Total as of 30.9.23
Management value-at-risk (1-day, 98% confidence, 2 years of historical data) of the Credit Suisse components of our
business divisions and Group Items by general market risk type
1
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
Personal & Corporate Banking
Asset Management
Non-core and Legacy
4
Group Items
Diversification effect
2,3
Total as of 31.12.23
Total as of 30.9.23
1 Statistics at individual levels may not be summed to deduce the corresponding aggregate figures. The minima and maxima for each level may occur on different days, and, likewise, the value-at-risk (VaR) for each
business line or risk type, being driven by the extreme loss tail of the corresponding distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the historical
time series, rendering invalid the simple summation of figures to arrive at the aggregate total. 2 The difference between the sum of the standalone VaR for the business divisions and Group Items and the total VaR.
3 As the minima and maxima for different business divisions and Group Items occur on different days, it is not meaningful to calculate a portfolio diversification effect. 4 Non-core and Legacy management VaR
consists of exposures of the previously reported Capital Release Unit (Credit Suisse) and Investment Bank (Credit Suisse).
Economic value of equity and net interest income sensitivity
The economic value of equity (EVE) sensitivity in the UBS Group banking book to a parallel shift in yield curves of
+1 basis point was negative USD 30.1m as of 31 December 2023, compared with negative USD 27.8m as of
30 September 2023. This excludes the sensitivity of USD 4.9m from additional tier 1 (AT1) capital instruments (as
per specific FINMA requirements) in contrast to general Basel Committee on Banking Supervision (BCBS) guidance.
The exposure in the banking book of the UBS Group increased during the fourth quarter of 2023, due to interest
rate risk hedges of the recent AT1 issuance and a combination of market movements, i.e., decreasing interest rates
and the Swiss franc appreciating against the US dollar.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 35
The majority of our interest rate risk in the banking book is a reflection of the net asset duration that we run to
offset our modeled sensitivity of net USD 24.3m (30 September 2023: USD 23.4m) assigned to our equity, goodwill
and real estate, with the aim of generating a stable net interest income contribution. Of this, USD 17.6m and
USD 5.6m are attributable to the US dollar and the Swiss franc portfolios, respectively (30 September 2023:
USD 17.5m and USD 4.9m, respectively).
In addition to the sensitivity mentioned above, we calculate the six interest rate shock scenarios prescribed by
FINMA. The “Parallel up” scenario, assuming all positions were fair valued, was the most severe and would have
resulted in a change in EVE of negative USD 5.7bn, or 6.1%, of our tier 1 capital (30 September 2023: negative
USD 5.2bn, or 5.6%), which is well below the 15% threshold as per the BCBS supervisory outlier test for high levels
of interest rate risk in the banking book.
The immediate effect on our tier 1 capital in the “Parallel up” scenario as of 31 December 2023 would have been
a decrease of approximately USD 0.9bn, or 0.9% (30 September 2023: USD 0.9bn, or 0.9%), reflecting the fact
that the vast majority of our banking book is accrual accounted or subject to hedge accounting. The “Parallel up”
scenario would subsequently have a positive effect on net interest income, assuming a constant balance sheet.
›
Refer to “Interest rate risk in the banking book” in the “Risk management and control” section of the Annual
Report 2022 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
31.12.23
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
30.9.23
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
1 Economic value of equity. 2 Rates across all tenors move by ±150 bps for Swiss franc, ±200 bps for euro and US dollar, and ±250 bps for pound sterling. 3 Short-term rates decrease and long-term rates increase.
4 Short-term rates increase and long-term rates decrease. 5 Short-term rates increase more than long-term rates. 6 Short-term rates decrease more than long-term rates.
Country risk
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, conflicts in the Middle East and US–China trade
relations. Our direct potential exposure to Israel is less than USD 0.5bn and our direct potential exposure to Gulf
Cooperation Council countries is less than USD 7bn. We have limited direct potential exposure to Egypt, Jordan
and Lebanon, and we have no direct exposure to Iran, Iraq or Syria. Our direct potential exposure to Russia, Belarus
and Ukraine is immaterial, and potential second-order impacts, such as European energy security, continue to be
monitored.
Inflation has abated to some extent in major Western economies, though there are still concerns regarding future
developments, and central banks’ monetary policy is in the spotlight. The potential for “higher-for-longer” interest
rates raises the prospect of a global recession, particularly as the growth of China’s economy has been muted. This
combination of factors translates into a more uncertain and volatile environment, which increases the risk of
financial market disruption.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 36
We continue to monitor potential trade policy disputes, as well as economic and political developments in addition
to those mentioned above. We are closely watching elections in a number of key emerging markets in 2024. Our
potential exposure to emerging market countries is less than 10% of our total potential country exposures.
›
Refer to the “Risk management and control” section of the UBS Group AG Annual Report 2023, which will be
available as of 28 March 2024 under “Annual reporting” at
ubs.com/investors
, for more information
Non-financial risk
UBS continues to actively manage the non-financial risks emerging from the acquisition of the Credit Suisse Group,
including the current operation of dual corporate structures, and the scale, pace and complexity of the required
integration activities. These activities continue to be managed by our program run by the Group Integration Office.
The integration of Credit Suisse is driving a mass migration of data, which requires robust controls to preserve
integrity, and we are working to enhance our frameworks relating to data quality and data retention to mitigate
these risks and to meet regulatory expectations.
Through this period of change, we place an increased focus on maintaining and enhancing our control environment
and continue to cooperate with regulators to submit and execute implementation plans to meet regulatory
requirements, including regulatory remediation requirements applicable to Credit Suisse AG. In addition, the Group
is closely monitoring operational risk indicators, to detect any potential for adverse impacts on the control
environment.
There is an increased risk of cyber-related operational disruption to business activities at our locations and / or those
of third parties due to operating an enlarged group of entities. This is combined with the increasingly dynamic
threat environment, which is intensified by current geopolitical factors and evidenced by the increased volumes and
sophistication of cyberattacks against financial institutions globally.
Cyberattacks on third-party vendors have affected our operations in the past and remain a source of residual risk
to our business. No cyber events occurred in the fourth quarter of 2023 related to our own infrastructure, or the
infrastructure of any third party, that had material financial or operational effects on us. We remain on heightened
alert to respond to and mitigate elevated cyber and information security threats. We continue to invest in improving
our technology infrastructure and information security governance to improve our defense, detection and response
capabilities against cyberattacks. Following a post-incident review of the ION XTP ransomware attack, we are
improving our frameworks for managing third parties that support our important business services and continue
with actions to enhance our cyber-risk assessments and controls over third-party vendors.
In addition, we are working to enhance our operational resilience to address these heightened risks and to meet
regulatory deadlines through 2026. We are implementing a global framework designed to drive enhancements in
operational resilience across all business divisions and relevant jurisdictions, as well as working with our third parties,
including third-party vendors, that are of critical importance to our operations, to assess their operational resilience
against our standards.
The increasing interest in data-driven advisory processes, and use of artificial intelligence (AI) and machine learning,
is opening up new questions related to the fairness of AI algorithms, data life cycle management, data ethics, data
privacy and security, and records management. In addition, new risks continue to emerge, such as those which
result from the demand from our clients for distributed ledger technology, blockchain-based assets and
cryptocurrencies; although we currently have limited exposure to such risks, relevant control frameworks for them
are implemented and reviewed on a regular basis as they evolve.
Competition to find new business opportunities, products and services across the financial services sector, both for
firms and for customers, is increasing, particularly during periods of market volatility and economic uncertainty.
Thus, suitability risk, product selection, cross-divisional service offerings, quality of advice and price transparency
also remain areas of heightened focus for UBS and for the industry as a whole.
Evolving environmental, social and governance regulations and major legislation, such as the Consumer Duty
Regulation in the United Kingdom, the Swiss Financial Services Act (FIDLEG) in Switzerland, Regulation Best Interest
(Reg BI) in the US and the Markets in Financial Instruments Directive II (MiFID II) in the EU, all significantly affect the
industry and have required adjustments to control processes.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 37
Cross-border risk remains an area of regulatory attention for global financial institutions, including a focus on
market access, such as third-country market access into the European Economic Area, and taxation of US persons.
Unintended permanent establishment remains an area of ongoing attention. We maintain a series of controls
designed to address these risks, and we are increasing the number of controls that are automated.
Financial crime, including money laundering, terrorist financing, sanctions violations, fraud, bribery and corruption,
continues to present a major risk, as technological innovation and geopolitical developments increase the
complexity of doing business and heightened regulatory attention continues. An effective financial crime prevention
program therefore remains essential for us and we continue to focus on strategic enhancements to our global anti-
money-laundering (AML), know-your-client (KYC) and sanctions programs. Money laundering and financial fraud
techniques are becoming increasingly sophisticated, and geopolitical volatility makes the sanctions landscape more
complex, such as the extensive and continuously evolving sanctions arising from the Russia–Ukraine war, which also
require constant attention to prevent circumvention risks, and the conflicts in the Middle East, which may increase
terrorist financing risks.
In the US, UBS AG is subject to a Consent Order with the Office of the Comptroller of the Currency (the OCC) since
May 2018 relating to our US branch AML and KYC programs. In response, we have introduced significant
improvements to our framework for the purpose of ensuring sustainable remediation of US-relevant Bank Secrecy
Act / AML issues across all our US legal entities.
Achieving fair outcomes for our clients, upholding market integrity and cultivating the highest standards of
employee conduct are of critical importance to us. We maintain a conduct risk framework across our activities,
which is designed to align our standards and conduct with these objectives and to retain momentum on fostering
a strong culture. The firm is integrating the UBS and Credit Suisse conduct risk frameworks to align the handling
of conduct risk across the firm.
In September 2022, the Securities and Exchange Commission (the SEC) and the Commodity Futures Trading
Commission (the CFTC) issued settlement orders relating to communications recordkeeping requirements in our US
broker-dealers and our registered swap dealers. In response to identified shortcomings, we are continuing to
implement a global remediation program.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 38
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 Annual Report 2022, 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 Credit
Suisse AG, and subsidiaries thereof. UBS Group AG, UBS AG and Credit Suisse AG have contributed 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 2023 Pillar 3 Report, which will be available as of 28 March 2024 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 2023, which will be available as of 28 March 2024 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
Swiss SRB going and gone concern requirements and information
As of 31.12.23
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
1
1
Common equity tier 1 capital
2
of which: minimum capital
of which: buffer capital
of which: countercyclical buffer
Maximum additional tier 1 capital
of which: additional tier 1 capital
of which: additional tier 1 buffer capital
Eligible going concern capital
Total going concern capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
3
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
of which: base requirement including add-ons for market share and LRD
7
7
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible senior unsecured debt
Total loss-absorbing capacity
Required total loss-absorbing capacity
Eligible total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
1 Includes applicable add-ons of 1.59% for risk-weighted assets (RWA) and 0.55% for leverage ratio denominator (LRD), of which 15 basis points for RWA and 5 basis points for LRD reflect the FINMA Pillar 2 capital
add-on of USD 800m related to the supply chain finance funds matter at Credit Suisse. 2 Our minimum CET1 leverage ratio requirement of 3.55% consists of a 1.5% base requirement, a 1.5% base buffer capital
requirement, a 0.25% LRD add-on requirement, a 0.25% market share add-on requirement based on our Swiss credit business and a 0.05% Pillar 2 capital add-on related to the supply chain finance funds matter at
Credit Suisse. 3 Includes outstanding low-trigger loss-absorbing additional tier 1 capital instruments, which are available under the Swiss systemically relevant bank 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 and the Pillar 2 add-on). 6 As of July 2024, the Swiss Financial Market Supervisory Authority (FINMA) will have the authority to impose a surcharge of up to 25% of the total going concern capital
requirements should obstacles to an SIB’s resolvability be identified in future resolvability assessments. 7 Includes applicable add-ons of 1.08% for RWA and 0.38% for LRD.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 39
We are subject to the going and gone concern requirements of the Swiss Capital Adequacy Ordinance that include
the too-big-to-fail (TBTF) provisions applicable to Swiss SRBs. The table above provides the risk-weighted asset
(RWA)- and leverage ratio denominator (LRD)-based requirements and information as of 31 December 2023.
In November 2022, the Swiss Federal Council adopted amendments to the Banking Act and the Banking Ordinance,
which entered into force as of 1 January 2023. The amendments replaced the resolvability discount on the gone
concern capital requirements for systemically important banks (SIBs), including UBS, with reduced base gone
concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical
buffer requirements and the Pillar 2 add-on). In addition, as of July 2024, the Swiss Financial Market Supervisory
Authority (FINMA) will have the authority to impose a surcharge of up to 25% of the total going concern
requirements based on obstacles to an SIB’s resolvability identified in future resolvability assessments. Our total
gone concern requirements remained substantially unchanged in the fourth quarter of 2023.
Transitional purchase price allocation adjustments for regulatory capital
As part of the acquisition of the Credit Suisse Group, the assets acquired and liabilities assumed, including
contingent liabilities, were recognized at fair value as of the acquisition date in accordance with IFRS 3,
Business
Combinations
. The purchase price allocation (PPA) fair value adjustments required under IFRS 3 are recognized as
part of negative goodwill and include effects on financial instruments measured at amortized cost, such as fair
value impacts from interest rates and own credit, that are expected to accrete back to par through the income
statement as the instruments are held to maturity. Similar own-credit-related effects have also been recognized as
part of the PPA adjustments on financial liabilities measured at fair value. As agreed with FINMA, a transitional
common equity tier 1 (CET1) capital treatment has been applied for certain of these fair value adjustments, given
the substantially temporary nature of the IFRS-3-accounting-driven effects. As such, IFRS equity reductions of
USD 5.9bn (before tax) and USD 5.0bn (net of tax) as of the acquisition date have been neutralized for CET1 capital
calculation purposes, of which USD 1.0bn (net of tax) relates to own-credit-related fair value adjustments. The
transitional treatment is subject to linear amortization and will reduce to nil by 30 June 2027. In the fourth quarter
of 2023, the amortization of transitional CET1 PPA adjustments (interest rate and own credit) was USD 0.3bn (net
of tax).
IFRS 3 measurement period adjustments in the fourth quarter of 2023 for the acquisition of the Credit
Suisse Group
UBS has reclassified certain loans and off-balance sheet loan commitments held by the Non-core and Legacy
business division to “measured at fair value through profit or loss”. Refer to “Accounting for the acquisition of the
Credit Suisse Group” in the “Consolidated financial information” section of this report for details on the accounting
treatment and respective adjustments to prior reporting periods. We have applied the amended classification and
measurement for LRD and RWA calculation purposes prospectively from the fourth quarter of 2023.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 40
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 Annual Report 2022. Changes to the Swiss SRB framework and requirements after the
publication of the Annual Report 2022 are described above.
Swiss SRB going and gone concern information
USD m, except where indicated
31.12.23
30.9.23
31.12.22
Eligible going concern capital
Total going concern capital
Total tier 1 capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: low-trigger loss-absorbing tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible senior unsecured debt
Total loss-absorbing capacity
Total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
of which: common equity tier 1 capital ratio
Gone concern loss-absorbing capacity ratio
Total loss-absorbing capacity ratio
Leverage ratios (%)
Going concern leverage ratio
of which: common equity tier 1 leverage ratio
Gone concern leverage ratio
Total loss-absorbing capacity leverage ratio
Total loss-absorbing capacity and movement
Our total loss-absorbing capacity (TLAC) increased by USD 5.4bn to USD 200.3bn in the fourth quarter of 2023.
Going concern capital and movement
Our going concern capital increased by USD 1.6bn to USD 93.2bn. Our CET1 capital increased by USD 0.7bn to
USD 79.3bn, mainly as the operating loss before tax of USD 0.8bn, dividend accruals of USD 0.8bn, compensation-
and own share -related capital components of USD 0.6bn and amortization of transitional CET1 PPA adjustments
(interest rate and own credit) of USD 0.3bn were more than offset by positive effects from foreign currency
translation of USD 1.6bn and an increase of USD 1.5bn in eligible deferred tax assets (DTAs) on temporary
differences. Previously unrecognized DTAs on temporary differences were recognized primarily in connection with
our business planning process and an election to capitalize compensation-related costs for US tax purposes. The
income statement impact of this DTAs on temporary differences write-up was largely offset by a reduction in DTAs
recognized for tax loss carry-forwards that were either converted into DTAs on temporary differences or amortized
against profits generated in the quarter.
Our loss-absorbing additional tier 1 (AT1) capital increased by USD 0.9bn to USD 13.9bn, mainly reflecting two
issuances of AT1 capital instruments of USD 3.5bn and positive impacts from interest rate risk hedge, foreign
currency translation and other effects. These increases were partly offset by USD 3.0bn equivalent of AT1 capital
instruments that ceased to be eligible as going concern capital when we issued a notice of redemption of the
instruments in the fourth quarter of 2023.
AT1 capital instruments issued from the beginning of the fourth quarter of 2023 are currently subject to write-
down upon occurrence of a trigger event or a viability event. The notes provide, however, that, following approval
of a minimum amount of conversion capital by UBS Group AG’s shareholders at the 2024 Annual General Meeting,
upon the occurrence of a trigger event or a viability event the notes will be converted into UBS Group AG ordinary
shares rather than being subject to a write-down.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 41
Gone concern loss-absorbing capacity and movement
Our total gone concern loss-absorbing capacity increased by USD 3.8bn to USD 107.1bn, mainly due to positive
impacts from interest rate risk hedge, foreign currency translation and other effects, as well as the issuance of an
aggregate of USD 0.3bn equivalent of TLAC-eligible senior unsecured debt. The aforementioned increases were
partly offset by the redemption of USD 2.2bn equivalent of TLAC-eligible senior unsecured debt. In addition, we
redeemed a CHF 400m TLAC-eligible senior unsecured debt on 30 January 2024, the first call date. This instrument
remained eligible as gone concern capital as of 31 December 2023.
›
Refer to “Bondholder information” at
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 increased to 14.5% from 14.4%, reflecting an increase in CET1 capital of USD 0.7bn.
Our CET1 leverage ratio decreased to 4.7% from 4.9%, reflecting a USD 79.6bn increase in the LRD, partly offset
by an increase in CET1 capital of USD 0.7bn.
Our gone concern loss-absorbing capacity ratio increased to 19.6% from 18.9%, due to an increase in gone
concern loss-absorbing capacity of USD 3.8bn.
Our gone concern leverage ratio decreased to 6.3% from 6.4%, due to the aforementioned increase in the LRD,
largely offset by an increase in gone concern loss-absorbing capacity of USD 3.8bn.
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 30.9.23
Operating profit / (loss) before tax
Current tax (expense) / benefit
Foreign currency translation effects, before tax
Deferred tax assets on temporary differences
Compensation- and own share-related capital components
Amortization of transitional CET1 purchase price allocation adjustments, net of tax
Other
1
Common equity tier 1 capital as of 31.12.23
Loss-absorbing additional tier 1 capital as of 30.9.23
Issuance of high-trigger loss-absorbing additional tier 1 capital
Call of high-trigger loss-absorbing additional tier 1 capital
Interest rate risk hedge, foreign currency translation and other effects
Loss-absorbing additional tier 1 capital as of 31.12.23
Total going concern capital as of 30.9.23
Total going concern capital as of 31.12.23
Gone concern loss-absorbing capacity
Tier 2 capital as of 30.9.23
Interest rate risk hedge, foreign currency translation and other effects
Tier 2 capital as of 31.12.23
TLAC-eligible senior unsecured debt as of 30.9.23
Issuance of TLAC-eligible senior unsecured debt
Call of TLAC-eligible senior unsecured debt
Interest rate risk hedge, foreign currency translation and other effects
TLAC-eligible senior unsecured debt as of 31.12.23
Total gone concern loss-absorbing capacity as of 30.9.23
Total gone concern loss-absorbing capacity as of 31.12.23
Total loss-absorbing capacity
Total loss-absorbing capacity as of 30.9.23
Total loss-absorbing capacity as of 31.12.23
1 Includes dividend accruals for the current year (negative USD 0.8bn) and movements related to other items.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 42
Reconciliation of IFRS equity to Swiss SRB common equity tier 1 capital
USD m
31.12.23
30.9.23
1
31.12.22
Total IFRS equity
Equity attributable to non-controlling interests
Defined benefit plans, net of tax
Deferred tax assets recognized for tax loss carry-forwards
Deferred tax assets for unused tax credits
Deferred tax assets on temporary differences, excess over threshold
Goodwill, net of tax
2
Intangible assets, net of tax
Compensation-related components (not recognized in net profit)
Expected losses on advanced internal ratings-based portfolio less provisions
Unrealized (gains) / losses from cash flow hedges, net of tax
Own credit related to (gains) / losses on financial liabilities measured at fair value that existed at the balance sheet date, net of tax
Own credit related to (gains) / losses on derivative financial instruments that existed at the balance sheet date
Prudential valuation adjustments
Accruals for dividends to shareholders for 2022
Transitional CET1 purchase price allocation adjustments, net of tax
Other
3
Total common equity tier 1 capital
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
2 Includes goodwill related to significant investments in financial institutions of USD 20m as of 31 December 2023 (USD 19m as of 30 September 2023; USD 20m as of 31 December 2022) presented on the balance
sheet line Investments in associates. 3 Includes dividend accruals for the current year and other items.
Additional information
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our RWA by
USD 24bn and our CET1 capital by USD 2.8bn as of 31 December 2023 (30 September 2023: USD 23bn and
USD 2.6bn, respectively) and decreased our CET1 capital ratio by 11 basis points (30 September 2023: 11 basis
points). Conversely, a 10% appreciation of the US dollar against other currencies would have decreased our RWA
by USD 21bn and our CET1 capital by USD 2.5bn (30 September 2023: USD 21bn and USD 2.4bn, respectively)
and increased our CET1 capital ratio by 11 basis points (30 September 2023: 11 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 114bn as of 31 December 2023 (30 September 2023: USD 103bn) and decreased our CET1 leverage ratio by
14 basis points (30 September 2023: 14 basis points). Conversely, a 10% appreciation of the US dollar against
other currencies would have decreased our LRD by USD 103bn (30 September 2023: USD 94bn) and increased our
CET1 leverage ratio by 15 basis points (30 September 2023: 14 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 Annual Report 2022 for more information
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 43
Estimated effect on capital from litigation, regulatory and similar matters subject to provisions and contingent
liabilities
We have estimated the loss in capital that we could incur as a result of the risks associated with the matters related
to UBS AG and subsidiaries described in “Provisions and contingent liabilities” in the “Consolidated financial
information” section of this report. We have employed for this purpose the advanced measurement approach
(AMA) methodology that we use when determining the capital requirements associated with operational risks,
based on a 99.9% confidence level over a 12-month horizon. The methodology takes into consideration UBS and
industry experience for the AMA operational risk categories to which those matters correspond, as well as the
external environment affecting risks of these types, in isolation from other areas. On this basis, with respect to the
litigation, regulatory and similar matters related to UBS AG and subsidiaries, we estimate the maximum loss in
capital that we could incur over a 12-month period as a result of our risks associated with these operational risk
categories at USD 4.0bn as of 31 December 2023. This estimate is not related to and does not take into account
any provisions recognized for any of these matters and does not constitute a subjective assessment of our actual
exposure in any of these matters.
›
Refer to “Non-financial risk” in the “Risk management and control” section of the Annual Report 2022 for more
information
›
Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for
more information
Risk-weighted assets
During the fourth quarter of 2023, RWA were unchanged at USD 546.5bn, primarily as decreases of USD 15.1bn
due to asset size and other movements and USD 0.5bn due to model updates were offset by increases of
USD 14.8bn due to currency effects and USD 0.7bn due to methodology and policy changes.
Movement in risk-weighted assets by key driver
USD bn
RWA as of
30.9.23
Currency
effects
Methodology
and policy
changes
Model
updates /
changes
Regulatory
add-ons
Asset size
and other
1
RWA as of
31.12.23
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
1 Includes the Pillar 3 categories “Asset size,” “Credit quality of counterparties,” “Acquisitions and disposals” and “Other.” For more information, refer to our 31 December 2023 Pillar 3 report, which will be available
as of 28 March 2024 under “Pillar 3 disclosures” at ubs.com/ investors. 2 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and securitization
exposures in the banking book. 3 Non-counterparty-related risk includes deferred tax assets recognized for temporary differences, property, equipment, software and other items.
Credit and counterparty credit risk
Credit and counterparty credit risk RWA were USD 345.3bn as of 31 December 2023. The decrease of USD 1.0bn
included positive currency effects of USD 13.9bn.
Asset size and other movements resulted in a USD 14.9bn decrease in RWA.
–
Non-core and Legacy RWA decreased by USD 5.7bn, mainly driven by an accelerated roll-off arising from our
actions to actively unwind the portfolio, in addition to the natural roll-off.
–
Global Wealth Management RWA decreased by USD 4.5bn, mainly due to negative net new loans.
–
Personal & Corporate Banking RWA decreased by USD 4.1bn, primarily driven by lower lending assets.
–
Group Items RWA decreased by USD 0.9bn, mainly driven by lower RWA in Group Treasury.
–
Asset Management RWA decreased by USD 0.2bn.
–
Investment Bank RWA increased by USD 0.5bn, mainly due to higher RWA from securities financing transactions.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 44
Methodology and policy changes resulted in an RWA increase of USD 0.7bn, due to a change in the treatment of
a derivatives portfolio from the internal model-based approach to the standardized approach for counterparty credit
risk.
Model updates resulted in an RWA decrease of USD 0.7bn, primarily related to the recalibration of certain multipliers
as a result of improvements to models, partly offset by an update to a model for securities financing transactions.
›
Refer to “Credit risk models” in the “Risk management and control” section of the Annual Report 2022 for more
information
Non-counterparty-related risk
Non-counterparty-related risk RWA increased by USD 3.7bn to USD 34.4bn in the fourth quarter of 2023, mainly
due to an increase in deferred taxes on temporary differences, as well as currency effects.
Market risk
Market risk RWA decreased by USD 2.7bn to USD 21.4bn in the fourth quarter of 2023, primarily driven by a
decrease of USD 2.9bn from asset size and other movements, partly offset by an increase of USD 0.3bn related to
ongoing parameter updates of the value-at-risk (VaR) models. FINMA approved the integration of time decay into
regulatory VaR and stressed VaR, which went live on 12 January 2024.
›
Refer to ”Market risk” in the “Risk management and control” section of the Annual Report 2022 for more
information
Operational risk
Operational risk RWA were unchanged at USD 145.4bn.
›
Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for
more information
›
Refer to “Non-financial risk” in the “Risk management and control” section of the Annual Report 2022 for
information about the advanced measurement approach model
Outlook
We expect that model updates will result in an RWA increase of around USD 10bn in 2024 and 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. In addition, we currently estimate that the revised Basel III framework, including the
Fundamental Review of the Trading Book, will lead to a further increase in RWA of approximately USD 25bn, of
which USD 10bn in Non-core and Legacy. This estimate is based on static balances and on our current
understanding of the relevant standards before taking into account mitigating actions and not reflecting the impact
of the output floor, which is phased in over time. It may change as a result of new or updated regulatory
interpretations, appropriate conservatism in model calibration, the implementation of Basel III standards into
national law, changes in business growth, market conditions and other factors. The core business-led reductions in
RWA, coupled with the run-down of positions in the Non-core and Legacy business division, are expected to more
than offset the effects of model updates and revised Basel III standards in 2024 and 2025.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 45
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
31.12.23
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
30.9.23
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
31.12.23 vs 30.9.23
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
1 Includes settlement risk, credit valuation adjustments, equity 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 2023: USD 16.4bn; 30 September 2023: USD 12.6bn), as well as property, equipment, software and other items (31 December 2023: USD 18.0bn; 30 September 2023:
USD 18.1bn).
Leverage ratio denominator
During the fourth quarter of 2023, the LRD increased by USD 79.6bn to USD 1,695.4bn, driven by currency effects
of USD 68.4bn and asset size and other movements of USD 11.1bn.
Movement in leverage ratio denominator by key driver
USD bn
LRD as of
30.9.23
Currency
effects
Asset size and
other
LRD as of
31.12.23
On-balance sheet exposures (excluding derivatives and securities financing transactions)
Derivatives
Securities financing transactions
Off-balance sheet items
Deduction items
Total
The LRD movements described below exclude currency effects.
On-balance sheet exposures (excluding derivatives and securities financing transactions) increased by USD 27.5bn,
mainly driven by higher central bank balances resulting primarily from customer deposits and net new issuances of
long-term debt, and higher trading portfolio assets, partly offset by lower lending balances.
Derivative exposures decreased by USD 17.6bn, mainly due to market-driven decreases in foreign exchange and
interest rate contracts and lower trading volumes across products.
Securities financing transactions increased by USD 5.0bn, predominantly reflecting net new excess cash
reinvestment trades.
Off-balance sheet items decreased by USD 3.8bn, mainly due to a decrease in guarantees and commitments.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 46
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
31.12.23
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
30.9.23
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
31.12.23 vs 30.9.23
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
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
Annual Report 2022, 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 increased 19.1 percentage points to
215.7%, remaining above the prudential requirement communicated by the Swiss Financial Market Supervisory
Authority (FINMA). The movement in the average LCR was primarily driven by an increase in high-quality liquid
assets (HQLA) of USD 48.1bn to USD 415.6bn, mostly driven by higher customer deposits and proceeds received
from debt issuances and negative net new loans. The effect of the increase in average HQLA was partly offset by a
USD 5.5bn increase in average net cash outflows, to USD 192.8bn. That increase was due to lower net inflows
from securities financing transactions and lower inflows from lending assets, partly offset by lower outflows from
debt issued.
›
Refer to the
31 December 2023 Pillar 3 report, which will be available as of 28 March 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the LCR
Liquidity coverage ratio
USD bn, except where indicated
Average 4Q23
1
Average 3Q23
1
High-quality liquid assets
Net cash outflows
2
Liquidity coverage ratio (%)
3
1 Calculated based on an average of 63 data points in the fourth quarter of 2023 and 63 data points in the third quarter of 2023. 2 Represents the net cash outflows expected over a stress period of 30 calendar
days. 3 Calculated after the application of haircuts and inflow and outflow rates, as well as, where applicable, caps on Level 2 assets and cash inflows.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 47
Net stable funding ratio
As of 31 December 2023, the net stable funding ratio (the NSFR) of the UBS Group increased 3.4 percentage points
to 124.1%, remaining above the prudential requirement communicated by FINMA.
Available stable funding increased by USD 55.7bn to USD 928.4bn, reflecting higher customer deposits, debt
securities issued and regulatory capital. Required stable funding increased by USD 25.3bn to USD 748.2bn,
predominantly reflecting higher trading and lending assets.
›
Refer to the 31 December 2023 Pillar 3 report, which will be available as of 28 March 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the NSFR
Net stable funding ratio
USD bn, except where indicated
31.12.23
30.9.23
Available stable funding
Required stable funding
Net stable funding ratio (%)
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
Annual Report 2022, which provides more information about the balance sheet and off-balance sheet positions.
For more information about the balance sheet effects of the acquisition of the Credit Suisse Group, refer to
“Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of
this report.
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 2023 vs 30 September 2023)
Total assets were USD 1,717.6bn as of 31 December 2023. The increase of USD 73.3bn included currency effects
of approximately USD 67.4bn.
Cash and balances at central banks increased by USD 51.7bn, mainly driven by inflows from customer deposits,
lending assets and net new issuances of long-term debt, partly offset by outflows into securities financing
transactions (SFTs). Lending assets increased by USD 22.3bn, reflecting currency effects of approximately
USD 35.6bn, partly offset by net new loan outflows, mainly in Global Wealth Management. SFTs at amortized cost
increased by USD 14.1bn, predominantly reflecting net new excess cash reinvestment trades. Trading assets
increased by USD 12.1bn, mainly driven by higher inventory levels held to hedge client positions in Financing and
Derivatives & Solutions in the Investment Bank.
These increases were partly offset by a decrease in derivatives and cash collateral receivables on derivative
instruments of USD 24.1bn, mainly driven by decreases in interest rate contracts and foreign currency contracts in
Derivatives & Solutions.
Assets
As of
% change from
USD bn
31.12.23
30.9.23
1
30.9.23
Cash and balances at central banks
Lending
2
Securities financing transactions at amortized cost
Trading assets
Derivatives and cash collateral receivables on derivative instruments
Brokerage receivables
Other financial assets measured at amortized cost
Other financial assets measured at fair value
3
Non-financial assets
Total assets
of which: Credit Suisse
559.2
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
2 Consists of Loans and advances to customers and Amounts due from banks. 3 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair value through other comprehensive
income.
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 48
Balance sheet liabilities (31 December 2023 vs 30 September 2023)
Total liabilities were USD 1,629.8bn as of 31 December 2023. The increase of USD 70.9bn included currency effects
of approximately USD 56.1bn.
Customer deposits increased by USD 58.9bn, including currency effects of approximately USD 32.4bn. Excluding
currency effects, the increase was primarily driven by net inflows into time deposits across all regions, mainly in
Global Wealth Management. Debt issued designated at fair value and long-term debt issued measured at amortized
cost increased by USD 15.5bn, mainly driven by currency effects and net new issuances of long-term debt in Group
Treasury and structured notes in Derivatives & Solutions.
›
Refer to “Bondholder information” at
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
31.12.23
30.9.23
1
30.9.23
Short-term borrowings
2,3
Securities financing transactions at amortized cost
Customer deposits
Debt issued designated at fair value and long-term debt issued measured at amortized cost
3
Trading liabilities
Derivatives and cash collateral payables on derivative instruments
Brokerage payables
Other financial liabilities measured at amortized cost
Other financial liabilities designated at fair value
Non-financial liabilities
Total liabilities
of which: Credit Suisse
4
Share capital
Share premium
Treasury shares
Retained earnings
Other comprehensive income
5
Total equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
2 Consists of short-term debt issued measured at amortized cost and amounts due to banks, which includes amounts due to central banks. 3 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. 4 Excludes USD 57.5bn (30 September 2023: USD 55.7bn) of debt instruments previously issued by Credit Suisse Group AG and transferred to UBS Group AG as part of the acquisition.
5 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Equity (31 December 2023 vs 30 September 2023)
Equity attributable to shareholders increased by USD 2,359m to USD 87,285m as of 31 December 2023.
The increase of USD 2,359m was mainly driven by total comprehensive income attributable to shareholders of
USD 2,677m, reflecting a net loss of USD 279m and other comprehensive income (OCI) of USD 2,956m, and an
increase in deferred share-based compensation awards expensed in the income statement of USD 306m. OCI mainly
included cash flow hedge OCI of USD 1,970m, OCI related to foreign currency translation of USD 1,597m and
negative OCI related to own credit on financial liabilities designated at fair value of USD 721m.
These effects were partly offset by net treasury share activity, which decreased equity by USD 673m, predominantly
due to USD 669m of shares purchased from the market to hedge future share delivery obligations related to
employee share-based compensation awards.
›
Refer to the “Group performance” and “Consolidated financial information” sections of this report for more
information
›
Refer to “Reconciliation of IFRS equity 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
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 49
Off-balance sheet (31 December 2023 vs 30 September 2023)
Guarantees increased by USD 8.9bn, mainly in Group Treasury, relating to sponsored repo clearing. Committed
unconditionally revocable credit lines increased by USD 4.3bn, mainly driven by increases in facilities provided to
clients in Global Wealth Management and Personal & Corporate Banking, as well as currency effects. Forward
starting reverse repurchase agreements increased by USD 8.0bn, reflecting fluctuations in levels of business division
activity in short-dated securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
31.12.23
30.9.23
1
30.9.23
Guarantees
2,3
Loan commitments
2
Committed unconditionally revocable credit lines
Forward starting reverse repurchase agreements
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report for more information.
2 Guarantees and loan commitments are shown net of sub-participations. 3 Includes guarantees measured at fair value through profit or loss.
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 following a change
of the share capital currency of UBS Group AG from the Swiss franc to the US dollar in the second quarter of 2023.
Shares issued were unchanged in the fourth quarter of 2023 compared with the third quarter of 2023.
We held 253m shares as of 31 December 2023, of which 121m shares had been acquired under our 2022 share
repurchase program for cancellation purposes. The remaining 133m shares are primarily held to hedge our share
delivery obligations related to employee share-based compensation and participation plans.
Treasury shares held increased by 24m shares in the fourth quarter of 2023. This mainly reflected the purchase of
25.0m shares from the market to hedge future share delivery obligations related to employee share-based
compensation awards.
Shares acquired under our 2022 program totaled 121m as of 31 December 2023 for a total acquisition cost of
USD 2,277m (CHF 2,138m). A new, two-year share repurchase program of up to USD 6bn was approved by
shareholders at the 2023 AGM. We have temporarily suspended repurchases under the share repurchase programs
due to the acquisition of the Credit Suisse Group, but we plan to repurchase up to USD 1bn of our shares in 2024
commencing after the completion of the merger of UBS AG and Credit Suisse AG.
›
Refer to the “Recent developments” section of this report for more information about the integration of Credit
Suisse
›
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
UBS Group fourth quarter 2023 report |
Risk, capital, liquidity and funding, and balance sheet | Share information and earnings per share 50
As of or for the quarter ended
As of or for the year ended
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Basic and diluted earnings (USD m)
Net profit / (loss) attributable to shareholders for basic EPS
Less: (profit) / loss on own equity derivative contracts
Net profit / (loss) attributable to shareholders for diluted EPS
Weighted average shares outstanding
Weighted average shares outstanding for basic EPS
2
Effect of dilutive potential shares resulting from notional employee shares, in-the-money
options and warrants outstanding
3
4
4
Weighted average shares outstanding for diluted EPS
Earnings per share (USD)
Basic
Diluted
Shares outstanding and potentially dilutive instruments
Shares issued
Treasury shares
5
of which: related to the 2021 share repurchase program
of which: related to the 2022 share repurchase program
Shares outstanding
Potentially dilutive instruments
6
4
4
Other key figures
Total book value per share (USD)
Tangible book value per share (USD)
Share price (USD)
7
Market capitalization (USD m)
8
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial information” section of this report 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 and third 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
(30 September 2023: 148,423,317 weighted average potential shares). 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. It 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 (30 September 2023: 148,423,317
weighted average potential shares). 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 has been amended in the second quarter of 2023 to reflect total shares issued multiplied by the share price at the end of the period. The calculation was previously based on total shares outstanding
multiplied by the share price at the end of the period. Market capitalization has been increased by USD 7.8bn as of 31 December 2022 as a result.
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 2023 report |
Consolidated financial information 51
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 2022, except for the changes described in “Note
1 Basis of accounting” in the “Consolidated financial statements” section of the first, second and third quarter
2023 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 2023, which
will be published on 28 March 2024, will incorporate the full financial statements prepared in accordance with IFRS
for the 2023 financial year.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 52
UBS Group AG interim consolidated financial
information (unaudited)
Income statement
For the quarter ended
For the year ended
USD m
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Interest income from financial instruments measured at amortized cost and fair value through
other comprehensive income
Interest expense from financial instruments measured at amortized cost
Net interest income from financial instruments measured at fair value through profit or loss and other
Net interest income
Other net income from financial instruments measured at fair value through profit or loss
Fee and commission income
Fee and commission expense
Net fee and commission income
Other income
Total revenues
Negative goodwill
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Earnings per share (USD)
Basic
Diluted
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in this section for more information.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 53
Statement of comprehensive income
For the quarter ended
For the year ended
USD m
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Comprehensive income attributable to shareholders
2
Net profit / (loss)
Other comprehensive income that may be reclassified to the income statement
Foreign currency translation
Foreign currency translation movements related to net assets of foreign operations, before tax
Effective portion of changes in fair value of hedging instruments designated as net investment hedges, before tax
Foreign currency translation differences on foreign operations reclassified to the income statement
Effective portion of changes in fair value of hedging instruments designated as net investment hedges reclassified to
the income statement
Income tax relating to foreign currency translations, including the effect of net investment hedges
Subtotal foreign currency translation, net of tax
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
Net realized (gains) / losses reclassified to the income statement from equity
Reclassification of financial assets to Other financial assets measured at amortized cost
3
Income tax relating to net unrealized gains / (losses)
Subtotal financial assets measured at fair value through other comprehensive income, net of tax
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax
Net (gains) / losses reclassified to the income statement from equity
Income tax relating to cash flow hedges
Subtotal cash flow hedges, net of tax
Cost of hedging
Cost of hedging, before tax
Income tax relating to cost of hedging
Subtotal cost of hedging, net of tax
Total other comprehensive income that may be reclassified to the income statement, net of tax
Other comprehensive income that will not be reclassified to the income statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
Income tax relating to defined benefit plans
Subtotal defined benefit plans, net of tax
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated at fair value, before tax
Income tax relating to own credit on financial liabilities designated at fair value
Subtotal own credit on financial liabilities designated at fair value, net of tax
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total other comprehensive income
Total comprehensive income attributable to shareholders
Comprehensive income attributable to non-controlling interests
Net profit / (loss)
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total comprehensive income attributable to non-controlling interests
Total comprehensive income
Net profit / (loss)
Other comprehensive income
of which: other comprehensive income that may be reclassified to the income statement
of which: other comprehensive income that will not be reclassified to the income statement
Total comprehensive income
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in this section for more information. 2 Refer to the “Group performance” section of this
report for more information. 3 Effective 1 April 2022, a portfolio of assets previously classified as Financial assets measured at fair value through other comprehensive income was reclassified to Other financial
assets measured at amortized cost. As a result, the related cumulative fair value losses of USD 449m before tax and USD 333m after tax, previously recognized in Other comprehensive income, have been removed
from equity and adjusted against the value of the assets at the reclassification date.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 54
Balance sheet
USD m
31.12.23
30.9.23
1
31.12.22
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
Derivative financial instruments
Brokerage receivables
Financial assets at fair value not held for trading
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
Investments in associates
Property, equipment and software
Goodwill and intangible assets
Deferred tax assets
Other non-financial assets
Total assets
of which: Credit Suisse
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
Derivative financial instruments
Brokerage payables designated at fair value
Debt issued designated at fair value
Other financial liabilities designated at fair value
Total financial liabilities measured at fair value through profit or loss
Provisions and contingent liabilities
Other non-financial liabilities
Total liabilities
of which: Credit Suisse
2
Equity
Share capital
Share premium
Treasury shares
Retained earnings
Other comprehensive income recognized directly in equity, net of tax
Equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in this section for more information. 2 Excludes USD 57.5bn (30 September 2023: USD 55.7bn)
of debt instruments previously issued by Credit Suisse Group AG and transferred to UBS Group AG as part of the acquisition of the Credit Suisse Group.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 55
Accounting for the acquisition of the Credit Suisse Group
The transaction
On 12 June 2023, UBS Group AG acquired Credit Suisse Group AG, succeeding by operation of Swiss law to all
assets and liabilities of Credit Suisse Group AG, and became the direct or indirect shareholder of all of the former
direct and indirect subsidiaries of Credit Suisse Group AG. The acquisition of the Credit Suisse Group constitutes a
business combination under IFRS 3,
Business Combinations
, and is required to be accounted for by applying the
acquisition method of accounting. Notes 1 and 2 in the UBS Group third quarter 2023 report and the UBS Group
second quarter 2023 report set out the details of the accounting for the acquisition.
IFRS 3 measurement period adjustments in the fourth quarter of 2023 for the acquisition of the Credit
Suisse Group
As explained in Note 2 of the UBS Group third quarter 2023 report, the acquisition of Credit Suisse Group AG was
made without the ordinary due diligence procedures and outside of the conventional time frame for an acquisition
of this scale and nature. As such, complete information about all relevant facts and circumstances as of the
acquisition date was not practically available to UBS at the time when the initial acquisition accounting was applied
for the purpose of the UBS Group third quarter 2023 report and the UBS Group second quarter 2023 report.
Therefore, the amounts that form part of the business combination accounting are considered to be provisional
and subject to further measurement period adjustments if new information about facts and circumstances existing
on the date of the acquisition is obtained within one year from the acquisition date.
In the fourth quarter of 2023, in light of additional information about circumstances existing on the acquisition
date that became available to management, IFRS 3 measurement period adjustments were made in the Non-core
and Legacy business division, reflecting additional decisions to sell acquired loans and off-balance sheet loan
commitments and the remeasurement of the acquisition date fair value adjustments of certain loans and off-balance
sheet loan commitments following a detailed review, with previously reported financial information revised. This
resulted in the reclassification of USD 8bn
1
liabilities to financial assets measured at fair value held for trading in the acquisition date balance sheet.
As a consequence of classification and measurement adjustments in the fourth quarter of 2023, USD 0.1bn of
stage 1 and stage 2 expected credit losses have been reversed from the UBS Group third quarter 2023 income
statement, resulting in corresponding increases in net profit. Additionally, interest income of USD 196m for the
quarter ended 30 September 2023 (USD 59m for the quarter ended 30 June 2023) was reclassified from
Interest
income from financial instruments measured at amortized cost and fair value through other comprehensive income
to
Net interest income from financial instruments measured at fair value through profit or loss and other,
with no
impact on Net interest income
.
Measurement period adjustments in the fourth quarter of 2023 had no further effect on the net assets acquired as
of the acquisition date and no overall impact on provisional negative goodwill.
Additionally, several presentational changes resulted in a reclassification of USD 7bn
2
fair value not held for trading to financial assets at fair value held for trading in the acquisition date balance sheet
to align with presentational approaches followed by the UBS Group.
Effect of measurement period adjustments on the acquisition date balance sheet in the fourth quarter
of 2023
The table below sets out the identifiable net assets attributable to the acquisition of the Credit Suisse Group as of
the acquisition date and includes the effects of measurement period adjustments on the acquisition date balance
sheet, made in the fourth quarter of 2023, detailed above.
1
2023 and 30 June 2023, respectively.
2
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 56
Accounting for the acquisition of the Credit Suisse Group (continued)
USD m
Purchase price consideration, after consideration of share-based compensation awards
Credit Suisse Group net identifiable assets on the acquisition date
Assets
As previously
reported in the third
quarter 2023 report
Measurement period
adjustment in the
fourth quarter 2023
Revised
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
Derivative financial instruments
Brokerage receivables
Financial assets at fair value not held for trading
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
Investments in associates
Property, equipment and software
Intangible assets
Deferred tax assets
Other non-financial assets
Total assets
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
Derivative financial instruments
Brokerage payables designated at fair value
Debt issued designated at fair value
Other financial liabilities designated at fair value
Total financial liabilities measured at fair value through profit or loss
Provisions and contingent liabilities
Other non-financial liabilities
Total liabilities
Non-controlling interests
Fair value of net assets acquired
Settlement of pre-existing relationships
Provisional negative goodwill resulting from the acquisition
The tables below set out the consequential impact of the measurement period adjustments detailed above on the
previously reported income statement for the quarter ended 30 September 2023, the balance sheets as of
30 September 2023 and 30 June 2023, and the off-balance sheet effects as of 30 September 2023 and 30 June
2023.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 57
Accounting for the acquisition of the Credit Suisse Group (continued)
Effect of the measurement period adjustments on the income statement for the quarter ended 30 September 2023
For the quarter ended 30 September 2023
USD m
As previously
reported in the
third quarter
2023 report
Measurement
period
adjustment in
the fourth
quarter 2023
Revised
Interest income from financial instruments measured at amortized cost and fair value through other comprehensive income
10,128
(196)
9,932
Interest expense from financial instruments measured at amortized cost
(9,082)
(9,082)
Net interest income from financial instruments measured at fair value through profit or loss and other
1,061
196
1,257
Net interest income
2,107
Other net income from financial instruments measured at fair value through profit or loss
3,212
14
Net fee and commission income
6,071
(14)
6,056
Other income
305
Total revenues
11,695
0
Negative goodwill
Credit loss expense / (release)
306
(67)
Operating expenses
11,644
(4)
Operating profit / (loss) before tax
(255)
71
Tax expense / (benefit)
526
Net profit / (loss)
(781)
Net profit / (loss) attributable to non-controlling interests
4
Net profit / (loss) attributable to shareholders
(785)
Effect of the measurement period adjustments on the balance sheet as of 30 September 2023 and 30 June 2023
USD m
As of 30 September 2023
As of 30 June 2023
Assets
As previously
reported in the
third quarter
2023 report
Measurement
period
adjustment in
the fourth
quarter 2023
Revised
As previously
reported in the
third quarter
2023 report
Measurement
period
adjustment in
the fourth
quarter 2023
Revised
Total financial assets measured at amortized cost
of which: Loans and advances to customers
(7,199)
(8,716)
Total financial assets measured at fair value through profit or loss
of which: Financial assets at fair value held for trading
14,647
14,445
of which: Financial assets at fair value not held for trading
(7,642)
(5,987)
Financial assets measured at fair value through other comprehensive income
Non-financial assets
Total assets
Liabilities
Total financial liabilities measured at amortized cost
Total financial liabilities measured at fair value through profit or loss
of which: Derivative financial instruments
1
1
Provisions and contingent liabilities
(23)
(18)
Other non-financial liabilities
57
70
Total liabilities
Equity
Equity attributable to shareholders
of which: Retained earnings
71
0
Total equity
Total liabilities and equity
1 Includes the fair value of loan commitments reclassified from loan commitments not measured at fair value to derivative loan commitments with a notional amount as of 30 September 2023 and 30 June 2023 of
USD 0.7bn and USD 0.9bn respectively.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 58
Accounting for the acquisition of the Credit Suisse Group (continued)
Off-balance sheet effect of the measurement period adjustments as of 30 September 2023 and 30 June 2023
As of 30 September 2023
As of 30 June 2023
USD bn
As previously
reported in the
third quarter
2023 report
Measurement
period
adjustment in
the fourth
quarter 2023
Revised
As previously
reported in the
third quarter
2023 report
Measurement
period
adjustment in
the fourth
quarter 2023
Revised
Guarantees
35.1
0.0
35.0
36.5
36.5
Loan commitments
91.5
1
90.8
92.8
1
91.9
Committed unconditionally revocable credit lines
159.0
159.0
168.6
168.6
Forward starting reverse repurchase agreements
10.4
10.4
5.0
5.0
1 Represents the notional amount of loan commitments reclassified from loan commitments not measured at fair value to derivative loan commitments, with a fair value as of 30 September 2023 and 30 June 2023
of USD 0.1bn and USD 0.1bn respectively.
Provisions and contingent liabilities
a) Provisions and contingent liabilities
The table below presents an overview of total provisions and contingent liabilities.
USD m
31.12.23
30.9.23
1
31.12.22
Provisions related to expected credit losses (IFRS 9,
Financial Instruments
)
Provisions related to Credit Suisse loan commitments (IFRS 3,
Business Combinations
)
Provisions related to litigation, regulatory and similar matters (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
Acquisition-related contingent liabilities (IFRS 3,
Business Combinations
)
Other provisions
Total provisions and contingent liabilities
of which: Credit Suisse
1 Comparative-period information has been revised. Refer to “Accounting for the acquisition of the Credit Suisse Group” in this section for more information.
The table below presents additional information for provisions related to litigation, regulatory and similar matters
and other provisions.
USD m
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total
Balance as of 31 December 2022
Balance as of 30 September 2023
5
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 31 December 2023
of which: Credit Suisse
1 Consists of provisions for losses resulting from legal, liability and compliance risks. 2 Primarily consists of USD 448m of provisions for onerous contracts related to real estate as of 31 December 2023 (30 September
2023: USD 389m; 31 December 2022: USD 28m) and USD 294m of personnel-related restructuring provisions as of 31 December 2023 (30 September 2023: USD 225m; 31 December 2022: USD 102m). 3 Mainly
includes provisions for reinstatement costs with respect to leased properties. 4 Mainly includes provisions related to onerous contracts and employee benefits. 5 Comparative-period information has been revised.
Refer to “Accounting for the acquisition of the Credit Suisse Group” in this section for more information.
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.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 59
Provisions and contingent liabilities (continued)
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.
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. It is not practicable to provide an aggregate estimate of liability for our litigation,
regulatory and similar matters as a class of contingent liabilities beyond what has been identified as a consequence
of the acquisition of Credit Suisse as set out below. Doing so would require UBS to provide speculative legal
assessments as to claims and proceedings that involve unique fact patterns or novel legal theories, that have not
yet been initiated or are at early stages of adjudication, or as to which alleged damages have not been quantified
by the claimants. Although UBS therefore cannot provide a numerical estimate of the future losses that could arise
from litigation, regulatory and similar matters, UBS believes that the aggregate amount of possible future losses
from this class that are more than remote substantially exceeds the level of current provisions.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 60
Provisions and contingent liabilities (continued)
Litigation, regulatory and similar matters may also result in non-monetary penalties and consequences. A guilty plea
to, or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may
require UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory
authorities to limit, suspend or terminate licenses and regulatory authorizations, and may permit financial market
utilities to limit, suspend or terminate UBS’s participation in such utilities. Failure to obtain such waivers, or any
limitation, suspension or termination of licenses, authorizations or participations, could have material consequences
for UBS.
The risk of loss associated with litigation, regulatory and similar matters is a component of operational risk for
purposes of determining capital requirements. Information concerning our capital requirements and the calculation
of operational risk for this purpose is included in the “Capital management” section of this report.
Matters related to Credit Suisse entities are separately described herein. The amounts shown in the table below
reflect the provisions recorded under IFRS accounting principles. In connection with the acquisition of Credit Suisse,
UBS Group AG additionally has reflected in its purchase accounting under IFRS 3 a further valuation adjustment of
USD 3bn 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 they will result in an outflow
of resources, significantly increasing the recognition threshold for litigation liabilities beyond those that generally
apply under IFRS and US GAAP.
Provisions for litigation, regulatory and similar matters by business division and in Group Items
1
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
UBS Group
Balance as of 31 December 2022
Balance as of 30 September 2023
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 31 December 2023
of which: Credit Suisse
1 Provisions, if any, for the matters described in items A3, B8 and B10 of this disclosure are recorded in Global Wealth Management; provisions, if any, for the matters described in items B1, B2, B3, B4, B5, B6, B7,
B9, B11 and B12 of this disclosure are recorded in Non-core and Legacy; provisions, if any, for the matters described in items B13 and B14 of this disclosure are recorded in Group Items. Provisions, if any, for the
matters described in items A1 and A4 of this disclosure are allocated between Global Wealth Management and Personal & Corporate Banking; and provisions, if any, for the matters described in item A3 are allocated
between the Investment Bank and Group Items.
A. Litigation, regulatory and similar matters involving UBS AG and subsidiaries
1. Inquiries regarding cross-border wealth management businesses
Tax and regulatory authorities in a number of countries have made inquiries, served requests for information or
examined employees located in their respective jurisdictions relating to the cross-border wealth management
services provided by UBS and other financial institutions.
Since 2013, UBS (France) S.A., UBS AG and certain former employees have been under investigation in France in
relation to UBS’s cross-border business with French clients. In connection with this investigation, the investigating
judges ordered UBS AG to provide bail (“
caution
”) of EUR 1.1bn.
In 2019, the court of first instance returned a verdict finding UBS AG guilty of unlawful solicitation of clients on
French territory and aggravated laundering of the proceeds of tax fraud, and UBS (France) S.A. guilty of aiding and
abetting unlawful solicitation and of laundering the proceeds of tax fraud. The court imposed fines aggregating
EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of civil damages to the French state. A trial
in the Paris Court of Appeal took place in March 2021. In December 2021, the Court of Appeal found UBS AG
guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. The court ordered a fine of
EUR 3.75m, the confiscation of EUR 1bn, and awarded civil damages to the French state of EUR 800m. UBS
appealed the decision to the French Supreme Court. The Supreme Court rendered its judgment on 15 November
2023. It upheld the Court of Appeal’s decision regarding unlawful solicitation and aggravated laundering of the
proceeds of tax fraud, but overturned the confiscation of EUR 1bn, the penalty of EUR 3.75m and the EUR 800m
of civil damages awarded to the French state. The case has been remanded to the Court of Appeal for a retrial
regarding these overturned elements. The French state has reimbursed the EUR 800m of civil damages to UBS AG.
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Provisions and contingent liabilities (continued)
Our balance sheet at 31 December 2023 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.
2. Madoff
In relation to the Bernard L. Madoff Investment Securities LLC (BMIS) investment fraud, UBS AG, UBS (Luxembourg)
S.A. (now UBS Europe SE, Luxembourg branch) and certain other UBS subsidiaries have been subject to inquiries
by a number of regulators, including the Swiss Financial Market Supervisory Authority (FINMA) and the Luxembourg
Commission de Surveillance du Secteur Financier. Those inquiries concerned two third-party funds established
under Luxembourg law, substantially all assets of which were with BMIS, as well as certain funds established in
offshore jurisdictions with either direct or indirect exposure to BMIS. These funds faced severe losses, and the
Luxembourg funds are in liquidation. The documentation establishing both funds identifies UBS entities in various
roles, including custodian, administrator, manager, distributor and promoter, and indicates that UBS employees
serve as board members.
In 2009 and 2010, the liquidators of the two Luxembourg funds filed claims against UBS entities, non-UBS entities
and certain individuals, including current and former UBS employees, seeking amounts totaling approximately EUR
2.1bn, which includes amounts that the funds may be held liable to pay the trustee for the liquidation of BMIS
(BMIS Trustee).
A large number of alleged beneficiaries have filed claims against UBS entities (and non-UBS entities) for purported
losses relating to the Madoff fraud. The majority of these cases have been filed in Luxembourg, where decisions
that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and
the Luxembourg Supreme Court has dismissed a further appeal in one of the test cases.
In the US, the BMIS Trustee filed claims against UBS entities, among others, in relation to the two Luxembourg
funds and one of the offshore funds. The total amount claimed against all defendants in these actions was not less
than USD 2bn. In 2014, the US Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions
dismissing all claims except those for the recovery of approximately USD 125m of payments alleged to be fraudulent
conveyances and preference payments. In 2016, the bankruptcy court dismissed these claims against the UBS
entities. In 2019, the Court of Appeals reversed the dismissal of the BMIS Trustee’s remaining claims, and the US
Supreme Court subsequently denied a petition seeking review of the Court of Appeals’ decision. The case has been
remanded to the Bankruptcy Court for further proceedings.
3. Foreign exchange, LIBOR and benchmark rates, and other trading practices
Foreign exchange-related regulatory matters:
concerning possible manipulation of foreign exchange markets and precious metals prices. As a result of these
investigations, UBS entered into resolutions with Swiss, US and United Kingdom regulators and the European
Commission. UBS was granted conditional immunity by the Antitrust Division of the DOJ and by authorities in other
jurisdictions in connection with potential competition law violations relating to foreign exchange and precious
metals businesses.
Foreign exchange-related civil litigation:
in other jurisdictions against UBS and other banks on behalf of putative classes of persons who engaged in foreign
currency transactions with any of the defendant banks. UBS has resolved US federal court class actions relating to
foreign currency transactions with the defendant banks and persons who transacted in foreign exchange futures
contracts and options on such futures under a settlement agreement that provides for UBS to pay an aggregate of
USD 141m and provide cooperation to the settlement classes. Certain class members have excluded themselves
from that settlement and have filed individual actions in US and English courts against UBS and other banks, alleging
violations of US and European competition laws and unjust enrichment. UBS and the other banks have resolved
those individual matters.
In 2015, a putative class action was filed in federal court against UBS and numerous other banks on behalf of
persons and businesses in the US who directly purchased foreign currency from the defendants and alleged co-
conspirators for their own end use. In 2022, the court denied plaintiffs’ motion for class certification. In March
2023, the court granted defendants’ summary judgment motion, dismissing the case. Plaintiffs have appealed.
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Provisions and contingent liabilities (continued)
LIBOR and other benchmark-related regulatory matters:
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain times. UBS reached settlements or otherwise concluded investigations relating to benchmark interest rates
with the investigating authorities. UBS was granted conditional leniency or conditional immunity from authorities
in certain jurisdictions, including the Antitrust Division of the DOJ and the Swiss Competition Commission (WEKO),
in connection with potential antitrust or competition law violations related to certain rates. However, UBS has not
reached a final settlement with WEKO, as the Secretariat of WEKO has asserted that UBS does not qualify for full
immunity.
LIBOR and other benchmark-related civil litigation:
in the federal courts in New York against UBS and numerous other banks on behalf of parties who transacted in
certain interest rate benchmark-based derivatives. Also pending in the US and in other jurisdictions are a number
of other actions asserting losses related to various products whose interest rates were linked to LIBOR and other
benchmarks, including adjustable rate mortgages, preferred and debt securities, bonds pledged as collateral, loans,
depository accounts, investments and other interest-bearing instruments. The complaints allege manipulation,
through various means, of certain benchmark interest rates, including USD LIBOR, Euroyen TIBOR, Yen LIBOR,
EURIBOR, CHF LIBOR, GBP LIBOR and seek unspecified compensatory and other damages under varying legal
theories.
USD LIBOR class and individual actions in the US:
In 2013 and 2015, the district court in the USD LIBOR actions
dismissed, in whole or in part, certain plaintiffs’ antitrust claims, federal racketeering claims, Commodity Exchange
Act claims, and state common law claims, and again dismissed the antitrust claims in 2016 following an appeal. In
2021, the Second Circuit affirmed the district court’s dismissal in part and reversed in part and remanded to the
district court for further proceedings. The Second Circuit, among other things, held that there was personal
jurisdiction over UBS and other foreign defendants. Separately, in 2018, the Second Circuit reversed in part the
district court’s 2015 decision dismissing certain individual plaintiffs’ claims and certain of these actions are now
proceeding. In 2018, the district court denied plaintiffs’ motions for class certification in the USD class actions for
claims pending against UBS, and plaintiffs sought permission to appeal that ruling to the Second Circuit. The Second
Circuit denied the petition to appeal. In 2020, an individual action was filed in the Northern District of California
against UBS and numerous other banks alleging that the defendants conspired to fix the interest rate used as the
basis for loans to consumers by jointly setting the USD LIBOR rate and monopolized the market for LIBOR-based
consumer loans and credit cards. In September 2022, the court granted defendants’ motion to dismiss the
complaint in its entirety, while allowing plaintiffs the opportunity to file an amended complaint. Plaintiffs filed an
amended complaint in October 2022, and defendants moved to dismiss the amended complaint. In October 2023,
the court dismissed the amended complaint with prejudice. In January 2024, plaintiffs appealed the dismissal to
the Ninth Circuit Court of Appeals.
Other benchmark class actions in the US:
Yen LIBOR / Euroyen TIBOR
– In 2017, the court dismissed one Yen LIBOR / Euroyen TIBOR action in its entirety on
standing grounds. In 2020, the appeals court reversed the dismissal and, subsequently, plaintiffs in that action filed
an amended complaint focused on Yen LIBOR. In 2022, the court granted UBS’s motion for reconsideration and
dismissed the case against UBS. The dismissal of the case against UBS could be appealed following the disposition
of the case against the remaining defendant in the district court.
CHF LIBOR
Plaintiffs filed an amended complaint, and the court granted a renewed motion to dismiss in 2019. Plaintiffs
appealed. In 2021, the Second Circuit granted the parties’ joint motion to vacate the dismissal and remand the case
for further proceedings. Plaintiffs filed a third amended complaint in November 2022 and defendants moved to
dismiss the amended complaint in January 2023.
EURIBOR
defendants for lack of personal jurisdiction. Plaintiffs have appealed.
GBP LIBOR
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Provisions and contingent liabilities (continued)
Government bonds:
banks on behalf of persons who participated in markets for US Treasury securities since 2007. A consolidated
complaint was filed in 2017 in the US District Court for the Southern District of New York alleging that the banks
colluded with respect to, and manipulated prices of, US Treasury securities sold at auction and in the secondary
market and asserting claims under the antitrust laws and for unjust enrichment. Defendants’ motions to dismiss
the consolidated complaint were granted in 2021. Plaintiffs filed an amended complaint, which defendants moved
to dismiss later in 2021. In March 2022, the court granted defendants’ motion to dismiss that complaint, and in
February 2024, the Second Circuit affirmed the district court’s dismissal. Similar class actions have been filed
concerning European government bonds and other government bonds.
In 2021, the European Commission issued a decision finding that UBS and six other banks breached European
Union antitrust rules in 2007–2011 relating to European government bonds. The European Commission fined UBS
EUR 172m. UBS is appealing the amount of the fine.
With respect to additional matters and jurisdictions not encompassed by the settlements and orders referred to
above, our balance sheet at 31 December 2023 reflected a provision in an amount that UBS believes to be
appropriate under the applicable accounting standard. As in the case of other matters for which we have established
provisions, the future outflow of resources in respect of such matters cannot be determined with certainty based
on currently available information and accordingly may ultimately prove to be substantially greater (or may be less)
than the provision that we have recognized.
4. Swiss retrocessions
The Federal Supreme Court of Switzerland ruled in 2012, in a test case against UBS, that distribution fees paid to
a firm for distributing third-party and intra-group investment funds and structured products must be disclosed and
surrendered to clients who have entered into a discretionary mandate agreement with the firm, absent a valid
waiver. FINMA issued a supervisory note to all Swiss banks in response to the Supreme Court decision. UBS has met
the FINMA requirements and has notified all potentially affected clients.
The Supreme Court decision has resulted, and continues to result, in a number of client requests for UBS to disclose
and potentially surrender retrocessions. Client requests are assessed on a case-by-case basis. Considerations taken
into account when assessing these cases include, among other things, the existence of a discretionary mandate and
whether or not the client documentation contained a valid waiver with respect to distribution fees.
Our balance sheet at 31 December 2023 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.
B. Litigation regulatory and similar matters involving Credit Suisse entities
1. Mortgage-related matters
Government and regulatory related matters:
DOJ RMBS settlement
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 2007. 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. Credit
Suisse continues to evaluate its approach toward satisfying its remaining consumer relief obligations, and Credit
Suisse currently anticipates that it will take much longer than the five-year period provided in the settlement to
satisfy in full its obligations in respect of these consumer relief measures, subject to risk appetite and market
conditions. Credit Suisse expects to incur costs in relation to satisfying those obligations. The amount of consumer
relief Credit Suisse must provide also increases after 2021 pursuant to the original settlement by 5% per annum of
the outstanding amount due until these obligations are settled. The monitor publishes reports periodically on these
consumer relief matters.
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Provisions and contingent liabilities (continued)
Civil litigation: Repurchase litigations
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 or anticipated future litigation exposure. Unless otherwise stated,
these amounts reflect the original unpaid principal balance amounts as alleged in these actions and do not include
any reduction in principal amounts since issuance.
DLJ Mortgage Capital, Inc. (DLJ) is a defendant in New York state court in: (i) one action brought by Asset Backed
Securities Corporation Home Equity Loan Trust, Series 2006-HE7, in which plaintiff alleges damages of not less than
USD 374m in an amended complaint filed in August 2019; in January 2020, DLJ filed a motion to dismiss, which
the court granted in part and denied in part on December 30, 2023, dismissing with prejudice all notice-based
claims; in February 2024, the parties filed notices of appeal; (ii) one action brought by Home Equity Asset Trust,
Series 2006-8, in which plaintiff alleges damages of not less than USD 436m; (iii) one action brought by Home
Equity Asset Trust 2007-1, in which plaintiff alleges damages of not less than USD 420m; in December 2018, the
court denied DLJ’s motion for partial summary judgment in this action, which was affirmed on appeal; in March
2022, the New York State Court of Appeals reversed the decision and ordered that DLJ’s motion for partial summary
judgment be granted; a non-jury trial in the action was held between January and February 2023, and a decision
is pending; (iv) one action brought by Home Equity Asset Trust 2007-2, in which plaintiff alleges damages of not
less than USD 495m; and (v) one action brought by CSMC Asset-Backed Trust 2007-NC1, in which no damages
amount is alleged. These actions are at various procedural stages.
DLJ is also a defendant in one action brought by Home Equity Asset Trust Series 2007-3, in which plaintiff alleges
damages of not less than USD 206m. In March 2022, DLJ and the plaintiffs executed an agreement to settle this
action. In November 2023, the Minnesota state court approved the settlement through a trust instruction
proceeding brought by the trustee of the plaintiff trust. The New York state court dismissed the underlying action
with prejudice in January 2024.
2. Tax and securities law matters
In May 2014, Credit Suisse AG entered into settlement agreements with several US regulators regarding its US
cross-border matters. As part of the agreements, Credit Suisse AG, among other things, engaged an independent
corporate monitor that reports to the New York State Department of Financial Services. As of July 2018, the monitor
concluded both his review and his assignment. Credit Suisse AG continues to report to and cooperate with US
authorities in accordance with Credit Suisse AG’s obligations under the agreements, including by conducting a
review of cross-border services provided by Credit Suisse’s Switzerland-based Israel Desk. Most recently, Credit
Suisse AG has provided information to US authorities regarding potentially undeclared US assets held by clients at
Credit Suisse AG since the May 2014 plea. Credit Suisse AG continues to cooperate with the authorities. In March
2023, the US Senate Finance Committee issued a report criticizing Credit Suisse AG’s history regarding US tax
compliance. The report called on the DOJ to investigate Credit Suisse AG’s compliance with the 2014 plea.
In February 2021, a qui tam complaint was filed in the Eastern District of Virginia, alleging that Credit Suisse AG
had violated the False Claims Act by failing to disclose all US accounts at the time of the 2014 plea, which allegedly
allowed Credit Suisse AG to pay a criminal fine in 2014 that was purportedly lower than it should have been. The
DOJ moved to dismiss the case, and the Court summarily dismissed the suit. The case is now on appeal with the
US Federal Court of Appeals for the Fourth Circuit.
3. Rates-related matters
Regulatory matters
: Regulatory authorities in a number of jurisdictions, including the US, UK, EU and Switzerland,
have for an extended period of time been conducting investigations into the setting of LIBOR and other reference
rates with respect to a number of currencies, as well as the pricing of certain related derivatives. These ongoing
investigations have included information requests from regulators regarding LIBOR-setting practices and reviews of
the activities of various financial institutions, including Credit Suisse Group AG, which was a member of three LIBOR
rate-setting panels (US Dollar LIBOR, Swiss Franc LIBOR and Euro LIBOR). Credit Suisse is cooperating fully with
these investigations.
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Provisions and contingent liabilities (continued)
Regulatory authorities in a number of jurisdictions, including WEKO, the European Commission (Commission), the
South African Competition Commission and the Brazilian Competition Authority have been conducting
investigations into the trading activities, information sharing and the setting of benchmark rates in the foreign
exchange (including electronic trading) markets. Credit Suisse continues to cooperate with ongoing investigations.
Credit Suisse Group AG, Credit Suisse AG and Credit Suisse Securities (Europe) Limited (CSSEL) received a Statement
of Objections and a Supplemental Statement of Objections from the Commission in July 2018 and March 2021,
respectively, alleging that Credit Suisse entities engaged in anticompetitive practices in connection with their foreign
exchange trading business. In December 2021, the Commission issued a formal decision imposing a fine of EUR
83.3m. In February 2022, Credit Suisse appealed this decision to the EU General Court.
The reference rates investigations have also included information requests from regulators concerning
supranational, sub-sovereign and agency (SSA) bonds and commodities markets. Credit Suisse Group AG and CSSEL
received a Statement of Objections from the Commission in December 2018, alleging that Credit Suisse entities
engaged in anticompetitive practices in connection with their SSA bonds trading business. In April 2021, the
Commission issued a formal decision imposing a fine of EUR 11.9m. In July 2021, Credit Suisse appealed this
decision to the EU General Court.
Civil litigation:
USD LIBOR litigation –
Beginning in 2011, certain Credit Suisse entities were named in various putative class and
individual lawsuits filed in the US, alleging banks on the US dollar LIBOR panel manipulated US dollar LIBOR to
benefit their reputation and increase profits. All remaining matters have been consolidated for pre-trial purposes
into a multi-district litigation in the US District Court for the Southern District of New York (SDNY).
In a series of rulings between 2013 and 2019 on motions to dismiss, the SDNY (i) narrowed the claims against the
Credit Suisse entities and the other defendants (dismissing antitrust, Racketeer Influenced and Corrupt
Organizations Act (RICO), Commodity Exchange Act, and state law claims), (ii) narrowed the set of plaintiffs who
may bring claims, and (iii) narrowed the set of defendants in the LIBOR actions (including the dismissal of several
Credit Suisse entities from various cases on personal jurisdiction and statute of limitation grounds). After a number
of putative class and individual plaintiffs appealed the dismissal of their antitrust claims to the United States Court
of Appeals for the Second Circuit (Second Circuit), in December 2021, the Second Circuit affirmed in part and
reversed in part the district court’s decision and remanded the case to the SDNY.
Separately, in May 2017, the plaintiffs in three putative class actions moved for class certification. In February 2018,
the SDNY denied certification in two of the actions and granted certification over a single antitrust claim in an
action brought by over-the-counter purchasers of LIBOR-linked derivatives.
USD ICE LIBOR litigation
certain of its affiliates, were named in a civil action in the US District Court for the Northern District of California,
alleging that panel banks manipulated ICE LIBOR to profit from variable interest loans and credit cards. In December
2021, the court denied plaintiffs’ motion for preliminary and permanent injunctions to enjoin panel banks from
continuing to set LIBOR or automatically setting the benchmark to zero each day, and in September 2022, the court
granted defendants’ motions to dismiss. In October 2022, plaintiffs filed an amended complaint. In November
2022, defendants filed a motion to dismiss the amended complaint. In October 2023, the court dismissed the
amended complaint with prejudice without leave to amend. Plaintiffs have appealed.
CHF LIBOR litigation
Suisse Group AG, were named in a civil putative class action lawsuit filed in the SDNY, alleging manipulation of
Swiss franc LIBOR to benefit defendants’ trading positions. After defendants’ motion to dismiss for lack of subject
matter jurisdiction was granted and plaintiffs successfully appealed, in July 2022, Credit Suisse entered into an
agreement to settle all claims. In February and September 2023, respectively, the court entered orders granting
preliminary and final approval to the agreement to settle all claims.
Foreign exchange litigation –
named in civil lawsuits relating to the alleged manipulation of foreign exchange rates.
Credit Suisse AG, together with other financial institutions, was named in a consolidated putative class action in
Israel, which made allegations similar to the consolidated class action. In April 2022, Credit Suisse entered into an
agreement to settle all claims. The settlement remains subject to court approval.
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Provisions and contingent liabilities (continued)
Treasury markets litigation
in a number of putative civil class action complaints in the US relating to the US treasury markets. These complaints
generally alleged that the defendants colluded to manipulate US treasury auctions, as well as the pricing of US
treasury securities in the when-issued market, with impacts upon related futures and options, and that certain of
the defendants participated in a group boycott to prevent the emergence of anonymous all-to-all trading in the
secondary market for treasury securities. In March 2022, the SDNY granted defendants’ motion to dismiss and
dismissed with prejudice all claims against the defendants, and in February 2024, the Second Circuit affirmed the
district court’s dismissal.
SSA bonds litigation
were named in two Canadian putative class actions, which allege that defendants conspired to fix the prices of SSA
bonds sold to and purchased from investors in the secondary market. One putative class action was dismissed
against Credit Suisse in February 2020. In October 2022, in the second action, Credit Suisse entered into an
agreement to settle all claims. The settlement remains subject to court approval.
Credit default swap auction litigation –
In June 2021, Credit Suisse Group AG and affiliates, along with other banks
and entities, were 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. In April 2022, defendants filed a
motion to dismiss. In June 2023, the court granted in part and denied in part defendants’ motion to dismiss. In
November 2023, defendants filed a motion to enforce the previous CDS settlement with the SDNY. In January 2024,
the SDNY ruled that the claims in the New Mexico action are barred by the settlement and release to the extent
they arise from conduct prior to 30 June 2014.
4. OTC trading cases
Interest rate swaps litigation:
been named in a consolidated putative civil class action complaint and complaints filed by individual plaintiffs
relating to interest rate swaps, alleging that dealer defendants conspired with trading platforms to prevent the
development of interest rate swap exchanges. The individual lawsuits were brought by TeraExchange LLC, a swap
execution facility, and affiliates; Javelin Capital Markets LLC, a swap execution facility, and an affiliate; and trueEX
LLC, a swap execution facility, which claim to have suffered lost profits as a result of defendants’ alleged conspiracy.
All interest rate swap actions have been consolidated in a multi-district litigation in the SDNY.
Defendants moved to dismiss the putative class and individual actions, and the SDNY granted in part and denied
in part these motions.
In February 2019, class plaintiffs in the consolidated multi-district litigation filed a motion for class certification. In
March 2019, class plaintiffs filed a fourth amended consolidated class action complaint. In January 2022, Credit
Suisse entered into an agreement to settle all class action claims. The settlement remains subject to court approval.
In December 2023, the SDNY denied the motion for class certification.
Credit default swaps litigation:
institutions, were named in a civil action filed in the SDNY by Tera Group, Inc. and related entities (Tera), alleging
violations of antitrust law in connection with the allegation that CDS dealers conspired to block Tera’s electronic
CDS trading platform from successfully entering the market. In July 2019, the SDNY granted in part and denied in
part defendants’ motion to dismiss. In January 2020, plaintiffs filed an amended complaint. In April 2020,
defendants filed a motion to dismiss. In August 2023, the court granted the motion, dismissing all claims with
prejudice. Plaintiffs have appealed.
Stock loan litigation:
originally named in a number of civil lawsuits in the SDNY, certain of which are brought by class action plaintiffs
alleging that the defendants conspired to keep stock-loan trading in an over-the-counter market and collectively
boycotted certain trading platforms that sought to enter the market, and certain of which are brought by trading
platforms that sought to enter the market alleging that the defendants collectively boycotted the platforms. In
January 2022, Credit Suisse entered into an agreement to settle all class action claims. In February 2022, the court
entered an order granting preliminary approval to the agreement to settle all class action claims. The settlement
remains subject to final court approval.
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Provisions and contingent liabilities (continued)
In October 2021, in a consolidated civil litigation brought in the SDNY by entities that developed a trading platform
for stock loans that sought to enter the market, alleging that the defendants collectively boycotted the platform,
the court granted defendants’ motion to dismiss. In October 2021, plaintiffs filed a notice of appeal. In March 2023,
the Second Circuit affirmed the decision granting defendants’ motion to dismiss.
Odd-lot corporate bond litigation:
In April 2020, CSS LLC and other financial institutions were named in a putative
class action complaint filed in the SDNY, alleging a conspiracy among the financial institutions to boycott electronic
trading platforms and fix prices in the secondary market for odd-lot corporate bonds. In October 2021, the SDNY
granted defendants’ motion to dismiss. Plaintiffs have appealed.
5. ATA litigation
Since November 2014, a series of lawsuits have been filed against a number of banks, including Credit Suisse AG
and, in two instances, Credit Suisse AG, New York Branch, 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. 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
plaintiffs have filed amended complaints, including two that were dismissed prior to the court allowing plaintiffs to
replead.
6. 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 is investigating 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. Several parties appealed the judgment. In June 2019,
the Criminal Court of Appeals of Geneva ruled in the appeal of the judgment against the former relationship
manager, upholding the main findings of the Geneva criminal court. Several parties appealed the decision to the
Swiss Federal Supreme Court. In February 2020, the Swiss Federal Supreme Court rendered its judgment on the
appeals, substantially confirming the findings of the Criminal Court of Appeals of Geneva.
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 the civil lawsuit brought against Credit Suisse Trust Limited, a Credit Suisse AG affiliate, in
May 2023, the Singapore International Commercial Court issued a first instance judgment finding for the plaintiffs
and directing the parties’ experts to agree on the amount of the damages award according to the calculation
method and parameters adopted by the court. As the parties’ experts were unable to agree on the amount of the
damages, following court directions, the parties filed their proposed draft orders with supporting documents in
August 2023. In September 2023, the court ruled that the damages under its May 2023 judgment are
USD 742.73m, excluding post-judgment interest. This figure does not exclude potential overlap with the Bermuda
proceedings against Credit Suisse Life (Bermuda) Ltd., which are currently being appealed. The court ordered the
parties to ensure that there shall be no double recovery in relation to this award and any sum recovered in the
Bermuda proceedings. Credit Suisse Trust Limited has appealed the judgment and has applied for a stay of execution
pending that appeal. On 2 November 2023, the court granted a stay of execution of its May 2023 judgment
pending appeal on the condition that damages awarded and post-judgment interest accrued are paid into court
deposit within 21 days, which condition was satisfied.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 68
Provisions and contingent liabilities (continued)
In Bermuda, in the civil lawsuit brought against Credit Suisse Life (Bermuda) Ltd., a Credit Suisse AG affiliate, trial
took place in the Supreme Court of Bermuda in November and December 2021. The Supreme Court of Bermuda
issued a first instance judgment in March 2022, finding for the plaintiff. In May 2022, the Supreme Court of
Bermuda issued an order awarding damages of USD 607.35m to the plaintiff. In May 2022, Credit Suisse Life
(Bermuda) Ltd. appealed the decision to the Bermuda Court of Appeal. In July 2022, the Supreme Court of Bermuda
granted a stay of execution of its judgment pending appeal on the condition that damages awarded were paid into
an escrow account within 42 days, which condition was satisfied. In June 2023, the Bermuda Court of Appeal
issued its judgment confirming the award issued by the Supreme Court of Bermuda and upholding the Supreme
Court of Bermuda’s finding that Credit Suisse Life (Bermuda) Ltd. had breached its contractual and fiduciary duties,
but overturning the Supreme Court of Bermuda’s finding that Credit Suisse Life (Bermuda) Ltd. had made fraudulent
misrepresentations. In July 2023, Credit Suisse Life (Bermuda) Ltd. filed its notice of motion for leave to appeal to
the Judicial Committee of the Privy Council and applied for a stay of execution of the Bermuda Court of Appeal’s
judgment pending the outcome of the appeal to the Judicial Committee of the Privy Council on the condition that
the damages awarded remain within the escrow account and that interest be added to the escrow account
calculated at the Bermuda statutory rate of 3.5%. A hearing on the applications for leave to appeal and stay of
execution took place in December 2023. Further, in December 2023, USD 75m was released from the escrow
account and paid to plaintiffs.
In Switzerland, civil lawsuits have commenced against Credit Suisse AG in the Court of First Instance of Geneva,
with statements of claim served in March 2023.
7. Mozambique matter
Credit Suisse has been 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 Mocambiacana 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 Exchange Commission (SEC),
the UK Financial Conduct Authority (FCA) and FINMA to resolve inquiries by these agencies. 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 consented to the entry of
a Cease and Desist Order by the SEC. Under the terms of the DPA, UBS Group AG (as successor to Credit Suisse
Group AG) must continue compliance enhancement and remediation efforts agreed by Credit Suisse, report to the
DOJ on those efforts for three years and undertake additional measures as outlined in the DPA. If the DPA’s
conditions are complied with, the charges will be dismissed at the end of the DPA’s three-year term. In addition,
CSSEL entered into a Plea Agreement and pleaded guilty to one count of conspiracy to violate the US federal wire
fraud statute. CSSEL is bound by the same compliance, remediation and reporting obligations under the DPA. The
total monetary sanctions paid to the DOJ and SEC, taking into account various credits and offsets, was
approximately USD 275m. Under the terms of the resolution with the DOJ, Credit Suisse also paid USD 22.6m in
restitution to eligible investors in the 2016 Eurobonds issued by the Republic of Mozambique.
In the resolution with the FCA, CSSEL, Credit Suisse International (CSI) and Credit Suisse AG, London Branch agreed
that, in respect of these transactions with Mozambique, its UK operations had failed to conduct business with due
skill, care and diligence and to take reasonable care to organize and control its affairs responsibly and effectively,
with adequate risk management systems. Credit Suisse paid a penalty of approximately USD 200m and, further to
an agreement with the FCA, forgave USD 200m of debt owed to Credit Suisse by Mozambique.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 69
Provisions and contingent liabilities (continued)
FINMA also entered a decree announcing the conclusion of its enforcement proceeding, finding that Credit Suisse
AG and Credit Suisse (Schweiz) AG violated the duty to file a suspicious activity report in Switzerland, and Credit
Suisse Group AG did not adequately manage and address the risks arising from specific sovereign lending and
related securities transactions, and ordering the bank to remediate certain deficiencies. Credit Suisse’s
implementation of the measures required under the FINMA decree has been reviewed by an independent third
party appointed by FINMA, which review recommends some enhancements to the measures that Credit Suisse has
implemented. FINMA also arranged for certain existing transactions to be reviewed by the same independent third
party on the basis of specific risk criteria, and required enhanced disclosure of certain sovereign transactions.
In February 2019, certain Credit Suisse entities, three former employees, and several other unrelated entities were
sued in the English High Court by the Republic of Mozambique. Credit Suisse entities subsequently filed cross claims
against several entities controlled by Privinvest Holding SAL (Privinvest) that acted as the project contractor, Iskander
Safa, the owner of Privinvest, and several Mozambique officials. The Republic of Mozambique sought (i) a
declaration that the sovereign guarantee issued in connection with the ProIndicus loan syndication arranged and
funded, in part, by a Credit Suisse subsidiary is void and (ii) damages alleged to have arisen in connection with the
transactions involving ProIndicus and EMATUM, and a transaction in which Credit Suisse had no involvement with
Mozambique Asset Management S.A. In addition, several of the banks that participated in the ProIndicus loan
syndicate brought claims against Credit Suisse entities seeking a declaration that Credit Suisse is liable to
compensate them for alleged losses suffered as a result of any invalidity of the sovereign guarantee or damages
stemming from the alleged loss suffered due to their reliance on representations made by Credit Suisse to the
syndicate lenders.
In January 2021, Privinvest entities filed a cross claim against the Credit Suisse entities (as well as the three former
Credit Suisse employees and various Mozambican officials) seeking an indemnity and/or contribution in the event
that the contractor is found liable to the Republic of Mozambique.
In February 2022, Privinvest and Iskandar Safa brought a defamation claim in a Lebanese court against CSSEL and
Credit Suisse Group AG. The lawsuit alleges damage to the claimants’ professional reputation in Lebanon due to
statements that were allegedly made by Credit Suisse in documents relating to the October 2021 settlements with
global regulators. In November 2022, a Privinvest employee who was the lead negotiator on behalf of Privinvest
entities in relation to the Mozambique transactions, also brought a defamation claim in a Lebanese court against
Credit Suisse Group AG and CSSEL.
In September 2023, Credit Suisse, the Republic of Mozambique, and certain of the lenders in the ProIndicus
syndicate entered into a settlement agreement. In November 2023, Credit Suisse, Privinvest and Iskander Safa
entered into an agreement to settle all claims among them in the English High Court and in Lebanon.
8. Cross-border private banking matters
Credit Suisse offices in various locations, including the UK, the Netherlands, France and Belgium, have been
contacted by regulatory and law enforcement authorities that are 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. Credit Suisse has conducted a review of these issues, the UK and French aspects of which
have been closed, and is continuing to cooperate with the authorities.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 70
Provisions and contingent liabilities (continued)
9. 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 due December 4, 2030 (XIV ETNs). In August 2018, plaintiffs filed a consolidated amended
class action complaint, naming Credit Suisse Group AG and certain affiliates and executives, which asserts claims
for violations of Sections 9(a)(4), 9(f), 10(b) and 20(a) of the US Securities Exchange Act of 1934 and Rule 10b-5
thereunder and Sections 11 and 15 of the US Securities Act of 1933 and alleges that the defendants are responsible
for losses to investors following a decline in the value of XIV ETNs in February 2018. Defendants moved to dismiss
the amended complaint in November 2018. In September 2019, the SDNY granted defendants’ motion to dismiss
and dismissed with prejudice all claims against the defendants. In October 2019, plaintiffs filed a notice of appeal.
In April 2021, the Second Circuit issued an order affirming in part and vacating in part the SDNY’s September 2019
decision granting defendants’ motion to dismiss with prejudice. In July 2022, plaintiffs filed a motion for class
certification. In March 2023, the court denied plaintiffs’ motion to certify two of their three alleged classes and
granted plaintiffs’ motion to certify their third alleged class. In March 2023, defendants moved for reconsideration
and filed a petition for permission to appeal the court’s class certification decision to the Second Circuit. In April
2023, plaintiffs filed a motion seeking leave to amend their complaint. In May 2023, plaintiffs filed a renewed
motion for class certification, which Defendants have opposed. In January 2024, the court issued an order denying
plaintiffs’ motion to amend.
DGAZ litigation:
In January 2022, Credit Suisse AG was named in a class action complaint filed in the SDNY brought
on behalf of a putative class of short sellers of VelocityShares 3x Inverse Natural Gas Exchange Traded Notes linked
to the S&P GSCI Natural Gas Index ER due February 9, 2032 (DGAZ ETNs). The complaint asserts claims for violations
of Section 10(b) of the US Securities Exchange Act of 1934 and Rule 10b-5 thereunder and alleges that Credit
Suisse is responsible for losses suffered by short sellers following a June 2020 announcement that Credit Suisse
would delist and suspend further issuances of the DGAZ ETNs. In July 2022, Credit Suisse AG filed a motion to
dismiss. In March 2023, the court granted Credit Suisse AG’s motion to dismiss. In May 2023, the court entered an
order dismissing the case with prejudice. In June 2023, plaintiff filed a notice of appeal.
10. Bulgarian former clients matter
Credit Suisse AG has been responding to an investigation by the Swiss Office of the Attorney General (SOAG)
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 December 2020, the SOAG brought charges
against Credit Suisse AG and other parties. Credit Suisse AG believes its diligence and controls complied with
applicable legal requirements and intends to defend itself vigorously. The trial in the Swiss Federal Criminal Court
took place in the first quarter of 2022. In June 2022, 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. In July 2022,
Credit Suisse AG appealed the decision to the Swiss Federal Court of Appeals.
11. SCFF
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 (SCFF) matter by FINMA, the FCA and
other regulatory and governmental agencies. The Luxembourg Commission de Surveillance du Secteur Financier is
reviewing the matter through a third party. Credit Suisse is cooperating with these authorities.
In February 2023, FINMA announced the conclusion of its enforcement proceedings against Credit Suisse in
connection with the SCFF 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 has already taken extensive organizational measures based on its own
investigation into the SCFF matter, particularly to strengthen its governance and control processes, and FINMA is
supportive of these measures, the regulator has ordered certain additional remedial measures. These include a
requirement that the most important (approximately 500) business relationships must be reviewed periodically and
holistically at the Executive Board level, in particular for counterparty risks, and that Credit Suisse must set up a
document defining the responsibilities of approximately 600 of its highest-ranking managers. FINMA will appoint
an audit officer to assess compliance with these supervisory measures. Separate from the enforcement proceeding
regarding Credit Suisse, FINMA has opened four enforcement proceedings against former managers of Credit
Suisse.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 71
Provisions and contingent liabilities (continued)
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 SCFF matter.
The Attorney General of the Canton of Zürich has initiated a criminal procedure in connection with the SCFF matter.
In such procedure, while certain former and active Credit Suisse employees, among others, have been named as
accused persons, Credit Suisse itself is not a party to the procedure.
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. Certain investors and other private parties have also filed criminal complaints
against Credit Suisse and other parties in connection with this matter.
12. Archegos
Credit Suisse has received requests for documents and information in connection with inquiries, investigations
and/or actions relating to Credit Suisse’s relationship 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, COMCO, the Hong Kong Competition Commission and other regulatory and
governmental agencies. Credit Suisse is cooperating with the authorities in these matters.
In July 2023, the US Federal Reserve and the PRA announced resolutions of their investigations of Credit Suisse’s
relationship with Archegos. UBS Group AG, Credit Suisse AG, Credit Suisse Holdings (USA) Inc., and Credit Suisse
AG, New York Branch entered into an Order to Cease and Desist with the Board of Governors of the Federal Reserve
System. Under the terms of the order, Credit Suisse paid a civil money penalty of USD 269m 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.
CSI and CSSEL entered into a settlement agreement with the PRA providing for the resolution of the PRA’s
investigation, following which the PRA published a Final Notice imposing a financial penalty of GBP 87m on CSI
and CSSEL for breaches of various of the PRA’s Fundamental Rules.
FINMA also entered a decree dated 14 July 2023 announcing the conclusion of its enforcement proceeding, finding
that Credit Suisse had seriously violated financial market law in connection with its business relationship with
Archegos and ordering remedial measures directed at Credit Suisse AG and UBS Group AG, as the legal successor
to Credit Suisse Group AG. These include a requirement that UBS Group AG apply its restrictions on its own
positions relating to individual clients throughout the financial group, as well as adjustments to the compensation
system of the entire financial group to provide for bonus allocation criteria that take into account risk appetite.
FINMA also announced it has opened enforcement proceedings against a former Credit Suisse manager in
connection with this matter.
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.
13. 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 (“AT1 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. Credit Suisse is
cooperating with the authorities in these matters.
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group AG interim consolidated financial information (unaudited) 72
Provisions and contingent liabilities (continued)
14. 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 United States federal law. Another complaint,
brought on behalf of holders of Credit Suisse AT1 notes, alleges breaches of fiduciary duty under Swiss law. These
complaints, filed by Credit Suisse shareholders and holders of additional tier 1 capital notes (“AT1 noteholders”) in
2023, allege that a series of scandals and misconduct led to Credit Suisse Group AG’s merger with UBS Group AG,
causing losses to shareholders and AT1 noteholders. Motions to dismiss have been filed and remain pending.
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
For the year ended
31.12.23
30.9.23
31.12.22
31.12.23
30.9.23
31.12.22
31.12.23
31.12.22
1 CHF
1 EUR
1 GBP
100 JPY
1 Monthly income statement items of operations with a functional currency other than the US dollar are translated into US dollars using month-end rates. Disclosed average rates for a quarter 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. Accordingly, the weighted average rates for the third and fourth quarter of 2023 and for the full year 2023 consider income and expenses from Credit Suisse’s operations generated since its acquisition
by UBS. Weighted average rates for individual business divisions may deviate from the weighted average rates for the Group.
UBS Group fourth quarter 2023 report |
Appendix 73
Appendix
Alternative performance measures
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. A number of APMs are reported in the discussion of the
financial and operating performance of the external reports (annual, quarterly and other reports). APMs are used
to provide a more complete picture of operating performance and to reflect management’s view of the fundamental
drivers of the business results. A definition of each APM, the method used to calculate it and the information
content are presented in alphabetical order in the table below. These APMs may qualify as non-GAAP measures as
defined by US Securities and Exchange Commission (SEC) regulations.
APM label
Calculation
Information content
Active Digital Banking clients in
Corporate & Institutional Clients (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships or legal
entities operated by Corporate & Institutional Clients,
excluding clients that do not have an account, mono-
product clients and clients that have defaulted on
loans or credit facilities. At the end of each month,
any client that has logged on at least once in that
month is determined to be “active” (a log-in time
stamp is allocated to all business relationship numbers
or per legal entity in a digital banking contract).
This measure provides information about the
proportion of active Digital Banking clients in the total
number of UBS clients (within the aforementioned
meaning) which are serviced by Corporate &
Institutional Clients.
Active Digital Banking clients in
Personal Banking (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships operated
by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account,
clients domiciled outside Switzerland and clients who
have defaulted on loans or credit facilities. At the end
of each month, any client that has logged on at least
once in that month is determined to be “active” (a
log-in time stamp is allocated to all business
relationship numbers in a digital banking contract).
This measure provides information about the
proportion of active Digital Banking clients in the total
number of UBS clients (within the aforementioned
meaning) who are serviced by Personal Banking.
Active Mobile Banking clients in
Personal Banking (%)
– Personal & Corporate Banking
Calculated as the average number of active clients for
each month in the relevant period divided by the
average number of total clients. “Clients” refers to
the number of unique business relationships operated
by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account,
clients domiciled outside Switzerland and clients who
have defaulted on loans or credit facilities. At the end
of each month, any client that has logged on via the
mobile app at least once in that month is determined
to be “active” (a log-in time stamp is allocated to all
business relationship numbers in a digital banking
contract).
This measure provides information about the
proportion of active Mobile Banking clients in the
total number of UBS clients (within the
aforementioned meaning) who are serviced by
Personal Banking.
Cost / income ratio (%)
Calculated as operating expenses divided by total
revenues.
This measure provides information about the
efficiency of the business by comparing operating
expenses with gross income.
Fee and trading income for Corporate &
Institutional Clients (USD and CHF)
– Personal & Corporate Banking
Calculated as the total of recurring net fee and
transaction-based income for Corporate &
Institutional Clients.
This measure provides information about the amount
of fee and trading income for Corporate &
Institutional Clients.
UBS Group fourth quarter 2023 report |
Appendix 74
APM label
Calculation
Information content
Fee-generating assets (USD)
– Global Wealth Management
Calculated as the sum of discretionary and
nondiscretionary wealth management portfolios
(mandate volume) and assets where generated
revenues are predominantly of a recurring nature, i.e.,
mainly investment, mutual, hedge and private-market
funds where we have a distribution agreement,
including client commitments into closed-ended
private-market funds from the date that recurring
fees are charged. Assets related to our Global
Financial Intermediaries business are excluded, as are
assets of sanctioned clients.
This measure provides information about the volume
of invested assets that create a revenue stream,
whether as a result of the nature of the contractual
relationship with clients or through the fee structure
of the asset. An increase in the level of fee-generating
assets results in an increase in the associated revenue
stream. Assets of sanctioned clients are excluded from
fee-generating assets.
Fee-pool-comparable revenues (USD)
– the Investment Bank
Calculated as the total of revenues from: merger-and-
acquisition-related transactions; Equity Capital
Markets, excluding derivatives; Leveraged Capital
Markets, excluding the impact of mark-to-market
movements on loan portfolios; and Debt Capital
Markets, excluding revenues related to debt
underwriting of UBS instruments.
This measure provides information about the amount
of revenues in the Investment Bank that are
comparable with the relevant global fee pools.
Gross margin on invested assets (bps)
– Asset Management
Calculated as total revenues (annualized as applicable)
divided by average invested assets.
This measure provides information about the total
revenues of the business in relation to invested assets.
Impaired loan portfolio as a percentage
of total loan portfolio, gross (%)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as impaired loan portfolio divided by total
gross loan portfolio.
This measure provides information about the
proportion of impaired loan portfolio in the total gross
loan portfolio.
Integration-related expenses (USD)
Generally include costs of internal staff and
contractors substantially dedicated to integration
activities, retention awards, redundancy costs,
incremental expenses from the shortening of useful
lives of property, equipment and software, and
impairment charges relating to these assets.
Classification as integration-related expenses does not
affect the timing of recognition and measurement of
those expenses or the presentation thereof in the
income statement. Integration-related expenses
incurred by Credit Suisse also included expenses
associated with restructuring programs that existed
prior to the acquisition.
This measure provides information about expenses
that are temporary, incremental and directly related to
the integration of Credit Suisse into UBS.
Invested assets (USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management
Calculated as the sum of managed fund assets,
managed institutional assets, discretionary and
advisory wealth management portfolios, fiduciary
deposits, time deposits, savings accounts, and wealth
management securities or brokerage accounts.
This measure provides information about the volume
of client assets managed by or deposited with UBS for
investment purposes.
Investment products for Personal
Banking (USD and CHF)
– Personal & Corporate Banking
Calculated as the sum of investment funds (including
UBS Vitainvest third-pillar pension funds, as well as
money market funds), mandates and third-party life
insurance operated in Personal Banking.
This measure provides information about the volume
of investment funds (including UBS Vitainvest third-
pillar pension funds, as well as money market funds),
mandates and third-party life insurance operated in
Personal Banking.
Net interest margin (bps)
– Personal & Corporate Banking
Calculated as net interest income (annualized as
applicable) divided by average loans.
This measure provides information about the
profitability of the business by calculating the
difference between the price charged for lending and
the cost of funding, relative to loan value.
Net new assets (USD)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period, plus interest and dividends.
Excluded from the calculation are movements due to
market performance, foreign exchange translation,
fees, and the effects on invested assets of strategic
decisions by UBS to exit markets or services.
This measure provides information about the
development of invested assets during a specific
period as a result of net new asset flows, plus the
effect of interest and dividends.
Net new assets growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable),
plus interest and dividends, divided by total invested
assets at the beginning of the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new asset flows.
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.
UBS Group fourth quarter 2023 report |
Appendix 75
APM label
Calculation
Information content
Net new investment products for
Personal Banking (USD and CHF)
– Personal & Corporate Banking
Calculated as the net amount of inflows and outflows
of investment products during a specific period.
This measure provides information about the
development of investment products during a specific
period as a result of net new investment product
flows.
Net new money (USD)
– Global Wealth Management,
Asset Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period. Excluded from the calculation
are movements due to market performance, foreign
exchange translation, dividends, interest and fees, as
well as the effects on invested assets of strategic
decisions by UBS to exit markets or services. Net new
money is not measured for Personal & Corporate
Banking.
This measure provides information about the
development of invested assets during a specific
period as a result of net new money flows.
Net new money growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable)
divided by total invested assets at the beginning of
the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new money flows.
Net profit growth (%)
Calculated as the change in net profit attributable to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
This measure provides information about profit
growth since the comparison period.
Operating expenses (underlying)
(USD)
Calculated by adjusting operating expenses as
reported in accordance with International Financial
Reporting Standards (IFRS) 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 International
Financial Reporting Standards (IFRS) 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.
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.
UBS Group fourth quarter 2023 report |
Appendix 76
APM label
Calculation
Information content
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 International Financial Reporting
Standards (IFRS) 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.
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 2023 and the third quarter of 2023 is presented on a consolidated basis, including for each quarter Credit Suisse data for three months, and for the purpose
of the calculation of return measures, has been annualized multiplying such by four. Profit or loss information for 2023 includes seven months (June to December 2023, inclusive) of Credit Suisse data for the year-to-
date return measure.
This is a general list of the APMs used in our financial reporting. Not all of the APMs listed above may appear in
this particular report.
UBS Group fourth quarter 2023 report |
Appendix 77
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
31.12.23
30.9.23
31.12.22
31.12.23
31.12.22
Underlying operating profit / (loss) before tax
Underlying tax expense / (benefit)
NCI
Underlying net profit / (loss)
Underlying net profit / (loss), annualized
Tangible equity
Average tangible equity
CET1 capital
Average CET1 capital
Underlying return on tangible equity (%)
Underlying return on common equity tier 1 capital
UBS Group fourth quarter 2023 report |
Appendix 78
Abbreviations frequently used in our financial reports
A
ABS asset-backed securities
AG Aktiengesellschaft
AGM Annual General Meeting of
shareholders
A-IRB advanced internal ratings-
based
AIV alternative investment
vehicle
ALCO Asset and Liability
Committee
AMA advanced measurement
approach
AML anti-money laundering
AoA Articles of Association
APM alternative performance
measure
ARR alternative reference rate
ARS auction rate securities
ASF available stable funding
AT1 additional tier 1
AuM assets under management
B
BCBS Basel Committee on
Banking Supervision
BIS Bank for International
Settlements
BoD Board of Directors
C
CAO Capital Adequacy
Ordinance
CCAR Comprehensive Capital
Analysis and Review
CCF credit conversion factor
CCP central counterparty
CCR counterparty credit risk
CCRC Corporate Culture and
Responsibility Committee
CDS credit default swap
CEA Commodity Exchange Act
CEO Chief Executive Officer
CET1 common equity tier 1
CFO Chief Financial Officer
CGU cash-generating unit
CHF Swiss franc
CIO Chief Investment Office
C&ORC Compliance & Operational
Risk Control
CRM credit risk mitigation (credit
risk) or comprehensive risk
measure (market risk)
CST combined stress test
CUSIP Committee on Uniform
Security Identification
Procedures
CVA credit valuation adjustment
D
DBO defined benefit obligation
DCCP Deferred Contingent
Capital Plan
DE&I diversity, equity and
inclusion
DFAST Dodd–Frank Act Stress Test
DM discount margin
DOJ US Department of Justice
DTA deferred tax asset
DVA debit valuation adjustment
E
EAD exposure at default
EB Executive Board
EC European Commission
ECB European Central Bank
ECL expected credit loss
EGM Extraordinary General
Meeting of shareholders
EIR effective interest rate
EL expected loss
EMEA Europe, Middle East and
Africa
EOP Equity Ownership Plan
EPS earnings per share
ESG environmental, social and
governance
ESR environmental and social
risk
ETD exchange-traded derivatives
ETF exchange-traded fund
EU European Union
EUR euro
EURIBOR Euro Interbank Offered Rate
EVE economic value of equity
EY Ernst & Young Ltd
F
FA financial advisor
FCA UK Financial Conduct
Authority
FDIC Federal Deposit Insurance
Corporation
FINMA Swiss Financial Market
Supervisory Authority
FMIA Swiss Financial Market
Infrastructure Act
FSB Financial Stability Board
FTA Swiss Federal Tax
Administration
FVA funding valuation
adjustment
FVOCI fair value through other
comprehensive income
FVTPL fair value through profit or
loss
FX foreign exchange
G
GAAP generally accepted
accounting principles
GBP pound sterling
GCRG Group Compliance,
Regulatory & Governance
GDP gross domestic product
GEB Group Executive Board
GHG greenhouse gas
GIA Group Internal Audit
GRI Global Reporting Initiative
G-SIB global systemically
important bank
H
HQLA
high-quality liquid assets
I
IAS International Accounting
Standards
IASB International Accounting
Standards Board
IBOR interbank offered rate
IFRIC International Financial
Reporting Interpretations
Committee
IFRS International Financial
Reporting 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 2023 report |
Appendix 79
Abbreviations frequently used in our financial reports (continued)
K
KRT Key Risk Taker
L
LAS liquidity-adjusted stress
LCR liquidity coverage ratio
LGD loss given default
LIBOR London Interbank Offered
Rate
LLC limited liability company
LoD lines of defense
LRD leverage ratio denominator
LTIP Long-Term Incentive Plan
LTV loan-to-value
M
M&A mergers and acquisitions
MRT Material Risk Taker
N
NII net interest income
NSFR net stable funding ratio
NYSE New York Stock Exchange
O
OCA own credit adjustment
OCI other comprehensive
income
OECD Organisation for Economic
Co-operation and
Development
OTC over-the-counter
P
PCI purchased credit impaired
PD probability of default
PIT point in time
PPA purchase price allocation
P&L profit or loss
Q
QCCP Qualifying central
counterparty
R
RBC risk-based capital
RbM risk-based monitoring
REIT real estate investment trust
RMBS residential mortgage-
backed securities
RniV risks not in VaR
RoCET1 return on CET1 capital
RoU right-of-use
rTSR relative total shareholder
return
RWA risk-weighted assets
S
SA standardized approach or
société anonyme
SA-CCR standardized approach for
counterparty credit risk
SAR Special Administrative
Region of the People’s
Republic of China
SDG Sustainable Development
Goal
SEC US Securities and Exchange
Commission
SFT securities financing
transaction
SI sustainable investing or
sustainable investment
SIBOR Singapore Interbank
Offered Rate
SICR significant increase in credit
risk
SIX SIX Swiss Exchange
SME small and medium-sized
entities
SMF Senior Management
Function
SNB Swiss National Bank
SOR Singapore Swap Offer Rate
SPPI solely payments of principal
and interest
SRB systemically relevant bank
SRM specific risk measure
SVaR stressed value-at-risk
T
TBTF too big to fail
TCFD Task Force on Climate-
related Financial Disclosures
TIBOR Tokyo Interbank Offered
Rate
TLAC total loss-absorbing capacity
TTC through the cycle
U
USD US dollar
V
VaR value-at-risk
VAT
value added tax
This is a general list of the abbreviations frequently used in our financial reporting. Not all of the listed abbreviations
may appear in this particular report.
UBS Group fourth quarter 2023 report |
Appendix 80
Information sources
Reporting publications
Annual publications
Annual Report
: Published in English, this single-volume 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, corporate responsibility and 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
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 Annual Report.
Sustainability Report
: Published in English, the Sustainability Report provides disclosures on environmental, social
and governance topics related to the UBS Group. It also provides certain disclosures related to diversity, equity and
inclusion.
Quarterly publications
Quarterly financial report
: This report provides an update on performance and strategy (where applicable) for the
respective quarter. It is available in English.
The annual and quarterly publications are available in .pdf and online formats at
ubs.com/investors
, under “Financial
information.” Starting with the Annual Report 2022, printed copies, in any language, of the aforementioned annual
publications are no longer provided.
Other information
Website
The “Investor Relations” website at
ubs.com/investors
news releases; financial information, including results-related filings with the US Securities and Exchange
Commission (the SEC); information for shareholders, including UBS share price charts, as well as data and dividend
information, and for bondholders; the corporate calendar; and presentations by management for investors and
financial analysts. Information is available online in English, with some information also available in German.
Results presentations
Quarterly results presentations are webcast live. Recordings of most presentations can be downloaded from
ubs.com/presentations
.
Messaging service
Email alerts to news about UBS can be subscribed for under “UBS News Alert” at
ubs.com/global/en/investor-
relations/contact/investor-services.html
. Messages are sent in English, German, French or Italian, with an option to
select theme preferences for such alerts.
Form 20-F and other submissions to the US Securities and Exchange Commission
UBS files periodic reports with and submits other information to the SEC. Principal among these filings is the annual
report on Form 20-F, filed pursuant to the US Securities Exchange Act of 1934. The filing of Form 20-F is structured
as a wraparound document. Most sections of the filing can be satisfied by referring to the combined UBS Group AG
and UBS AG Annual Report. However, there is a small amount of additional information in Form 20-F that is not
presented elsewhere and is particularly targeted at readers in the US. Readers are encouraged to refer to this
additional disclosure. Any document that filed with the SEC is available on the SEC’s website:
sec.gov
. Refer to
ubs.com/investors
UBS Group fourth quarter 2023 report |
Appendix 81
Cautionary statement regarding forward-looking statements |
not limited to management’s outlook for UBS’s financial performance, statements relating to the anticipated effect of transactions and strategic initiatives on
UBS’s business and future development and goals or intentions to achieve climate, sustainability and other social objectives. While these forward-looking
statements represent UBS’s judgments, expectations and objectives concerning the matters described, a number of risks, uncertainties and other important
factors could cause actual developments and results to differ materially from UBS’s expectations. In particular, terrorist activity and conflicts in the Middle East,
as well as the continuing Russia–Ukraine war, may have significant impacts on global markets, exacerbate global inflationary pressures, and slow global growth.
In addition, the ongoing conflicts may continue to cause significant population displacement, and lead to shortages of vital commodities, including energy
shortages and food insecurity outside the areas immediately involved in armed conflict. Governmental responses to the armed conflicts, including, with respect
to the Russia–Ukraine war, coordinated successive sets of sanctions on Russia and Belarus, and Russian and Belarusian entities and nationals, and the uncertainty
as to whether the ongoing conflicts will widen and intensify, may continue to have significant adverse effects on the market and macroeconomic conditions,
including in ways that cannot be anticipated. UBS’s acquisition of the Credit Suisse Group has materially changed our outlook and strategic direction and
introduced new operational challenges. The integration of the Credit Suisse entities into the UBS structure is expected to take between three and five years and
presents significant risks, including the risks that UBS Group AG may be unable to achieve the cost reductions and other benefits contemplated by the transaction.
This creates significantly greater uncertainty about forward-looking statements. Other factors that may affect our performance and ability to achieve our plans,
outlook and other objectives also include, but are not limited to: (i) the degree to which UBS is successful in the execution of its strategic plans, including its cost
reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA) and leverage ratio denominator (LRD), liquidity coverage ratio
and other financial resources, including changes in RWA assets and liabilities arising from higher market volatility and the size of the combined Group; (ii) the
degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions, including as a result of
the acquisition of the Credit Suisse Group; (iii) increased inflation and interest rate volatility in major markets; (iv) developments in the macroeconomic climate
and in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, currency exchange rates,
deterioration or slow recovery in residential and commercial real estate markets, the effects of economic conditions, including increasing inflationary pressures,
market developments, increasing geopolitical tensions, and changes to national trade policies on the financial position or creditworthiness of UBS’s clients and
counterparties, as well as on client sentiment and levels of activity; (v) changes in the availability of capital and funding, including any adverse changes in UBS’s
credit spreads and credit ratings of UBS, Credit Suisse, sovereign issuers, structured credit products or credit-related exposures, as well as availability and cost of
funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC), in particular in light of the acquisition of the Credit Suisse Group;
(vi) changes in central bank policies or the implementation of financial legislation and regulation in Switzerland, the US, the UK, the EU and other financial centers
that have imposed, or resulted in, or may do so in the future, more stringent or entity-specific capital, TLAC, leverage ratio, net stable funding ratio, liquidity and
funding requirements, heightened operational resilience requirements, incremental tax requirements, additional levies, limitations on permitted activities,
constraints on remuneration, constraints on transfers of capital and liquidity and sharing of operational costs across the Group or other measures, and the effect
these will or would have on UBS’s business activities; (vii) UBS’s ability to successfully implement resolvability and related regulatory requirements and the potential
need to make further changes to the legal structure or booking model of UBS in response to legal and regulatory requirements and any additional requirements
due to its acquisition of the Credit Suisse Group, or other developments; (viii) UBS’s ability to maintain and improve its systems and controls for complying with
sanctions in a timely manner and for the detection and prevention of money laundering to meet evolving regulatory requirements and expectations, in particular
in current geopolitical turmoil; (ix) the uncertainty arising from domestic stresses in certain major economies; (x) changes in UBS’s competitive position, including
whether differences in regulatory capital and other requirements among the major financial centers adversely affect UBS’s ability to compete in certain lines of
business; (xi) changes in the standards of conduct applicable to our businesses that may result from new regulations or new enforcement of existing standards,
including measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (xii) the
liability to which UBS may be exposed, or possible constraints or sanctions that regulatory authorities might impose on UBS, due to litigation, contractual claims
and regulatory investigations, including the potential for disqualification from certain businesses, potentially large fines or monetary penalties, or the loss of
licenses or privileges as a result of regulatory or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the
operational risk component of our RWA, including as a result of its acquisition of the Credit Suisse Group, as well as the amount of capital available for return
to shareholders; (xiii) the effects on UBS’s business, in particular cross-border banking, of sanctions, tax or regulatory developments and of possible changes in
UBS’s policies and practices; (xiv) UBS’s ability to retain and attract the employees necessary to generate revenues and to manage, support and control its
businesses, which may be affected by competitive factors; (xv) changes in accounting or tax standards or policies, and determinations or interpretations affecting
the recognition of gain or loss, the valuation of goodwill, the recognition of deferred tax assets and other matters; (xvi) UBS’s ability to implement new
technologies and business methods, including digital services and technologies, and ability to successfully compete with both existing and new financial service
providers, some of which may not be regulated to the same extent; (xvii) limitations on the effectiveness of UBS’s internal processes for risk management, risk
control, measurement and modeling, and of financial models generally; (xviii) the occurrence of operational failures, such as fraud, misconduct, unauthorized
trading, financial crime, cyberattacks, data leakage and systems failures, the risk of which is increased with cyberattack threats from both nation states and non-
nation-state actors targeting financial institutions; (xix) restrictions on the ability of UBS Group AG to make payments or distributions, including due to restrictions
on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by FINMA or the
regulators of UBS’s operations in other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation proceedings;
(xx) the degree to which changes in regulation, capital or legal structure, financial results or other factors may affect UBS’s ability to maintain its stated capital
return objective; (xxi) uncertainty over the scope of actions that may be required by UBS, governments and others for UBS to achieve goals relating to climate,
environmental and social matters, as well as the evolving nature of underlying science and industry and the possibility of conflict between different governmental
standards and regulatory regimes; (xxii) the ability of UBS to access capital markets; (xxiii) the ability of UBS to successfully recover from a disaster or other business
continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, conflict (e.g., the Russia–Ukraine war), pandemic, security breach, cyberattack,
power loss, telecommunications failure or other natural or man-made event, including the ability to function remotely during long-term disruptions such as the
COVID-19 (coronavirus) pandemic; (xxiv) the level of success in the absorption of Credit Suisse, in the integration of the two groups and their businesses, and in
the execution of the planned strategy regarding cost reduction and divestment of any non-core assets, the existing assets and liabilities of Credit Suisse, the level
of resulting impairments and write-downs, the effect of the consummation of the integration on the operational results, share price and credit rating of UBS –
delays, difficulties, or failure in closing the transaction may cause market disruption and challenges for UBS to maintain business, contractual and operational
relationships; and (xxv) the effect that these or other factors or unanticipated events, including media reports and speculations, may have on our reputation and
the additional consequences that this may have on our business and performance. The sequence in which the factors above are presented is not indicative of
their likelihood of occurrence or the potential magnitude of their consequences. Our business and financial performance could be affected by other factors
identified in our past and future filings and reports, including those filed with the US Securities and Exchange Commission (the SEC). More detailed information
about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including the Risk Factors filed on Form 6-K with the 2Q23
UBS Group AG report on 31 August 2023 and the Annual Report on Form 20-F for the year ended 31 December 2022. UBS is not under any obligation to (and
expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
Rounding |
disclosed in text and tables are calculated on the basis of unrounded figures. Absolute changes between reporting periods disclosed in the text, which can be
derived from numbers presented in related tables, are calculated on a rounded basis.
Tables |
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Values
that are zero on a rounded basis can be either negative or positive on an actual basis.
Websites |
of any such websites into this report.
UBS Group AG
P.O. 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, 333-272539 and 333-272452), 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 and Credit Suisse AG that
incorporates by reference any Forms 6-K of UBS AG and Credit Suisse AG (respectively) 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
Credit Suisse AG
By: /s/ Ulrich Körner
______________
Name: Ulrich Körner
Title: Chief Executive Officer
By: /s/ Simon Grimwood
_
Name: Simon Grimwood
Title: Chief Financial Officer
Date: February 6, 2024