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UBS Group AG, et al. – ‘6-K’ for 12/31/23

On:  Tuesday, 2/6/24, at 6:28am ET   ·   For:  12/31/23   ·   Accession #:  1610520-24-18   ·   File #s:  1-15060, 1-33434, 1-36764

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          Credit Suisse AG
          UBS AG

Current, Quarterly or Annual Report by a Foreign Issuer   —   Form 6-K   —   SEA’34

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Document Table of Contents

Page (sequential)   (alphabetic) ↑Top
 
11st Page  –  Filing Submission
"Recent developments
"Group performance
"Global Wealth Management
"Personal & Corporate Banking
"Asset Management
"Investment Bank
"Non-core and Legacy
"Group Items
"Risk management and control
"Credit risk
"Market risk
"Country risk
"Non-financial risk
"Capital management
"Total loss-absorbing capacity
"Risk-weighted assets
"Leverage ratio denominator
"Liquidity and funding management
"Strategy, objectives and governance
"Liquidity coverage ratio
"Net stable funding ratio
"Balance sheet and off-balance sheet
"Balance sheet assets
"Balance sheet liabilities
"Equity
"Off-balance sheet
"Share information and earnings per share
"UBS Group AG interim consolidated
"Financial Information (Unaudited)
"Alternative performance measures
"Abbreviations frequently used in
"Our Financial Reports
"Information sources
"Cautionary statement

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 C: 
  edgarq23ubsgroupag  
 
 
 
 
 
 
 
 
 
 
 
 
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
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
 
☒
 
Form 40-F
 
☐
 
 
This Form 6-K
 
consists of the
 
Fourth Quarter 2023
 
Report of UBS
 
Group AG, which
 
appears immediately following
this page.
 
edgarq23ubsgroupagp3i0
 
 
 
UBS
 
Group
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
Switchboards
For all general inquiries
 
ubs.com/contact
Zurich +41-44-234 1111
London +44-207-567
 
8000
New York +1-212-821 3000
Hong Kong +852-2971 8888
Singapore +65-6495 8000
Investor Relations
UBS’s Investor Relations team manages
relationships with institutional investors,
research analysts and credit rating agencies.
 
ubs.com/investors
Zurich +41-44-234 4100
New York +1-212-882 5734
Media Relations
UBS’s Media Relations team manages
relationships with global media and
journalists.
ubs.com/media
Zurich +41-44-234 8500
London +44-20-7567 4714
 
New York +1-212-882 5858
 
Hong Kong +852-2971 8200
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
Zurich +41-44-235 6652
Shareholder Services
UBS’s Shareholder Services team, a unit
of the Group Company Secretary’s office,
manages relationships with shareholders
and the registration of UBS Group AG
registered shares.
 
UBS Group AG, Shareholder Services
P.O.
 
Box, CH-8098 Zurich, Switzerland
Zurich +41-44-235 6652
US Transfer Agent
For global registered share-related
inquiries in the US.
Computershare Trust Company NA
P.O.
 
Box 43006
Province, RI, 02940 – 3006, USA
Shareholder online inquiries:
investor-inquiries
Shareholder website:
computershare.com/investor
Calls from the US
 
+1-866-305-9566
Calls from outside the US
+1-781-575-2623
TDD for hearing impaired
+1-800-231-5469
TDD for foreign shareholders
+1-201-680-6610
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
 
2
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
 
3
Our key figures
As of or for the quarter ended
As of or for the year ended
USD m, except where indicated
31.12.23
30.9.23
1
31.12.22
31.12.23
31.12.22
Group results
Total revenues
 
10,855
 
11,695
 
8,029
 
40,834
 
34,563
Negative goodwill
 
28,925
Credit loss expense / (release)
 
136
 
239
 
7
 
1,037
 
29
Operating expenses
 
11,470
 
11,640
 
6,085
 
38,806
 
24,930
Operating profit / (loss) before tax
 
(751)
 
(184)
 
1,937
 
29,916
 
9,604
Net profit / (loss) attributable to shareholders
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
Diluted earnings per share (USD)
2
 
(0.09)
 
(0.22)
 
0.50
 
8.81
 
2.25
Profitability and growth
3,4,5
Return on equity (%)
 
(1.3)
 
(3.3)
 
11.7
 
38.6
 
13.3
Return on tangible equity (%)
 
(1.4)
 
(3.6)
 
13.2
 
42.6
 
14.9
Underlying return on tangible equity (%)
 
4.7
 
1.5
 
12.7
 
4.0
 
12.8
Return on common equity tier 1 capital (%)
 
(1.4)
 
(3.6)
 
14.7
 
43.7
 
17.0
Underlying return on common equity tier 1 capital (%)
 
4.7
 
1.4
 
14.1
 
4.1
 
14.6
Return on leverage ratio denominator, gross (%)
 
2.6
 
2.8
 
3.2
 
2.9
 
3.3
Cost / income ratio (%)
6
 
105.7
 
99.5
 
75.8
 
95.0
 
72.1
Underlying cost / income ratio (%)
6
 
93.0
 
89.3
 
76.4
 
87.2
 
74.5
Effective tax rate (%)
n.m.
7
n.m.
7
 
14.5
 
2.9
 
20.2
Net profit growth (%)
n.m.
n.m.
 
22.6
 
280.4
 
2.3
Resources
3
Total assets
 
1,717,569
 
1,644,329
 
1,104,364
 
1,717,569
 
1,104,364
Equity attributable to shareholders
 
87,285
 
84,926
 
56,876
 
87,285
 
56,876
Common equity tier 1 capital
8
 
79,263
 
78,587
 
45,457
 
79,263
 
45,457
Risk-weighted assets
8
 
546,505
 
546,491
 
319,585
 
546,505
 
319,585
Common equity tier 1 capital ratio (%)
8
 
14.5
 
14.4
 
14.2
 
14.5
 
14.2
Going concern capital ratio (%)
8
 
17.0
 
16.8
 
18.2
 
17.0
 
18.2
Total loss-absorbing capacity ratio (%)
8
 
36.6
 
35.7
 
33.0
 
36.6
 
33.0
Leverage ratio denominator
8
 
1,695,403
 
1,615,817
 
1,028,461
 
1,695,403
 
1,028,461
Common equity tier 1 leverage ratio (%)
8
 
4.7
 
4.9
 
4.4
 
4.7
 
4.4
Liquidity coverage ratio (%)
9
 
215.7
 
196.5
 
163.7
 
215.7
 
163.7
Net stable funding ratio (%)
 
124.1
 
120.7
 
119.8
 
124.1
 
119.8
Other
Invested assets (USD bn)
4,10,11
 
5,714
 
5,373
 
3,981
 
5,714
 
3,981
Personnel (full-time equivalents)
 
112,842
 
115,981
 
72,597
 
112,842
 
72,597
Market capitalization
2,12
 
107,355
 
85,768
 
65,608
 
107,355
 
65,608
Total book value per share (USD)
2
 
27.20
 
26.27
 
18.30
 
27.20
 
18.30
Tangible book value per share (USD)
2
 
24.86
 
23.96
 
16.28
 
24.86
 
16.28
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
 
2,095
 
2,107
 
1,589
 
(1)
 
32
 
7,297
 
6,621
Other net income from financial instruments measured
 
at fair value through profit or loss
 
3,158
 
3,226
 
1,876
 
(2)
 
68
 
11,583
 
7,517
Net fee and commission income
 
5,780
 
6,056
 
4,359
 
(5)
 
33
 
21,570
 
18,966
Other income
 
(179)
 
305
 
206
 
384
 
1,459
Total revenues
 
10,855
 
11,695
 
8,029
 
(7)
 
35
 
40,834
 
34,563
Negative goodwill
 
28,925
Credit loss expense / (release)
 
136
 
239
 
7
 
(43)
 
1,037
 
29
Personnel expenses
 
7,061
 
7,567
 
4,122
 
(7)
 
71
 
24,899
 
17,680
General and administrative expenses
 
2,999
 
3,124
 
1,420
 
(4)
 
111
 
10,156
 
5,189
Depreciation, amortization and impairment of non-financial
 
assets
 
1,409
 
950
 
543
 
48
 
159
 
3,750
 
2,061
Operating expenses
 
11,470
 
11,640
 
6,085
 
(1)
 
88
 
38,806
 
24,930
Operating profit / (loss) before tax
 
(751)
 
(184)
 
1,937
 
307
 
29,916
 
9,604
Tax expense / (benefit)
 
 
(473)
 
526
 
280
 
873
 
1,942
Net profit / (loss)
 
(278)
 
(711)
 
1,657
 
(61)
 
29,043
 
7,661
Net profit / (loss) attributable to non-controlling interests
 
1
 
4
 
4
 
(80)
 
(79)
 
16
 
32
Net profit / (loss) attributable to shareholders
 
(279)
 
(715)
 
1,653
 
(61)
 
29,027
 
7,630
Comprehensive income
Total comprehensive income
 
2,695
 
(2,622)
 
2,208
 
22
 
30,035
 
3,167
Total comprehensive income attributable to non-controlling interests
 
18
 
(8)
 
17
 
5
 
22
 
18
Total comprehensive income attributable to shareholders
 
2,677
 
(2,614)
 
2,190
 
22
 
30,013
 
3,149
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
 
5,444
 
2,431
 
805
 
2,139
 
162
 
(126)
 
10,855
of which: accretion of PPA adjustments on financial instruments and
other effects
 
284
 
414
 
277
 
(32)
 
944
of which: losses related to investment in SIX Group
 
(190)
 
(317)
 
(508)
Total revenues (underlying)
 
5,351
 
2,334
 
805
 
1,861
 
162
 
(94)
 
10,419
Credit loss expense / (release)
 
(7)
 
83
 
(1)
 
48
 
15
 
(2)
 
136
Operating expenses as reported
 
5,070
 
1,560
 
691
 
2,260
 
1,873
 
17
 
11,470
of which: integration-related expenses
 
490
 
188
 
66
 
166
 
749
 
93
 
1,751
of which: acquisition-related costs
 
(1)
 
(1)
of which: amortization from newly recognized intangibles
 
resulting from
the acquisition of the Credit Suisse Group
 
29
 
29
Operating expenses (underlying)
 
4,580
 
1,343
 
625
 
2,094
 
1,124
 
(75)
 
9,690
Operating profit / (loss) before tax as reported
 
381
 
788
 
115
 
(169)
 
(1,726)
 
(140)
 
(751)
Operating profit / (loss) before tax (underlying)
 
778
 
908
 
180
 
(280)
 
(977)
 
(17)
 
592
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
 
5,810
 
2,871
 
755
 
2,151
 
350
 
(242)
 
11,695
of which: accretion of PPA adjustments on financial instruments and
other effects
 
318
 
446
 
251
 
(57)
 
958
Total revenues (underlying)
 
5,492
 
2,426
 
755
 
1,900
 
350
 
(186)
 
10,737
Credit loss expense / (release)
 
2
 
168
 
0
 
4
 
59
 
6
 
239
Operating expenses as reported
 
4,801
 
1,579
 
724
 
2,377
 
2,152
 
7
 
11,640
of which: integration-related expenses
 
431
 
166
 
125
 
365
 
918
 
(2)
 
2,003
of which: acquisition-related costs
 
26
 
26
of which: amortization from newly recognized intangibles
 
resulting from
the acquisition of the Credit Suisse Group
 
28
 
28
Operating expenses (underlying)
 
4,370
 
1,385
 
599
 
2,012
 
1,234
 
(17)
 
9,583
Operating profit / (loss) before tax as reported
 
1,007
 
1,124
 
31
 
(230)
 
(1,861)
 
(255)
 
(184)
Operating profit / (loss) before tax (underlying)
 
1,119
 
872
 
156
 
(116)
 
(943)
 
(174)
 
914
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
 
4,601
 
1,130
 
495
 
1,682
 
53
 
67
 
8,029
of which: gain from sales of real estate
 
68
 
68
Total revenues (underlying)
 
4,601
 
1,130
 
495
 
1,682
 
53
 
(1)
 
7,961
Credit loss expense / (release)
 
3
 
(4)
 
0
 
8
 
0
 
0
 
7
Operating expenses as reported
 
3,540
 
605
 
372
 
1,563
 
21
 
(15)
 
6,085
Operating profit / (loss) before tax as reported
 
1,058
 
529
 
124
 
112
 
33
 
81
 
1,937
Operating profit / (loss) before tax (underlying)
 
1,058
 
529
 
124
 
112
 
33
 
13
 
1,869
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
 
21,190
 
8,436
 
2,639
 
8,661
 
741
 
(833)
 
40,834
of which: accretion of PPA adjustments on financial
instruments and other effects
 
719
 
1,013
 
583
 
(35)
 
2,280
of which: losses related to investment in SIX Group
 
(190)
 
(317)
 
(508)
Total revenues (underlying)
 
20,661
 
7,741
 
2,639
 
8,078
 
741
 
(798)
 
39,062
Negative goodwill
 
28,925
 
28,925
Credit loss expense / (release)
 
147
 
501
 
0
 
190
 
193
 
6
 
1,037
Operating expenses as reported
 
17,454
 
4,787
 
2,321
 
8,515
 
5,290
 
440
 
38,806
of which: integration-related expenses
 
988
 
383
 
205
 
692
 
1,772
 
438
 
4,478
of which: acquisition-related costs
 
202
 
202
of which: amortization from newly recognized intangibles
resulting from the acquisition of the Credit Suisse Group
 
65
 
65
Operating expenses (underlying)
 
16,466
 
4,338
 
2,116
 
7,823
 
3,518
 
(200)
 
34,061
Operating profit / (loss) before tax as reported
 
3,589
 
3,148
 
318
 
(44)
 
(4,741)
 
(1,279)
 
28,925
 
29,916
Operating profit / (loss) before tax (underlying)
 
4,048
 
2,902
 
522
 
64
 
(2,969)
 
(603)
 
3,963
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
 
18,967
 
4,302
 
2,961
 
8,717
 
237
 
(622)
 
34,563
of which: net gain from disposals
 
848
 
848
of which: gains from sales of subsidiary and business
 
219
 
219
of which: losses in the first quarter of 2022 from
transactions with Russian counterparties
 
(93)
 
(93)
of which: litigation settlement
 
62
 
62
of which: gain from sales of real estate
 
68
 
68
Total revenues (underlying)
 
18,748
 
4,302
 
2,114
 
8,810
 
175
 
(690)
 
33,459
Credit loss expense / (release)
 
0
 
39
 
0
 
(12)
 
2
 
1
 
29
Operating expenses as reported
 
13,989
 
2,452
 
1,564
 
6,832
 
104
 
(12)
 
24,930
Operating profit / (loss) before tax as reported
 
4,977
 
1,812
 
1,397
 
1,897
 
131
 
(611)
 
9,604
Operating profit / (loss) before tax (underlying)
 
4,758
 
1,812
 
550
 
1,990
 
69
 
(679)
 
8,500
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
 
490
 
431
 
988
Personal & Corporate Banking
 
188
 
166
 
383
Asset Management
 
66
 
125
 
205
Investment Bank
 
166
 
365
 
692
Non-core and Legacy
 
749
 
918
 
1,772
Group Items
 
93
 
(2)
 
438
Total net integration-related expenses
 
1,751
 
2,003
 
4,478
of which: personnel expenses
 
794
 
1,039
 
2,192
of which: general and administrative expenses
 
455
 
860
 
1,436
of which: depreciation, amortization and impairment of non-financial
 
assets
 
503
 
104
 
850
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
 
597
 
850
 
1,226
 
(30)
 
(51)
 
3,527
 
5,218
Net interest income from financial instruments measured
 
at fair value through profit or loss
and other
 
1,498
 
1,257
 
363
 
19
 
313
 
3,770
 
1,403
Other net income from financial instruments measured
 
at fair value through profit or loss
 
3,158
 
3,226
 
1,876
 
(2)
 
68
 
11,583
 
7,517
Total
 
5,253
 
5,334
 
3,464
 
(2)
 
52
 
18,880
 
14,137
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.
 
The prior-year quarter
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
 
(11)
 
3
 
0
 
(7)
Personal & Corporate Banking
 
(16)
 
95
 
4
 
83
Asset Management
 
0
 
0
 
0
 
(1)
Investment Bank
 
(13)
 
60
 
1
 
48
Non-core and Legacy
 
(1)
 
25
 
(9)
 
15
Group Items
 
(2)
 
0
 
0
 
(2)
Total
 
(43)
 
183
 
(4)
 
136
For the quarter ended 30.9.23
1
Global Wealth Management
 
(18)
 
15
 
6
 
2
Personal & Corporate Banking
 
85
 
60
 
23
 
168
Asset Management
 
0
 
0
 
0
 
0
Investment Bank
 
(6)
 
10
 
0
 
4
Non-core and Legacy
 
4
 
20
 
34
 
59
Group Items
 
5
 
0
 
0
 
6
Total
 
70
 
105
 
63
 
239
For the quarter ended 31.12.22
Global Wealth Management
 
3
 
0
 
3
Personal & Corporate Banking
 
(6)
 
3
 
(4)
Asset Management
 
0
 
0
 
0
Investment Bank
 
1
 
7
 
8
Group Items
 
0
 
0
 
0
Total
 
(2)
 
9
 
7
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
 
 
7,061
 
7,567
 
4,122
 
(7)
 
71
 
24,899
 
17,680
of which: salaries and variable compensation
 
5,728
 
6,424
 
3,478
 
(11)
 
65
 
20,842
 
14,999
of which: variable compensation – financial advisors
2
 
1,176
 
1,150
 
1,073
 
2
 
10
 
4,549
 
4,508
General and administrative expenses
 
 
2,999
 
3,124
 
1,420
 
(4)
 
111
 
10,156
 
5,189
of which: net expenses for litigation, regulatory and similar
 
matters
 
8
 
12
 
50
 
(36)
 
(85)
 
809
 
348
of which: other general and administrative expenses
 
2,992
 
3,112
 
1,370
 
(4)
 
118
 
9,347
 
4,841
Depreciation, amortization and impairment of non-financial
 
assets
 
1,409
 
950
 
543
 
48
 
159
 
3,750
 
2,061
Total operating expenses
 
11,470
 
11,640
 
6,085
 
(1)
 
88
 
38,806
 
24,930
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
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
Equity
 
Equity attributable to shareholders
 
87,285
 
84,926
 
56,876
 
87,285
 
56,876
Less: goodwill and intangible assets
 
7,515
 
7,462
 
6,267
 
7,515
 
6,267
Tangible equity attributable to shareholders
 
79,770
 
77,465
 
50,609
 
79,770
 
50,609
Less: other CET1 deductions
 
507
 
(1,122)
 
5,152
 
507
 
5,152
CET1 capital
 
79,263
 
78,587
 
45,457
 
79,263
 
45,457
Returns
Return on equity (%)
 
(1.3)
 
(3.3)
 
11.7
 
38.6
 
13.3
Return on tangible equity (%)
 
(1.4)
 
(3.6)
 
13.2
 
42.6
 
14.9
Underlying return on tangible equity (%)
 
4.7
 
1.5
 
12.7
 
4.0
 
12.8
Return on CET1 capital (%)
 
(1.4)
 
(3.6)
 
14.7
 
43.7
 
17.0
Underlying return on CET1 capital (%)
 
4.7
 
1.4
 
14.1
 
4.1
 
14.6
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
 
1,872
 
1,946
 
1,499
 
(4)
 
25
 
6,965
 
5,273
Recurring net fee income
2
 
2,818
 
2,886
 
2,399
 
(2)
 
17
 
10,793
 
10,282
Transaction-based income
2
 
927
 
959
 
658
 
(3)
 
41
 
3,569
 
3,137
Other income
 
(172)
 
19
 
45
 
(137)
 
275
Total revenues
 
5,444
 
5,810
 
4,601
 
(6)
 
18
 
21,190
 
18,967
Credit loss expense / (release)
 
(7)
 
2
 
3
 
147
 
0
Operating expenses
 
5,070
 
4,801
 
3,540
 
6
 
43
 
17,454
 
13,989
Business division operating profit / (loss) before tax
 
381
 
1,007
 
1,058
 
(62)
 
(64)
 
3,589
 
4,977
Underlying results
Total revenues as reported
 
5,444
 
5,810
 
4,601
 
(6)
 
18
 
21,190
 
18,967
of which: gains from sales of subsidiary and business
 
219
of which: accretion of PPA adjustments on financial instruments and other effects
 
284
 
318
 
(11)
 
719
of which: losses related to investment in SIX Group
 
(190)
 
(190)
Total revenues (underlying)
2
 
5,351
 
5,492
 
4,601
 
(3)
 
16
 
20,661
 
18,748
Credit loss expense / (release)
 
(7)
 
2
 
3
 
147
 
0
Operating expenses as reported
 
5,070
 
4,801
 
3,540
 
6
 
43
 
17,454
 
13,989
of which: integration-related expenses
2
 
490
 
431
 
14
 
988
Operating expenses (underlying)
2
 
4,580
 
4,370
 
3,540
 
5
 
29
 
16,466
 
13,989
of which: expenses for litigation, regulatory and similar matters
 
49
 
22
 
53
 
122
 
(7)
 
122
 
244
Business division operating profit / (loss) before tax as reported
 
381
 
1,007
 
1,058
 
(62)
 
(64)
 
3,589
 
4,977
Business division operating profit / (loss) before tax (underlying)
2
 
778
 
1,119
 
1,058
 
(31)
 
(26)
 
4,048
 
4,758
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
 
(63.9)
 
(30.7)
 
87.9
 
(27.9)
 
4.1
Cost / income ratio (%)
2
 
93.1
 
82.6
 
76.9
 
82.4
 
73.8
Average attributed equity (USD bn)
3
 
24.9
 
25.0
 
20.3
 
(1)
 
23
 
22.8
 
20.0
Return on attributed equity (%)
2,3
 
6.1
 
16.1
 
20.9
 
15.8
 
24.9
Financial advisor compensation
4
 
1,176
 
1,150
 
1,073
 
2
 
10
 
4,548
 
4,508
Net new fee-generating assets (USD bn)
2
 
(1.3)
 
23.3
 
60.1
Fee-generating assets (USD bn)
2
 
1,619
 
1,271
 
27
 
1,619
 
1,271
Net new assets (USD bn)
2
 
21.8
 
39.3
 
24.6
 
131.7
 
89.2
Invested assets (USD bn)
2
 
3,850
 
3,617
 
2,815
 
6
 
37
 
3,850
 
2,815
Loans, gross (USD bn)
5
 
284.3
 
282.9
 
225.0
 
1
 
26
 
284.3
 
225.0
Customer deposits (USD bn)
5
 
466.9
 
439.9
 
348.2
 
6
 
34
 
466.9
 
348.2
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,6
 
0.4
 
0.5
 
0.3
 
0.4
 
0.3
Advisors (full-time equivalents)
 
10,027
 
10,278
 
9,215
 
(2)
 
9
 
10,027
 
9,215
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
 
(26.5)
 
(9.2)
 
87.9
 
(14.9)
 
1.6
Cost / income ratio (%)
2
 
85.6
 
79.6
 
76.9
 
79.7
 
74.6
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)
 
2,587
 
844
 
1,150
 
763
 
100
 
5,444
Operating profit / (loss) before tax (USD m)
 
102
 
341
 
238
 
97
 
(396)
 
381
Operating profit / (loss) before tax (underlying) (USD m)
4
 
102
 
341
 
238
 
97
 
0
 
778
Cost / income ratio (%)
4
 
96.1
 
60.1
 
79.3
 
87.7
 
93.1
Cost / income ratio (underlying) (%)
4
 
96.1
 
60.1
 
79.3
 
87.7
 
85.6
Loans, gross
 
97.3
5
 
76.9
 
63.4
 
45.8
 
0.9
 
284.3
Net new loans
 
(3.2)
 
0.0
 
(1.1)
 
(2.5)
 
(0.0)
 
(6.9)
Net new fee-generating assets
4
 
7.9
 
2.0
 
(5.9)
 
(5.2)
 
(0.1)
 
(1.3)
Fee-generating assets
4
 
933
 
173
 
361
 
152
 
1
 
1,619
Net new assets
4
 
13.4
 
1.0
 
(5.7)
 
13.5
 
(0.4)
 
21.8
Net new assets growth rate (%)
4
 
3.0
 
0.7
 
(3.7)
 
8.8
 
2.4
Invested assets
4
 
1,888
 
663
 
649
 
645
 
5
 
3,850
Advisors (full-time equivalents)
 
6,117
 
988
 
1,737
 
1,101
 
84
 
10,027
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
 
1,505
 
1,550
 
603
 
(3)
 
150
 
4,727
 
2,087
Recurring net fee income
2
 
421
 
431
 
193
 
(2)
 
118
 
1,349
 
812
Transaction-based income
2
 
427
 
543
 
269
 
(21)
 
59
 
1,663
 
1,154
Other income
 
(217)
 
31
 
13
 
(198)
 
46
Total revenues
 
2,136
 
2,556
 
1,079
 
(16)
 
98
 
7,541
 
4,099
Credit loss expense / (release)
 
72
 
154
 
(3)
 
(53)
 
450
 
36
Operating expenses
 
1,363
 
1,405
 
578
 
(3)
 
136
 
4,267
 
2,337
Business division operating profit / (loss) before tax
 
701
 
997
 
504
 
(30)
 
39
 
2,824
 
1,726
Underlying results
Total revenues as reported
 
2,136
 
2,556
 
1,079
 
(16)
 
98
 
7,541
 
4,099
of which: accretion of PPA adjustments on financial instruments and other effects
 
362
 
397
 
(9)
 
896
of which: losses related to investment in SIX Group
 
(267)
 
(267)
Total revenues (underlying)
2
 
2,042
 
2,159
 
1,079
 
(5)
 
89
 
6,912
 
4,099
Credit loss expense / (release)
 
72
 
154
 
(3)
 
(53)
 
450
 
36
Operating expenses as reported
 
1,363
 
1,405
 
578
 
(3)
 
136
 
4,267
 
2,337
of which: integration-related expenses
2
 
163
 
148
 
10
 
337
of which: amortization from newly recognized intangibles
 
resulting from the acquisition of
the Credit Suisse Group
 
25
 
25
 
0
 
58
Operating expenses (underlying)
2
 
1,175
 
1,232
 
578
 
(5)
 
103
 
3,872
 
2,337
of which: expenses for litigation, regulatory and similar matters
 
0
 
(9)
 
(12)
 
(8)
 
(12)
Business division operating profit / (loss) before tax as reported
 
701
 
997
 
504
 
(30)
 
39
 
2,824
 
1,726
Business division operating profit / (loss) before tax (underlying)
2
 
794
 
773
 
504
 
3
 
58
 
2,591
 
1,726
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
 
39.1
 
132.0
 
50.6
 
63.6
 
8.8
Cost / income ratio (%)
2
 
63.8
 
55.0
 
53.6
 
56.6
 
57.0
Average attributed equity (CHF bn)
3
 
17.9
 
18.0
 
9.0
 
0
 
100
 
13.9
 
8.8
Return on attributed equity (%)
2,3
 
15.6
 
22.2
 
22.4
 
20.3
 
19.5
Loans, gross (CHF bn)
 
283.8
 
288.5
 
142.9
 
(2)
 
99
 
283.8
 
142.9
Customer deposits (CHF bn)
 
273.0
 
268.9
 
167.2
 
2
 
63
 
273.0
 
167.2
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
 
0.9
 
0.7
 
0.8
 
0.9
 
0.8
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
 
57.6
 
79.8
 
50.6
 
50.1
 
11.1
Cost / income ratio (%)
2
 
57.6
 
57.1
 
53.6
 
56.0
 
57.0
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
 
1,722
 
1,742
 
633
 
(1)
 
172
 
5,304
 
2,191
Recurring net fee income
2
 
481
 
485
 
202
 
(1)
 
138
 
1,511
 
852
Transaction-based income
2
 
486
 
611
 
281
 
(20)
 
73
 
1,859
 
1,212
Other income
 
(259)
 
34
 
14
 
(238)
 
48
Total revenues
 
2,431
 
2,871
 
1,130
 
(15)
 
115
 
8,436
 
4,302
Credit loss expense / (release)
 
83
 
168
 
(4)
 
(51)
 
501
 
39
Operating expenses
 
1,560
 
1,579
 
605
 
(1)
 
158
 
4,787
 
2,452
Business division operating profit / (loss) before tax
 
788
 
1,124
 
529
 
(30)
 
49
 
3,148
 
1,812
Underlying results
Total revenues as reported
 
2,431
 
2,871
 
1,130
 
(15)
 
115
 
8,436
 
4,302
of which: accretion of PPA adjustments on financial instruments and other effects
 
414
 
446
 
(7)
 
1,013
of which: losses related to investment in SIX Group
 
(317)
 
(317)
Total revenues (underlying)
2
 
2,334
 
2,426
 
1,130
 
(4)
 
106
 
7,741
 
4,302
Credit loss expense / (release)
 
83
 
168
 
(4)
 
(51)
 
501
 
39
Operating expenses as reported
 
1,560
 
1,579
 
605
 
(1)
 
158
 
4,787
 
2,452
of which: integration-related expenses
2
 
188
 
166
 
14
 
383
of which: amortization from newly recognized intangibles
 
resulting from the acquisition of
the Credit Suisse Group
 
29
 
28
 
2
 
65
Operating expenses (underlying)
2
 
1,343
 
1,385
 
605
 
(3)
 
122
 
4,338
 
2,452
of which: expenses for litigation, regulatory and similar matters
 
0
 
(9)
 
(13)
 
(9)
 
(13)
Business division operating profit / (loss) before tax as reported
 
788
 
1,124
 
529
 
(30)
 
49
 
3,148
 
1,812
Business division operating profit / (loss) before tax (underlying)
2
 
908
 
872
 
529
 
4
 
72
 
2,902
 
1,812
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
 
49.1
 
154.5
 
44.9
 
73.8
 
4.7
Cost / income ratio (%)
2
 
64.2
 
55.0
 
53.5
 
56.7
 
57.0
Average attributed equity (USD bn)
3
 
20.2
 
20.2
 
9.3
 
0
 
117
 
15.5
 
9.3
Return on attributed equity (%)
2,3
 
15.6
 
22.2
 
22.8
 
20.3
 
19.5
Loans, gross (USD bn)
 
337.2
 
315.0
 
154.6
 
7
 
118
 
337.2
 
154.6
Customer deposits (USD bn)
 
324.3
 
293.6
 
180.8
 
10
 
79
 
324.3
 
180.8
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
2,4
 
0.9
 
0.7
 
0.8
 
0.9
 
0.8
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
 
71.7
 
97.5
 
44.9
 
60.2
 
6.9
Cost / income ratio (%)
2
 
57.5
 
57.1
 
53.5
 
56.0
 
57.0
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
 
725
 
737
 
471
 
(2)
 
54
 
2,507
 
2,050
Performance fees
 
52
 
18
 
24
 
194
 
118
 
104
 
64
Net gain from disposals
 
27
 
27
 
848
Total revenues
 
805
 
755
 
495
 
7
 
63
 
2,639
 
2,961
Credit loss expense / (release)
 
(1)
 
0
 
0
 
0
 
0
Operating expenses
 
691
 
724
 
372
 
(5)
 
86
 
2,321
 
1,564
Business division operating profit / (loss) before tax
 
115
 
31
 
124
 
269
 
(7)
 
318
 
1,397
Underlying results
Total revenues as reported
 
805
 
755
 
495
 
7
 
63
 
2,639
 
2,961
of which: net gain from disposals
3
 
848
Total revenues (underlying)
4
 
805
 
755
 
495
 
7
 
63
 
2,639
 
2,114
Credit loss expense / (release)
 
(1)
 
0
 
0
 
0
 
0
Operating expenses as reported
 
691
 
724
 
372
 
(5)
 
86
 
2,321
 
1,564
of which: integration-related expenses
4
 
66
 
125
 
(47)
 
205
Operating expenses (underlying)
4
 
625
 
599
 
372
 
4
 
68
 
2,116
 
1,564
of which: expenses for litigation, regulatory and similar matters
 
6
 
1
 
0
 
8
 
1
Business division operating profit / (loss) before tax as reported
 
115
 
31
 
124
 
269
 
(7)
 
318
 
1,397
Business division operating profit / (loss) before tax (underlying)
4
 
180
 
156
 
124
 
16
 
46
 
522
 
550
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
4
 
(7.5)
 
(77.8)
 
(62.9)
 
(77.3)
 
35.7
Cost / income ratio (%)
4
 
85.8
 
95.9
 
75.1
 
88.0
 
52.8
Average attributed equity (USD bn)
5
 
2.3
 
2.3
 
1.7
 
0
 
36
 
2.0
 
1.7
Return on attributed equity (%)
4,5
 
19.9
 
5.4
 
29.3
 
15.6
 
81.2
Gross margin on invested assets (bps)
4,6
 
20
 
19
 
19
 
19
 
27
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
4
 
45.6
 
11.2
 
(62.9)
 
(5.0)
 
(46.6)
Cost / income ratio (%)
4
 
77.7
 
79.3
 
75.1
 
80.2
 
74.0
Information by business line / asset
 
class
Net new money (USD bn)
4
Equities
 
(6.4)
 
(5.7)
 
0.3
 
(4.0)
 
(12.8)
Fixed Income
 
(5.6)
 
4.6
 
12.9
 
17.8
 
36.5
of which: money market
 
1.4
 
5.7
 
16.3
 
22.3
 
26.3
Multi-asset & Solutions
 
0.9
 
(0.5)
 
(6.7)
 
2.2
 
(1.3)
Hedge Fund Businesses
 
(1.6)
 
(1.7)
 
3.6
 
(4.2)
 
2.3
Real Estate & Private Markets
 
0.3
 
0.7
 
0.5
 
2.7
 
0.2
Total net new money excluding associates
 
(12.4)
 
(2.6)
 
10.8
 
14.6
 
24.8
of which: net new money excluding money market
 
(13.8)
 
(8.3)
 
(5.6)
 
(7.7)
 
(1.6)
Associates
7
 
0.1
 
1.2
 
(1.4)
 
1.1
 
7.7
Total net new money
6
 
(12.2)
 
(1.5)
 
9.3
 
15.7
 
32.5
Invested assets (USD bn)
4
Equities
 
644
 
588
 
456
 
10
 
41
 
644
 
456
Fixed Income
 
445
 
446
 
296
 
0
 
51
 
445
 
296
of which: money market
 
134
 
146
 
119
 
(8)
 
13
 
134
 
119
Multi-asset & Solutions
 
274
 
248
 
155
 
10
 
77
 
274
 
155
Hedge Fund Businesses
 
57
 
58
 
55
 
(2)
 
3
 
57
 
55
Real Estate & Private Markets
 
156
 
149
 
102
 
5
 
54
 
156
 
102
Total invested assets excluding associates
 
1,577
 
1,489
 
1,064
 
6
 
48
 
1,577
 
1,064
of which: passive strategies
 
715
 
642
 
443
 
11
 
61
 
715
 
443
Associates
7
 
72
 
70
 
24
 
3
 
205
 
72
 
24
Total invested assets
6
 
1,649
 
1,559
 
1,088
 
6
 
52
 
1,649
 
1,088
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
402
 
387
 
298
 
4
 
35
 
402
 
298
Asia Pacific
6
 
211
 
225
 
173
 
(6)
 
22
 
211
 
173
Europe, Middle East and Africa (excluding Switzerland)
 
354
 
328
 
263
 
8
 
35
 
354
 
263
Switzerland
 
682
 
619
 
354
 
10
 
93
 
682
 
354
Total invested assets
6
 
1,649
 
1,559
 
1,088
 
6
 
52
 
1,649
 
1,088
Information by channel
Invested assets (USD bn)
4
Third-party institutional
 
939
 
899
 
606
 
4
 
55
 
939
 
606
Third-party wholesale
 
177
 
162
 
116
 
9
 
53
 
177
 
116
UBS’s wealth management businesses
 
461
 
427
 
342
 
8
 
35
 
461
 
342
Associates
7
 
72
 
70
 
24
 
3
 
205
 
72
 
24
Total invested assets
6
 
1,649
 
1,559
 
1,088
 
6
 
52
 
1,649
 
1,088
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
 
190
 
191
 
172
 
(1)
 
11
 
746
 
733
Capital Markets
 
646
 
507
 
159
 
27
 
305
 
1,649
 
854
Global Banking
 
836
 
698
 
331
 
20
 
152
 
2,395
 
1,587
Execution Services
 
414
 
379
 
371
 
9
 
11
 
1,578
 
1,643
Derivatives & Solutions
 
446
 
605
 
541
 
(26)
 
(18)
 
2,707
 
3,665
Financing
 
442
 
468
 
438
 
(6)
 
1
 
1,981
 
1,822
Global Markets
 
1,303
 
1,452
 
1,351
 
(10)
 
(4)
 
6,265
 
7,129
of which: Equities
 
1,005
 
1,080
 
883
 
(7)
 
14
 
4,546
 
4,970
of which: Foreign Exchange, Rates and Credit
 
297
 
373
 
468
 
(20)
 
(36)
 
1,720
 
2,160
Total revenues
 
2,139
 
2,151
 
1,682
 
(1)
 
27
 
8,661
 
8,717
Credit loss expense / (release)
 
48
 
4
 
8
 
496
 
190
 
(12)
Operating expenses
 
2,260
 
2,377
 
1,563
 
(5)
 
45
 
8,515
 
6,832
Business division operating profit / (loss) before tax
 
(169)
 
(230)
 
112
 
(27)
 
(44)
 
1,897
Underlying results
Total revenues as reported
 
2,139
 
2,151
 
1,682
 
(1)
 
27
 
8,661
 
8,717
of which: accretion of PPA adjustments on financial instruments
 
277
 
251
 
11
 
583
of which: losses in the first quarter of 2022 from transactions with
 
Russian counterparties
 
(93)
Total revenues (underlying)
2
 
1,861
 
1,900
 
1,682
 
(2)
 
11
 
8,078
 
8,810
Credit loss expense / (release)
 
48
 
4
 
8
 
496
 
190
 
(12)
Operating expenses as reported
 
2,260
 
2,377
 
1,563
 
(5)
 
45
 
8,515
 
6,832
of which: integration-related expenses
2
 
166
 
365
 
(55)
 
692
Operating expenses (underlying)
2
 
2,094
 
2,012
 
1,563
 
4
 
34
 
7,823
 
6,832
of which: expenses for litigation, regulatory and similar matters
 
13
 
0
 
20
 
(36)
 
78
 
122
Business division operating profit / (loss) before tax as reported
 
(169)
 
(230)
 
112
 
(27)
 
(44)
 
1,897
Business division operating profit / (loss) before tax (underlying)
2
 
(280)
 
(116)
 
112
 
143
 
64
 
1,990
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
2
 
(251.2)
 
(151.5)
 
(84.4)
 
(102.3)
 
(27.9)
Cost / income ratio (%)
2
 
105.7
 
110.5
 
92.9
 
98.3
 
78.4
Average attributed equity (USD bn)
3
 
14.4
 
14.7
 
12.7
 
(2)
 
14
 
13.8
 
13.0
Return on attributed equity (%)
2,3
 
(4.7)
 
(6.2)
 
3.5
 
(0.3)
 
14.6
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
2
 
(351.3)
 
(125.9)
 
(84.4)
 
(96.8)
 
(43.0)
Cost / income ratio (%)
2
 
112.5
 
105.9
 
92.9
 
96.8
 
77.6
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
 
162
 
350
 
53
 
(54)
 
204
 
741
 
237
Credit loss expense / (release)
 
15
 
59
 
0
 
193
 
2
Operating expenses
 
1,873
 
2,152
 
21
 
(13)
 
5,290
 
104
Operating profit / (loss) before tax
 
(1,726)
 
(1,861)
 
33
 
(7)
 
(4,741)
 
131
Underlying results
Total revenues as reported
 
162
 
350
 
53
 
(54)
 
204
 
741
 
237
of which: litigation settlement
 
62
Total revenues (underlying)
3
 
162
 
350
 
53
 
(54)
 
204
 
741
 
175
Credit loss expense / (release)
 
15
 
59
 
0
 
193
 
2
Operating expenses as reported
 
1,873
 
2,152
 
21
 
(13)
 
5,290
 
104
of which: integration-related expenses
3
 
749
 
918
 
1,772
Operating expenses (underlying)
3
 
1,124
 
1,234
 
21
 
(9)
 
3,518
 
104
of which: expenses for litigation, regulatory and similar matters
 
(33)
 
(2)
 
(11)
 
637
 
(12)
Operating profit / (loss) before tax as reported
 
(1,726)
 
(1,861)
 
33
 
(7)
 
(4,741)
 
131
Operating profit / (loss) before tax (underlying)
3
 
(977)
 
(943)
 
33
 
4
 
(2,969)
 
69
Performance measures and other information
Average attributed equity
4
 
8.1
 
9.0
 
1.0
 
(11)
 
687
 
5.2
 
1.1
Risk-weighted assets (USD bn)
 
72.0
 
77.5
 
13.0
 
(7)
 
454
 
72.0
 
13.0
Leverage ratio denominator (USD bn)
 
137.1
 
156.4
 
6.3
 
(12)
 
137.1
 
6.3
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
 
3.1
 
4.1
 
20.0
 
28.9
 
13.4
 
17.9
Macro
 
9.3
 
7.9
 
55.7
 
64.6
 
24.8
 
29.8
Loans
 
11.2
 
14.5
 
13.0
 
14.0
 
14.8
 
17.2
Securitized products
 
13.5
 
14.3
 
26.2
 
28.2
 
27.6
 
29.2
Credit
 
2.8
 
3.4
 
5.2
 
2.8
 
4.9
 
3.9
High-quality liquid assets
 
50.5
 
55.3
 
50.5
 
53.2
Operational risk
 
30.0
 
30.0
Other
 
2.0
 
3.3
 
2.3
 
3.2
 
1.1
 
5.2
Total
 
72.0
 
77.5
 
172.9
 
196.9
 
137.1
 
156.4
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
 
(126)
 
(242)
 
67
 
(48)
 
(833)
 
(622)
Credit loss expense / (release)
 
(2)
 
6
 
0
 
6
 
1
Operating expenses
 
17
 
7
 
(15)
 
125
 
440
 
(12)
Operating profit / (loss) before tax
 
(140)
 
(255)
 
81
 
(45)
 
(1,279)
 
(611)
Underlying results
Total revenues as reported
 
(126)
 
(242)
 
67
 
(48)
 
(833)
 
(622)
of which: accretion of PPA adjustments on financial instruments
 
(32)
 
(57)
 
(35)
of which: gain from sales of real estate
 
68
 
68
Total revenues (underlying)
2
 
(94)
 
(186)
 
(1)
 
(49)
 
(798)
 
(690)
Credit loss expense / (release)
 
(2)
 
6
 
0
 
6
 
1
Operating expenses as reported
 
17
 
7
 
(15)
 
124
 
440
 
(12)
of which: integration-related expenses
2
 
93
 
(2)
 
438
of which: acquisition-related costs
 
(1)
 
26
 
202
Operating expenses (underlying)
2
 
(75)
 
(17)
 
(15)
 
349
 
416
 
(200)
 
(12)
of which: expenses for litigation, regulatory and similar matters
 
(28)
 
0
 
0
 
(27)
 
6
Operating profit / (loss) before tax as reported
 
(140)
 
(255)
 
81
 
(45)
 
(1,279)
 
(611)
Operating profit / (loss) before tax (underlying)
2
 
(17)
 
(174)
 
13
 
(90)
 
(603)
 
(679)
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 | 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
 
409,735
 
482,123
 
1,700
 
96,878
 
50,223
 
138,884
 
1,179,543
of which: loans and advances to customers (on-balance sheet)
 
279,384
 
337,218
 
13
 
16,993
 
8,106
 
155
 
641,868
of which: guarantees and loan commitments (off-balance sheet)
 
21,344
 
58,618
 
59
 
36,094
 
3,149
 
18,569
 
137,833
Traded products
2,3,4
Gross exposure
 
11,812
 
4,748
 
0
 
47,630
 
64,191
of which: over-the-counter derivatives
 
8,397
 
4,116
 
0
 
12,400
 
24,913
of which: securities financing transactions
 
371
 
19
 
0
 
23,044
 
23,434
of which: exchange-traded derivatives
 
3,045
 
613
 
0
 
12,186
 
15,844
Other credit lines, gross
5
 
70,130
 
88,279
 
0
 
4,714
 
5
 
127
 
163,256
Total credit-impaired exposure, gross
 
1,681
 
3,045
 
0
 
469
 
1,169
 
2
 
6,367
of which: stage 3
 
1,012
 
2,640
 
0
 
408
 
290
 
2
 
4,352
of which: PCI
 
668
 
405
 
0
 
61
 
879
 
0
 
2,014
Total allowances and provisions for expected credit losses
 
390
 
1,234
 
1
 
358
 
271
 
8
 
2,260
of which: stage 1
 
166
 
372
 
1
 
133
 
20
 
7
 
700
of which: stage 2
 
66
 
255
 
0
 
78
 
16
 
0
 
416
of which: stage 3
 
98
 
590
 
0
 
146
 
158
 
0
 
992
of which: PCI
 
59
 
16
 
0
 
1
 
77
 
0
 
153
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
 
401,291
 
451,608
 
1,927
 
97,031
 
53,811
 
93,444
 
1,099,112
of which: loans and advances to customers (on-balance sheet)
 
277,710
 
314,973
 
(1)
 
16,244
 
9,531
 
676
 
619,133
of which: guarantees and loan commitments (off-balance sheet)
 
20,382
 
56,321
 
57
 
37,914
 
5,801
 
11,792
 
132,266
Traded products
2,3,4
Gross exposure
 
13,364
 
5,749
 
0
 
52,529
 
71,642
of which: over-the-counter derivatives
 
9,653
 
5,185
 
0
 
15,631
 
30,469
of which: securities financing transactions
 
370
 
17
 
0
 
24,469
 
24,856
of which: exchange-traded derivatives
 
3,341
 
549
 
0
 
12,429
 
16,319
Other credit lines, gross
5
 
69,094
 
85,140
 
0
 
4,634
 
5
 
111
 
158,986
Total credit-impaired exposure, gross
 
1,550
 
2,288
 
0
 
357
 
955
 
118
 
5,267
of which: stage 3
 
914
 
1,848
 
0
 
348
 
156
 
1
 
3,266
of which: PCI
 
636
 
440
 
0
 
9
 
800
 
117
 
2,002
Total allowances and provisions for expected credit losses
 
409
 
1,090
 
1
 
305
 
154
 
18
 
1,977
of which: stage 1
 
167
 
362
 
1
 
151
 
37
 
15
 
733
of which: stage 2
 
97
 
241
 
0
 
73
 
6
 
0
 
418
of which: stage 3
 
101
 
476
 
0
 
76
 
71
 
0
 
723
of which: PCI
 
44
 
11
 
0
 
5
 
40
 
3
 
103
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
 
1
 
2
 
2
 
1
 
0
 
1
 
2
 
0
 
0
Personal & Corporate Banking
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Asset Management
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Investment Bank
 
10
 
23
 
18
 
16
 
9
 
16
 
6
 
2
 
3
Non-core and Legacy
 
1
 
2
 
1
 
1
 
0
 
1
 
1
 
0
 
0
Group Items
 
4
 
5
 
5
 
4
 
1
 
4
 
3
 
1
 
0
Diversification effect
2,3
 
 
 
(7)
 
(6)
 
(1)
 
(6)
 
(4)
 
(1)
 
0
Total as of 31.12.23
 
11
 
24
 
19
 
16
 
9
 
16
 
7
 
2
 
3
Total as of 30.9.23
 
10
 
25
 
15
 
17
 
12
 
11
 
7
 
2
 
3
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
 
2
 
7
 
2
 
4
 
1
 
0
 
3
 
0
 
0
Personal & Corporate Banking
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Asset Management
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Non-core and Legacy
4
 
18
 
22
 
19
 
21
 
11
 
8
 
16
 
1
 
1
Group Items
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Diversification effect
2,3
 
(1)
 
(2)
 
0
 
4
 
(3)
 
0
 
0
Total as of 31.12.23
 
20
 
25
 
21
 
23
 
11
 
12
 
16
 
1
 
1
Total as of 30.9.23
 
23
 
29
 
23
 
27
 
14
 
14
 
18
 
2
 
1
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
 
– FINMA
Effect on EVE
1
 
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
 
(3.7)
 
(0.6)
 
0.1
 
(26.0)
 
0.2
 
(30.1)
 
4.9
 
(25.2)
Parallel up
2
 
(548.9)
 
(119.3)
 
16.2
 
(5,027.2)
 
(0.9)
 
(5,680.2)
 
904.6
 
(4,775.5)
Parallel down
2
 
561.8
 
124.3
 
(29.2)
 
5,216.0
 
2.8
 
5,875.7
 
(1,044.5)
 
4,831.3
Steepener
3
 
(305.3)
 
(13.1)
 
(11.9)
 
(1,037.0)
 
(33.8)
 
(1,401.1)
 
93.4
 
(1,307.6)
Flattener
4
 
189.6
 
(5.0)
 
14.0
 
(124.2)
 
30.8
 
105.2
 
109.6
 
214.8
Short-term up
5
 
(27.3)
 
(39.4)
 
19.4
 
(2,171.3)
 
23.9
 
(2,194.7)
 
486.3
 
(1,708.4)
Short-term down
6
 
26.5
 
41.8
 
(21.8)
 
2,312.1
 
(26.8)
 
2,331.9
 
(507.8)
 
1,824.1
30.9.23
USD m
Effect on EVE
1
 
– FINMA
Effect on EVE
1
 
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
 
(3.1)
 
(0.6)
 
0.1
 
(24.4)
 
0.2
 
(27.8)
 
2.5
 
(25.2)
Parallel up
2
 
(458.9)
 
(113.1)
 
12.6
 
(4,685.4)
 
18.5
 
(5,226.3)
 
475.6
 
(4,750.7)
Parallel down
2
 
463.5
 
131.4
 
(19.6)
 
4,989.0
 
(16.9)
 
5,547.5
 
(525.0)
 
5,022.4
Steepener
3
 
(221.0)
 
(31.3)
 
(10.1)
 
(959.0)
 
(33.6)
 
(1,254.9)
 
(55.4)
 
(1,310.3)
Flattener
4
 
126.5
 
14.1
 
12.1
 
(108.5)
 
34.9
 
79.1
 
161.4
 
240.5
Short-term up
5
 
(51.1)
 
(21.3)
 
15.4
 
(2,047.8)
 
34.6
 
(2,070.1)
 
342.8
 
(1,727.3)
Short-term down
6
 
45.3
 
23.7
 
(16.3)
 
2,172.8
 
(36.2)
 
2,189.2
 
(357.7)
 
1,831.6
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
 
14.92
1
 
81,530
 
5.05
1
 
85,570
Common equity tier 1 capital
 
10.62
 
58,031
 
3.55
2
 
60,139
of which: minimum capital
 
4.50
 
24,593
 
1.50
 
25,431
of which: buffer capital
 
5.50
 
30,058
 
2.00
 
33,908
of which: countercyclical buffer
 
0.47
 
2,580
Maximum additional tier 1 capital
 
4.30
 
23,500
 
1.50
 
25,431
of which: additional tier 1 capital
 
3.50
 
19,128
 
1.50
 
25,431
of which: additional tier 1 buffer capital
 
0.80
 
4,372
Eligible going concern capital
Total going concern capital
 
17.05
 
93,155
 
5.49
 
93,155
Common equity tier 1 capital
 
14.50
 
79,263
 
4.68
 
79,263
Total loss-absorbing additional tier 1 capital
3
 
2.54
 
13,892
 
0.82
 
13,892
of which: high-trigger loss-absorbing additional tier 1 capital
 
2.32
 
12,678
 
0.75
 
12,678
of which: low-trigger loss-absorbing additional tier 1 capital
 
0.22
 
1,214
 
0.07
 
1,214
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
 
10.73
 
58,613
 
3.75
 
63,578
of which: base requirement including add-ons for market share and LRD
 
10.73
7
 
58,613
 
3.75
7
 
63,578
Eligible gone concern capital
Total gone concern loss-absorbing capacity
 
19.60
 
107,106
 
6.32
 
107,106
Total tier 2 capital
 
0.10
 
538
 
0.03
 
538
of which: non-Basel III-compliant tier 2 capital
 
0.10
 
538
 
0.03
 
538
TLAC-eligible senior unsecured debt
 
19.50
 
106,567
 
6.29
 
106,567
Total loss-absorbing capacity
Required total loss-absorbing capacity
 
25.64
 
140,143
 
8.80
 
149,148
Eligible total loss-absorbing capacity
 
36.64
 
200,261
 
11.81
 
200,261
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
 
546,505
Leverage ratio denominator
 
1,695,403
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
 
93,155
 
91,546
 
58,321
Total tier 1 capital
 
93,155
 
91,546
 
58,321
Common equity tier 1 capital
 
79,263
 
78,587
 
45,457
Total loss-absorbing additional tier 1 capital
 
13,892
 
12,960
 
12,864
of which: high-trigger loss-absorbing additional tier 1 capital
 
12,678
 
11,764
 
11,675
of which: low-trigger loss-absorbing additional tier 1 capital
 
1,214
 
1,195
 
1,189
Eligible gone concern capital
Total gone concern loss-absorbing capacity
 
107,106
 
103,353
 
46,991
Total tier 2 capital
 
538
 
536
 
2,958
of which: low-trigger loss-absorbing tier 2 capital
 
0
 
0
 
2,422
of which: non-Basel III-compliant tier 2 capital
 
538
 
536
 
536
TLAC-eligible senior unsecured debt
 
106,567
 
102,817
 
44,033
Total loss-absorbing capacity
Total loss-absorbing capacity
 
200,261
 
194,899
 
105,312
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
 
546,505
 
546,491
 
319,585
Leverage ratio denominator
 
1,695,403
 
1,615,817
 
1,028,461
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
 
17.0
 
16.8
 
18.2
of which: common equity tier 1 capital ratio
 
14.5
 
14.4
 
14.2
Gone concern loss-absorbing capacity ratio
 
19.6
 
18.9
 
14.7
Total loss-absorbing capacity ratio
 
36.6
 
35.7
 
33.0
Leverage ratios (%)
Going concern leverage ratio
 
5.5
 
5.7
 
5.7
of which: common equity tier 1 leverage ratio
 
4.7
 
4.9
 
4.4
Gone concern leverage ratio
 
6.3
 
6.4
 
4.6
Total loss-absorbing capacity leverage ratio
 
11.8
 
12.1
 
10.2
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
 
ubs.com/investors
for more information about the eligibility of capital and
senior unsecured debt instruments and about key features and terms and conditions of capital instruments
Loss-absorbing capacity and leverage ratios
Our CET1 capital ratio 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
 
78,587
Operating profit / (loss) before tax
 
(751)
Current tax (expense) / benefit
 
(69)
Foreign currency translation effects, before tax
 
1,612
Deferred tax assets on temporary differences
 
1,500
Compensation-
 
and own share-related capital components
 
(629)
Amortization of transitional CET1 purchase price allocation adjustments, net of
 
tax
 
(283)
Other
1
 
(704)
Common equity tier 1 capital as of 31.12.23
 
79,263
Loss-absorbing additional tier 1 capital as of 30.9.23
 
12,960
Issuance of high-trigger loss-absorbing additional tier 1 capital
 
3,455
Call of high-trigger loss-absorbing additional tier 1 capital
 
(3,023)
Interest rate risk hedge, foreign currency translation and other effects
 
500
Loss-absorbing additional tier 1 capital as of 31.12.23
 
13,892
Total going concern capital as of 30.9.23
 
91,546
Total going concern capital as of 31.12.23
 
93,155
Gone concern loss-absorbing capacity
Tier 2 capital as of 30.9.23
 
536
Interest rate risk hedge, foreign currency translation and other effects
 
3
Tier 2 capital as of 31.12.23
 
538
TLAC-eligible senior unsecured debt as of 30.9.23
 
102,817
Issuance of TLAC-eligible senior unsecured debt
 
266
Call of TLAC-eligible senior unsecured debt
 
(2,236)
Interest rate risk hedge, foreign currency translation and other effects
 
5,720
TLAC-eligible senior unsecured debt as of 31.12.23
 
106,567
Total gone concern loss-absorbing capacity as of 30.9.23
 
103,353
Total gone concern loss-absorbing capacity as of 31.12.23
 
107,106
Total loss-absorbing capacity
Total loss-absorbing capacity as of 30.9.23
 
194,899
Total loss-absorbing capacity as of 31.12.23
 
200,261
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
 
87,816
 
85,468
 
57,218
Equity attributable to non-controlling interests
 
(531)
 
(542)
 
(342)
Defined benefit plans, net of tax
 
(965)
 
(929)
 
(311)
Deferred tax assets recognized for tax loss carry-forwards
 
(3,039)
 
(3,760)
 
(4,077)
Deferred tax assets for unused tax credits
 
(97)
 
(245)
Deferred tax assets on temporary differences, excess over threshold
 
(64)
Goodwill, net of tax
2
 
(5,750)
 
(5,736)
 
(5,754)
Intangible assets, net of tax
 
(894)
 
(844)
 
(150)
Compensation-related components (not recognized in net profit)
 
(2,586)
 
(2,296)
 
(2,287)
Expected losses on advanced internal ratings-based portfolio less provisions
 
(713)
 
(553)
 
(471)
Unrealized (gains) / losses from cash flow hedges, net of tax
 
3,109
 
4,947
 
4,234
Own credit related to (gains) / losses on financial liabilities
 
measured at fair value that existed at the balance sheet date, net of tax
 
1,291
 
571
 
(523)
Own credit related to (gains) / losses on derivative financial instruments
 
that existed at the balance sheet date
 
(89)
 
(123)
 
(105)
Prudential valuation adjustments
 
(368)
 
(407)
 
(201)
Accruals for dividends to shareholders for 2022
 
(1,683)
Transitional CET1 purchase price allocation adjustments, net of tax
 
4,316
 
4,600
Other
3
 
(2,237)
 
(1,565)
 
(29)
Total common equity tier 1 capital
 
79,263
 
78,587
 
45,457
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
 
346.3
 
13.9
 
0.7
 
(0.7)
 
(14.9)
 
345.3
Non-counterparty-related risk
3
 
30.7
 
0.9
 
2.7
 
34.4
Market risk
 
24.1
 
0.3
 
(2.9)
 
21.4
Operational risk
 
145.4
 
0.0
 
145.4
Total
 
546.5
 
14.8
 
0.7
 
(0.5)
 
(15.1)
 
546.5
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
 
90.4
 
137.8
 
7.6
 
65.0
 
34.3
 
10.2
 
345.3
Non-counterparty-related risk
2
 
6.8
 
3.4
 
0.8
 
3.8
 
2.5
 
17.1
 
34.4
Market risk
 
1.7
 
0.1
 
0.1
 
12.5
 
5.1
 
1.9
 
21.4
Operational risk
 
57.5
 
19.5
 
7.2
 
25.0
 
30.0
 
6.2
 
145.4
Total
 
156.5
 
160.8
 
15.6
 
106.3
 
72.0
 
35.3
 
546.5
30.9.23
Credit and counterparty credit risk
1
 
92.8
 
132.0
 
7.6
 
64.4
 
38.8
 
10.7
 
346.3
Non-counterparty-related risk
2
 
6.8
 
3.5
 
0.8
 
3.7
 
2.7
 
13.2
 
30.7
Market risk
 
1.6
 
0.1
 
0.0
 
13.9
 
5.9
 
2.4
 
24.1
Operational risk
 
57.5
 
19.5
 
7.2
 
25.0
 
30.0
 
6.2
 
145.4
Total
 
158.8
 
155.1
 
15.6
 
107.0
 
77.5
 
32.5
 
546.5
31.12.23 vs 30.9.23
Credit and counterparty credit risk
1
 
(2.4)
 
5.8
 
0.0
 
0.6
 
(4.5)
 
(0.5)
 
(1.0)
Non-counterparty-related risk
2
 
0.0
 
(0.1)
 
0.0
 
0.1
 
(0.3)
 
3.9
 
3.7
Market risk
 
0.1
 
0.0
 
0.0
 
(1.4)
 
(0.8)
 
(0.6)
 
(2.7)
Operational risk
Total
 
(2.3)
 
5.7
 
0.0
 
(0.7)
 
(5.5)
 
2.8
 
0.0
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)
 
1,242.4
 
59.2
 
27.5
 
1,329.2
Derivatives
 
143.5
 
2.2
 
(17.6)
 
128.1
Securities financing transactions
 
157.1
 
3.3
 
5.0
 
165.4
Off-balance sheet items
 
80.4
 
3.3
 
(3.8)
 
79.9
Deduction items
 
(7.6)
 
0.3
 
0.0
 
(7.2)
Total
 
1,615.8
 
68.4
 
11.1
 
1,695.4
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
 
428.3
 
442.4
 
5.8
 
217.2
 
95.0
 
140.5
 
1,329.2
Derivatives
 
8.1
 
3.0
 
0.0
 
90.3
 
23.6
 
3.1
 
128.1
Securities financing transactions
 
36.4
 
28.3
 
0.1
 
39.9
 
17.7
 
43.1
 
165.4
Off-balance sheet items
 
20.3
 
38.5
 
0.2
 
18.3
 
1.6
 
1.1
 
79.9
Items deducted from Swiss SRB tier 1 capital
 
(4.7)
 
4.3
 
(1.2)
 
(0.4)
 
(0.7)
 
(4.5)
 
(7.2)
Total
 
488.4
 
516.6
 
4.9
 
365.2
 
137.1
 
183.2
 
1,695.4
30.9.23
On-balance sheet exposures
 
427.3
 
424.0
 
5.9
 
199.9
 
115.9
 
69.4
 
1,242.4
Derivatives
 
8.0
 
4.8
 
0.0
 
96.2
 
32.3
 
2.1
 
143.5
Securities financing transactions
 
23.1
 
12.5
 
0.1
 
41.3
 
5.0
 
75.1
 
157.1
Off-balance sheet items
 
18.2
 
37.6
 
0.2
 
19.2
 
3.8
 
1.5
 
80.4
Items deducted from Swiss SRB tier 1 capital
 
(4.6)
 
4.7
 
(1.2)
 
(0.4)
 
(0.6)
 
(5.4)
 
(7.6)
Total
 
472.0
 
483.7
 
5.0
 
356.0
 
156.4
 
142.7
 
1,615.8
31.12.23 vs 30.9.23
On-balance sheet exposures
 
1.1
 
18.3
 
(0.1)
 
17.3
 
(20.9)
 
71.1
 
86.7
Derivatives
 
0.1
 
(1.8)
 
0.0
 
(5.9)
 
(8.8)
 
1.0
 
(15.3)
Securities financing transactions
 
13.3
 
15.8
 
0.0
 
(1.4)
 
12.6
 
(32.0)
 
8.3
Off-balance sheet items
 
2.1
 
1.0
 
0.0
 
(0.9)
 
(2.2)
 
(0.4)
 
(0.5)
Items deducted from Swiss SRB tier 1 capital
 
(0.1)
 
(0.4)
 
0.0
 
0.0
 
0.0
 
0.9
 
0.3
Total
 
16.4
 
32.9
 
(0.1)
 
9.2
 
(19.3)
 
40.5
 
79.6
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
 
415.6
 
367.5
Net cash outflows
2
 
192.8
 
187.3
Liquidity coverage ratio (%)
3
 
215.7
 
196.5
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
 
928.4
 
872.7
Required stable funding
 
748.2
 
722.9
Net stable funding ratio (%)
 
124.1
 
120.7
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
 
314.1
 
262.4
 
20
Lending
2
 
661.3
 
639.0
 
3
Securities financing transactions at amortized cost
 
99.0
 
84.9
 
17
Trading assets
 
169.6
 
157.5
 
8
Derivatives and cash collateral receivables on derivative instruments
 
226.2
 
250.3
 
(10)
Brokerage receivables
 
21.0
 
24.6
 
(15)
Other financial assets measured at amortized cost
 
65.5
 
64.2
 
2
Other financial assets measured at fair value
3
 
106.2
 
106.8
 
(1)
Non-financial assets
 
54.5
 
54.7
 
0
Total assets
 
1,717.6
 
1,644.3
 
4
of which: Credit Suisse
 
583.5
559.2
 
4
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
 
ubs.com/investors
for more information about capital and senior debt
instruments
 
›
Refer to the “Consolidated financial information” section of this report for more information
Liabilities and equity
As of
 
% change from
USD bn
31.12.23
30.9.23
1
30.9.23
Short-term borrowings
2,3
 
109.5
 
106.5
 
3
Securities financing transactions at amortized cost
 
14.4
 
15.0
 
(4)
Customer deposits
 
792.0
 
733.1
 
8
Debt issued designated at fair value and long-term debt issued measured
 
at amortized cost
3
 
327.6
 
312.1
 
5
Trading liabilities
 
34.2
 
35.0
 
(2)
Derivatives and cash collateral payables on derivative instruments
 
233.8
 
239.3
 
(2)
Brokerage payables
 
42.5
 
41.3
 
3
Other financial liabilities measured at amortized cost
 
20.9
 
19.2
 
9
Other financial liabilities designated at fair value
 
29.5
 
33.3
 
(11)
Non-financial liabilities
 
25.4
 
24.2
 
5
Total liabilities
 
1,629.8
 
1,558.9
 
5
of which: Credit Suisse
4
 
474.8
 
462.2
 
3
Share capital
 
0.3
 
0.3
 
0
Share premium
 
13.2
 
12.9
 
3
Treasury shares
 
(4.8)
 
(4.1)
 
16
Retained earnings
 
76.1
 
76.8
 
(1)
Other comprehensive income
5
 
2.5
 
(1.0)
Total equity attributable to shareholders
 
87.3
 
84.9
 
3
Equity attributable to non-controlling interests
 
0.5
 
0.5
 
(2)
Total equity
 
87.8
 
85.5
 
3
Total liabilities and equity
 
1,717.6
 
1,644.3
 
4
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
 
43.9
 
35.0
 
25
Loan commitments
2
 
91.6
 
90.8
 
1
Committed unconditionally revocable credit lines
 
163.3
 
159.0
 
3
Forward starting reverse repurchase agreements
 
18.4
 
10.4
 
77
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
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
Less: (profit) / loss on own equity derivative contracts
 
0
 
(1)
 
0
 
0
 
0
Net profit / (loss) attributable to shareholders for diluted
 
EPS
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
Weighted average shares outstanding
Weighted average shares outstanding for basic EPS
2
 
3,225,500,133
 
3,229,878,446
 
3,141,689,290
 
3,152,579,449
 
3,260,938,561
Effect of dilutive potential shares resulting from notional
 
employee shares, in-the-money
options and warrants outstanding
3
 
123,601
4
 
380,852
4
 
136,909,896
 
143,416,753
 
136,531,654
Weighted average shares outstanding for diluted EPS
 
3,225,623,734
 
3,230,259,298
 
3,278,599,186
 
3,295,996,202
 
3,397,470,215
Earnings per share (USD)
Basic
 
(0.09)
 
(0.22)
 
0.53
 
9.21
 
2.34
Diluted
 
(0.09)
 
(0.22)
 
0.50
 
8.81
 
2.25
Shares outstanding and potentially dilutive instruments
Shares issued
 
3,462,087,722
 
3,462,087,722
 
3,524,635,722
 
3,462,087,722
 
3,524,635,722
Treasury shares
5
 
253,233,437
 
228,822,625
 
416,909,010
 
253,233,437
 
416,909,010
of which: related to the 2021 share repurchase program
 
62,548,000
 
62,548,000
of which: related to the 2022 share repurchase program
 
120,506,008
 
120,506,008
 
233,901,950
 
120,506,008
 
233,901,950
Shares outstanding
 
3,208,854,285
 
3,233,265,097
 
3,107,726,712
 
3,208,854,285
 
3,107,726,712
Potentially dilutive instruments
6
 
163,417,391
4
 
160,925,793
4
 
5,873,046
 
5,638,817
 
5,873,046
Other key figures
Total book value per share (USD)
 
27.20
 
26.27
 
18.30
 
27.20
 
18.30
Tangible book value per share (USD)
 
24.86
 
23.96
 
16.28
 
24.86
 
16.28
Share price (USD)
7
 
31.01
 
24.77
 
18.61
 
31.01
 
18.61
Market capitalization (USD m)
8
 
107,355
 
85,768
 
65,608
 
107,355
 
65,608
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
 
 
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
 
10,036
 
9,932
 
4,180
 
31,743
 
11,782
Interest expense from financial instruments measured at
 
amortized cost
 
(9,440)
 
(9,082)
 
(2,954)
 
(28,216)
 
(6,564)
Net interest income from financial instruments measured
 
at fair value through profit or loss and other
 
1,498
 
1,257
 
363
 
3,770
 
1,403
Net interest income
 
2,095
 
2,107
 
1,589
 
7,297
 
6,621
Other net income from financial instruments measured
 
at fair value through profit or loss
 
3,158
 
3,226
 
1,876
 
11,583
 
7,517
Fee and commission income
 
6,409
 
6,669
 
4,771
 
23,766
 
20,789
Fee and commission expense
 
(629)
 
(613)
 
(413)
 
(2,195)
 
(1,823)
Net fee and commission income
 
5,780
 
6,056
 
4,359
 
21,570
 
18,966
Other income
 
(179)
 
305
 
206
 
384
 
1,459
Total revenues
 
10,855
 
11,695
 
8,029
 
40,834
 
34,563
Negative goodwill
 
28,925
Credit loss expense / (release)
 
136
 
239
 
7
 
1,037
 
29
Personnel expenses
 
7,061
 
7,567
 
4,122
 
24,899
 
17,680
General and administrative expenses
 
2,999
 
3,124
 
1,420
 
10,156
 
5,189
Depreciation, amortization and impairment of non-financial
 
assets
 
1,409
 
950
 
543
 
3,750
 
2,061
Operating expenses
 
11,470
 
11,640
 
6,085
 
38,806
 
24,930
Operating profit / (loss) before tax
 
(751)
 
(184)
 
1,937
 
29,916
 
9,604
Tax expense / (benefit)
 
(473)
 
526
 
280
 
873
 
1,942
Net profit / (loss)
 
(278)
 
(711)
 
1,657
 
29,043
 
7,661
Net profit / (loss) attributable to non-controlling interests
 
1
 
4
 
4
 
16
 
32
Net profit / (loss) attributable to shareholders
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
Earnings per share (USD)
Basic
 
(0.09)
 
(0.22)
 
0.53
 
9.21
 
2.34
Diluted
 
(0.09)
 
(0.22)
 
0.50
 
8.81
 
2.25
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)
 
(279)
 
(715)
 
1,653
 
29,027
 
7,630
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
 
4,197
 
(1,425)
 
1,753
 
3,762
 
(894)
Effective portion of changes in fair value of hedging instruments
 
designated as net investment hedges, before tax
 
(2,620)
 
806
 
(798)
 
(2,320)
 
337
Foreign currency translation differences on foreign operations reclassified to the
 
income statement
 
60
 
2
 
0
 
58
 
32
Effective portion of changes in fair value of hedging instruments
 
designated as net investment hedges reclassified
 
to
the income statement
 
(25)
 
0
 
3
 
(28)
 
(4)
Income tax relating to foreign currency translations, including the effect of
 
net investment hedges
 
(15)
 
4
 
(10)
 
(17)
 
4
Subtotal foreign currency translation, net of tax
 
1,597
 
(615)
 
948
 
1,456
 
(525)
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
 
8
 
(2)
 
5
 
7
 
(440)
Net realized (gains) / losses reclassified to the income statement
 
from equity
 
(4)
 
0
 
0
 
(3)
 
1
Reclassification of financial assets to Other financial assets measured
 
at amortized cost
3
 
449
Income tax relating to net unrealized gains / (losses)
 
0
 
0
 
0
 
0
 
(3)
Subtotal financial assets measured at fair value through other comprehensive
 
income, net of tax
 
3
 
(2)
 
6
 
4
 
6
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated
 
as cash flow hedges, before tax
 
1,803
 
(1,198)
 
59
 
(323)
 
(5,758)
Net (gains) / losses reclassified to the income statement from
 
equity
 
566
 
580
 
210
 
1,905
 
(159)
Income tax relating to cash flow hedges
 
(399)
 
92
 
(43)
 
(308)
 
1,124
Subtotal cash flow hedges, net of tax
 
1,970
 
(526)
 
225
 
1,275
 
(4,793)
Cost of hedging
Cost of hedging, before tax
 
(24)
 
(1)
 
(69)
 
(19)
 
45
Income tax relating to cost of hedging
 
0
 
0
 
3
 
0
 
0
Subtotal cost of hedging, net of tax
 
(24)
 
(1)
 
(66)
 
(19)
 
45
Total other comprehensive income that may be reclassified to the income statement, net
 
of tax
 
3,546
 
(1,144)
 
1,113
 
2,715
 
(5,267)
Other comprehensive income that will not be reclassified to the income
 
statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
 
164
 
(62)
 
(372)
 
110
 
(73)
Income tax relating to defined benefit plans
 
(33)
 
(7)
 
29
 
(70)
 
63
Subtotal defined benefit plans, net of tax
 
131
 
(69)
 
(343)
 
40
 
(10)
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated
 
at fair value, before tax
 
(731)
 
(715)
 
(304)
 
(1,850)
 
867
Income tax relating to own credit on financial liabilities designated
 
at fair value
 
10
 
29
 
71
 
82
 
(71)
Subtotal own credit on financial liabilities designated at
 
fair value, net of tax
 
(721)
 
(686)
 
(233)
 
(1,769)
 
796
Total other comprehensive income that will not be reclassified to the income statement,
 
net of tax
 
(591)
 
(755)
 
(576)
 
(1,729)
 
786
Total other comprehensive income
 
2,956
 
(1,899)
 
538
 
986
 
(4,481)
Total comprehensive income attributable to shareholders
 
2,677
 
(2,614)
 
2,190
 
30,013
 
3,149
Comprehensive income attributable to non-controlling
 
interests
Net profit / (loss)
 
1
 
4
 
4
 
16
 
32
Total other comprehensive income that will not be reclassified to the income statement,
 
net of tax
 
17
 
(12)
 
13
 
5
 
(14)
Total comprehensive income attributable to non-controlling interests
 
18
 
(8)
 
17
 
22
 
18
Total comprehensive income
Net profit / (loss)
 
(278)
 
(711)
 
1,657
 
29,043
 
7,661
Other comprehensive income
 
2,973
 
(1,911)
 
551
 
991
 
(4,494)
of which: other comprehensive income that may be reclassified
 
to the income statement
 
3,546
 
(1,144)
 
1,113
 
2,715
 
(5,267)
of which: other comprehensive income that will not be reclassified
 
to the income statement
 
(573)
 
(767)
 
(562)
 
(1,723)
 
772
Total comprehensive income
 
2,695
 
(2,622)
 
2,208
 
30,035
 
3,167
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
 
314,148
 
262,383
 
169,445
Amounts due from banks
 
21,161
 
21,334
 
14,792
Receivables from securities financing transactions measured at amortized
 
cost
 
99,039
 
84,872
 
67,814
Cash collateral receivables on derivative instruments
 
50,082
 
55,606
 
35,032
Loans and advances to customers
 
640,170
 
617,686
 
387,220
Other financial assets measured at amortized cost
 
65,498
 
64,159
 
53,264
Total financial assets measured at amortized cost
 
1,190,099
 
1,106,039
 
727,568
Financial assets at fair value held for trading
 
169,633
 
157,535
 
107,866
Derivative financial instruments
 
176,084
 
194,661
 
150,108
Brokerage receivables
 
21,037
 
24,611
 
17,576
Financial assets at fair value not held for trading
 
103,983
 
104,614
 
59,796
Total financial assets measured at fair value through profit or loss
 
470,738
 
481,421
 
335,347
Financial assets measured at fair value through other comprehensive income
 
2,233
 
2,213
 
2,239
Investments in associates
 
2,461
 
2,715
 
1,101
Property, equipment and software
 
17,849
 
17,919
 
12,288
Goodwill and intangible assets
 
7,515
 
7,462
 
6,267
Deferred tax assets
 
10,626
 
10,469
 
9,389
Other non-financial assets
 
16,049
 
16,091
 
10,166
Total assets
 
1,717,569
 
1,644,329
 
1,104,364
of which: Credit Suisse
 
583,520
 
559,231
Liabilities
Amounts due to banks
 
70,962
 
68,461
 
11,596
Payables from securities financing transactions measured at amortized cost
 
14,394
 
14,954
 
4,202
Cash collateral payables on derivative instruments
 
41,582
 
41,546
 
36,436
Customer deposits
 
792,029
 
733,071
 
525,051
Debt issued measured at amortized cost
 
237,817
 
224,025
 
114,621
Other financial liabilities measured at amortized cost
 
20,851
 
19,211
 
9,575
Total financial liabilities measured at amortized cost
 
1,177,633
 
1,101,268
 
701,481
Financial liabilities at fair value held for trading
 
34,159
 
34,989
 
29,515
Derivative financial instruments
 
192,220
 
197,721
 
154,906
Brokerage payables designated at fair value
 
42,522
 
41,313
 
45,085
Debt issued designated at fair value
 
128,289
 
126,135
 
73,638
Other financial liabilities designated at fair value
 
29,484
 
33,284
 
30,237
Total financial liabilities measured at fair value through profit or loss
 
426,674
 
433,441
 
333,381
Provisions and contingent liabilities
 
11,357
 
11,493
 
3,243
Other non-financial liabilities
 
14,089
 
12,660
 
9,040
Total liabilities
 
1,629,753
 
1,558,861
 
1,047,146
of which: Credit Suisse
2
 
474,815
 
462,228
Equity
Share capital
 
346
 
346
 
304
Share premium
 
13,216
 
12,858
 
13,546
Treasury shares
 
(4,796)
 
(4,122)
 
(6,874)
Retained earnings
 
76,057
 
76,796
 
50,004
Other comprehensive income recognized directly in equity, net of tax
 
2,462
 
(953)
 
(103)
Equity attributable to shareholders
 
87,285
 
84,926
 
56,876
Equity attributable to non-controlling interests
 
531
 
542
 
342
Total equity
 
87,816
 
85,468
 
57,218
Total liabilities and equity
 
1,717,569
 
1,644,329
 
1,104,364
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
 
of
 
loans
 
and
 
advances
 
to
 
customers
 
and
 
USD 0.3bn
 
of
 
derivative
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
 
of financial assets reported
 
at
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
 
Corresponding reclassification to financial assets at fair value held for trading
 
of USD 7bn and USD 9bn of loans and advances to customers
 
and USD 0.3bn and USD 0.3bn of derivative liabilities as of 30
 
September
2023 and 30 June 2023, respectively.
2
 
Corresponding reclassification to financial assets at fair value held for trading of USD 8bn and USD 6bn of financial assets at fair
 
value not held for trading as of 30 September 2023 and 30 June 2023, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
3,710
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
 
93,012
 
93,012
Amounts due from banks
 
13,590
 
13,590
Receivables from securities financing transactions measured at amortized
 
cost
 
26,194
 
26,194
Cash collateral receivables on derivative instruments
 
20,878
 
20,878
Loans and advances to customers
 
255,547
 
(8,002)
 
247,545
Other financial assets measured at amortized cost
 
13,428
 
13,428
Total financial assets measured at amortized cost
 
422,650
 
(8,002)
 
414,648
Financial assets at fair value held for trading
 
41,350
 
14,887
 
56,237
Derivative financial instruments
 
62,162
 
62,162
Brokerage receivables
 
366
 
366
Financial assets at fair value not held for trading
 
61,305
 
(7,141)
 
54,164
Total financial assets measured at fair value through profit or loss
 
165,183
 
7,746
 
172,929
Financial assets measured at fair value through other comprehensive income
 
0
 
0
Investments in associates
 
1,657
 
1,657
Property, equipment and software
 
6,055
 
6,055
Intangible assets
 
1,287
 
1,287
Deferred tax assets
 
942
 
942
Other non-financial assets
 
6,892
 
6,892
Total assets
 
604,667
 
(256)
 
604,411
Liabilities
Amounts due to banks
 
107,617
 
107,617
Payables from securities financing transactions measured at amortized cost
 
11,911
 
11,911
Cash collateral payables on derivative instruments
 
10,939
 
10,939
Customer deposits
 
183,119
 
183,119
Debt issued measured at amortized cost
 
110,491
 
110,491
Other financial liabilities measured at amortized cost
 
7,992
 
7,992
Total financial liabilities measured at amortized cost
 
432,070
 
0
 
432,070
Financial liabilities at fair value held for trading
 
5,711
 
5,711
Derivative financial instruments
 
68,129
 
(308)
 
67,821
Brokerage payables designated at fair value
 
316
 
316
Debt issued designated at fair value
 
44,909
 
44,909
Other financial liabilities designated at fair value
 
7,574
 
7,574
Total financial liabilities measured at fair value through profit or loss
 
126,639
 
(308)
 
126,331
Provisions and contingent liabilities
 
9,070
 
(18)
 
9,052
Other non-financial liabilities
 
3,832
 
69
 
3,901
Total liabilities
 
571,611
 
(256)
 
571,355
Non-controlling interests
 
(285)
 
(285)
Fair value of net assets acquired
 
32,771
 
0
 
32,771
Settlement of pre-existing relationships
 
135
 
135
Provisional negative goodwill resulting from the acquisition
 
28,925
 
0
 
28,925
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
 
2,107
Other net income from financial instruments measured
 
at fair value through profit or loss
3,212
14
 
3,226
Net fee and commission income
6,071
(14)
6,056
Other income
305
 
305
Total revenues
11,695
0
 
11,695
Negative goodwill
 
0
Credit loss expense / (release)
306
(67)
 
239
Operating expenses
11,644
(4)
 
11,640
Operating profit / (loss) before tax
(255)
71
 
(184)
Tax expense / (benefit)
526
 
526
Net profit / (loss)
(781)
 
71
 
(711)
Net profit / (loss) attributable to non-controlling interests
4
 
4
Net profit / (loss) attributable to shareholders
(785)
 
71
 
(715)
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
 
1,113,238
 
(7,199)
 
1,106,039
 
1,137,531
 
(8,716)
 
1,128,815
of which: Loans and advances to customers
 
624,885
(7,199)
 
617,686
 
645,785
(8,716)
 
637,069
Total financial assets measured at fair value through profit or loss
 
474,415
 
7,006
 
481,421
 
483,261
 
8,459
 
491,719
of which: Financial assets at fair value held for trading
 
142,888
14,647
 
157,535
 
157,171
14,445
 
171,616
of which: Financial assets at fair value not held for trading
 
112,256
(7,642)
 
104,614
 
118,605
(5,987)
 
112,618
Financial assets measured at fair value through other comprehensive income
 
2,213
 
2,213
 
2,217
 
2,217
Non-financial assets
 
54,656
 
54,656
 
55,846
 
55,846
Total assets
 
1,644,522
 
(193)
 
1,644,329
 
1,678,856
 
(257)
 
1,678,598
Liabilities
Total financial liabilities measured at amortized cost
 
1,101,268
 
1,101,268
 
1,125,687
 
1,125,687
Total financial liabilities measured at fair value through profit or loss
 
433,739
 
(298)
 
433,441
 
440,569
 
(309)
 
440,260
of which: Derivative financial instruments
 
198,019
 
(298)
1
 
197,721
 
195,182
 
(309)
1
 
194,873
Provisions and contingent liabilities
 
11,515
(23)
 
11,493
 
12,951
(18)
 
12,933
Other non-financial liabilities
 
12,603
57
 
12,660
 
11,896
70
 
11,966
Total liabilities
 
1,559,125
 
(264)
 
1,558,861
 
1,591,104
 
(257)
 
1,590,847
Equity
Equity attributable to shareholders
 
84,856
 
71
 
84,926
 
87,116
 
0
 
87,116
of which: Retained earnings
 
76,726
71
 
76,796
 
78,297
0
 
78,297
Total equity
 
85,398
 
71
 
85,468
 
87,752
 
0
 
87,752
Total liabilities and equity
 
1,644,522
 
(193)
 
1,644,329
 
1,678,856
 
(257)
 
1,678,598
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
 
(0.7)
1
90.8
92.8
 
(0.9)
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
)
 
350
 
333
 
201
Provisions related to Credit Suisse loan commitments (IFRS
 
3,
Business Combinations
)
 
1,924
 
2,181
Provisions related to litigation, regulatory and similar matters
 
(IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
 
3,976
 
4,017
 
2,586
Acquisition-related contingent liabilities (IFRS 3,
Business Combinations
)
 
2,983
 
2,973
Other provisions
 
2,123
 
1,988
 
456
Total provisions and contingent liabilities
 
11,357
 
11,493
 
3,243
of which: Credit Suisse
 
8,787
 
9,141
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
 
2,586
 
130
 
129
 
197
 
3,042
Balance as of 30 September 2023
5
 
4,017
 
613
 
243
 
1,133
 
6,006
Increase in provisions recognized in the income statement
 
84
 
393
 
3
 
75
 
555
Release of provisions recognized in the income statement
 
(77)
 
(114)
 
0
 
(99)
 
(291)
Provisions used in conformity with designated purpose
 
(125)
 
(158)
 
(8)
 
(9)
 
(299)
Foreign currency translation and other movements
 
76
 
8
 
21
 
23
 
128
Balance as of 31 December 2023
 
3,976
 
741
 
259
 
1,123
 
6,099
of which: Credit Suisse
 
2,165
 
519
 
114
 
918
 
3,717
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
 
1,182
 
159
 
8
 
308
 
771
 
158
 
2,586
Balance as of 30 September 2023
 
1,160
 
149
 
9
 
272
 
2,264
 
163
 
4,017
Increase in provisions recognized in the income statement
 
50
 
0
 
6
 
15
 
12
 
1
 
84
Release of provisions recognized in the income statement
 
(1)
 
0
 
0
 
(1)
 
(46)
 
(29)
 
(77)
Provisions used in conformity with designated purpose
 
(22)
 
0
 
0
 
0
 
(101)
 
(1)
 
(125)
Foreign currency translation and other movements
 
48
 
7
 
0
 
9
 
11
 
0
 
76
Balance as of 31 December 2023
 
1,235
 
157
 
15
 
294
 
2,141
 
134
 
3,976
of which: Credit Suisse
 
15
 
1
 
2
 
8
 
2,137
 
2
 
2,165
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.
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
61
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:
 
Beginning in 2013, numerous authorities commenced investigations
concerning possible
 
manipulation of
 
foreign
 
exchange markets
 
and
 
precious
 
metals prices.
 
As
 
a
 
result
 
of these
investigations,
 
UBS
 
entered
 
into
 
resolutions
 
with
 
Swiss,
 
US
 
and
 
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:
 
Putative class actions have been filed since 2013 in US federal
 
courts and
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.
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
62
Provisions and contingent liabilities
 
(continued)
LIBOR and other benchmark-related regulatory
 
matters:
 
Numerous government agencies conducted investigations
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain times. UBS reached settlements or otherwise concluded investigations relating to benchmark interest rates
with the investigating authorities. UBS
 
was granted conditional leniency or
 
conditional immunity from authorities
in certain jurisdictions,
 
including the Antitrust
 
Division of the DOJ
 
and the Swiss Competition
 
Commission (WEKO),
in connection with potential antitrust or competition law violations related to certain rates. However, UBS has not
reached a final settlement with WEKO, as the
 
Secretariat of WEKO has asserted that UBS does
 
not qualify for full
immunity.
LIBOR and
 
other benchmark-related
 
civil litigation:
 
A number
 
of putative
 
class actions
 
and other
 
actions are
 
pending
in the federal
 
courts in New
 
York against UBS
 
and numerous other banks
 
on behalf of
 
parties who transacted in
certain interest rate benchmark-based derivatives. Also
 
pending in the US
 
and in other jurisdictions are
 
a number
of other
 
actions asserting losses
 
related to
 
various products whose
 
interest rates were
 
linked to
 
LIBOR and other
benchmarks, including
 
adjustable rate
 
mortgages, preferred
 
and debt securities,
 
bonds pledged
 
as collateral, loans,
depository
 
accounts,
 
investments
 
and
 
other
 
interest-bearing
 
instruments.
 
The
 
complaints
 
allege
 
manipulation,
through
 
various
 
means,
 
of
 
certain
 
benchmark
 
interest
 
rates,
 
including
 
USD LIBOR,
 
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
 
– In 2017, the court
 
dismissed the CHF LIBOR action on standing
 
grounds and failure to state a
 
claim.
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
 
–
 
In
 
2017,
 
the
 
court
 
in
 
the
 
EURIBOR
 
lawsuit
 
dismissed
 
the
 
case
 
as
 
to
 
UBS
 
and
 
certain
 
other
 
foreign
defendants for lack of personal jurisdiction.
 
Plaintiffs have appealed.
 
GBP LIBOR
 
– The court dismissed the GBP LIBOR action
 
in 2019. Plaintiffs have appealed.
 
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
63
Provisions and contingent liabilities
 
(continued)
Government bonds:
 
Putative class actions
 
have been filed
 
since 2015 in
 
US federal courts
 
against UBS and
 
other
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
 
– In January
 
2017, Credit Suisse
 
Securities (USA)
LLC
 
(CSS
 
LLC)
 
and
 
its
 
current
 
and
 
former
 
US
 
subsidiaries
 
and
 
US
 
affiliates
 
reached
 
a
 
settlement
 
with
 
the
 
US
Department of
 
Justice (DOJ)
 
related to
 
its legacy
 
Residential
 
Mortgage-Backed
 
Securities (RMBS)
 
business, a
 
business
conducted through
 
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.
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
64
Provisions and contingent liabilities
 
(continued)
Civil litigation: Repurchase litigations
 
– CSS LLC and/or certain of its affiliates
 
have also been named as defendants
in various
 
civil litigation
 
matters related to
 
their roles
 
as issuer,
 
sponsor, depositor, underwriter
 
and/or servicer
 
of
RMBS
 
transactions.
 
These
 
cases
 
currently
 
include
 
repurchase
 
actions
 
by
 
RMBS
 
trusts
 
and/or
 
trustees,
 
in
 
which
plaintiffs
 
generally
 
allege
 
breached
 
representations
 
and
 
warranties
 
in
 
respect
 
of
 
mortgage
 
loans
 
and
 
failure
 
to
repurchase such
 
mortgage loans
 
as required
 
under the
 
applicable agreements. The
 
amounts disclosed
 
below do
not reflect actual realized plaintiff losses to date 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.
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
65
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
 
– In August 2020,
 
members of the
 
ICE LIBOR panel,
 
including Credit Suisse
 
Group AG and
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
 
– In February 2015,
 
various banks that
 
served on the Swiss
 
franc LIBOR panel,
 
including Credit
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 –
 
Credit Suisse Group AG and affiliates
 
as well as other financial institutions
 
have been
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.
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
66
Provisions and contingent liabilities
 
(continued)
Treasury markets
 
litigation
 
– CSS
 
LLC, along
 
with over
 
20 other
 
primary dealers
 
of US
 
treasury securities,
 
was named
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
 
– Credit Suisse
 
Group AG and
 
certain of its affiliates,
 
together with other
 
financial institutions,
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:
 
Credit
 
Suisse Group
 
AG and
 
affiliates, along
 
with other
 
financial institutions,
 
have
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:
 
In
 
June
 
2017,
 
Credit
 
Suisse
 
Group
 
AG
 
and
 
affiliates,
 
along
 
with
 
other
 
financial
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:
 
Credit Suisse Group
 
AG and certain
 
of its affiliates,
 
as well as
 
other financial institutions,
 
were
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.
 
 
 
 
UBS Group fourth quarter 2023 report |
Consolidated financial information | UBS Group
 
AG interim consolidated financial information
 
(unaudited)
 
67
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.
 
 
 
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(unaudited)
 
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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 |
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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 |
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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
 
1.19
 
1.09
 
1.08
 
1.13
 
1.12
 
1.05
 
1.12
 
1.05
1 EUR
 
1.10
 
1.06
 
1.07
 
1.08
 
1.08
 
1.04
 
1.08
 
1.05
1 GBP
 
1.28
 
1.22
 
1.21
 
1.25
 
1.26
 
1.19
 
1.25
 
1.23
100 JPY
 
0.71
 
0.67
 
0.76
 
0.68
 
0.69
 
0.73
 
0.70
 
0.76
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
 
592
 
914
 
1,869
 
3,963
 
8,500
Underlying tax expense / (benefit)
 
(329)
 
623
 
280
 
1,194
 
1,909
NCI
 
1
 
4
 
4
 
16
 
32
Underlying net profit / (loss)
 
920
 
287
 
1,585
 
2,753
 
6,559
Underlying net profit / (loss), annualized
 
3,681
 
1,148
 
6,339
 
2,753
 
6,559
Tangible equity
 
79,770
 
77,465
 
50,609
 
79,770
 
50,609
Average tangible equity
 
78,617
 
78,506
 
50,078
 
68,171
 
51,249
CET1 capital
 
79,263
 
78,587
 
45,457
 
79,263
 
45,457
Average CET1 capital
 
78,925
 
79,422
 
45,061
 
66,449
 
44,856
Underlying return on tangible equity (%)
 
4.7
 
1.5
 
12.7
 
4.0
 
12.8
Underlying return on common equity tier 1 capital
 
4.7
 
1.4
 
14.1
 
4.1
 
14.6
 
 
 
 
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
 
provides the
 
following information
 
about UBS:
 
results-related
news
 
releases;
 
financial
 
information,
 
including
 
results-related
 
filings
 
with
 
the
 
US
 
Securities
 
and
 
Exchange
Commission (the SEC);
 
information for shareholders,
 
including UBS 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
 
for more information.
 
 
 
 
UBS Group fourth quarter 2023 report |
Appendix
 
81
Cautionary statement
 
regarding forward-looking statements
 
|
 
This report contains
 
statements that
 
constitute “forward-looking
 
statements,” including
 
but
not limited to management’s
 
outlook for UBS’s financial performance,
 
statements relating to the
 
anticipated effect of transactions
 
and strategic initiatives on
UBS’s
 
business and
 
future
 
development and
 
goals
 
or
 
intentions to
 
achieve climate,
 
sustainability and
 
other social
 
objectives. While
 
these
 
forward-looking
statements represent
 
UBS’s judgments,
 
expectations and
 
objectives concerning the
 
matters described,
 
a number
 
of risks,
 
uncertainties and
 
other important
factors could cause actual developments and results to differ materially from UBS’s expectations. In particular,
 
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 |
 
Numbers presented throughout this report may not add up
 
precisely to the totals provided in the tables and text.
 
Percentages and percent changes
disclosed in text and tables are
 
calculated on the basis of unrounded
 
figures. Absolute changes between reporting periods disclosed in
 
the text, which can be
derived from numbers presented in related tables, are calculated on
 
a rounded basis.
Tables |
 
Within tables, blank fields generally indicate non-applicability or that presentation of any content would not be meaningful, or that information is not
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis.
 
Values
that are zero on a rounded basis can be either negative
 
or positive on an actual basis.
Websites |
 
In this report, any
 
website addresses are provided
 
solely for information
 
and are not intended
 
to be active links.
 
UBS is not incorporating
 
the contents
of any such websites into this report.
edgarq23ubsgroupagp85i0
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-
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
 
___
Title:
 
Group Chief Executive Officer
 
By:
 
/s/ Todd Tuckner
 
_
Name:
 
Todd Tuckner
Title:
 
Group Chief Financial Officer
By:
 
/s/ Steffen Henrich
 
____________
Title:
 
Group Controller
 
UBS AG
By:
 
/s/
 
Sergio Ermotti
 
_
Title:
 
President of the Executive Board
By:
 
/s/ Todd Tuckner
 
_
Name:
 
Todd Tuckner
Title:
 
Chief Financial Officer
By:
 
/s/ Steffen Henrich
 
_____________
Title:
 
Controller
 
Credit Suisse AG
By:
 
/s/
 
Ulrich Körner
 
______________
Title:
 
Chief Executive Officer
By:
 
/s/
 
Simon Grimwood
 
_
Title:
 
Chief Financial Officer

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘6-K’ Filing    Date    Other Filings
2/9/32
12/4/30
Filed on:2/6/24
For Period end:12/31/23
12/30/23
6/23/04
5/17/04
5/10/046-K
 List all Filings 
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