6-K 1 edgar3q24ubsgroup.htm edgar3q24ubsgroup
 
 
 
 
 
 
 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE
 
ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: October 30, 2024
UBS Group AG
(Registrant's
 
Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's
 
Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
 
(Address of principal executive offices)
Commission File Number: 1-15060
 
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 Third Quarter 2024 Report of UBS Group
 
AG, which appears immediately following
this page.
 
edgarq24ubsgroupagp3i0
 
 
 
UBS
 
Group
Third quarter
 
2024 report
 
 
 
 
 
Corporate calendar UBS Group
Publication of the UBS Group fourth quarter 2024
 
report
 
Tuesday,
 
4 February 2025
Information about future publication dates is available
 
at
ubs.com/global/en/investor-relations/events/calendar.html
Publication of the UBS AG third quarter 2024 report
 
Friday, 8 November 2024
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
mediarelations@ubs.com
London +44-20-7567 4714
 
ubs-media-relations@ubs.com
New York +1-212-882 5858
 
mediarelations@ubs.com
Hong Kong +852-2971 8200
sh-mediarelations-ap@ubs.com
Office of the Group Company Secretary
The Group Company Secretary handles
 
inquiries directed to the Chairman or to
other members of the Board of Directors.
UBS Group AG, Office of the Group
Company Secretary
PO Box, CH-8098 Zurich, Switzerland
sh-company-secretary@ubs.com
Zurich +41-44-235 6652
Shareholder Services
UBS’s Shareholder Services team, a unit
of the Group Company Secretary’s office,
manages relationships with shareholders
and the registration of UBS Group AG
registered shares.
 
UBS Group AG, Shareholder Services
PO Box, CH-8098 Zurich, Switzerland
sh-shareholder-services@ubs.com
Zurich +41-44-235 6652
US Transfer Agent
For global registered share-related
inquiries in the US.
Computershare Trust Company NA
PO Box 43006
Providence, RI, 02940-3006, USA
Shareholder online inquiries:
www.computershare.com/us/
investor-inquiries
Shareholder website:
computershare.com/investor
Calls from the US
 
+1-866-305-9566
Calls from outside the US
+1-781-575-2623
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
6
2.
UBS business divisions
 
and Group Items
18
22
25
28
31
33
3.
Risk, capital, liquidity and funding,
and balance sheet
35
40
50
51
54
4.
Consolidated
financial statements
56
Appendix
97
101
103
104
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report
 
2
Terms used in this report, unless the context requires otherwise
“UBS”, “UBS Group”, “UBS Group
 
AG consolidated”, “Group”, “we”,
 
“us” and “our”
UBS Group AG and its consolidated subsidiaries
“UBS AG” and “UBS
 
AG consolidated”
 
UBS AG and its consolidated subsidiaries
“Credit Suisse AG” and “Credit
 
Suisse AG consolidated”
Credit Suisse AG and its consolidated subsidiaries
 
before the merger
with UBS AG
“Credit Suisse Group“ and “Credit Suisse Group
 
AG consolidated”
Pre-acquisition Credit Suisse Group
”Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries
 
before the merger
with UBS AG, Credit Suisse Services
 
AG, and other small former
Credit Suisse Group entities now directly held by UBS Group
 
AG
“UBS Group AG” and “UBS
 
Group AG standalone”
 
UBS Group AG on a standalone basis
“UBS AG standalone”
 
UBS AG on a standalone basis
“UBS Switzerland AG” and “UBS
 
Switzerland AG standalone”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
 
UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and
 
“UBS Americas Holding LLC consolidated”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e. 1,000,000
“1bn”
One billion, i.e. 1,000,000,000
“1trn”
One trillion, i.e. 1,000,000,000,000
In this report, unless the context requires otherwise,
 
references to any gender shall apply to all genders.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or
 
future financial performance,
financial position
 
or cash
 
flows other
 
than a
 
financial measure
 
defined or
 
specified in
 
the applicable
 
recognized
accounting standards
 
or
 
in other
 
applicable regulations.
 
We
 
report
 
a
 
number of
 
APMs
 
in
 
the discussion
 
of
 
the
financial and
 
operating performance
 
of the
 
Group, our
 
business divisions
 
and Group
 
Items. We
 
use APMs
 
to provide
a
 
more
 
complete
 
picture of
 
our
 
operating performance
 
and
 
to
 
reflect
 
management’s view
 
of
 
the
 
fundamental
drivers
 
of
 
our
 
business
 
results. A
 
definition
 
of
 
each
 
APM,
 
the
 
method
 
used
 
to
 
calculate
 
it
 
and
 
the
 
information
content are presented
 
under “Alternative performance measures”
 
in the
 
appendix to this
 
report. Our APMs
 
may
qualify
 
as
 
non-GAAP
 
measures
 
as
 
defined
 
by
 
US
 
Securities
 
and
 
Exchange
 
Commission
 
(SEC)
 
regulations.
 
Our
underlying results are APMs and are non-GAAP
 
financial measures.
›
Refer to the “Group performance” section of this report and to “Alternative performance measures” in the
appendix to this report for additional information about underlying results
Comparability
Comparative information in this report is presented
 
as follows.
Profit and
 
loss information for
 
all quarters
 
covered by this
 
report and
 
for 2024
 
year-to-date information is
 
based
entirely
 
on
 
consolidated
 
data
 
following
 
the
 
acquisition
 
of
 
the
 
Credit
 
Suisse
 
Group.
 
Comparative
 
year-to-date
information for
 
2023 includes
 
four months
 
(June to
 
September 2023)
 
of post-acquisition
 
consolidated data
 
and
five months of UBS Group data only (January
 
to May 2023).
All balance sheet information presented in this
 
report includes only post-acquisition consolidated
 
information.
 
Significant regulated subsidiary and sub-group
 
information
Financial and regulatory key figures
 
for our significant regulated subsidiaries and sub-groups
 
will be published on
8 November 2024 and
 
will be
 
available under “Holding
 
company and
 
significant regulated subsidiaries
 
and sub-
groups” at
ubs.com/investors
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report
 
3
Our key figures
As of or for the quarter ended
As of or year-to-date
USD m, except where indicated
30.9.24
30.6.24
31.12.23
1
30.9.23
1
30.9.24
30.9.23
1
Group results
Total revenues
 
12,334
 
11,904
 
10,855
 
11,695
 
36,976
 
29,979
Negative goodwill
 
27,264
Credit loss expense / (release)
 
121
 
95
 
136
 
239
 
322
 
901
Operating expenses
 
10,283
 
10,340
 
11,470
 
11,640
 
30,880
 
27,336
Operating profit / (loss) before tax
 
1,929
 
1,469
 
(751)
 
(184)
 
5,773
 
29,006
Net profit / (loss) attributable to shareholders
 
1,425
 
1,136
 
(279)
 
(715)
 
4,315
 
27,645
Diluted earnings per share (USD)
2
 
0.43
 
0.34
 
(0.09)
 
(0.22)
 
1.29
 
8.46
Profitability and growth
3,4
Return on equity (%)
 
6.7
 
5.4
 
(1.3)
 
(3.4)
 
6.8
 
52.1
Return on tangible equity (%)
 
7.3
 
5.9
 
(1.4)
 
(3.7)
 
7.4
 
57.7
Underlying return on tangible equity (%)
5
 
9.0
 
8.4
 
4.8
 
1.5
 
9.1
 
3.8
Return on common equity tier 1 capital (%)
 
7.6
 
5.9
 
(1.4)
 
(3.7)
 
7.5
 
60.0
Underlying return on common equity tier 1 capital (%)
5
 
9.4
 
8.4
 
4.8
 
1.5
 
9.2
 
4.0
Return on leverage ratio denominator, gross (%)
 
3.1
 
3.0
 
2.6
 
2.8
 
3.1
 
3.0
Cost / income ratio (%)
6
 
83.4
 
86.9
 
105.7
 
99.5
 
83.5
 
91.2
Underlying cost / income ratio (%)
5,6
 
78.5
 
80.6
 
93.0
 
89.3
 
78.8
 
85.1
Effective tax rate (%)
 
26.0
 
20.0
n.m.
7
n.m.
7
 
24.4
 
4.6
Net profit growth (%)
n.m.
 
(95.8)
n.m.
n.m.
 
(84.4)
 
362.5
Resources
3
Total assets
 
1,623,941
 
1,560,976
 
1,716,924
 
1,643,684
 
1,623,941
 
1,643,684
Equity attributable to shareholders
 
87,025
 
83,683
 
85,624
 
83,265
 
87,025
 
83,265
Common equity tier 1 capital
8
 
74,213
 
76,104
 
78,002
 
76,926
 
74,213
 
76,926
Risk-weighted assets
8
 
519,363
 
511,376
 
546,505
 
546,491
 
519,363
 
546,491
Common equity tier 1 capital ratio (%)
8
 
14.3
 
14.9
 
14.3
 
14.1
 
14.3
 
14.1
Going concern capital ratio (%)
8
 
17.5
 
18.0
 
16.8
 
16.4
 
17.5
 
16.4
Total loss-absorbing capacity ratio (%)
8
 
37.5
 
38.7
 
36.4
 
35.4
 
37.5
 
35.4
Leverage ratio denominator
8
 
1,608,341
 
1,564,201
 
1,695,403
 
1,615,817
 
1,608,341
 
1,615,817
Common equity tier 1 leverage ratio (%)
8
 
4.6
 
4.9
 
4.6
 
4.8
 
4.6
 
4.8
Liquidity coverage ratio (%)
9
 
199.2
 
212.0
 
215.7
 
196.5
 
199.2
 
196.5
Net stable funding ratio (%)
 
126.9
 
128.0
 
124.7
 
120.7
 
126.9
 
120.7
Other
Invested assets (USD bn)
4,10
 
6,199
 
5,873
 
5,714
 
5,373
 
6,199
 
5,373
Personnel (full-time equivalents)
 
109,396
 
109,991
 
112,842
 
115,981
 
109,396
 
115,981
Market capitalization
2,11
 
106,528
 
101,903
 
107,355
 
85,768
 
106,528
 
85,768
Total book value per share (USD)
2
 
27.32
 
26.13
 
26.68
 
25.75
 
27.32
 
25.75
Tangible book value per share (USD)
2
 
25.10
 
23.85
 
24.34
 
23.44
 
25.10
 
23.44
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of 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
 
“Targets,
 
capital guidance and
 
ambitions” section of
 
the UBS Group
 
Annual Report 2023,
available under “Annual
 
reporting” at ubs.com/investors,
 
for more information about our
 
performance targets.
 
4 Refer to “Alternative
 
performance measures” in the appendix
 
to this report for the definition
 
and
calculation method.
 
5 Refer to the “Group
 
performance” section of this
 
report for more information
 
about underlying results.
 
6 Negative goodwill is
 
not used in the
 
calculation as it is
 
presented in a
 
separate
reporting line and is
 
not part of total
 
revenues.
 
7 The effective tax
 
rate for the fourth
 
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 fram
 
ework 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 65 data
 
points in the third quarter of 2024,
 
61 data points in the second quarter of
 
2024, 63 data points in
the fourth quarter of 2023 and
 
63 data points in the third quarter
 
of 2023. Refer to the “Liquidity
 
and funding management” section of
 
this report for more information.
 
10 Consists of invested assets for
 
Global
Wealth Management,
 
Asset Management
 
(including invested
 
assets from
 
associates) and
 
Personal &
 
Corporate Banking.
 
Refer to
 
“Note 32
 
Invested assets
 
and net
 
new money”
 
in the
 
“Consolidated financial
statements” section of the UBS Group
 
Annual Report 2023, available
 
under “Annual
 
reporting” at ubs.com/investors,
 
for more information.
 
11 The calculation of market
 
capitalization reflects total shares
 
issued
multiplied by the share price at the end of the period.
 
 
UBS Group third quarter 2024 report |
UBS Group | Recent developments
 
4
UBS Group
Management report
Recent developments
Regulatory capital developments and capital
 
returns guidance
In
 
the
 
third
 
quarter
 
of
 
2024,
 
reflecting
 
our
 
strong
 
capital
 
position,
 
completion
 
of
 
legal
 
entity
 
mergers,
 
overall
progress
 
on
 
the
 
integration
 
and
 
the
 
winding
 
down
 
of
 
Non-core
 
and
 
Legacy,
 
we
 
voluntarily
 
accelerated
 
the
amortization of
 
the remaining
 
transitional purchase
 
price allocation
 
(PPA)
 
adjustments for
 
common equity
 
tier 1
(CET1) capital purposes. This resulted in a USD 3.4bn decrease in CET1 capital and a CET1 capital ratio of 14.3%.
Excluding this adjustment,
 
the CET1
 
capital ratio would
 
have been 14.9%.
 
In connection with
 
the acquisition of
the
 
Credit
 
Suisse
 
Group
 
in
 
2023,
 
the
 
Swiss
 
Financial
 
Market
 
Supervisory
 
Authority
 
(FINMA)
 
had
 
approved
neutralizing
 
a
 
CET1
 
capital
 
effect
 
of
 
USD 5.0bn
 
(net
 
of
 
tax)
 
of
 
interest-rate-
 
and
 
own-credit-driven
 
fair
 
value
adjustments for UBS
 
Group AG that are
 
expected to fully reverse
 
into income and
 
be accretive to CET1
 
capital over
time. The
 
transitional treatment was
 
subject to linear
 
amortization at the
 
rate of USD 0.3bn
 
per quarter through
30 June 2027. This
 
quarterly
 
amortization was eliminated
 
upon fully
 
amortizing the transitional
 
treatment in
 
the
third
 
quarter
 
of
 
2024.
 
As
 
these
 
transitional
 
adjustments only
 
applied
 
to
 
UBS
 
Group
 
AG,
 
the
 
regulatory
 
capital
position
 
of
 
UBS
 
AG
 
was
 
not
 
impacted
 
by
 
the
 
decision
 
to
 
fully
 
amortize
 
them.
 
On
 
a
 
standalone
 
basis
 
as
 
of
30 September 2024, UBS AG’s fully applied
 
CET1 capital ratio is expected to be
 
around 13.3%.
We expect
 
that the
 
adoption of
 
the final
 
Basel III standards
 
in January
 
2025 will
 
lead to
 
a low
 
single-digit percentage
increase in the UBS
 
Group’s RWA,
 
reducing the CET1 capital
 
ratio by around 30
 
basis points. This
 
estimate is based
on
 
our
 
current understanding
 
of
 
the
 
relevant
 
standards as
 
we
 
are
 
in
 
an
 
active
 
dialogue
 
with
 
FINMA
 
regarding
various aspects of the final rules. We continue to expect to operate with a CET1 capital ratio of around 14% after
the implementation of the final Basel III standards.
We expect to complete our planned USD 1bn of share repurchases
 
in the fourth quarter of 2024. Our ambition to
continue
 
share
 
repurchases
 
in
 
2025
 
and
 
for
 
our
 
capital
 
returns
 
in
 
2026
 
to
 
exceed
 
pre-acquisition
 
levels
 
is
unchanged.
 
Our
 
ambitions
 
beyond
 
2025
 
are
 
subject
 
to
 
our
 
assessment
 
of
 
any
 
proposed
 
requirements
 
from
Switzerland’s ongoing review of its capital regime.
›
Refer to “Amortization of transitional purchase price allocation adjustments for regulatory capital” in the “Capital
management”
 
section of this report for more information.
Integration of Credit Suisse
We continue to make progress related to the integration of Credit
 
Suisse, with the current focus on client account
and platform migrations.
Following the merger of UBS AG and Credit Suisse AG in May 2024 and the
 
transition to a single US intermediate
holding company in June
 
2024, the merger of
 
UBS Switzerland AG and Credit
 
Suisse (Schweiz) AG was
 
completed
on 1 July 2024 and was another critical step on
 
our integration roadmap.
In October 2024, we completed the migration of our Global
 
Wealth Management client accounts in Luxembourg
and Hong Kong to UBS
 
platforms and we plan to
 
migrate our Global Wealth
 
Management client accounts
 
booked
in
 
Singapore
 
and
 
Japan
 
before
 
the
 
end
 
of
 
2024.
 
In
 
Switzerland,
 
we
 
expect
 
the
 
next
 
phase
 
of
 
Global
 
Wealth
Management and Personal & Corporate Banking
 
client account migrations in the second quarter
 
of 2025.
 
In
 
the
 
third
 
quarter
 
of
 
2024,
 
we
 
realized
 
an
 
additional
 
USD 0.8bn
 
in
 
gross
 
cost
 
savings,
 
for
 
a
 
total
 
of
 
around
USD 6.8bn in annualized exit rate gross cost savings
 
compared with the 2022 combined cost base
 
of Credit Suisse
and UBS. We
 
expect to achieve
 
around USD 7.5bn of
 
gross cost savings
 
by the end
 
of 2024, or approximately
 
58%
of our ambition of around USD 13bn by the
 
end of 2026.
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Recent developments
 
5
Our
 
Non-core
 
and
 
Legacy
 
business
 
division
 
continues
 
to
 
actively
 
exit
 
positions
 
and
 
reduce
 
its
 
exposures.
 
On
13 August
 
2024,
 
UBS
 
entered
 
into
 
an
 
agreement
 
to
 
sell
 
Select
 
Portfolio
 
Servicing,
 
the
 
US
 
mortgage-servicing
business of Credit Suisse managed in the Non-core and Legacy business division. Completion of the
 
transaction is
subject to regulatory approvals and other customary closing conditions. The transaction
 
is expected to close in the
first quarter
 
of 2025. UBS
 
does not
 
expect to
 
recognize a
 
material profit
 
or loss
 
upon completion
 
of the
 
transaction.
Based on
 
balances as
 
of 30 September
 
2024, the
 
completion of
 
the transaction
 
would reduce
 
the Group’s
 
risk-
weighted
 
assets
 
(RWA)
 
by
 
around
 
USD 1.4bn
 
and
 
the
 
Group’s
 
leverage
 
ratio
 
denominator
 
(LRD)
 
by
 
around
USD 1.7bn.
In
 
October
 
2024, UBS
 
entered into
 
an
 
agreement to
 
sell
 
to American
 
Express Swiss
 
Holdings GmbH
 
(American
Express) its 50% interest in
 
Swisscard AECS GmbH (Swisscard),
 
a joint venture between UBS
 
and American Express
in Switzerland. In addition,
 
UBS and Swisscard entered into
 
an agreement to transition the
 
Credit Suisse-branded
card portfolios to UBS. Both
 
transactions are subject to certain
 
closing conditions and are not
 
expected to have a
material impact for UBS.
 
Regulatory and legal developments
Withholding tax exemption period for too-big-to-fail
 
instruments
In August
 
2024, the
 
Swiss Federal
 
Council launched
 
a consultation
 
related to
 
the existing
 
withholding
 
tax exemption
that
 
applies
 
to
 
too-big-to-fail instruments
 
issued
 
by
 
no
 
later
 
than
 
31 December 2026.
 
The
 
Federal Council
 
had
recommended an
 
unlimited extension
 
of the
 
exemption as
 
part of
 
a broader reform
 
package in
 
its April
 
2024 report
on banking stability. As these reforms are not expected to enter into force before the expiry of the existing special
rules,
 
the
 
Swiss
 
Federal
 
Council
 
proposes
 
to
 
extend
 
the
 
current
 
exemption,
 
from
 
31 December
 
2026
 
to
31 December 2031, to ensure that banks can continue
 
to issue capital instruments on competitive terms.
 
Swiss legislators postpone the review of a
 
public liquidity backstop
In
 
August
 
2024,
 
the Swiss
 
Economic Affairs
 
and
 
Taxation
 
Committee of
 
the Council
 
of
 
States deferred
 
further
deliberations
 
on the
 
introduction of
 
a public
 
liquidity backstop
 
until the
 
Swiss parliamentary
 
investigation
 
committee
publishes its report on the failure
 
of the Credit Suisse Group,
 
which is expected to
 
be released by the end of
 
2024.
 
FINMA suspends annual approval of UBS’s recovery
 
and emergency plans
 
In
 
October
 
2024,
 
FINMA
 
published
 
its
 
2024
 
resolution
 
reporting
 
for
 
UBS.
 
FINMA
 
noted
 
that
 
if
 
the
 
preferred
resolution
 
strategy
 
was
 
applied,
 
UBS
 
would
 
be
 
resolvable
 
by
 
means
 
of
 
a
 
single
 
point
 
of
 
entry
 
recapitalization.
Considering the ongoing integration activities and the additional requirements for alternative resolution strategies
following
 
the
 
Credit
 
Suisse
 
crisis,
 
including
 
the
 
need
 
for
 
legislative
 
changes,
 
FINMA
 
announced
 
that
 
it
 
had
suspended the annual
 
approval of UBS’s
 
recovery and emergency
 
plans. UBS has
 
started working on
 
the new plans
in close dialogue with FINMA.
Switzerland implements the Income Inclusion Rule
In September 2024, the Swiss
 
Federal Council introduced the Income
 
Inclusion Rule (the IIR), a measure developed
by the Organisation
 
for Economic Co-operation and
 
Development (the OECD) as
 
part of the
 
minimum corporate
taxation rules applicable to corporate groups
 
with a worldwide turnover of at
 
least EUR 750m. Under the IIR,
 
the
profits of foreign subsidiaries and branches of Swiss corporate groups will be taxed at a minimum rate of 15% on
the OECD global minimum
 
tax base with
 
respect to each jurisdiction
 
in which the corporate
 
groups operate.
 
The
IIR complements
 
the Swiss
 
supplementary
 
tax that
 
was introduced
 
in January
 
2024. The
 
IIR will
 
apply from
 
1 January
2025, and UBS expects the overall tax impact from
 
the IIR will be limited,
 
given that UBS is subject to a corporate
tax burden of more than 15% in the vast majority of countries
 
in which it operates.
Mutual recognition agreement with the UK submitted
 
to the Swiss Parliament
In
 
September
 
2024,
 
the
 
Swiss
 
Federal
 
Council
 
submitted
 
for
 
parliamentary
 
approval
 
a
 
mutual
 
recognition
agreement
 
(an
 
MRA)
 
with
 
the
 
UK
 
regarding
 
financial
 
services.
 
The
 
agreement
 
facilitates
 
cross-border
 
financial
activities based
 
on a
 
new model
 
for regulatory
 
cooperation and
 
an outcomes-based
 
mutual recognition
 
of domestic
rules.
 
The
 
MRA
 
is
 
supplemented
 
by
 
an
 
enhanced
 
and
 
closer
 
supervisory
 
process
 
and
 
additional
 
supervisory
arrangements where new market access
 
is granted. It is expected
 
that the Parliaments in Switzerland and
 
the UK
will grant approval for the MRA in 2025.
 
Developments related to the final Basel III implementation
In Switzerland,
 
the amendments
 
to the
 
Capital Adequacy
 
Ordinance that
 
will incorporate
 
the final
 
Basel III standards
into Swiss law are still scheduled to enter into force on 1 January 2025, as confirmed
 
by the Swiss Federal Council
in June 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Recent developments
 
6
We expect that the adoption
 
of the final Basel III standards
 
in January 2025 will
 
lead to low single-digit percentage
increases in
 
the UBS
 
Group’s RWA
 
and LRD,
 
reducing the
 
CET1 capital
 
ratio by
 
around 30
 
basis points
 
and the
 
CET1
leverage
 
ratio
 
by
 
around
 
10 basis
 
points.
 
This
 
estimate
 
is
 
based
 
on
 
our
 
current
 
understanding
 
of
 
the
 
relevant
standards,
 
as we are in an
 
active dialogue with FINMA
 
regarding various aspects
 
of the final rules.
 
Our estimate for
the RWA and CET1 capital ratio does not
 
take into account the impact of the output floor,
 
which is to be phased
in over time.
In
 
September
 
2024,
 
the
 
UK
 
Prudential
 
Regulatory
 
Authority
 
(the
 
PRA)
 
published
 
its
 
final
 
rules
 
covering
 
the
implementation of
 
the final Basel III
 
standards. As
 
part of the
 
package, the PRA
 
announced the
 
pushing back
 
of the
implementation date,
 
from 1 July
 
2025 to
 
1 January 2026,
 
with full
 
phase-in of
 
the output
 
floor by
 
1 January 2030.
The overall impact on UBS is expected to be
 
limited.
 
In the US,
 
the banking agencies, including the
 
Federal Reserve Board, have been
 
discussing amendments to their
original proposals
 
regarding the
 
implementation
 
of the
 
final Basel III
 
standards.
 
The banking
 
agencies have
 
indicated
that they plan to issue a revised proposal before
 
issuing the final rules.
 
The Federal Reserve Board stress capital buffer
 
requirements
In August 2024, the Federal Reserve Board
 
assigned UBS Americas Holding LLC a stress capital
 
buffer (an SCB) of
9.3% as of 1
 
October 2024 (previously 9.1%)
 
under the Federal Reserve
 
Board’s SCB rule, resulting in
 
a total CET1
capital requirement of 13.8%.
 
The SCB for our
 
US-based intermediate holding
 
company is based
 
on the previously
released
 
results
 
of the
 
Federal Reserve
 
Board’s 2024
 
Dodd–Frank Act
 
Stress
 
Test
 
(DFAST),
 
where
 
UBS Americas
Holding LLC exceeded the minimum capital
 
requirements under the severely adverse scenario.
 
Group performance
 
Income statement
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
2Q24
3Q23
30.9.24
30.9.23
1
Net interest income
 
1,794
 
1,535
 
2,107
 
17
 
(15)
 
5,270
 
5,202
Other net income from financial instruments measured
 
at fair value through profit or loss
 
3,681
 
3,684
 
3,226
 
0
 
14
 
11,547
 
8,425
Net fee and commission income
 
6,517
 
6,531
 
6,056
 
0
 
8
 
19,540
 
15,790
Other income
 
341
 
154
 
305
 
122
 
12
 
619
 
563
Total revenues
 
12,334
 
11,904
 
11,695
 
4
 
5
 
36,976
 
29,979
Negative goodwill
 
27,264
Credit loss expense / (release)
 
121
 
95
 
239
 
28
 
(49)
 
322
 
901
Personnel expenses
 
6,889
 
7,119
 
7,567
 
(3)
 
(9)
 
20,957
 
17,838
General and administrative expenses
 
2,389
 
2,318
 
3,124
 
3
 
(24)
 
7,120
 
7,157
Depreciation, amortization and impairment of non-financial
 
assets
 
1,006
 
903
 
950
 
11
 
6
 
2,804
 
2,341
Operating expenses
 
10,283
 
10,340
 
11,640
 
(1)
 
(12)
 
30,880
 
27,336
Operating profit / (loss) before tax
 
1,929
 
1,469
 
(184)
 
31
 
5,773
 
29,006
Tax expense / (benefit)
 
 
502
 
293
 
526
 
71
 
(5)
 
1,407
 
1,346
Net profit / (loss)
 
1,428
 
1,175
 
(711)
 
21
 
4,366
 
27,660
Net profit / (loss) attributable to non-controlling interests
 
3
 
40
 
4
 
(92)
 
(22)
 
51
 
15
Net profit / (loss) attributable to shareholders
 
1,425
 
1,136
 
(715)
 
25
 
4,315
 
27,645
Comprehensive income
Total comprehensive income
 
3,910
 
1,614
 
(2,622)
 
142
 
5,279
 
25,679
Total comprehensive income attributable to non-controlling interests
 
27
 
18
 
(8)
 
47
 
40
 
4
Total comprehensive income attributable to shareholders
 
3,883
 
1,596
 
(2,614)
 
143
 
5,239
 
25,675
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
7
Selected financial information of the business divisions and Group Items
For the quarter ended 30.9.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
 
6,199
 
2,394
 
873
 
2,645
 
262
 
(39)
 
12,334
of which: PPA effects and other integration items
1
 
224
 
278
 
185
 
(25)
 
662
Total revenues (underlying)
 
5,975
 
2,116
 
873
 
2,461
 
262
 
(14)
 
11,672
Credit loss expense / (release)
 
2
 
83
 
0
 
9
 
28
 
0
 
121
Operating expenses as reported
 
5,112
 
1,465
 
722
 
2,231
 
837
 
(84)
 
10,283
of which: integration-related expenses and PPA effects
2
 
419
 
198
 
86
 
156
 
270
 
(11)
 
1,119
Operating expenses (underlying)
 
4,693
 
1,267
 
636
 
2,076
 
567
 
(74)
 
9,165
Operating profit / (loss) before tax as reported
 
1,085
 
846
 
151
 
405
 
(603)
 
45
 
1,929
Operating profit / (loss) before tax (underlying)
 
1,280
 
766
 
237
 
377
 
(333)
 
60
 
2,386
For the quarter ended 30.6.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
 
6,053
 
2,272
 
768
 
2,803
 
401
 
(392)
 
11,904
of which: PPA effects and other integration items
1
 
233
 
246
 
310
 
(8)
 
780
Total revenues (underlying)
 
5,820
 
2,026
 
768
 
2,493
 
401
 
(384)
 
11,124
Credit loss expense / (release)
 
(1)
 
103
 
0
 
(6)
 
(1)
 
0
 
95
Operating expenses as reported
 
5,183
 
1,396
 
638
 
2,332
 
807
 
(15)
 
10,340
of which: integration-related expenses and PPA effects
2
 
523
 
182
 
98
 
245
 
325
 
(2)
 
1,372
Operating expenses (underlying)
 
4,660
 
1,213
 
540
 
2,087
 
481
 
(13)
 
8,969
Operating profit / (loss) before tax as reported
 
871
 
773
 
130
 
477
 
(405)
 
(377)
 
1,469
Operating profit / (loss) before tax (underlying)
 
1,161
 
710
 
228
 
412
 
(80)
 
(371)
 
2,060
For the quarter ended 30.9.23
3
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
 
5,953
 
2,517
 
775
 
2,162
 
366
 
(78)
 
11,695
of which: PPA effects and other integration items
1
 
388
 
333
 
251
 
(14)
 
958
Total revenues (underlying)
 
5,565
 
2,184
 
775
 
1,911
 
366
 
(64)
 
10,737
Credit loss expense / (release)
 
10
 
160
 
0
 
4
 
59
 
5
 
239
Operating expenses as reported
 
5,017
 
1,400
 
738
 
2,412
 
2,068
 
6
 
11,640
of which: integration-related expenses and PPA effects
2
 
448
 
174
 
126
 
368
 
920
 
(5)
 
2,031
of which: acquisition-related costs
 
26
 
26
Operating expenses (underlying)
 
4,569
 
1,226
 
612
 
2,043
 
1,149
 
(15)
 
9,583
Operating profit / (loss) before tax as reported
 
926
 
957
 
37
 
(254)
 
(1,762)
 
(89)
 
(184)
Operating profit / (loss) before tax (underlying)
 
986
 
798
 
163
 
(136)
 
(842)
 
(55)
 
914
1 Includes accretion of PPA
 
adjustments on financial instruments and other
 
PPA effects, as well
 
as temporary and incremental items directly
 
related to the integration.
 
2 Includes temporary, incremental
 
operating
expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group.
 
3 Comparative-period information has been restated for
changes in business division perimeters, Group Treasury
 
allocations and Non-core and Legacy cost allocations. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements”
 
section of this report.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
8
Selected financial information of the business divisions and Group Items (continued)
Year-to-date 30.9.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
 
18,395
 
7,089
 
2,416
 
8,199
 
1,664
 
(786)
 
36,976
of which: PPA effects and other integration items
1
 
691
 
780
 
787
 
(37)
 
2,221
Total revenues (underlying)
 
17,705
 
6,308
 
2,416
 
7,412
 
1,664
 
(749)
 
34,755
Credit loss expense / (release)
 
(2)
 
229
 
0
 
34
 
63
 
(2)
 
322
Operating expenses as reported
 
15,340
 
4,265
 
2,025
 
6,728
 
2,655
 
(132)
 
30,880
of which: integration-related expenses and PPA effects
2
 
1,347
 
540
 
255
 
543
 
837
 
(12)
 
3,511
Operating expenses (underlying)
 
13,993
 
3,725
 
1,770
 
6,185
 
1,817
 
(120)
 
27,370
Operating profit / (loss) before tax as reported
 
3,057
 
2,594
 
392
 
1,437
 
(1,054)
 
(652)
 
5,773
Operating profit / (loss) before tax (underlying)
 
3,713
 
2,354
 
647
 
1,193
 
(216)
 
(627)
 
7,063
Year-to-date 30.9.23
3,4
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
 
16,002
 
5,604
 
1,861
 
6,562
 
551
 
(602)
 
29,979
of which: PPA effects and other integration items
1
 
574
 
477
 
306
 
(20)
 
1,336
Total revenues (underlying)
 
15,428
 
5,128
 
1,861
 
6,257
 
551
 
(582)
 
28,643
Negative goodwill
 
27,264
 
27,264
Credit loss expense / (release)
 
174
 
398
 
1
 
142
 
178
 
7
 
901
Operating expenses as reported
 
12,663
 
2,996
 
1,649
 
6,302
 
3,304
 
422
 
27,336
of which: integration-related expenses and PPA effects
2
 
516
 
211
 
140
 
529
 
1,024
 
342
 
2,763
of which: acquisition-related costs
 
202
 
202
Operating expenses (underlying)
 
12,147
 
2,785
 
1,509
 
5,773
 
2,279
 
(122)
 
24,371
Operating profit / (loss) before tax as reported
 
3,165
 
2,210
 
211
 
118
 
(2,930)
 
(1,031)
 
27,264
 
29,006
Operating profit / (loss) before tax (underlying)
 
3,107
 
1,945
 
351
 
341
 
(1,906)
 
(467)
 
3,371
1 Includes accretion of PPA
 
adjustments on financial instruments and other
 
PPA effects, as well
 
as temporary and incremental items directly
 
related to the integration.
 
2 Includes temporary, incremental
 
operating
expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group.
 
3 Comparative-period information has been restated for
changes in business division perimeters, Group Treasury
 
allocations and Non-core and Legacy cost allocations.
 
Refer to “Note 3 Segment reporting” in the “Consolidated
 
financial statements” section of this report.
 
4 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated
 
financial statements” section of this report for more information.
Integration-related expenses, by business division and Group Items
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Global Wealth Management
 
420
 
536
 
446
 
1,388
 
513
Personal & Corporate Banking
 
172
 
159
 
148
 
470
 
177
Asset Management
 
86
 
98
 
126
 
255
 
140
Investment Bank
 
156
 
245
 
368
 
543
 
529
Non-core and Legacy
 
270
 
325
 
920
 
837
 
1,024
Group Items
 
21
 
8
 
(5)
 
30
 
342
Total integration-related expenses
 
1,124
 
1,370
 
2,003
 
3,523
 
2,727
of which: total revenues
 
35
 
26
 
0
 
97
 
0
of which: operating expenses
 
1,090
 
1,344
 
2,003
 
3,426
 
2,727
of which: personnel expenses
 
561
 
825
 
1,039
 
1,942
 
1,399
of which: general and administrative expenses
 
415
 
426
 
860
 
1,197
 
979
of which: depreciation, amortization and impairment of non-financial
 
assets
 
113
 
93
 
104
 
287
 
349
1 Comparative-period information has been restated for changes in business division perimeters, Group
 
Treasury allocations and Non-core and Legacy cost allocations.
 
Refer to “Note 3 Segment reporting” in the
“Consolidated financial statements” section of this report.
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
9
Underlying results
In addition to
 
reporting our
 
results in accordance
 
with IFRS
 
Accounting Standards,
 
we report underlying
 
results that
exclude items of profit or loss that management believes
 
are not representative of the underlying performance.
In
 
the
 
third
 
quarter
 
of
 
2024,
 
underlying
 
revenues
 
exclude
 
purchase
 
price
 
allocation
 
(PPA)
 
effects
 
and
 
other
integration items. PPA
 
effects mainly consist
 
of PPA
 
adjustments on financial
 
instruments measured at
 
amortized
cost, including
 
off-balance sheet
 
positions, arising
 
from the
 
acquisition of
 
the Credit
 
Suisse Group.
 
Accretion of
 
PPA
adjustments on financial
 
instruments is accelerated
 
when the related
 
financial instrument is
 
derecognized before
its contractual maturity. No adjustment is made for accretion of PPA on financial instruments within Non-core and
Legacy, due to the nature of its business model.
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.
 
Results: 3Q24 vs 3Q23
Reported operating profit before tax was USD
 
1,929m, compared with an operating loss
 
before tax of USD 184m,
reflecting lower
 
operating expenses,
 
an increase
 
in total
 
revenues and
 
lower net
 
credit loss
 
expenses. Total
 
revenues
increased by
 
USD 639m, or
 
5%,
 
to
 
USD 12,334m, and
 
included
 
a
 
decrease
 
of USD
 
296m
 
in
 
accretion
 
impacts
resulting from PPA adjustments on financial instruments and other PPA effects. The increase in total revenues was
driven by a
 
USD 461m increase
 
in net fee
 
and commission
 
income, a USD
 
142m increase
 
in net interest
 
income and
other net income from financial
 
instruments measured at
 
fair value through profit or
 
loss, and a USD 36m increase
in
 
other
 
income.
 
Operating
 
expenses
 
decreased
 
by
 
USD 1,357m,
 
or
 
12%,
 
to
 
USD 10,283m
 
and
 
included
 
a
USD 913m decrease
 
in integration-related expenses.
 
The decrease
 
in operating
 
expenses was
 
mainly driven
 
by a
USD 735m decrease
 
in general
 
and administrative
 
expenses and
 
a USD 678m
 
decrease in
 
personnel expenses,
 
partly
offset by a USD 56m increase in depreciation, amortization and impairment of non-financial assets.
 
Net credit loss
expenses were USD 121m, compared with USD
 
239m in the third quarter of 2023.
Underlying results 3Q24 vs 3Q23
Underlying results
 
for the
 
third quarter
 
of 2024
 
excluded PPA
 
effects and
 
other integration
 
items of
 
USD 662m
from total revenues
 
and also excluded
 
integration-related expenses
 
and PPA effects
 
of USD 1,119m from
 
operating
expenses.
 
On an underlying
 
basis, profit
 
before tax
 
increased by
 
USD 1,472m to
 
USD 2,386m,
 
reflecting a
 
USD 935m
 
increase
in underlying total revenues,
 
a USD 418m decrease in underlying
 
operating expenses and a
 
USD 118m decrease in
net credit loss expenses.
 
Total revenues: 3Q24 vs 3Q23
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 142m to USD 5,476m and included
 
a decrease of USD 156m in
 
accretion impacts
resulting from PPA adjustments on financial instruments and other PPA effects.
 
Global Wealth Management decreased by
 
USD 136m to USD 2,232m,
 
which included USD 221m of accretion
 
of
PPA adjustments on financial instruments and other PPA effects, compared with USD 371m in the third quarter of
2023.
 
Excluding
 
the
 
aforementioned
 
effects,
 
net
 
interest
 
income
 
decreased,
 
reflecting
 
lower
 
deposit
 
margins,
including the effects
 
of shifts to
 
lower-margin deposit
 
products and the
 
effects of liquidity
 
and funding costs,
 
partly
offset
 
by
 
higher
 
deposit
 
volumes. The
 
decrease
 
was
 
also
 
due
 
to
 
lower
 
loan
 
revenues,
 
reflecting
 
lower
 
average
volumes.
 
These decreases were
 
partly offset by
 
an increase
 
in transaction-based income,
 
mainly driven by
 
higher
levels of client activity.
Personal & Corporate Banking
 
decreased
 
by USD 106m to USD 1,638m,
 
which included USD 255m of
 
accretion of
PPA adjustments on financial instruments and other PPA effects, compared with USD 290m in the third quarter of
2023. The
 
remaining
 
decrease
 
was mainly
 
due to
 
higher liquidity
 
and funding
 
costs,
 
as well
 
as lower
 
deposit margins
resulting from both lower reinvestment rates and
 
shifts to lower-margin deposit products.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
10
The
 
Investment
 
Bank
 
increased
 
by
 
USD 401m
 
to
 
USD 1,518m,
 
mainly
 
due
 
to
 
higher
 
revenues
 
in
 
Derivatives
 
&
Solutions, reflecting
 
increases mostly
 
in
 
Equity
 
Derivatives,
 
Foreign
 
Exchange and
 
Rates
 
revenues,
 
as
 
well
 
as
 
an
increase in Global Banking,
 
mainly from higher revenues
 
across Public Capital Markets.
 
These increases were partly
offset by lower revenues in Financing, particularly
 
in the Capital Markets Financing business.
 
Non-core and Legacy decreased by
 
USD 174m
 
to USD 98m, mainly as a
 
result of portfolio reductions.
Group Items
 
was negative USD 32m
 
compared with negative
 
USD 166m, mainly as
 
a result
 
of positive effects
 
in
Group hedging and own debt, including hedge accounting ineffectiveness, within Group Treasury. Higher gains in
Group hedging and
 
own debt
 
during the third
 
quarter of
 
2024 were driven
 
by mark-to-market
 
effects on portfolio-
level economic hedges, mainly due to the
 
impact of decreasing interest rates.
›
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
›
Refer to “Note 4 Net interest income” in the “Consolidated financial statements” section of this report for more
information about net interest income
 
Net interest income and other net income from financial instruments measured at fair value through profit or loss
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1,2
2Q24
3Q23
30.9.24
30.9.23
1,2
Net interest income from financial instruments measured
 
at amortized cost and fair
value through other comprehensive income
 
(256)
 
2
 
850
 
101
 
2,930
Net interest income from financial instruments measured
 
at fair value through profit or
loss and other
 
2,050
 
1,533
 
1,257
 
34
 
63
 
5,168
 
2,272
Other net income from financial instruments measured
 
at fair value through profit or
loss
 
3,681
 
3,684
 
3,226
 
0
 
14
 
11,547
 
8,425
Total
 
5,476
 
5,218
 
5,334
 
5
 
3
 
16,817
 
13,626
Global Wealth Management
 
2,232
 
2,232
 
2,368
 
0
 
(6)
 
6,814
 
6,216
of which: net interest income
 
1,811
 
1,825
 
1,991
 
(1)
 
(9)
 
5,509
 
5,211
of which: transaction-based income from foreign exchange and other
 
intermediary
activity
2
 
421
 
407
 
377
 
3
 
12
 
1,306
 
1,005
Personal & Corporate Banking
 
 
1,638
 
1,564
 
1,744
 
5
 
(6)
 
4,907
 
3,834
of which: net interest income
 
 
1,429
 
1,350
 
1,559
 
6
 
(8)
 
4,288
 
3,367
of which: transaction-based income from foreign exchange and other
 
intermediary
activity
2
 
210
 
214
 
186
 
(2)
 
13
 
619
 
467
Asset Management
 
21
 
1
 
(2)
 
21
 
(15)
Investment Bank
 
1,518
 
1,528
 
1,117
 
(1)
 
36
 
4,608
 
4,072
Non-core and Legacy
3
 
98
 
310
 
272
 
(68)
 
(64)
 
1,316
 
347
Group Items
3
 
(32)
 
(417)
 
(166)
 
(92)
 
(80)
 
(851)
 
(828)
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
 
2 Comparative-period information
 
has been restated
 
for changes in
 
business division perimeters,
 
Group Treasury
 
allocations and Non-core
 
and Legacy cost
 
allocations. Refer to
 
“Note 3 Segment
 
reporting” in the
“Consolidated financial statements” section of this report.
 
3 Mainly includes spread-related income in connection with client-driven
 
transactions, foreign currency translation
 
effects and income and expenses from
precious metals, which are
 
included in the income statement
 
line Other net income from
 
financial instruments measured at fair
 
value through profit or
 
loss. The amounts
 
reported on this line are
 
one component of
Transaction-based income in the management discussion and analysis in the
 
“Global Wealth Management” and “Personal & Corporate Banking” sections
 
of this report.
Net fee and commission income
Net fee and commission income
 
increased by USD 461m
 
to USD 6,517m and included a
 
decrease of USD 118m
 
in
accretion of PPA adjustments on financial instruments and other PPA effects, which was reflected in other fee and
commission income, predominantly in the Investment
 
Bank.
Investment fund
 
fees increased
 
by USD 291m
 
to USD 1,530m,
 
and there was
 
a USD 106m
 
increase to
 
USD 3,117m
in
 
fees
 
from
 
portfolio
 
management
 
and
 
related
 
services,
 
predominantly
 
in
 
Global
 
Wealth
 
Management.
 
These
increases were largely attributable to positive market
 
performance.
Net brokerage
 
fees increased
 
by USD 117m
 
to USD 1,042m,
 
reflecting an
 
increase across
 
all regions
 
in Cash
 
Equities
in Execution Services
 
in the Investment Bank,
 
as well as an
 
increase in Global Wealth
 
Management that was
 
due to
higher levels of client activity,
 
particularly in the Americas,
 
Asia Pacific and Switzerland regions.
Underwriting
 
fee
 
income
 
increased
 
by
 
USD 54m
 
to
 
USD 153m,
 
largely
 
driven
 
by
 
a
 
USD 40m
 
increase
 
in
 
debt
underwriting revenues, mainly due to higher deal
 
volumes
 
in the Global Banking business in the Investment
 
Bank.
›
Refer to “Note 5 Net fee and commission income” in the “Consolidated financial statements” section of this report
for more information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
11
Other income
Other
 
income
 
was
 
USD 341m,
 
compared
 
with
 
USD 305m
 
in
 
the
 
third
 
quarter
 
of
 
2023.
 
Revenues
 
included
 
a
USD 135m gain related to the
 
sale of our investment
 
in an associate, with
 
half of the gain being
 
recognized within
the
 
Investment
 
Bank
 
and
 
the
 
other
 
half
 
in
 
Non-core
 
and
 
Legacy,
 
as
 
well
 
as
 
a
 
USD 72m
 
net
 
gain
 
in
 
Asset
Management
 
from
 
both
 
the
 
closing
 
of
 
the
 
remaining
 
portion
 
of
 
the
 
sale
 
of
 
our
 
Brazilian
 
real
 
estate
 
fund
management business
 
and the
 
sale of
 
our shareholding
 
in Credit
 
Suisse Insurance
 
Linked Strategies
 
Ltd (CSILS).
These
 
gains
 
were
 
partly
 
offset
 
by
 
a
 
USD 35m
 
decrease
 
in
 
gains
 
recognized
 
on
 
repurchases
 
of
 
UBS’s
 
own
 
debt
instruments.
 
›
Refer to “Note 6 Other income” in the “Consolidated financial statements” section of this report for more
information
›
Refer to “Asset Management”, “Investment Bank” and “Non-core and Legacy”
 
in the “UBS business divisions and
Group Items” section of this report for more information about the sale of businesses
Credit loss expense / release: 3Q24 vs
 
3Q23
Total
 
net
 
credit loss
 
expenses in
 
the
 
third quarter
 
of 2024
 
were USD 121m,
 
reflecting net
 
releases of
 
USD 15m
related to performing positions and net expenses
 
of USD 136m on credit-impaired positions. Credit loss
 
expenses
were USD 239m in the prior-year quarter.
›
Refer to “Note 9 Expected credit loss measurement” in the “Consolidated financial statements” section of this
report for more information
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
 
Total
For the quarter ended 30.9.24
Global Wealth Management
 
(11)
 
12
 
1
 
2
Personal & Corporate Banking
 
(10)
 
94
 
0
 
83
Asset Management
 
0
 
0
 
0
 
0
Investment Bank
 
9
 
0
 
0
 
9
Non-core and Legacy
 
(2)
 
0
 
30
 
28
Group Items
 
0
 
0
 
0
 
0
Total
 
(15)
 
106
 
30
 
121
For the quarter ended 30.6.24
Global Wealth Management
 
(13)
 
12
 
0
 
(1)
Personal & Corporate Banking
 
(15)
 
132
 
(14)
 
103
Asset Management
 
0
 
0
 
0
 
0
Investment Bank
 
7
 
(14)
 
1
 
(6)
Non-core and Legacy
 
(1)
 
3
 
(2)
 
(1)
Group Items
 
0
 
0
 
0
 
0
Total
 
(22)
 
132
 
(15)
 
95
For the quarter ended 30.9.23
1
Global Wealth Management
 
(10)
 
15
 
6
 
10
Personal & Corporate Banking
 
77
 
60
 
23
 
160
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
 
5
Total
 
71
 
105
 
63
 
239
1 Comparative-period information
 
has been restated
 
for changes in business
 
division perimeters. Refer
 
to “Changes to segment
 
reporting in 2024”
 
in the “UBS business
 
divisions and Group
 
Items” section of
 
the
UBS Group first quarter 2024 report,
 
available under
 
“Quarterly reporting” at ubs.com/investors, and “Note 3 Segment reporting”
 
in the “Consolidated financial statements” section of
 
this report for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
12
Operating expenses: 3Q24 vs 3Q23
Operating expenses
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
2Q24
3Q23
30.9.24
30.9.23
1
Personnel expenses
 
 
6,889
 
7,119
 
7,567
 
(3)
 
(9)
 
20,957
 
17,838
of which: salaries and variable compensation
 
5,805
 
6,058
 
6,424
 
(4)
 
(10)
 
17,726
 
15,114
of which: variable compensation – financial advisors
2
 
1,335
 
1,291
 
1,150
 
3
 
16
 
3,893
 
3,372
General and administrative expenses
 
 
2,389
 
2,318
 
3,124
 
3
 
(24)
 
7,120
 
7,157
of which: net expenses for litigation, regulatory and similar
 
matters
 
(69)
 
(153)
 
12
 
(55)
 
(227)
 
802
Depreciation, amortization and impairment of non-financial
 
assets
 
1,006
 
903
 
950
 
11
 
6
 
2,804
 
2,341
Total operating expenses
 
10,283
 
10,340
 
11,640
 
(1)
 
(12)
 
30,880
 
27,336
1 Comparative-period information has been revised. Refer to
 
“Note 2 Accounting for the acquisition of
 
the Credit Suisse Group” in the
 
“Consolidated financial statements” section of 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. Also includes expenses related to compensation commitments
 
with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
Personnel expenses
Personnel expenses decreased
 
by USD 678m
 
to USD 6,889m, which
 
included a USD 478m
 
decrease in integration-
related
 
expenses, which
 
was mainly
 
due
 
to awards
 
granted to
 
employees to
 
support retention
 
and
 
operational
stability in 2023. Salaries and
 
variable compensation decreased by USD 619m, mainly
 
due to the aforementioned
effects and
 
decreases
 
in salaries
 
as a
 
result of
 
a smaller workforce.
 
These decreases
 
were partly
 
offset by
 
annual
salary increases,
 
unfavorable foreign
 
currency exchange impacts
 
and higher
 
accruals for
 
performance awards on
an underlying basis.
 
In addition, there
 
was a USD 185m
 
increase in financial advisor
 
compensation,
 
which reflected
higher compensable revenues.
›
Refer to “Note 7 Personnel expenses” in the “Consolidated financial statements” section of this report for more
information
General and administrative expenses
General and
 
administrative expenses
 
decreased by
 
USD 735m to
 
USD 2,389m, largely
 
due to
 
a USD 445m
 
decrease
in integration-related
 
expenses, which
 
was mainly
 
attributable to
 
lower real
 
estate and
 
consulting costs.
 
In addition,
there was a release of USD 84m
 
of IFRS 3 acquisition-related contingent
 
liabilities following settlements
 
reached in
the third
 
quarter of
 
2024. In
 
the third
 
quarter of
 
2023,
 
integration-related expenses
 
included a
 
one-time fee
 
of
USD 289m related to a provision for an onerous contract.
 
›
Refer to “Note 8 General and administrative expenses” in the “Consolidated financial statements” section of this
report for more information
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information about litigation, regulatory and similar matters
›
Refer to the “Regulatory and legal developments” and “Risk factors” sections of the UBS Group Annual Report
2023, available under “Annual reporting” at
ubs.com/investors
, for more information about litigation, regulatory
and similar matters
 
Depreciation, amortization and impairment of
 
non-financial assets
Depreciation, amortization
 
and impairment
 
of non-financial
 
assets increased
 
by USD 56m
 
to USD 1,006m,
 
including
a USD 9m
 
increase in
 
integration-related expenses.
 
The increase
 
was mainly
 
attributable to
 
depreciation of
 
internally
generated capitalized
 
software, reflecting
 
a higher
 
level of
 
capitalized cost
 
and accelerated
 
depreciation of
 
own
used buildings, partly offset by a decrease in depreciation of leasehold
 
improvements.
Tax: 3Q24 vs 3Q23
The Group had a net income tax expense of USD 502m
 
in the third quarter of 2024, compared with USD
 
526m in
the prior-year quarter.
The net current
 
tax expense
 
was USD 378m, compared
 
with USD 643m, and
 
primarily related to
 
the taxable profits
of UBS Switzerland AG and other entities.
There was a
 
net deferred tax expense
 
of USD 124m, compared with
 
a net benefit
 
of USD 116m in
 
the prior-year
quarter. This included a net expense of USD 222m that primarily related to the amortization of deferred tax assets
(DTAs) previously
 
recognized in
 
relation to
 
tax losses
 
carried forward
 
and deductible
 
temporary differences.
 
This
was partly offset by benefits
 
of USD 98m from increases
 
in recognized DTAs, of which
 
USD 41m reflected updated
expectations of future profits available to utilize tax losses carried forward,
 
and USD 57m in respect of an increase
in tax credits carried forward in relation to US
 
corporate alternative minimum tax.
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
13
The
 
Group’s
 
effective
 
tax
 
rate
 
for
 
the
 
quarter
 
was
 
26.0%,
 
although
 
it
 
would
 
have
 
been
 
28.1%
 
without
 
the
aforementioned deferred tax benefit from
 
updated expectations of future
 
profits. This is higher
 
than the Group’s
structural rate of 23%, mainly because its
 
net profit includes operating losses of certain entities,
 
mostly 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 effective
tax rate
 
for the
 
fourth quarter
 
of 2024
 
may be
 
higher than
 
the Group’s
 
structural rate
 
if further
 
such operating
losses are incurred
 
in these entities,
 
and the amount
 
of that impact
 
will depend on
 
the amount of those
 
losses. The
Group’s effective tax rate is expected to decrease
 
toward the structural rate in subsequent
 
years.
Total comprehensive income attributable
 
to shareholders
In the third quarter of 2024, total comprehensive income
 
attributable to shareholders was USD 3,883m,
 
reflecting
a net profit of USD 1,425m and other comprehensive income
 
(OCI), net of tax, of USD 2,459m.
OCI related
 
to cash
 
flow hedges
 
was USD 1,593m,
 
mainly reflecting
 
net unrealized
 
gains on
 
US dollar
 
hedging
derivatives resulting from decreases in the relevant
 
US dollar long-term interest rates.
Foreign
 
currency
 
translation
 
OCI
 
was
 
USD 1,333m,
 
mainly
 
resulting
 
from
 
the
 
Swiss
 
franc
 
and
 
the
 
euro
 
both
strengthening against the US dollar.
OCI related to own credit on financial
 
liabilities designated at fair value was negative USD 323m, primarily due
 
to
a tightening of our own credit spreads.
Defined benefit plan OCI was
 
negative USD 128m, primarily reflecting
 
negative pre-tax OCI in our
 
non-Swiss plans
of
 
USD 107m,
 
mainly
 
driven
 
by
 
the
 
Credit
 
Suisse
 
UK
 
plan
 
following
 
a
 
buy-in
 
insurance
 
transaction to
 
mitigate
inherent risks.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial statements” section of this report for
more information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to “Note 21 Fair value measurement” in the “Consolidated financial statements” section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about own
credit on financial liabilities designated at fair value
›
Refer to “Note 27 Post-employment benefit plans” in the “Consolidated financial statements” section of the UBS
Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about
OCI related to defined benefit plans
 
Sensitivity to interest rate movements
As of 30 September
 
2024, it is
 
estimated that a
 
parallel shift in
 
yield curves by
 
+100 basis points
 
could lead to
 
a
combined increase in
 
annual net interest
 
income from our
 
banking book of
 
approximately USD 1.7bn in
 
the first
year after
 
such a
 
shift. Of
 
this increase,
 
approximately USD 1.0bn, 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 0.3bn. Of
 
this decrease,
 
approximately USD 0.4bn
 
and USD 0.1bn
 
would result
 
from changes
in US dollar and euro
 
interest rates, respectively. Swiss franc interest rates
 
would provide an offsetting increase of
approximately USD 0.3bn, driven by both contractual
 
and assumed flooring benefits under negative
 
interest 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
 
30 September
 
2024
applied
 
to
 
our
 
banking
 
book.
 
These
estimates further assume no change to balance sheet size and product mix, stable foreign exchange rates, and no
specific management action. These estimates do
 
not represent 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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
14
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: 3Q24 vs 3Q23
The cost / income ratio
 
was 83.4%, compared with
 
99.5%, and on an
 
underlying basis the
 
cost / income ratio was
78.5%, compared with 89.3%.
 
These decreases were a
 
result of higher total
 
revenues and a decrease in
 
operating
expenses.
 
Personnel: 3Q24 vs 2Q24
The number
 
of internal
 
and external
 
personnel employed
 
was 131,677
 
(workforce count)
 
as of
 
30 September 2024,
a
 
net
 
decrease
 
of
 
1,361
 
compared
 
with
 
30 June
 
2024.
 
The
 
number
 
of
 
internal
 
personnel
 
employed
 
as
 
of
30 September 2024 was 109,396 (full-time equivalents),
 
a net decrease of 595 compared with 30 June 2024. The
number of external staff
 
was approximately 22,281 (workforce
 
count) as of 30 September
 
2024, a net decrease of
approximately 766 compared with 30 June 2024.
 
Equity, CET1 capital and returns
As of or for the quarter ended
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Net profit
Net profit / (loss) attributable to shareholders
 
1,425
 
1,136
 
(715)
 
4,315
 
27,645
Equity
 
Equity attributable to shareholders
 
87,025
 
83,683
 
83,265
 
87,025
 
83,265
less: goodwill and intangible assets
 
7,048
 
7,313
 
7,462
 
7,048
 
7,462
Tangible equity attributable to shareholders
 
79,976
 
76,370
 
75,804
 
79,976
 
75,804
less: other CET1 adjustments
 
5,763
 
267
 
(1,122)
 
5,763
 
(1,122)
CET1 capital
 
74,213
 
76,104
 
76,926
 
74,213
 
76,926
Returns
Return on equity (%)
 
6.7
 
5.4
 
(3.4)
 
6.8
 
52.1
Return on tangible equity (%)
 
7.3
 
5.9
 
(3.7)
 
7.4
 
57.7
Underlying return on tangible equity (%)
 
9.0
 
8.4
 
1.5
 
9.1
 
3.8
Return on CET1 capital (%)
 
7.6
 
5.9
 
(3.7)
 
7.5
 
60.0
Underlying return on CET1 capital (%)
 
9.4
 
8.4
 
1.5
 
9.2
 
4.0
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
Common equity tier 1 capital: 3Q24 vs 2Q24
During the third
 
quarter of 2024,
 
our common
 
equity tier 1 (CET1)
 
capital decreased by
 
USD 1.9bn to USD 74.2bn,
mainly as operating
 
profit before tax of
 
USD 1.9bn and foreign
 
currency translation gains
 
of USD 1.3bn were
 
more
than offset
 
by the
 
effect of our
 
voluntary acceleration
 
of the
 
amortization of
 
the remaining transitional
 
CET1 capital
PPA
 
adjustments of USD 3.4bn (net
 
of tax) and
 
the regular amortization of
 
these adjustments during the
 
quarter
of USD 0.3bn
 
(net of
 
tax), as
 
well as
 
dividend accruals of
 
USD 0.6bn,
 
current tax
 
expenses of
 
USD 0.4bn, and
 
a
negative effect from
 
compensation-
 
and own-share-related capital components of
 
USD 0.3bn.
 
Share repurchases
of USD 0.5bn carried
 
out in the
 
third quarter of 2024
 
under our 2024
 
share repurchase program did not
 
affect our
CET1 capital position, as there was an equal reduction
 
in the capital reserve for potential share repurchases.
Return on common equity tier 1 capital: 3Q24
 
vs 3Q23
The annualized return on CET1 capital was 7.6%, compared with negative 3.7%, driven by net profit attributable
to shareholders compared with
 
a loss attributable
 
to shareholders in the
 
prior-year quarter, as well as a decrease in
average CET1 capital. On an underlying basis
 
the return on CET1 capital was 9.4%, compared with
 
1.5%.
Risk-weighted assets: 3Q24 vs 2Q24
During the third
 
quarter of
 
2024, RWA increased
 
by USD 8.0bn
 
to USD 519.4bn,
 
driven by an
 
USD 11.2bn increase
in currency effects, partly offset by
 
decreases of USD 1.7bn resulting from asset
 
size and other movements,
 
as well
as USD 1.6bn resulting from model updates and methodology
 
changes.
Common equity tier 1 capital ratio: 3Q24 vs 2Q24
Our CET1 capital ratio decreased to 14.3% from 14.9%,
 
reflecting a USD 1.9bn decrease in CET1 capital and the
aforementioned increase in RWA.
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
15
Leverage ratio denominator: 3Q24 vs 2Q24
The leverage ratio denominator (the
 
LRD) increased by USD 44.1bn
 
to USD 1,608.3bn, driven by
 
currency effects
of USD 53.6bn,
 
partly offset by asset size and other movements of
 
USD 9.5bn.
Common equity tier 1 leverage ratio: 3Q24
 
vs 2Q24
Our CET1 leverage ratio
 
decreased to 4.6% from
 
4.9%, reflecting the aforementioned
 
increase in the
 
LRD and a
USD 1.9bn decrease in CET1 capital.
Results 9M24 vs 9M23
Operating profit before
 
tax decreased by
 
USD 23,233m, or 80%,
 
to USD 5,773m, as
 
the prior-year period included
negative goodwill of USD 27,264m
 
relating to the acquisition of
 
the Credit Suisse Group.
 
Total revenues increased
by USD 6,997m
 
and included
 
an increase
 
of USD 886m
 
in accretion
 
impacts resulting
 
from PPA
 
adjustments on
financial instruments and other PPA effects. This increase was partly offset by a USD 3,544m increase in operating
expenses,
 
including a
 
USD 699m increase
 
in integration-related
 
expenses. Net
 
credit loss
 
expenses were
 
USD 322m,
compared with USD 901m in the first nine months
 
of 2023.
Total combined
 
net interest
 
income and
 
other net
 
income from
 
financial instruments
 
measured at
 
fair value
 
through
profit or
 
loss increased
 
by USD 3,191m
 
to USD 16,817m
 
and included
 
an increase
 
of USD 514m
 
in accretion
 
impacts
resulting
 
from
 
PPA
 
adjustments
 
on
 
financial
 
instruments
 
and
 
other
 
PPA
 
effects.
 
Global
 
Wealth
 
Management
revenues
 
increased
 
by
 
USD 598m,
 
largely
 
as
 
a
 
result
 
of
 
the
 
consolidation of
 
Credit
 
Suisse
 
revenues
 
for
 
the
 
full
period, and included
 
USD 717m of accretion
 
of PPA
 
adjustments on financial
 
instruments and other
 
PPA effects,
compared with
 
USD 552m in
 
the first
 
nine months
 
of 2023.
 
The remaining variance
 
was largely
 
driven by lower
deposit revenues, mainly
 
as a
 
result of
 
lower margins and
 
including the
 
effects of
 
shifts to
 
lower-margin deposit
products. The
 
remaining variance
 
was also due
 
to higher
 
liquidity and
 
funding costs,
 
as well as
 
lower loan
 
revenues,
reflecting lower average volumes. Personal &
 
Corporate Banking increased by USD 1,073m, mainly due
 
to higher
net interest income,
 
largely attributable to
 
the consolidation of
 
Credit Suisse net
 
interest income for
 
the full period,
which
 
included
 
USD 717m
 
of
 
accretion
 
of
 
PPA
 
adjustments
 
on
 
financial
 
instruments
 
and
 
other
 
PPA
 
effects,
compared with USD 418m in the first nine months of 2023. Non-core
 
and Legacy increased by USD 969m, mainly
due to the consolidation of Credit Suisse revenues for the full period. Non-core and Legacy revenues reflected net
gains from position exits, along with net interest income from
 
securitized products and credit products, as well as
a net
 
gain of
 
USD 272m, after
 
the accounting
 
for the
 
PPA adjustments
 
at the
 
closing of
 
the acquisition
 
of the
 
Credit
Suisse
 
Group,
 
from
 
the
 
sale
 
of
 
assets
 
from
 
the
 
former
 
Credit
 
Suisse
 
securitized
 
products
 
group
 
to
 
Apollo
Management Holdings and certain other entities
 
(collectively, Apollo).
 
›
Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial
statements” section of this report for information about the conclusion of an investment management agreement
with Apollo and the transfer of senior secured asset-based financing
Net fee and commission income increased by
 
USD 3,750m to USD 19,540m and included a USD
 
394m increase in
accretion of PPA adjustments on financial instruments and other PPA effects, which was reflected in other fee and
commission income, mainly
 
in the
 
Investment Bank. Portfolio
 
management and related
 
service fees
 
increased by
USD 1,531m, and
 
investment fund
 
fees increased
 
by USD 575m,
 
predominantly in
 
Global Wealth
 
Management
and Asset
 
Management, respectively, due
 
to positive market
 
performance and
 
the consolidation of
 
Credit Suisse
revenues for
 
the full
 
period. Net
 
brokerage fees
 
increased by
 
USD 531m, reflecting
 
an increase
 
in Execution
 
Services
in the
 
Investment Bank,
 
mainly driven
 
by increases
 
in Cash
 
Equities across
 
all regions,
 
as well
 
as an
 
increase in
 
Global
Wealth Management,
 
mainly due
 
to higher
 
levels of
 
client activity
 
and also
 
due to
 
the consolidation
 
of Credit
 
Suisse.
Underwriting fee
 
income
 
increased by
 
USD 200m, largely
 
driven
 
by
 
a
 
USD 152m increase
 
in
 
debt
 
underwriting
revenues, mainly due to increased deal volumes in the Global Banking business in the Investment Bank. M&A and
corporate finance
 
fees increased
 
by USD 156m,
 
predominantly reflecting
 
an increase
 
in advisory
 
revenues in
 
our
Global Banking business within the Investment
 
Bank.
 
 
 
UBS Group third quarter 2024 report |
UBS Group | Group performance
 
16
Other income was USD 619m,
 
compared with USD 563m in the
 
first nine months of 2023.
 
This was mainly due to
a USD 135m gain
 
related to the
 
sale of our
 
investment in an
 
associate,
 
as well as
 
a USD 100m net
 
gain in Asset
Management
 
from
 
both
 
the
 
sale
 
of
 
our
 
Brazilian
 
real
 
estate
 
fund
 
management
 
business
 
and
 
the
 
sale
 
of
 
our
shareholding in CSILS. In addition, the share of net profits of associates and joint ventures increased by USD 59m,
mainly as a result of
 
the consolidation of Credit Suisse revenues for
 
the full period. These gains were partly offset
by a USD 93m
 
decrease in gains
 
recognized on repurchases
 
of UBS’s own
 
debt instruments compared
 
with the first
nine months of 2023.
Personnel expenses increased
 
by USD 3,119m
 
to USD 20,957m, largely
 
due to
 
the consolidation of
 
Credit Suisse
expenses for the
 
full period, and
 
included an increase
 
of USD 543m
 
of integration-related expenses,
 
which were
largely related to
 
salaries, severance and variable
 
compensation.
 
Salaries and variable
 
compensation increased by
USD 2,612m,
 
due
 
to
 
the
 
aforementioned
 
effects,
 
and
 
included
 
a
 
USD 521m
 
increase
 
in
 
financial
 
advisor
compensation due to higher compensable
 
revenues.
General
 
and
 
administrative
 
expenses
 
decreased
 
by
 
USD 37m
 
to
 
USD 7,120m.
 
Litigation,
 
regulatory
 
and
 
similar
matters reflected a release
 
of USD 227m, predominantly
 
due to releases of USD
 
234m of IFRS 3 acquisition-related
contingent liabilities following settlements of the relevant matter in 2024, compared with expenses of
 
USD 802m
in the first nine months of 2023, which included a USD 665m increase in provisions recognized
 
in the first quarter
of 2023 related
 
to the US
 
residential mortgage-backed securities litigation
 
matter. The nine-month
 
period ended
30 September 2023 also
 
included a one-time expense
 
of USD 289m related to
 
a provision for an
 
onerous contract.
In addition, the
 
prior-year period included
 
USD 202m of
 
acquisition costs. These
 
decreases were
 
partly offset by
 
the
consolidation of Credit
 
Suisse expenses,
 
higher technology costs
 
and an increase
 
in integration-related expenses,
mainly related to consulting, legal and outsourcing
 
costs.
Depreciation, amortization
 
and impairment of
 
non-financial assets increased
 
by USD 463m to
 
USD 2,804m, largely
due to the consolidation of Credit
 
Suisse expenses for the full period,
 
a USD 173m increase in internally
 
generated
capitalized
 
software,
 
reflecting
 
a
 
higher
 
level
 
of
 
capitalized
 
cost,
 
and
 
a
 
USD 136m
 
increase
 
in
 
accelerated
depreciation of real
 
estate as a
 
result of decisions
 
to vacate certain
 
leased and owned
 
properties. This was
 
partly
offset by the recognition of a USD 206m impairment in
 
the second quarter of 2023 related to software projects
 
in
progress resulting from a reprioritization
 
of software development activity in
 
the context of the
 
acquisition of the
Credit Suisse Group.
Outlook
In the third
 
quarter of 2024 we
 
saw strong client activity
 
against a market backdrop
 
that, while constructive, still
exhibited periods of high volatility and dislocation.
 
Entering the fourth quarter, we see a continuation of these market conditions sustained
 
by the prospects of a soft
landing in
 
the US
 
economy. However,
 
the macroeconomic
 
outlook in
 
the rest
 
of the
 
world remains
 
clouded. In
addition to seasonality,
 
the ongoing geopolitical conflicts
 
and the upcoming US elections
 
are creating uncertainties
that are likely to affect investor behavior.
 
In the fourth quarter,
 
we anticipate a mid-single
 
digit decline in net
 
interest income in Global
 
Wealth Management
and a
 
low single-digit
 
decline in
 
Personal &
 
Corporate Banking.
 
Non-core and
 
Legacy is
 
expected to
 
generate a
quarterly pre-tax loss in line with our earlier guidance.
 
The Group’s non-personnel
 
costs are expected
 
to show a
 
seasonal sequential uptick.
 
The Group’s quarterly
 
tax rate
is expected to be
 
around 35%. Integration-related expenses are
 
expected to be around USD 1.2bn
 
and accretion
of PPA effects to contribute around USD 0.5bn
 
to the Group’s total revenues.
 
As we stay close
 
to clients, helping
 
them navigate this
 
environment, and execute
 
on our priorities,
 
we will continue
to invest
 
to drive
 
sustainable long-term
 
value for
 
our stakeholders
 
while maintaining
 
a balance
 
sheet for
 
all seasons.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items
 
17
UBS business divisions and
Group Items
Management report
Our businesses
We report
 
five business
 
divisions, each
 
of which
 
qualifies as
 
an operating
 
segment pursuant
 
to IFRS
 
Accounting
Standards: Global Wealth Management,
 
Personal & Corporate Banking,
 
Asset Management, the Investment
 
Bank,
and Non-core
 
and Legacy.
 
Non-core and
 
Legacy includes
 
positions and
 
businesses not
 
aligned with
 
our strategy
and policies. Those
 
consist of the
 
assets and liabilities
 
reported as part
 
of the
 
former Capital Release
 
Unit (Credit
Suisse) and certain
 
assets and liabilities
 
of the former
 
Investment Bank (Credit
 
Suisse), the former
 
Corporate Center
(Credit Suisse) and other former Credit Suisse business divisions. Non-core and Legacy also includes the remaining
assets and
 
liabilities of
 
UBS’s Non-core
 
and Legacy
 
Portfolio, previously
 
reported in
 
Group Functions
 
(which has
been renamed
 
Group Items),
 
and smaller
 
amounts of
 
assets and
 
liabilities of
 
UBS’s business
 
divisions that
 
have been
assessed as not strategic in light of the acquisition
 
of the Credit Suisse Group.
Our Group functions
 
are support and
 
control functions that
 
provide services to
 
the Group. Virtually
 
all costs and
revenues incurred
 
by the
 
support and
 
control functions
 
are allocated
 
to the
 
business divisions,
 
leaving a
 
residual
amount, mainly
 
related to
 
certain Group
 
funding and
 
hedging items,
 
that we
 
refer to
 
as Group
 
Items in
 
our segment
reporting.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Global Wealth Management
 
18
Global Wealth Management
Global Wealth Management
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
 
1,811
 
1,825
 
1,991
 
(1)
 
(9)
 
5,509
 
5,211
Recurring net fee income
3
 
3,235
 
3,104
 
2,965
 
4
 
9
 
9,363
 
8,088
Transaction-based income
3
 
1,144
 
1,105
 
977
 
4
 
17
 
3,461
 
2,669
Other income
 
10
 
19
 
19
 
(50)
 
(50)
 
63
 
34
Total revenues
 
6,199
 
6,053
 
5,953
 
2
 
4
 
18,395
 
16,002
Credit loss expense / (release)
 
2
 
(1)
 
10
 
(78)
 
(2)
 
174
Operating expenses
 
5,112
 
5,183
 
5,017
 
(1)
 
2
 
15,340
 
12,663
Business division operating profit / (loss) before tax
 
1,085
 
871
 
926
 
25
 
17
 
3,057
 
3,165
Underlying results
Total revenues as reported
 
6,199
 
6,053
 
5,953
 
2
 
4
 
18,395
 
16,002
of which: PPA effects and other integration items
4
 
224
 
233
 
388
 
(4)
 
(42)
 
691
 
574
of which: PPA effects recognized in net interest income
 
221
 
240
 
371
 
(8)
 
(40)
 
717
 
552
of which: PPA effects and other integration items recognized in transaction-based income
 
3
 
(6)
 
17
 
(81)
 
(27)
 
22
Total revenues (underlying)
3
 
5,975
 
5,820
 
5,565
 
3
 
7
 
17,705
 
15,428
Credit loss expense / (release)
 
2
 
(1)
 
10
 
(78)
 
(2)
 
174
Operating expenses as reported
 
5,112
 
5,183
 
5,017
 
(1)
 
2
 
15,340
 
12,663
of which: integration-related expenses and PPA effects
3,5
 
419
 
523
 
448
 
(20)
 
(6)
 
1,347
 
516
Operating expenses (underlying)
3
 
4,693
 
4,660
 
4,569
 
1
 
3
 
13,993
 
12,147
of which: expenses for litigation, regulatory and similar matters
 
18
 
17
 
22
 
6
 
(19)
 
46
 
73
Business division operating profit / (loss) before tax as reported
 
1,085
 
871
 
926
 
25
 
17
 
3,057
 
3,165
Business division operating profit / (loss) before tax (underlying)
3
 
1,280
 
1,161
 
986
 
10
 
30
 
3,713
 
3,107
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
 
17.2
 
(15.3)
 
(36.3)
 
(3.4)
 
(19.2)
Cost / income ratio (%)
3
 
82.5
 
85.6
 
84.3
 
83.4
 
79.1
Average attributed equity (USD bn)
6
 
33.5
 
32.9
 
33.1
 
2
 
1
 
33.2
 
27.9
Return on attributed equity (%)
3,6
 
13.0
 
10.6
 
11.2
 
12.3
 
15.1
Financial advisor compensation
7
 
1,335
 
1,291
 
1,150
 
3
 
16
 
3,892
 
3,372
Net new fee-generating assets (USD bn)
3
 
14.6
 
16.3
 
48.4
Fee-generating assets (USD bn)
3
 
1,858
 
1,764
 
5
 
1,858
Net new assets (USD bn)
3
 
24.7
 
26.9
 
38.0
 
79.0
 
108.2
Invested assets (USD bn)
3
 
4,259
 
4,038
 
3,685
 
5
 
16
 
4,259
 
3,685
Loans, gross (USD bn)
8
 
311.5
 
305.2
 
318.2
 
2
 
(2)
 
311.5
 
318.2
Customer deposits (USD bn)
8
 
481.9
 
476.2
 
456.3
 
1
 
6
 
481.9
 
456.3
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,9
 
0.4
 
0.4
 
0.4
 
0.4
 
0.4
Advisors (full-time equivalents)
 
9,897
 
10,068
 
10,738
 
(2)
 
(8)
 
9,897
 
10,738
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
 
29.9
 
27.7
 
(20.1)
 
19.5
 
(16.0)
Cost / income ratio (%)
3
 
78.5
 
80.1
 
82.1
 
79.0
 
78.7
Return on attributed equity (%)
3,6
 
15.3
 
14.1
 
11.9
 
14.9
 
14.8
1 Comparatives may differ due to adjustments
 
following organizational changes,
 
restatements due to the retrospective adoption
 
of new accounting standards or changes
 
in accounting policies, and events
 
after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes in
 
business division
 
perimeters, Group
 
Treasury allocations
 
and Non-core
 
and Legacy
 
cost allocations,
 
as well as
 
changes in
 
the equity
attribution framework. Refer to “Note 3 Segment reporting” in the
 
“Consolidated financial statements” section of this report and to “Changes to
 
segment reporting in 2024” in the “UBS business divisions
 
and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information.
 
3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method. We started to report fee-generating assets and net new fee-generating assets on a consolidated basis,
 
including Credit Suisse data,
from the fourth
 
quarter of 2023
 
onward.
 
4 Includes accretion
 
of PPA
 
adjustments on financial
 
instruments and other
 
PPA effects,
 
as well as
 
temporary and
 
incremental items directly
 
related to the
 
integration.
 
5 Includes temporary, incremental operating expenses
 
directly related to the integration, as well as amortization of newly recognized intangibles
 
resulting from the acquisition of the Credit Suisse Group.
 
6 Refer to
the “Equity attribution” section of this report for more information about the equity attribution framework.
 
7 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas.
Consists of cash and deferred compensation awards
 
and is based on compensable revenues and firm
 
tenure using a formulaic approach. Also
 
includes expenses related to compensation commitments
 
with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
 
Recruitment loans to financial advisors were USD 1,749m as of 30 September 2024.
 
8 Loans and Customer deposits in this
table include customer brokerage receivables
 
and payables, respectively,
 
which are presented in separate reporting
 
lines on the balance sheet.
 
9 Refer to the “Risk management and control”
 
section of this report
for more information about (credit-)impaired exposures. Excludes loans to financial advisors.
Results: 3Q24 vs 3Q23
Profit
 
before
 
tax increased
 
by
 
USD 159m, or
 
17%, to
 
USD 1,085m, mainly
 
due to
 
higher total
 
revenues, partly
offset
 
by
 
higher
 
operating expenses.
 
Underlying
 
profit
 
before
 
tax
 
was
 
USD 1,280m,
 
an
 
increase
 
of
 
30%,
 
after
excluding USD 419m
 
of integration-related
 
expenses and
 
purchase price
 
allocation (PPA)
 
effects from
 
operating
expenses, as well as USD 224m
 
of PPA effects and other integration items from total revenues.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Global Wealth Management
 
19
Total revenues
Total
 
revenues
 
increased
 
by
 
USD 246m, or
 
4%,
 
to USD 6,199m,
 
largely driven
 
by
 
higher
 
recurring
 
net fee
 
and
transaction-based income, partly offset by lower net interest income. Total revenues included the aforementioned
USD 224m of
 
PPA
 
effects and
 
other integration
 
items, which represented
 
a USD 164m
 
decrease compared
 
with
the USD 388m recorded
 
for such effects
 
and items in
 
the third
 
quarter of 2023. Excluding
 
these PPA
 
effects and
other integration items, underlying total revenues were USD 5,975m,
 
an increase of 7%.
Net interest income decreased by USD 180m, or 9%, to USD 1,811m
 
and included USD 221m
 
of accretion of PPA
adjustments on
 
financial instruments
 
and other
 
PPA effects,
 
compared with
 
USD 371m in
 
the third
 
quarter of
 
2023.
The remaining decrease
 
was largely driven
 
by lower deposit
 
margins, including the
 
effects of shifts
 
to lower-margin
deposit
 
products
 
and
 
the
 
effects
 
of
 
liquidity
 
and
 
funding
 
costs,
 
partly
 
offset
 
by
 
higher
 
deposit
 
volumes.
 
The
remaining
 
decrease
 
was
 
also
 
due
 
to
 
lower
 
loan
 
revenues,
 
reflecting
 
lower
 
average
 
volumes.
 
Excluding
 
the
aforementioned accretion and other effects, underlying
 
net interest income was USD 1,590m, a decrease
 
of 2%.
 
Recurring
 
net
 
fee
 
income
 
increased
 
by
 
USD 270m,
 
or
 
9%,
 
to
 
USD 3,235m,
 
mainly
 
driven
 
by
 
positive
 
market
performance.
Transaction-based income
 
increased by
 
USD 167m, or
 
17%, to
 
USD 1,144m, mainly
 
driven by
 
higher levels
 
of client
activity,
 
particularly
 
in
 
the
 
Americas,
 
Asia
 
Pacific
 
and
 
Switzerland
 
regions.
 
Transaction-based
 
income
 
included
USD 6m of accretion of PPA adjustments on financial instruments
 
and other PPA effects, compared with USD 17m
in the
 
third quarter
 
of 2023;
 
the third
 
quarter of
 
2024 also
 
included negative
 
USD 3m of
 
temporary and
 
incremental
items
 
directly
 
related
 
to
 
the
 
integration
 
of
 
Credit
 
Suisse. Excluding
 
USD 3m
 
resulting
 
from
 
the
 
aforementioned
accretion
 
and
 
other
 
effects
 
and
 
temporary
 
and
 
incremental
 
items,
 
underlying
 
transaction-based
 
income
 
was
USD 1,140m, an increase of 19%.
Credit loss expense / release
Net credit loss expenses decreased by USD 8m to USD 2m.
 
Operating expenses
Operating
 
expenses
 
increased
 
by
 
USD 95m,
 
or
 
2%,
 
to
 
USD 5,112m,
 
largely
 
due
 
to
 
an
 
increase
 
in
 
personnel
expenses,
 
which
 
resulted
 
from
 
higher
 
financial
 
advisor
 
compensation
 
reflecting
 
an
 
increase
 
in
 
compensable
revenues. Operating expenses included integration-related
 
expenses of USD 417m, which represented a USD 29m
decrease
 
compared with
 
the USD 446m
 
of integration-related
 
expenses recorded
 
for the
 
third quarter
 
of 2023.
Excluding
 
integration-related
 
expenses
 
and
 
PPA
 
effects
 
of
 
USD 419m,
 
underlying
 
operating
 
expenses
 
were
USD 4,693m, an increase of 3%.
Invested assets: 3Q24 vs 2Q24
Invested
 
assets
 
increased
 
by
 
USD 221bn
 
to
 
USD 4,259bn,
 
mainly
 
driven
 
by
 
positive
 
market
 
performance
 
of
USD 146.7bn, positive foreign currency effects of USD 53.7bn and
 
net new asset inflows of USD 24.7bn.
Loans: 3Q24 vs 2Q24
Loans increased by
 
USD 6.3bn to
 
USD 311.5bn, driven
 
by positive
 
foreign currency effects,
 
partly offset
 
by negative
net new loans of USD 3.0bn.
Customer deposits: 3Q24 vs 2Q24
Customer deposits
 
increased
 
by
 
USD 5.7bn to
 
USD 481.9bn, mainly
 
driven by
 
positive
 
foreign
 
currency
 
effects,
partly offset by net new deposit outflows of USD 3.9bn.
Results: 9M24 vs 9M23
Profit before tax decreased
 
by USD 108m, or 3%,
 
to USD 3,057m, mainly
 
due to higher operating
 
expenses, partly
offset by the
 
impact from the
 
acquisition of the
 
Credit Suisse Group
 
and by higher
 
total revenues. Underlying
 
profit
before tax was USD 3,713m,
 
an increase of 20%,
 
after excluding USD 1,347m
 
of integration-related expenses
 
and
PPA effects from
 
operating expenses, as
 
well as USD 691m
 
of PPA
 
effects and other
 
integration items from
 
total
revenues.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Global Wealth Management
 
20
Total revenues increased by USD 2,393m,
 
or 15%, to USD 18,395m, largely
 
driven by the consolidation of
 
Credit
Suisse revenues for
 
the full period,
 
as well as
 
higher recurring
 
net fee and
 
transaction-based income.
 
Total revenues
included the
 
aforementioned
 
USD 691m
 
of PPA
 
effects and
 
other integration
 
items, which
 
represented a
 
USD 117m
increase compared with the USD 574m recorded for
 
such effects and items in the nine months
 
of 2023. Excluding
these PPA effects and other integration items,
 
underlying total revenues were USD 17,705m,
 
an increase of 15%.
Net interest income
 
increased by USD 298m,
 
or 6%, to
 
USD 5,509m, largely attributable
 
to the
 
consolidation of
Credit Suisse net interest
 
income for the
 
full period, and included
 
USD 717m of accretion of
 
PPA adjustments on
financial
 
instruments
 
and
 
other
 
PPA
 
effects,
 
compared
 
with
 
USD 552m
 
in
 
the
 
first
 
nine
 
months
 
of
 
2023.
 
The
remaining variance was largely
 
driven by lower deposit
 
revenues, mainly as a result
 
of lower margins and including
the effects of shifts to lower-margin deposit products.
 
The remaining variance was also due to higher liquidity and
funding costs,
 
as well
 
as
 
lower loan
 
revenues,
 
reflecting lower
 
average volumes.
 
Excluding
 
the aforementioned
accretion and other effects, underlying net interest
 
income was USD 4,791m, an increase
 
of 3%.
 
Recurring net
 
fee income
 
increased by
 
USD 1,275m, or
 
16%, to
 
USD 9,363m, mainly
 
driven by
 
positive market
performance and the consolidation of Credit
 
Suisse recurring net fee income for the full period.
Transaction-based income
 
increased by
 
USD 792m, or
 
30%, to
 
USD 3,461m, mainly
 
driven by
 
higher levels
 
of client
activity, particularly
 
in the
 
Americas and
 
Asia Pacific
 
regions, and
 
the consolidation
 
of Credit
 
Suisse transaction-
based income for the full period. Transaction-based
 
income included USD 21m of accretion
 
of PPA adjustments on
financial instruments
 
and other
 
PPA effects,
 
compared with
 
USD 22m in
 
the first
 
nine months
 
of 2023;
 
the first
nine months of 2024
 
also included negative USD 48m of
 
temporary and incremental items directly
 
related to the
integration of Credit
 
Suisse. Excluding negative USD 27m
 
resulting from the
 
aforementioned accretion and other
effects and temporary and incremental items, underlying transaction-based income was USD 3,488m, an increase
of 32%.
Other income increased by USD 29m to
 
USD 63m, mainly due to the
 
consolidation of Credit Suisse other income
for the full period.
Net credit
 
loss releases
 
were USD 2m,
 
compared with
 
net credit loss
 
expenses of
 
USD 174m in the
 
first nine
 
months
of 2023. Prior-year period net
 
credit loss expenses were largely driven
 
by the initial recognition of expected credit
loss allowances and provisions with respect
 
to Credit-Suisse-related positions.
Operating expenses
 
increased by
 
USD 2,677m, or
 
21%, to
 
USD 15,340m, largely
 
due to
 
the consolidation
 
of Credit
Suisse
 
expenses
 
for
 
the
 
full
 
period.
 
Operating
 
expenses
 
included
 
integration-related
 
expenses
 
of
 
USD 1,340m,
which represented an USD 827m increase compared
 
with the USD 513m of integration-related expenses recorded
for the
 
first nine
 
months of
 
2023. The
 
remaining variance
 
was due
 
to higher
 
personnel expenses,
 
primarily reflecting
an increase in
 
financial advisor compensation reflecting
 
higher compensable revenues, and
 
also due
 
to increased
technology expenses.
 
Excluding integration-related
 
expenses and
 
PPA effects of
 
USD 1,347m, underlying
 
operating
expenses were USD 13,993m, an increase of
 
15%.
 
Regional breakdown of performance measures
As of or for the quarter ended 30.9.24
USD bn, except where indicated
Americas
1
Switzerland
EMEA
Asia Pacific
Global
2
Global Wealth
Management
Total revenues (USD m)
 
2,838
 
1,043
 
1,169
 
919
 
230
 
6,199
Operating profit / (loss) before tax (USD m)
 
330
 
368
 
304
 
286
 
(204)
 
1,085
Operating profit / (loss) before tax (underlying) (USD m)
3
 
330
 
368
 
304
 
286
 
(8)
 
1,280
Cost / income ratio (%)
3
 
88.1
 
65.0
 
74.2
 
69.4
 
82.5
Cost / income ratio (underlying) (%)
3
 
88.1
 
65.0
 
74.2
 
69.4
 
78.5
Loans, gross
 
96.5
4
 
111.5
 
59.7
 
42.8
 
0.9
 
311.5
Net new loans
 
0.0
 
(1.3)
 
(1.5)
 
0.0
 
(0.1)
 
(3.0)
Net new fee-generating assets
3
 
7.5
 
1.6
 
1.0
 
4.5
 
(0.1)
 
14.6
Fee-generating assets
3
 
1,063
 
236
 
388
 
170
 
1
 
1,858
Net new assets
3
 
8.0
 
9.4
 
0.7
 
7.3
 
(0.8)
 
24.7
Net new assets growth rate (%)
3
 
1.6
 
5.0
 
0.5
 
4.7
 
2.4
Invested assets
3
 
2,096
 
796
 
684
 
678
 
5
 
4,259
Advisors (full-time equivalents)
 
5,986
 
1,331
 
1,522
 
949
 
109
 
9,897
1 Including the following business units: United States
 
and Canada; and Latin America.
 
2 Includes minor functions, which
 
are not included in the four regions
 
individually presented in this table,
 
and also includes
impacts from accretion of
 
PPA adjustments on
 
financial instruments and other
 
PPA effects and
 
integration-related expenses.
 
3 Refer to “Alternative
 
performance measures” in the
 
appendix to this report
 
for the
definition and calculation method.
 
4 Loans include customer brokerage receivables,
 
which are presented in a separate reporting line on the balance sheet.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Global Wealth Management
 
21
Regional comments 3Q24 vs 3Q23, except where
 
indicated
 
Americas
Profit
 
before
 
tax
 
increased
 
by
 
USD 32m
 
to
 
USD 330m.
 
Total
 
revenues
 
increased
 
by
 
USD 236m,
 
or
 
9%,
 
to
USD 2,838m, mainly
 
driven by
 
higher recurring
 
net fee
 
income and
 
transaction-based
 
income, partly
 
offset by
 
lower
net interest income.
 
The cost / income
 
ratio decreased
 
to 88.1%
 
from 89.1%. Loans
 
were broadly stable
 
compared
with the second quarter of 2024, at USD 96.5bn.
 
Net new asset inflows were USD 8.0bn.
Switzerland
Profit
 
before
 
tax
 
increased
 
by
 
USD 51m
 
to
 
USD 368m.
 
Total
 
revenues
 
increased
 
by
 
USD 48m,
 
or
 
5%,
 
to
USD 1,043m, mostly driven
 
by higher transaction-based income
 
and recurring net
 
fee income. The
 
cost / income
ratio
 
decreased
 
to
 
65.0%
 
from
 
66.2%.
 
Loans
 
increased
 
5%
 
compared
 
with
 
the
 
second
 
quarter
 
of
 
2024,
 
to
USD 111.5bn, mainly reflecting
 
positive foreign currency
 
effects, partly offset
 
by USD 1.3bn of
 
negative net new
loans. Net new asset inflows were USD 9.4bn.
EMEA
Profit
 
before
 
tax
 
increased
 
by
 
USD 75m
 
to
 
USD 304m.
 
Total
 
revenues
 
increased
 
by
 
USD 31m,
 
or
 
3%,
 
to
USD 1,169m, mainly driven
 
by higher recurring
 
net fee income
 
and transaction-based income.
 
The cost / income
ratio
 
decreased
 
to
 
74.2%
 
from
 
79.1%.
 
Loans
 
increased
 
1%
 
compared
 
with
 
the
 
second
 
quarter
 
of
 
2024,
 
to
USD 59.7bn, mainly
 
driven by
 
positive foreign
 
currency effects,
 
partly offset
 
by USD 1.5bn
 
of negative
 
net new
loans. Net new asset inflows were USD 0.7bn.
Asia Pacific
Profit
 
before
 
tax
 
increased
 
by
 
USD 154m
 
to
 
USD 286m.
 
Total
 
revenues
 
increased
 
by
 
USD 106m,
 
or
 
13%,
 
to
USD 919m,
 
mainly
 
driven
 
by
 
increases
 
in
 
transaction-based
 
income,
 
recurring
 
net
 
fee
 
income
 
and
 
net
 
interest
income. The cost / income ratio
 
decreased to 69.4% from 84.2%. Loans increased
 
1% compared with the second
quarter of
 
2024, to
 
USD 42.8bn, mainly
 
driven by
 
positive foreign
 
currency effects.
 
Net new
 
asset inflows
 
were
USD 7.3bn.
Global
Operating loss before tax
 
was USD 204m, mainly including USD 419m
 
of the aforementioned integration-related
expenses and
 
PPA
 
effects in
 
operating expenses,
 
partly offset
 
by the
 
aforementioned USD 224m
 
related to
 
PPA
effects and other integration items in total revenues.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Personal & Corporate Banking
 
22
Personal & Corporate Banking
 
Personal & Corporate Banking – in Swiss francs
1
As of or for the quarter ended
% change from
Year-to-date
CHF m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
 
1,227
 
1,225
 
1,387
 
0
 
(12)
 
3,783
 
3,030
Recurring net fee income
3
 
363
 
357
 
345
 
1
 
5
 
1,068
 
805
Transaction-based income
3
 
439
 
463
 
479
 
(5)
 
(8)
 
1,350
 
1,159
Other income
 
29
 
16
 
31
 
79
 
(7)
 
56
 
53
Total revenues
 
2,056
 
2,061
 
2,242
 
0
 
(8)
 
6,257
 
5,048
Credit loss expense / (release)
 
71
 
92
 
147
 
(23)
 
(52)
 
202
 
359
Operating expenses
 
1,258
 
1,266
 
1,246
 
(1)
 
1
 
3,765
 
2,698
Business division operating profit / (loss) before tax
 
728
 
703
 
849
 
3
 
(14)
 
2,290
 
1,991
Underlying results
Total revenues as reported
 
2,056
 
2,061
 
2,242
 
0
 
(8)
 
6,257
 
5,048
of which: PPA effects and other integration items
4
 
239
 
223
 
297
 
7
 
(20)
 
688
 
425
of which: PPA effects recognized in net interest income
 
 
219
 
201
 
259
 
9
 
(15)
 
632
 
374
of which: PPA effects and other integration items recognized in transaction-based income
 
20
 
22
 
38
 
(7)
 
(47)
 
56
 
52
Total revenues (underlying)
3
 
1,818
 
1,838
 
1,945
 
(1)
 
(7)
 
5,569
 
4,622
Credit loss expense / (release)
 
71
 
92
 
147
 
(23)
 
(52)
 
202
 
359
Operating expenses as reported
 
1,258
 
1,266
 
1,246
 
(1)
 
1
 
3,765
 
2,698
of which: integration-related expenses and PPA effects
3,5
 
170
 
165
 
155
 
3
 
10
 
477
 
188
Operating expenses (underlying)
3
 
1,088
 
1,101
 
1,091
 
(1)
 
0
 
3,288
 
2,509
of which: expenses for litigation, regulatory and similar matters
 
0
 
0
 
(9)
 
(59)
 
0
 
(8)
Business division operating profit / (loss) before tax as reported
 
728
 
703
 
849
 
3
 
(14)
 
2,290
 
1,991
Business division operating profit / (loss) before tax (underlying)
3
 
659
 
645
 
707
 
2
 
(7)
 
2,079
 
1,753
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
 
(14.3)
 
19.2
 
97.6
 
15.0
 
62.9
Cost / income ratio (%)
3
 
61.2
 
61.4
 
55.6
 
60.2
 
53.4
Average attributed equity (CHF bn)
6
 
18.9
 
19.4
 
19.0
 
(3)
 
(1)
 
19.1
 
13.7
Return on attributed equity (%)
3,6
 
15.4
 
14.5
 
17.9
 
15.9
 
19.4
Net interest margin (bps)
3
 
199
 
195
 
217
 
202
 
202
Loans, gross (CHF bn)
 
244.2
 
249.5
 
254.5
 
(2)
 
(4)
 
244.2
 
254.5
Customer deposits (CHF bn)
 
252.3
 
254.7
 
253.9
 
(1)
 
(1)
 
252.3
 
253.9
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,7
 
1.2
 
1.1
 
0.8
 
1.2
 
0.8
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
 
(6.8)
 
30.5
 
64.5
 
18.5
 
43.4
Cost / income ratio (%)
3
 
59.9
 
59.9
 
56.1
 
59.0
 
54.3
Return on attributed equity (%)
3,6
 
13.9
 
13.3
 
14.9
 
14.5
 
17.1
1 Comparatives may differ due to
 
adjustments following organizational changes,
 
restatements due to the retrospective
 
adoption of new accounting standards
 
or changes in accounting policies,
 
and events after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes
 
in business
 
division perimeters,
 
Group Treasury
 
allocations and
 
Non-core and
 
Legacy cost allocations,
 
as well
 
as changes
 
in the
 
equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial
 
statements” section of this report and to “Changes to segment reporting in
 
2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information.
 
3 Refer to “Alternative performance
measures” in the appendix
 
to this report for
 
the definition and calculation
 
method.
 
4 Includes accretion of
 
PPA adjustments on
 
financial instruments and other
 
PPA effects,
 
as well as temporary
 
and incremental
items directly related to the integration.
 
5 Includes temporary, incremental operating expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition
of the Credit Suisse Group.
 
6 Refer to the “Equity
 
attribution” section of this report
 
for more information about
 
the equity attribution framework.
 
7 Refer to the “Risk
 
management and control” section
 
of this
report for more information about (credit-)impaired exposures.
Results
:
3Q24 vs 3Q23
Profit before tax decreased by CHF 121m, or 14%, to
 
CHF 728m, mainly due to lower
 
total revenues, partly offset
by lower net credit
 
loss expenses.
 
Underlying profit before tax was
 
CHF 659m, a decrease of 7%,
 
after excluding
CHF 239m of
 
purchase price
 
allocation (PPA)
 
effects and
 
other integration
 
items from
 
total revenues,
 
as well
 
as
excluding integration-related expenses and PPA effects of CHF 170m from operating expenses.
Total revenues
Total
 
revenues decreased by CHF 186m, or 8%, to
 
CHF 2,056m, largely reflecting lower
 
net interest income. Total
revenues included the aforementioned CHF 239m
 
of PPA effects and other integration items, which represented a
CHF 58m
 
decrease compared with the
 
CHF 297m recorded for such
 
effects and items in
 
the third quarter of
 
2023.
Excluding
 
the
 
aforementioned
 
PPA
 
effects
 
and
 
other
 
integration
 
items,
 
underlying
 
total
 
revenues
 
were
CHF 1,818m, a decrease of 7%.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Personal & Corporate Banking
 
23
Net interest income
 
decreased by CHF 160m,
 
or 12%, to CHF 1,227m
 
and included CHF 219m
 
of accretion of
 
PPA
adjustments on
 
financial instruments
 
and other
 
PPA effects,
 
compared with
 
CHF 259m in the
 
third quarter
 
of 2023.
The remaining
 
decrease was
 
mainly due
 
to higher
 
liquidity and
 
funding costs,
 
as well
 
as lower
 
deposit margins
resulting
 
from
 
both
 
lower
 
reinvestment
 
rates
 
and
 
shifts
 
to
 
lower-margin
 
deposit
 
products.
 
Excluding
 
the
aforementioned accretion and other effects,
 
underlying net interest income was CHF 1,008m,
 
a decrease of 11%.
Recurring net fee income increased by CHF 18m,
 
or 5%, to CHF 363m, mainly due to higher custody
 
asset levels.
Transaction-based income
 
decreased by
 
CHF 40m, or
 
8%, to
 
CHF 439m, and
 
included an
 
CHF 18m decrease
 
in
accretion of PPA adjustments
 
on financial instruments and
 
other PPA effects, which
 
were CHF 20m compared with
CHF 38m
 
in
 
the
 
third
 
quarter of
 
2023.
 
The
 
decrease
 
in
 
transaction-based income
 
was
 
also
 
due
 
to
 
lower
 
trade
finance
 
revenues,
 
partly
 
offset
 
by
 
higher
 
card
 
fees.
 
Excluding
 
the
 
aforementioned
 
accretion
 
and
 
other
 
effects,
underlying transaction-based income was
 
CHF 419m, a decrease of 5%.
Other income was broadly stable at CHF 29m.
Credit loss expense / release
Net credit loss expenses were CHF 71m,
 
mainly reflecting net credit loss expenses of CHF 80m
 
on credit-impaired
positions with
 
a small
 
number of
 
corporate counterparties,
 
partly offset
 
by net
 
credit loss
 
releases of
 
CHF 9m related
to performing positions. These compared with net credit loss expenses of CHF 147m in the third quarter of 2023,
which reflected both performing and credit-impaired positions.
Operating expenses
Operating expenses increased
 
by CHF 12m, or
 
1%, to CHF 1,258m
 
and included integration-related
 
expenses of
CHF 148m, which represented a CHF 16m increase compared with the CHF 132m of integration-related expenses
recorded
 
for
 
the
 
third
 
quarter
 
of
 
2023.
 
Excluding
 
integration-related
 
expenses
 
and
 
PPA
 
effects
 
of
 
CHF 170m,
underlying operating expenses were CHF 1,088m,
broadly stable year over year.
Results: 9M24 vs 9M23
Profit
 
before tax
 
increased by
 
CHF 299m,
 
or 15%,
 
to CHF
 
2,290m, mainly
 
due to
 
the acquisition
 
of the
 
Credit
Suisse Group.
 
Underlying profit
 
before tax was
 
CHF 2,079m, an
 
increase of
 
19%, after
 
excluding CHF 688m
 
of PPA
effects and other integration items from total revenues, as well as excluding integration-related expenses and PPA
effects of CHF 477m from operating expenses.
Total revenues increased
 
by CHF 1,209m,
 
or 24%, to
 
CHF 6,257m, mainly
 
due to the
 
consolidation of Credit
 
Suisse
revenues
 
for
 
the
 
full
 
period.
 
Total
 
revenues
 
included
 
the
 
aforementioned
 
CHF 688m
 
of
 
PPA
 
effects
 
and
 
other
integration items,
 
which represented
 
a CHF 263m
 
increase compared
 
with the CHF 425m
 
recorded for such
 
effects
and items in the first nine months of 2023.
 
Excluding the aforementioned PPA effects
 
and other integration items,
underlying total revenues were CHF 5,569m,
 
an increase of 20%.
Net interest
 
income increased by
 
CHF 753m, or
 
25%, to
 
CHF 3,783m, largely
 
as a
 
result of
 
the consolidation of
Credit Suisse net
 
interest income for the
 
full period,
 
and included CHF 632m of
 
accretion of PPA
 
adjustments on
financial instruments and other PPA effects, compared
 
with CHF 374m in the first nine months
 
of 2023. Excluding
the aforementioned accretion
 
and other effects,
 
underlying net interest
 
income was CHF 3,151m,
 
an increase of
19%.
Recurring net
 
fee income
 
increased by
 
CHF 263m, or
 
33%, to
 
CHF 1,068m, mainly
 
due to
 
the consolidation
 
of
Credit Suisse
 
recurring net fee
 
income for
 
the full
 
period, with
 
the remaining increase
 
including higher revenues
from increased custody asset levels.
Transaction-based income
 
increased by CHF 191m,
 
or 16%, to
 
CHF 1,350m, largely as
 
a result of the
 
consolidation
of
 
Credit
 
Suisse
 
transaction-based
 
income
 
for
 
the
 
full
 
period.
 
Transaction-based
 
income
 
included
 
CHF 63m
 
of
accretion of PPA adjustments on financial instruments and other PPA
 
effects, compared with CHF 52m in the first
nine months of 2023; the first nine months of 2024 also
 
included negative CHF 7m of temporary and incremental
items directly
 
related to
 
the integration
 
of Credit
 
Suisse. Excluding
 
CHF 56m resulting
 
from the
 
aforementioned
accretion
 
and
 
other
 
effects
 
and
 
temporary
 
and
 
incremental
 
items,
 
underlying
 
transaction-based
 
income
 
was
CHF 1,294m, an increase of 17%.
 
Other income was broadly stable at CHF 56m.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Personal & Corporate Banking
 
24
Net credit
 
loss expenses
 
were CHF 202m,
 
mainly reflecting
 
net credit
 
loss expenses
 
on credit-impaired
 
positions
with
 
a
 
small
 
number of
 
corporate
 
counterparties, partly
 
offset
 
by
 
net credit
 
loss
 
releases
 
related
 
to
 
performing
positions. These
 
compared with
 
net credit
 
loss expenses
 
of CHF 359m
 
in the
 
first nine
 
months of
 
2023, largely
driven
 
by the
 
initial recognition
 
of expected
 
credit loss
 
allowances and
 
provisions with
 
respect to
 
Credit-Suisse-
related positions.
Operating expenses increased by CHF 1,067m,
 
or 40%, to CHF 3,765m, largely due to the
 
consolidation of Credit
Suisse expenses for the full
 
period. Operating expenses
 
included integration-related expenses
 
of CHF 409m, which
represented a CHF 251m increase compared with the CHF 158m of
 
integration-related expenses recorded for the
first
 
nine
 
months
 
of
 
2023.
 
Excluding
 
integration-related
 
expenses
 
and
 
PPA
 
effects
 
of
 
CHF 477m,
 
underlying
operating expenses were CHF 3,288m, an increase
 
of 31%.
Personal & Corporate Banking – in US dollars
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
 
1,429
 
1,350
 
1,559
 
6
 
(8)
 
4,288
 
3,367
Recurring net fee income
3
 
422
 
394
 
387
 
7
 
9
 
1,210
 
893
Transaction-based income
3
 
510
 
510
 
539
 
0
 
(5)
 
1,528
 
1,287
Other income
 
33
 
17
 
34
 
88
 
(3)
 
63
 
58
Total revenues
 
2,394
 
2,272
 
2,517
 
5
 
(5)
 
7,089
 
5,604
Credit loss expense / (release)
 
83
 
103
 
160
 
(19)
 
(48)
 
229
 
398
Operating expenses
 
1,465
 
1,396
 
1,400
 
5
 
5
 
4,265
 
2,996
Business division operating profit / (loss) before tax
 
846
 
773
 
957
 
9
 
(12)
 
2,594
 
2,210
Underlying results
Total revenues as reported
 
2,394
 
2,272
 
2,517
 
5
 
(5)
 
7,089
 
5,604
of which: PPA effects and other integration items
4
 
278
 
246
 
333
 
13
 
(16)
 
780
 
477
of which: PPA effects recognized in net interest income
 
255
 
221
 
290
 
15
 
(12)
 
717
 
418
of which: PPA effects and other integration items recognized in transaction-based income
 
23
 
24
 
43
 
(2)
 
(46)
 
64
 
58
Total revenues (underlying)
3
 
2,116
 
2,026
 
2,184
 
4
 
(3)
 
6,308
 
5,128
Credit loss expense / (release)
 
83
 
103
 
160
 
(19)
 
(48)
 
229
 
398
Operating expenses as reported
 
1,465
 
1,396
 
1,400
 
5
 
5
 
4,265
 
2,996
of which: integration-related expenses and PPA effects
3,5
 
198
 
182
 
174
 
9
 
14
 
540
 
211
Operating expenses (underlying)
3
 
1,267
 
1,213
 
1,226
 
4
 
3
 
3,725
 
2,785
of which: expenses for litigation, regulatory and similar matters
 
0
 
0
 
(9)
 
(56)
 
0
 
(9)
Business division operating profit / (loss) before tax as reported
 
846
 
773
 
957
 
9
 
(12)
 
2,594
 
2,210
Business division operating profit / (loss) before tax (underlying)
3
 
766
 
710
 
798
 
8
 
(4)
 
2,354
 
1,945
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
 
(11.6)
 
18.0
 
116.7
 
17.4
 
72.3
Cost / income ratio (%)
3
 
61.2
 
61.4
 
55.6
 
60.2
 
53.5
Average attributed equity (USD bn)
6
 
21.8
 
21.4
 
21.4
 
2
 
2
 
21.7
 
15.2
Return on attributed equity (%)
3,6
 
15.5
 
14.5
 
17.9
 
15.9
 
19.4
Net interest margin (bps)
3
 
202
 
194
 
221
 
201
 
204
Loans, gross (USD bn)
 
288.4
 
277.6
 
277.9
 
4
 
4
 
288.4
 
277.9
Customer deposits (USD bn)
 
297.9
 
283.4
 
277.2
 
5
 
7
 
297.9
 
277.2
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,7
 
1.2
 
1.1
 
0.8
 
1.2
 
0.8
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
 
(4.1)
 
29.4
 
80.7
 
21.0
 
51.6
Cost / income ratio (%)
3
 
59.9
 
59.9
 
56.1
 
59.1
 
54.3
Return on attributed equity (%)
3,6
 
14.1
 
13.3
 
14.9
 
14.5
 
17.1
1 Comparatives may differ due to
 
adjustments following organizational changes,
 
restatements due to the retrospective
 
adoption of new accounting standards
 
or changes in accounting policies,
 
and events after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes
 
in business
 
division perimeters,
 
Group Treasury
 
allocations and
 
Non-core and
 
Legacy cost allocations,
 
as well
 
as changes
 
in the
 
equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial
 
statements” section of this report and to “Changes to segment reporting in
 
2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information.
 
3 Refer to “Alternative performance
measures” in the appendix
 
to this report for
 
the definition and calculation
 
method.
 
4 Includes accretion of
 
PPA adjustments on
 
financial instruments and other
 
PPA effects,
 
as well as temporary
 
and incremental
items directly related to the integration.
 
5 Includes temporary, incremental operating expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition
of the Credit Suisse Group.
 
6 Refer to the “Equity
 
attribution” section of this report
 
for more information about
 
the equity attribution framework.
 
7 Refer to the “Risk
 
management and control” section
 
of this
report for more information about (credit-)impaired exposures.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Asset Management
 
25
Asset Management
Asset Management
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net management fees
3
 
755
 
711
 
757
 
6
 
0
 
2,212
 
1,809
Performance fees
 
46
 
28
 
18
 
62
 
157
 
104
 
52
Net gain from disposals
 
72
 
28
 
152
 
100
Total revenues
 
873
 
768
 
775
 
14
 
13
 
2,416
 
1,861
Credit loss expense / (release)
 
0
 
0
 
0
 
0
 
1
Operating expenses
 
722
 
638
 
738
 
13
 
(2)
 
2,025
 
1,649
Business division operating profit / (loss) before tax
 
151
 
130
 
37
 
16
 
309
 
392
 
211
Underlying results
Total revenues as reported
 
873
 
768
 
775
 
14
 
13
 
2,416
 
1,861
Total revenues (underlying)
4
 
873
 
768
 
775
 
14
 
13
 
2,416
 
1,861
Credit loss expense / (release)
 
0
 
0
 
0
 
0
 
1
Operating expenses as reported
 
722
 
638
 
738
 
13
 
(2)
 
2,025
 
1,649
of which: integration-related expenses
4
 
86
 
98
 
126
 
(12)
 
(32)
 
255
 
140
Operating expenses (underlying)
4
 
636
 
540
 
612
 
18
 
4
 
1,770
 
1,509
of which: expenses for litigation, regulatory and similar matters
 
6
 
0
 
1
 
6
 
2
Business division operating profit / (loss) before tax as reported
 
151
 
130
 
37
 
16
 
309
 
392
 
211
Business division operating profit / (loss) before tax (underlying)
4
 
237
 
228
 
163
 
4
 
46
 
647
 
351
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
4
 
309.1
 
64.8
 
(73.7)
 
85.9
 
(83.5)
Cost / income ratio (%)
4
 
82.7
 
83.0
 
95.2
 
83.8
 
88.6
Average attributed equity (USD bn)
5
 
2.7
 
2.7
 
3.1
 
1
 
(13)
 
2.7
 
2.3
Return on attributed equity (%)
4,5
 
22.4
 
19.5
 
4.8
 
19.6
 
12.4
Gross margin on invested assets (bps)
4
 
20
 
18
 
20
 
19
 
18
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
4
 
45.5
 
145.3
 
16.2
 
84.4
 
(17.6)
Cost / income ratio (%)
4
 
72.8
 
70.3
 
79.0
 
73.2
 
81.1
Return on attributed equity (%)
4,5
 
35.2
 
34.2
 
21.1
 
32.3
 
20.6
Information by business line / asset
 
class
Net new money (USD bn)
4
Equities
 
(4.9)
 
(8.2)
 
(5.7)
 
(9.8)
 
2.4
Fixed Income
 
5.3
 
(5.1)
 
4.6
 
14.0
 
23.5
of which: money market
 
4.7
 
(0.9)
 
5.7
 
14.2
 
20.9
Multi-asset & Solutions
 
(0.6)
 
(2.1)
 
(0.5)
 
(1.0)
 
1.3
Hedge Fund Businesses
 
(0.5)
 
0.0
 
(1.7)
 
(0.7)
 
(2.6)
Real Estate & Private Markets
 
0.7
 
0.0
 
0.7
 
1.0
 
2.4
Total net new money excluding associates
 
0.0
 
(15.5)
 
(2.6)
 
3.4
 
26.9
of which: net new money excluding money market
 
(4.8)
 
(14.6)
 
(8.3)
 
(10.8)
 
6.0
Associates
6
 
2.0
 
3.7
 
1.2
 
7.8
 
1.0
Total net new money
 
2.0
 
(11.8)
 
(1.5)
 
11.2
 
27.9
Invested assets (USD bn)
4
Equities
 
747
 
691
 
588
 
8
 
27
 
747
 
588
Fixed Income
 
471
 
450
 
446
 
5
 
6
 
471
 
446
of which: money market
 
153
 
146
 
146
 
5
 
5
 
153
 
146
Multi-asset & Solutions
 
285
 
277
 
248
 
3
 
15
 
285
 
248
Hedge Fund Businesses
 
60
 
59
 
58
 
2
 
4
 
60
 
58
Real Estate & Private Markets
 
152
 
147
 
149
 
4
 
2
 
152
 
149
Total invested assets excluding associates
 
1,714
 
1,624
 
1,489
 
6
 
15
 
1,714
 
1,489
of which: passive strategies
 
806
 
756
 
642
 
7
 
26
 
806
 
642
Associates
6
 
83
 
77
 
70
 
8
 
18
 
83
 
70
Total invested assets
 
1,797
 
1,701
 
1,559
 
6
 
15
 
1,797
 
1,559
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Asset Management
 
26
Asset Management (continued)
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Information by region
Invested assets (USD bn)
4
Americas
 
438
 
426
 
387
 
3
 
13
 
438
 
387
Asia Pacific
7
 
229
 
213
 
225
 
7
 
2
 
229
 
225
EMEA (excluding Switzerland)
 
403
 
380
 
328
 
6
 
23
 
403
 
328
Switzerland
 
728
 
682
 
619
 
7
 
18
 
728
 
619
Total invested assets
 
1,797
 
1,701
 
1,559
 
6
 
15
 
1,797
 
1,559
Information by channel
Invested assets (USD bn)
4
Third-party institutional
 
1,010
 
959
 
899
 
5
 
12
 
1,010
 
899
Third-party wholesale
 
182
 
181
 
162
 
0
 
12
 
182
 
162
UBS’s wealth management businesses
 
522
 
484
 
427
 
8
 
22
 
522
 
427
Associates
6
 
83
 
77
 
70
 
8
 
18
 
83
 
70
Total invested assets
 
1,797
 
1,701
 
1,559
 
6
 
15
 
1,797
 
1,559
1 Comparatives may differ due to adjustments
 
following organizational changes, restatements
 
due to the retrospective adoption of
 
new accounting standards or changes in
 
accounting policies, and events
 
after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes in
 
business division
 
perimeters, Group
 
Treasury allocations
 
and Non-core
 
and Legacy
 
cost allocations,
 
as well as
 
changes in
 
the equity
attribution framework. Refer to “Note 3 Segment reporting” in the
 
“Consolidated financial statements” section of this report and to “Changes to
 
segment reporting in 2024” in the “UBS business
 
divisions and Group
Items” section and the “Equity
 
attribution” section of the
 
UBS Group first quarter 2024
 
report, available under “Quarterly
 
reporting” at ubs.com/investors,
 
for more information.
 
3 Net management fees include
transaction fees, fund administration revenues (including net interest and trading income from lending activities and foreign-exchange hedging as part of the fund services offering),
 
distribution fees, incremental fund-
related expenses, gains or losses from seed money and co-investments, funding costs, the negative pass-through impact of third-party
 
performance fees, and other items that are not Asset Management’s performance
fees.
 
4 Refer to “Alternative performance
 
measures” in the appendix to this report for
 
the definition and calculation method.
 
5 Refer to the “Equity attribution” section of
 
this report for more information about
the equity attribution framework.
 
6 The invested assets and net new money amounts reported for associates are prepared in accordance with their
 
local regulatory requirements and practices.
 
7 Includes invested
assets from associates.
Results: 3Q24 vs 3Q23
 
Profit before tax increased by
 
USD 114m, or 309%, to USD
 
151m, mainly due to a
 
USD 72m net gain from
 
both
the closing of the
 
remaining portion of
 
the sale of our
 
Brazilian real estate
 
fund management business
 
and the sale
of
 
our
 
shareholding
 
in
 
Credit
 
Suisse
 
Insurance
 
Linked
 
Strategies
 
Ltd
 
(CSILS).
 
Underlying
 
profit
 
before
 
tax
 
was
USD 237m, an increase of 46%, after excluding
 
integration-related expenses of USD 86m.
Total revenues
Total
 
revenues
 
increased
 
by
 
USD 98m,
 
or
 
13%,
 
to
 
USD 873m,
 
mainly
 
reflecting
 
the
 
total
 
net
 
gain
 
from
 
the
aforementioned sales.
Net management
 
fees decreased
 
by USD 2m
 
to USD 755m,
 
mainly reflecting
 
continued margin
 
compression, partly
offset by positive market performance and foreign currency effects. In addition, net management fees in the third
quarter of 2024 included a revaluation of USD 19m
 
related to a real estate fund co-investment.
Performance fees
 
increased by
 
USD 28m, or
 
157%, to
 
USD 46m, mostly
 
due to increases
 
in Hedge Fund
 
Businesses
and Fixed Income.
Operating expenses
Operating expenses
 
decreased by
 
USD 16m, or
 
2%, to
 
USD 722m
 
and included
 
integration-related expenses
 
of
USD 86m, which represented a USD 40m decrease compared with the USD 126m of integration-related expenses
recorded
 
for
 
the
 
third
 
quarter of
 
2023.
 
This
 
decrease
 
was
 
almost
 
entirely
 
offset
 
by
 
higher
 
personnel expenses,
reflecting
 
higher
 
revenues,
 
and
 
higher
 
expenses
 
for
 
litigation,
 
regulatory
 
and
 
similar
 
matters.
 
Excluding
 
the
aforementioned integration-related expenses, underlying
 
operating expenses were USD 636m, an increase
 
of 4%.
Invested assets: 3Q24 vs 2Q24
 
Invested
 
assets
 
increased
 
by
 
USD 96bn
 
to
 
USD 1,797bn,
 
mainly
 
reflecting
 
favorable
 
foreign
 
currency
 
effects
 
of
USD 53bn, positive market performance of
 
USD 45bn and net new money of USD
 
2bn. There was also a USD 4bn
decrease in invested
 
assets mainly related
 
to both the
 
sale of our shareholding
 
in CSILS and
 
the sale of
 
our Brazilian
real estate
 
fund management
 
business. Excluding
 
money market
 
flows and
 
associates, net
 
new money
 
was negative
USD 5bn.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Asset Management
 
27
Results: 9M24 vs 9M23
Profit before tax
 
increased by
 
USD 181m, or
 
86%, to USD 392m,
 
mainly reflecting
 
a USD 100m net
 
gain from
 
both
the sale of our
 
Brazilian real estate fund management business and
 
the sale of our
 
shareholding in CSILS, as well
as the consolidation of
 
Credit Suisse for the full
 
period. Underlying profit
 
before tax was USD 647m,
 
an increase of
84%, after excluding integration-related expenses
 
of USD 255m.
Total revenues
 
increased by
 
USD 555m, or
 
30%, to
 
USD 2,416m, primarily reflecting
 
the consolidation of
 
Credit
Suisse revenues for
 
the full
 
period. Total
 
revenues in the
 
first nine
 
months of 2024
 
included the
 
USD 100m total
net gain from the aforementioned sales.
 
Net management fees increased by USD 403m, or 22%, to USD 2,212m, largely
 
attributable to the consolidation
of Credit
 
Suisse net management
 
fees for the
 
full period,
 
positive market
 
performance and
 
foreign currency
 
effects,
as well
 
as the
 
revaluation of a
 
real estate
 
fund co-investment, partly
 
offset by
 
continued margin compression.
 
In
addition, the first nine months of 2023 included the fee income of the former UBS Hana Asset Management Co.,
Ltd. and negative pass-through fees, with the corresponding
 
offset in performance fees.
Performance fees
 
increased
 
by USD 52m,
 
or 101%,
 
to USD 104m,
 
mostly due
 
to increases
 
in Hedge
 
Fund Businesses
and Fixed Income,
 
as well as
 
the consolidation of
 
Credit Suisse performance
 
fees for the
 
full period. These
 
increases
were partly offset by lower performance fees
 
related to the aforementioned pass-through
 
fees in 2023.
Operating expenses
 
increased by
 
USD 376m, or
 
23%, to
 
USD 2,025m, mainly
 
reflecting the
 
consolidation of
 
Credit
Suisse expenses for the
 
full period. Operating
 
expenses included integration-related
 
expenses of USD 255m,
 
which
represented a USD 115m increase compared with the USD 140m of integration-related expenses recorded for the
first
 
nine
 
months
 
of
 
2023.
 
Excluding
 
the
 
aforementioned
 
integration-related
 
expenses,
 
underlying
 
operating
expenses were USD 1,770m, an increase of
 
17%.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Investment Bank
 
28
Investment Bank
Investment Bank
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Advisory
 
220
 
239
 
195
 
(8)
 
13
 
648
 
560
Capital Markets
 
516
 
736
 
514
 
(30)
 
0
 
1,935
 
1,019
Global Banking
 
736
 
974
 
708
 
(24)
 
4
 
2,582
 
1,578
Execution Services
3
 
440
 
405
 
317
 
9
 
39
 
1,247
 
1,002
Derivatives & Solutions
3
 
964
 
897
 
671
 
7
 
44
 
2,795
 
2,444
Financing
 
506
 
526
 
465
 
(4)
 
9
 
1,574
 
1,538
Global Markets
 
1,910
 
1,829
 
1,453
 
4
 
31
 
5,616
 
4,984
of which: Equities
 
1,432
 
1,355
 
1,076
 
6
 
33
 
4,140
 
3,545
of which: Foreign Exchange, Rates and Credit
 
477
 
474
 
377
 
1
 
27
 
1,476
 
1,439
Total revenues
 
2,645
 
2,803
 
2,162
 
(6)
 
22
 
8,199
 
6,562
Credit loss expense / (release)
 
9
 
(6)
 
4
 
120
 
34
 
142
Operating expenses
 
2,231
 
2,332
 
2,412
 
(4)
 
(7)
 
6,728
 
6,302
Business division operating profit / (loss) before tax
 
405
 
477
 
(254)
 
(15)
 
1,437
 
118
Underlying results
Total revenues as reported
 
2,645
 
2,803
 
2,162
 
(6)
 
22
 
8,199
 
6,562
of which: PPA effects
4
 
185
 
310
 
251
 
(40)
 
(26)
 
787
 
306
of which: PPA effects recognized in Global Banking revenue line
 
180
 
306
 
251
 
(41)
 
(28)
 
775
 
306
Total revenues (underlying)
5
 
2,461
 
2,493
 
1,911
 
(1)
 
29
 
7,412
 
6,257
Credit loss expense / (release)
 
9
 
(6)
 
4
 
120
 
34
 
142
Operating expenses as reported
 
2,231
 
2,332
 
2,412
 
(4)
 
(7)
 
6,728
 
6,302
of which: integration-related expenses
5
 
156
 
245
 
368
 
(36)
 
(58)
 
543
 
529
Operating expenses (underlying)
5
 
2,076
 
2,087
 
2,043
 
(1)
 
2
 
6,185
 
5,773
of which: expenses for litigation, regulatory and similar matters
 
(1)
 
(1)
 
0
 
(41)
 
(3)
 
65
Business division operating profit / (loss) before tax as reported
 
405
 
477
 
(254)
 
(15)
 
1,437
 
118
Business division operating profit / (loss) before tax (underlying)
5
 
377
 
412
 
(136)
 
(9)
 
1,193
 
341
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
n.m.
 
(93.4)
Cost / income ratio (%)
5
 
84.4
 
83.2
 
111.6
 
82.1
 
96.0
Average attributed equity (USD bn)
6
 
17.0
 
17.0
 
17.1
 
1
 
0
 
17.0
 
15.6
Return on attributed equity (%)
5,6
 
9.5
 
11.3
 
(5.9)
 
11.3
 
1.0
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
 
249.4
 
(81.8)
Cost / income ratio (%)
5
 
84.4
 
83.7
 
106.9
 
83.4
 
92.3
Return on attributed equity (%)
5,6
 
8.8
 
9.7
 
(3.2)
 
9.4
 
2.9
1 Comparatives may differ due to
 
adjustments following organizational changes,
 
restatements due to the retrospective
 
adoption of new accounting standards
 
or changes in accounting policies,
 
and events after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes
 
in business
 
division perimeters,
 
Group Treasury
 
allocations and
 
Non-core and
 
Legacy cost allocations,
 
as well
 
as changes
 
in the
 
equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial
 
statements” section of this report and to “Changes to segment reporting in 2024”
 
in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the
 
UBS Group first quarter 2024 report, available under “Quarterly
 
reporting” at ubs.com/investors, for more information.
 
3 Comparative figures for the quarter
ended 30 September 2023 and for the
 
nine-month period ended 30 September 2023 have been
 
restated as a result of the shift
 
of the foreign exchange products that are traded over
 
electronic platforms from Execution
Services to Derivatives & Solutions. The restatement had no effect on total Global Markets revenues.
 
4 Includes accretion of PPA adjustments on financial instruments and other PPA effects.
 
5 Refer to “Alternative
performance measures” in the appendix to this report for the definition and calculation method.
 
6 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Investment Bank
 
29
Results: 3Q24 vs 3Q23
Profit before
 
tax was
 
USD 405m, compared
 
with a loss
 
before tax of
 
USD 254m in
 
the third quarter
 
of 2023,
 
mainly
due
 
to
 
higher
 
total
 
revenues and
 
lower
 
operating expenses.
 
Underlying profit
 
before
 
tax
 
was
 
USD 377m, after
excluding USD 185m of purchase price allocation
 
(PPA) effects and USD 156m of integration-related
 
expenses.
Total revenues
Total revenues increased by
 
USD 483m, or
 
22%, to
 
USD 2,645m, due
 
to higher
 
Global Markets
 
and Global
 
Banking
revenues,
 
and
 
included
 
USD 185m
 
of
 
PPA
 
effects,
 
which
 
represented
 
a
 
USD 66m
 
decrease
 
compared
 
with
 
the
USD 251m recorded for
 
such effects in
 
the third quarter
 
of 2023. Excluding
 
these effects,
 
underlying total
 
revenues
were USD 2,461m, an increase of 29%.
Global Banking
Global Banking
 
revenues increased
 
by USD 28m,
 
or 4%,
 
to USD 736m
 
and included
 
a decrease
 
of USD 71m
 
of
accretion of PPA
 
adjustments on financial instruments and other PPA
 
effects. Excluding these accretion and other
effects, underlying Global Banking revenues increased by USD 98m,
 
or 21%.
 
Advisory revenues
 
increased by
 
USD 25m, or
 
13%, to
 
USD 220m, mainly
 
due to
 
higher merger
 
and acquisition
transaction revenues, which increased by
 
USD 24m, or 13%.
 
Capital Markets revenues increased by
 
USD 2m to USD 516m and included
 
a decrease of USD 71m of accretion
 
of
PPA
 
adjustments
 
on
 
financial
 
instruments
 
and
 
other
 
PPA
 
effects.
 
Excluding
 
these
 
accretion
 
and
 
other
 
effects,
underlying
 
Capital
 
Markets
 
revenues
 
increased
 
by
 
USD 73m,
 
or
 
28%,
 
with
 
increases
 
across
 
all
 
products.
 
Debt
Capital Markets revenues increased by USD 10m, or 12%, Equity Capital Markets revenues increased by USD 5m,
or 9%, and Leveraged Capital Markets revenues
 
increased by USD 4m, or 4%.
 
Global Markets
Global Markets revenues increased by USD 457m, or
 
31%, to USD 1,910m, primarily driven by higher Derivatives
& Solutions and Execution Services revenues.
Execution
 
Services
 
revenues
 
increased
 
by
 
USD 123m,
 
or
 
39%,
 
to
 
USD 440m,
 
mainly
 
due
 
to
 
increases
 
in
 
Cash
Equities across all regions.
Derivatives &
 
Solutions revenues
 
increased by
 
USD 293m, or
 
44%, to
 
USD 964m, with
 
increases across
 
all products,
led by Equity Derivatives,
 
Foreign Exchange and Rates.
Financing revenues increased
 
by USD 41m, or
 
9%, to USD 506m
 
and included a
 
USD 67m gain from
 
the sale of
our investment in an associate.
Equities
Global Markets Equities revenues increased by USD 356m, or 33%,
 
to USD 1,432m, mostly driven by increases in
Equity Derivatives and Cash Equities, as well
 
as by the aforementioned gain from sale.
Foreign Exchange, Rates and Credit
Global
 
Markets
 
Foreign
 
Exchange,
 
Rates
 
and
 
Credit
 
revenues
 
increased
 
by
 
USD 100m,
 
or
 
27%,
 
to
 
USD 477m,
primarily driven by increases in Foreign Exchange and Rates.
Credit loss expense / release
Net credit loss expenses increased by USD 5m to USD 9m.
Operating expenses
Operating expenses
 
decreased
 
by USD 181m,
 
or 7%,
 
to USD 2,231m,
 
largely due
 
to a
 
decrease
 
in integration-
related expenses,
 
which totaled USD 156m, representing a USD 212m decrease compared with the USD 368m of
integration-related
 
expenses
 
recorded
 
for
 
the
 
third
 
quarter
 
of
 
2023.
 
Excluding
 
integration-related
 
expenses,
underlying operating expenses were USD 2,076m, an
 
increase of 2%.
Results: 9M24 vs 9M23
Profit before
 
tax increased by
 
USD 1,319m to USD 1,437m,
 
mainly due
 
to higher total
 
revenues, partly
 
offset by
higher operating
 
expenses. Underlying
 
profit before
 
tax was
 
USD 1,193m, after
 
excluding USD 787m
 
of PPA
 
effects
and USD 543m of integration-related expenses.
Total revenues
Total revenues increased by
 
USD 1,637m, or
 
25%, to
 
USD 8,199m, mainly
 
due to
 
higher Global
 
Banking and
 
Global
Markets
 
revenues.
 
The
 
consolidation
 
of
 
Credit
 
Suisse
 
revenues
 
included
 
USD 787m
 
of
 
PPA
 
effects,
 
which
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Investment Bank
 
30
represented a USD 481m increase compared
 
with the USD 306m recorded for
 
such effects in the first
 
nine months
of 2023. Excluding these effects, underlying total revenues were USD
 
7,412m, an increase of 18%.
Global Banking
Global Banking revenues increased by USD 1,004m, or 64%, to USD 2,582m, including an increase of USD 469m
of accretion
 
of PPA adjustments
 
on financial
 
instruments and
 
other PPA effects.
 
Excluding these
 
accretion and
 
other
effects, underlying Global Banking revenues were USD 1,808m, an
 
increase of 42%.
 
Advisory revenues
 
increased by
 
USD 88m, or
 
16%, to
 
USD 648m, mainly
 
due to
 
higher merger
 
and acquisition
transaction revenues, which increased by
 
USD 71m, or 14%.
 
Capital Markets revenues
 
increased by USD 916m,
 
or 90%, to USD
 
1,935m, including an
 
increase of USD 469m
 
of
accretion of PPA adjustments on
 
financial instruments and other PPA
 
effects. Excluding these accretion and
 
other
effects, underlying Capital Markets revenues increased by
 
USD 447m, or 63%, with increases
 
across all products.
Leveraged Capital Markets revenues increased by
 
USD 215m, or 129%, Debt Capital
 
Markets revenues increased
by USD 72m, or 32%, and Equity Capital
 
Markets revenues increased by USD 57m,
 
or 33%.
 
Global Markets
Global Markets revenues increased by USD 632m, or
 
13%, to USD 5,616m, primarily driven by higher Derivatives
& Solutions and Execution Services revenues.
Execution Services revenues increased by USD 245m, or 24%, to USD 1,247m, mainly driven by increases in
 
Cash
Equities across all regions.
Derivatives & Solutions revenues
 
increased by USD 351m, or 14%,
 
to USD 2,795m, with increases largely
 
in Equity
Derivatives and Foreign Exchange revenues.
Financing
 
revenues
 
increased
 
by
 
USD 36m,
 
or
 
2%,
 
to
 
USD 1,574m
 
and
 
included
 
a
 
USD 67m
 
gain
 
from
 
the
aforementioned sale of our investment in an
 
associate.
Equities
Global Markets Equities revenues increased by USD 595m, or 17%,
 
to USD 4,140m, mainly driven by increases in
Equity Derivatives and Cash Equities, as well
 
as by the aforementioned gain from sale.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues increased by
 
USD 37m, or 3%, to USD 1,476m.
Credit loss expense / release
Net
 
credit
 
loss
 
expenses
 
were
 
USD 34m,
 
mainly
 
reflecting
 
net
 
credit
 
loss
 
expenses
 
on
 
performing
 
and
 
credit-
impaired positions.
 
This compared
 
with net
 
credit loss
 
expenses of
 
USD 142m in
 
the first
 
nine months
 
of 2023,
largely driven
 
by the
 
initial recognition
 
of expected
 
credit loss
 
allowances and
 
provisions with
 
respect to
 
Credit-
Suisse-related positions.
Operating expenses
Operating expenses increased
 
by USD 426m, or
 
7%, to USD 6,728m,
 
and included integration-related
 
expenses of
USD 543m, which represented a USD 14m increase
 
compared with the USD 529m of
 
integration-related expenses
recorded for the first nine months of 2023. Excluding
 
integration-related expenses, underlying operating
 
expenses
were USD 6,185m, an
 
increase of 7%,
 
mainly due to
 
the consolidation
 
of Credit Suisse
 
expenses for
 
the full
 
period,
increases in technology expenses and higher variable
 
compensation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Non-core and Legacy
 
31
Non-core and Legacy
Non-core and Legacy
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Total revenues
 
262
 
401
 
366
 
(35)
 
(29)
 
1,664
 
551
Credit loss expense / (release)
 
28
 
(1)
 
59
 
(54)
 
63
 
178
Operating expenses
 
837
 
807
 
2,068
 
4
 
(60)
 
2,655
 
3,304
Operating profit / (loss) before tax
 
(603)
 
(405)
 
(1,762)
 
49
 
(66)
 
(1,054)
 
(2,930)
Underlying results
Total revenues as reported
 
262
 
401
 
366
 
(35)
 
(29)
 
1,664
 
551
Total revenues (underlying)
3
 
262
 
401
 
366
 
(35)
 
(29)
 
1,664
 
551
Credit loss expense / (release)
 
28
 
(1)
 
59
 
(54)
 
63
 
178
Operating expenses as reported
 
837
 
807
 
2,068
 
4
 
(60)
 
2,655
 
3,304
of which: integration-related expenses
3
 
270
 
325
 
920
 
(17)
 
(71)
 
837
 
1,024
Operating expenses (underlying)
3
 
567
 
481
 
1,149
 
18
 
(51)
 
1,817
 
2,279
of which: expenses for litigation, regulatory and similar matters
 
(91)
 
(172)
 
(2)
 
(47)
 
(279)
 
670
Operating profit / (loss) before tax as reported
 
(603)
 
(405)
 
(1,762)
 
49
 
(66)
 
(1,054)
 
(2,930)
Operating profit / (loss) before tax (underlying)
3
 
(333)
 
(80)
 
(842)
 
317
 
(60)
 
(216)
 
(1,906)
Performance measures and other information
Average attributed equity (USD bn)
4
 
8.5
 
10.1
 
10.5
 
(16)
 
(19)
 
9.7
 
4.8
Risk-weighted assets (USD bn)
 
44.8
 
49.6
 
79.9
 
(10)
 
(44)
 
44.8
 
79.9
Leverage ratio denominator (USD bn)
 
69.0
 
80.0
 
172.7
 
(14)
 
(60)
 
69.0
 
172.7
1 Comparatives may differ due to adjustments
 
following organizational changes, restatements
 
due to the retrospective adoption
 
of new accounting standards or changes
 
in accounting policies, and events
 
after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes in
 
business division
 
perimeters, Group
 
Treasury allocations
 
and Non-core
 
and Legacy
 
cost allocations,
 
as well as
 
changes in
 
the equity
attribution framework. Refer to “Note 3 Segment reporting” in the
 
“Consolidated financial statements” section of this report and to “Changes
 
to segment reporting in 2024” in the “UBS business
 
divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information.
 
3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method.
 
4 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
 
Composition of Non-core and Legacy
USD bn
RWA
Total assets
LRD
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
Exposure category
Equities
 
1.0
 
1.5
 
4.5
 
6.4
 
4.2
 
7.6
Macro
 
4.7
 
5.2
 
33.6
 
33.8
 
14.4
 
16.8
Loans
 
4.4
 
5.8
 
4.3
 
7.5
 
6.0
 
6.2
Securitized products
 
6.4
 
7.7
 
7.8
 
13.2
 
10.4
 
12.8
Credit
 
0.4
 
0.7
 
0.2
 
0.2
 
0.7
 
1.3
High-quality liquid assets
 
31.7
 
32.6
 
31.7
 
32.6
Operational risk
 
27.1
 
27.1
Other
 
0.8
 
1.6
 
3.0
 
2.9
 
1.6
 
2.7
Total
 
44.8
 
49.6
 
85.1
 
96.6
 
69.0
 
80.0
Results: 3Q24 vs 3Q23
Loss before
 
tax was
 
USD 603m, compared
 
with a
 
loss
 
before
 
tax of
 
USD 1,762m in
 
the third
 
quarter of
 
2023.
Underlying
 
loss
 
before
 
tax was
 
USD 333m,
 
a
 
decrease
 
of
 
60%,
 
after
 
excluding
 
integration-related expenses
 
of
USD 270m.
Total revenues
Total
 
revenues
 
decreased
 
by
 
USD 104m,
 
or
 
29%,
 
to
 
USD 262m,
 
mainly
 
due
 
to
 
lower
 
net
 
interest
 
income
 
and
trading revenues as
 
a result of
 
portfolio reductions.
 
Total revenues in the third
 
quarter of
 
2024 included
 
a USD 67m
gain from the sale of our investment in an associate.
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Non-core and Legacy
 
32
Credit loss expense / release
Net credit
 
loss expenses
 
decreased by
 
USD 31m to
 
USD 28m and
 
mainly reflected
 
net credit
 
loss expenses
 
on credit-
impaired positions with a small number of corporate counterparties.
 
Operating expenses
Operating expenses
 
decreased by
 
USD 1,231m, or
 
60%, to
 
USD 837m, mainly
 
due to
 
decreases
 
in integration-
related expenses,
 
professional fees,
 
outsourcing expenses
 
and personnel
 
expenses. Operating
 
expenses included
integration-related expenses of
 
USD 270m, which was
 
USD 650m lower than
 
the amount
 
recorded for
 
the third
quarter of 2023, which included a one-time fee
 
of USD 289m related to a provision
 
for an onerous contract, and
also real estate
 
expenses.
 
In addition,
 
operating expenses
 
in the
 
third quarter
 
of 2024
 
included releases
 
of USD 84m
of
 
IFRS 3
 
acquisition-related
 
contingent
 
liabilities
 
following
 
settlements
 
reached
 
in
 
that
 
quarter.
 
Excluding
 
the
aforementioned
 
integration-related expenses,
 
underlying
 
operating expenses
 
in
 
the
 
third
 
quarter
 
of
 
2024
 
were
USD 567m, a decrease of 51%.
Risk-weighted assets and leverage ratio denominator:
 
3Q24 vs 2Q24
Risk-weighted assets (RWA)
 
decreased by USD 4.8bn
 
to USD 44.8bn,
 
and the leverage
 
ratio denominator (the
 
LRD)
decreased
 
by
 
USD 11.0bn
 
to
 
USD 69.0bn.
 
The
 
active
 
unwinding
 
of
 
Non-core
 
and
 
Legacy
 
assets
 
resulted
 
in
 
a
decrease in RWA,
 
mainly related to the loan and securitized
 
products portfolios,
 
and a decrease in the LRD, mainly
driven by the equity, macro and securitized products portfolios.
Results: 9M24 vs 9M23
Loss before tax
 
was USD 1,054m, compared with
 
loss before tax
 
of USD 2,930m. Underlying loss
 
before tax was
USD 216m, a decrease of 89%, after excluding
 
integration-related expenses of USD 837m.
Total revenues
Total
 
revenues were
 
USD 1,664m, which
 
was USD 1,113m
 
higher than
 
the total
 
revenues recorded
 
for the
 
first
nine months of
 
2023, and included
 
the impact of
 
the consolidation of
 
Credit Suisse revenues
 
for the full
 
period.
Total revenues reflected net gains from
 
position exits,
 
along with net
 
interest income
 
from securitized products
 
and
credit products. Total revenues also
 
included a
 
net gain
 
of USD 272m,
 
after the
 
accounting for
 
the PPA adjustments
at the closing of the
 
acquisition of the Credit Suisse
 
Group, from the
 
sale of assets from the
 
former Credit Suisse
securitized
 
products
 
group
 
to
 
Apollo
 
Management
 
Holdings
 
and
 
certain
 
other
 
entities
 
(collectively,
 
Apollo).
 
In
addition, total
 
revenues included
 
the aforementioned
 
USD 67m gain
 
from the
 
sale of
 
our investment
 
in an
 
associate.
›
Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial
statements” section of this report for information about the conclusion of an investment management agreement
with Apollo and the transfer of senior secured asset-based financing
Credit loss expense / release
Net credit loss
 
expenses were USD 63m,
 
mainly reflecting net
 
credit loss expenses
 
on credit-impaired positions
 
with
a small number
 
of corporate counterparties,
 
partly offset by
 
net credit loss releases
 
related to performing
 
positions.
These compared with net credit loss expenses of USD 178m in
 
the first nine months of 2023, largely driven
 
by the
initial recognition of expected credit loss allowances and
 
provisions with respect to Credit-Suisse-related positions.
 
Operating expenses
Operating expenses were
 
USD 2,655m, which was USD 649m
 
lower than the
 
amount recorded
 
for the first
 
nine
months of
 
2023,
 
mainly due
 
to
 
decreases
 
in integration-related
 
expenses and
 
outsourcing
 
expenses. Operating
expenses
 
included
 
integration-related
 
expenses
 
of
 
USD 837m,
 
which
 
was
 
USD 187m
 
lower
 
than
 
the
 
amount
recorded for
 
the first
 
nine months
 
of 2023.
 
In addition,
 
operating expenses
 
in the
 
first nine
 
months of
 
2024 included
releases of
 
USD 234m of
 
IFRS 3 acquisition-related
 
contingent
 
liabilities following
 
settlements reached
 
in the
 
second
and third quarters
 
of 2024. The
 
first nine months of
 
2023 included a USD 665m
 
increase in provisions
 
related to
the US
 
residential mortgage-backed
 
securities litigation
 
matter,
 
which was
 
settled in
 
the third
 
quarter of
 
2023.
Excluding the aforementioned
 
integration-related expenses,
 
underlying operating
 
expenses in the
 
first nine months
of 2024 were USD 1,817m, a decrease of 20%.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
UBS business divisions and Group Items |
 
Group Items
 
33
Group Items
Group Items
1
As of or for the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Total revenues
 
(39)
 
(392)
 
(78)
 
(90)
 
(50)
 
(786)
 
(602)
Credit loss expense / (release)
 
0
 
0
 
5
 
(2)
 
7
Operating expenses
 
(84)
 
(15)
 
6
 
467
 
(132)
 
422
Operating profit / (loss) before tax
 
45
 
(377)
 
(89)
 
(652)
 
(1,031)
Underlying results
Total revenues as reported
 
(39)
 
(392)
 
(78)
 
(90)
 
(50)
 
(786)
 
(602)
of which: PPA effects and other integration items
3
 
(25)
 
(8)
 
(14)
 
(37)
 
(20)
Total revenues (underlying)
4
 
(14)
 
(384)
 
(64)
 
(96)
 
(78)
 
(749)
 
(582)
Credit loss expense / (release)
 
0
 
0
 
5
 
(2)
 
7
Operating expenses as reported
 
(84)
 
(15)
 
6
 
467
 
(132)
 
422
of which: integration-related expenses
4
 
(11)
 
(2)
 
(5)
 
(12)
 
342
of which: acquisition-related costs
 
26
 
202
Operating expenses (underlying)
4
 
(74)
 
(13)
 
(15)
 
468
 
401
 
(120)
 
(122)
of which: expenses for litigation, regulatory and similar matters
 
0
 
3
 
0
 
3
 
1
Operating profit / (loss) before tax as reported
 
45
 
(377)
 
(89)
 
(652)
 
(1,031)
Operating profit / (loss) before tax (underlying)
4
 
60
 
(371)
 
(55)
 
(627)
 
(467)
1 Comparatives may differ due to adjustments
 
following organizational changes, restatements
 
due to the retrospective adoption
 
of new accounting standards or changes
 
in accounting policies, and events
 
after the
reporting period.
 
2 Comparative
 
figures have
 
been restated
 
for changes in
 
business division
 
perimeters, Group
 
Treasury allocations
 
and Non-core
 
and Legacy
 
cost allocations,
 
as well as
 
changes in
 
the equity
attribution framework. Refer to “Note 3 Segment reporting” in the
 
“Consolidated financial statements” section of this report and to “Changes to
 
segment reporting in 2024” in the “UBS business
 
divisions and Group
Items” section
 
and the
 
“Equity attribution”
 
section of
 
the UBS
 
Group first
 
quarter 2024
 
report, available
 
under “Quarterly
 
reporting” at
 
ubs.com/investors,
 
for more
 
information.
 
3 Includes accretion
 
of PPA
adjustments on financial instruments
 
and other PPA
 
effects, as well as
 
temporary and incremental items
 
directly related to the
 
integration.
 
4 Refer to “Alternative
 
performance measures” in the
 
appendix to this
report for the definition and calculation method.
Results: 3Q24 vs 3Q23
Profit before tax was
 
USD 45m, mainly
 
driven by mark-to-market
 
gains in Group
 
hedging and
 
own debt, compared
with a loss before tax of USD 89m. Underlying profit before tax was USD 60m, after excluding negative USD 25m
of purchase price allocation (PPA)
 
effects and other integration items from total revenues,
 
and negative USD 11m
of integration-related
 
expenses from
 
operating expenses,
 
compared with
 
an underlying
 
loss before
 
tax of
 
USD 55m,
after excluding
 
USD 26m of
 
acquisition-related costs
 
and negative
 
USD 5m of
 
integration-related expenses from
operating expenses and negative USD 14m of
 
PPA effects and other integration items from total revenues.
Income
 
from
 
Group
 
hedging
 
and
 
own
 
debt,
 
including
 
hedge
 
accounting
 
ineffectiveness,
 
was
 
net
 
USD 200m,
compared with net
 
income of USD 100m.
 
The gains in
 
the third quarter
 
of 2024 were
 
driven by mark-to-market
effects on portfolio-level economic hedges,
 
mainly due to decreasing interest rates.
Results: 9M24 vs 9M23
Loss before tax decreased by USD 379m, or 37%, to USD 652m, mainly
 
driven by mark-to-market losses in Group
hedging and
 
own debt.
 
Underlying loss
 
before tax
 
was USD 627m,
 
after excluding
 
negative USD 37m
 
of PPA
 
effects
and
 
other
 
integration
 
items
 
from
 
total
 
revenues
 
and
 
negative
 
USD 12m
 
of
 
integration-related
 
expenses
 
from
operating
 
expenses,
 
compared
 
with
 
an
 
underlying
 
loss
 
before
 
tax
 
of
 
USD 467m,
 
after
 
excluding
 
USD 342m
 
of
integration-related
 
expenses
 
and
 
USD 202m
 
of
 
acquisition-related
 
costs
 
from
 
operating
 
expenses
 
and
 
negative
USD 20m of PPA effects and other integration
 
items from total revenues.
Income
 
from
 
Group
 
hedging
 
and
 
own
 
debt,
 
including
 
hedge
 
accounting
 
ineffectiveness,
 
was
 
net
 
negative
USD 185m, compared
 
with net
 
negative income
 
of USD 23m.
 
The losses
 
in the
 
first nine
 
months of
 
2024 were
driven by mark-to-market
 
effects on portfolio-level
 
economic hedges, mainly
 
due to cross-currency-basis
 
widening.
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
35
Risk management and control
This
 
section
 
provides
 
information
 
about
 
key
 
developments
 
during
 
the
 
reporting
 
period
 
and
 
should
 
be
 
read
 
in
conjunction with
 
the “Risk
 
management and
 
control” section
 
of the
 
UBS Group
 
Annual Report
 
2023, available
under “Annual
 
reporting” at
ubs.com/investors
, and
 
the “Recent
 
developments” section of
 
this report
 
for more
information about the integration of Credit
 
Suisse.
Credit risk
 
Overall banking products exposure
Overall banking
 
products exposure
 
increased by
 
USD 12bn to
 
USD 1,065bn as
 
of 30 September
 
2024, primarily
reflecting currency
 
effects, partly
 
offset by
 
negative net
 
new loans
 
in Personal
 
& Corporate
 
Banking and
 
Global
Wealth Management and a decrease in balances at central
 
banks.
Total
 
net credit
 
loss
 
expenses in
 
the
 
third quarter
 
of 2024
 
were USD 121m,
 
reflecting net
 
releases of
 
USD 15m
related to performing positions and net expenses
 
of USD 136m 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 and “Note 9 Expected credit loss measurement” in the “Consolidated
financial statements” 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 increased by USD 1.5bn
 
to
USD 4.3bn as of
 
30 September 2024,
 
driven by new
 
mandates, partly offset
 
by deal syndications
 
and cancellations.
As of 30 September 2024, USD 0.1bn of these
 
commitments had not been distributed
 
as originally planned.
 
As of
30 September 2024, Non-core and Legacy had
 
no loan underwriting commitments.
Loan underwriting exposures
 
in the Investment
 
Bank are classified
 
as held for
 
trading, with
 
fair values reflecting
 
the
market conditions
 
at the
 
end of
 
the quarter.
 
Credit hedges
 
are in place
 
to help
 
protect against
 
fair value
 
movements
in the portfolio.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
36
Banking and traded products exposure in the business divisions and Group Items
30.9.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
 
Bank
Non-core
 
and Legacy
Group
 
Items
Total
Banking products
1,2
Gross exposure
 
471,513
 
449,650
 
1,671
 
88,207
 
33,493
 
20,529
 
1,065,063
of which: loans and advances to customers (on-balance sheet)
 
306,747
 
288,387
 
14
 
18,503
 
1,758
 
2,308
 
617,718
of which: guarantees and loan commitments (off-balance sheet)
 
19,348
 
47,158
 
10
 
34,539
 
2,922
 
17,977
 
121,955
Traded products
2,3
Gross exposure
 
14,834
 
4,258
 
0
 
40,420
 
59,512
of which: over-the-counter derivatives
 
10,877
 
3,681
 
0
 
9,585
 
24,143
of which: securities financing transactions
 
205
 
0
 
0
 
18,696
 
18,901
of which: exchange-traded derivatives
 
3,752
 
577
 
0
 
12,139
 
16,468
Other credit lines, gross
4
 
73,443
 
76,620
 
0
 
3,018
 
4
 
0
 
153,085
Total credit-impaired exposure, gross
 
1,442
 
3,695
 
0
 
398
 
1,098
 
0
 
6,633
of which: stage 3
 
1,327
 
3,316
 
0
 
351
 
163
 
0
 
5,157
of which: PCI
 
115
 
379
 
0
 
47
 
935
 
0
 
1,475
Total allowances and provisions for expected credit losses
 
317
 
1,393
 
0
 
328
 
385
 
7
 
2,431
of which: stage 1
 
125
 
319
 
0
 
122
 
6
 
7
 
579
of which: stage 2
 
69
 
265
 
0
 
99
 
3
 
0
 
436
of which: stage 3
 
118
 
807
 
0
 
106
 
116
 
0
 
1,147
of which: PCI
 
5
 
2
 
0
 
2
 
261
 
0
 
269
30.6.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
 
Bank
Non-core
 
and Legacy
Group
Items
Total
Banking products
1,2
Gross exposure
 
469,136
 
435,333
 
1,436
 
100,115
 
31,866
 
15,598
 
1,053,484
of which: loans and advances to customers (on-balance sheet)
 
300,567
 
277,634
 
11
 
17,438
 
5,069
 
130
 
600,849
of which: guarantees and loan commitments (off-balance sheet)
 
19,663
 
48,443
 
10
 
34,702
 
3,020
 
16,789
 
122,626
Traded products
2,3
Gross exposure
 
13,459
 
3,937
 
0
 
42,155
 
59,551
of which: over-the-counter derivatives
 
9,718
 
3,415
 
0
 
10,897
 
24,029
of which: securities financing transactions
 
343
 
0
 
0
 
21,079
 
21,422
of which: exchange-traded derivatives
 
3,398
 
522
 
0
 
10,180
 
14,099
Other credit lines, gross
4
 
69,061
 
77,486
 
0
 
2,294
 
3
 
87
 
148,931
Total credit-impaired exposure, gross
 
1,373
 
3,325
 
0
 
491
 
1,086
 
0
 
6,275
of which: stage 3
 
1,221
 
2,953
 
0
 
441
 
169
 
0
 
4,784
of which: PCI
 
152
 
371
 
0
 
50
 
918
 
0
 
1,492
Total allowances and provisions for expected credit losses
5
 
320
 
1,273
 
0
 
329
 
328
 
7
 
2,258
of which: stage 1
 
136
 
327
 
0
 
121
 
6
 
7
 
597
of which: stage 2
 
68
 
235
 
0
 
96
 
5
 
0
 
404
of which: stage 3
 
110
 
718
 
0
 
112
 
114
 
0
 
1,053
of which: PCI
 
7
 
(6)
 
0
 
1
 
203
 
0
 
204
1 IFRS 9 gross exposure
 
for banking products includes
 
the following financial instruments
 
in scope of expected
 
credit loss requirements: balances
 
at central banks,
 
amounts due from banks,
 
loans and advances to
customers, other financial assets at amortized cost, guarantees and irrevocable loan commitments.
 
2 Internal management view of credit risk, which differs in certain respects from
 
IFRS Accounting Standards.
 
3 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 Unconditionally revocable
committed credit lines.
 
5 Negative balances are representative of a net improvement in credit quality since the acquisition of the respective financial instrument,
 
which is reflected as a negative ECL allowance.
 
Collateralization of Loans and advances to customers
1
Global Wealth Management
Personal & Corporate Banking
USD m, except where indicated
30.9.24
30.6.24
30.9.24
30.6.24
Secured by collateral
 
301,089
 
292,302
 
249,314
 
237,866
Residential real estate
 
112,883
 
107,910
 
199,016
 
187,409
Commercial / industrial real estate
 
9,804
 
9,963
 
40,126
 
38,822
Cash
 
29,597
 
30,139
 
2,828
 
2,906
Equity and debt instruments
 
121,586
 
119,116
 
2,990
 
3,206
Other collateral
2
 
27,219
 
25,174
 
4,353
 
5,523
Subject to guarantees
 
646
 
705
 
7,262
 
7,398
Uncollateralized and not subject to guarantees
 
5,013
 
7,560
 
31,812
 
32,369
Total loans and advances to customers, gross
 
306,747
 
300,567
 
288,387
 
277,634
Allowances
 
(233)
 
(238)
 
(1,162)
 
(1,055)
Total loans and advances to customers, net of allowances
 
306,514
 
300,329
 
287,225
 
276,579
Collateralized loans and advances to customers in % of total loans
 
and advances to customers, gross (%)
 
98.2
 
97.3
 
86.5
 
85.7
1 Collateral arrangements generally
 
incorporate a range of
 
collateral, including cash, securities,
 
real estate and other collateral.
 
UBS applies a risk-based approach that
 
generally prioritizes collateral according
 
to its
liquidity profile. In the case of loan facilities with funded and unfunded elements, the collateral is first allocated to the funded
 
element. For legacy Credit Suisse exposure, a risk-based approach is applied that generally
prioritizes real estate collateral and prioritizes other
 
collateral according to its liquidity profile.
 
In the case of loan facilities with funded and
 
unfunded elements, the collateral is proportionately allocated.
 
2 Includes
but is not limited to life insurance contracts, rights in respect of subscription or capital commitments
 
from fund partners, inventory, gold and other commodities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
37
Market risk
UBS
 
Group
 
excluding
 
certain
 
legacy
 
Credit
 
Suisse
 
components
 
continued
 
to
 
maintain
 
generally
 
low
 
levels
 
of
management value-at-risk (VaR). Average management VaR
 
(1-day, 95%
 
confidence level) increased to USD 12m
from USD 9m in the third
 
quarter of 2024, mainly driven by the Investment Bank’s Rates business.
 
There were no
new
 
VaR
 
negative
 
backtesting
 
exceptions
 
in
 
the
 
third
 
quarter
 
of
 
2024.
 
The
 
number
 
of
 
negative
 
backtesting
exceptions within the most recent 250-business-day
 
window remained at zero.
Average
 
management VaR
 
(1-day,
 
98%
 
confidence level)
 
of
 
the
 
legacy
 
Credit
 
Suisse
 
components decreased
 
to
USD 11m from USD 15m in the third quarter of 2024, driven by continued strategic migration of positions to UBS
from the
 
former Investment
 
Bank (Credit
 
Suisse) and
 
reductions in
 
Non-core and
 
Legacy.
 
In the
 
third quarter
 
of
2024, the aforementioned legacy
 
Credit Suisse components had three
 
new negative backtesting exceptions
 
driven
by Non-core and
 
Legacy. Two backtesting
 
exceptions were caused
 
by market moves
 
and one backtesting
 
exception
was
 
due
 
to
 
valuation
 
adjustments
 
related
 
to
 
additional
 
exit
 
cost
 
reserves.
 
The
 
number
 
of
 
negative
 
backtesting
exceptions within the most recent 250-business-day
 
window increased to four from one.
As the number
 
of negative backtesting
 
exceptions for the
 
legacy Credit Suisse
 
components also remained below
five,
 
the Swiss
 
Financial Market
 
Supervisory Authority
 
(FINMA) VaR
 
multiplier derived
 
from negative
 
backtesting
exceptions for market risk
 
risk-weighted assets was unchanged
 
compared with the prior
 
quarter, at 3.0,
 
for both
the UBS
 
Group excluding
 
certain legacy
 
Credit Suisse
 
components and
 
the aforementioned
 
legacy Credit
 
Suisse
components.
Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of the business divisions and Group Items
excluding certain legacy Credit Suisse components, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
 
1
 
2
 
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
 
5
 
17
 
13
 
10
 
3
 
15
 
8
 
3
 
5
Non-core and Legacy
 
1
 
3
 
1
 
1
 
0
 
1
 
1
 
0
 
0
Group Items
 
4
 
6
 
6
 
5
 
1
 
4
 
3
 
1
 
0
Diversification effect
3,4
 
(6)
 
(6)
 
(1)
 
(5)
 
(4)
 
(1)
 
0
Total as of 30.9.24
 
7
 
19
 
15
 
12
 
3
 
16
 
10
 
4
 
5
Total as of 30.6.24
 
6
 
15
 
8
 
9
 
4
 
13
 
9
 
4
 
3
Management value-at-risk (1-day, 98% confidence, 2 years of historical data) of certain legacy Credit Suisse
components of the business divisions and Group Items, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
 
1
 
2
 
1
 
2
 
1
 
0
 
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
 
2
 
3
 
2
 
2
 
1
 
1
 
1
 
0
 
0
Non-core and Legacy
 
8
 
11
 
8
 
9
 
3
 
3
 
8
 
1
 
0
Group Items
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Diversification effect
3,4
 
(2)
 
(2)
 
(1)
 
0
 
(2)
 
(1)
 
0
Total as of 30.9.24
 
9
 
14
 
9
 
11
 
4
 
4
 
9
 
1
 
0
Total as of 30.6.24
 
13
 
17
 
15
 
15
 
7
 
8
 
10
 
1
 
1
1 Legacy Credit Suisse components
 
not included in the
 
UBS Group management VaR
 
predominantly reflect the portfolio
 
in Non-core and Legacy and
 
the transition portfolio in
 
the Investment Bank. These
 
positions
continue to
 
be managed
 
on legacy
 
Credit Suisse
 
infrastructure based
 
on legacy
 
Credit Suisse
 
management VaR
 
methodology until
 
full migration
 
of these
 
positions to
 
the UBS
 
infrastructure or
 
liquidation of
 
the
positions. This process is ongoing, and the management VaR
 
of the legacy Credit Suisse components is expected to continue decreasing over time.
 
2 Statistics at individual levels may not be summed to deduce the
corresponding aggregate figures. The minima and maxima for each level may occur on different
 
days, and, likewise, the VaR for each business line or risk type, being driven by the extreme loss tail of
 
the corresponding
distribution of simulated profits and losses for
 
that business line or risk type, may well be
 
driven by different days in the historical time
 
series, rendering invalid the simple summation of figures to arrive at
 
the aggregate
total.
 
3 The difference between the sum
 
of the standalone VaR for the business
 
divisions and Group Items and the total VaR.
 
4 As the minima and maxima for different business
 
divisions and Group Items occur
on different days, it is not meaningful to calculate a portfolio diversification effect.
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 37.2m
 
as
 
of
 
30 September
 
2024,
 
compared
 
with
 
negative
 
USD 32.1m
 
as
 
of
30 June 2024.
 
This excluded
 
the sensitivity
 
of USD 6.1m
 
from additional
 
tier 1 (AT1)
 
capital instruments
 
(as per
specific
 
FINMA requirements)
 
in
 
contrast
 
to
 
general Basel
 
Committee on
 
Banking Supervision
 
(BCBS) guidance.
Exposure in the banking book of the UBS Group increased during the third quarter of 2024, driven by net interest
income stabilization initiatives.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
38
The majority of our interest rate risk in the banking book was a reflection of the net asset duration that we ran to
offset our modeled sensitivity of net USD 28.0m (30 June 2024: USD 24.6m) assigned to our equity, goodwill and
real estate,
 
with the
 
aim of
 
generating a
 
stable net
 
interest income
 
contribution. Of
 
this, USD 17.2m
 
and USD 9.0m
were
 
attributable
 
to
 
the
 
US dollar
 
and
 
the
 
Swiss
 
franc
 
portfolios,
 
respectively,
 
(30 June
 
2024:
 
USD 16.1m
 
and
USD 7.5m, respectively).
In addition to
 
the aforementioned
 
sensitivity, we
 
calculate the
 
six interest
 
rate shock
 
scenarios prescribed
 
by FINMA.
The “Parallel up” scenario, assuming all
 
positions were fair valued, was the
 
most severe and would have resulted
in a
 
change in EVE
 
of negative USD 6.8bn,
 
or 7.5%, of
 
our tier 1
 
capital (30 June 2024:
 
negative USD 6.0bn, or
6.5%), which is
 
well below
 
the 15% threshold
 
set in the
 
BCBS supervisory
 
outlier test
 
for high levels
 
of interest
 
rate
risk in the banking book.
The immediate effect on our
 
tier 1 capital in the “Parallel up”
 
scenario as of 30 September
 
2024 would have been
a decrease of
 
approximately USD 0.7bn,
 
or 0.8%, (30 June
 
2024: USD 0.8bn, 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.
As the overall interest rate risk sensitivity shows a greater
 
impact from slower asset repricing compared with faster
liabilities repricing, the “Parallel
 
down“ scenario was the
 
most beneficial and would
 
have resulted in
 
a change in
EVE of positive USD 7.3bn (30 June 2024: positive USD 6.2bn) and a small positive immediate effect on
 
our tier 1
capital.
›
Refer to “Interest rate risk in the banking book” in the “Risk management and control”
 
section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about the
management of interest rate risk in the banking book
›
Refer to “Sensitivity to interest rate movements” in the “Group performance” section of this report for more
information about the effects of increases in interest rates on the net interest income of our banking book
 
Interest rate risk – banking book
30.9.24
USD m
Effect on EVE
1
 
– FINMA
Effect on EVE
1
 
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
 
(8.8)
 
(1.3)
 
(0.2)
 
(26.4)
 
(0.4)
 
(37.2)
 
6.1
 
(31.1)
Parallel up
2
 
(1,262.3)
 
(258.0)
 
(43.1)
 
(5,123.1)
 
(102.4)
 
(6,788.9)
 
1,100.8
 
(5,688.1)
Parallel down
2
 
1,382.8
 
272.4
 
63.9
 
5,450.8
 
94.4
 
7,264.2
 
(1,295.4)
 
5,968.8
Steepener
3
 
(548.7)
 
(14.2)
 
(12.0)
 
(1,328.7)
 
(15.5)
 
(1,919.2)
 
198.2
 
(1,721.0)
Flattener
4
 
303.5
 
(28.3)
 
4.0
 
155.7
 
(7.4)
 
427.4
 
53.2
 
480.5
Short-term up
5
 
(188.9)
 
(104.4)
 
(13.8)
 
(1,974.3)
 
(43.5)
 
(2,325.0)
 
521.3
 
(1,803.7)
Short-term down
6
 
186.8
 
102.9
 
13.2
 
2,088.0
 
44.5
 
2,435.4
 
(542.6)
 
1,892.8
30.6.24
USD m
Effect on EVE
1
 
– FINMA
Effect on EVE
1
 
– BCBS
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
 
(6.3)
 
(0.5)
 
0.0
 
(25.1)
 
(0.3)
 
(32.1)
 
5.3
 
(26.8)
Parallel up
2
 
(897.5)
 
(99.7)
 
11.4
 
(4,881.7)
 
(88.4)
 
(5,956.0)
 
969.0
 
(4,987.0)
Parallel down
2
 
985.8
 
96.6
 
(18.8)
 
5,050.0
 
85.4
 
6,199.0
 
(1,113.3)
 
5,085.7
Steepener
3
 
(401.8)
 
(45.8)
 
(4.4)
 
(1,144.3)
 
(24.3)
 
(1,620.6)
 
168.8
 
(1,451.9)
Flattener
4
 
228.8
 
30.4
 
5.5
 
17.7
 
4.4
 
286.7
 
48.7
 
335.4
Short-term up
5
 
(122.1)
 
1.3
 
8.7
 
(1,980.2)
 
(29.5)
 
(2,121.8)
 
457.9
 
(1,663.9)
Short-term down
6
 
126.5
 
(1.1)
 
(10.4)
 
2,095.7
 
30.7
 
2,241.4
 
(475.3)
 
1,766.0
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,
 
the escalation of
 
conflicts in
 
the Middle
 
East,
and global trade
 
relations.
 
As of
 
30 September 2024, our
 
direct exposure
 
to Israel
 
was less
 
than USD 0.5bn and
our direct exposure to Gulf Cooperation Council countries was less
 
than USD 5bn,
 
while direct exposure to Egypt
and Jordan
 
was limited, and
 
there was no
 
direct exposure
 
to Iran, Iraq,
 
Lebanon or Syria.
 
Our direct
 
exposure to
Russia as
 
of 30 September
 
2024 was
 
less than
 
USD 0.5bn,
 
and our
 
direct exposure
 
to Belarus
 
and Ukraine
 
remained
immaterial.
 
Potential second-order impacts, such as European
 
energy security, continue to be monitored.
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
39
Inflation has abated
 
to some extent
 
in major Western
 
economies, although there
 
are still concerns
 
regarding future
developments, and central banks’ monetary
 
policies are in the spotlight. In
 
China, stress in the property sector
 
and
strained local
 
government finances
 
continue to
 
have an
 
adverse impact
 
on economic
 
growth,
 
raising the
 
risk of
financial instability. This
 
combination of factors
 
translates into
 
a more
 
uncertain and volatile
 
environment, which
increases the risk of financial market disruption.
We continue to monitor
 
potential trade policy
 
disputes, as well as
 
economic and political
 
developments in addition
to those mentioned
 
above. We are closely
 
watching elections and
 
their aftermath in a
 
number of key
 
markets in
2024. As
 
of 30 September
 
2024, our
 
exposure to
 
emerging
 
market countries
 
was less
 
than 10%
 
of our
 
total country
exposure and mainly to certain countries
 
in Asia.
›
Refer to the “Risk management and control” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
Non-financial risk
We continue to actively manage the non-financial risks emerging from the acquisition of the Credit Suisse Group.
Progress continues to be made regarding the legal entity mergers, client account migrations
 
to UBS platforms, the
integration of policies, systems
 
and controls,
 
and operational integration.
 
These activities continue to be managed
via the program run by our Group Integration Office.
Through this
 
period of
 
change, we
 
place an
 
increased focus
 
on maintaining
 
and enhancing
 
our control
 
environment
and continue to cooperate with regulators in relation to the submission and execution
 
of implementation plans to
meet regulatory requirements, including remediation requirements applicable to Credit Suisse
 
AG. In addition, the
Group is closely monitoring
 
non-financial risk indicators, to detect
 
any potential for adverse impacts
 
on the control
environment.
The integration of Credit Suisse requires data to
 
be migrated to the UBS environment,
 
and we aim to ensure that
we have robust controls to preserve
 
data integrity, quality and availability,
 
to mitigate data migration risks,
 
and to
meet regulatory expectations.
There is an increased risk of cyber-related operational
 
disruption to business activities at our
 
locations and those of
third-party suppliers
 
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.
 
We
 
continue
 
to
 
invest
 
in
 
improving
 
our
technology
 
infrastructure
 
and
 
information
 
security
 
governance
 
in
 
order
 
to
 
improve
 
our
 
cyberattack
 
defense,
detection and response capabilities.
Cyberattacks on
 
third-party vendors
 
have affected
 
our operations
 
in the
 
past and
 
continue to
 
be a
 
source of
 
residual
risk to our business.
 
No cyber events occurred
 
in the third quarter
 
of 2024 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 cybersecurity
 
and information-security
 
threats. We maintain
 
a program to
advance
 
our
 
frameworks
 
for
 
managing
 
third
 
parties
 
that
 
support
 
our
 
important
 
business
 
services,
 
and
 
we
 
are
continuing 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 have implemented
 
a global framework designed
 
to drive enhancements in
operational
 
resilience
 
across
 
all
 
business
 
divisions
 
and
 
relevant
 
jurisdictions,
 
and
 
we
 
are
 
working
 
with
 
the
 
third
parties, including
 
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 that
 
result
from the demand from
 
our clients for distributed
 
ledger technology, blockchain-based
 
assets and cryptocurrencies;
however, we currently have limited exposure to such risks, and
 
relevant control frameworks are implemented and
reviewed on a regular basis as these risks 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
remain areas of heightened focus for UBS and
 
for the industry as a whole.
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Risk management and control
 
40
Evolving regulations,
 
such as those relating
 
to environmental, social
 
and governance matters
 
and the upcoming EU
Markets in Financial Instruments Directive III (MiFID
III), as well as the EU Artificial Intelligence Act, are expected to
have significant impacts
 
on the financial sector and to require ongoing adjustments
 
to policies, processes, controls
and surveillance.
Cross-border
 
risk
 
(including
 
unintended
 
permanent
 
establishment)
 
remains
 
an
 
area
 
of
 
regulatory
 
attention
 
for
global
 
financial
 
institutions,
 
including
 
a
 
focus
 
on
 
market
 
access,
 
such
 
as
 
third-country
 
market
 
access
 
into
 
the
European Economic Area, and taxation of US persons. 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.
 
Money laundering
 
and financial
 
fraud
techniques are becoming increasingly sophisticated, including growing use of
 
AI, and geopolitical volatility makes
the sanctions landscape more
 
complex. The extensive and
 
continuously evolving sanctions arising
 
from the Russia–
Ukraine war require
 
constant attention to
 
prevent circumvention risks, while
 
the conflicts in
 
the Middle East may
increase terrorist financing
 
risks. An effective
 
financial crime prevention
 
program therefore remains
 
essential for us.
We are
 
focused on
 
strategic enhancements
 
to our
 
global anti-money-laundering
 
(AML), know-your-client
 
(KYC)
and
 
sanctions programs
 
to respond
 
to new
 
and existing
 
regulatory requirements
 
and
 
to respond
 
to developing
threats,
 
as
 
well
 
as
 
alignment
 
of
 
standards
 
and
 
processes
 
as
 
Credit
 
Suisse
 
client
 
accounts
 
are
 
migrated
 
to
 
UBS
platforms.
In the
 
US, UBS AG has
 
been 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 relevant
 
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, which we continue to
refine, across our activities, and which is designed
 
to align our standards and conduct
 
with these objectives and to
retain momentum on fostering a strong culture.
 
Capital management
The
 
disclosures
 
in
 
this
 
section
 
are
 
provided
 
for
 
UBS Group AG
 
on
 
a
 
consolidated
 
basis
 
and
 
focus
 
on
 
key
developments during
 
the reporting
 
period and
 
information in
 
accordance with
 
the Basel III
 
framework, as
 
applicable
to Swiss systemically relevant banks (SRBs).
 
They should be read in conjunction
 
with “Capital management” in the
“Capital, liquidity and funding,
 
and balance sheet” section
 
of the UBS Group
 
Annual Report 2023, available
 
under
“Annual
 
reporting”
 
at
ubs.com/investors
,
 
which
 
provides
 
more
 
information
 
about
 
our
 
capital
 
management
objectives, planning and activities, as
 
well as the Swiss SRB total loss-absorbing
 
capacity (TLAC) framework.
UBS Group AG
 
is
 
a
 
holding
 
company
 
and
 
conducts
 
substantially
 
all
 
of
 
its
 
operations
 
through
 
UBS AG
 
and
subsidiaries thereof. UBS Group AG and UBS AG contribute a significant portion of their respective capital to, and
provide substantial
 
liquidity to,
 
such subsidiaries.
 
Many of
 
these subsidiaries
 
are subject
 
to regulations
 
requiring
compliance with minimum capital, liquidity
 
and similar requirements.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 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 third
 
quarter 2024
 
report, which
 
will be available
 
as of 8 November
 
2024 under
 
“Quarterly
reporting”
 
at
ubs.com/investors
, for more information
 
about capital
 
and other regulatory
 
information
 
for UBS AG
consolidated,
 
in accordance
 
with the Basel
 
III framework,
 
as applicable
 
to Swiss
 
SRBs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
41
We
 
are
 
subject
 
to
 
the
 
going
 
and
 
gone
 
concern requirements
 
of
 
the
 
Swiss
 
Capital
 
Adequacy Ordinance,
 
which
include the too-big-to-fail
 
(TBTF) provisions applicable
 
to Swiss
 
SRBs. The
 
table below provides
 
the risk-weighted
asset (RWA)-
 
and leverage ratio
 
denominator (LRD)-based
 
requirements and information
 
as of 30 September
 
2024.
Swiss SRB going and gone concern requirements and information
As of 30.9.24
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
 
14.85
1
 
77,144
 
5.00
1
 
80,417
Common equity tier 1 capital
 
10.55
 
54,811
 
3.50
2
 
56,292
of which: minimum capital
 
4.50
 
23,371
 
1.50
 
24,125
of which: buffer capital
 
5.50
 
28,565
 
2.00
 
32,167
of which: countercyclical buffer
 
0.55
 
2,875
Maximum additional tier 1 capital
 
4.30
 
22,333
 
1.50
 
24,125
of which: additional tier 1 capital
 
3.50
 
18,178
 
1.50
 
24,125
of which: additional tier 1 buffer capital
 
0.80
 
4,155
Eligible going concern capital
Total going concern capital
 
17.53
 
91,024
 
5.66
 
91,024
Common equity tier 1 capital
 
14.29
 
74,213
 
4.61
 
74,213
Total loss-absorbing additional tier 1 capital
3
 
3.24
 
16,810
 
1.05
 
16,810
of which: high-trigger loss-absorbing additional tier 1 capital
 
3.00
 
15,572
 
0.97
 
15,572
of which: low-trigger loss-absorbing additional tier 1 capital
 
0.24
 
1,239
 
0.08
 
1,239
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
 
10.73
7
 
55,702
 
3.75
7
 
60,313
of which: base requirement including add-ons for market share and LRD
 
10.73
 
55,702
 
3.75
 
60,313
Eligible gone concern capital
Total gone concern loss-absorbing capacity
 
20.00
 
103,882
 
6.46
 
103,882
Total tier 2 capital
 
0.06
 
289
 
0.02
 
289
of which: non-Basel III-compliant tier 2 capital
 
0.06
 
289
 
0.02
 
289
TLAC-eligible senior unsecured debt
 
19.95
 
103,593
 
6.44
 
103,593
Total loss-absorbing capacity
Required total loss-absorbing capacity
 
25.58
 
132,846
 
8.75
 
140,730
Eligible total loss-absorbing capacity
 
37.53
 
194,906
 
12.12
 
194,906
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
 
519,363
Leverage ratio denominator
 
1,608,341
1 Includes
 
applicable add-ons
 
of 1.44%
 
for risk-weighted
 
assets (RWA)
 
and 0.50%
 
for leverage
 
ratio denominator
 
(LRD).
 
2 Our
 
minimum CET1
 
leverage ratio
 
requirement of
 
3.50% consists
 
of a
 
1.5% base
requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement
 
and a 0.25% market share add-on requirement
 
based on our Swiss credit business.
 
3 Includes outstanding low-trigger loss-
absorbing additional tier 1
 
capital instruments, which
 
are available under the
 
Swiss 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 has
been replaced with reduced base gone concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical buffer requirements).
 
6 As of July 2024, the Swiss Financial
Market Supervisory Authority (FINMA) has the authority to impose a surcharge of up to 25% of the total going concern capital requirements should obstacles to an SIB’s resolvability be identified in future resolvability
assessments.
 
7 Includes applicable add-ons of 1.08% for RWA and 0.38% for LRD.
 
Amortization of transitional purchase
 
price allocation adjustments for regulatory
 
capital
As part of the acquisition of
 
the Credit Suisse Group in 2023,
 
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 were
 
recognized as
part of
 
negative goodwill and
 
included 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.
 
The
 
Swiss
 
Financial
 
Market
 
Supervisory
 
Authority
 
(FINMA)
approved a transitional common equity tier 1
 
(CET1) capital treatment for certain of
 
these fair value adjustments,
given
 
the
 
substantially
 
temporary
 
nature
 
of
 
the
 
IFRS-3-accounting-driven
 
effects,
 
which
 
neutralized
 
equity
reductions
 
under
 
IFRS
 
Accounting
 
Standards
 
of
 
USD 5.9bn
 
(before
 
tax)
 
and
 
USD 5.0bn
 
(net
 
of
 
tax)
 
as
 
of
 
the
acquisition date. The transitional treatment
 
was subject to linear amortization through
 
30 June 2027.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
42
In the third quarter of 2024, we
 
voluntarily accelerated the amortization
 
of the remaining transitional CET1
 
capital
PPA adjustments,
 
resulting in
 
a USD 3.4bn
 
decrease in
 
CET1 capital
 
and a
 
reduction in
 
our CET1
 
capital ratio
 
of
approximately 65 basis
 
points. As
 
these
 
transitional adjustments
 
only
 
applied
 
to UBS
 
Group
 
AG,
 
the regulatory
capital position of UBS
 
AG was not impacted
 
by the decision to
 
fully amortize them. On
 
a standalone basis as
 
of
30 September 2024, UBS AG’s fully applied CET1 capital ratio is expected to be around 13.3%. Additional capital
information and final capital figures for UBS AG standalone
 
will be published with our 30 September 2024 Pillar
 
3
report, which will be available as of 8 November
 
2024 under “Pillar 3 disclosures” at
ubs.com/investors
.
Additional capital requirements for
 
UBS Group AG consolidated under current
 
requirements
As a result
 
of the
 
acquisition of
 
the Credit
 
Suisse Group
 
in 2023,
 
the capital
 
add-on for
 
UBS Group AG
 
consolidated
that
 
reflects
 
the
 
Group’s
 
degree
 
of
 
systemic
 
importance
 
and
 
is
 
based
 
on
 
market
 
share
 
and
 
LRD
 
will
 
increase
commensurate with
 
the higher
 
market share
 
and LRD
 
of UBS
 
Group AG consolidated
 
after the
 
acquisition. We
currently estimate that this
 
will add around USD 10bn
 
to the Group’s tier 1 capital
 
requirement, when fully phased
in. The phase-in of the
 
increased capital requirements will
 
commence from the end of
 
2025 and will be completed
by the beginning of 2030, at the latest.
Total loss-absorbing capacity
The table below provides Swiss SRB going and gone concern information based on the Swiss SRB
 
framework and
requirements that are discussed under “Capital management” in the “Capital, liquidity and funding, and
 
balance
sheet” section of the UBS Group Annual Report 2023,
 
available under “Annual reporting” at
ubs.com/investors
.
 
Swiss SRB going and gone concern information
USD m, except where indicated
30.9.24
30.6.24
31.12.23
Eligible going concern capital
Total going concern capital
 
91,024
 
91,804
 
91,894
Total tier 1 capital
 
91,024
 
91,804
 
91,894
Common equity tier 1 capital
 
74,213
 
76,104
 
78,002
Total loss-absorbing additional tier 1 capital
 
16,810
 
15,700
 
13,892
of which: high-trigger loss-absorbing additional tier 1 capital
 
15,572
 
14,475
 
12,678
of which: low-trigger loss-absorbing additional tier 1 capital
 
1,239
 
1,225
 
1,214
Eligible gone concern capital
Total gone concern loss-absorbing capacity
 
103,882
 
105,886
 
107,106
Total tier 2 capital
 
289
 
536
 
538
of which: non-Basel III-compliant tier 2 capital
 
289
 
536
 
538
TLAC-eligible senior unsecured debt
 
103,593
 
105,350
 
106,567
Total loss-absorbing capacity
Total loss-absorbing capacity
 
194,906
 
197,690
 
199,000
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
 
519,363
 
511,376
 
546,505
Leverage ratio denominator
 
1,608,341
 
1,564,201
 
1,695,403
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
 
17.5
 
18.0
 
16.8
of which: common equity tier 1 capital ratio
 
14.3
 
14.9
 
14.3
Gone concern loss-absorbing capacity ratio
 
20.0
 
20.7
 
19.6
Total loss-absorbing capacity ratio
 
37.5
 
38.7
 
36.4
Leverage ratios (%)
Going concern leverage ratio
 
5.7
 
5.9
 
5.4
of which: common equity tier 1 leverage ratio
 
4.6
 
4.9
 
4.6
Gone concern leverage ratio
 
6.5
 
6.8
 
6.3
Total loss-absorbing capacity leverage ratio
 
12.1
 
12.6
 
11.7
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
43
Total loss-absorbing capacity and movement
 
Our TLAC decreased by USD 2.8bn to USD 194.9bn
 
in the third quarter of 2024.
Going concern capital and movement
Our going concern capital decreased
 
by USD 0.8bn to USD 91.0bn. Our
 
CET1 capital decreased by USD
 
1.9bn to
USD 74.2bn,
 
mainly
 
as
 
operating
 
profit
 
before
 
tax
 
of
 
USD 1.9bn
 
and
 
foreign
 
currency
 
translation
 
gains
 
of
USD 1.3bn were more than offset by the effect of our voluntary acceleration of the amortization of the remaining
transitional
 
CET1
 
capital
 
PPA
 
adjustments
 
of
 
USD 3.4bn
 
(net
 
of
 
tax)
 
and
 
the
 
regular
 
amortization
 
of
 
these
adjustments during the
 
quarter of USD 0.3bn
 
(net of tax),
 
as well as
 
dividend accruals of
 
USD 0.6bn,
 
current tax
expenses of USD 0.4bn, and a
 
negative effect from
 
compensation-
 
and own-share-related capital components of
USD 0.3bn.
 
Share
 
repurchases
 
of
 
USD 0.5bn
 
carried
 
out
 
in
 
the
 
third
 
quarter
 
of
 
2024
 
under
 
our
 
2024
 
share
repurchase program did not affect our
 
CET1 capital position,
 
as there was an equal
 
reduction in the capital
 
reserve
for potential share repurchases.
Our loss-absorbing additional
 
tier 1 (AT1) capital
 
increased by USD 1.1bn to
 
USD 16.8bn, reflecting the
 
issuance of
new AT1
 
capital instruments
 
equivalent to
 
USD 1.6bn and positive
 
impacts from interest
 
rate risk
 
hedge, foreign
currency translation and other effects, partly
 
offset by the call of AT1 capital instruments
 
equivalent to USD 1.0bn.
Following the approval of a maximum amount of conversion capital by UBS Group AG’s shareholders at the 2024
Annual General
 
Meeting, AT1
 
capital instruments
 
issued from
 
the beginning
 
of the
 
fourth quarter
 
of 2023
 
are,
upon the
 
occurrence of
 
a trigger event
 
or a
 
viability event,
 
subject to
 
conversion into
 
UBS Group AG
 
ordinary shares
rather than a
 
write-down. AT1 capital instruments
 
issued prior to
 
the fourth quarter of
 
2023 remain subject to
 
a
write-down.
Gone concern loss-absorbing capacity and movement
Our
 
total
 
gone
 
concern
 
loss-absorbing
 
capacity
 
decreased
 
by
 
USD 2.0bn
 
to
 
USD 103.9bn
 
and
 
included
USD 103.6bn of TLAC-eligible senior
 
unsecured debt instruments.
 
The decrease of USD 2.0bn mainly reflected
 
the
call of USD 6.4bn equivalent of TLAC-eligible senior unsecured debt instruments, as well as USD 3.1bn equivalent
of TLAC-eligible
 
senior unsecured
 
debt instruments
 
and a
 
USD 0.3bn tier 2
 
instrument ceasing
 
to be
 
eligible as
gone
 
concern
 
capital,
 
as
 
they
 
entered
 
the
 
final
 
year
 
before
 
maturity.
 
These
 
effects
 
were
 
partly
 
offset
 
by
 
new
issuances of TLAC-eligible senior
 
unsecured debt instruments totaling
 
USD 1.8bn equivalent and positive impacts
from interest rate risk hedge, foreign currency translation and other effects.
 
›
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
 
decreased to 14.3% from
 
14.9%,
 
reflecting a USD 1.9bn decrease
 
in CET1 capital and an
USD 8.0bn increase in RWA.
 
Our
 
CET1
 
leverage
 
ratio
 
decreased
 
to
 
4.6%
 
from
 
4.9%,
 
reflecting
 
a
 
USD 44.1bn
 
increase
 
in
 
the
 
LRD
 
and
 
a
USD 1.9bn decrease in CET1 capital.
Our
 
gone
 
concern
 
loss-absorbing
 
capacity
 
ratio
 
decreased
 
to
 
20.0%
 
from
 
20.7%,
 
due
 
to
 
a
 
decrease
 
in
 
gone
concern loss-absorbing capacity of USD 2.0bn
 
and the aforementioned increase in RWA.
 
Our gone
 
concern leverage ratio
 
decreased to 6.5%
 
from 6.8%, due
 
to the
 
aforementioned increase in
 
the LRD
and a decrease in gone concern loss-absorbing
 
capacity of USD 2.0bn.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
44
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 30.6.24
 
76,104
Operating profit / (loss) before tax
 
1,929
Current tax (expense) / benefit
 
(378)
Foreign currency translation effects, before tax
 
1,324
Share repurchase program
 
(549)
Capital reserve for potential share repurchases
 
549
Voluntary acceleration of the amortization of the remaining transitional CET1 capital
 
PPA adjustments, net of tax
 
(3,371)
Regular amortization of the transitional CET1 capital PPA adjustments, net of tax
 
(293)
Compensation-
 
and own-share-related capital components
 
(296)
Other
1
 
(805)
Common equity tier 1 capital as of 30.9.24
 
74,213
Loss-absorbing additional tier 1 capital as of 30.6.24
 
15,700
Issuance of high-trigger loss-absorbing additional tier 1 capital
 
1,631
Call of high-trigger loss-absorbing additional tier 1 capital
 
(1,015)
Interest rate risk hedge, foreign currency translation and other effects
 
495
Loss-absorbing additional tier 1 capital as of 30.9.24
 
16,810
Total going concern capital as of 30.6.24
 
91,804
Total going concern capital as of 30.9.24
 
91,024
Gone concern loss-absorbing capacity
Tier 2 capital as of 30.6.24
 
536
Debt no longer eligible as gone concern loss-absorbing capacity
 
due to residual tenor falling to below one year
 
(251)
Interest rate risk hedge, foreign currency translation and other effects
 
5
Tier 2 capital as of 30.9.24
 
289
TLAC-eligible unsecured debt as of 30.6.24
 
105,350
Issuance of TLAC-eligible senior unsecured debt
 
1,787
Call of TLAC-eligible senior unsecured debt
 
(6,367)
Debt no longer eligible as gone concern loss-absorbing capacity
 
due to residual tenor falling to below one year
 
(3,052)
Interest rate risk hedge, foreign currency translation and other effects
 
5,875
TLAC-eligible unsecured debt as of 30.9.24
 
103,593
Total gone concern loss-absorbing capacity as of 30.6.24
 
105,886
Total gone concern loss-absorbing capacity as of 30.9.24
 
103,882
Total loss-absorbing capacity
Total loss-absorbing capacity as of 30.6.24
 
197,690
Total loss-absorbing capacity as of 30.9.24
 
194,906
1 Includes dividend accruals for 2024 (negative USD 0.6bn) and movements related to other items.
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
30.9.24
30.6.24
31.12.23
Total equity under IFRS Accounting Standards
 
87,589
 
84,218
 
86,156
Equity attributable to non-controlling interests
 
(564)
 
(535)
 
(531)
Defined benefit plans, net of tax
 
(883)
 
(951)
 
(965)
Deferred tax assets recognized for tax loss carry-forwards
 
(2,681)
 
(2,817)
 
(3,039)
Deferred tax assets for unused tax credits
 
(238)
 
(181)
 
(97)
Goodwill, net of tax
1
 
(5,752)
 
(5,730)
 
(5,750)
Intangible assets, net of tax
 
(788)
 
(776)
 
(894)
Compensation-related components (not recognized in net profit)
 
(2,432)
 
(2,147)
 
(2,186)
Expected losses on advanced internal ratings-based portfolio less provisions
 
(665)
 
(638)
 
(713)
Unrealized (gains) / losses from cash flow hedges, net of tax
 
1,830
 
3,373
 
3,109
Own credit related to (gains) / losses on financial liabilities
 
measured at fair value that existed at the balance sheet date, net of tax
 
1,359
 
1,059
 
1,291
Own credit related to (gains) / losses on derivative financial instruments
 
that existed at the balance sheet date
 
(72)
 
(76)
 
(89)
Prudential valuation adjustments
 
(217)
 
(231)
 
(368)
Accruals for dividends to shareholders for 2023
 
(2,240)
Capital reserve for potential share repurchases
 
(301)
 
(850)
Transitional CET1 capital PPA adjustments, net of tax
 
3,664
 
4,316
Other
 
(1,970)
2
 
(1,281)
2
 
3
Total common equity tier 1 capital
 
74,213
 
76,104
 
78,002
1 Includes goodwill related to significant investments in financial institutions of USD 20m as
 
of 30 September 2024 (USD 19m as of 30 June 2024,
 
USD 20m as of 31 December 2023) presented on the balance sheet
line Investments in associates.
 
2 Includes dividend accruals for 2024 and other items.
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
45
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 2.4bn as
 
of 30 September
 
2024 (30 June
 
2024: USD 22bn and
 
USD 2.5bn,
respectively) and decreased our CET1
 
capital ratio by 18 basis points
 
(30 June 2024: 15 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 2.2bn
 
(30 June 2024: USD 20bn and USD
 
2.3bn, respectively) and increased our CET1
 
capital
ratio by 18 basis points (30 June 2024: 14 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 109bn
 
as
 
of
 
30
 
September
 
2024
 
(30
 
June
 
2024:
 
USD 101bn)
 
and
 
decreased
 
our
 
CET1
 
leverage
 
ratio
 
by
15 basis points
 
(30 June
 
2024: 14 basis
 
points). Conversely,
 
a
 
10%
 
appreciation of
 
the US
 
dollar against
 
other
currencies would
 
have decreased
 
our LRD
 
by USD 99bn
 
(30 June
 
2024: USD 91bn)
 
and increased
 
our CET1
 
leverage
ratio by 16 basis points (30 June 2024: 15 basis
 
points).
The aforementioned
 
sensitivities do
 
not consider
 
foreign currency
 
translation effects
 
related to
 
defined benefit
 
plans
other than those related to the currency
 
translation of the net equity of foreign operations.
›
Refer to “Active management of sensitivity to foreign exchange movements” under “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
 
Risk-weighted assets
 
During the third
 
quarter of 2024,
 
RWA increased
 
by USD 8.0bn
 
to USD 519.4bn,
 
driven by an
 
USD 11.2bn increase
in currency effects,
 
partly offset by decreases of USD
 
1.7bn resulting from asset size
 
and other movements, as well
as USD 1.6bn resulting from model updates
 
and methodology changes.
Movement in risk-weighted assets, by key driver
USD bn
RWA as of
30.6.24
Currency
effects
Model updates
and
methodology
changes
Asset size and
other
1
RWA as of
30.9.24
Credit and counterparty credit risk
2
 
310.2
 
10.6
 
(3.0)
 
(3.7)
 
314.1
Non-counterparty-related risk
3
 
33.2
 
0.7
 
1.0
 
34.8
Market risk
 
22.5
 
1.4
 
1.0
 
25.0
Operational risk
 
145.4
 
145.4
Total
 
511.4
 
11.2
 
(1.6)
 
(1.7)
 
519.4
1 Includes the
 
Pillar 3 categories
 
“Asset
 
size”, “Credit quality
 
of counterparties”,
 
“Acquisitions
 
and disposals” and
 
“Other”. For
 
more information, refer
 
to the 30
 
September 2024 Pillar
 
3 Report, which
 
will be
available as of 8
 
November 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
 
increased
 
by
 
USD
 
3.9bn
 
to
 
USD 314.1bn
 
as
 
of
 
30
 
September
 
2024,
including currency effects of USD 10.6bn.
Asset size and other movements resulted in
 
a USD 3.7bn decrease in RWA:
–
Non-core and
 
Legacy RWA
 
decreased by
 
USD 4.0bn,
 
mainly driven
 
by our
 
actions to
 
actively unwind
 
the portfolio,
in addition to the natural roll-off.
–
Personal & Corporate Banking RWA decreased by
 
USD 0.9bn, mainly driven by negative net
 
new loans.
–
Asset Management RWA decreased by USD 0.4bn,
 
mainly due to lower RWA from equity
 
investments in funds.
–
Global Wealth Management RWA decreased by
 
USD 0.1bn, mainly driven by negative net new
 
loans.
–
Investment Bank RWA increased by USD 1.4bn,
 
mainly due to higher RWA from loans and loan
 
commitments.
–
Group Items RWA increased by USD 0.4bn.
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
46
Model updates
 
and methodology
 
changes resulted
 
in a
 
RWA decrease
 
of USD
 
3.0bn, mainly
 
reflecting an
 
RWA
decrease of USD 2.3bn related
 
to the recalibration of certain
 
multipliers as a result
 
of improvements to models
 
and
an RWA
 
reduction of
 
USD 0.7bn related
 
to model
 
updates
 
and harmonizations
 
for structured
 
margin loans
 
and
similar products in Global Wealth Management.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information
 
›
Refer to “Credit risk” in the “Risk management and control” section of this report for more information
 
Market risk
Market risk RWA increased
 
by USD 2.4bn to USD 25.0bn
 
in the third quarter of
 
2024, mainly driven by
 
an increase
of USD 1.4bn
 
from a
 
capital buffer
 
newly introduced
 
by FINMA
 
to capitalize
 
potential maturity
 
mismatches between
positions and hedges in the
 
incremental risk charge (the IRC). The
 
IRC, including the capital buffer, will
 
no longer
be applicable with
 
the adoption of
 
the final Basel III
 
standards (including the Fundamental
 
Review of the
 
Trading
Book) in January
 
2025. Additionally,
 
in the third
 
quarter of 2024,
 
we observed an
 
increase of USD 1.0bn
 
from asset
size and
 
other movements
 
that reflected
 
updates from
 
the monthly
 
risks-not-in-value-at-risk assessment,
 
which was
partially offset by the de-risking within Non-core
 
and Legacy.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
 
ubs.com/investors,
 
for more information
 
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information
Operational risk
Operational risk RWA were unchanged at USD
 
145.4bn.
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information
›
Refer to “Non-financial risk” in the “Risk management and control” section of the UBS Group Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for information about the AMA models
Outlook
 
We expect
 
that the
 
adoption of
 
the final
 
Basel III standards
 
in January
 
2025 will
 
lead to
 
a low
 
single-digit percentage
increase in the UBS
 
Group’s RWA, reducing
 
the CET1 capital
 
ratio by around 30
 
basis points. This estimate
 
is based
on
 
our
 
current understanding
 
of
 
the
 
relevant
 
standards
 
as
 
we
 
are
 
in
 
an
 
active
 
dialogue
 
with
 
FINMA
 
regarding
various aspects of the final rules. Our estimate for the RWA and CET1 capital ratio does not take into account the
impact of the output floor, which is to be
 
phased in over time.
We expect RWA from credit and counterparty credit risk model updates
 
and methodology changes to decrease by
around USD 2bn in the fourth quarter
 
of 2024, mainly reflecting a decrease related to
 
the recalibration of certain
multipliers as a result of
 
improvements to models and other model
 
updates,
 
which is expected to be
 
partly offset
by increases due to the migration of Credit Suisse
 
portfolios to UBS models, as well as methodology
 
changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
47
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
30.9.24
Credit and counterparty credit risk
1
 
95.0
 
129.5
 
7.2
 
63.8
 
13.6
 
5.2
 
314.1
Non-counterparty-related risk
2
 
6.8
 
3.1
 
0.7
 
3.8
 
1.7
 
18.8
 
34.8
Market risk
 
1.9
 
0.4
 
0.0
 
20.2
 
2.5
 
0.0
 
25.0
Operational risk
 
63.2
 
19.3
 
7.2
 
24.4
 
27.1
 
4.2
 
145.4
Total
 
166.8
 
152.3
 
15.1
 
112.2
 
44.8
 
28.1
 
519.4
30.6.24
Credit and counterparty credit risk
1
 
93.8
 
123.8
 
7.4
 
63.4
 
17.4
 
4.5
 
310.2
Non-counterparty-related risk
2
 
6.6
 
3.1
 
0.7
 
3.7
 
1.6
 
17.4
 
33.2
Market risk
 
1.9
 
0.5
 
0.0
 
16.6
 
3.5
 
0.0
 
22.5
Operational risk
 
63.2
 
19.3
 
7.2
 
24.4
 
27.1
 
4.2
 
145.4
Total
 
165.5
 
146.7
 
15.4
 
108.1
 
49.6
 
26.1
 
511.4
30.9.24 vs 30.6.24
Credit and counterparty credit risk
1
 
1.2
 
5.7
 
(0.3)
 
0.4
 
(3.9)
 
0.7
 
3.9
Non-counterparty-related risk
2
 
0.2
 
0.0
 
0.0
 
0.1
 
0.0
 
1.3
 
1.7
Market risk
 
0.0
 
(0.1)
 
0.0
 
3.6
 
(1.0)
 
0.0
 
2.4
Operational risk
 
0.0
 
0.0
 
0.0
 
0.0
 
0.0
 
0.0
 
0.0
Total
 
1.3
 
5.6
 
(0.3)
 
4.0
 
(4.8)
 
2.1
 
8.0
1 Includes settlement risk, credit valuation adjustments,
 
equity and investments in funds exposures in the
 
banking book, and securitization exposures in the
 
banking book.
 
2 Non-counterparty-related risk includes
deferred tax assets recognized for temporary differences (30 September
 
2024: USD 18.0bn; 30 June 2024: USD 16.6bn), as well as property,
 
equipment, software and other items (30 September 2024: USD
 
16.8bn;
30 June 2024: USD 16.6bn).
 
Leverage ratio denominator
During the third quarter of 2024, the LRD
 
increased by USD 44.1bn to USD 1,608.3bn, driven by currency effects
of USD 53.6bn,
 
partly offset by asset size and other movements
 
of USD 9.5bn.
Movement in leverage ratio denominator, by key driver
USD bn
LRD as of
 
30.6.24
Currency
 
effects
Asset size and
 
other
LRD as of
 
30.9.24
On-balance sheet exposures (excluding derivatives and securities
 
financing transactions)
 
1,205.8
 
44.9
 
(9.2)
 
1,241.6
Derivatives
 
125.2
 
2.4
 
6.1
 
133.7
Securities financing transactions
 
168.4
 
4.2
 
(0.9)
 
171.7
Off-balance sheet items
 
72.3
 
2.0
 
(1.9)
 
72.4
Deduction items
 
(7.5)
 
0.1
 
(3.6)
 
(11.0)
Total
 
1,564.2
 
53.6
 
(9.5)
 
1,608.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
48
The LRD movements described below exclude
 
currency effects.
 
On-balance sheet exposures (excluding derivatives and securities
 
financing transactions) decreased by USD 9.2bn,
mainly reflecting a decrease in cash and balances at central banks, as well as decreases in lending balances due to
negative net new loans mainly in Personal & Corporate Banking
 
and Global Wealth Management.
 
There was also
a decrease in
 
trading portfolio assets
 
in Non-core and
 
Legacy driven by
 
our actions to
 
actively unwind the
 
portfolio,
in addition to the natural roll-off. These decreases were
 
partly offset by increases in other financial assets in Group
Treasury and
 
trading portfolio
 
assets, primarily
 
driven by
 
an increase
 
in positions
 
held in
 
the Investment
 
Bank to
hedge client positions, as well as market-driven
 
increases.
 
Derivative exposures increased by USD 6.1bn,
 
mainly due to client-driven increases in the
 
Investment Bank.
Securities financing transactions decreased
 
by USD 0.9bn.
Off-balance sheet items decreased by USD 1.9bn,
 
primarily driven by lower commitments.
Deduction items increased by
 
USD 3.6bn to USD 11.0bn from USD
 
7.5bn, due to our voluntary
 
acceleration of the
amortization of the remaining transitional CET1
 
capital PPA adjustments in the third quarter
 
of 2024.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
›
Refer to “Amortization of transitional purchase price allocation adjustments for regulatory capital” in this section
for more information about the change in deduction items
Outlook
 
We expect
 
that the
 
adoption of
 
the final
 
Basel III standards
 
in January
 
2025 will
 
lead to
 
a low
 
single-digit percentage
increase in the
 
UBS Group’s LRD,
 
reducing the CET1
 
leverage ratio
 
by around 10 basis
 
points. This
 
estimate is
 
based
on our current understanding of the relevant standards.
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
 
30.9.24
On-balance sheet exposures
 
504.9
 
429.2
 
5.7
 
238.8
 
46.0
 
17.0
 
1,241.6
Derivatives
 
10.8
 
3.3
 
0.0
 
106.0
 
13.4
 
0.1
 
133.7
Securities financing transactions
 
66.3
 
45.3
 
0.0
 
52.6
 
7.5
 
0.0
 
171.7
Off-balance sheet items
 
18.6
 
32.3
 
0.1
 
18.6
 
2.5
 
0.2
 
72.4
Items deducted from Swiss SRB tier 1 capital
 
(5.4)
 
(1.0)
 
(1.2)
 
(0.4)
 
(0.5)
 
(2.5)
 
(11.0)
Total
 
595.2
 
509.0
 
4.7
 
415.6
 
69.0
 
14.8
 
1,608.3
30.6.24
On-balance sheet exposures
 
492.5
 
407.9
 
5.3
 
234.1
 
49.8
 
16.3
 
1,205.8
Derivatives
 
9.0
 
2.5
 
0.0
 
97.1
 
16.6
 
0.0
 
125.2
Securities financing transactions
 
59.3
 
42.9
 
0.1
 
53.5
 
12.5
 
0.1
 
168.4
Off-balance sheet items
 
18.1
 
33.7
 
0.2
 
18.4
 
1.7
 
0.3
 
72.3
Items deducted from Swiss SRB tier 1 capital
 
(3.5)
 
1.5
 
(1.2)
 
(0.4)
 
(0.6)
 
(3.4)
 
(7.5)
Total
 
575.4
 
488.5
 
4.3
 
402.6
 
80.0
 
13.4
 
1,564.2
30.9.24 vs 30.6.24
On-balance sheet exposures
 
12.4
 
21.3
 
0.4
 
4.8
 
(3.7)
 
0.7
 
35.7
Derivatives
 
1.9
 
0.8
 
0.0
 
8.9
 
(3.2)
 
0.1
 
8.5
Securities financing transactions
 
7.0
 
2.4
 
0.0
 
(0.8)
 
(5.1)
 
(0.2)
 
3.3
Off-balance sheet items
 
0.5
 
(1.4)
 
0.0
 
0.2
 
0.9
 
(0.1)
 
0.1
Items deducted from Swiss SRB tier 1 capital
 
(1.9)
 
(2.6)
 
0.0
 
0.0
 
0.1
 
0.9
 
(3.5)
Total
 
19.9
 
20.5
 
0.3
 
13.0
 
(11.0)
 
1.4
 
44.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Capital management
 
49
Equity attribution
Under our equity attribution
 
framework, tangible equity
 
is attributed based on
 
equally weighted average
 
RWA and
average LRD, which both include resource allocations from our Group functions to the business divisions. Average
RWA and LRD are converted
 
to CET1 capital equivalents
 
using target capital ratios.
 
If the attributed tangible equity
calculated under the weighted-driver approach is less than
 
the CET1 capital equivalent of risk-based capital (RBC)
for any business division,
 
the CET1 capital equivalent of RBC is used
 
as a floor for that business division.
In addition to
 
tangible equity,
 
we allocate equity
 
to the business
 
divisions to
 
support goodwill
 
and intangible
 
assets.
We
 
also
 
allocate
 
to
 
the
 
business
 
divisions
 
attributed
 
equity
 
related
 
to
 
CET1
 
capital
 
deduction
 
items
 
that
 
are
attributable
 
to
 
divisional
 
activities,
 
such
 
as
 
compensation-related
 
components
 
or
 
expected
 
losses
 
on
 
the
advanced internal
 
ratings-based
 
portfolio
 
less
 
provisions.
 
We
 
attribute
 
all
 
remaining
 
capital
 
deduction
 
items
 
to
Group Items.
 
These primarily
 
include equity
 
related to
 
deferred tax
 
assets, accruals
 
for shareholder
 
returns, and
unrealized gains / losses from cash flow hedges.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about movements in
equity attributable to shareholders
Average attributed equity
For the quarter ended
Year-to-date
USD bn
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Global Wealth Management
 
33.5
 
32.9
 
33.1
 
33.2
 
27.9
Personal & Corporate Banking
 
21.8
 
21.4
 
21.4
 
21.7
 
15.2
Asset Management
 
2.7
 
2.7
 
3.1
 
2.7
 
2.3
Investment Bank
 
17.0
 
17.0
 
17.1
 
17.0
 
15.6
Non-core and Legacy
 
8.5
 
10.1
 
10.5
 
9.7
 
4.8
Group Items
2
 
1.8
 
0.2
 
(0.8)
 
0.7
 
4.9
Average equity attributed to business divisions and Group Items
 
85.4
 
84.2
 
84.4
 
84.9
 
70.8
1 Comparative figures have been restated
 
to reflect the changes to the
 
equity attribution framework. Refer
 
to the “Equity attribution” section of
 
the UBS Group first quarter 2024
 
report, available under “Quarterly
reporting” at ubs.com/investors,
 
for more information.
 
2 Includes average attributed equity
 
related to capital deduction
 
items for deferred tax assets,
 
accruals for shareholder returns and
 
unrealized gains / losses
from cash flow hedges.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Liquidity and funding management
 
50
Liquidity and funding management
Strategy, objectives and governance
 
This
 
section
 
provides
 
liquidity
 
and
 
funding
 
management
 
information
 
and
 
should
 
be
 
read
 
in
 
conjunction
 
with
“Liquidity and funding
 
management” in
 
the “Capital,
 
liquidity and funding,
 
and balance sheet”
 
section of the
 
UBS
Group
 
Annual
 
Report
 
2023,
 
available
 
under
 
“Annual
 
reporting”
 
at
ubs.com/investors
,
 
which
 
provides
 
more
information
 
about
 
the
 
Group’s
 
strategy,
 
objectives
 
and
 
governance
 
in
 
connection
 
with
 
liquidity
 
and
 
funding
management.
Liquidity coverage ratio
The
 
quarterly average
 
liquidity coverage
 
ratio
 
(the LCR)
 
of the
 
UBS
 
Group
 
decreased 12.7 percentage
 
points to
199.2%, remaining
 
above the
 
prudential requirement
 
communicated by
 
the Swiss
 
Financial Market
 
Supervisory
Authority (FINMA). The movement in the quarterly average LCR was primarily driven by
 
a decrease in high-quality
liquid assets of USD 17.6bn to USD 360.6bn, mainly reflecting lower cash available,
 
due to the funding of trading
assets and an increase
 
in Swiss regulatory
 
minimum reserve requirements.
 
The average net
 
cash outflows increased
by USD 2.6bn to USD 181.1bn, reflecting higher
 
net outflows from derivatives and higher
 
outflows from deposits,
partly offset by lower outflows from irrevocable
 
loan commitments.
›
Refer to the
30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the LCR
Liquidity coverage ratio
USD bn, except where indicated
Average 3Q24
1
Average 2Q24
1
High-quality liquid assets
 
360.6
 
378.2
Net cash outflows
2
 
181.1
 
178.5
Liquidity coverage ratio (%)
3
 
199.2
 
212.0
1 Calculated based on an average of 65 data points in the third quarter of 2024 and 61 data points in
 
the second quarter of 2024.
 
2 Represents the net cash outflows expected over a stress period of 30 calendar
days.
 
3 Calculated after the application of haircuts and inflow and outflow rates, as well as,
 
where applicable, caps on Level 2 assets and cash inflows.
Net stable funding ratio
 
As
 
of 30 September
 
2024, the
 
net stable
 
funding ratio
 
(the NSFR)
 
of the
 
UBS Group
 
decreased 1.2 percentage
points to 126.9%, remaining above the prudential
 
requirement communicated by FINMA.
Available
 
stable
 
funding increased
 
by
 
USD 22.0bn to
 
USD 904.3bn, mainly
 
driven
 
by
 
higher customer
 
deposits,
largely due to currency effects.
Required stable funding increased by
 
USD 23.8bn to USD 712.8bn, primarily reflecting
 
increases in trading assets
and in lending assets, with the latter increase
 
mainly driven by currency effects.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the NSFR
Net stable funding ratio
USD bn, except where indicated
30.9.24
30.6.24
Available stable funding
 
904.3
 
882.3
Required stable funding
 
712.8
 
689.0
Net stable funding ratio (%)
 
126.9
 
128.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Balance sheet and off-balance
 
sheet
 
51
Balance sheet and off-balance sheet
This
 
section
 
provides
 
balance
 
sheet
 
and
 
off-balance sheet
 
information
 
and
 
should
 
be
 
read
 
in
 
conjunction
 
with
“Balance sheet
 
and off-balance
 
sheet” in
 
the “Capital,
 
liquidity and
 
funding, and
 
balance sheet”
 
section of
 
the
UBS Group
 
Annual Report
 
2023, available
 
under “Annual reporting”
 
at
ubs.com/investors
, which
 
provides more
information about the balance sheet and off-balance
 
sheet positions.
 
Balances disclosed in this
 
report represent quarter-end
 
positions, unless indicated
 
otherwise. Intra-quarter balances
fluctuate in the ordinary course of business
 
and may differ from quarter-end positions.
Balance sheet assets (30 September
 
2024 vs 30 June 2024)
Total assets
 
were USD 1,623.9bn
 
as of
 
30 September 2024,
 
an increase
 
of USD 62.9bn
 
compared with
 
30 June
2024, largely reflecting currency effects
 
as a result of the depreciation of the US
 
dollar.
Derivatives and
 
cash collateral
 
receivables on
 
derivative instruments
 
increased by
 
USD 23.1bn, predominantly
 
in
Derivatives
 
&
 
Solutions
 
and
 
Financing
 
in
 
the
 
Investment
 
Bank,
 
primarily
 
reflecting
 
increases
 
in
 
foreign
 
currency
contracts, where the contracts in
 
place at the end
 
of September 2024 had a
 
higher fair value compared with the
contracts in
 
place at
 
the end
 
of June
 
2024, and
 
in equity
 
contracts,
 
reflecting market-driven
 
increases.
 
Lending
assets increased by USD 16.4bn,
 
primarily reflecting currency
 
effects of approximately USD
 
25.8bn,
 
partly offset by
negative net
 
new loans
 
in Personal
 
&
 
Corporate Banking
 
and
 
Global Wealth
 
Management.
 
Securities financing
transactions at
 
amortized cost
 
increased
 
by
 
USD 10.1bn, mainly
 
reflecting net
 
new
 
excess cash
 
reinvestment in
Group Treasury.
 
Trading assets
 
increased by
 
USD 10.0bn, primarily
 
driven by
 
an increase
 
in inventory
 
held in
 
the
Investment Bank to
 
hedge client positions,
 
as well as
 
market-driven increases,
 
partly offset by
 
the unwinding of
 
the
Credit Suisse
 
business in
 
Non-core and
 
Legacy.
 
Other financial
 
assets measured
 
at fair
 
value increased
 
by USD 6.2bn,
mainly reflecting currency effects and increases
 
in securities financing transactions
 
measured at fair value.
These increases were partly offset by
 
a USD 5.0bn decrease in Cash
 
and balances at central banks,
 
mainly due to
net redemptions
 
of debt
 
issued, net
 
increases in
 
securities financing
 
transactions and
 
net new
 
customer deposit
outflows,
 
partly
 
offset
 
by
 
inflows
 
reflecting
 
negative
 
net
 
new
 
loans
 
and
 
by
 
currency
 
effects
 
of
 
approximately
USD 10.2bn.
Assets
As of
% change from
USD bn
30.9.24
30.6.24
30.6.24
Cash and balances at central banks
 
243.3
 
248.3
 
(2)
Lending
1
 
637.5
 
621.1
 
3
Securities financing transactions at amortized cost
 
92.1
 
82.0
 
12
Trading assets
 
172.0
 
162.0
 
6
Derivatives and cash collateral receivables on derivative instruments
 
206.3
 
183.2
 
13
Brokerage receivables
 
24.7
 
25.3
 
(2)
Other financial assets measured at amortized cost
 
61.2
 
60.4
 
1
Other financial assets measured at fair value
2
 
131.6
 
125.4
 
5
Non-financial assets
 
55.4
 
53.2
 
4
Total assets
 
1,623.9
 
1,561.0
 
4
1 Consists of Loans and advances to customers and Amounts due from banks.
 
2 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair
 
value through other comprehensive
income.
 
Balance sheet liabilities (30 September
 
2024 vs 30 June 2024)
Total liabilities were USD 1,536.4bn as of 30 September 2024, an increase of USD 59.6bn compared
 
with 30 June
2024, largely reflecting currency effects as
 
a result of the depreciation of the US dollar.
Derivatives and cash collateral payables
 
on derivative instruments increased by
 
USD 26.2bn, predominantly in the
Investment
 
Bank,
 
primarily
 
reflecting
 
the
 
same
 
drivers
 
as
 
on
 
the
 
asset
 
side.
 
Customer
 
deposits
 
increased
 
by
USD 19.2bn,
 
primarily driven
 
by currency
 
effects of
 
approximately USD 24.6bn, partly
 
offset by
 
net new
 
deposit
outflows. Brokerage payables increased by USD
 
6.2bn, mainly reflecting increases in client activity
 
levels.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Balance sheet and off-balance
 
sheet
 
52
These increases were partly offset by a
 
USD 2.0bn decrease in Debt issued designated at
 
fair value and long-term
debt issued measured at amortized cost,
 
mainly driven by net redemptions of
 
debt issued measured at amortized
cost in Group Treasury, which were largely offset
 
by currency effects of approximately USD 6.6bn.
The “Liabilities,
 
by product
 
and currency”
 
table
 
in this
 
section provides
 
more information
 
about the
 
Group’s funding
sources.
›
Refer to “Bondholder information” at
 
ubs.com/investors
for more information about capital and senior debt
instruments
 
›
Refer to the “Consolidated financial statements” section of this report for more information
Liabilities and equity
As of
 
% change from
USD bn
30.9.24
30.6.24
30.6.24
Short-term borrowings
1,2
 
61.9
 
61.7
 
0
Securities financing transactions at amortized cost
 
16.4
 
14.9
 
10
Customer deposits
 
776.0
 
756.8
 
3
Debt issued designated at fair value and long-term debt issued measured
 
at amortized cost
2
 
305.5
 
307.5
 
(1)
Trading liabilities
 
36.4
 
33.5
 
9
Derivatives and cash collateral payables on derivative instruments
 
208.1
 
181.9
 
14
Brokerage payables
 
52.4
 
46.2
 
13
Other financial liabilities measured at amortized cost
 
21.2
 
21.4
 
(1)
Other financial liabilities designated at fair value
 
35.3
 
31.9
 
11
Non-financial liabilities
 
23.2
 
21.0
 
11
Total liabilities
 
1,536.4
 
1,476.8
 
4
Share capital
 
0.3
 
0.3
 
0
Share premium
 
11.8
 
11.7
 
0
Treasury shares
 
(6.1)
 
(5.5)
 
10
Retained earnings
 
77.2
 
76.2
 
1
Other comprehensive income
3
 
3.8
 
0.9
 
312
Total equity attributable to shareholders
 
87.0
 
83.7
 
4
Equity attributable to non-controlling interests
 
0.6
 
0.5
 
6
Total equity
 
87.6
 
84.2
 
4
Total liabilities and equity
 
1,623.9
 
1,561.0
 
4
1 Consists of short-term debt issued measured at amortized cost and amounts due to banks, which includes amounts due to central banks.
 
2 The classification of debt issued measured at amortized cost into short-
term and long-term is based
 
on original contractual
 
maturity and therefore long-term
 
debt also includes debt
 
with a remaining time
 
to maturity of less
 
than one year.
 
This classification does
 
not consider any
 
early
redemption features.
 
3 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Equity (30 September 2024 vs 30 June 2024)
Equity attributable to shareholders increased
 
by USD 3,342m to USD 87,025m as of
 
30 September 2024.
The
 
net
 
increase
 
of
 
USD 3,342m
 
was
 
mainly
 
driven
 
by
 
positive
 
total
 
comprehensive
 
income
 
attributable
 
to
shareholders
 
of
 
USD 3,883m, reflecting
 
a
 
net
 
profit
 
of
 
USD 1,425m
 
and
 
other
 
comprehensive
 
income
 
(OCI)
 
of
USD 2,459m. OCI
 
mainly included
 
cash flow
 
hedge OCI
 
of USD 1,593m,
 
OCI related to
 
foreign currency
 
translation
of USD 1,333m
 
and negative
 
OCI related to
 
own credit
 
on financial liabilities
 
designated at
 
fair value of
 
USD 323m.
This increase
 
was partly
 
offset by
 
net treasury
 
share activity,
 
which reduced
 
equity by
 
USD 798m, predominantly
due to the repurchasing of USD 549m
 
of shares under our 2024 share repurchase program and the purchasing of
USD 254m of shares in relation to employee
 
share-based compensation plans.
 
›
Refer to the “Group performance” and “Consolidated financial statements” sections of this report for more
information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to the “Share information and earnings per share”
 
section of this report for more information about our
share repurchase programs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Balance sheet and off-balance
 
sheet
 
53
Liabilities, by product and currency
All currencies
of which: USD
of which: CHF
of which: EUR
USD bn
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
Short-term borrowings
61.9
61.7
28.9
32.0
7.9
8.0
11.2
8.6
of which: amounts due to banks
28.1
26.8
10.0
10.0
7.4
7.5
3.5
3.2
of which: short-term debt issued
1,2
33.9
34.9
18.9
22.0
0.5
0.5
7.7
5.4
Securities financing transactions at amortized cost
16.4
14.9
8.8
8.5
3.3
2.7
3.6
2.5
Customer deposits
776.0
756.8
310.0
307.2
320.0
301.9
75.8
76.8
of which: demand deposits
228.2
220.1
55.4
54.8
109.1
101.3
34.8
35.3
of which: retail savings / deposits
189.1
177.8
33.7
31.0
151.2
142.7
4.2
4.0
of which: sweep deposits
34.5
35.7
34.5
35.7
0.0
0.0
0.0
0.0
of which: time deposits
324.2
323.3
186.4
185.8
59.7
57.9
36.8
37.5
Debt issued designated at fair value and long-term debt issued measured
 
at amortized
cost
2
305.5
307.5
167.6
174.8
45.0
42.6
67.6
64.5
Trading liabilities
36.4
33.5
14.5
12.7
1.7
1.1
10.4
9.7
Derivatives and cash collateral payables on derivative instruments
208.1
181.9
167.2
145.0
4.2
3.5
21.9
21.0
Brokerage payables
52.4
46.2
41.7
35.4
0.7
0.7
2.6
2.9
Other financial liabilities measured at amortized cost
 
21.2
21.4
11.0
11.5
4.2
4.2
2.0
1.5
Other financial liabilities designated at fair value
35.3
31.9
6.3
6.1
0.1
0.1
6.9
4.9
Non-financial liabilities
23.2
21.0
13.0
11.5
4.0
3.8
3.0
2.9
Total liabilities
1,536.4
1,476.8
769.1
744.8
391.0
368.6
205.0
195.0
1 Short-term debt issued consists of
 
certificates of deposit, commercial paper,
 
acceptances and promissory notes, and
 
other money market paper.
 
2 The classification of
 
debt issued measured at amortized
 
cost into
short-term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year.
 
This classification does not consider any early
redemption features.
Off-balance sheet (30 September 2024
 
vs 30 June 2024)
Committed
 
unconditionally
 
revocable
 
credit
 
lines
 
increased
 
by
 
USD 4.2bn,
 
driven
 
by
 
currency
 
effects.
 
Forward
starting reverse repurchase and securities borrowing agreements increased by USD
 
6.4bn, reflecting an increase in
levels of business division activity in short-dated
 
securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
30.9.24
30.6.24
30.6.24
Guarantees
1,2
 
39.6
 
38.8
 
2
Irrevocable loan commitments
1
 
80.5
 
81.9
 
(2)
Committed unconditionally revocable credit lines
 
153.1
 
148.9
 
3
Forward starting reverse repurchase and securities borrowing agreements
 
16.1
 
9.7
 
65
1 Guarantees and irrevocable loan commitments are shown net of sub-participations.
 
2 Includes guarantees measured at fair value through profit or loss.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and
 
balance sheet | Share information and earnings
 
per share
 
54
Share information and earnings per share
UBS Group AG
 
shares
 
are
 
listed
 
on
 
the
 
SIX
 
Swiss
 
Exchange
 
(SIX).
 
They
 
are
 
also
 
listed
 
on
 
the
 
New
 
York
 
Stock
Exchange (the NYSE) as global registered shares. Each share has
 
a nominal value of USD 0.10. Shares issued were
unchanged in the third quarter of 2024 compared
 
with the second quarter of 2024.
We held
 
276m shares as
 
of 30 September 2024,
 
of which
 
144m shares
 
had been
 
acquired under our
 
2022 and
2024 share repurchase
 
programs
 
for cancellation
 
purposes. The
 
remaining 132m
 
shares are primarily
 
held to hedge
our share delivery obligations related to employee
 
share-based compensation and participation
 
plans.
Treasury
 
shares
 
held
 
increased
 
by
 
16m
 
shares
 
in
 
the
 
third
 
quarter
 
of
 
2024.
 
This
 
mainly
 
reflected
 
19.1m
 
shares
repurchased under our 2024 program and 7.2m shares purchased from the market to hedge future share delivery
obligations related to employee share-based compensation awards, partly offset by the delivery of treasury shares
under our share-based compensation plans.
 
Shares
 
acquired under
 
our
 
2024
 
program
 
totaled 23m
 
as
 
of
 
30 September 2024
 
for
 
a
 
total acquisition
 
cost
 
of
USD 700m (CHF 610m).
 
As previously
 
communicated, we expect
 
to repurchase
 
a total
 
of up
 
to USD 1bn
 
of our
shares in 2024.
Shares acquired
 
under our
 
2022 program
 
totaled 121m
 
as of
 
30 September 2024
 
for a
 
total acquisition
 
cost of
USD 2,277m (CHF 2,138m). This program concluded
 
on 28 March 2024, and the 121m shares repurchased
 
under
this program will be canceled by means of a
 
capital reduction, subject to approval by the shareholders at a future
Annual General Meeting.
›
Refer to the “Equity, CET1 capital and returns” table in the “Group performance” section of this report
 
for more
information about equity attributable to shareholders and tangible equity attributable to shareholders
As of or for the quarter ended
As of or year-to-date
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Basic and diluted earnings (USD m)
Net profit / (loss) attributable to shareholders for basic
 
EPS
 
1,425
 
1,136
 
(715)
 
4,315
 
27,645
less: (profit) / loss on own equity derivative contracts
 
0
 
0
 
(1)
 
0
 
(2)
Net profit / (loss) attributable to shareholders for diluted
 
EPS
 
1,424
 
1,136
 
(715)
 
4,315
 
27,643
.
Weighted average shares outstanding
Weighted average shares outstanding for basic EPS
2
 
3,196,573,895
 
3,212,672,606
 
3,229,878,446
 
3,204,826,901
 
3,128,272,554
Effect of dilutive potential shares resulting from notional
 
employee shares, in-the-money
options and warrants outstanding
3
 
147,480,584
 
146,621,312
 
380,852
4
 
151,321,464
 
139,759,974
Weighted average shares outstanding for diluted EPS
 
3,344,054,479
 
3,359,293,918
 
3,230,259,298
 
3,356,148,365
 
3,268,032,528
.
Earnings per share (USD)
Basic
 
0.45
 
0.35
 
(0.22)
 
1.35
 
8.84
Diluted
 
0.43
 
0.34
 
(0.22)
 
1.29
 
8.46
.
Shares outstanding and potentially dilutive instruments
Shares issued
 
3,462,087,722
 
3,462,087,722
 
3,462,087,722
 
3,462,087,722
 
3,462,087,722
Treasury shares
5
 
276,381,209
 
259,953,381
 
228,822,625
 
276,381,209
 
228,822,625
of which: related to the 2022 share repurchase program
 
120,506,008
 
120,506,008
 
120,506,008
 
120,506,008
 
120,506,008
of which: related to the 2024 share repurchase program
 
23,479,400
 
4,406,000
 
23,479,400
Shares outstanding
 
3,185,706,513
 
3,202,134,341
 
3,233,265,097
 
3,185,706,513
 
3,233,265,097
Potentially dilutive instruments
6
 
13,561,823
 
14,636,947
 
160,925,793
4
 
13,600,262
 
8,518,394
.
Other key figures
Total book value per share (USD)
 
27.32
 
26.13
 
25.75
 
27.32
 
25.75
Tangible book value per share (USD)
 
25.10
 
23.85
 
23.44
 
25.10
 
23.44
Share price (USD)
7
 
30.77
 
29.43
 
24.77
 
30.77
 
24.77
Market capitalization (USD m)
8
 
106,528
 
101,903
 
85,768
 
106,528
 
85,768
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of 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
 
third quarter
 
of 2023,
148,423,317 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
 
30 September 2023. Such
shares are only taken into account for
 
the diluted EPS calculation when their conversion
 
to ordinary shares would decrease earnings
 
per share or increase the loss per
 
share, in accordance with IAS 33,
 
Earnings per
Share.
 
5 Based on a settlement date view.
 
6 Reflects potential shares that could dilute basic EPS in
 
the future but were not dilutive for any of the periods
 
presented. Mainly includes equity-based awards subject
to absolute and relative performance
 
conditions and equity derivative
 
contracts. For
 
the quarter ended 30
 
September 2023, it also
 
includes 148,423,317 weighted average
 
potential shares from unvested
 
notional
share awards that were not included in the calculation of diluted EPS as they were not dilutive.
 
7 Represents the share price as listed on the SIX Swiss Exchange, translated to US dollars using the closing exchange
rate as of the respective date.
 
8 The calculation of market capitalization reflects total shares issued multiplied
 
by the share price at the end of the period.
Ticker symbols UBS Group AG
Security identification codes
Trading exchange
SIX / NYSE
Bloomberg
Reuters
ISIN
CH0244767585
SIX Swiss Exchange
UBSG
UBSG SW
UBSG.S
Valoren
24 476 758
New York Stock Exchange
UBS
UBS UN
UBS.N
CUSIP
CINS H42097 10 7
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group
 
AG interim consolidated financial statements
 
(unaudited)
 
56
UBS Group AG interim consolidated financial
statements (unaudited)
Income statement
For the quarter ended
Year-to-date
USD m
Note
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Interest income from financial instruments measured at
 
amortized cost and fair value through
other comprehensive income
4
 
8,766
 
9,320
 
9,932
 
28,165
 
21,707
Interest expense from financial instruments measured at
 
amortized cost
4
 
(9,022)
 
(9,319)
 
(9,082)
 
(28,064)
 
(18,777)
Net interest income from financial instruments measured
 
at fair value through profit or loss and other
4
 
2,050
 
1,533
 
1,257
 
5,168
 
2,272
Net interest income
4
 
1,794
 
1,535
 
2,107
 
5,270
 
5,202
Other net income from financial instruments measured
 
at fair value through profit or loss
 
3,681
 
3,684
 
3,226
 
11,547
 
8,425
Fee and commission income
5
 
7,170
 
7,211
 
6,669
 
21,461
 
17,357
Fee and commission expense
5
 
(653)
 
(679)
 
(613)
 
(1,921)
 
(1,566)
Net fee and commission income
5
 
6,517
 
6,531
 
6,056
 
19,540
 
15,790
Other income
6
 
341
 
154
 
305
 
619
 
563
Total revenues
 
12,334
 
11,904
 
11,695
 
36,976
 
29,979
Negative goodwill
2
 
27,264
Credit loss expense / (release)
9
 
121
 
95
 
239
 
322
 
901
Personnel expenses
7
 
6,889
 
7,119
 
7,567
 
20,957
 
17,838
General and administrative expenses
8
 
2,389
 
2,318
 
3,124
 
7,120
 
7,157
Depreciation, amortization and impairment of non-financial
 
assets
 
1,006
 
903
 
950
 
2,804
 
2,341
Operating expenses
 
10,283
 
10,340
 
11,640
 
30,880
 
27,336
Operating profit / (loss) before tax
 
1,929
 
1,469
 
(184)
 
5,773
 
29,006
Tax expense / (benefit)
 
502
 
293
 
526
 
1,407
 
1,346
Net profit / (loss)
 
1,428
 
1,175
 
(711)
 
4,366
 
27,660
Net profit / (loss) attributable to non-controlling interests
 
3
 
40
 
4
 
51
 
15
Net profit / (loss) attributable to shareholders
 
1,425
 
1,136
 
(715)
 
4,315
 
27,645
Earnings per share (USD)
Basic
 
0.45
 
0.35
 
(0.22)
 
1.35
 
8.84
Diluted
 
0.43
 
0.34
 
(0.22)
 
1.29
 
8.46
1 Comparative-period information has been revised. Refer to Note 2 for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group
 
AG interim consolidated financial statements
 
(unaudited)
 
57
 
Statement of comprehensive income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Comprehensive income attributable to shareholders
2
Net profit / (loss)
 
1,425
 
1,136
 
(715)
 
4,315
 
27,645
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
 
2,404
 
(268)
 
(1,425)
 
(1,337)
 
(435)
Effective portion of changes in fair value of hedging instruments
 
designated as net investment hedges, before tax
 
(1,081)
 
291
 
806
 
1,392
 
300
Foreign currency translation differences on foreign operations reclassified to the
 
income statement
 
2
 
2
 
2
 
4
 
(1)
Effective portion of changes in fair value of hedging instruments
 
designated as net investment hedges reclassified
 
to
the income statement
 
0
 
0
 
0
 
1
 
(3)
Income tax relating to foreign currency translations, including the effect of
 
net investment hedges
 
9
 
0
 
4
 
22
 
(2)
Subtotal foreign currency translation, net of tax
 
1,333
 
25
 
(615)
 
81
 
(141)
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
 
2
 
0
 
(2)
 
2
 
0
Net realized (gains) / losses reclassified to the income statement
 
from equity
 
0
 
0
 
0
 
0
 
1
Income tax relating to net unrealized gains / (losses)
 
0
 
0
 
0
 
0
 
0
Subtotal financial assets measured at fair value through other comprehensive
 
income, net of tax
 
2
 
0
 
(2)
 
2
 
0
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated
 
as cash flow hedges, before tax
 
1,579
 
(417)
 
(1,198)
 
(84)
 
(2,126)
Net (gains) / losses reclassified to the income statement from
 
equity
 
388
 
668
 
580
 
1,600
 
1,339
Income tax relating to cash flow hedges
 
(374)
 
5
 
92
 
(250)
 
91
Subtotal cash flow hedges, net of tax
 
1,593
 
256
 
(526)
 
1,266
 
(695)
Cost of hedging
Cost of hedging, before tax
 
(19)
 
(19)
 
(1)
 
(47)
 
5
Income tax relating to cost of hedging
 
0
 
0
 
0
 
0
 
0
Subtotal cost of hedging, net of tax
 
(19)
 
(19)
 
(1)
 
(47)
 
5
Total other comprehensive income that may be reclassified to the income statement, net
 
of tax
 
2,910
 
262
 
(1,144)
 
1,302
 
(832)
Other comprehensive income that will not be reclassified to the income
 
statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
 
(138)
 
(38)
 
(62)
 
(238)
 
(54)
Income tax relating to defined benefit plans
 
10
 
8
 
(7)
 
23
 
(36)
Subtotal defined benefit plans, net of tax
 
(128)
 
(30)
 
(69)
 
(215)
 
(91)
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated
 
at fair value, before tax
 
(317)
 
231
 
(715)
 
(156)
 
(1,119)
Income tax relating to own credit on financial liabilities designated
 
at fair value
 
(6)
 
(3)
 
29
 
(7)
 
72
Subtotal own credit on financial liabilities designated at
 
fair value, net of tax
 
(323)
 
228
 
(686)
 
(163)
 
(1,047)
Total other comprehensive income that will not be reclassified to the income statement,
 
net of tax
 
(451)
 
198
 
(755)
 
(378)
 
(1,138)
Total other comprehensive income
 
2,459
 
460
 
(1,899)
 
924
 
(1,970)
Total comprehensive income attributable to shareholders
 
3,883
 
1,596
 
(2,614)
 
5,239
 
25,675
Comprehensive income attributable to non-controlling
 
interests
Net profit / (loss)
 
3
 
40
 
4
 
51
 
15
Total other comprehensive income that will not be reclassified to the income statement,
 
net of tax
 
24
 
(21)
 
(12)
 
(11)
 
(12)
Total comprehensive income attributable to non-controlling interests
 
27
 
18
 
(8)
 
40
 
4
Total comprehensive income
Net profit / (loss)
 
1,428
 
1,175
 
(711)
 
4,366
 
27,660
Other comprehensive income
 
2,482
 
439
 
(1,911)
 
913
 
(1,981)
of which: other comprehensive income that may be reclassified
 
to the income statement
 
2,910
 
262
 
(1,144)
 
1,302
 
(832)
of which: other comprehensive income that will not be reclassified
 
to the income statement
 
(428)
 
176
 
(767)
 
(389)
 
(1,150)
Total comprehensive income
 
3,910
 
1,614
 
(2,622)
 
5,279
 
25,679
1 Comparative-period information has been revised. Refer to Note 2 for more information.
 
2 Refer to the “Group performance” section of this report for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group
 
AG interim consolidated financial statements
 
(unaudited)
 
58
 
Balance sheet
USD m
Note
30.9.24
30.6.24
31.12.23
1
Assets
Cash and balances at central banks
 
243,261
 
248,336
 
314,060
Amounts due from banks
 
21,716
 
21,959
 
21,146
Receivables from securities financing transactions measured at amortized
 
cost
 
92,104
 
82,028
 
99,039
Cash collateral receivables on derivative instruments
11
 
47,209
 
43,637
 
50,082
Loans and advances to customers
9
 
615,820
 
599,105
 
639,669
Other financial assets measured at amortized cost
12
 
61,169
 
60,431
 
65,455
Total financial assets measured at amortized cost
 
1,081,280
 
1,055,494
 
1,189,451
Financial assets at fair value held for trading
10
 
171,983
 
162,025
 
169,633
of which: assets pledged as collateral that may be sold or repledged
 
by counterparties
 
46,599
 
43,452
 
51,263
Derivative financial instruments
10, 11
 
159,068
 
139,597
 
176,084
Brokerage receivables
10
 
24,656
 
25,273
 
21,037
Financial assets at fair value not held for trading
10
 
129,416
 
123,266
 
104,018
Total financial assets measured at fair value through profit or loss
 
485,124
 
450,161
 
470,773
Financial assets measured at fair value through other comprehensive income
10
 
2,179
 
2,167
 
2,233
Investments in associates
 
2,484
 
2,236
 
2,373
Property, equipment and software
 
16,571
 
16,440
 
17,849
Goodwill and intangible assets
 
7,048
 
7,313
 
7,515
Deferred tax assets
 
10,254
 
10,651
 
10,682
Other non-financial assets
12
 
19,002
 
16,514
 
16,049
Total assets
 
1,623,941
 
1,560,976
 
1,716,924
Liabilities
Amounts due to banks
 
28,058
 
26,750
 
70,962
Payables from securities financing transactions measured at amortized cost
 
16,374
 
14,872
 
14,394
Cash collateral payables on derivative instruments
 
11
 
33,757
 
32,843
 
41,582
Customer deposits
 
775,994
 
756,830
 
792,029
Debt issued measured at amortized cost
 
14
 
227,168
 
229,223
 
237,817
Other financial liabilities measured at amortized cost
 
12
 
21,171
 
21,383
 
20,851
Total financial liabilities measured at amortized cost
 
1,102,523
 
1,081,902
 
1,177,633
Financial liabilities at fair value held for trading
 
10
 
36,437
 
33,493
 
34,159
Derivative financial instruments
10, 11
 
174,296
 
149,069
 
192,181
Brokerage payables designated at fair value
 
10
 
52,403
 
46,198
 
42,522
Debt issued designated at fair value
10, 13
 
112,218
 
113,209
 
128,289
Other financial liabilities designated at fair value
10, 12
 
35,256
 
31,875
 
29,484
Total financial liabilities measured at fair value through profit or loss
 
410,610
 
373,844
 
426,635
Provisions and contingent liabilities
 
15
 
9,245
 
9,293
 
12,412
Other non-financial liabilities
 
12
 
13,974
 
11,720
 
14,089
Total liabilities
 
1,536,352
 
1,476,758
 
1,630,769
Equity
Share capital
 
346
 
346
 
346
Share premium
 
11,755
 
11,742
 
13,216
Treasury shares
 
(6,051)
 
(5,498)
 
(4,796)
Retained earnings
 
77,197
 
76,176
 
74,397
Other comprehensive income recognized directly in equity, net of tax
 
3,777
 
917
 
2,462
Equity attributable to shareholders
 
87,025
 
83,683
 
85,624
Equity attributable to non-controlling interests
 
564
 
535
 
531
Total equity
 
87,589
 
84,218
 
86,156
Total liabilities and equity
 
1,623,941
 
1,560,976
 
1,716,924
1 Comparative-period information has been revised. Refer to Note 2 for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group
 
AG interim consolidated financial statements
 
(unaudited)
 
59
 
Statement of changes in equity
USD m
Share
capital and
share
premium
Treasury
shares
Retained
earnings
OCI
recognized
directly in
equity,
net of tax
1
of which:
foreign
currency
translation
of which:
cash flow
hedges
Total equity
attributable to
shareholders
Balance as of 1 January 2024
2,3
 
13,562
 
(4,796)
 
74,397
 
2,462
 
5,584
 
(3,109)
 
85,624
Acquisition of treasury shares
 
(2,693)
4
 
(2,693)
Delivery of treasury shares under share-based compensation
 
plans
 
(1,282)
 
1,335
 
53
Other disposal of treasury shares
 
2
 
102
4
 
104
Share-based compensation expensed in the income statement
 
883
 
883
Tax (expense) / benefit
 
15
 
15
Dividends
 
(1,128)
5
 
(1,128)
5
 
(2,256)
Equity classified as obligation to purchase own shares
 
(42)
 
(42)
Translation effects recognized directly in retained earnings
 
(14)
 
14
 
14
 
0
Share of changes in retained earnings of associates and
 
joint ventures
 
(3)
 
(3)
New consolidations / (deconsolidations) and other increases
 
/ (decreases)
 
92
 
7
 
99
Total comprehensive income for the period
 
3,937
 
1,302
 
81
 
1,266
 
5,239
of which: net profit / (loss)
 
4,315
 
4,315
of which: OCI, net of tax
 
(378)
 
1,302
 
81
 
1,266
 
924
Balance as of 30 September 2024
2
 
12,101
 
(6,051)
 
77,197
 
3,777
 
5,666
 
(1,830)
 
87,025
Non-controlling interests as of 30 September 2024
 
564
Total equity as of 30 September 2024
 
87,589
Balance as of 1 January 2023
2
 
13,850
 
(6,874)
 
50,004
 
(103)
 
4,128
 
(4,234)
 
56,876
Purchase price consideration for Credit Suisse Group acquisition,
 
before consideration of
share-based compensation awards
6
 
619
 
2,928
 
3,547
Impact of share-based compensation awards from Credit Suisse Group
 
acquisition
6
 
162
 
162
Impact of the settlement of pre-existing relationships from
 
Credit Suisse Group acquisition
6
 
(61)
 
(61)
Acquisition of treasury shares
 
(2,353)
4
 
(2,353)
Delivery of treasury shares under share-based compensation
 
plans
 
(856)
 
946
 
91
Other disposal of treasury shares
 
6
 
177
4
 
182
Cancellation of treasury shares related to the 2021
 
share repurchase program
7
 
(561)
 
1,115
 
(554)
 
0
Share-based compensation expensed in the income statement
 
791
 
791
Tax (expense) / benefit
 
7
 
7
Dividends
 
(839)
5
 
(839)
5
 
(1,679)
Equity classified as obligation to purchase own shares
 
21
 
21
Translation effects recognized directly in retained earnings
 
18
 
(18)
 
(18)
 
0
Share of changes in retained earnings of associates and joint
 
ventures
 
(1)
 
(1)
New consolidations / (deconsolidations) and other increases
 
/ (decreases)
 
2
 
1
 
3
Total comprehensive income for the period
 
26,507
 
(832)
 
(141)
 
(695)
 
25,675
of which: net profit / (loss)
 
27,645
 
27,645
of which: OCI, net of tax
 
(1,138)
 
(832)
 
(141)
 
(695)
 
(1,970)
Balance as of 30 September 2023
2,3
 
13,204
 
(4,122)
 
75,135
 
(953)
 
3,987
 
(4,947)
 
83,265
Non-controlling interests as of 30 September 2023
 
542
8
Total equity as of 30 September 2023
3
 
83,807
1 Excludes other comprehensive income related to defined
 
benefit plans and own credit that is recorded
 
directly in Retained earnings.
 
2 Excludes non-controlling interests.
 
3 Comparative-period information has
been revised. Refer to Note 2 for more information.
 
4 Includes treasury shares acquired and disposed of by the Investment Bank in its capacity
 
as a market maker with regard to UBS
 
shares and related derivatives,
and to hedge
 
certain issued structured
 
debt instruments. These
 
acquisitions and disposals
 
are reported based
 
on the sum
 
of the net
 
monthly movements.
 
5 Reflects the payment
 
of an ordinary
 
cash dividend of
USD 0.70 per dividend-bearing share in
 
May 2024 (2023: USD 0.55 per dividend-bearing
 
share paid in April 2023). Swiss
 
tax law requires Switzerland-domiciled companies with
 
shares listed on a Swiss
 
stock exchange
to pay no more than
 
50% of dividends from
 
capital contribution reserves,
 
with the remainder required
 
to be paid from retained
 
earnings.
 
6 Refer to Note 2
 
for more information.
 
7 Reflects the cancellation
 
of
62,548,000 shares purchased under
 
UBS’s 2021 share
 
repurchase program as approved
 
by shareholders at the
 
2023 Annual General
 
Meeting. Swiss tax law
 
requires Switzerland-domiciled companies
 
with shares
listed on a Swiss stock exchange to reduce capital contribution reserves by at least 50% of the total capital reduction amount exceeding the nominal value upon cancellation of the shares.
 
8 Includes an increase of
USD 285m in the second quarter of 2023 due to the acquisition of the Credit Suisse Group.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group
 
AG interim consolidated financial statements
 
(unaudited)
 
60
Statement of cash flows
Year-to-date
USD m
30.9.24
30.9.23
1
Cash flow from / (used in) operating activities
Net profit / (loss)
 
4,366
 
27,660
Non-cash items included in net profit and other adjustments
Depreciation, amortization and impairment of non-financial
 
assets
 
2,804
 
2,341
Credit loss expense / (release)
 
322
 
901
Share of net (profits) / loss of associates and joint ventures and
 
impairment related to associates
 
(177)
 
(118)
Deferred tax expense / (benefit)
 
252
 
(152)
Net loss / (gain) from investing activities
 
(178)
 
26
Net loss / (gain) from financing activities
 
4,287
 
(1,921)
Negative goodwill
 
(27,264)
Other net adjustments
2
 
2,213
 
3,496
Net change in operating assets and liabilities
2
Amounts due from banks and amounts due to banks
 
1,416
 
4,813
Receivables from securities financing transactions measured at amortized
 
cost
 
6,392
 
7,351
Payables from securities financing transactions measured at amortized cost
 
169
 
(1,044)
Cash collateral on derivative instruments
 
(4,578)
 
(5,826)
Loans and advances to customers
 
21,557
 
22,190
Customer deposits
 
(15,220)
 
20,701
Financial assets and liabilities at fair value held for trading and derivative financial
 
instruments
 
1,882
 
(5,696)
Brokerage receivables and payables
 
6,498
 
(10,517)
Financial assets at fair value not held for trading and other financial assets
 
and liabilities
 
(12,866)
 
11,109
Provisions and other non-financial assets and liabilities
 
(1,495)
 
1,624
Income taxes paid, net of refunds
 
(1,682)
 
(1,544)
Net cash flow from / (used in) operating activities
3
 
15,961
 
48,131
Cash flow from / (used in) investing activities
Cash and cash equivalents acquired upon the acquisition of the
 
Credit Suisse Group
 
108,406
Purchase of subsidiaries, associates and intangible assets
 
(1)
Disposal of subsidiaries, associates and intangible assets
 
188
 
47
Purchase of property, equipment and software
 
(1,470)
 
(1,227)
Disposal of property, equipment and software
 
46
 
63
Net (purchase) / redemption of financial assets measured
 
at fair value through other comprehensive income
 
28
 
25
Purchase of debt securities measured at amortized cost
 
(3,841)
 
(11,632)
Disposal and redemption of debt securities measured at amortized
 
cost
 
6,857
 
7,227
Net cash flow from / (used in) investing activities
 
1,807
 
102,908
Cash flow from / (used in) financing activities
Repayment of Swiss National Bank funding
 
(42,587)
 
(56,516)
Net issuance (repayment) of short-term debt measured at amortized
 
cost
 
(5,127)
 
3,084
Net movements in treasury shares and own equity derivative
 
activity
 
(2,570)
 
(2,100)
Distributions paid on UBS shares
 
(2,256)
 
(1,679)
Issuance of debt designated at fair value and long-term debt measured
 
at amortized cost
 
81,200
 
88,028
Repayment of debt designated at fair value and long-term debt measured
 
at amortized cost
 
(109,952)
 
(82,904)
Inflows from securities financing transactions measured at amortized
 
cost
4
 
4,979
Outflows from securities financing transactions measured at amortized
 
cost
4
 
(3,165)
Net cash flows from other financing activities
 
(595)
 
(481)
Net cash flow from / (used in) financing activities
 
(80,073)
 
(52,568)
Total cash flow
Cash and cash equivalents at the beginning of the period
 
340,207
 
195,321
Net cash flow from / (used in) operating, investing and financing
 
activities
 
(62,305)
 
98,472
Effects of exchange rate differences on cash and cash equivalents
2
 
(2,492)
 
(1,497)
Cash and cash equivalents at the end of the period
5
 
275,410
6
 
292,296
of which: cash and balances at central banks
5
 
243,261
 
262,215
of which: amounts due from banks
5
 
20,031
 
18,946
of which: money market paper
5,7
 
11,917
 
11,135
Additional information
Net cash flow from / (used in) operating activities includes:
Interest received in cash
 
41,643
 
30,680
Interest paid in cash
 
37,323
 
23,541
Dividends on equity investments, investment funds and associates received
 
in cash
8
 
2,260
 
1,867
1 Comparative-period
 
information has been
 
revised. Refer
 
to Note 2
 
for more information.
 
2 Foreign currency
 
translation and
 
foreign exchange effects
 
on operating
 
assets and liabilities
 
and on cash
 
and cash
equivalents are
 
presented within
 
the Other
 
net adjustments
 
line. Does
 
not include
 
foreign currency
 
hedge effects
 
related to
 
foreign exchange
 
swaps.
 
3 Includes cash
 
receipts from
 
the sale
 
of loans
 
and loan
commitments of USD 11,957m
 
and USD 2,758m
 
within Non-core and
 
Legacy for the
 
nine-month periods ended
 
30 September 2024
 
and 30 September 2023,
 
respectively.
 
4 Reflects cash
 
flows from securities
financing transactions measured at amortized cost that use UBS debt instruments as the
 
underlying.
 
5 Includes only balances with an original maturity of three months or less.
 
6
 
The balance includes USD 0.2bn
related to cash held in Assets of disposal
 
groups held for sale, recognized
 
within Other non-financial assets.
 
7 Money market paper is included
 
in the balance sheet under Financial assets
 
at fair value not held for
trading (30 September 2024: USD 11,130m; 30 September 2023:
 
USD 10,158m), Other financial assets measured at amortized cost
 
(30 September 2024: USD 457m; 30 September 2023: USD 393m) and
 
Financial
assets at fair value held for trading (30 September 2024: USD 331m; 30 September
 
2023: USD 583m).
 
8 Includes dividends received from associates reported within Net cash
 
flow from / (used in) investing activities.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
61
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 1
 
Basis of accounting
Basis of preparation
The consolidated
 
financial statements
 
(the financial
 
statements) of
 
UBS Group AG and
 
its subsidiaries
 
(together,
UBS
 
or
 
the
 
Group)
 
are
 
prepared
 
in
 
accordance
 
with
 
IFRS
 
Accounting
 
Standards, as
 
issued
 
by
 
the
 
International
Accounting Standards
 
Board (the
 
IASB), and
 
are
 
presented in
 
US
 
dollars. These
 
interim
 
financial statements
 
are
prepared in accordance with IAS 34,
Interim Financial Reporting
.
In preparing
 
these interim financial
 
statements, the same
 
accounting policies and
 
methods of
 
computation have
been applied as in the
 
UBS Group AG consolidated annual
 
financial statements for
 
the period ended 31 December
2023, except for the changes described in this Note and changes
 
in segment reporting as set out in Note 3. These
interim
 
financial
 
statements
 
are
 
unaudited
 
and
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
UBS Group AG’s
 
audited
consolidated financial statements in
 
the UBS Group Annual Report
 
2023 and the “Management
 
report” sections
of this report. In the opinion of management, all necessary adjustments have
 
been made for a fair presentation of
the Group’s financial position, results of
 
operations and cash flows.
Preparation of
 
these interim financial
 
statements requires management
 
to make
 
estimates and
 
assumptions that
affect
 
the
 
reported
 
amounts
 
of
 
assets,
 
liabilities,
 
income,
 
expenses
 
and
 
disclosures
 
of
 
contingent
 
assets
 
and
liabilities. These estimates
 
and assumptions are based
 
on the best available
 
information. Actual results
 
in the future
could differ
 
from such
 
estimates and
 
differences may
 
be material
 
to the
 
financial statements.
 
Revisions to
 
estimates,
based on regular
 
reviews, are recognized
 
in the period
 
in which they
 
occur. For more
 
information about areas of
estimation
 
uncertainty
 
that
 
are
 
considered
 
to
 
require
 
critical
 
judgment,
 
refer
 
to
 
“Note 1a
 
Material
 
accounting
policies” in the “Consolidated financial statements”
 
section of the UBS Group Annual Report
 
2023.
Amendments to IAS 12,
 
Income Taxes
UBS
 
has
 
applied
 
for
 
the
 
purposes
 
of
 
these
 
financial
 
statements
 
the
 
exception
 
that
 
was
 
introduced
 
by
 
the
amendments to
 
IAS 12,
Income Taxes
, issued in
 
May 2023
 
in relation to
 
top-up taxes
 
on income
 
under Global
 
Anti-
Base Erosion
 
Rules that
 
have been
 
imposed under
 
legislation that
 
has been
 
enacted or
 
substantively enacted
 
to
implement the Pillar
 
Two model rules published by the
 
Organisation for Economic
 
Co-operation and Development.
The exception
 
requires that
 
deferred tax
 
assets and
 
deferred tax
 
liabilities be
 
neither recognized
 
nor disclosed
 
in
respect of such top-up taxes.
Other amendments to IFRS Accounting Standards
A number of minor amendments
 
to IFRS Accounting Standards became
 
effective from 1 January 2024 or
 
later and
have had no material effect on the Group.
IFRS 18,
Presentation and Disclosure in Financial
 
Statements
In April 2024, the IASB issued a new standard,
 
IFRS 18,
Presentation and Disclosure in Financial Statements,
 
which
replaces IAS 1,
Presentation of Financial Statements
. The main changes introduced by IFRS 18 relate
 
to:
–
the structure of income statements;
–
new disclosure requirements for management performance
 
measures; and
–
enhanced guidance on aggregation and disaggregation of information on
 
the face of financial
 
statements and
in the notes thereto.
IFRS 18 is effective from 1 January 2027 and
 
will also apply to comparative information. UBS
 
will first apply these
new requirements in
 
the Annual Report
 
2027 and, for
 
interim reporting, in
 
the first quarter
 
2027 interim report.
UBS is assessing the impact of the
 
new requirements on its reporting
 
but expects it to be limited. UBS
 
will take the
opportunity to refine the grouping of items in the primary financial statements and
 
in the notes thereto based on
new principles of aggregation and disaggregation
 
in IFRS 18.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
62
Note 1
 
Basis of accounting (continued)
Amendments to IFRS 9,
Financial Instruments
, and IFRS 7,
Financial Instruments: Disclosures
In
 
May
 
2024,
 
the
 
IASB
 
issued
Amendments
 
to
 
the
 
Classification
 
and
 
Measurement
 
of
 
Financial
 
Instruments
 
–
Amendments to IFRS 9 and IFRS 7
 
(the Amendments).
 
The Amendments relate to:
–
derecognition of financial liabilities settled
 
through electronic transfer systems;
–
assessment
 
of
 
contractual
 
cash
 
flow
 
characteristics
 
in
 
classifying
 
financial
 
assets,
 
including
 
those
 
with
environmental, social and
 
corporate governance and
 
similar features, non-recourse
 
features, and
 
contractually
linked instruments; and
–
disclosure of information about
 
financial instruments with contingent features
 
that can change
 
the amount of
contractual
 
cash
 
flows,
 
as
 
well
 
as
 
equity
 
instruments
 
designated
 
at
 
fair
 
value
 
through
 
other
 
comprehensive
income.
The Amendments
 
are effective
 
from 1 January 2026,
 
with early
 
application permitted either
 
for the
 
entire set
 
of
amendments or
 
for only
 
those that relate
 
to classification of
 
financial instruments. UBS
 
is currently
 
assessing the
impact of the new requirements on its financial
 
statements.
 
Currency translation rates
The
 
following table
 
shows the
 
rates of
 
the main
 
currencies used
 
to translate
 
the financial
 
information of
 
UBS’s
operations with a functional currency other
 
than the US dollar into US dollars.
Closing exchange rate
Average rate
1
As of
For the quarter ended
Year-to-date
30.9.24
30.6.24
31.12.23
30.9.23
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
1 CHF
 
1.18
 
1.11
 
1.19
 
1.09
 
1.17
 
1.10
 
1.12
 
1.13
 
1.11
1 EUR
 
1.11
 
1.07
 
1.10
 
1.06
 
1.10
 
1.07
 
1.08
 
1.08
 
1.08
1 GBP
 
1.34
 
1.26
 
1.28
 
1.22
 
1.31
 
1.26
 
1.26
 
1.28
 
1.25
100 JPY
 
0.69
 
0.62
 
0.71
 
0.67
 
0.68
 
0.63
 
0.69
 
0.66
 
0.71
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 represent an average of
three month-end rates, weighted according to the income and expense volumes of
 
all operations of the Group with the same functional
 
currency for each month. Weighted average rates for individual business divisions
may deviate from the weighted average rates for the Group.
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
63
Note 2
 
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 Credit Suisse Group AG constituted
 
a
business combination under IFRS 3,
Business Combinations
, and was required to be accounted for by applying the
acquisition method of accounting.
 
IFRS 3 measurement period adjustments
 
for the acquisition of the Credit Suisse
 
Group
The acquisition of
 
Credit Suisse Group
 
AG was made
 
without the ordinary
 
due diligence procedures
 
and outside
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 second quarter 2023 report, with
the amounts that form part of
 
the business combination accounting therefore
 
considered provisional and subject
to further measurement period
 
adjustments if new
 
information about facts
 
and circumstances existing on
 
the date
of the acquisition were to
 
be obtained within one year from
 
the acquisition date. The acquisition of Credit
 
Suisse
Group AG resulted in
 
provisional negative
 
goodwill of
 
USD 27.7bn reported
 
in the
 
UBS Group
 
Annual Report
 
2023.
 
For details
 
of the
 
accounting for the
 
acquisition, including measurement
 
period adjustments effected
 
during the
year ended 31 December
 
2023, refer to
 
“Note 1a Material accounting
 
policies” and “Note 2
 
Accounting for the
acquisition of
 
the Credit
 
Suisse Group”
 
in the
 
“Consolidated financial
 
statements”
 
section of
 
the UBS
 
Group Annual
Report 2023.
 
In the
 
second quarter
 
of 2024,
 
in light of
 
the additional
 
information about
 
circumstances existing
 
on the
 
acquisition
date that became available to management, IFRS 3 measurement period adjustments of USD 0.2bn were made in
relation to
Provisions and contingent liabilities
 
(refer to
“Change in provisions and contingent
 
liabilities”
 
below). In
addition,
 
fair
 
value
 
measurement
 
adjustments
 
of
 
USD 0.3bn
 
were
 
made
 
to
 
the
 
acquisition
 
date
 
fair
 
values
 
of
exposures associated with Russia, as well as
 
other positions in Non-core and Legacy,
 
following the completion of a
detailed review.
 
The adjustments
 
reflect management’s
 
final conclusions
 
on critical
 
assumptions and
 
judgments,
which are within a range of reasonably possible outcomes, relating to significant uncertainties that
 
existed on the
acquisition date. Comparative-period information
 
has been revised accordingly.
 
The measurement
 
period adjustments
 
effected in
 
the second
 
quarter of
 
2024 resulted
 
in a
 
decrease in
 
negative
goodwill to USD 27.3bn from
 
the provisional amount of
 
USD 27.7bn previously reported
 
in the UBS Group Annual
Report 2023. Retained earnings
 
have been revised
 
to reflect the
 
impact on the
 
prior-period income statement of
net
 
USD 0.5bn.
 
With
 
the
 
measurement
 
period
 
adjustments
 
effected
 
in
 
the
 
second
 
quarter
 
of
 
2024
 
and
 
the
finalization of the amount of negative goodwill,
 
the acquisition accounting for the transaction
 
is complete.
Change in provisions and contingent liabilities
In
 
addition
 
to
 
the
 
existing
 
USD 1.3bn
 
litigation provisions
 
previously
 
recorded
 
by
 
the
 
Credit
 
Suisse
 
Group,
 
UBS
recognized
 
on
 
the
 
acquisition
 
date
 
USD 5.6bn
 
in
Provisions
 
and
 
contingent
 
liabilities
 
for
 
additional
 
litigation
provisions
 
and contingent
 
liabilities, which
 
includes USD 1.6bn
 
for litigation
 
provisions
 
to reflect
 
management’s
assessment
 
of
 
the
 
associated
 
probability,
 
timing
 
and
 
amount
 
considering
 
new
 
information,
 
and
 
USD 4.0bn
contingent liabilities for certain
 
obligations in respect of
 
litigation, regulatory and similar
 
matters identified in the
purchase
 
price
 
allocation.
 
The
 
timing
 
and
 
actual
 
amount
 
of
 
outflows
 
associated
 
with
 
litigation
 
matters
 
are
uncertain.
 
UBS
 
has
 
continued
 
to
 
assess
 
the
 
development
 
of
 
these
 
obligations
 
and
 
the
 
amount
 
and
 
timing
 
of
potential outflows. The USD 4.0bn of contingent liabilities reflect an
 
increase of USD 0.2bn in the
 
second quarter
of 2024 from the USD 3.8bn previously reported in the UBS Group Annual Report
 
2023.
Effect of measurement period adjustments on
 
the acquisition date balance sheet
 
The table
 
below sets
 
out the
 
identifiable net
 
assets attributable
 
to the
 
acquisition of
 
the Credit
 
Suisse Group
 
as
adjusted to reflect
 
the effects of
 
measurement period adjustments
 
made in the
 
second quarter
 
of 2024, as
 
detailed
above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
64
Note 2
 
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 UBS
Group Annual Report
2023
Measurement period
adjustments made in
the second quarter
2024
Revised
Cash and balances at central banks
 
93,012
 
(89)
 
92,923
Amounts due from banks
 
13,590
 
(15)
 
13,575
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
 
247,219
 
(175)
 
247,044
Other financial assets measured at amortized cost
 
13,428
 
(43)
 
13,385
Total financial assets measured at amortized cost
 
414,322
 
(322)
 
414,000
Financial assets at fair value held for trading
 
56,237
 
56,237
Derivative financial instruments
 
62,162
 
62,162
Brokerage receivables
 
366
 
366
Financial assets at fair value not held for trading
 
54,199
 
54,199
Total financial assets measured at fair value through profit or loss
 
172,964
 
172,964
Financial assets measured at fair value through other comprehensive income
 
0
 
0
Investments in associates
 
1,569
 
1,569
Property, equipment and software
 
6,055
 
6,055
Intangible assets
 
1,287
 
1,287
Deferred tax assets
 
998
 
998
Other non-financial assets
 
6,892
 
6,892
Total assets
 
604,088
 
(322)
 
603,766
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
 
432,070
Financial liabilities at fair value held for trading
 
5,711
 
5,711
Derivative financial instruments
 
67,782
 
67,782
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
 
126,292
 
126,292
Provisions and contingent liabilities
 
9,945
 
161
 
10,106
Other non-financial liabilities
 
3,901
 
3,901
Total liabilities
 
572,209
 
161
 
572,370
Non-controlling interests
 
(285)
 
(285)
Fair value of net assets acquired
 
31,594
 
(483)
 
31,110
Settlement of pre-existing relationships
 
135
 
135
Negative goodwill resulting from the acquisition
 
27,748
 
(483)
 
27,264
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
65
Note 2
 
Accounting for the acquisition of the Credit
 
Suisse Group (continued)
The
 
tables
 
below
 
set
 
out
 
the
 
consequential
 
impact
 
of
 
the
 
measurement
 
period
 
adjustments
 
on
 
the
 
previously
reported
 
income
 
statements
 
for
 
the
 
nine-month
 
period
 
ended
 
30 September
 
2023
 
and
 
the
 
quarter
 
ended
30 September 2023,
 
the balance
 
sheet as of
 
31 December 2023,
 
and the cumulative
 
effect of measurement
 
period
adjustments on the statement of cash flows
 
for the nine-month period ended 30 September
 
2023.
 
Effect of the measurement period adjustments on the income statement for the nine-month period and the quarter
ended 30 September 2023
For the quarter ended 30 September 2023
For the nine-month period ended 30 September 2023
USD m
As previously
reported in the
UBS Group
third quarter
2023 report
Measurement
period
adjustments
made in the
fourth quarter
of 2023
Revised
As previously
reported in the
UBS Group
third quarter
2023 report
Measurement
period
adjustments
made in the
fourth quarter
of 2023
Measurement
period
adjustment
made in the
UBS Group
Annual Report
2023
Measurement
period
adjustments
made in the
second quarter
of 2024
Revised
Net interest income
 
2,107
 
2,107
 
5,202
 
5,202
Other net income from financial instruments measured
at fair value through profit or loss
 
3,212
 
14
 
3,226
 
8,410
 
14
 
8,425
Fee and commission income
 
6,683
 
(14)
 
6,669
 
17,371
 
(14)
 
17,357
Fee and commission expense
 
(613)
 
(613)
 
(1,566)
 
(1,566)
Net fee and commission income
 
6,071
 
(14)
 
6,056
 
15,804
 
(14)
 
15,790
Other income
 
305
 
305
 
563
 
563
Total revenues
 
11,695
 
11,695
 
29,979
 
29,979
Negative goodwill
 
28,925
 
(1,177)
 
(483)
 
27,264
Credit loss expense / (release)
 
306
 
(67)
 
239
 
967
 
(67)
 
901
Personnel expenses
 
7,571
 
(4)
 
7,567
 
17,842
 
(4)
 
17,838
General and administrative expenses
 
3,124
 
3,124
 
7,157
 
7,157
Depreciation, amortization and impairment of non-
financial assets
 
950
 
950
 
2,341
 
2,341
Operating expenses
 
11,644
 
(4)
 
11,640
 
27,340
 
(4)
 
27,336
Operating profit / (loss) before tax
 
(255)
 
71
 
 
(184)
 
30,597
 
71
 
(1,177)
 
(483)
 
29,006
Tax expense / (benefit)
 
526
 
526
 
1,346
 
1,346
Net profit / (loss)
 
(781)
 
71
 
 
(711)
 
29,251
 
71
 
(1,177)
 
(483)
 
27,660
Net profit / (loss) attributable to non-controlling
interests
 
4
 
4
 
15
 
15
Net profit / (loss) attributable to shareholders
 
(785)
 
71
 
 
(715)
 
29,235
 
71
 
(1,177)
 
(483)
 
27,645
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
66
Note 2
 
Accounting for the acquisition of the Credit
 
Suisse Group (continued)
Effect of the measurement period adjustments on the balance sheet as of 31 December 2023
USD m
As of 31 December 2023
Assets
As previously
reported in the
UBS Group first
quarter 2024
report
Measurement
period
adjustment
made in the
second quarter
of 2024
Revised
Total financial assets measured at amortized cost
 
1,189,773
 
(322)
 
1,189,451
of which: Cash and balances at central banks
 
314,148
 
(89)
 
314,060
of which: Amounts due from banks
 
21,161
 
(15)
 
21,146
of which: Loans and advances to customers
 
639,844
 
(175)
 
639,669
of which: Other financial assets measured at amortized cost
 
65,498
 
(43)
 
65,455
Total assets
 
1,717,246
 
(322)
 
1,716,924
Liabilities
Provisions and contingent liabilities
 
12,250
 
161
 
12,412
Total liabilities
 
1,630,607
 
161
 
1,630,769
Equity
Equity attributable to shareholders
 
86,108
 
(483)
 
85,624
of which: Retained earnings
 
74,880
 
(483)
 
74,397
Total equity
 
86,639
 
(483)
 
86,156
Total liabilities and equity
 
1,717,246
 
(322)
 
1,716,924
Effect of the measurement period adjustments on the statement of cash flows for the nine-month period ended
30
September 2023
For the nine-month period ended 30 September 2023
USD m
As previously
reported in the
UBS Group third
quarter 2023
report
Cumulative
measurement
period
adjustment
Revised
Cash flow from / (used in) operating activities
Net profit / (loss)
 
29,251
 
(1,590)
 
27,660
of which: Credit loss expense / (release)
 
967
 
(67)
 
901
of which: Negative goodwill
 
(28,925)
 
1,661
 
(27,264)
Net cash flow from / (used in) operating activities
 
48,131
 
48,131
of which: Loans and advances to customers and customer deposits
 
43,632
 
(741)
 
42,891
of which: Financial assets and liabilities at fair value held for trading
 
and derivative financial instruments
 
(8,521)
 
2,824
 
(5,696)
of which: Financial assets at fair value not held for trading and other financial
 
assets and liabilities
 
13,185
 
(2,076)
 
11,109
of which: Provisions and other non-financial assets and
 
liabilities
 
1,637
 
(12)
 
1,624
Net cash flow from / (used in) investing activities
 
103,013
 
(104)
 
102,908
of which: Cash and cash equivalents acquired upon acquisition of
 
the Credit Suisse Group
 
108,510
 
(104)
 
108,406
Net cash flow from / (used in) financing activities
 
(52,568)
 
(52,568)
Total cash flow
Cash and cash equivalents at the beginning of the period
 
195,321
 
195,321
Net cash flow from / (used in) operating, investing and financing
activities
 
98,576
 
(104)
 
98,472
Effects of exchange rate differences on cash and cash equivalents
 
(1,497)
 
(1,497)
Cash and cash equivalents at the end of the period
 
292,400
 
(104)
 
292,296
of which: cash and balances at central banks
 
262,304
 
(89)
 
262,215
of which: amounts due from banks
 
18,961
 
(15)
 
18,946
of which: money market paper
 
11,135
 
11,135
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
67
Note 2
 
Accounting for the acquisition of the Credit
 
Suisse Group (continued)
Conclusion of an investment management agreement
 
with Apollo and the transfer of senior
 
secured
asset-based financing
In
 
the
 
first
 
quarter
 
of
 
2024,
 
Credit
 
Suisse
 
entered
 
into
 
agreements
 
with
 
entities
 
managed
 
by
 
Atlas
 
Securitized
Products Management Holdings
 
(Atlas) and
 
other affiliates
 
of Apollo Management
 
Holdings (collectively,
 
Apollo)
to
 
conclude
 
the
 
investment
 
management
 
agreement
 
under
 
which
 
Atlas
 
has
 
managed
 
Credit
 
Suisse’s
 
retained
portfolio of
 
assets of
 
its
 
former securitized
 
products group.
 
Following the
 
closure of
 
this
 
agreement,
 
the assets
previously managed by Atlas are to be managed in
 
Non-core and Legacy.
 
The parties also agreed to conclude the
transition services
 
agreement under
 
which Credit
 
Suisse has
 
provided services
 
to Atlas.
 
In addition,
 
Credit Suisse AG
entered into
 
an agreement
 
with Apollo
 
Capital Management
 
(ACM) and
 
other parties
 
managed, controlled
 
and / or
advised by
 
ACM or
 
its affiliates
 
(collectively,
 
the Assignees)
 
to transfer
 
USD 8.0bn of
 
senior secured
 
asset-based
financing, with
 
USD 6.0bn funded
 
as of
 
31 December 2023
 
recognized as
 
financial assets
 
at fair
 
value held
 
for
trading
 
at
 
a
 
fair
 
value
 
of
 
USD 5.5bn
 
and
 
the
 
remaining
 
notional
 
of
 
USD 2.0bn
 
recognized
 
as
 
derivative
 
loan
commitments at a fair
 
value of USD 0.15bn, with the
 
fair values of both financing
 
components derecognized from
the Group’s balance
 
sheet as
 
of 31 March 2024.
 
As part
 
of the loan
 
transfer, the Group extended
 
a one-year
 
senior
swingline facility
 
to the
 
Assignees with
 
a
 
total
 
amount as
 
of 30 September
 
2024 of
 
USD 750m (30 June
 
2024:
USD 750m), which is accounted for as an
 
off-balance sheet irrevocable commitment. In the
 
first quarter of 2024,
the Group recognized
 
a net
 
gain of
 
USD 0.3bn from
 
the conclusion
 
of the
 
investment management
 
agreement and
the
 
assignment
 
of
 
the
 
loan
 
facilities,
 
after
 
the
 
accounting
 
for
 
the
 
purchase
 
price
 
allocation
 
adjustments at
 
the
closing of the acquisition of the Credit Suisse Group.
Agreement to sell Select Portfolio Servicing
 
On 13 August 2024,
 
UBS entered
 
into an agreement
 
to sell Select
 
Portfolio Servicing, the US
 
mortgage servicing
business of Credit
 
Suisse, which is
 
managed in Non-core
 
and Legacy.
 
Completion of the transaction
 
is subject to
regulatory approvals
 
and other customary
 
closing conditions. The
 
associated assets and
 
liabilities are
 
disclosed in
Assets of disposal groups held for sale
 
and
Liabilities of disposal groups held for sale
, respectively,
 
within Note 12
in these financial statements.
 
The transaction is expected
 
to close in the first
 
quarter of 2025. The UBS
 
Group does
not expect to recognize a material profit or loss upon
 
completion of the transaction.
 
 
Note 3
 
Segment reporting
As part of
 
the continued refinement
 
of UBS’s reporting
 
structure and organizational setup,
 
in the first
 
quarter of
2024 certain
 
changes were
 
made, with
 
an impact
 
on segment
 
reporting for
 
UBS’s business
 
divisions and
 
Group
Items. Prior-period information has been adjusted
 
for comparability. The changes are as follows.
–
Change
 
in
 
business
 
division
 
perimeters:
UBS
 
has
 
transferred
 
certain
 
businesses
 
from
 
Swiss
 
Bank
 
(Credit
Suisse),
 
previously
 
included
 
in
 
Personal
 
&
 
Corporate
 
Banking,
 
to
 
Global
 
Wealth
 
Management.
 
The
 
change
predominantly related to the high
 
net worth client segment and
 
represents approximately USD 72bn
 
in invested
assets and approximately
 
USD 0.6bn in annualized
 
revenues. A
 
number of
 
other smaller
 
business shifts
 
were also
executed between the business divisions in the
 
first quarter of 2024.
 
–
Changes to Group Treasury allocations:
UBS has allocated to the business divisions nearly all Group Treasury
costs that historically
 
were retained and
 
reported in Group
 
Items. Costs
 
that continue to
 
be retained in
 
Group
Items include costs related
 
to hedging and own
 
debt, and deferred tax
 
asset funding costs. UBS
 
has also aligned
the internal funds
 
transfer pricing methodologies
 
applied by Credit
 
Suisse entities to
 
UBS’s funds transfer
 
pricing
methodology.
 
These changes
 
resulted in
 
funding costs
 
of approximately
 
USD 0.3bn
 
for 2023,
 
moving from
 
Group
Items
 
to
 
the
 
business
 
divisions,
 
predominantly
 
related
 
to
 
the
 
second
 
half
 
of
 
2023.
 
In
 
parallel
 
with
 
the
aforementioned changes, UBS
 
has increased
 
the allocation of
 
balance sheet resources
 
from Group
 
Treasury to
the business divisions.
–
Updated cost
 
allocations:
UBS has
 
reallocated USD 0.3bn of
 
annualized costs from
 
Non-core and
 
Legacy to
the other business divisions, with
 
the aim of avoiding
 
stranded costs in Non-core and
 
Legacy at the end
 
of the
integration process.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
68
Note 3
 
Segment reporting (continued)
Following
 
the
 
collective
 
changes
 
outlined
 
above,
 
prior-period
 
information
 
for
 
the
 
nine-month
 
period
 
ended
30 September 2023 has been
 
restated, resulting in decreases
 
in Operating profit / (loss)
 
before tax of USD 42m for
Global Wealth Management, USD 150m
 
for Personal & Corporate Banking and USD 7m for the Investment Bank,
and
 
increases in
 
Operating profit
 
/
 
(loss) before
 
tax of
 
USD 106m
 
for Group
 
Items,
 
USD 84m
 
for Non-core
 
and
Legacy and USD 9m for Asset Management.
Prior-period information as
 
of 31 December
 
2023 has also
 
been restated, resulting
 
in increases
 
of Total
 
assets of
USD 98.4bn
 
in
 
Global
 
Wealth
 
Management, USD 13.3bn
 
in
 
Personal
 
&
 
Corporate Banking,
 
USD 28.9bn
 
in
 
the
Investment
 
Bank
 
and
 
USD 28.6bn
 
in
 
Non-core
 
and
 
Legacy,
 
with
 
a
 
corresponding
 
decrease
 
of
 
Total
 
assets
 
of
USD 169.2bn in Group Items.
These changes had no effect on the reported
 
results or financial position of the Group.
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
UBS Group
For the nine months ended 30 September 2024
1
Total revenues
 
18,395
 
7,089
 
2,416
 
8,199
 
1,664
 
(786)
 
36,976
Credit loss expense / (release)
 
(2)
 
229
 
0
 
34
 
63
 
(2)
 
322
Operating expenses
 
15,340
 
4,265
 
2,025
 
6,728
 
2,655
 
(132)
 
30,880
Operating profit / (loss) before tax
 
3,057
 
2,594
 
392
 
1,437
 
(1,054)
 
(652)
 
5,773
Tax expense / (benefit)
 
1,407
Net profit / (loss)
 
4,366
As of 30 September 2024
Total assets
 
577,847
 
474,725
 
24,096
 
448,583
 
85,082
 
13,609
 
1,623,941
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
 
Management
Investment
Bank
Non-core and
Legacy
Group Items
Negative
goodwill
2
UBS Group
For the nine months ended 30 September 2023
1
Total revenues
 
16,002
 
5,604
 
1,861
 
6,562
 
551
 
(602)
 
29,979
Negative goodwill
 
27,264
 
27,264
Credit loss expense / (release)
 
174
 
398
 
1
 
142
 
178
 
7
 
901
Operating expenses
 
12,663
 
2,996
 
1,649
 
6,302
 
3,304
 
422
 
27,336
Operating profit / (loss) before tax
 
3,165
 
2,210
 
211
 
118
 
(2,930)
 
(1,031)
 
27,264
 
29,006
Tax expense / (benefit)
 
1,346
Net profit / (loss)
 
27,660
As of 31 December 2023
2,3
Total assets
 
567,648
 
483,794
 
21,804
 
428,269
 
201,131
 
14,277
 
1,716,924
1 Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023 for more information about the Group’s reporting segments.
 
2 Comparative-period
information has been revised. Refer to Note 2 for more information.
 
3 Comparative-period information has been restated for Group Treasury
 
allocations.
 
Note 4
 
Net interest income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Interest income from loans and deposits
2
 
8,051
 
8,403
 
9,117
 
25,543
 
19,367
Interest income from securities financing transactions measured
 
at amortized cost
3
 
898
 
1,136
 
1,094
 
3,252
 
2,863
Interest income from other financial instruments measured
 
at amortized cost
 
346
 
328
 
307
 
1,021
 
847
Interest income from debt instruments measured at fair
 
value through other comprehensive income
 
26
 
26
 
27
 
80
 
75
Interest income from derivative instruments designated as cash
 
flow hedges
 
 
(556)
 
(574)
 
(613)
 
(1,731)
 
(1,446)
Total interest income from financial instruments measured at amortized cost and fair
 
value through other comprehensive
income
 
8,766
 
9,320
 
9,932
 
28,165
 
21,707
Interest expense on loans and deposits
4
 
4,887
 
5,074
 
4,780
 
15,400
 
9,798
Interest expense on securities financing transactions measured
 
at amortized cost
5
 
558
 
541
 
575
 
1,594
 
1,555
Interest expense on debt issued
 
3,531
 
3,655
 
3,676
 
10,926
 
7,311
Interest expense on lease liabilities
 
46
 
49
 
52
 
145
 
113
Total interest expense from financial instruments measured at amortized cost
 
9,022
 
9,319
 
9,082
 
28,064
 
18,777
Total net interest income from financial instruments measured at amortized cost and fair
 
value through other comprehensive
income
 
(256)
 
2
 
850
 
101
 
2,930
Net interest income from financial instruments measured at fair value through profit
 
or loss and other
 
2,050
 
1,533
 
1,257
 
5,168
 
2,272
Total net interest income
 
1,794
 
1,535
 
2,107
 
5,270
 
5,202
1 Comparative-period information
 
has been revised.
 
Refer to Note
 
2 for more
 
information.
 
2 Consists of
 
interest income from
 
cash and balances
 
at central banks,
 
amounts due from
 
banks, and cash
 
collateral
receivables on derivative instruments, as well as negative interest on amounts due to banks, customer deposits, and cash collateral payables on derivative instruments.
 
3 Includes interest income on receivables from
securities financing transactions and negative interest, including
 
fees, on payables from securities financing transactions.
 
4 Consists of interest expense on
 
amounts due to banks, cash collateral payables on
 
derivative
instruments, and customer deposits, as well as negative interest on cash and balances
 
at central banks, amounts due from banks, and cash collateral receivables on derivative instruments.
 
5 Includes interest expense
on payables from securities financing transactions and negative interest, including fees, on receivables
 
from securities financing transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
69
Note 5
 
Net fee and commission income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Underwriting fees
 
153
 
233
 
99
 
579
 
379
M&A and corporate finance fees
 
242
 
272
 
239
 
772
 
616
Brokerage fees
 
1,122
 
1,144
 
1,008
 
3,417
 
2,817
Investment fund fees
 
1,530
 
1,401
 
1,239
 
4,188
 
3,613
Portfolio management and related services
 
3,117
 
3,071
 
3,011
 
9,238
 
7,707
Other
 
1,008
 
1,090
 
1,073
 
3,267
 
2,224
Total fee and commission income
2
 
7,170
 
7,211
 
6,669
 
21,461
 
17,357
of which: recurring
 
4,679
 
4,484
 
4,391
 
13,570
 
11,593
of which: transaction-based
 
2,447
 
2,697
 
2,261
 
7,785
 
5,713
of which: performance-based
 
44
 
30
 
17
 
106
 
51
Fee and commission expense
 
653
 
679
 
613
 
1,921
 
1,566
Net fee and commission income
 
6,517
 
6,531
 
6,056
 
19,540
 
15,790
1 Comparative-period
 
information has
 
been revised.
 
Refer to
 
Note 2
 
for more
 
information.
 
2 Includes
 
third-party fee
 
and commission
 
income for
 
the third
 
quarter of
 
2024 of
 
USD 4,155m for
 
Global Wealth
Management (second
 
quarter of 2024:
 
USD 4,011m; third
 
quarter of 2023:
 
USD 3,732m), USD 726m
 
for Personal
 
& Corporate
 
Banking (second
 
quarter of
 
2024: USD 876m;
 
third quarter
 
of 2023:
 
USD 734m),
USD 928m for
 
Asset Management
 
(second quarter
 
of 2024:
 
USD 924m; third
 
quarter of
 
2023: USD 956m),
 
USD 1,297m for
 
the Investment
 
Bank (second
 
quarter of
 
2024: USD 1,322m;
 
third quarter
 
of 2023:
USD 1,184m), USD 102m for Non-core and Legacy (second quarter of 2024: USD 125m; third quarter of 2023: negative USD 2m) and negative USD 37m for Group Items (second quarter of 2024: negative USD 47m;
third quarter of 2023: USD 64m). Comparative-period information has been restated for changes in business division perimeters, Group Treasury
 
allocations and Non-core and Legacy cost allocations. Refer to Note 3
for more information.
 
Note 6
 
Other income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Associates, joint ventures and subsidiaries
Net gains / (losses) from acquisitions and disposals of
 
subsidiaries
1
 
(14)
 
(2)
 
(2)
 
(17)
 
4
Net gains / (losses) from disposals of investments in associates
 
and joint ventures
 
132
2
 
2
 
0
 
132
2
 
0
Share of net profits of associates and joint ventures
 
67
 
52
 
81
 
177
 
118
Total
 
185
 
52
 
79
 
292
 
122
Income from properties
3
 
14
 
15
 
13
 
44
 
27
Net gains / (losses) from properties held for sale
 
(14)
 
(2)
 
11
 
(18)
 
11
Other
 
156
4
 
89
 
201
 
301
4
 
404
Total other income
 
341
 
154
 
305
 
619
 
563
1 Includes foreign exchange gains / (losses) reclassified from other comprehensive income related to the disposal
 
or closure of foreign operations.
 
2 Includes a gain of USD 135m related to the sale
 
of our investment
in an associate.
 
3 Includes rent received from
 
third parties.
 
4 Includes a USD 72m
 
net gain in Asset Management
 
from the sale of
 
our Brazilian real estate
 
fund management business and
 
from the sale of
 
our
shareholding in Credit Suisse Insurance Linked Strategies Ltd (nine-month period ended 30
 
September 2024: USD 100m).
 
Note 7
 
Personnel expenses
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Salaries and variable compensation
2
 
5,805
 
6,058
 
6,424
 
17,726
 
15,114
of which: variable compensation – financial advisors
3
 
1,335
 
1,291
 
1,150
 
3,893
 
3,372
Contractors
 
82
 
82
 
96
 
250
 
243
Social security
 
409
 
419
 
470
 
1,236
 
1,042
Post-employment benefit plans
 
338
 
309
 
320
 
1,014
 
817
Other personnel expenses
 
255
 
251
 
256
 
731
 
622
Total personnel expenses
 
6,889
 
7,119
 
7,567
 
20,957
 
17,838
1 Comparative-period information has been revised. Refer
 
to Note 2 for more information.
 
2 Includes role-based allowances.
 
3 Consists of cash and deferred compensation awards and is
 
based on compensable
revenues and firm
 
tenure using a
 
formulaic approach. Also includes
 
expenses related to compensation
 
commitments with financial advisors
 
entered into at
 
the time of recruitment
 
that are subject
 
to vesting requirements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
70
Note 8
 
General and administrative expenses
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Outsourcing costs
 
455
 
463
 
455
 
1,341
 
1,014
Technology costs
 
580
 
567
 
552
 
1,734
 
1,287
Consulting, legal and audit fees
 
349
 
394
 
521
 
1,146
 
1,053
Real estate and logistics costs
 
311
 
302
 
593
 
902
 
942
Market data services
 
178
 
188
 
208
 
565
 
472
Marketing and communication
 
130
 
137
 
108
 
381
 
249
Travel and entertainment
 
69
 
87
 
61
 
228
 
188
Litigation, regulatory and similar matters
1
 
(69)
 
(153)
 
12
 
(227)
 
802
Other
 
384
 
334
 
614
 
1,049
 
1,151
Total general and administrative expenses
 
2,389
 
2,318
 
3,124
 
7,120
 
7,157
1 Reflects the net increase
 
/ (decrease) in provisions
 
for litigation, regulatory and similar
 
matters recognized in the
 
income statement, as well
 
as a decrease in acquired
 
contingent liabilities measured under
 
IFRS 3.
Refer to Note 15b for more information.
 
Note 9
 
Expected credit loss measurement
a) Credit loss expense / release
 
Total net credit loss
 
expenses in the
 
third quarter of 2024
 
were USD 121m, reflecting
 
USD 15m net releases
 
related
to performing positions and USD 136m net
 
expenses on credit-impaired positions.
Stage 1 and 2 net releases of USD 15m
 
included scenario-update-related net
 
releases of USD 8m, mainly from real
estate lending,
 
and portfolio changes.
Credit loss expenses of USD 136m for credit-impaired positions primarily related to Personal & Corporate Banking
and Non-core and Legacy exposures with a small
 
number of corporate counterparties.
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
 
Total
For the quarter ended 30.9.24
Global Wealth Management
 
(11)
 
12
 
1
 
2
Personal & Corporate Banking
 
(10)
 
94
 
0
 
83
Asset Management
 
0
 
0
 
0
 
0
Investment Bank
 
9
 
0
 
0
 
9
Non-core and Legacy
 
(2)
 
0
 
30
 
28
Group Items
 
0
 
0
 
0
 
0
Total
 
(15)
 
106
 
30
 
121
For the quarter ended 30.6.24
Global Wealth Management
 
(13)
 
12
 
0
 
(1)
Personal & Corporate Banking
 
(15)
 
132
 
(14)
 
103
Asset Management
 
0
 
0
 
0
 
0
Investment Bank
 
7
 
(14)
 
1
 
(6)
Non-core and Legacy
 
(1)
 
3
 
(2)
 
(1)
Group Items
 
0
 
0
 
0
 
0
Total
 
(22)
 
132
 
(15)
 
95
For the quarter ended 30.9.23
1
Global Wealth Management
 
(10)
 
15
 
6
 
10
Personal & Corporate Banking
 
77
 
60
 
23
 
160
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
 
5
Total
 
71
 
105
 
63
 
239
1 Comparative-period information
 
has been restated
 
for changes in business
 
division perimeters. Refer
 
to “Changes to segment
 
reporting in 2024”
 
in the “UBS business
 
divisions and Group
 
Items” section of
 
the
UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors,
 
and Note 3 for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
71
Note 9
 
Expected credit loss measurement (continued)
b) Changes to ECL models, scenarios, scenario
 
weights and post-model adjustments
Scenarios and scenario weights
The expected
 
credit loss
 
(ECL) scenarios,
 
along with
 
their related
 
macroeconomic factors and
 
market data,
 
were
reviewed in light of
 
the economic and political conditions prevailing
 
in the third quarter
 
of 2024 through a
 
series
of governance meetings, with input and feedback
 
from UBS Risk and Finance experts across the business divisions
and regions. ECLs for
 
former Credit Suisse positions
 
were calculated based
 
on Credit Suisse’s models,
 
including the
same scenarios
 
and scenario weight inputs as for UBS.
UBS kept
 
the scenarios
 
and scenario
 
weights in
 
line with
 
those applied
 
in the
 
UBS Group
 
second quarter
 
2024
report.
The baseline scenario was updated
 
with the latest macroeconomic forecasts
 
as of 30 September 2024. The
assumptions on a calendar-year basis are included
 
in the table below.
 
The mild
 
debt crisis
 
scenario and
 
the stagflationary
 
geopolitical crisis
 
scenario were
 
updated based
 
on the
 
latest
market data, but the assumptions remained
 
broadly unchanged.
 
The scenario-update-related
 
ECL releases
 
in the
 
third quarter
 
of 2024
 
mainly stemmed
 
from real
 
estate lending,
driven by the upward revision of Swiss house
 
price and rental income levels, as well as
 
interest rate assumptions in
the stagflation scenario.
Post-model adjustments
Total
 
stage 1 and
 
2
 
allowances and
 
provisions
 
were
 
USD 1,015m
 
as of
 
30 September 2024
 
and
 
included post-
model
 
adjustments
 
of
 
USD 281m
 
(30 June
 
2024:
 
USD 300m).
 
Post-model
 
adjustments
 
are
 
intended
 
to
 
cover
uncertainty levels, including the geopolitical
 
situation,
 
and to align
 
outputs from Credit
 
Suisse models with those
from UBS models for dedicated segments.
Comparison of shock factors
Baseline
Key parameters
2023
2024
2025
Real GDP growth (annual percentage change)
US
 
 
2.9
 
2.6
 
1.6
Eurozone
 
0.5
 
0.6
 
1.2
Switzerland
 
0.7
 
1.4
 
1.5
Unemployment rate (%, annual average)
US
 
 
3.6
 
4.1
 
4.3
Eurozone
 
6.6
 
6.5
 
6.9
Switzerland
 
2.0
 
2.4
 
2.6
Fixed income: 10-year government bonds (%, Q4)
USD
 
3.9
 
3.8
 
3.8
EUR
 
2.0
 
2.1
 
2.1
CHF
 
0.7
 
0.4
 
0.5
Real estate (annual percentage change, Q4)
US
 
 
5.3
 
2.4
 
2.9
Eurozone
 
(1.1)
 
0.6
 
3.1
Switzerland
 
0.1
 
3.0
 
4.0
Economic scenarios and weights applied
Assigned weights in %
ECL scenario
30.9.24
30.6.24
30.9.23
Baseline
 
60.0
 
60.0
 
60.0
Mild debt crisis
 
 
15.0
 
15.0
 
15.0
Stagflationary geopolitical crisis
 
25.0
 
25.0
 
25.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
72
Note 9
 
Expected credit loss measurement (continued)
c) ECL-relevant balance sheet and off-balance
 
sheet positions including ECL allowances
 
and provisions
The following tables
 
provide information
 
about financial
 
instruments and
 
certain non-financial
 
instruments that
 
are
subject
 
to
 
ECL
 
requirements.
 
For
 
amortized-cost
 
instruments,
 
the
 
carrying
 
amount
 
represents
 
the
 
maximum
exposure to credit risk, taking
 
into account the allowance for
 
credit losses. Financial assets measured at
 
fair value
through other comprehensive
 
income (FVOCI) are
 
also subject to ECL;
 
however, unlike amortized-cost
 
instruments,
the allowance
 
for credit
 
losses for
 
FVOCI instruments
 
does not
 
reduce the
 
carrying amount
 
of these financial
 
assets.
Instead, the
 
carrying amount
 
of financial
 
assets measured
 
at FVOCI
 
represents the
 
maximum exposure
 
to credit
 
risk.
In addition to recognized financial assets, certain off-balance sheet financial instruments and other credit lines are
also subject to ECL.
 
The maximum exposure to
 
credit risk for off-balance
 
sheet financial instruments is calculated
based on the maximum contractual amounts.
USD m
30.9.24
Carrying amount
1
ECL allowances
2
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
 
243,261
 
243,130
 
15
 
0
 
116
 
(55)
 
0
 
(25)
 
0
 
(30)
Amounts due from banks
 
21,716
 
21,510
 
194
 
0
 
13
 
(31)
 
(5)
 
(2)
 
0
 
(24)
Receivables from securities financing transactions measured at
amortized cost
 
92,104
 
92,104
 
0
 
0
 
0
 
(1)
 
(1)
 
0
 
0
 
0
Cash collateral receivables on derivative instruments
 
47,209
 
47,209
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Loans and advances to customers
 
615,820
 
585,415
 
25,794
 
3,623
 
987
 
(1,898)
 
(332)
 
(321)
 
(1,033)
 
(212)
of which: Private clients with mortgages
 
266,225
 
254,487
 
10,381
 
1,275
 
82
 
(188)
 
(54)
 
(82)
 
(40)
 
(12)
of which: Real estate financing
 
89,752
 
84,386
 
5,095
 
256
 
16
 
(59)
 
(25)
 
(31)
 
(5)
 
2
of which: Large corporate clients
 
29,450
 
24,471
 
3,947
 
679
 
353
 
(555)
 
(79)
 
(101)
 
(279)
 
(97)
of which: SME clients
 
23,662
 
19,323
 
2,920
 
1,171
 
247
 
(635)
 
(56)
 
(49)
 
(520)
 
(9)
of which: Lombard
 
149,956
 
149,500
 
351
 
39
 
66
 
(40)
 
(7)
 
(1)
 
(18)
 
(14)
of which: Credit cards
 
2,145
 
1,658
 
446
 
42
 
0
 
(44)
 
(7)
 
(11)
 
(26)
 
0
of which: Commodity trade finance
 
3,753
 
3,595
 
153
 
4
 
0
 
(88)
 
(13)
 
(1)
 
(74)
 
0
of which: Ship / aircraft financing
 
8,059
 
7,548
 
510
 
0
 
0
 
(45)
 
(36)
 
(8)
 
0
 
(2)
of which: Consumer financing
 
2,990
 
2,756
 
142
 
49
 
43
 
(88)
 
(21)
 
(26)
 
(46)
 
4
Other financial assets measured at amortized cost
 
61,169
 
60,465
 
528
 
167
 
10
 
(136)
 
(33)
 
(8)
 
(87)
 
(9)
of which: Loans to financial advisors
 
2,677
 
2,494
 
82
 
101
 
0
 
(46)
 
(4)
 
(1)
 
(41)
 
0
Total financial assets measured at amortized cost
 
1,081,280
 
1,049,833
 
26,530
 
3,790
 
1,126
 
(2,121)
 
(371)
 
(356)
 
(1,120)
 
(275)
Financial assets measured at fair value through other comprehensive
income
 
2,179
 
2,179
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Total on-balance sheet financial assets in scope of ECL requirements
 
1,083,458
 
1,052,012
 
26,530
 
3,790
 
1,126
 
(2,121)
 
(371)
 
(356)
 
(1,120)
 
(275)
Total exposure
ECL provisions
2
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
 
41,449
 
40,019
 
1,279
 
125
 
27
 
(64)
 
(24)
 
(18)
 
(23)
 
2
of which: Large corporate clients
 
8,120
 
7,470
 
620
 
29
 
1
 
(26)
 
(8)
 
(9)
 
(9)
 
0
of which: SME clients
 
2,616
 
2,214
 
301
 
84
 
17
 
(10)
 
(4)
 
(4)
 
(4)
 
2
of which: Financial intermediaries and hedge funds
 
 
22,056
 
21,983
 
73
 
0
 
0
 
(12)
 
(8)
 
(4)
 
0
 
0
of which: Lombard
 
4,197
 
3,985
 
206
 
6
 
0
 
(6)
 
0
 
0
 
(6)
 
0
of which: Commodity trade finance
 
1,773
 
1,771
 
1
 
0
 
0
 
(1)
 
(1)
 
0
 
0
 
0
Irrevocable loan commitments
 
80,506
 
76,601
 
3,736
 
123
 
47
 
(158)
 
(113)
 
(45)
 
(3)
 
3
of which: Large corporate clients
 
48,794
 
45,464
 
3,208
 
84
 
39
 
(118)
 
(77)
 
(34)
 
(6)
 
0
Forward starting reverse repurchase and securities borrowing
agreements
 
16,063
 
16,063
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Unconditionally revocable loan commitments
 
153,085
 
150,287
 
2,543
 
255
 
0
 
(86)
 
(68)
 
(17)
 
0
 
0
of which: Real estate financing
 
11,547
 
11,249
 
297
 
1
 
0
 
(7)
 
(6)
 
0
 
0
 
0
of which: Large corporate clients
 
16,378
 
15,853
 
523
 
3
 
0
 
(24)
 
(16)
 
(6)
 
(2)
 
0
of which: SME clients
 
11,099
 
10,381
 
509
 
209
 
0
 
(36)
 
(29)
 
(6)
 
0
 
0
of which: Lombard
 
62,624
 
62,562
 
61
 
1
 
0
 
0
 
0
 
0
 
0
 
0
of which: Credit cards
 
10,400
 
9,910
 
487
 
3
 
0
 
(9)
 
(7)
 
(2)
 
0
 
0
Irrevocable committed prolongation of existing loans
 
3,701
 
3,691
 
5
 
5
 
0
 
(3)
 
(3)
 
0
 
0
 
0
Total off-balance sheet financial instruments and other credit lines
 
294,805
 
286,660
 
7,564
 
507
 
73
 
(310)
 
(208)
 
(80)
 
(27)
 
5
Total allowances and provisions
 
(2,431)
 
(579)
 
(436)
 
(1,147)
 
(269)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective
 
ECL allowances.
 
2 Negative balances are representative of a net improvement in
credit quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
73
Note 9
 
Expected credit loss measurement (continued)
USD m
30.6.24
Carrying amount
1
ECL allowances
2
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
 
248,336
 
248,244
 
16
 
0
 
76
 
(60)
 
(1)
 
(27)
 
0
 
(32)
Amounts due from banks
 
21,959
 
21,627
 
319
 
0
 
13
 
(28)
 
(6)
 
0
 
0
 
(22)
Receivables from securities financing transactions measured at
amortized cost
 
82,028
 
82,028
 
0
 
0
 
0
 
(2)
 
(2)
 
0
 
0
 
0
Cash collateral receivables on derivative instruments
 
43,637
 
43,637
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Loans and advances to customers
 
599,105
 
569,476
 
25,249
 
3,287
 
1,093
 
(1,743)
 
(355)
 
(298)
 
(937)
 
(153)
of which: Private clients with mortgages
 
252,724
 
241,499
 
10,077
 
1,062
 
86
 
(167)
 
(57)
 
(77)
 
(30)
 
(3)
of which: Real estate financing
 
86,854
 
82,018
 
4,507
 
243
 
86
 
(53)
 
(28)
 
(31)
 
(2)
 
8
of which: Large corporate clients
 
28,773
 
23,888
 
3,829
 
700
 
357
 
(526)
 
(93)
 
(94)
 
(272)
 
(67)
of which: SME clients
 
23,406
 
19,585
 
2,531
 
1,049
 
241
 
(515)
 
(60)
 
(38)
 
(414)
 
(3)
of which: Lombard
 
148,268
 
147,272
 
875
 
54
 
66
 
(41)
 
(6)
 
(2)
 
(16)
 
(16)
of which: Credit cards
 
1,927
 
1,479
 
408
 
40
 
0
 
(41)
 
(6)
 
(11)
 
(25)
 
0
of which: Commodity trade finance
 
5,792
 
5,556
 
222
 
11
 
2
 
(125)
 
(19)
 
(2)
 
(104)
 
0
of which: Ship / aircraft financing
 
8,284
 
7,846
 
421
 
3
 
15
 
(44)
 
(38)
 
(4)
 
0
 
(2)
of which: Consumer financing
 
2,902
 
2,703
 
119
 
39
 
41
 
(68)
 
(20)
 
(21)
 
(27)
 
0
Other financial assets measured at amortized cost
 
60,431
 
59,710
 
533
 
171
 
16
 
(131)
 
(34)
 
(8)
 
(84)
 
(5)
of which: Loans to financial advisors
 
2,601
 
2,408
 
83
 
110
 
0
 
(47)
 
(4)
 
(1)
 
(41)
 
0
Total financial assets measured at amortized cost
 
1,055,494
 
1,024,721
 
26,117
 
3,458
 
1,198
 
(1,964)
 
(397)
 
(333)
 
(1,021)
 
(212)
Financial assets measured at fair value through other comprehensive
income
 
2,167
 
2,167
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Total on-balance sheet financial assets in scope of ECL requirements
 
1,057,661
 
1,026,888
 
26,117
 
3,458
 
1,198
 
(1,964)
 
(397)
 
(333)
 
(1,021)
 
(212)
Total exposure
ECL provisions
2
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
 
40,759
 
39,176
 
1,382
 
159
 
44
 
(63)
 
(25)
 
(14)
 
(26)
 
2
of which: Large corporate clients
 
8,290
 
7,390
 
820
 
67
 
15
 
(24)
 
(10)
 
(8)
 
(7)
 
0
of which: SME clients
 
2,540
 
2,153
 
287
 
77
 
22
 
(10)
 
(5)
 
(3)
 
(4)
 
2
of which: Financial intermediaries and hedge funds
 
 
21,270
 
21,080
 
189
 
0
 
0
 
(11)
 
(8)
 
(3)
 
0
 
0
of which: Lombard
 
3,895
 
3,872
 
10
 
13
 
0
 
(4)
 
0
 
0
 
(4)
 
0
of which: Commodity trade finance
 
1,642
 
1,628
 
13
 
0
 
0
 
(1)
 
(1)
 
0
 
0
 
0
Irrevocable loan commitments
 
81,867
 
77,447
 
4,236
 
145
 
39
 
(147)
 
(104)
 
(43)
 
(6)
 
6
of which: Large corporate clients
 
46,697
 
42,890
 
3,699
 
73
 
34
 
(126)
 
(84)
 
(36)
 
(6)
 
0
Forward starting reverse repurchase and securities borrowing
agreements
 
9,724
 
9,724
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Unconditionally revocable loan commitments
 
148,932
 
146,532
 
2,154
 
245
 
0
 
(81)
 
(69)
 
(12)
 
0
 
0
of which: Real estate financing
 
11,705
 
11,154
 
552
 
0
 
0
 
(7)
 
(7)
 
0
 
0
 
0
of which: Large corporate clients
 
16,000
 
15,677
 
314
 
9
 
0
 
(23)
 
(16)
 
(4)
 
(2)
 
0
of which: SME clients
 
11,002
 
10,575
 
346
 
80
 
0
 
(34)
 
(29)
 
(5)
 
0
 
0
of which: Lombard
 
60,962
 
60,934
 
26
 
1
 
0
 
0
 
0
 
0
 
0
 
0
of which: Credit cards
 
10,056
 
9,576
 
477
 
4
 
0
 
(8)
 
(6)
 
(2)
 
0
 
0
Irrevocable committed prolongation of existing loans
 
3,329
 
3,319
 
7
 
2
 
0
 
(2)
 
(2)
 
0
 
0
 
0
Total off-balance sheet financial instruments and other credit lines
 
284,611
 
276,199
 
7,779
 
551
 
83
 
(294)
 
(200)
 
(70)
 
(31)
 
8
Total allowances and provisions
 
(2,258)
 
(597)
 
(404)
 
(1,053)
 
(204)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances.
 
2 Negative balances are representative of a net improvement in credit
quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
74
Note 9
 
Expected credit loss measurement (continued)
USD m
31.12.23
Carrying amount
1,2
ECL allowances
3
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
 
314,060
 
314,025
 
18
 
0
 
18
 
(48)
 
0
 
(26)
 
0
 
(22)
Amounts due from banks
 
21,146
 
21,092
 
17
 
0
 
38
 
(12)
 
(6)
 
(1)
 
0
 
(5)
Receivables from securities financing transactions measured at
amortized cost
 
99,039
 
99,039
 
0
 
0
 
0
 
(2)
 
(2)
 
0
 
0
 
0
Cash collateral receivables on derivative instruments
 
50,082
 
50,082
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Loans and advances to customers
 
639,669
 
610,922
 
24,408
 
2,869
 
1,470
 
(1,698)
 
(423)
 
(289)
 
(862)
 
(123)
of which: Private clients with mortgages
 
268,616
 
256,614
 
10,695
 
929
 
378
 
(209)
 
(62)
 
(97)
 
(39)
 
(11)
of which: Real estate financing
 
97,817
 
92,084
 
5,367
 
270
 
97
 
(103)
 
(41)
 
(31)
 
(21)
 
(11)
of which: Large corporate clients
 
30,084
 
25,671
 
3,182
 
700
 
532
 
(575)
 
(105)
 
(70)
 
(312)
 
(89)
of which: SME clients
 
25,957
 
22,155
 
2,919
 
754
 
129
 
(402)
 
(71)
 
(42)
 
(277)
 
(13)
of which: Lombard
 
156,353
 
156,299
 
3
 
50
 
0
 
(41)
 
(13)
 
(11)
 
(17)
 
0
of which: Credit cards
 
2,041
 
1,564
 
438
 
39
 
0
 
(42)
 
(6)
 
(11)
 
(24)
 
0
of which: Commodity trade finance
 
5,727
 
5,662
 
25
 
22
 
18
 
(130)
 
(18)
 
(1)
 
(111)
 
0
of which: Ship / aircraft financing
 
9,214
 
8,920
 
273
 
4
 
17
 
(51)
 
(48)
 
(3)
 
0
 
(1)
of which: Consumer financing
 
2,982
 
2,795
 
92
 
38
 
57
 
(59)
 
(22)
 
(17)
 
(20)
 
0
Other financial assets measured at amortized cost
 
65,455
 
64,268
 
968
 
158
 
61
 
(151)
 
(41)
 
(10)
 
(94)
 
(5)
of which: Loans to financial advisors
 
2,615
 
2,422
 
79
 
114
 
0
 
(49)
 
(4)
 
(1)
 
(44)
 
0
Total financial assets measured at amortized cost
 
1,189,451
 
1,159,428
 
25,410
 
3,027
 
1,587
 
(1,911)
 
(473)
 
(326)
 
(956)
 
(156)
Financial assets measured at fair value through other comprehensive
income
 
2,233
 
2,233
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Total on-balance sheet financial assets in scope of ECL requirements
 
1,191,684
 
1,161,661
 
25,410
 
3,027
 
1,587
 
(1,911)
 
(473)
 
(326)
 
(956)
 
(156)
Total exposure
ECL provisions
3
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
 
46,191
 
44,487
 
1,495
 
151
 
58
 
(73)
 
(28)
 
(22)
 
(23)
 
0
of which: Large corporate clients
 
9,267
 
8,138
 
1,023
 
89
 
17
 
(31)
 
(11)
 
(13)
 
(7)
 
0
of which: SME clients
 
2,839
 
2,469
 
337
 
31
 
2
 
(14)
 
(4)
 
(5)
 
(5)
 
0
of which: Financial intermediaries and hedge funds
 
 
22,922
 
22,876
 
46
 
0
 
0
 
(12)
 
(8)
 
(3)
 
0
 
0
of which: Lombard
 
5,045
 
5,045
 
0
 
0
 
0
 
(1)
 
0
 
0
 
(1)
 
0
of which: Commodity trade finance
 
2,037
 
2,027
 
9
 
0
 
0
 
(1)
 
(1)
 
0
 
0
 
0
Irrevocable loan commitments
 
91,643
 
87,080
 
4,297
 
218
 
48
 
(178)
 
(117)
 
(51)
 
(14)
 
4
of which: Large corporate clients
 
50,696
 
46,708
 
3,881
 
59
 
48
 
(149)
 
(94)
 
(41)
 
(12)
 
(2)
Forward starting reverse repurchase and securities borrowing
agreements
 
18,444
 
18,444
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Unconditionally revocable loan commitments
 
163,256
 
160,456
 
2,654
 
146
 
0
 
(95)
 
(78)
 
(17)
 
0
 
0
of which: Real estate financing
 
15,846
 
15,033
 
813
 
0
 
0
 
(14)
 
(11)
 
(3)
 
0
 
0
of which: Large corporate clients
 
17,139
 
16,678
 
454
 
8
 
0
 
(23)
 
(17)
 
(6)
 
0
 
0
of which: SME clients
 
11,658
 
11,253
 
375
 
29
 
0
 
(38)
 
(33)
 
(5)
 
0
 
0
of which: Lombard
 
77,618
 
77,618
 
0
 
1
 
0
 
0
 
0
 
0
 
0
 
0
of which: Credit cards
 
10,458
 
9,932
 
522
 
4
 
0
 
(10)
 
(8)
 
(2)
 
0
 
0
Irrevocable committed prolongation of existing loans
 
4,608
 
4,593
 
11
 
4
 
0
 
(4)
 
(4)
 
0
 
0
 
0
Total off-balance sheet financial instruments and other credit lines
 
324,141
 
315,060
 
8,456
 
519
 
106
 
(350)
 
(226)
 
(90)
 
(37)
 
3
Total allowances and provisions
 
(2,261)
 
(700)
 
(416)
 
(993)
 
(153)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances.
 
2 Information has been revised. Refer to Note 2 for more information.
 
3 Negative balances are representative of a net improvement in credit quality since the acquisition of the respective financial instrument, which is reflected
 
as a negative ECL allowance.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
75
Note 9
 
Expected credit loss measurement (continued)
The table
 
below provides information
 
about the gross
 
carrying amount of
 
exposures subject to
 
ECL and
 
the ECL
coverage ratio for UBS’s core
 
loan portfolios (i.e.
Loans and advances to customers
 
and
 
Loans to financial advisors
)
and
 
relevant
 
off-balance
 
sheet
 
exposures.
Cash
 
and
 
balances
 
at
 
central
 
banks
,
Amounts
 
due
 
from
 
banks
,
Receivables from
 
securities
 
financing transactions
,
Cash collateral
 
receivables
 
on derivative
 
instruments
 
and
Financial
assets measured
 
at fair
 
value through
 
other comprehensive
 
income
 
are not included
 
in the
 
table below, due
 
to their
lower sensitivity to ECL.
ECL coverage ratios are calculated by dividing ECL
 
allowances and provisions by the gross carrying amount of the
related exposures.
The
 
overall
 
coverage
 
ratio
 
for
 
performing
 
positions
 
was
 
unchanged
 
at
 
11 basis
 
points.
 
Coverage
 
ratios
 
for
performing positions related to real estate lending (on-balance sheet) decreased by 1 basis point to 5 basis points.
Coverage ratios
 
for performing
 
positions related
 
to corporate
 
lending (on-balance
 
sheet)
decreased by
 
1 basis point
to 56 basis points.
Coverage ratios for core loan portfolio
30.9.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
266,413
 
254,541
 
10,464
 
1,314
 
93
 
7
 
2
 
79
 
5
 
303
 
1,244
Real estate financing
 
89,811
 
84,411
 
5,126
 
261
 
14
 
7
 
3
 
61
 
6
 
191
 
0
Total real estate lending
 
356,224
 
338,952
 
15,590
 
1,575
 
108
 
7
 
2
 
73
 
5
 
284
 
859
Large corporate clients
 
30,005
 
24,549
 
4,048
 
958
 
450
 
185
 
32
 
248
 
63
 
2,910
 
2,152
SME clients
 
24,296
 
19,380
 
2,969
 
1,692
 
256
 
261
 
29
 
165
 
47
 
3,076
 
351
Total corporate lending
 
54,301
 
43,929
 
7,017
 
2,649
 
706
 
219
 
31
 
213
 
56
 
3,016
 
1,500
Lombard
 
149,996
 
149,507
 
351
 
58
 
80
 
3
 
0
 
21
 
1
 
3,173
 
1,789
Credit cards
 
2,189
 
1,664
 
457
 
68
 
0
 
203
 
40
 
251
 
85
 
3,879
 
0
Commodity trade finance
 
3,841
 
3,608
 
154
 
78
 
0
 
230
 
37
 
89
 
39
 
9,474
 
0
Ship / aircraft financing
 
8,104
 
7,584
 
518
 
0
 
2
 
56
 
47
 
148
 
54
 
0
 
10,239
Consumer financing
 
3,077
 
2,777
 
168
 
95
 
38
 
285
 
75
 
1,544
 
158
 
4,819
 
0
Other loans and advances to customers
 
39,986
 
37,726
 
1,860
 
134
 
265
 
39
 
9
 
56
 
11
 
1,898
 
3,217
Loans to financial advisors
 
2,723
 
2,497
 
83
 
142
 
0
 
169
 
15
 
135
 
18
 
2,892
 
0
Total other lending
 
209,916
 
205,363
 
3,592
 
575
 
386
 
24
 
6
 
163
 
9
 
4,015
 
2,510
Total
1
 
620,441
 
588,244
 
26,198
 
4,799
 
1,199
 
31
 
6
 
123
 
11
 
2,239
 
1,768
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
7,687
 
7,428
 
221
 
38
 
0
 
5
 
5
 
32
 
5
 
39
 
0
Real estate financing
 
12,680
 
12,341
 
338
 
1
 
0
 
6
 
6
 
1
 
6
 
0
 
0
Total real estate lending
 
20,366
 
19,769
 
559
 
39
 
0
 
6
 
5
 
14
 
5
 
39
 
0
Large corporate clients
 
73,307
 
68,801
 
4,350
 
115
 
40
 
23
 
15
 
115
 
21
 
1,482
 
82
SME clients
 
15,639
 
14,318
 
996
 
308
 
17
 
33
 
28
 
165
 
37
 
33
 
0
Total corporate lending
 
88,946
 
83,119
 
5,346
 
423
 
57
 
25
 
17
 
124
 
23
 
427
 
0
Lombard
 
70,232
 
69,957
 
268
 
7
 
0
 
1
 
0
 
2
 
0
 
8,523
 
0
Credit cards
 
10,400
 
9,910
 
487
 
3
 
0
 
8
 
7
 
38
 
8
 
0
 
0
Commodity trade finance
 
3,128
 
3,124
 
4
 
0
 
0
 
9
 
8
 
288
 
9
 
0
 
0
Ship / aircraft financing
 
2,239
 
2,233
 
6
 
0
 
0
 
31
 
28
 
1,006
 
31
 
0
 
0
Consumer financing
 
150
 
150
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Financial intermediaries and hedge funds
 
36,770
 
36,332
 
438
 
0
 
0
 
4
 
3
 
87
 
4
 
0
 
0
Other off-balance sheet commitments
 
46,510
 
46,002
 
456
 
36
 
16
 
9
 
6
 
146
 
8
 
828
 
705
Total other lending
 
169,429
 
167,709
 
1,659
 
46
 
16
 
5
 
3
 
79
 
4
 
1,893
 
0
Total
2
 
278,742
 
270,597
 
7,564
 
507
 
73
 
11
 
8
 
106
 
10
 
529
 
0
Total on- and off-balance sheet
3
 
899,183
 
858,841
 
33,762
 
5,307
 
1,273
 
25
 
6
 
119
 
11
 
2,076
 
1,625
1 Includes Loans and advances
 
to customers and Loans
 
to financial advisors,
 
which are presented on
 
the balance sheet line Other
 
financial assets measured
 
at amortized cost.
 
2 Excludes Forward
 
starting reverse
repurchase and securities borrowing agreements.
 
3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related
 
ECL coverage ratio (bps).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
76
Note 9
 
Expected credit loss measurement (continued)
Coverage ratios for core loan portfolio
30.6.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
252,892
 
241,557
 
10,154
 
1,092
 
89
 
7
 
2
 
76
 
5
 
272
 
337
Real estate financing
 
86,907
 
82,045
 
4,538
 
245
 
78
 
6
 
3
 
69
 
7
 
72
 
0
Total real estate lending
 
339,798
 
323,602
 
14,692
 
1,337
 
167
 
6
 
3
 
74
 
6
 
235
 
0
Large corporate clients
 
29,299
 
23,981
 
3,923
 
972
 
424
 
180
 
39
 
240
 
67
 
2,798
 
1,580
SME clients
 
23,922
 
19,646
 
2,569
 
1,463
 
244
 
215
 
31
 
146
 
44
 
2,831
 
123
Total corporate lending
 
53,221
 
43,627
 
6,491
 
2,435
 
668
 
196
 
35
 
203
 
57
 
2,818
 
1,048
Lombard
 
148,308
 
147,278
 
877
 
71
 
82
 
3
 
0
 
23
 
1
 
2,328
 
1,951
Credit cards
 
1,968
 
1,485
 
419
 
64
 
0
 
208
 
39
 
252
 
86
 
3,826
 
0
Commodity trade finance
 
5,917
 
5,575
 
224
 
115
 
2
 
211
 
33
 
92
 
36
 
9,037
 
0
Ship / aircraft financing
 
8,329
 
7,883
 
426
 
3
 
17
 
53
 
48
 
103
 
51
 
0
 
1,176
Consumer financing
 
2,970
 
2,723
 
140
 
66
 
41
 
229
 
73
 
1,500
 
143
 
4,091
 
0
Other loans and advances to customers
 
40,339
 
37,661
 
2,277
 
131
 
270
 
41
 
8
 
80
 
12
 
3,532
 
2,630
Loans to financial advisors
 
2,647
 
2,412
 
84
 
151
 
0
 
176
 
18
 
146
 
22
 
2,736
 
0
Total other lending
 
210,478
 
205,018
 
4,447
 
601
 
412
 
25
 
6
 
134
 
9
 
4,323
 
2,160
Total
1
 
603,497
 
572,247
 
25,631
 
4,372
 
1,247
 
30
 
6
 
117
 
11
 
2,235
 
1,236
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
8,091
 
7,834
 
226
 
31
 
0
 
4
 
4
 
23
 
4
 
11
 
0
Real estate financing
 
12,715
 
12,143
 
572
 
0
 
0
 
5
 
6
 
0
 
5
 
0
 
0
Total real estate lending
 
20,805
 
19,977
 
798
 
31
 
0
 
5
 
5
 
0
 
5
 
11
 
0
Large corporate clients
 
71,060
 
66,029
 
4,833
 
149
 
49
 
24
 
17
 
100
 
22
 
987
 
0
SME clients
 
15,352
 
14,421
 
720
 
189
 
22
 
33
 
27
 
207
 
36
 
197
 
0
Total corporate lending
 
86,412
 
80,450
 
5,553
 
338
 
71
 
26
 
19
 
114
 
25
 
546
 
0
Lombard
 
68,071
 
68,017
 
40
 
14
 
0
 
1
 
0
 
0
 
0
 
2,887
 
0
Credit cards
 
10,056
 
9,576
 
477
 
4
 
0
 
8
 
7
 
35
 
8
 
0
 
0
Commodity trade finance
 
3,732
 
3,712
 
20
 
0
 
0
 
7
 
7
 
13
 
7
 
0
 
0
Ship / aircraft financing
 
1,836
 
1,817
 
19
 
0
 
0
 
11
 
11
 
0
 
11
 
0
 
0
Consumer financing
 
152
 
152
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Financial intermediaries and hedge funds
 
46,338
 
45,878
 
461
 
0
 
0
 
3
 
2
 
74
 
3
 
0
 
0
Other off-balance sheet commitments
 
37,485
 
36,897
 
411
 
163
 
13
 
7
 
4
 
55
 
4
 
538
 
0
Total other lending
 
167,670
 
166,049
 
1,427
 
181
 
13
 
3
 
2
 
52
 
3
 
710
 
0
Total
2
 
274,888
 
266,475
 
7,778
 
550
 
84
 
11
 
7
 
90
 
10
 
570
 
0
Total on- and off-balance sheet
3
 
878,385
 
838,722
 
33,409
 
4,923
 
1,331
 
24
 
7
 
111
 
11
 
2,049
 
1,202
1 Includes Loans and advances
 
to customers and Loans to financial
 
advisors, which are presented
 
on the balance sheet line
 
Other financial assets measured
 
at amortized cost.
 
2 Excludes Forward starting
 
reverse
repurchase and securities borrowing agreements.
 
3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related
 
ECL coverage ratio (bps).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
77
Note 9
 
Expected credit loss measurement (continued)
Coverage ratios for core loan portfolio
31.12.23
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
268,825
 
256,675
 
10,792
 
968
 
389
 
8
 
2
 
90
 
6
 
399
 
283
Real estate financing
 
97,920
 
92,124
 
5,398
 
290
 
108
 
11
 
4
 
57
 
7
 
713
 
980
Total real estate lending
 
366,745
 
348,800
 
16,190
 
1,258
 
497
 
9
 
3
 
79
 
6
 
472
 
434
Large corporate clients
 
30,660
 
25,775
 
3,252
 
1,012
 
620
 
188
 
41
 
215
 
60
 
3,083
 
1,429
SME clients
 
26,359
 
22,226
 
2,961
 
1,031
 
142
 
153
 
32
 
141
 
45
 
2,689
 
893
Total corporate lending
 
57,019
 
48,001
 
6,213
 
2,042
 
762
 
172
 
37
 
180
 
53
 
2,884
 
1,329
Lombard
 
156,394
 
156,312
 
15
 
67
 
0
 
3
 
1
 
7,616
 
2
 
2,487
 
0
Credit cards
 
2,083
 
1,571
 
449
 
63
 
0
 
200
 
40
 
253
 
87
 
3,801
 
0
Commodity trade finance
 
5,858
 
5,681
 
26
 
133
 
18
 
223
 
32
 
365
 
34
 
8,333
 
6
Ship / aircraft financing
 
9,265
 
8,968
 
276
 
4
 
17
 
56
 
54
 
99
 
55
 
0
 
315
Consumer financing
 
3,041
 
2,817
 
110
 
58
 
57
 
195
 
79
 
1,559
 
135
 
3,422
 
7
Other loans and advances to customers
 
40,961
 
39,196
 
1,419
 
105
 
242
 
21
 
10
 
39
 
11
 
3,981
 
0
Loans to financial advisors
 
2,665
 
2,426
 
80
 
159
 
0
 
185
 
17
 
122
 
20
 
2,793
 
0
Total other lending
 
220,267
 
216,971
 
2,373
 
589
 
334
 
21
 
7
 
210
 
9
 
4,376
 
9
Total
1
 
644,031
 
613,772
 
24,777
 
3,889
 
1,593
 
27
 
7
 
117
 
11
 
2,329
 
773
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
 
9,782
 
9,505
 
261
 
15
 
0
 
6
 
5
 
27
 
6
 
40
 
0
Real estate financing
 
17,107
 
16,281
 
826
 
0
 
0
 
9
 
8
 
44
 
9
 
0
 
0
Total real estate lending
 
26,889
 
25,786
 
1,088
 
15
 
0
 
8
 
7
 
40
 
8
 
40
 
0
Large corporate clients
 
77,103
 
71,524
 
5,357
 
157
 
65
 
26
 
17
 
111
 
24
 
1,217
 
242
SME clients
 
16,762
 
15,868
 
812
 
80
 
2
 
40
 
29
 
196
 
37
 
640
 
0
Total corporate lending
 
93,865
 
87,392
 
6,170
 
236
 
67
 
29
 
19
 
122
 
26
 
1,022
 
221
Lombard
 
86,173
 
86,173
 
0
 
1
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Credit cards
 
10,458
 
9,932
 
522
 
4
 
0
 
10
 
8
 
35
 
10
 
0
 
0
Commodity trade finance
 
4,640
 
4,628
 
13
 
0
 
0
 
6
 
5
 
151
 
6
 
0
 
0
Ship / aircraft financing
 
1,053
 
1,053
 
0
 
0
 
0
 
26
 
26
 
0
 
26
 
0
 
0
Consumer financing
 
153
 
153
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
 
0
Financial intermediaries and hedge funds
 
42,578
 
42,325
 
253
 
0
 
0
 
3
 
3
 
142
 
3
 
0
 
0
Other off-balance sheet commitments
 
39,887
 
39,174
 
411
 
263
 
39
 
7
 
4
 
111
 
5
 
453
 
0
Total other lending
 
184,944
 
183,438
 
1,199
 
268
 
39
 
3
 
2
 
85
 
3
 
486
 
0
Total
2
 
305,697
 
296,616
 
8,456
 
519
 
106
 
11
 
8
 
107
 
10
 
717
 
0
Total on- and off-balance sheet
3,4
 
949,729
 
910,388
 
33,233
 
4,408
 
1,699
 
22
 
7
 
114
 
11
 
2,140
 
706
1 Includes Loans and advances to
 
customers and Loans to financial
 
advisors, which are presented on
 
the balance sheet line Other
 
financial assets measured at amortized cost.
 
2 Excludes Forward starting
 
reverse
repurchase and securities borrowing agreements.
 
3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
 
4
 
Information has been revised.
Refer to Note 2 for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
78
Note 10
 
Fair value measurement
a) Fair value hierarchy
The fair
 
value hierarchy
 
classification of
 
financial and
 
non-financial assets
 
and liabilities
 
measured at
 
fair value
 
is
summarized in the table below.
During the
 
first nine months
 
of 2024,
 
assets and liabilities
 
that were transferred
 
from Level 2
 
to Level 1, or
 
from
Level 1 to Level 2, and were held for the entire
 
reporting period were not material.
Determination of fair values from quoted market
 
prices or valuation techniques
1
30.9.24
30.6.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value on a recurring basis
Financial assets at fair value held for trading
136,785
30,051
5,148
171,983
124,602
29,381
8,042
162,025
118,975
28,045
22,613
169,633
of which: Equity instruments
 
124,895
 
1,049
 
172
 
126,116
 
112,416
 
827
 
185
 
113,429
 
102,602
 
1,403
 
321
 
104,325
of which: Government bills / bonds
 
4,005
 
4,642
 
18
 
8,665
 
5,603
 
5,319
 
75
 
10,997
 
6,995
 
8,763
 
73
 
15,830
of which: Investment fund units
 
6,649
 
1,003
 
176
 
7,827
 
5,677
 
1,222
 
240
 
7,139
 
8,392
 
1,124
 
129
 
9,645
of which: Corporate and municipal bonds
 
1,232
 
19,007
 
863
 
21,102
 
896
 
16,569
 
900
 
18,365
 
984
 
12,801
 
1,284
 
15,069
of which: Loans
 
0
 
4,118
 
3,712
 
7,830
 
0
 
5,246
 
6,419
 
11,666
 
0
 
3,837
 
19,618
 
23,456
of which: Asset-backed securities
 
4
 
225
 
163
 
393
 
10
 
192
 
169
 
370
 
3
 
112
 
133
 
248
Derivative financial instruments
1,484
155,018
2,566
159,068
836
136,437
2,325
139,597
622
172,903
2,559
176,084
of which: Foreign exchange
 
828
 
60,634
 
177
 
61,639
 
331
 
50,521
 
121
 
50,974
 
347
 
78,060
 
253
 
78,659
of which: Interest rate
 
0
 
46,499
 
640
 
47,139
 
0
 
48,437
 
403
 
48,840
 
0
 
55,190
 
407
 
55,597
of which: Equity / index
 
0
 
40,818
 
996
 
41,815
 
0
 
32,239
 
1,154
 
33,392
 
0
 
34,174
 
1,299
 
35,473
of which: Credit
 
0
 
2,694
 
608
 
3,302
 
0
 
2,553
 
478
 
3,031
 
0
 
3,456
 
513
 
3,969
of which: Commodities
 
6
 
4,027
 
18
 
4,051
 
3
 
2,563
 
16
 
2,582
 
1
 
1,869
 
13
 
1,883
Brokerage receivables
 
0
 
24,656
 
0
 
24,656
 
0
 
25,273
 
0
 
25,273
 
0
 
21,037
 
0
 
21,037
Financial assets at fair value not held for trading
 
45,904
 
75,445
 
8,067
 
129,416
 
34,766
 
80,555
 
7,945
 
123,266
 
30,717
 
64,865
 
8,435
 
104,018
of which: Financial assets for unit-linked
investment contracts
 
18,274
 
6
 
0
 
18,280
 
16,957
 
6
 
0
 
16,963
 
15,877
 
7
 
0
 
15,884
of which: Corporate and municipal bonds
 
85
 
15,701
 
152
 
15,937
 
61
 
14,338
 
210
 
14,609
 
62
 
16,722
 
215
 
17,000
of which: Government bills / bonds
 
27,043
 
8,036
 
0
 
35,079
 
17,262
 
7,817
 
0
 
25,079
 
14,306
 
4,801
 
0
 
19,107
of which: Loans
 
0
 
4,464
 
2,545
 
7,010
 
0
 
3,699
 
2,553
 
6,252
 
0
 
4,252
 
2,258
 
6,510
of which: Securities financing transactions
 
0
 
45,665
 
484
 
46,149
 
0
 
53,069
 
268
 
53,337
 
0
 
36,857
 
52
 
36,909
of which: Asset-backed securities
 
0
 
1,058
 
553
 
1,611
 
0
 
1,108
 
500
 
1,608
 
0
 
1,525
 
180
 
1,704
of which: Auction rate securities
 
0
 
0
 
190
 
190
 
0
 
0
 
191
 
191
 
0
 
0
 
1,208
 
1,208
of which: Investment fund units
 
409
 
421
 
645
 
1,475
 
395
 
421
 
670
 
1,486
 
367
 
548
 
678
 
1,592
of which: Equity instruments
 
93
 
0
 
3,023
 
3,117
 
92
 
5
 
2,896
 
2,993
 
105
 
38
 
3,097
 
3,241
Financial assets measured at fair value through other comprehensive income on
 
a recurring basis
Financial assets measured at fair value through
other comprehensive income
 
65
 
2,114
 
0
 
2,179
 
62
 
2,105
 
0
 
2,167
 
68
 
2,165
 
0
 
2,233
of which: Commercial paper and certificates
of deposit
 
0
 
1,935
 
0
 
1,935
 
0
 
1,891
 
0
 
1,891
 
0
 
1,948
 
0
 
1,948
of which: Corporate and municipal bonds
 
65
 
178
 
0
 
243
 
62
 
205
 
0
 
267
 
68
 
207
 
0
 
276
Non-financial assets measured at fair value on a recurring basis
Precious metals and other physical commodities
 
6,965
 
0
 
0
 
6,965
 
6,445
 
0
 
0
 
6,445
 
5,930
 
0
 
0
 
5,930
Non-financial assets measured at fair value on a non-recurring basis
Other non-financial assets
2
 
0
 
0
 
110
 
110
 
0
 
0
 
43
 
43
 
0
 
0
 
31
 
31
Total assets measured at fair value
191,203
287,284
15,891
494,378
166,712
273,750
18,354
458,817
156,312
289,015
33,639
478,966
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
79
Note 10
 
Fair value measurement (continued)
Determination of fair values from quoted market
 
prices or valuation techniques (continued)
1
30.9.24
30.6.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial liabilities measured at fair value on a recurring basis
Financial liabilities at fair value held for trading
 
26,197
 
10,041
 
199
 
36,437
 
24,476
 
8,906
 
111
 
33,493
 
27,684
 
6,315
 
161
 
34,159
of which: Equity instruments
 
19,375
 
552
 
58
 
19,986
 
16,956
 
417
 
66
 
17,438
 
18,266
 
248
 
92
 
18,606
of which: Corporate and municipal bonds
 
29
 
8,054
 
135
 
8,218
 
33
 
7,118
 
35
 
7,186
 
28
 
4,981
 
62
 
5,071
of which: Government bills / bonds
 
4,390
 
1,069
 
0
 
5,458
 
6,171
 
1,260
 
5
 
7,437
 
8,559
 
905
 
0
 
9,464
of which: Investment fund units
 
2,403
 
285
 
4
 
2,691
 
1,315
 
38
 
4
 
1,357
 
832
 
118
 
4
 
954
Derivative financial instruments
1,633
167,309
5,354
174,296
876
143,744
4,448
149,069
771
185,815
5,595
192,181
of which: Foreign exchange
 
881
 
68,418
 
36
 
69,335
 
326
 
51,640
 
48
 
52,014
 
457
 
89,394
 
36
 
89,887
of which: Interest rate
 
0
 
43,065
 
298
 
43,363
 
0
 
47,021
 
243
 
47,264
 
0
 
52,673
 
246
 
52,920
of which: Equity / index
 
0
 
48,901
 
4,299
 
53,200
 
0
 
38,001
 
3,379
 
41,380
 
0
 
38,046
 
3,333
 
41,380
of which: Credit
 
0
 
3,426
 
422
 
3,848
 
0
 
3,456
 
371
 
3,827
 
0
 
4,081
 
619
 
4,700
of which: Commodities
 
5
 
3,303
 
38
 
3,345
 
2
 
1,951
 
14
 
1,967
 
0
 
1,437
 
21
 
1,458
of which: Loan commitments measured at
FVTPL
 
0
 
73
 
188
 
260
 
0
 
1,547
 
288
 
1,835
 
0
 
135
 
1,037
 
1,172
Financial liabilities designated at fair value on a recurring basis
Brokerage payables designated at fair value
 
0
 
52,403
 
0
 
52,403
 
0
 
46,198
 
0
 
46,198
 
0
 
42,522
 
0
 
42,522
Debt issued designated at fair value
 
0
 
99,674
 
12,545
 
112,218
 
0
 
100,223
 
12,986
 
113,209
 
0
 
113,012
 
15,276
 
128,289
Other financial liabilities designated at fair value
 
0
 
32,730
 
2,525
 
35,256
 
0
 
28,484
 
3,391
 
31,875
 
0
 
26,878
 
2,606
 
29,484
of which: Financial liabilities related to unit-
linked investment contracts
 
0
 
18,389
 
0
 
18,389
 
0
 
17,080
 
0
 
17,080
 
0
 
15,992
 
0
 
15,992
of which: Securities financing transactions
 
0
 
10,784
 
0
 
10,784
 
0
 
7,699
 
0
 
7,699
 
0
 
7,416
 
0
 
7,416
of which: Over-the-counter debt instruments
and others
 
0
 
3,557
 
2,525
 
6,082
 
0
 
3,705
 
3,391
 
7,096
 
0
 
3,471
 
2,606
 
6,076
Total liabilities measured at fair value
27,830
362,156
20,623
410,610
25,352
327,555
20,936
373,844
28,454
374,542
23,638
426,635
1 Bifurcated embedded derivatives are presented on the same balance sheet
 
lines as their host contracts and are not included in
 
this table. The fair value of these derivatives was not material for the periods
 
presented.
 
2 Other non-financial assets primarily consist of properties and other non-current assets held for sale, which are measured at the
 
lower of their net carrying amount or fair value less costs to sell.
b) Valuation adjustments
The table below summarizes the changes
 
in deferred day-1 profit or loss reserves during the
 
relevant period.
 
Deferred day-1 profit or loss is generally released into
Other net income from financial instruments measured
 
at fair
value
 
through
 
profit
 
or
 
loss
 
when
 
the
 
pricing
 
of
 
equivalent
 
products
 
or
 
the
 
underlying
 
parameters
 
become
observable or when the transaction is closed out.
Deferred day-1 profit or loss reserves
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Reserve balance at the beginning of the period
 
388
 
384
 
402
 
404
 
422
Profit / (loss) deferred on new transactions
 
85
 
59
 
37
 
187
 
196
(Profit) / loss recognized in the income statement
 
(54)
 
(55)
 
(42)
 
(170)
 
(228)
Foreign currency translation
 
(1)
 
(1)
 
(1)
 
(2)
 
(1)
Reserve balance at the end of the period
 
418
 
388
 
396
 
418
 
389
The table below summarizes other valuation
 
adjustment reserves recognized on the
 
balance sheet.
Other valuation adjustment reserves on the
 
balance sheet
As of
USD m
30.9.24
30.6.24
31.12.23
Own credit adjustments on financial liabilities designated at fair value
1
 
(1,367)
 
(1,062)
 
(1,287)
of which: debt issued designated at fair value
 
(1,395)
 
(1,085)
 
(1,297)
of which: other financial liabilities designated at fair value
 
27
 
23
 
10
Credit valuation adjustments
2
 
(145)
 
(104)
 
(145)
Funding and debit valuation adjustments
 
(94)
 
(81)
 
(116)
Other valuation adjustments
 
(1,617)
 
(1,745)
 
(2,654)
of which: liquidity
 
(1,076)
 
(1,230)
 
(2,051)
of which: model uncertainty
 
(542)
 
(516)
 
(603)
1 Own credit adjustments on financial liabilities designated at fair value includes amounts for TLAC notes.
 
2 Amount does not include reserves against defaulted counterparties.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
80
Note 10
 
Fair value measurement (continued)
c) Level 3 instruments: valuation techniques
 
and inputs
The
 
table
 
below
 
presents material
 
Level 3
 
assets
 
and
 
liabilities,
 
together
 
with
 
the
 
valuation
 
techniques
 
used
 
to
measure fair value,
 
as well as
 
the inputs used
 
in a given
 
valuation technique that are
 
considered significant as of
30 September 2024 and unobservable, and a range
 
of values for those unobservable inputs.
The range of values
 
represents the highest- and
 
lowest-level inputs used in the valuation
 
techniques. Therefore, the
range does not reflect the level of uncertainty regarding a particular input or an assessment of the reasonableness of
the Group’s estimates and assumptions, but rather the different underlying characteristics of the relevant
 
assets and
liabilities held by the Group.
 
The significant unobservable
 
inputs disclosed in
 
the table below
 
are consistent with
 
those included in
 
“Note 21 Fair
value measurement” in the “Consolidated financial
 
statements” section of the UBS Group
 
Annual Report 2023.
Valuation techniques and inputs
 
used in the fair value measurement of Level
 
3 assets and liabilities
Fair value
Significant unobservable
input(s)
1
Range of inputs
Assets
Liabilities
Valuation technique(s)
30.9.24
31.12.23
USD bn
30.9.24
31.12.23
30.9.24
31.12.23
low
high
weighted
average
2
low
high
weighted
average
2
unit
1
Financial assets and liabilities at fair value held for
 
trading and Financial assets at fair value not held for
 
trading
Corporate and municipal
bonds
 
1.0
 
1.5
 
0.1
 
0.1
Relative value to
market comparable
Bond price equivalent
 
17
 
126
 
98
 
5
 
126
 
99
points
Discounted expected
cash flows
Discount margin
 
829
 
829
 
829
 
135
 
491
 
463
basis
points
Traded loans,
 
loans
designated at fair value
and guarantees
 
6.4
 
22.0
 
0.0
 
0.0
Relative value to
market comparable
Loan price equivalent
 
1
 
258
 
81
 
1
 
120
 
88
points
Discounted expected
cash flows
Credit spread
 
18
 
1,533
 
334
 
19
 
2,681
 
614
basis
points
Investment fund units
3
 
0.8
 
0.8
 
0.0
 
0.0
Relative value to
market comparable
Net asset value
Equity instruments
3
 
3.2
 
3.4
 
0.1
 
0.1
Relative value to
market comparable
Price
Debt issued designated at
fair value
4
 
12.5
 
15.3
Other financial liabilities
designated at fair value
 
2.5
 
2.6
Discounted expected
cash flows
Funding spread
 
106
 
201
 
51
 
201
basis
points
Derivative financial instruments
Interest rate
 
0.6
 
0.4
 
0.3
 
0.2
Option model
Volatility of interest rates
 
47
 
156
 
45
 
154
basis
points
Volatility of inflation
 
1
 
6
 
1
 
6
%
IR-to-IR correlation
 
70
 
99
 
4
 
100
%
Discounted expected
cash flows
Funding spread
 
5
 
20
basis
points
Credit
 
0.6
 
0.5
 
0.4
 
0.6
Discounted expected
cash flows
Credit spreads
 
 
2
 
1,270
 
1
 
2,421
basis
points
Credit correlation
 
50
 
66
 
50
 
66
%
Credit volatility
 
60
 
60
 
60
 
60
%
Recovery rates
 
0
 
100
 
14
 
100
%
Equity / index
 
1.0
 
1.3
 
4.3
 
3.3
Option model
Equity dividend yields
 
0
 
11
 
0
 
17
%
Volatility of equity stocks,
equity and other indices
 
4
 
140
 
4
 
142
%
Equity-to-FX correlation
 
(40)
 
70
 
(40)
 
77
%
Equity-to-equity correlation
 
0
 
100
 
(50)
 
100
%
Loan commitments
measured at FVTPL
 
0.2
 
1.0
Relative value to
market comparable
Loan price equivalent
 
15
 
100
 
35
 
102
points
1 The ranges of significant unobservable inputs are represented in points,
 
percentages and basis points. Points are a percentage
 
of par (e.g. 100 points would be 100% of par).
 
2 Weighted averages are provided for
most non-derivative financial instruments and were calculated
 
by weighting inputs based on the
 
fair values of the respective instruments. Weighted averages are
 
not provided for inputs related
 
to Other financial liabilities
designated at fair value
 
and Derivative financial instruments,
 
as this would not
 
be meaningful.
 
3 The range
 
of inputs is not
 
disclosed, as there is
 
a dispersion of values
 
given the diverse nature
 
of the investments.
 
4 Debt issued designated at fair value primarily consists of UBS structured notes, which include variable maturity notes with various equity and foreign exchange underlying risks, as well as rates-linked and credit-linked
notes, all of
 
which have embedded
 
derivative parameters
 
that are considered
 
to be unobservable.
 
The equivalent
 
derivative instrument parameters
 
for debt issued
 
or embedded derivatives
 
for over-the-counter
 
debt
instruments are presented in the respective derivative financial instruments lines in this table.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
81
Note 10
 
Fair value measurement (continued)
d) Level 3 instruments: sensitivity to changes
 
in unobservable input assumptions
 
The table below summarizes those financial assets and liabilities classified as Level 3 for
 
which a change in one or
more of
 
the unobservable
 
inputs to
 
reflect reasonably
 
possible alternative
 
assumptions would
 
change fair
 
value
significantly, and the estimated effect thereof.
 
The
 
sensitivity data
 
shown below
 
presents an
 
estimation of
 
valuation uncertainty
 
based
 
on
 
reasonably possible
alternative values for Level 3
 
inputs at the balance sheet
 
date and does not represent
 
the estimated effect of stress
scenarios. Typically,
 
these financial
 
assets and
 
liabilities are
 
sensitive to
 
a combination
 
of inputs
 
from Levels 1–3.
Although well-defined interdependencies
 
may exist
 
between Level 1 / 2 parameters
 
and Level 3
 
parameters (e.g.
between interest rates,
 
which are generally
 
Level 1 or Level 2,
 
and prepayments,
 
which are generally
 
Level 3), these
have not been incorporated
 
in the table. Furthermore,
 
direct interrelationships between
 
the Level 3 parameters are
not a significant element of the valuation uncertainty.
Sensitivity of fair value measurements to changes
 
in unobservable input assumptions
1
30.9.24
30.6.24
31.12.23
USD m
Favorable
 
changes
Unfavorable
 
changes
Favorable
 
changes
Unfavorable
 
changes
Favorable
 
changes
Unfavorable
 
changes
Traded loans, loans measured at fair value and guarantees
 
295
 
(271)
 
453
 
(433)
 
635
 
(600)
Securities financing transactions
 
32
 
(28)
 
34
 
(31)
 
30
 
(32)
Auction rate securities
 
9
 
(6)
 
8
 
(6)
 
67
 
(21)
Asset-backed securities
 
40
 
(44)
 
44
 
(48)
 
39
 
(36)
Equity instruments
 
353
 
(318)
 
428
 
(403)
 
430
 
(413)
Investment fund units
 
138
 
(139)
 
140
 
(141)
 
135
 
(137)
Loan commitments measured at FVTPL
 
88
 
(83)
 
85
 
(110)
 
313
 
(343)
Interest rate derivatives, net
 
145
 
(47)
 
139
 
(81)
 
217
 
(103)
Credit derivatives, net
 
119
 
(122)
 
124
 
(128)
 
140
 
(131)
Foreign exchange derivatives, net
 
4
 
(4)
 
3
 
(4)
 
5
 
(4)
Equity / index derivatives, net
 
690
 
(695)
 
651
 
(546)
 
521
 
(443)
Other
 
281
 
(134)
 
83
 
(90)
 
281
 
(276)
Total
 
2,194
 
(1,891)
 
2,192
 
(2,021)
 
2,815
 
(2,538)
1 Sensitivity of issued and over-the-counter debt instruments is reported with the equivalent derivative
 
or Other.
e) Level 3 instruments: movements during
 
the period
The table below presents additional information about material Level 3 assets and liabilities measured at fair value
on a recurring basis. Level 3 assets and liabilities
 
may be hedged with instruments
 
classified as Level 1 or Level 2 in
the fair
 
value hierarchy
 
and, as
 
a
 
result,
 
realized and
 
unrealized gains
 
and losses
 
included in
 
the table
 
may not
include the effect of related hedging
 
activity. Furthermore, the realized and unrealized gains and
 
losses presented
in the table are not
 
limited solely to those
 
arising from Level 3 inputs,
 
as valuations are generally
 
derived from both
observable and unobservable parameters.
Assets
 
and
 
liabilities
 
transferred
 
into
 
or
 
out
 
of
 
Level 3
 
are
 
presented
 
as
 
if
 
those
 
assets
 
or
 
liabilities
 
had
 
been
transferred on 1 January 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
82
Note 10
 
Fair value measurement (continued)
Movements of Level 3 instruments
USD bn
Balance
at the
 
beginning
of the
period
Credit
Suisse
Level 3
assets and
liabilities
acquired
Net gains /
losses
included in
compre-
hensive
income
1
of which:
related to
instruments
held at the
end of the
period
Purchases
Sales
Issuances
Settlements
Transfers
 
into
 
Level 3
Transfers
 
out of
 
Level 3
Foreign
 
currency
 
translation
Balance
at the
end
of the
period
For the nine months ended 30 September 2024
2
Financial assets at fair value held for
trading
 
22.6
 
0.4
 
(0.3)
 
1.0
 
(13.6)
 
1.3
 
(7.1)
 
1.4
 
(0.9)
 
(0.0)
 
5.1
of which: Equity instruments
 
0.3
 
(0.0)
 
(0.0)
 
0.0
 
(0.1)
 
0.0
 
(0.0)
 
0.1
 
(0.1)
 
(0.0)
 
0.2
of which: Corporate and municipal
bonds
 
1.3
 
(0.2)
 
(0.1)
 
0.4
 
(0.7)
0.0
 
(0.0)
 
0.0
 
(0.1)
 
0.0
 
0.9
of which: Loans
 
19.6
 
0.7
 
(0.2)
 
0.4
 
(11.6)
 
1.3
 
(7.1)
 
1.2
 
(0.7)
 
(0.0)
 
3.7
Derivative financial instruments –
assets
 
2.6
 
(0.0)
 
(0.1)
 
0.0
 
(0.2)
 
0.9
 
(1.0)
 
0.7
 
(0.4)
 
(0.0)
 
2.6
of which: Interest rate
 
0.4
 
0.1
 
0.1
0.0
 
(0.2)
 
0.3
 
(0.2)
 
0.2
 
0.0
 
(0.0)
 
0.6
of which: Equity / index
 
1.3
 
(0.1)
 
(0.1)
 
0.0
 
(0.0)
 
0.4
 
(0.4)
 
0.1
 
(0.3)
 
(0.0)
 
1.0
of which: Credit
 
0.5
 
(0.1)
 
(0.0)
0.0
 
(0.0)
 
0.1
 
(0.2)
 
0.3
 
(0.0)
 
(0.0)
 
0.6
Financial assets at fair value not held
for trading
 
8.4
 
0.1
 
(0.1)
 
0.4
 
(0.6)
 
1.5
 
(2.2)
 
0.8
 
(0.2)
 
(0.1)
 
8.1
of which: Loans
 
2.3
 
0.1
 
0.1
 
0.2
 
0.0
 
0.9
 
(0.7)
0.0
 
(0.1)
 
(0.1)
 
2.5
of which: Auction rate securities
 
1.2
 
0.0
 
(0.0)
0.0
0.0
0.0
 
(1.1)
0.0
0.0
0.0
 
0.2
of which: Equity instruments
 
3.1
 
(0.0)
 
(0.1)
 
0.1
 
(0.2)
 
0.0
0.0
 
0.1
0.0
 
(0.0)
 
3.0
of which: Investment fund units
 
0.7
 
0.0
 
0.0
 
0.1
 
(0.2)
0.0
 
(0.0)
 
0.0
 
(0.0)
 
(0.0)
 
0.6
of which: Asset-backed securities
 
0.2
 
0.0
 
(0.0)
 
0.0
 
(0.1)
0.0
0.0
 
0.5
 
(0.1)
 
(0.0)
 
0.6
Derivative financial instruments –
liabilities
 
5.6
 
(0.0)
 
0.8
 
0.0
 
(0.2)
 
1.8
 
(1.8)
 
0.5
 
(0.4)
 
(0.1)
 
5.4
of which: Interest rate
 
0.2
 
0.1
 
0.3
 
0.0
 
(0.0)
 
0.0
 
(0.1)
 
0.1
 
(0.0)
 
(0.0)
 
0.3
of which: Equity / index
 
3.3
 
0.8
 
0.9
0.0
 
(0.0)
 
1.6
 
(1.4)
 
0.4
 
(0.4)
 
(0.0)
 
4.3
of which: Credit
 
0.6
 
(0.1)
 
(0.1)
0.0
 
(0.0)
 
0.1
 
(0.1)
 
(0.0)
 
(0.0)
 
(0.0)
 
0.4
of which: Loan commitments
measured at FVTPL
 
1.0
 
(0.7)
 
(0.2)
 
0.0
 
(0.1)
 
0.0
 
(0.0)
 
(0.0)
 
(0.0)
 
(0.0)
 
0.2
Debt issued designated at fair value
 
15.3
 
0.2
 
0.5
0.0
0.0
 
3.3
 
(3.0)
 
1.2
 
(4.4)
 
0.0
 
12.5
Other financial liabilities designated at
fair value
 
2.6
 
(0.0)
 
0.0
 
0.0
 
(0.0)
 
0.8
 
(1.2)
 
0.4
 
(0.1)
 
(0.0)
 
2.5
For the nine months ended 30 September 2023
3
Financial assets at fair value held for
trading
 
1.5
 
26.2
 
(0.8)
 
(0.6)
 
0.8
 
(6.8)
 
3.2
 
(0.0)
 
1.1
 
(0.6)
 
(0.0)
 
24.5
of which: Investment fund units
 
0.1
 
0.1
 
0.0
 
0.0
 
0.0
 
(0.0)
0.0
 
(0.0)
 
0.0
 
(0.0)
 
(0.0)
 
0.1
of which: Corporate and municipal
bonds
 
0.5
 
1.1
 
(0.3)
 
(0.0)
 
0.6
 
(0.8)
0.0
0.0
 
0.1
 
(0.1)
 
(0.0)
 
1.2
of which: Loans
 
0.6
 
23.1
 
(0.4)
 
(0.4)
 
0.1
 
(5.4)
 
3.2
 
(0.0)
 
0.9
 
(0.4)
 
(0.0)
 
21.6
Derivative financial instruments –
assets
 
1.5
 
1.4
 
0.3
 
0.2
 
0.0
 
(0.0)
 
0.7
 
(0.4)
 
0.2
 
(0.5)
 
(0.0)
 
3.1
of which: Interest rate
 
0.5
 
0.2
 
0.2
 
0.2
 
0.0
0.0
 
0.1
 
(0.1)
 
0.0
 
(0.1)
 
(0.0)
 
0.8
of which: Equity / index
 
0.7
 
0.5
 
0.1
 
0.1
 
0.0
 
(0.0)
 
0.4
 
(0.2)
 
0.1
 
(0.3)
 
(0.0)
 
1.3
of which: Credit
 
0.3
 
0.2
 
(0.0)
 
(0.1)
 
0.0
 
(0.0)
 
0.1
 
(0.0)
 
0.1
 
(0.0)
 
0.0
 
0.6
Financial assets at fair value not held
for trading
 
3.7
 
4.2
 
0.2
 
0.2
 
1.0
 
(1.4)
 
0.0
 
(0.1)
 
0.6
 
(0.1)
 
(0.0)
 
8.1
of which: Loans
 
0.7
 
0.8
 
0.3
 
0.3
 
0.2
 
(0.5)
0.0
 
(0.0)
 
0.4
 
(0.1)
 
(0.0)
 
1.9
of which: Auction rate securities
 
1.3
0.0
 
0.0
 
0.0
0.0
 
(0.1)
0.0
0.0
0.0
0.0
0.0
 
1.2
of which: Equity instruments
 
0.8
 
2.1
 
(0.0)
 
(0.0)
 
0.5
 
(0.3)
 
0.0
 
(0.1)
 
0.1
0.0
 
(0.0)
 
3.0
Derivative financial instruments –
liabilities
 
1.7
 
4.5
 
(0.3)
 
(0.2)
 
0.0
 
(0.2)
 
1.3
 
(1.0)
 
0.2
 
(0.8)
 
(0.0)
 
5.4
of which: Interest rate
 
0.1
 
0.2
 
(0.0)
 
0.0
 
0.0
0.0
 
0.1
 
(0.1)
 
0.0
 
(0.1)
 
(0.0)
 
0.3
of which: Equity / index
 
1.2
 
1.7
 
(0.2)
 
(0.0)
 
0.0
 
(0.0)
 
0.8
 
(0.4)
 
0.1
 
(0.2)
 
(0.0)
 
2.9
of which: Credit
 
0.3
 
0.3
 
0.1
 
0.1
 
0.0
 
(0.0)
 
0.4
 
(0.1)
 
0.0
 
(0.4)
 
(0.0)
 
0.6
of which: Loan commitments
measured at FVTPL
0.0
 
2.0
 
(0.2)
 
(0.2)
0.0
 
(0.2)
0.0
 
(0.3)
0.0
0.0
0.0
 
1.3
Debt issued designated at fair value
 
10.5
 
8.5
 
0.0
 
(0.1)
0.0
0.0
 
4.7
 
(4.0)
 
1.0
 
(3.1)
 
(0.1)
 
17.5
Other financial liabilities designated at
fair value
 
0.7
 
2.1
 
0.1
 
0.1
 
0.0
 
(0.0)
 
0.1
 
(0.1)
 
0.0
 
(0.1)
 
(0.0)
 
2.8
1 Net gains / losses included
 
in comprehensive income are recognized
 
in Net interest income and
 
Other net income from financial
 
instruments measured at fair value
 
through profit or loss in
 
the Income statement,
and also in Gains / (losses) from own credit
 
on financial liabilities designated at fair value,
 
before tax in the Statement of comprehensive income.
 
2 Total Level 3 assets as of 30
 
September 2024 were USD 15.9bn
(31 December 2023: USD 33.6bn). Total Level 3 liabilities as of 30 September
 
2024 were USD 20.6bn (31 December 2023: USD 23.6bn).
 
3 Comparative-period information has been revised. Please refer to “Note
2 Accounting for the acquisition of the Credit Suisse Group” in the UBS Group Annual Report 2023 for more information about the IFRS 3 measurement
 
period adjustments.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
83
Note 10
 
Fair value measurement (continued)
f) Financial instruments not measured
 
at fair value
The table
 
below reflects
 
the estimated
 
fair values
 
of financial
 
instruments not
 
measured at
 
fair value.
 
Valuation
principles applied
 
when determining fair
 
value estimates for
 
financial instruments not
 
measured at
 
fair value
 
are
consistent with those described in “Note 21
 
Fair value measurement” in the “Consolidated financial statements”
section of the UBS Group Annual Report 2023.
Financial instruments not measured at fair value
30.9.24
30.6.24
31.12.23
USD bn
Carrying
amount
Fair value
Carrying
amount
Fair value
Carrying
amount
1
Fair value
Assets
Cash and balances at central banks
 
243.3
 
243.3
 
248.3
 
248.3
 
314.1
 
314.1
Amounts due from banks
 
21.7
 
21.7
 
22.0
 
22.0
 
21.1
 
21.2
Receivables from securities financing transactions measured at amortized
 
cost
 
92.1
 
92.1
 
82.0
 
82.0
 
99.0
 
99.0
Cash collateral receivables on derivative instruments
 
47.2
 
47.2
 
43.6
 
43.6
 
50.1
 
50.1
Loans and advances to customers
 
615.8
 
615.8
 
599.1
 
594.6
 
639.7
 
633.5
Other financial assets measured at amortized cost
 
61.2
 
59.8
 
60.4
 
58.2
 
65.5
 
63.9
Liabilities
Amounts due to banks
 
28.1
 
28.1
 
26.8
 
26.8
 
71.0
 
71.0
Payables from securities financing transactions measured at amortized cost
 
16.4
 
16.4
 
14.9
 
14.9
 
14.4
 
14.4
Cash collateral payables on derivative instruments
 
33.8
 
33.8
 
32.8
 
32.8
 
41.6
 
41.5
Customer deposits
 
776.0
 
777.2
 
756.8
 
757.3
 
792.0
 
792.9
Debt issued measured at amortized cost
 
227.2
 
233.1
 
229.2
 
233.8
 
237.8
 
241.3
Other financial liabilities measured at amortized cost
2
 
16.1
 
16.1
 
16.3
 
16.2
 
15.3
 
15.2
1 Comparative-period information has been revised. Refer to Note 2 for more information.
 
2 Excludes lease liabilities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
84
Note 11
 
Derivative instruments
a) Derivative instruments
As of 30.9.24, USD bn
Derivative
financial
assets
Derivative
financial
liabilities
Notional values
related to derivative
financial assets and
liabilities
1
Other
notional
values
2
Derivative financial instruments
Interest rate
 
47.1
 
43.4
 
4,052
 
19,927
Credit derivatives
 
3.3
 
3.8
 
166
Foreign exchange
 
61.6
 
69.3
 
7,850
 
270
Equity / index
 
41.8
 
53.2
 
1,545
 
99
Commodities
 
4.1
 
3.3
 
169
 
21
Other
3
 
1.1
 
1.2
 
172
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
 
159.1
 
174.3
 
13,954
 
20,317
Further netting potential not recognized on the balance
 
sheet
5
 
(144.4)
 
(155.1)
of which: netting of recognized financial liabilities / assets
 
(122.0)
 
(122.0)
of which: netting with collateral received / pledged
 
(22.4)
 
(33.1)
Total derivative financial instruments, after consideration of further netting potential
 
14.7
 
19.2
As of 30.6.24, USD bn
Derivative financial instruments
Interest rate
 
48.8
 
47.3
 
3,472
 
20,200
Credit derivatives
 
3.0
 
3.8
 
170
Foreign exchange
 
51.0
 
52.0
 
7,148
 
213
Equity / index
 
33.4
 
41.4
 
1,432
 
96
Commodities
 
2.6
 
2.0
 
153
 
18
Other
3
 
0.8
 
2.6
 
151
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
 
139.6
 
149.1
 
12,526
 
20,526
Further netting potential not recognized on the balance
 
sheet
5
 
(124.4)
 
(132.4)
of which: netting of recognized financial liabilities / assets
 
(101.3)
 
(101.3)
of which: netting with collateral received / pledged
 
(23.1)
 
(31.1)
Total derivative financial instruments, after consideration of further netting potential
 
15.2
 
16.7
As of 31.12.23, USD bn
Derivative financial instruments
Interest rate
 
55.6
 
52.9
3,524
20,074
Credit derivatives
 
4.0
 
4.7
275
Foreign exchange
 
78.7
 
89.9
6,913
 
180
Equity / index
 
35.5
 
41.4
1,397
95
Commodities
 
2.0
 
1.6
143
16
Other
3
 
0.4
 
1.6
117
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
 
176.1
 
192.2
12,369
20,366
Further netting potential not recognized on the balance
 
sheet
5
 
(162.8)
 
167.9
of which: netting of recognized financial liabilities / assets
 
(133.0)
 
(133.0)
of which: netting with collateral received / pledged
 
(29.8)
 
(35.0)
Total derivative financial instruments, after consideration of further netting potential
 
13.3
 
24.2
1 In cases where derivative
 
financial instruments are presented
 
on a net basis
 
on the balance sheet,
 
the respective notional
 
values of the netted
 
derivative financial instruments
 
are still presented on
 
a gross basis.
Notional amounts of client-cleared ETD and OTC transactions
 
through central clearing counterparties are not disclosed, as they
 
have a significantly different risk profile.
 
2 Other notional values relate to derivatives
that are cleared through either
 
a central counterparty or an
 
exchange and settled on a
 
daily basis (except for
 
OTC derivatives settled through collateralized-to-market arrangements, which are presented under
 
Derivative
financial assets and Derivative financial liabilities). The fair value of these derivatives is presented on the balance sheet net of the corresponding cash margin under Cash collateral receivables on derivative instruments
and Cash collateral payables on derivative
 
instruments and was not material for all
 
periods presented.
 
3 Includes Loan commitments measured at FVTPL, as
 
well as unsettled purchases and sales of non-derivative
financial instruments for which
 
the changes in the
 
fair value between trade
 
date and settlement date
 
are recognized as derivative
 
financial instruments.
 
4 Financial assets and liabilities
 
are presented net
 
on the
balance sheet if UBS
 
has the unconditional and
 
legally enforceable right to
 
offset the recognized amounts,
 
both in the normal
 
course of business and
 
in the event of
 
default, bankruptcy or insolvency
 
of UBS or its
counterparties, and intends
 
either to settle
 
on a net
 
basis or to
 
realize the asset
 
and settle the
 
liability simultaneously.
 
5 Reflects the
 
netting potential in
 
accordance with enforceable
 
master netting and
 
similar
arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 22 Offsetting financial assets and financial liabilities” in
 
the “Consolidated financial statements” section
of the UBS Group Annual Report 2023 for more information.
 
b) Cash collateral on derivative instruments
USD bn
Receivables
30.9.24
Payables
30.9.24
Receivables
30.6.24
Payables
30.6.24
Receivables
31.12.23
Payables
31.12.23
Cash collateral on derivative instruments, based on netting under IFRS Accounting
Standards
1
 
47.2
 
33.8
 
43.6
 
32.8
 
50.1
 
41.6
Further netting potential not recognized on the balance
 
sheet
2
 
(28.7)
 
(18.2)
 
(27.2)
 
(19.0)
 
(32.9)
 
(26.4)
of which: netting of recognized financial liabilities / assets
 
(26.4)
 
(15.9)
 
(24.6)
 
(16.5)
 
(29.7)
 
(23.2)
of which: netting with collateral received / pledged
 
(2.3)
 
(2.3)
 
(2.5)
 
(2.5)
 
(3.2)
 
(3.2)
Cash collateral on derivative instruments, after consideration of further netting potential
 
18.5
 
15.5
 
16.5
 
13.8
 
17.2
 
15.2
1 Financial assets and liabilities are presented
 
net on the balance sheet if UBS
 
has the unconditional and legally enforceable
 
right to offset the recognized amounts,
 
both in the normal course of business
 
and in the
event of default,
 
bankruptcy or insolvency
 
of UBS or
 
its counterparties, and
 
intends either to
 
settle on a
 
net basis or
 
to realize the
 
asset and settle
 
the liability simultaneously.
 
2 Reflects the
 
netting potential in
accordance with enforceable
 
master netting and
 
similar
 
arrangements where not
 
all criteria for
 
a net presentation
 
on the balance
 
sheet have been
 
met. Refer to
 
“Note 22 Offsetting
 
financial assets and
 
financial
liabilities” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023 for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
85
Note
12
 
Other assets and liabilities
a) Other financial assets measured at
 
amortized cost
USD m
30.9.24
30.6.24
31.12.23
1
Debt securities
 
42,177
 
41,489
 
45,057
Loans to financial advisors
 
2,677
 
2,601
 
2,615
Fee- and commission-related receivables
 
2,622
 
2,460
 
2,576
Finance lease receivables
 
6,356
 
6,001
 
6,288
Settlement and clearing accounts
 
 
475
 
529
 
338
Accrued interest income
 
2,267
 
2,599
 
3,163
Other
2
 
4,595
 
4,752
 
5,418
Total other financial assets measured at amortized cost
 
61,169
 
60,431
 
65,455
1 Comparative-period information has
 
been revised. Refer to
 
Note 2 for more information.
 
2 Predominantly includes cash collateral
 
provided to exchanges and
 
clearing houses to secure securities
 
trading activity
through those counterparties.
b) Other non-financial assets
USD m
30.9.24
30.6.24
31.12.23
Precious metals and other physical commodities
 
 
6,965
 
6,445
 
5,930
Deposits and collateral provided in connection with litigation,
 
regulatory and similar matters
1
 
2,847
 
2,761
 
2,726
Prepaid expenses
 
1,887
 
1,889
 
2,080
Current tax assets
 
 
1,846
 
1,866
 
1,456
VAT,
 
withholding tax and other tax receivables
 
1,282
 
1,106
 
1,327
Properties and other non-current assets held for sale
 
234
 
151
 
188
Assets of disposal groups held for sale
2
 
1,722
Other
 
2,219
 
2,295
 
2,342
Total other non-financial assets
 
19,002
 
16,514
 
16,049
1 Refer to Note 15 for more information.
 
2 Refer to Note 2 for more information about the agreement to sell Select Portfolio Servicing.
c) Other financial liabilities measured at
 
amortized cost
USD m
30.9.24
30.6.24
31.12.23
Other accrued expenses
 
3,195
 
3,115
 
3,270
Accrued interest expenses
 
6,409
 
6,872
 
6,692
Settlement and clearing accounts
 
1,780
 
1,815
 
1,519
Lease liabilities
 
5,094
 
5,097
 
5,502
Other
 
 
4,693
 
4,484
 
3,868
Total other financial liabilities measured at amortized cost
 
21,171
 
21,383
 
20,851
d) Other financial liabilities designated at
 
fair value
 
USD m
30.9.24
30.6.24
31.12.23
Financial liabilities related to unit-linked investment contracts
 
18,389
 
17,080
 
15,992
Securities financing transactions
 
10,784
 
7,699
 
7,416
Over-the-counter debt instruments and other
 
6,082
 
7,096
 
6,076
Total other financial liabilities designated at fair value
 
35,256
 
31,875
 
29,484
e) Other non-financial liabilities
USD m
30.9.24
30.6.24
31.12.23
Compensation-related liabilities
 
9,086
 
7,771
 
9,746
of which: net defined benefit liability
 
800
 
757
 
796
Current tax liabilities
 
1,202
 
1,303
 
1,460
Deferred tax liabilities
 
345
 
319
 
325
VAT,
 
withholding tax and other tax payables
 
1,115
 
1,070
 
1,120
Deferred income
 
644
 
763
 
635
Liabilities of disposal groups held for sale
1
 
1,274
Other
 
308
 
494
 
802
Total other non-financial liabilities
 
13,974
 
11,720
 
14,089
1 Refer to Note 2 for more information about the agreement to sell Select Portfolio Servicing.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
86
Note
13
 
Debt issued designated at fair value
USD m
30.9.24
30.6.24
31.12.23
Equity-linked
1
 
56,691
 
55,911
 
60,573
Rates-linked
 
 
22,466
 
25,811
 
28,883
Credit-linked
 
5,990
 
6,510
 
7,730
Fixed-rate
 
15,811
 
15,271
 
20,541
Commodity-linked
 
3,638
 
3,507
 
3,844
Other
 
7,622
 
6,200
 
6,718
of which: debt that contributes to total loss-absorbing capacity
 
5,225
 
4,585
 
4,629
Total debt issued designated at fair value
2
 
112,218
 
113,209
 
128,289
1 Includes investment fund unit-linked instruments issued.
 
2 As of 30 September 2024, 99% of Total debt issued designated at fair value was unsecured
 
(30 June 2024: 99%).
 
Note
14
 
Debt issued measured at amortized cost
USD m
30.9.24
30.6.24
31.12.23
Short-term debt
1
 
33,851
 
34,944
 
38,530
Senior unsecured debt
 
 
139,417
 
143,832
 
147,547
of which: contributes to total loss-absorbing capacity
 
98,368
 
100,765
 
101,939
Covered bonds
 
10,206
 
8,524
 
5,214
Subordinated debt
 
15,441
 
14,350
 
17,644
of which: eligible as high-trigger loss-absorbing additional
 
tier 1 capital instruments
 
13,470
 
12,400
 
10,744
of which: eligible as low-trigger loss-absorbing additional
 
tier 1 capital instruments
 
1,239
 
1,225
 
1,214
of which: eligible as non-Basel III-compliant tier 2 capital
 
instruments
 
289
 
536
 
538
Debt issued through the Swiss central mortgage institutions
 
27,786
 
26,011
 
27,377
Other long-term debt
 
468
 
1,563
 
1,506
Long-term debt
2
 
193,318
 
194,279
 
199,288
Total debt issued measured at amortized cost
3,4
 
227,168
 
229,223
 
237,817
1 Debt with an original contractual maturity
 
of less than one year,
 
includes mainly certificates of deposit
 
and commercial paper.
 
2 Debt with an original contractual
 
maturity greater than or equal to
 
one year. The
classification of debt
 
issued into
 
short-term and
 
long-term does
 
not consider
 
any early redemption
 
features.
 
3 Net of
 
bifurcated embedded
 
derivatives, the
 
fair value
 
of which
 
was not
 
material for
 
the periods
presented.
 
4 Except for Covered bonds (100% secured), Debt issued through the Swiss central
 
mortgage institutions (100% secured) and Other long-term debt (88% secured), 100% of the balance
 
was unsecured
as of 30 September 2024.
 
Note 15
 
Provisions and contingent liabilities
a) Provisions and contingent liabilities
The table below presents an overview of total provisions
 
and contingent liabilities.
USD m
30.9.24
30.6.24
31.12.23
1
Provisions related to expected credit losses (IFRS 9,
Financial Instruments
)
2
 
310
 
294
 
350
Provisions related to Credit Suisse loan commitments (IFRS
 
3,
Business Combinations
)
 
1,230
 
1,367
 
1,924
Provisions related to litigation, regulatory and similar matters
 
(IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
 
3,842
 
3,630
 
4,020
Acquisition-related contingent liabilities (IFRS 3,
Business Combinations
)
 
2,430
 
2,619
 
3,993
Restructuring, real-estate and other provisions (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
 
1,433
 
1,382
 
2,123
Total provisions and contingent liabilities
 
9,245
 
9,293
 
12,412
1 Comparative-period information has been revised. Refer to Note 2 for more information.
 
2 Refer to Note 9c for more information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
87
Note 15
 
Provisions and contingent liabilities
 
(continued)
The table below presents additional information for provisions under IAS 37,
Provisions, Contingent Liabilities and
Contingent Assets
.
USD m
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total
Balance as of 31 December 2023
 
4,020
 
741
 
259
 
1,123
 
6,144
Balance as of 30 June 2024
 
3,630
 
827
 
233
 
322
 
5,013
Increase in provisions recognized in the income statement
 
51
 
271
 
4
 
27
 
354
Release of provisions recognized in the income statement
 
(35)
 
(66)
 
(2)
 
(18)
 
(121)
Reclassifications
 
211
5
 
0
 
0
 
0
 
211
Provisions used in conformity with designated purpose
 
(76)
 
(212)
 
(2)
 
(10)
 
(300)
Foreign currency translation and other movements
 
60
 
45
 
11
 
3
 
120
Balance as of 30 September 2024
 
3,842
 
865
 
245
 
324
 
5,275
1 Consists of
 
provisions for
 
losses resulting
 
from legal,
 
liability and
 
compliance risks.
 
2 Includes USD
 
482m of
 
provisions for
 
onerous contracts
 
related to
 
real estate
 
as of
 
30 September 2024
 
(30 June 2024:
USD 461m; 31 December 2023:
 
USD 448m), USD 322m
 
of personnel-related restructuring
 
provisions as of
 
30 September 2024
 
(30 June 2024: USD 365m;
 
31 December 2023: USD 294m)
 
and onerous
 
contracts
related to technology.
 
3 Mainly includes provisions for reinstatement
 
costs with respect to leased properties.
 
4 Mainly includes provisions related to
 
employee benefits and operational risks.
 
5 Mainly includes
reclassifications from IFRS 3 contingent liabilities
 
to IAS 37 provisions and a
 
reclassification from derivative liabilities to IAS 37
 
provisions in the amount of USD 92m
 
reflecting the funding obligation relating to investors
who did not accept the redemption offer for the Credit Suisse supply chain finance funds.
Information about provisions and
 
contingent liabilities in respect of
 
litigation, regulatory and similar matters,
 
as a
class,
 
is
 
included
 
in
 
Note
 
15b.
 
There
 
are
 
no
 
material
 
contingent
 
liabilities
 
associated
 
with
 
the
 
other
 
classes
 
of
provisions.
b) Litigation, regulatory and similar matters
The Group operates in
 
a legal and regulatory
 
environment that exposes it to
 
significant litigation and similar risks
arising from disputes
 
and regulatory proceedings. As
 
a result,
 
UBS (which for
 
purposes of this
 
Note may
 
refer to
UBS
 
Group
 
AG
 
and/or
 
one
 
or
 
more
 
of
 
its
 
subsidiaries,
 
as
 
applicable)
 
is
 
involved
 
in
 
various
 
disputes
 
and
 
legal
proceedings, including litigation, arbitration,
 
and regulatory and criminal investigations.
Such matters are subject
 
to many uncertainties,
 
and the outcome and the
 
timing of resolution are
 
often difficult to
predict,
 
particularly in
 
the
 
earlier
 
stages
 
of
 
a
 
case.
 
There
 
are
 
also
 
situations
 
where
 
the Group
 
may
 
enter into
 
a
settlement
 
agreement.
 
This
 
may
 
occur
 
in
 
order
 
to
 
avoid
 
the
 
expense,
 
management
 
distraction
 
or
 
reputational
implications of
 
continuing to
 
contest liability,
 
even
 
for those
 
matters for
 
which
 
the Group
 
believes it
 
should be
exonerated. The uncertainties inherent in all such matters affect the amount and timing of any potential outflows
for both matters
 
with respect to
 
which provisions have
 
been established and
 
other contingent liabilities.
 
The Group
makes
 
provisions
 
for
 
such
 
matters
 
brought
 
against
 
it
 
when,
 
in
 
the
 
opinion
 
of
 
management
 
after
 
seeking legal
advice, it
 
is more
 
likely than
 
not that
 
the Group
 
has a
 
present legal
 
or constructive obligation
 
as a
 
result of
 
past
events, it
 
is probable
 
that an
 
outflow of
 
resources will
 
be required,
 
and the
 
amount can
 
be reliably
 
estimated. Where
these factors
 
are
 
otherwise satisfied,
 
a
 
provision may
 
be
 
established for
 
claims that
 
have
 
not
 
yet been
 
asserted
against the
 
Group, but
 
are nevertheless
 
expected to
 
be, based
 
on
 
the Group’s
 
experience with
 
similar asserted
claims.
 
If
 
any
 
of
 
those
 
conditions
 
is
 
not
 
met,
 
such
 
matters
 
result
 
in
 
contingent
 
liabilities.
 
If
 
the
 
amount
 
of
 
an
obligation cannot
 
be reliably
 
estimated, a
 
liability exists
 
that is
 
not recognized
 
even if
 
an outflow
 
of resources
 
is
probable. Accordingly, no
 
provision is
 
established even if
 
the potential
 
outflow of resources
 
with respect
 
to such
matters could be significant. Developments relating to a matter that occur after the relevant reporting period, but
prior
 
to
 
the
 
issuance
 
of
 
financial
 
statements, which
 
affect
 
management’s assessment
 
of
 
the
 
provision
 
for
 
such
matter
 
(because,
 
for
 
example,
 
the
 
developments provide
 
evidence of
 
conditions that
 
existed
 
at
 
the
 
end
 
of
 
the
reporting
 
period),
 
are
 
adjusting
 
events
 
after
 
the
 
reporting period
 
under
 
IAS
 
10
 
and
 
must
 
be
 
recognized in
 
the
financial statements for the reporting period.
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
88
Note 15
 
Provisions and contingent liabilities
 
(continued)
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 Note 15a above. UBS provides
 
below an estimate of the aggregate liability for
 
our litigation,
regulatory and
 
similar matters
 
as a
 
class of
 
contingent liabilities.
 
Estimates of
 
contingent liabilities
 
are inherently
imprecise and
 
uncertain as
 
these
 
estimates require UBS
 
to
 
make speculative
 
legal assessments
 
as
 
to claims
 
and
proceedings that involve
 
unique fact patterns
 
or novel legal
 
theories, that have
 
not yet been
 
initiated or are
 
at early
stages of
 
adjudication, or
 
as to
 
which
 
alleged damages
 
have
 
not been
 
quantified by
 
the claimants.
 
Taking into
account these uncertainties
 
and the other factors
 
described herein, UBS
 
estimates the future losses
 
that could arise
from litigation,
 
regulatory and
 
similar matters
 
disclosed below
 
for which
 
an estimate
 
is possible,
 
that are
 
not covered
by existing
 
provisions (including
 
provisions established
 
under IFRS
 
3 in
 
connection with
 
the acquisition
 
of Credit
Suisse), are in the range of USD 0bn to USD 1.8bn.
 
Litigation, regulatory
 
and similar
 
matters may
 
also result
 
in non-monetary
 
penalties and
 
consequences. A
 
guilty plea
to, or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may
require UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory
authorities to limit, suspend or terminate
 
licenses and regulatory authorizations, and may
 
permit financial market
utilities to
 
limit, suspend
 
or terminate
 
UBS’s participation
 
in such
 
utilities. Failure
 
to obtain
 
such waivers,
 
or any
limitation, suspension
 
or termination
 
of licenses,
 
authorizations or
 
participations, could
 
have material
 
consequences
for UBS.
The
 
amounts
 
shown
 
in
 
the
 
table
 
below
 
reflect
 
the
 
provisions
 
recorded
 
under
 
IFRS
 
Accounting
 
Standards.
 
In
connection with
 
the acquisition
 
of Credit
 
Suisse, UBS
 
Group AG
 
additionally has
 
reflected in
 
its purchase
 
accounting
under IFRS
 
3 a
 
valuation adjustment
 
reflecting an
 
estimate of
 
outflows relating
 
to contingent
 
liabilities for
 
all present
obligations included in
 
the scope
 
of the
 
acquisition at fair
 
value upon
 
closing, even
 
if it
 
is not
 
probable that the
contingent
 
liability
 
will
 
result
 
in
 
an
 
outflow
 
of
 
resources,
 
significantly
 
decreasing
 
the
 
recognition
 
threshold
 
for
litigation
 
liabilities
 
beyond
 
those
 
that
 
generally apply
 
under
 
IFRS
 
Accounting Standards.
 
The
 
IFRS
 
3
 
acquisition-
related contingent liabilities
 
of USD 2.4bn at
 
30 September 2024 reflect
 
reclassifications to provisions
 
under IAS 37
and releases upon resolution of the relevant
 
matter.
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 2023
 
1,235
 
157
 
15
 
294
 
2,186
 
134
 
4,020
Balance as of 30 June 2024
 
1,199
 
152
 
2
 
280
 
1,862
 
135
 
3,630
Increase in provisions recognized in the income statement
 
21
 
0
 
6
 
1
 
23
 
0
 
51
Release of provisions recognized in the income statement
 
(4)
 
0
 
0
 
(2)
 
(30)
 
0
 
(35)
Reclassifications
2
 
0
 
0
 
0
 
0
 
211
 
0
 
211
Provisions used in conformity with designated purpose
 
(14)
 
0
 
(6)
 
(3)
 
(52)
 
(1)
 
(76)
Foreign currency translation and other movements
 
43
 
6
 
0
 
7
 
4
 
0
 
60
Balance as of 30 September 2024
 
1,247
 
157
 
2
 
283
 
2,018
 
135
 
3,842
1 Provisions, if any,
 
for the matters
 
described in items 2
 
and 10 of this
 
Note are recorded
 
in Global Wealth
 
Management. Provisions, if
 
any, for the
 
matters described in
 
items 5, 6, 7,
 
8, 9 and 11
 
of this Note are
recorded in Non-core and Legacy. Provisions, if any, for the matters described
 
in items 13 and 14 of
 
this Note are recorded in Group Items. Provisions, if any, for the
 
matters described in item 1 of this
 
Note are allocated
between Global Wealth Management,
 
Personal & Corporate
 
Banking and Non-core and
 
Legacy. Provisions,
 
if any, for
 
the matters described in item
 
3 of this Note are
 
allocated between the Investment Bank,
 
Non-
core and Legacy and Group Items.
 
Provisions, if any,
 
for the matters described in item 4 of
 
this Note are allocated between Global
 
Wealth Management and Personal
 
& Corporate Banking. Provisions,
 
if any, for the
matters described in
 
item 12 of
 
this Note are
 
allocated between
 
the Investment Bank
 
and Non-core
 
and Legacy.
 
2 Mainly includes reclassifications
 
from IFRS
 
3 contingent liabilities
 
to IAS 37
 
provisions and
 
a
reclassification from derivative liabilities to IAS 37 provisions in the amount of USD 92m reflecting the funding obligation relating
 
to investors who did not accept the redemption offer for the Credit Suisse supply chain
finance funds.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
89
Note 15
 
Provisions and contingent liabilities
 
(continued)
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. Credit Suisse
 
offices in various
 
locations, including
 
the UK,
the Netherlands, France and
 
Belgium, have been contacted
 
by regulatory and law enforcement
 
authorities seeking
records and information
 
concerning investigations
 
into Credit
 
Suisse’s historical
 
private banking
 
services on a
 
cross-
border basis and
 
in part through
 
its local branches
 
and banks.
 
The UK and
 
French aspects of
 
these issues have
 
been
closed. UBS is continuing to cooperate with
 
the authorities.
Since 2013, UBS
 
(France) S.A., UBS AG
 
and certain former employees
 
have been under investigation in
 
France in
relation to UBS’s cross-border business with French
 
clients. In connection with this investigation, the investigating
judges ordered UBS AG to provide bail (“
caution
”) of EUR 1.1bn.
In 2019,
 
the court of
 
first instance
 
returned a verdict
 
finding UBS AG
 
guilty of
 
unlawful solicitation of
 
clients on
French territory and aggravated
 
laundering of the proceeds
 
of tax fraud, and UBS
 
(France) S.A. guilty of aiding
 
and
abetting unlawful
 
solicitation and
 
of laundering
 
the proceeds
 
of tax
 
fraud. The
 
court imposed
 
fines aggregating
EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of
 
civil damages to the French state. A trial
in the
 
Paris Court
 
of Appeal
 
took place
 
in March
 
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.
In
 
May
 
2014,
 
Credit
 
Suisse
 
entered
 
into
 
settlement
 
agreements
 
with
 
the
 
SEC,
 
Federal
 
Reserve
 
and
 
New
 
York
Department of
 
Financial
 
Services and
 
plead
 
guilty
 
to conspiring
 
to
 
aid
 
and
 
abet US
 
taxpayers
 
in
 
filing
 
false
 
tax
returns. Credit Suisse continued to report
 
to and cooperate with US authorities in
 
accordance with its obligations
under the
 
plea and
 
agreements, including
 
by conducting
 
a review
 
of cross-border
 
services provided
 
by Credit
 
Suisse.
In this connection,
 
Credit Suisse provided information to US authorities regarding potentially undeclared
 
US assets
held by clients at
 
Credit Suisse since the
 
May 2014 plea. UBS
 
continues to cooperate with the
 
authorities in their
ongoing reviews. 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 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 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.
 
On appeal,
 
the US Court
 
of Appeals for
 
the
Fourth Circuit affirmed the dismissal of the action.
Our balance sheet
 
at 30 September 2024
 
reflected a provision in
 
an amount that UBS
 
believes to be appropriate
under the
 
applicable accounting
 
standard. As
 
in the
 
case of
 
other matters
 
for which
 
we have
 
established provisions,
the future outflow of resources in respect of such matters
 
cannot be determined with certainty based on currently
available information
 
and accordingly
 
may ultimately
 
prove to
 
be substantially
 
greater (or
 
may be
 
less) than
 
the
provision that we have recognized.
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.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
90
Note 15
 
Provisions and contingent liabilities
 
(continued)
In 2009 and 2010, the liquidators
 
of the two Luxembourg funds
 
filed claims against UBS entities,
 
non-UBS entities
and
 
certain
 
individuals,
 
including
 
current
 
and
 
former
 
UBS
 
employees,
 
seeking
 
amounts
 
totaling
 
approximately
EUR 2.1bn, which includes
 
amounts that the
 
funds may be
 
held liable to
 
pay the trustee
 
for the liquidation
 
of BMIS
(BMIS Trustee).
A large number of alleged beneficiaries have filed claims
 
against UBS entities (and non-UBS entities) for purported
losses relating to
 
the Madoff fraud.
 
The majority of
 
these cases have
 
been filed in
 
Luxembourg, where decisions
that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and
the Luxembourg Supreme Court has dismissed
 
a further appeal in one of the test
 
cases.
In the
 
US, the
 
BMIS Trustee
 
filed claims
 
against UBS
 
entities, among
 
others, in
 
relation to
 
the two
 
Luxembourg
funds and one of
 
the offshore funds. The
 
total amount claimed against
 
all defendants in
 
these actions was
 
not less
than USD
 
2bn. In
 
2014, the
 
US Supreme
 
Court rejected
 
the BMIS
 
Trustee’s motion for
 
leave to
 
appeal decisions
dismissing all
 
claims against
 
UBS defendants
 
except those
 
for the
 
recovery of
 
approximately USD
 
125m of
 
payments
alleged to be
 
fraudulent conveyances
 
and preference
 
payments. Similar
 
claims have
 
been filed against
 
Credit Suisse
entities seeking to recover
 
redemption payments. In
 
2016, the bankruptcy
 
court dismissed these
 
claims against the
UBS entities and
 
most of
 
the Credit
 
Suisse entities.
 
In 2019, the
 
Court of Appeals
 
reversed the
 
dismissal of
 
the BMIS
Trustee’s remaining claims. The case has been
 
remanded to the Bankruptcy Court
 
for further proceedings.
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. In December 2021, the European Commission issued a
 
decision imposing a fine of EUR 83.3m
on
 
Credit
 
Suisse
 
entities based
 
on
 
findings of
 
anticompetitive practices
 
in
 
the foreign
 
exchange
 
market. Credit
Suisse has
 
appealed the
 
decision to
 
the European
 
General Court.
 
UBS received
 
leniency and
 
accordingly no
 
fine
was assessed.
Foreign exchange-related civil litigation:
 
Putative class actions have been filed since 2013 in US federal
 
courts and
in
 
other
 
jurisdictions
 
against
 
UBS,
 
Credit
 
Suisse
 
and
 
other
 
banks
 
on
 
behalf
 
of
 
putative
 
classes
 
of
 
persons
 
who
engaged in foreign
 
currency transactions with
 
any of the defendant
 
banks. UBS and
 
Credit Suisse have resolved
 
US
federal
 
court class
 
actions relating
 
to foreign
 
currency transactions
 
with the
 
defendant banks
 
and persons
 
who
transacted in
 
foreign exchange
 
futures contracts
 
and options
 
on such
 
futures. Certain
 
class members
 
have excluded
themselves from
 
that settlement
 
and filed individual
 
actions in
 
US and English
 
courts against
 
UBS, Credit Suisse
 
and
other banks, alleging
 
violations of US
 
and European competition
 
laws and unjust
 
enrichment. UBS, Credit
 
Suisse
and the other
 
banks have resolved
 
those individual matters. Credit
 
Suisse and UBS,
 
together with other
 
financial
institutions, were named in
 
a consolidated putative
 
class action in
 
Israel, which made
 
allegations similar to those
made in the actions pursued in other jurisdictions. In April 2022,
 
Credit Suisse entered into an agreement to settle
all claims in
 
this action. In
 
February 2024, UBS
 
entered into
 
an agreement to
 
settle all
 
claims in
 
this action. Both
settlements remain subject to court approval.
A putative class action was filed in federal court against UBS and numerous other banks on behalf of persons and
businesses in the US who directly purchased foreign currency from the defendants
 
and alleged co-conspirators for
their own end use. In May 2024, the Second
 
Circuit upheld the district court’s dismissal of
 
the case.
 
LIBOR and other benchmark-related regulatory
 
matters:
 
Numerous government agencies conducted investigations
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain
 
times.
 
UBS
 
and
 
Credit
 
Suisse
 
reached
 
settlements
 
or
 
otherwise
 
concluded
 
investigations
 
relating
 
to
benchmark interest
 
rates with
 
the investigating
 
authorities. UBS
 
was granted
 
conditional leniency
 
or conditional
immunity
 
from
 
authorities
 
in
 
certain
 
jurisdictions,
 
including
 
the
 
Antitrust
 
Division
 
of
 
the
 
DOJ
 
and
 
the
 
Swiss
Competition Commission (WEKO), in
 
connection with potential
 
antitrust or competition
 
law violations related
 
to
certain rates.
 
However, UBS
 
has not
 
reached a
 
final settlement
 
with WEKO,
 
as the
 
Secretariat of
 
WEKO has
 
asserted
that UBS does not qualify for full immunity.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
91
Note 15
 
Provisions and contingent liabilities
 
(continued)
LIBOR and
 
other benchmark-related
 
civil litigation:
 
A number
 
of putative
 
class actions
 
and other
 
actions are
 
pending
in the federal
 
courts in New
 
York against UBS
 
and numerous other banks
 
on behalf of
 
parties who transacted in
certain interest rate benchmark-based derivatives. Also
 
pending in the US
 
and in other jurisdictions are
 
a number
of other
 
actions asserting losses
 
related to
 
various products whose
 
interest rates were
 
linked to
 
LIBOR and other
benchmarks, including
 
adjustable rate
 
mortgages, preferred
 
and debt securities,
 
bonds pledged
 
as collateral, loans,
depository
 
accounts,
 
investments
 
and
 
other
 
interest-bearing
 
instruments.
 
The
 
complaints
 
allege
 
manipulation,
through various
 
means, of
 
certain benchmark
 
interest rates,
 
including USD LIBOR,
 
Yen LIBOR,
 
EURIBOR, CHF LIBOR,
GBP LIBOR and seek unspecified compensatory
 
and other damages under various
 
legal theories.
USD LIBOR class and individual actions in the
 
US:
Beginning in 2013, putative class actions
 
were filed in US federal
district
 
courts
 
(and
 
subsequently
 
consolidated
 
in
 
the
 
SDNY)
 
by
 
plaintiffs
 
who
 
engaged
 
in
 
over-the-counter
instruments,
 
exchange
 
traded
 
Eurodollar
 
futures
 
and
 
options,
 
bonds
 
or
 
loans
 
that
 
referenced
 
USD LIBOR.
 
The
complaints allege
 
violations of
 
antitrust law
 
and the
 
Commodities Exchange
 
Act, as
 
well breach
 
of contract
 
and
unjust enrichment. Following various rulings
 
by the district court
 
and the Second Circuit
 
dismissing certain of the
causes of action and allowing others to proceed, one class
 
action with respect to transactions in over the counter
instruments and several actions brought by
 
individual plaintiffs are proceeding in
 
the district court. UBS and Credit
Suisse
 
have
 
entered
 
into
 
settlement
 
agreements
 
in
 
respect
 
of
 
the
 
class
 
actions
 
relating
 
to
 
exchange
 
traded
instruments, bonds
 
and
 
loans.
 
These
 
settlements
 
have
 
received
 
final
 
court
 
approval
 
and
 
the
 
actions
 
have been
dismissed as
 
to UBS
 
and Credit
 
Suisse. In
 
addition, an
 
individual action
 
was filed
 
in the
 
Northern District
 
of California
against UBS, Credit
 
Suisse and numerous
 
other banks alleging
 
that the defendants
 
conspired to fix
 
the interest rate
used as the basis for
 
loans to consumers by jointly
 
setting the USD ICE LIBOR
 
rate and monopolized the
 
market for
LIBOR-based consumer
 
loans and
 
credit cards. The
 
court dismissed
 
the initial complaint
 
and subsequently
 
dismissed
an amended complaint with
 
prejudice. In January 2024,
 
plaintiffs appealed the dismissal
 
to the Ninth Circuit
 
Court
of Appeals.
Other benchmark
 
class actions
 
in the
 
US:
The Yen
 
LIBOR/Euroyen TIBOR,
 
EURIBOR and
 
GBP LIBOR
 
actions
 
have
been dismissed.
 
Plaintiffs have appealed the dismissals.
In November 2022, defendants have moved to dismiss the
 
complaint in the CHF LIBOR action. In
 
2023, the court
approved a settlement by Credit Suisse of the
 
claims against it in this matter.
Government bonds:
 
In 2021,
 
the European
 
Commission issued
 
a decision
 
finding that
 
UBS and
 
six other
 
banks
breached European
 
Union antitrust
 
rules between
 
2007 and
 
2011 relating
 
to European
 
government bonds. The
European Commission fined
 
UBS EUR 172m.
 
UBS has appealed
 
the amount of
 
the fine.
Also in 2021,
 
the European
Commission
 
issued
 
a
 
decision
 
finding
 
that
 
Credit
 
Suisse
 
and
 
four
 
other
 
banks
 
had
 
breached
 
European
 
Union
antitrust
 
rules
 
relating
 
to
 
supra-sovereign,
 
sovereign
 
and
 
agency
 
bonds
 
denominated
 
in
 
USD.
 
The
 
European
Commission fined
 
Credit Suisse EUR
 
11.9m. Credit
 
Suisse has
 
appealed and
 
the European
 
Commission is
 
scheduled
to announce its determination on appeal on
 
7 November 2024.
Credit Suisse, together with other financial institutions, was named in two Canadian putative class actions, which
allege that
 
defendants conspired to
 
fix the
 
prices of
 
supranational, sub-sovereign and
 
agency bonds sold
 
to and
purchased
 
from
 
investors
 
in
 
the
 
secondary market.
 
One
 
action
 
was
 
dismissed
 
against
 
Credit
 
Suisse
 
in
 
February
2020.
 
In
 
October
 
2022,
 
Credit
 
Suisse
 
entered
 
into
 
an
 
agreement
 
to
 
settle
 
all
 
claims
 
in
 
the
 
second
 
action.
 
The
settlement remains subject to court approval.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
92
Note 15
 
Provisions and contingent liabilities
 
(continued)
Credit default
 
swap auction
 
litigation –
In June
 
2021, Credit
 
Suisse, along
 
with other
 
banks and
 
entities, was
 
named
in a
 
putative class
 
action complaint
 
filed in
 
the US
 
District Court
 
for the
 
District of
 
New Mexico
 
alleging manipulation
of credit default swap (CDS) final auction prices. Defendants filed a motion to enforce a previous CDS class action
settlement in the SDNY. In January 2024,
 
the SDNY ruled that, to the extent
 
claims in the New Mexico action arise
from conduct prior to 30 June 2014,
 
those claims are barred by the SDNY
 
settlement. The plaintiffs have appealed
the SDNY decision.
With respect
 
to additional
 
matters and
 
jurisdictions not
 
encompassed by
 
the settlements
 
and orders
 
referred to
above,
 
our
 
balance
 
sheet
 
at
 
30
 
September
 
2024
 
reflected
 
a
 
provision
 
in
 
an
 
amount
 
that
 
UBS
 
believes
 
to
 
be
appropriate under
 
the applicable
 
accounting standard.
 
As in
 
the case
 
of other
 
matters for
 
which we
 
have established
provisions, the future outflow
 
of resources in respect
 
of such matters
 
cannot be determined with
 
certainty based
on currently available information and
 
accordingly may ultimately prove to be
 
substantially greater (or may be less)
than the provision that we have recognized.
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 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
 
30 September 2024 reflected a
 
provision with respect to
 
matters described in this item
 
4 in
an amount that UBS
 
believes to be
 
appropriate under the applicable accounting standard.
 
The ultimate exposure
will depend on client requests and the resolution thereof, factors that are difficult to predict and assess. Hence, as
in the case of other
 
matters for which we have
 
established provisions, the
 
future outflow of resources
 
in respect of
such matters
 
cannot be
 
determined with certainty
 
based on
 
currently available information
 
and accordingly may
ultimately prove to be substantially greater (or
 
may be less) than the provision that we
 
have recognized.
5. 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.
 
UBS
continues
 
to
 
evaluate
 
its
 
approach
 
toward
 
satisfying
 
the
 
remaining
 
consumer
 
relief
 
obligations.
 
The
 
aggregate
amount of the consumer relief obligation increased after 2021 by 5% per annum of the outstanding amount due
until these obligations are settled. The monitor
 
publishes reports periodically on these consumer relief matters.
Civil litigation:
 
Repurchase litigations
 
– Credit
 
Suisse affiliates
 
are defendants
 
in various
 
civil litigation
 
matters related
to their roles as issuer, sponsor, depositor, underwriter and/or servicer of RMBS transactions. These cases currently
include
 
repurchase
 
actions
 
by
 
RMBS
 
trusts
 
and/or
 
trustees,
 
in
 
which
 
plaintiffs
 
generally
 
allege
 
breached
representations and
 
warranties
 
in
 
respect of
 
mortgage loans
 
and
 
failure
 
to
 
repurchase such
 
mortgage loans
 
as
required
 
under
 
the
 
applicable
 
agreements. The
 
amounts disclosed
 
below
 
do
 
not
 
reflect
 
actual
 
realized
 
plaintiff
losses to
 
date. Unless
 
otherwise stated,
 
these amounts
 
reflect
 
the original
 
unpaid principal
 
balance amounts
 
as
alleged in these actions.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
93
Note 15
 
Provisions and contingent liabilities
 
(continued)
DLJ Mortgage Capital, Inc. (DLJ) is a defendant in New
 
York state court in five actions: An action brought by Asset
Backed
 
Securities
 
Corporation
 
Home
 
Equity
 
Loan
 
Trust,
 
Series
 
2006-HE7
 
alleges
 
damages
 
of
 
not
 
less
 
than
USD 374m.
 
In
 
December 2023,
 
the
 
court granted
 
in
 
part
 
DLJ’s
 
motion
 
to
 
dismiss,
 
dismissing with
 
prejudice all
notice-based
 
claims;
 
the
 
parties
 
have
 
appealed.
 
An
 
action
 
by
 
Home
 
Equity
 
Asset
 
Trust,
 
Series
 
2006-8,
 
alleges
damages of not
 
less than
 
USD 436m. An action
 
by Home
 
Equity Asset Trust
 
2007-1 alleges damages
 
of not
 
less
than USD 420m.
 
A non-jury
 
trial in
 
this action
 
was held
 
between January
 
and February
 
2023, and
 
a decision
 
is
pending. An action by Home Equity Asset Trust 2007-2 alleges damages of not less than USD 495m. An action by
CSMC Asset-Backed Trust 2007-NC1 does not
 
allege a damages amount.
6. ATA litigation
Since November 2014, a
 
series of lawsuits have
 
been filed against a
 
number of banks, including
 
Credit Suisse, in
the US District Court
 
for the Eastern District of
 
New York
 
(EDNY) and the SDNY
 
alleging claims under the
 
United
States Anti-Terrorism
 
Act (ATA)
 
and the Justice
 
Against Sponsors of Terrorism
 
Act. The plaintiffs
 
in each of
 
these
lawsuits are, or are relatives of, victims of various terrorist
 
attacks in Iraq and allege a conspiracy
 
and/or aiding and
abetting based on allegations that various
 
international financial institutions, including the defendants, agreed to
alter,
 
falsify or omit
 
information from payment
 
messages that involved
 
Iranian parties for
 
the express
 
purpose of
concealing the
 
Iranian parties’ financial
 
activities and transactions
 
from detection
 
by US
 
authorities. The lawsuits
allege that
 
this conduct
 
has made
 
it possible
 
for Iran
 
to transfer
 
funds to
 
Hezbollah and
 
other terrorist
 
organizations
actively engaged
 
in harming
 
US military
 
personnel and
 
civilians. In
 
January 2023,
 
the United
 
States Court
 
of Appeals
for the Second Circuit affirmed a September 2019 ruling by the EDNY granting defendants’ motion to dismiss the
first
 
filed
 
lawsuit.
 
In
 
October
 
2023,
 
the
 
United
 
States
 
Supreme
 
Court
 
denied
 
plaintiffs’
 
petition
 
for
 
a
 
writ
 
of
certiorari.
 
In February 2024, plaintiffs filed a
 
motion to vacate the judgment in the
 
first filed lawsuit. Of the other
seven cases, four
 
are stayed, including
 
one that was
 
dismissed as to
 
Credit Suisse and
 
most of the
 
bank defendants
prior to entry of the stay, and in three plaintiffs have filed amended complaints.
7. Customer account matters
Several
 
clients
 
have
 
claimed
 
that
 
a
 
former
 
relationship
 
manager
 
in
 
Switzerland
 
had
 
exceeded
 
his
 
investment
authority
 
in
 
the
 
management of
 
their
 
portfolios, resulting
 
in
 
excessive concentrations
 
of
 
certain
 
exposures
 
and
investment losses. Credit
 
Suisse AG has
 
investigated the claims,
 
as well as
 
transactions among the
 
clients. Credit
Suisse AG filed a criminal complaint against the former relationship manager with the Geneva Prosecutor’s Office
upon which the
 
prosecutor initiated
 
a criminal investigation.
 
Several clients of
 
the former relationship
 
manager also
filed criminal complaints with the
 
Geneva Prosecutor’s Office. In
 
February 2018, the former relationship manager
was sentenced to five years
 
in prison by the Geneva criminal
 
court for fraud, forgery
 
and criminal mismanagement
and ordered
 
to pay
 
damages of approximately
 
USD 130m. On
 
appeal, the Criminal
 
Court of Appeals
 
of Geneva
and, subsequently, the Swiss Federal Supreme Court upheld the main findings of the
 
Geneva criminal court.
Civil lawsuits have been initiated against
 
Credit Suisse AG and/or certain
 
affiliates in various jurisdictions, based
 
on
the findings established in the criminal proceedings
 
against the former relationship manager.
In Singapore,
 
in a
 
civil lawsuit
 
against Credit
 
Suisse Trust
 
Limited, the
 
Singapore International Commercial
 
Court
issued a judgment
 
finding for
 
the plaintiffs and,
 
in September 2023,
 
the court awarded
 
damages of USD 742.73m,
excluding post-judgment
 
interest. This
 
figure does
 
not exclude
 
potential overlap
 
with the
 
Bermuda proceedings
against Credit Suisse Life (Bermuda)
 
Ltd., described below, and the
 
court ordered the parties to
 
ensure that there
shall be no double
 
recovery in relation to
 
this award and the
 
Bermuda proceedings.
 
On appeal from this
 
judgment,
in
 
July
 
2024,
 
the court
 
ordered some
 
changes to
 
the calculation
 
of
 
damages and
 
directed the
 
parties to
 
agree
adjustments to
 
the award.
 
The court ordered
 
a revised
 
award of USD
 
461m, including
 
interest and
 
costs, in
 
October
2024.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
94
Note 15
 
Provisions and contingent liabilities
 
(continued)
In Bermuda, in the civil
 
lawsuit brought against Credit Suisse Life
 
(Bermuda) Ltd., the Supreme Court of Bermuda
issued a
 
judgment finding for
 
the plaintiff
 
and awarded
 
damages of
 
USD 607.35m to the
 
plaintiff. Credit Suisse
Life (Bermuda) Ltd.
 
appealed the decision
 
and in June
 
2023, the Bermuda
 
Court of Appeal
 
confirmed the award
issued by the
 
Supreme Court of Bermuda
 
and the finding that
 
Credit Suisse Life (Bermuda)
 
Ltd. had breached
 
its
contractual
 
and
 
fiduciary
 
duties,
 
but
 
overturning
 
the
 
finding
 
that
 
Credit
 
Suisse
 
Life
 
(Bermuda)
 
Ltd.
 
had
 
made
fraudulent misrepresentations. In
 
March 2024,
 
the Bermuda
 
Court of
 
Appeal granted
 
a motion
 
by Credit
 
Suisse
Life (Bermuda) Ltd for leave to appeal the judgment to the Judicial Committee of the Privy Council and the notice
of such appeal was filed.
 
The Court of Appeal also ordered
 
that the current stay continue pending determination
of the
 
appeal on
 
the condition
 
that the
 
damages awarded
 
remain within
 
the escrow
 
account plus
 
interest calculated
at the Bermuda statutory rate of
 
3.5%. In December 2023, USD 75m
 
was released from the escrow account and
paid to plaintiffs.
 
In
 
Switzerland,
 
civil
 
lawsuits
 
have
 
been
 
commenced
 
against
 
Credit
 
Suisse
 
AG
 
in
 
the
 
Court
 
of
 
First
 
Instance
 
of
Geneva, with statements of claim served in March
 
2023 and March 2024.
8. Mozambique matter
Credit
 
Suisse
 
was
 
subject to
 
investigations by
 
regulatory
 
and
 
enforcement
 
authorities, as
 
well as
 
civil
 
litigation,
regarding certain Credit
 
Suisse entities’
 
arrangement of
 
loan financing
 
to Mozambique
 
state enterprises,
 
Proindicus
S.A. and Empresa Moçambicana de Atum
 
S.A. (EMATUM), a
 
distribution to private investors of loan
 
participation
notes (LPN) related
 
to the EMATUM
 
financing in September
 
2013, and certain
 
Credit Suisse
 
entities’ subsequent
role in arranging the exchange
 
of those LPNs for
 
Eurobonds issued by the Republic
 
of Mozambique. In 2019,
 
three
former Credit Suisse employees pleaded guilty in the EDNY to accepting improper personal benefits in connection
with financing transactions carried out with
 
two Mozambique state enterprises.
In
 
October 2021,
 
Credit
 
Suisse reached
 
settlements with
 
the DOJ,
 
the US
 
Securities and
 
Exchange Commission
(SEC), the
 
UK Financial
 
Conduct Authority
 
(FCA) and
 
FINMA to
 
resolve inquiries
 
by these
 
agencies, including
 
findings
that Credit
 
Suisse failed
 
to appropriately
 
organize and
 
conduct its
 
business with
 
due skill
 
and care,
 
and manage
risks. Credit
 
Suisse Group
 
AG entered
 
into a
 
three-year Deferred
 
Prosecution Agreement
 
(DPA) with
 
the DOJ
 
in
connection with the criminal information
 
charging Credit Suisse Group AG
 
with conspiracy to commit wire
 
fraud
and CSSEL entered into a Plea Agreement and pleaded guilty to one count
 
of conspiracy to violate the US federal
wire fraud statute.
 
Under the terms
 
of the DPA, UBS
 
Group AG (as
 
successor to Credit
 
Suisse Group AG) continued
compliance enhancement and remediation efforts agreed by
 
Credit Suisse, and undertake additional measures as
outlined in the DPA. If the DPA’s conditions are complied
 
with, the charges will be dismissed within six months of
the end of the DPA’s three-year term.
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
 
(XIV
 
ETNs).
 
The
 
complaints have
 
been
 
consolidated and
 
asserts
 
claims
 
against
 
Credit
Suisse
 
for
 
violations
 
of
 
various
 
anti-fraud
 
and
 
anti-manipulation provisions
 
of
 
US
 
securities
 
laws
 
arising
 
from
 
a
decline in the value of XIV ETNs in February 2018. On appeal from an order of the SDNY dismissing all claims, the
Second Circuit issued an
 
order that reinstated a
 
portion of the
 
claims. In decisions
 
in March 2023 and
 
March 2024,
the court
 
denied class
 
certification for
 
two of
 
the three
 
classes proposed
 
by plaintiffs
 
and certified
 
the third
 
proposed
class.
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
95
Note 15
 
Provisions and contingent liabilities
 
(continued)
10. Bulgarian former clients matter
In December 2020, the Swiss Office
 
of the Attorney General brought charges against Credit
 
Suisse AG and other
parties concerning the diligence and controls applied to a historical relationship with Bulgarian former clients
 
who
are
 
alleged to
 
have laundered
 
funds through
 
Credit
 
Suisse AG
 
accounts. In
 
June 2022,
 
following a
 
trial, Credit
Suisse AG was convicted in the Swiss Federal Criminal Court of certain historical organizational
 
inadequacies in its
anti-money laundering framework
 
and ordered to pay a fine of
 
CHF 2m. In addition, the
 
court seized certain client
assets in the amount of approximately
 
CHF 12m and ordered Credit Suisse AG to pay
 
a compensatory claim in the
amount of approximately CHF
 
19m. Credit Suisse AG
 
appealed the decision to
 
the Swiss Federal Court
 
of Appeals.
Following the merger of UBS AG and Credit Suisse
 
AG, UBS AG confirmed the appeal.
 
The trial before the Federal
Court of Appeals occurred in October 2024.
11. Supply chain finance funds
Credit
 
Suisse
 
has
 
received
 
requests
 
for
 
documents and
 
information in
 
connection with
 
inquiries, investigations,
enforcement and other
 
actions relating to
 
the supply chain finance
 
funds (SCFFs) matter by
 
FINMA, the FCA and
other regulatory and governmental agencies. The Luxembourg
 
Commission de Surveillance du Secteur Financier is
reviewing the
 
matter and
 
has commissioned
 
a report
 
from 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
 
SCFFs matter. In
 
its order, FINMA reported
 
that Credit Suisse
 
had seriously breached
 
applicable
Swiss supervisory
 
laws in
 
this context
 
with regard
 
to risk
 
management and
 
appropriate operational
 
structures. While
FINMA
 
recognized
 
that
 
Credit
 
Suisse
 
had
 
already
 
taken
 
extensive
 
organizational
 
measures
 
to
 
strengthen
 
its
governance
 
and
 
control
 
processes,
 
FINMA
 
ordered
 
certain
 
additional
 
remedial
 
measures.
 
These
 
include
 
a
requirement that
 
Credit Suisse
 
documents the
 
responsibilities
 
of approximately
 
600 of
 
its highest-ranking
 
managers.
This
 
measure
 
has
 
been
 
made
 
applicable
 
to
 
UBS
 
Group.
 
FINMA
 
has
 
also
 
separately
 
opened
 
four
 
enforcement
proceedings against former managers of Credit
 
Suisse.
In May 2023,
 
FINMA opened
 
an enforcement
 
proceeding against
 
Credit Suisse in
 
order to confirm
 
compliance with
supervisory requirements in response to inquiries
 
from FINMA’s enforcement division in the SCFFs
 
matter.
The Attorney
 
General of
 
the Canton
 
of Zurich
 
has initiated
 
a criminal
 
procedure in
 
connection with
 
the SCFFs
 
matter
and several fund investors have joined the procedure as interested parties. Certain former and active Credit Suisse
employees, among others, have been named as accused persons, but Credit Suisse itself was not made a party to
the proceeding.
Certain civil actions have
 
been filed by fund investors
 
and other parties against
 
Credit Suisse and/or certain
 
officers
and directors in various
 
jurisdictions, which make allegations including mis-selling and
 
breaches of duties of care,
diligence and
 
other fiduciary
 
duties. In June
 
2024, the
 
Credit Suisse
 
SCFFs made
 
a
 
voluntary offer
 
to the
 
SCFFs
investors to
 
redeem all
 
outstanding fund
 
units. The
 
offer expired
 
on
 
31 July 2024,
 
and
 
fund
 
units representing
around 92%
 
of the
 
SCFFs’ net
 
asset value
 
were tendered
 
in the
 
offer and
 
accepted. Fund
 
units accepted
 
in the
offer were redeemed at 90% of the net asset
 
value determined on 25 February 2021, net of any payments made
by the relevant
 
fund to the
 
fund investors
 
since that
 
time. Investors
 
whose units
 
were redeemed
 
released any
 
claims
they may have had against the SCFFs, Credit Suisse
 
or UBS. The offer was funded by UBS through the purchase
 
of
units of feeder sub-funds.
 
 
 
 
UBS Group third
 
quarter 2024
 
report |
Consolidated
 
financial statements
 
| Notes to the
 
UBS Group AG
 
interim consolidated
 
financial
 
statements (unaudited)
 
96
Note 15
 
Provisions and contingent liabilities
 
(continued)
12. Archegos
Credit
 
Suisse
 
and
 
UBS
 
have
 
received
 
requests
 
for
 
documents
 
and
 
information
 
in
 
connection
 
with
 
inquiries,
investigations
 
and/or
 
actions
 
relating
 
to
 
their
 
relationships
 
with
 
Archegos
 
Capital
 
Management
 
(Archegos),
including from FINMA
 
(assisted by a
 
third party appointed
 
by FINMA), the
 
DOJ, the SEC,
 
the US Federal
 
Reserve,
the
 
US
 
Commodity
 
Futures
 
Trading
 
Commission
 
(CFTC),
 
the
 
US
 
Senate
 
Banking
 
Committee,
 
the
 
Prudential
Regulation Authority (PRA),
 
the FCA, COMCO, the
 
Hong Kong Competition
 
Commission and other regulatory
 
and
governmental agencies.
 
UBS
 
is
 
cooperating
 
with
 
the
 
authorities
 
in
 
these
 
matters.
 
In
 
July
 
2023,
 
CSI
 
and
 
CSSEL
entered into a settlement agreement
 
with the PRA providing for
 
the resolution of the PRA’s
 
investigation. Also in
July 2023, FINMA
 
issued a decree
 
ordering remedial measures
 
and the Federal
 
Reserve Board issued
 
an Order
 
to
Cease and Desist. Under the terms of the order,
 
Credit Suisse paid a civil money penalty and agreed to undertake
certain remedial
 
measures relating
 
to counterparty
 
credit risk
 
management, liquidity
 
risk management
 
and non-
financial risk management, as well as enhancements to board oversight and governance. UBS Group, as
 
the legal
successor to Credit Suisse Group AG,
 
is a party to the FINMA
 
decree and Federal Reserve Board
 
Cease and Desist
Order.
 
Civil
 
actions
 
relating
 
to
 
Credit
 
Suisse’s
 
relationship with
 
Archegos
 
have
 
been
 
filed
 
against
 
Credit
 
Suisse
 
and/or
certain officers and directors, including claims
 
for breaches of fiduciary duties.
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, and
 
other securities
 
in 2023,
 
allege that
 
defendants made
 
misleading statements
 
regarding:
(i) customer
 
outflows
 
in
 
late
 
2022;
 
(ii) the
 
adequacy
 
of
 
Credit
 
Suisse’s
 
financial
 
reporting
 
controls;
 
and
 
(iii) the
adequacy
 
of
 
Credit
 
Suisse’s
 
risk
 
management
 
processes,
 
and
 
include
 
allegations
 
relating
 
to
 
Credit
 
Suisse
Group AG’s merger with
 
UBS Group AG. Many
 
of the actions
 
have been consolidated,
 
and a motion
 
to dismiss has
been
 
filed
 
and
 
remains
 
pending.
 
One
 
additional
 
action,
 
filed
 
in
 
October
 
2023,
 
has
 
been
 
stayed
 
pending
 
a
determination on whether it should be consolidated
 
with the earlier actions.
Credit Suisse has received requests for documents and information from regulatory and governmental agencies in
connection with inquiries,
 
investigations and/or actions
 
relating to
 
these matters, as
 
well as
 
for other statements
regarding Credit Suisse’s financial condition,
 
including from the SEC, the DOJ
 
and FINMA. UBS is cooperating with
the authorities in these matters.
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. In February 2024,
the court granted
 
defendants’ motions to
 
dismiss the civil
 
RICO claims and
 
conditionally dismissed the Swiss
 
law
claims pending defendants’ acceptance of jurisdiction in Switzerland. In March 2024, having received consents to
Swiss jurisdiction from all defendants served
 
with the complaint, the court dismissed the Swiss
 
law claims against
those defendants.
 
Additional complaints,
 
brought
 
on behalf
 
of holders
 
of Credit
 
Suisse additional
 
tier 1
 
capital
notes (AT1
 
noteholders) allege
 
breaches of
 
fiduciary duty
 
under Swiss
 
law,
 
arising from
 
a series
 
of scandals
 
and
misconduct, which
 
led to Credit
 
Suisse Group AG’s
 
merger with
 
UBS Group AG,
 
causing losses
 
to shareholders
 
and
AT1
 
noteholders. Motions to dismiss these
 
complaints were granted in
 
March 2024 and
 
September 2024 on the
basis that Switzerland is the most appropriate forum for litigation. Plaintiff in one of these cases has appealed the
dismissal.
 
Note 16
 
Events after the reporting period
In
 
October 2024,
 
UBS entered
 
into
 
an
 
agreement
 
to sell
 
to American
 
Express
 
Swiss Holdings
 
GmbH (American
Express)
 
its 50% interest in
 
Swisscard AECS GmbH (Swisscard),
 
a joint venture between
 
UBS and American Express
in Switzerland. In addition, UBS and
 
Swisscard entered into an
 
agreement to transition the Credit
 
Suisse-branded
card portfolios to UBS.
 
Both transactions are subject to
 
certain closing conditions and are
 
not expected to have
 
a
material impact for UBS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
97
Appendix
Alternative performance measures
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or
 
future financial performance,
financial position
 
or cash
 
flows other
 
than a
 
financial measure
 
defined or
 
specified in
 
the applicable
 
recognized
accounting standards or in
 
other applicable regulations. A
 
number of APMs
 
are reported in
 
the discussion of
 
the
financial and operating performance of
 
the external reports (annual, quarterly
 
and other reports). APMs
 
are used
to provide
 
a more
 
complete
 
picture of
 
operating
 
performance and
 
to reflect
 
management’s
 
view of
 
the fundamental
drivers
 
of
 
the
 
business
 
results. A
 
definition
 
of
 
each
 
APM,
 
the
 
method
 
used
 
to
 
calculate
 
it
 
and
 
the
 
information
content are presented in alphabetical order
 
in the table below. These APMs may
 
qualify as non-GAAP measures as
defined by US Securities and Exchange Commission
 
(SEC) regulations.
APM label
Calculation
 
Information content
Cost / income ratio (%)
Calculated as operating expenses divided by
 
total
revenues.
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues.
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
98
APM label
Calculation
 
Information content
Net interest margin (bps)
– Personal & Corporate Banking
Calculated as net interest income (annualized
 
as
applicable) divided by average loans.
This measure provides information about the
profitability of the business by calculating the
difference between the price charged for lending and
the cost of funding, relative to loan value.
Net new assets (USD)
– Global Wealth Management
Calculated as the net amount of inflows and
 
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period, plus interest and dividends.
Excluded from the calculation are movements due to
market performance, foreign exchange translation,
fees, and the effects on invested assets of strategic
decisions by UBS to exit markets or services.
 
This measure provides information about the
development of invested assets during a
 
specific
period as a result of net new asset flows, plus the
effect of interest and dividends.
 
Net new assets growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and
 
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable),
plus interest and dividends, divided by total invested
assets at the beginning of the period.
This measure provides information about the growth
of invested assets during a specific period
 
as a result
of net new asset flows.
 
Net new fee-generating assets (USD)
– Global Wealth Management
Calculated as the net amount of fee-generating
 
asset
inflows and outflows, including dividend
 
and interest
inflows into mandates and outflows from mandate
fees paid by clients during a specific period.
 
Excluded
from the calculation are the effects on fee-generating
assets of strategic decisions by UBS to exit
 
markets or
services.
 
This measure provides information about the
development of fee-generating assets during
 
a
specific period as a result of net flows, excluding
movements due to market performance and
 
foreign
exchange translation, as well as the effects on fee-
generating assets of strategic decisions by UBS
 
to exit
markets or services.
 
Net new money (USD)
– Global Wealth Management,
Asset Management
Calculated as the net amount of inflows and
 
outflows
of invested assets (as defined in UBS policy) recorded
during a specific period. Excluded from the calculation
are movements due to market performance, foreign
exchange translation, dividends, interest and fees,
 
as
well as the effects on invested assets of strategic
decisions by UBS to exit markets
 
or services. Net new
money is not measured for Personal & Corporate
Banking.
This measure provides information about the
development of invested assets during a
 
specific
period as a result of net new money flows.
Net 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 IFRS Accounting
Standards for items that management believes
 
are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating expenses, while excluding items
 
that
management believes are not representative of the
underlying performance of the businesses.
Operating profit / (loss) before tax
(underlying) (USD)
Calculated by adjusting operating profit / (loss) before
tax as reported in accordance with IFRS Accounting
Standards for items that management believes
 
are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating profit / (loss) before tax, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
Pre-tax profit growth (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period.
This measure provides information about pre-tax
profit growth since the comparison period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
99
APM label
Calculation
 
Information content
Pre-tax profit growth (underlying) (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period. Net profit before tax attributable
to shareholders from continuing operations excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about pre-tax
profit growth since the comparison period, while
excluding items that management believes
 
are not
representative of the underlying performance of the
businesses.
Recurring net fee income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of fees for services provided
 
on
an ongoing basis, such as portfolio management
 
fees,
asset-based investment fund fees and custody
 
fees,
which are generated on client assets, and
administrative fees for accounts.
This measure provides information about the amount
of recurring net fee income.
Return on attributed equity
1
 
(%)
Calculated as annualized business division
 
operating
profit before tax divided by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity.
Return on common equity tier 1
capital
1
 
(%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity
 
tier 1
capital.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital.
Return on equity
1
 
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
 
to
shareholders.
This measure provides information about the
profitability of the business in relation to equity.
Return on leverage ratio denominator,
gross
1
 
(%)
Calculated as annualized total revenues divided by
average leverage ratio denominator.
This measure provides information about the revenues
of the business in relation to the leverage ratio
denominator.
Return on tangible equity
1
 
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
 
to
shareholders less average goodwill and intangible
assets.
This measure provides information about the
profitability of the business in relation to tangible
equity.
Tangible book value per share
(USD)
Calculated as equity attributable to shareholders less
goodwill and intangible assets divided by the
 
number
of shares outstanding.
This measure provides information about tangible net
assets on a per-share basis.
Total book value per share
(USD)
Calculated as equity attributable to shareholders
divided by the number of shares outstanding.
This measure provides information about net assets
on a per-share basis.
Total revenues (underlying)
(USD)
Calculated by adjusting total revenues as reported in
accordance with IFRS Accounting Standards for items
that management believes are not representative of
the underlying performance of the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of total revenues, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Transaction-based income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of the non-recurring portion
 
of
net fee and commission income, mainly composed
 
of
brokerage and transaction-based investment fund
fees, and credit card fees, as well as fees for payment
and foreign-exchange transactions, together with
other net income from financial instruments
measured at fair value through profit or loss.
This measure provides information about the amount
of the non-recurring portion of net fee and
commission income, together with other net
 
income
from financial instruments measured at fair value
through profit or loss.
Underlying cost / income ratio (%)
Calculated as underlying operating expenses
 
(as
defined above) divided by underlying total
 
revenues
(as defined above).
 
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues, while excluding items
that management believes are not representative of
the underlying performance of the businesses.
Underlying net profit growth (%)
Calculated as the change in net profit attributable
 
to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
 
Net profit
attributable to shareholders from continuing
operations excludes items that management
 
believes
are not representative of the underlying performance
of the businesses and also excludes related tax
impact.
This measure provides information about profit
growth since the comparison period, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
100
APM label
Calculation
 
Information content
Underlying return on attributed equity
1
(%)
 
Calculated as annualized underlying business
 
division
operating profit before tax (as defined above) divided
by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on common equity
tier 1 capital
1
 
(%)
Calculated as annualized net profit attributable to
shareholders divided by average common equity
 
tier 1
capital. Net profit attributable to shareholders
excludes items that management believes
 
are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on tangible equity
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable
 
to
shareholders less average goodwill and intangible
assets. Net profit attributable to shareholders excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to tangible
equity, while excluding items that management
believes are not representative of the underlying
performance of the businesses.
1
Profit or loss information for each of the third quarter of 2024, the second quarter of 2024, the fourth quarter of 2023 and the third quarter of 2023 is based entirely on consolidated data following the acquisition of
the Credit Suisse
 
Group and for
 
the purpose of
 
the calculation of
 
return measures has
 
been annualized
 
by multiplying such
 
by four.
 
Profit or loss
 
information for the
 
first nine months
 
of 2024
 
is based entirely
 
on
consolidated data following the acquisition of the Credit Suisse Group
 
and for the purpose of the calculation of return measures has been annualized by dividing such by three and then multiplying by four. Profit or loss
information for the first nine months of 2023 includes four months (June to September 2023) of post
 
-acquisition consolidated data and five months of UBS Group data only (January
 
to May 2023) and for the purpose
of the calculation of return measures has been annualized by dividing such by three and then multiplying by four.
 
This is
 
a general list
 
of the APMs
 
used in our
 
financial reporting. Not
 
all of
 
the APMs listed
 
above may appear
 
in
this particular report.
 
Information related to underlying return on common equity tier 1 (CET1) capital and underlying return on tangible
equity (%)
As of or for the quarter ended
As of or year-to-date
USD m, except where indicated
30.9.24
30.6.24
31.12.23
1
30.9.23
1
30.9.24
30.9.23
1
Underlying operating profit / (loss) before tax
 
2,386
 
2,060
 
592
 
914
 
7,063
 
3,371
Underlying tax expense / (benefit)
 
619
 
410
 
(329)
 
623
 
1,706
 
1,523
Net profit / (loss) attributable to non-controlling interests
 
3
 
40
 
1
 
4
 
51
 
15
Underlying net profit / (loss) attributable to shareholders
 
1,763
 
1,611
 
920
 
287
 
5,306
 
1,833
Underlying net profit / (loss) attributable to shareholders, annualized
 
7,054
 
6,442
 
3,680
 
1,148
 
7,075
 
2,444
Tangible equity
 
 
79,976
 
76,370
 
78,109
 
75,804
 
79,976
 
75,804
Average tangible equity
 
 
78,173
 
76,882
 
76,956
 
76,845
 
77,602
 
63,858
CET1 capital
 
 
74,213
 
76,104
 
78,002
 
76,926
 
74,213
 
76,926
Average CET1 capital
 
 
75,158
 
76,883
 
77,464
 
77,761
 
76,625
 
61,460
Underlying return on tangible equity (%)
 
9.0
 
8.4
 
4.8
 
1.5
 
9.1
 
3.8
Underlying return on common equity tier 1 capital (%)
 
9.4
 
8.4
 
4.8
 
1.5
 
9.2
 
4.0
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
 
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
101
Abbreviations frequently used in our financial reports
A
ABS
 
asset-backed securities
AG
 
Aktiengesellschaft
AGM
 
Annual General Meeting of
shareholders
AI
 
artificial intelligence
A-IRB
 
advanced internal ratings-
based
AIV
 
alternative investment
vehicle
ALCO
 
Asset and Liability
Committee
AMA
 
advanced measurement
approach
AML
 
anti-money laundering
AoA
 
Articles of Association
APM
 
alternative performance
measure
ARR
 
alternative reference rate
ARS
 
auction rate securities
ASF
 
available stable funding
AT1
 
additional tier 1
AuM
 
assets under management
B
BCBS
 
Basel Committee on
Banking Supervision
BIS
 
Bank for International
Settlements
BoD
 
Board of Directors
C
CAO
 
Capital Adequacy
Ordinance
CCAR
 
Comprehensive Capital
Analysis and Review
CCF
 
credit conversion factor
CCP
 
central counterparty
CCR
 
counterparty credit risk
CCRC
 
Corporate Culture and
Responsibility Committee
CDS
 
credit default swap
CEA
 
Commodity Exchange Act
CEO
 
Chief Executive Officer
CET1
 
common equity tier 1
CFO
 
Chief Financial Officer
CGU
 
cash-generating unit
CHF
 
Swiss franc
CIO
 
Chief Investment Office
C&ORC
 
Compliance & Operational
Risk Control
CRM
 
credit risk mitigation (credit
risk) or comprehensive risk
measure (market risk)
CST
 
combined stress test
CUSIP
 
Committee on Uniform
Security Identification
Procedures
CVA
 
credit valuation adjustment
D
DBO
 
defined benefit obligation
DCCP
 
Deferred Contingent
Capital Plan
 
DE&I
 
diversity, equity and
inclusion
DFAST
 
Dodd–Frank Act Stress Test
DM
 
discount margin
DOJ
 
US Department of Justice
DTA
 
deferred tax asset
DVA
 
debit valuation adjustment
E
EAD
 
exposure at default
EB
 
Executive Board
EC
 
European Commission
ECB
 
European Central Bank
ECL
 
expected credit loss
EGM
 
Extraordinary General
Meeting of shareholders
EIR
 
effective interest rate
EL
 
expected loss
EMEA
 
Europe, Middle East and
Africa
EOP
 
Equity Ownership Plan
EPS
 
earnings per share
ESG
 
environmental, social and
governance
ESR
 
environmental and social
risk
ETD
 
exchange-traded derivatives
ETF
 
exchange-traded fund
EU
 
European Union
EUR
 
euro
EURIBOR
 
Euro Interbank Offered Rate
EVE
 
economic value of equity
EY
 
Ernst & Young Ltd
F
FA
 
financial advisor
FCA
 
UK Financial Conduct
Authority
FDIC
 
Federal Deposit Insurance
Corporation
FINMA
 
Swiss Financial Market
Supervisory Authority
FMIA
 
Swiss Financial Market
Infrastructure Act
FSB
 
Financial Stability Board
FTA
 
Swiss Federal Tax
Administration
FVA
 
funding valuation
adjustment
FVOCI
 
fair value through other
comprehensive income
FVTPL
 
fair value through profit or
loss
FX
 
foreign exchange
G
GAAP
 
generally accepted
accounting principles
GBP
 
pound sterling
GCRG
 
Group Compliance,
Regulatory & Governance
GDP
 
gross domestic product
GEB
 
Group Executive Board
GHG
 
greenhouse gas
GIA
 
Group Internal Audit
GRI
 
Global Reporting Initiative
G-SIB
 
global systemically
important bank
H
HQLA
high-quality liquid assets
I
IAS
 
International Accounting
Standards
IASB
 
International Accounting
Standards Board
IBOR
 
interbank offered rate
IFRIC
 
International Financial
Reporting Interpretations
Committee
IFRS
 
accounting standards
Accounting
 
issued by the IASB
Standards
IRB
 
internal ratings-based
IRRBB
 
interest rate risk in the
banking book
ISDA
 
International Swaps and
Derivatives Association
ISIN
 
International Securities
Identification Number
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
102
Abbreviations frequently used in our financial reports (continued)
K
KRT
 
Key Risk Taker
L
LAS
 
liquidity-adjusted stress
LCR
 
liquidity coverage ratio
LGD
 
loss given default
LIBOR
 
London Interbank Offered
Rate
LLC
 
limited liability company
LoD
 
lines of defense
LRD
 
leverage ratio denominator
LTIP
 
Long-Term
 
Incentive Plan
LTV
 
loan-to-value
M
M&A
 
mergers and acquisitions
MRT
 
Material Risk Taker
N
NII
 
net interest income
NSFR
 
net stable funding ratio
NYSE
 
New York Stock Exchange
O
OCA
 
own credit adjustment
OCI
 
other comprehensive
income
OECD
 
Organisation for Economic
Co-operation and
Development
OTC
 
over-the-counter
P
PCI
 
purchased credit impaired
PD
 
probability of default
PIT
 
point in time
P&L
 
profit or loss
PPA
 
purchase price allocation
Q
QCCP
 
qualifying central
counterparty
R
RBC
 
risk-based capital
RbM
 
risk-based monitoring
REIT
 
real estate investment trust
RMBS
 
residential mortgage-
backed securities
RniV
 
risks not in VaR
RoCET1
 
return on CET1 capital
RoU
 
right-of-use
rTSR
 
relative total shareholder
return
RWA
 
risk-weighted assets
S
SA
 
standardized approach or
société anonyme
SA-CCR
 
standardized approach for
counterparty credit risk
SAR
 
Special Administrative
Region of the People’s
Republic of China
SDG
 
Sustainable Development
Goal
SEC
 
US Securities and Exchange
Commission
SFT
 
securities financing
transaction
SI
 
sustainable investing or
sustainable investment
SIBOR
 
Singapore Interbank
Offered Rate
SICR
 
significant increase in credit
risk
SIX
 
SIX Swiss Exchange
SME
 
small and medium-sized
entities
SMF
 
Senior Management
Function
SNB
 
Swiss National Bank
SOR
 
Singapore Swap Offer Rate
SPPI
 
solely payments of principal
and interest
SRB
 
systemically relevant bank
SRM
 
specific risk measure
SVaR
 
stressed value-at-risk
T
TBTF
 
too big to fail
TCFD
 
Task
 
Force on Climate-
related Financial Disclosures
TIBOR
 
Tokyo
 
Interbank Offered
Rate
TLAC
 
total loss-absorbing capacity
TTC
 
through the cycle
U
USD
 
US dollar
V
VaR
 
value-at-risk
VAT
value added tax
This is a
 
general list
 
of the
 
abbreviations frequently
 
used in
 
our financial
 
reporting. Not
 
all of the
 
listed abbreviations
may appear in this particular report.
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
103
Information sources
 
Reporting publications
Annual publications
UBS
 
Group
 
Annual
 
Report
:
 
Published
 
in
 
English,
 
this
 
report
 
provides
 
descriptions
 
of:
 
the
 
Group
 
strategy
 
and
performance; the
 
strategy and
 
performance of
 
the business
 
divisions and
 
Group Items;
 
risk, treasury
 
and capital
management; corporate
 
governance;
 
the compensation
 
framework, including
 
information about
 
compensation for
the Board of Directors and the Group Executive Board members; and financial information, including the financial
statements.
 
“Auszug aus
 
dem Geschäftsbericht
”: This publication
 
provides a German
 
translation of
 
selected sections
 
of the UBS
Group Annual Report.
 
Compensation
 
Report
:
 
This
 
report
 
discusses
 
the
 
compensation
 
framework
 
and
 
provides
 
information
 
about
compensation for
 
the Board
 
of Directors
 
and the
 
Group Executive
 
Board members.
 
It is
 
available in
 
English and
German (
“Vergütungsbericht
”) and represents a component of the UBS
 
Group Annual Report.
Sustainability Report
: Published
 
in English,
 
the Sustainability Report
 
provides disclosures on
 
environmental, social
and governance topics related to the UBS Group.
 
It also provides certain disclosures related to diversity,
 
equity and
inclusion.
Quarterly publications
 
Quarterly financial report
: This report provides an
 
update on performance and strategy (where
 
applicable) for the
respective quarter. It is available in English.
The annual
 
and quarterly
 
publications
 
are available
 
in .pdf
 
and online
 
formats
 
at
ubs.com/investors
, under
 
“Financial
information”.
 
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 UBS Group AG Annual
Report. However, there is
 
a small amount
 
of additional information in
 
Form 20-F that is
 
not presented elsewhere
and is particularly targeted at readers in the US. Readers are encouraged to refer to this additional disclosure. Any
document that filed
 
with the SEC
 
is available on
 
the SEC’s website:
sec.gov
. Refer to
ubs.com/investors
 
for more
information.
 
 
 
 
UBS Group third quarter 2024 report |
Appendix
 
104
Cautionary statement
 
regarding forward-looking statements
 
|
 
This report contains
 
statements that
 
constitute “forward-looking
 
statements”,
 
including but
not limited to management’s
 
outlook for UBS’s financial performance,
 
statements relating to the
 
anticipated effect of transactions
 
and strategic initiatives on
UBS’s
 
business and
 
future
 
development and
 
goals
 
or
 
intentions to
 
achieve climate,
 
sustainability and
 
other social
 
objectives. While
 
these
 
forward-looking
statements represent
 
UBS’s judgments,
 
expectations and
 
objectives concerning the
 
matters described,
 
a number
 
of risks,
 
uncertainties and
 
other important
factors could cause actual
 
developments and results to
 
differ materially from UBS’s
 
expectations. In particular, the global economy
 
may be negatively affected
 
by
shifting political circumstances, including as a result of elections, increased tension
 
between world powers, growing conflicts in the Middle East, as well
 
as the
continuing Russia–Ukraine war.
 
In addition,
 
the ongoing
 
conflicts may
 
continue to
 
cause significant
 
population displacement, and
 
lead to
 
shortages of
 
vital
commodities, including energy shortages and food
 
insecurity outside the areas
 
immediately involved in armed conflict. Governmental responses
 
to the armed
conflicts, including, 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 further 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 its
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 UBS’s
performance and ability to
 
achieve its plans, outlook
 
and other objectives also
 
include, but are
 
not limited to: (i) the
 
degree to which
 
UBS is successful in
 
the
execution of its strategic
 
plans, including its
 
cost reduction and efficiency
 
initiatives and its ability
 
to manage its levels
 
of risk-weighted assets
 
(RWA) and leverage
ratio denominator (LRD),
 
liquidity coverage ratio
 
and other financial
 
resources, including changes
 
in RWA assets and
 
liabilities arising from
 
higher market volatility
and the size of the combined Group; (ii) the degree to which
 
UBS is successful in implementing changes to its businesses to meet changing market, regulatory
and other
 
conditions, 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
 
elevated 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 its businesses that
 
may result
from new regulations or new enforcement of existing standards, including measures to impose new
 
and enhanced duties when interacting with customers
 
and
in the
 
execution and
 
handling of
 
customer transactions;
 
(xii) the liability
 
to which
 
UBS may
 
be exposed,
 
or possible
 
constraints or
 
sanctions that
 
regulatory
authorities might
 
impose on
 
UBS, due
 
to litigation,
 
contractual claims
 
and regulatory
 
investigations, including the
 
potential for
 
disqualification from
 
certain
businesses, potentially large fines or monetary penalties, or the loss of licenses or privileges
 
as a result of regulatory or other governmental sanctions, as well as
the effect that litigation, regulatory and similar matters have on the operational risk component of its RWA, 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 and UBS AG to make payments
 
or distributions, including due
 
to restrictions on the ability of
 
its subsidiaries to make loans
 
or distributions, directly or
indirectly, or,
 
in the case of financial difficulties, due
 
to the exercise by FINMA or
 
the regulators of UBS’s operations in
 
other countries of their broad statutory
powers in relation to protective
 
measures, restructuring and liquidation proceedings; (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 its
 
reputation and the
 
additional consequences
 
that this may
 
have on its
 
business
and performance. The sequence in which the factors above are presented is not
 
indicative of their likelihood of occurrence or the potential magnitude of their
consequences. UBS’s business and financial performance could be affected by other factors identified in
 
its past and future filings and reports,
 
including those
filed with the US Securities and Exchange Commission
 
(the SEC). More detailed information about those factors is set forth
 
in documents furnished by UBS and
filings made by UBS with the SEC, including the UBS Group
 
AG and UBS AG Annual Reports on Form 20- F for the year ended
 
31 December 2023. 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.
edgarq24ubsgroupagp108i0
UBS Group AG
PO Box
CH-8098 Zurich
ubs.com
This
 
Form
 
6-K
 
is
 
hereby
 
incorporated
 
by
 
reference
 
into
 
(1)
 
each
 
of
 
the
 
registration
 
statements
 
on
 
Form
 
F-3
(Registration Numbers
 
333-263376 and
 
333-278934), and
 
on Form
 
S-8 (Registration
 
Numbers 333-200634;
 
333-
200635;
 
333-200641;
 
333-200665;
 
333-215254;
 
333-215255;
 
333-228653;
 
333-230312;
 
333-249143
 
and
 
333-
272975), and
 
into each
 
prospectus outstanding
 
under any
 
of the
 
foregoing registration
 
statements, (2)
 
any outstanding
offering circular or similar document issued
 
or authorized by UBS AG that incorporates by
 
reference any Forms 6-
K of UBS AG that are
 
incorporated into its registration
 
statements filed with the SEC,
 
and (3) the base prospectus of
Corporate Asset Backed
 
Corporation (“CABCO”)
 
dated June 23,
 
2004 (Registration
 
Number 333-111572), the Form
8-K
 
of
 
CABCO
 
filed
 
and
 
dated
 
June
 
23,
 
2004
 
(SEC
 
File
 
Number
 
001-13444),
 
and
 
the
 
Prospectus
 
Supplements
relating to
 
the CABCO
 
Series 2004-101
 
Trust
 
dated May
 
10, 2004
 
and May
 
17, 2004
 
(Registration Number
 
033-
91744 and 033-91744-05).
 
 
 
 
 
 
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
 
registrants have duly caused this
report to be signed on their behalf by the undersigned, thereunto duly
 
authorized.
UBS Group AG
By:
 
/s/
 
Sergio Ermotti
 
___
Name:
 
Sergio Ermotti
Title:
 
Group Chief Executive Officer
 
By:
 
/s/ Todd Tuckner
 
_
Name:
 
Todd Tuckner
Title:
 
Group Chief Financial Officer
By:
 
/s/ Steffen Henrich
 
____________
Name:
 
Steffen Henrich
Title:
 
Group Controller
 
UBS AG
By:
 
/s/
 
Sergio Ermotti
 
_
Name:
 
Sergio Ermotti
Title:
 
President of the Executive Board
By:
 
/s/ Todd Tuckner
 
_
Name:
 
Todd Tuckner
Title:
 
Chief Financial Officer
By:
 
/s/ Steffen Henrich
 
_____________
Name:
 
Steffen Henrich
Title:
 
Controller
 
Date:
 
October 30, 2024