UBS UBS Group AG

Fourth quarter net profit attributable to UBS Group AG shareholders CHF 738 million; 4Q16 diluted earnings per share CHF 0.19

2016 adjusted1 profit before tax CHF 5.4 billion; net profit attributable to UBS Group AG shareholders CHF 3.3 billion; diluted earnings per share CHF 0.86

Proposed ordinary dividend of CHF 0.60 per share for 2016, unchanged from 2015

Fully applied CET1 capital ratio 13.8%; fully applied CET1 leverage ratio 3.53%

UBS launches new philanthropic portfolio to improve child healthcare in world’s most neglected communities

Regulatory News:

UBS Group (NYSE:UBS) (SWX:UBSN) / ISIN: CH0024899483 net profit for 2016 was CHF 3.3 billion. Adjusted1 profit before tax for the year was CHF 5.4 billion and reported profit before tax was CHF 4.2 billion. The full-year adjusted1 return on tangible equity was 9.2%. Despite very challenging market conditions and macroeconomic and geopolitical uncertainty, UBS delivered solid results in 2016, while prudently managing resources and risk. As of 31 December 2016, the Group achieved CHF 1.6 billion of annualized net cost savings, an improvement from CHF 1.1 billion at year-end 2015, and is on track to achieve its CHF 2.1 billion target by the end of 2017.

UBS’s capital position remains strong, with a fully applied CET1 capital ratio of 13.8% and a fully applied CET1 leverage ratio of 3.53%. Risk-weighted assets (RWA) were CHF 223 billion. The fully applied leverage ratio denominator (LRD) was CHF 870 billion at year end.

UBS’s Board of Directors intends to propose a dividend of CHF 0.60 per share to shareholders for the financial year 2016. Subject to shareholder approval, the dividend will be paid out of capital contribution reserves on 10 May 2017 to shareholders of record as of 9 May 20172 . The ex-dividend date will be 8 May 2017.

“Despite a very challenging market environment in 2016, we achieved solid results, thanks to our balanced business and geographic mix, as well as our strong focus on executing our strategy. Wealth Management Americas delivered a record performance, and our Swiss Personal and Corporate business achieved its best full-year results since 2008. While we saw persistent client risk aversion and substantial cross-border outflows, we generated over CHF 40 billion of net new money in our wealth management businesses.”

Sergio P. Ermotti, Group Chief Executive Officer

Information in this release is presented for UBS Group AG on a consolidated basis unless otherwise specified. Financial information for UBS AG (consolidated) does not differ materially from UBS Group AG (consolidated) and a comparison between UBS Group AG (consolidated) and UBS AG (consolidated) is provided at the end of this news release.

Full-year 2016: Group, divisional and Corporate Center performance overview

UBS’s full-year 2016 adjusted1 profit before tax was CHF 5,443 million, and reported profit before tax was CHF 4,192 million. Net profit attributable to shareholders was CHF 3,306 million. This included expenses for provisions for litigation, regulatory and similar matters of CHF 693 million, as well as restructuring expenses of CHF 1,458 million. Adjusted1 return on tangible equity was 9.2%.

Wealth Management delivered an adjusted1 profit before tax of CHF 2,397 million, down 15% year on year. Net new money was CHF 26.8 billion, despite cross-border outflows of CHF 14 billion. Net mandate sales were CHF 14.0 billion, with mandate penetration increasing 50 basis points to 26.9% of invested assets, while total invested assets increased by CHF 30 billion. Adjusted1 net margin decreased by 5 basis points to 25 basis points.

Wealth Management Americas posted a record adjusted1 profit before tax of USD 1,250 million, a 43% increase year on year, reflecting higher net interest income and lower expenses for provisions for litigation, regulatory and similar matters. Net new money was USD 15.4 billion, and managed accounts increased 70 basis points to 34.7% of invested assets, while total invested assets increased by USD 78 billion. Adjusted1 net margin improved by 4 basis points to 12 basis points.

Personal & Corporate Banking delivered an adjusted1 profit before tax of CHF 1,754 million, the best full-year results since 2008 and up 4% year on year, despite negative interest rates. The net new business volume growth in personal banking was 3.1% with the highest net new client acquisition on record.

Asset Management recorded an adjusted1 profit before tax of CHF 552 million, down 10% year on year. Net new money, excluding money markets, was negative at CHF 22.5 billion.

The Investment Bank posted an adjusted1 profit before tax of CHF 1,503 million, down 34% compared with a strong prior year. The adjusted1 return on attributed equity was 19.6%. Investor Client Services adjusted1 revenues were down 11% year on year, mostly due to a decrease in Equities. Corporate Client Solutions revenues decreased 20%, mostly due to lower equity capital market revenues. RWA increased by CHF 8 billion to CHF 70 billion, largely due to regulatory inflation, while LRD was reduced by CHF 37 billion to CHF 231 billion at year-end.

Corporate Center – Services recorded an adjusted1 loss before tax of CHF 912 million. Group Asset and Liability Management recorded an adjusted1 loss before tax of CHF 96 million. Non-core and Legacy Portfolio posted an adjusted1 loss before tax of CHF 991 million, driven by expenses for provisions for litigation, regulatory and similar matters of CHF 482 million. Non-core and Legacy Portfolio LRD was reduced by CHF 16 billion to CHF 22 billion at year-end.

Fourth quarter 2016: Group, divisional and Corporate Center performance overview

UBS’s fourth quarter adjusted1 profit before tax was CHF 1,105 million, and reported profit before tax was CHF 848 million. Net profit attributable to shareholders was CHF 738 million. This included provisions for litigation, regulatory and similar matters of CHF 162 million, as well as restructuring expenses of CHF 372 million. Adjusted1 return on tangible equity was 8.2%.

Wealth Management delivered an adjusted1 profit before tax of CHF 511 million, up 1% from the fourth quarter of 2015, reflecting lower operating expenses offset by decreased operating income. This includes provisions for litigation, regulatory and similar matters of CHF 62 million in the fourth quarter of 2016, compared with CHF 79 million in the fourth quarter of 2015. Negative net new money of CHF 4.1 billion was driven by cross-border outflows of CHF 7.4 billion, mainly driven by outflows from emerging markets and Asia Pacific.

Wealth Management Americas posted an adjusted1 profit before tax of USD 358 million, a substantial increase year on year, reflecting lower expenses for provisions for litigation, regulatory and similar matters, which were USD 52 million in the fourth quarter of 2016, as well as higher recurring fees and net interest income. Net new money was negative USD 1.3 billion.

Personal & Corporate Banking recorded an adjusted1 profit before tax of CHF 395 million, flat year on year, as increased expenses offset higher income. The annualized net new business volume growth in personal banking was 1.1%.

Asset Management delivered an adjusted1 profit before tax of CHF 156 million, up 2% from the fourth quarter of 2015. Net new money, excluding money markets, was negative CHF 9.8 billion.

The Investment Bank posted an adjusted1 profit before tax of CHF 344 million, an increase of 54% year on year. The annualized adjusted1 return on attributed equity was 18.1%. Adjusted1 Investor Client Services revenues were up 10% year on year, as an increase in Equities more than offset a decrease in FX, Rates and Credit. Corporate Client Solutions revenues increased 9%. RWA increased to CHF 70 billion, as market risk RWA rose from exceptionally low levels. LRD reduced to CHF 231 billion.

Corporate Center – Services recorded an adjusted1 loss before tax of CHF 275 million. Group Asset and Liability Management recorded an adjusted1 loss before tax of CHF 171 million. Non-core and Legacy Portfolio posted an adjusted1 loss before tax of CHF 215 million. Non-core and Legacy Portfolio LRD was reduced by CHF 3 billion to CHF 22 billion at year-end.

1 Refer to the “Performance by business division and Corporate Center unit – reported and adjusted“ table in this news release.

2 UBS expects that dividends will be paid out of capital contribution reserves for the foreseeable future. Dividends paid out of capital contribution reserves are not subject to the deduction of Swiss withholding tax. For US federal income tax purposes, we expect that the dividend will be paid out of current or accumulated profits.

UBS Optimus Foundation launches groundbreaking philanthropic health portfolio

Going Further: a philanthropic health portfolio breaks new ground in financing and delivering large-scale, transformational change for the world’s most neglected and underserved communities. UBS Optimus Foundation plans to co-fund the portfolio. Furthermore, all donations will be doubled by portfolio partners, increasing the reach and impact of each donation significantly. Optimus guarantees that 100% of each donation will go to portfolio programs, as UBS covers all administrative costs.

UBS also recently announced plans to launch several new impact investment funds totaling USD 5 billion over the next five years to support the UN Sustainable Development Goals.

In 2016, 18,386 – or over 30% – of UBS employees recorded a total of 155,325 volunteer hours in social and community engagement projects as part of our Community Affairs program. That compares with 27% of UBS employees who volunteered in 2015.

Winners of UBS Social Innovators program announced

The finals in Zurich, London and Singapore brought to a close the first phase of the UBS Social Innovators program. The program sought out high-potential social enterprises delivering innovative solutions to society’s most pressing challenges. Choba Choba, a Swiss chocolate brand owned by its cocoa farmers, was chosen as the winner from Switzerland. Kiron, a Germany-based social enterprise that integrates refugees through higher education was chosen as the winner from EMEA, while the provider of e-Doctor clinics in rural India, Karma Healthcare, was named APAC winner.

Awards and achievements

UBS claimed the title as Best Global Private Bank and Best Private Bank in Asia at the FT’s PWM/The Banker Awards 2016 in October. The firm was also awarded Most Innovative Investment Bank for M&A at The Banker Investment Banking Awards 2016. UBS was named Europe Financial Bond House of the Year by the International Financing Review for the second year running. UBS Switzerland received the Euromoney Award 2016 for Best Cash Manager Switzerland for the sixth time in a row.

UBS continued to innovate for the benefit of its customers. In the fourth quarter, UBS Atrium was launched in Switzerland, a platform that connects borrowers looking to finance commercial property investments with external institutional investors. Our UBS SmartWealth digital initiative, launched in the UK in the fourth quarter, exceeded expectations in attracting new clients during its pilot phase. The full launch is planned for February 2017. At the end of 2016, we also launched "Ask UBS", a voice-activated service in partnership with Amazon, which gives users access to investment insights and opinions of UBS CIO House View, as well as explanations of financial terminology.

Outlook

Although macroeconomic uncertainty, geopolitical tensions and divisive politics continue to affect client sentiment and transaction volumes, we have begun to observe improved investor confidence, primarily in the US, which may benefit our wealth management businesses. Lower than expected and negative interest rates, particularly in Switzerland and the eurozone, continue to present headwinds to net interest margins, which may be offset by the effect of higher US dollar interest rates. Implementing Switzerland's new bank capital standards and the proposed further changes to the international regulatory framework for banks will result in increasing capital requirements and costs. UBS will continue to execute its strategy with discipline, positioning it to mitigate these challenges and to benefit from any further improvement in market conditions.

  Performance by business division and Corporate Center unit – reported and adjusted¹,²       For the quarter ended 31.12.16 CHF million    

WealthManage-ment

 

WealthManage-

mentAmericas

 

Personal&Corporate

Banking

 

Asset

Manage

ment

 

InvestmentBank

 

CC –Services

 

CC –GroupALM

 

CC – Non-core andLegacyPortfolio

 

UBS

Operating income as reported     1,782   2,076   941   499   2,014   (59)   (144)   (53)   7,055 of which: gains on sale of financial assets available for sale⁴         10           78               88 of which: net foreign currency translation gains⁵                             27       27 Operating income (adjusted)     1,782   2,066   941   499   1,936   (59)   (171)   (53)   6,940                                         Operating expenses as reported     1,413   1,737   567   356   1,708   256   0   170   6,206 of which: personnel-related restructuring expenses     15   1   2   1   40   114   0   0   174 of which: non-personnel-related restructuring expenses     25   0   0   5   5   163   0   0   197 of which: restructuring expenses allocated from CC ­ Services     103   30   19   5   72   (237)   0   8   0 Operating expenses (adjusted)     1,270   1,706   546   344   1,592   216   0   162   5,834

of which: expenses for provisions for litigation, regulatory andsimilar matters

    62   53   7   1   14   (2)   0   27   162                                         Operating profit / (loss) before tax as reported     368   339   374   144   306   (315)   (144)   (223)   848 Operating profit / (loss) before tax (adjusted)     511   360   395   156   344   (275)   (171)   (215)   1,105                   For the quarter ended 31.12.15 CHF million    

WealthManage-ment

 

WealthManage-mentAmericas

 

Personal &CorporateBanking

 

AssetManagement

 

InvestmentBank

 

CC –

Services³

 

CC –GroupALM

 

CC – Non-core andLegacyPortfolio

  UBS Operating income as reported     1,869   1,885   915   568   1,721   (54)   (59)   (71)   6,775 of which: net foreign currency translation gains⁵                             115       115 of which: own credit on financial liabilities designated at fair value                             35       35 of which: gains / (losses) on sale of subsidiaries and businesses     (28)           56                   28 of which: net losses related to the buyback of debt                             (257)       (257) Operating income (adjusted)     1,897   1,885   915   512   1,721   (54)   48   (71)   6,854                                         Operating expenses as reported     1,526   1,871   560   397   1,641   291   (3)   258   6,541 of which: personnel-related restructuring expenses     3   0   0   3   12   144   0   1   164 of which: non-personnel-related restructuring expenses     14   0   0   8   2   252   0   0   276 of which: restructuring expenses allocated from CC ­ Services     116   50   41   27   129   (377)   0   15   0 Operating expenses (adjusted)     1,393   1,821   519   359   1,498   272   (3)   241   6,100

of which: expenses for provisions for litigation, regulatory andsimilar matters

    79   233   0   (3)   4   1   0   51   365                                         Operating profit / (loss) before tax as reported     344   14   355   171   80   (345)   (56)   (329)   234 Operating profit / (loss) before tax (adjusted)     505   64   396   153   223   (326)   51   (312)   754

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table may differ from those originally published in quarterly and annualreports due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events afterthe reporting period. 3 CC ­ Services operating expenses presented in this table are after service allocations to business divisions and other Corporate Center units. 4 Includes a gain on thepartial sale of our investment in Markit in the Investment Bank. 5 Related to the disposal of foreign subsidiaries and branches.

    Performance by business division and Corporate Center unit – reported and adjusted¹,²       For the year ended 31.12.16 CHF million    

WealthManage-ment

 

WealthManage-mentAmericas

 

Personal&CorporateBanking

 

Asset

Management

 

InvestmentBank

 

CC –Services³

 

CC –GroupALM

 

CC – Non-core andLegacyPortfolio

  UBS Operating income as reported     7,291   7,782   3,984   1,931   7,688   (102)   (219)   (36)   28,320 of which: gains on sale of financial assets available for sale⁴     21   10   102       78               211 of which: gains on sales of real estate                         120           120 of which: gains related to investments in associates             21                       21 of which: net foreign currency translation losses⁵                             (122)       (122) of which: losses on sales of subsidiaries and businesses     (23)                               (23) Operating income (adjusted)     7,293   7,772   3,861   1,931   7,610   (222)   (97)   (36)   28,113                                         Operating expenses as reported     5,343   6,675   2,224   1,479   6,684   747   (1)   976   24,128 of which: personnel-related restructuring expenses     53   7   4   15   154   518   0   1   751 of which: non-personnel-related restructuring expenses     55   0   0   15   14   623   0   0   706 of which: restructuring expenses allocated from CC ­ Services     339   132   113   70   410   (1,084)   0   21   0 Operating expenses (adjusted)     4,896   6,536   2,107   1,379   6,107   690   (1)   955   22,670

of which: expenses for provisions for litigation, regulatory andsimilar matters

    69   96   3   (2)   42   2   0   482   693                                         Operating profit / (loss) before tax as reported     1,948   1,107   1,760   452   1,004   (849)   (218)   (1,012)   4,192 Operating profit / (loss) before tax (adjusted)     2,397   1,236   1,754   552   1,503   (912)   (96)   (991)   5,443                   For the year ended 31.12.15 CHF million    

WealthManage-ment

 

WealthManage-mentAmericas

 

Personal &CorporateBanking

 

AssetManage-ment

 

InvestmentBank

 

CC –Services³

 

CC –GroupALM

 

CC – Non-core andLegacyPortfolio

  UBS Operating income as reported     8,155   7,381   3,877   2,057   8,821   241   277   (203)   30,605 of which: own credit on financial liabilities designated at fair value                             553       553 of which: gains on sales of real estate                         378           378 of which: gains on sales of subsidiaries and businesses     169           56                   225

of which: net foreign currency translation gains⁵

                            88       88 of which: gains related to investments in associates     15       66                       81 of which: gains on sale of financial assets available for sale⁴                     11               11 of which: net losses related to the buyback of debt                             (257)       (257) Operating income (adjusted)     7,971   7,381   3,811   2,001   8,810   (137)   (107)   (203)   29,526                                         Operating expenses as reported     5,465   6,663   2,231   1,474   6,929   1,059   (5)   1,301   25,116 of which: personnel-related restructuring expenses     20   0   2   4   14   406   0   14   460 of which: non-personnel-related restructuring expenses     38   0   0   11   7   719   0   0   775 of which: restructuring expenses allocated from CC ­ Services     265   137   99   68   376   (986)   0   43   0 of which: gain related to a change to retiree benefit plans in the US         (21)                           (21) of which: impairment of an intangible asset                     11               11 Operating expenses (adjusted)     5,142   6,547   2,130   1,392   6,522   919   (5)   1,245   23,891

of which: expenses for provisions for litigation, regulatory andsimilar matters

    104   351   (2)   (3)   2   15   0   620   1,087                                         Operating profit / (loss) before tax as reported     2,689   718   1,646   584   1,892   (818)   282   (1,503)   5,489 Operating profit / (loss) before tax (adjusted)     2,828   834   1,681   610   2,288   (1,056)   (102)   (1,447)   5,635

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table may differ from those originally published in quarterly and annualreports due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events afterthe reporting period. 3 CC ­ Services operating expenses presented in this table are after service allocations to business divisions and other Corporate Center units. 4 Includes gains onpartial sales of our investment in Markit in 2016 and 2015 in the Investment Bank as well as a gain on the sale of our investment in Visa Europe in 2016 in Wealth Management and Personal &Corporate Banking. 5 Related to the disposal of foreign subsidiaries and branches.

                UBS Group AG key figures                             As of or for the quarter ended As of or for the year ended CHF million, except where indicated     31.12.16   30.9.16   31.12.15     31.12.16   31.12.15                           Group results                         Operating income     7,055   7,029   6,775     28,320   30,605 Operating expenses     6,206   6,152   6,541     24,128   25,116 Operating profit / (loss) before tax     848   877   234     4,192   5,489 Net profit / (loss) attributable to shareholders     738   827   949     3,306   6,203 Diluted earnings per share (CHF)¹     0.19   0.22   0.25     0.86   1.64   Key performance indicators²                         Profitability                         Return on tangible equity (%)     6.5   7.3   8.1     7.2   13.7 Return on assets, gross (%)     3.0   2.9   2.8     3.0   3.1 Cost / income ratio (%)     87.7   87.5   95.7     85.1   81.8 Growth                         Net profit growth (%)     (22.2)   (60.0)   10.6     (46.7)   79.0 Net new money growth for combined wealth management businesses (%)³     (1.1)   2.1   2.9     2.1   2.2 Resources                         Common equity tier 1 capital ratio (fully applied, %)⁴     13.8   14.0   14.5     13.8   14.5 Going concern leverage ratio (phase-in, %)⁵     6.4   6.2         6.4       Additional information                         Profitability                         Return on equity (RoE) (%)     5.5   6.2   6.9     6.1   11.8 Return on risk-weighted assets, gross (%)�     12.9   13.1   12.9     13.2   14.4 Resources                         Total assets     935,016   935,206   942,819     935,016   942,819 Equity attributable to shareholders     53,723   53,300   55,313     53,723   55,313 Common equity tier 1 capital (fully applied)⁴     30,693   30,254   30,044     30,693   30,044 Common equity tier 1 capital (phase-in)⁴     37,788   37,207   40,378     37,788   40,378 Risk-weighted assets (fully applied)⁴     222,677   216,830   207,530     222,677   207,530 Common equity tier 1 capital ratio (phase-in, %)⁴     16.8   16.9   19.0     16.8   19.0 Going concern capital ratio (fully applied, %)⁵     17.9   18.0         17.9     Going concern capital ratio (phase-in, %)⁵     24.7   24.8         24.7     Common equity tier 1 leverage ratio (fully applied, %)⁷     3.5   3.4   3.3     3.5   3.3 Going concern leverage ratio (fully applied, %)⁵     4.6   4.4         4.6     Leverage ratio denominator (fully applied)⁷     870,470   877,313   897,607     870,470   897,607 Liquidity coverage ratio (%)⁸     132   124   124     132   124 Other                         Invested assets (CHF billion)⁹     2,821   2,747   2,689     2,821   2,689 Personnel (full-time equivalents)     59,387   59,946   60,099     59,387   60,099 Market capitalization     61,420   50,941   75,147     61,420   75,147 Total book value per share (CHF)     14.47   14.37   14.75     14.47   14.75 Tangible book value per share (CHF)     12.71   12.66   13.00     12.71   13.00

1 Weighted average shares outstanding for diluted earnings per share were 3,828 million shares in the fourth quarter of 2016 (third quarter of 2016: 3,812 million shares; fourth quarter of2015: 3,852 million shares) and 3,824 million shares for the year ended 31 December 2016 (year ended 31 December 2015: 3,781 million shares). 2 Refer to the “Measurement ofperformance” section of our Annual Report 2015. 3 Based on adjusted net new money, which excludes the negative effect on net new money (third quarter of 2015: CHF 3.3 billion, secondquarter of 2015: CHF 6.6 billion) in Wealth Management from our balance sheet and capital optimization program. 4 Based on the Basel III framework as applicable for Swiss systemicallyrelevant banks (SRBs). Refer to the “Capital management” section of the UBS Group fourth quarter 2016 report for more information. 5 Based on the revised Swiss SRB framework thatbecame effective on 1 July 2016. 6 Based on fully applied risk-weighted assets. 7 Calculated in accordance with Swiss SRB rules. Refer to the “Capital management” section of the UBSGroup fourth quarter 2016 report for more information. 8 Refer to the “Balance sheet, liquidity and funding management” section of the UBS Group fourth quarter 2016 report for moreinformation. Figures represent a 3-month average. 9 Includes invested assets for Personal & Corporate Banking.

                      Income statement                                     For the quarter ended % change from For the year ended CHF million     31.12.16   30.9.16   31.12.15     3Q16   4Q15     31.12.16   31.12.15 Net interest income     1,762   1,775   1,759     (1)   0     6,413   6,732 Credit loss (expense) / recovery     (24)   (4)   (59)     500   (59)     (37)   (117) Net interest income after credit loss expense     1,738   1,771   1,700     (2)   2     6,376   6,615 Net fee and commission income     4,161   4,056   4,218     3   (1)     16,397   17,140 Net trading income     946   1,098   898     (14)   5     4,948   5,742 of which: net trading income excluding own credit     946   1,098   863     (14)   10     4,948   5,190 of which: own credit on financial liabilities designated at fair value             35                   553 Other income     209   104   (41)     101         599   1,107 Total operating income     7,055   7,029   6,775     0   4     28,320   30,605 of which: net interest and trading income     2,708   2,873   2,657     (6)   2     11,361   12,474 Personnel expenses     3,868   3,942   3,843     (2)   1     15,720   15,981 General and administrative expenses     2,063   1,939   2,413     6   (15)     7,332   8,107 Depreciation and impairment of property, equipment and software     255   248   260     3   (2)     985   920 Amortization and impairment of intangible assets     21   23   24     (9)   (13)     91   107 Total operating expenses     6,206   6,152   6,541     1   (5)     24,128   25,116 Operating profit / (loss) before tax     848   877   234     (3)   262     4,192   5,489 Tax expense / (benefit)     109   49   (715)     122         805   (898) Net profit / (loss)     739   829   950     (11)   (22)     3,388   6,386 Net profit / (loss) attributable to non-controlling interests     1   1   1     0   0     82   183 Net profit / (loss) attributable to shareholders     738   827   949     (11)   (22)     3,306   6,203   Comprehensive income                                   Total comprehensive income     173   191   1,164     (9)   (85)     2,272   5,781 Total comprehensive income attributable to non-controlling interests     (12)   7   38               352   83 Total comprehensive income attributable to shareholders     185   184   1,126     1   (84)     1,919   5,698     Comparison UBS Group AG (consolidated) versus UBS AG (consolidated)       As of or for the quarter ended 31.12.16     As of or for the quarter ended 30.9.16       As of or for the quarter ended 31.12.15

CHF million, except where indicated

   

UBS GroupAG(consolidated)

 

UBS AG(consolidated)

 

Difference(absolute)

     

UBS GroupAG(consolidated)

 

UBS AG(consolidated)

 

Difference(absolute)

     

UBS GroupAG(consolidated)

 

UBS AG(consolidated)

 

Difference(absolute)

            Income statement                                               Operating income     7,055   7,118   (63)       7,029   7,049   (20)       6,775   6,771   4 Operating expenses     6,206   6,271   (65)       6,152   6,161   (9)       6,541   6,543   (2) Operating profit / (loss) before tax     848   847   1       877   888   (11)       234   228   6 of which: Wealth Management     368   368   0       504   502   2       344   342   2 of which: Wealth Management Americas     339   338   1       320   313   7       14   8   6 of which: Personal & Corporate Banking     374   375   (1)       453   454   (1)       355   356   (1) of which: Asset Management     144   144   0       104   104   0       171   171   0 of which: Investment Bank     306   304   2       161   155   6       80   83   (3) of which: Corporate Center     (682)   (681)   (1)       (665)   (640)   (25)       (729)   (732)   3 of which: Services     (315)   (307)   (8)       (218)   (216)   (2)       (345)   (349)   4 of which: Group ALM     (144)   (150)   6       30   53   (23)       (56)   (54)   (2) of which: Non-core and Legacy Portfolio     (223)   (224)   1       (477)   (476)   (1)       (329)   (329)   0 Net profit / (loss)     739   741   (2)       829   847   (18)       950   951   (1)

of which: net profit / (loss) attributable toshareholders

    738   740   (2)       827   846   (19)       949   950   (1)

of which: net profit / (loss) attributable topreferred noteholders

        0   0           0   0           0   0

of which: net profit / (loss) attributable tonon-controlling interests

    1   1   0       1   1   0       1   1   0   Statement of comprehensive income                                               Other comprehensive income     (566)   (566)   0       (637)   (638)   1       214   214   0 of which: attributable to shareholders     (553)   (553)   0       (643)   (643)   0       177   177   0

of which: attributable to preferrednoteholders

        (12)   12           4   (4)           35   (35)

of which: attributable to non-controllinginterests

    (13)   (1)   (12)       5   1   4       37   2   35 Total comprehensive income     173   175   (2)       191   210   (19)       1,164   1,165   (1) of which: attributable to shareholders     185   187   (2)       184   203   (19)       1,126   1,126   0

of which: attributable to preferrednoteholders

        (12)   12           4   (4)           35   (35)

of which: attributable to non-controllinginterests

    (12)   0   (12)       7   3   4       38   3   35   Balance sheet                                               Total assets     935,016   935,353   (337)       935,206   935,683   (477)       942,819   943,256   (437) Total liabilities     880,612   880,907   (295)       881,213   881,433   (220)       885,511   886,013   (502) Total equity     54,404   54,445   (41)       53,993   54,250   (257)       57,308   57,243   65

of which: equity attributable toshareholders

    53,723   53,764   (41)       53,300   53,556   (256)       55,313   55,248   65

of which: equity attributable to preferrednoteholders

        642   (642)           654   (654)           1,954   (1,954)

of which: equity attributable to non-controlling interests

    682   40   642       693   40   653       1,995   41   1,954   Capital information                                               Common equity tier 1 capital (fully applied)     30,693   33,054   (2,361)       30,254   32,110   (1,856)       30,044   32,042   (1,998) Common equity tier 1 capital (phase-in)     37,788   40,059   (2,271)       37,207   38,994   (1,787)       40,378   41,516   (1,138) Going concern capital (fully applied)¹     39,844   36,901   2,943       39,003   35,885   3,118                 Going concern capital (phase-in)¹     55,593   51,669   3,924       54,623   50,522   4,101                 Risk-weighted assets (fully applied)     222,677   223,232   (555)       216,830   217,297   (467)       207,530   208,186   (656)

Common equity tier 1 capital ratio (fullyapplied, %)

    13.8   14.8   (1.0)       14.0   14.8   (0.8)       14.5   15.4   (0.9)

Common equity tier 1 capital ratio (phase-in, %)

    16.8   17.7   (0.9)       16.9   17.7   (0.8)       19.0   19.5   (0.5)

Going concern capital ratio (fully applied,%)¹

    17.9   16.5   1.4       18.0   16.5   1.5                 Going concern capital ratio (phase-in, %)¹     24.7   22.9   1.8       24.8   23.0   1.8                 Leverage ratio denominator (fully applied)     870,470   870,987   (517)       877,313   877,926   (613)       897,607   898,251   (644)

Common equity tier 1 leverage ratio (fullyapplied)

    3.5   3.8   (0.3)       3.4   3.7   (0.3)       3.3   3.6   (0.3)

Going concern leverage ratio (fully applied,%)¹

    4.6   4.2   0.4       4.4   4.1   0.3                

Going concern leverage ratio (phase-in,%)¹

    6.4   5.9   0.5       6.2   5.7   0.5                 1 Based on the revised Swiss SRB framework that became effective on 1 July 2016.

 

UBS’s fourth quarter 2016 report, news release and slide presentation will be available from 06:45 CET on Friday, 27 January 2017, at www.ubs.com/quarterlyreporting.

UBS will hold a presentation of its fourth quarter 2016 results on Friday, 27 January 2017. The results will be presented by Sergio P. Ermotti, Group Chief Executive Officer, Kirt Gardner, Group Chief Financial Officer, Martin Osinga, Global Head of Investor Relations ad interim, and Hubertus Kuelps, Group Head of Communications & Branding.

Time

• 09:00–11:00 CET

• 08:00–10:00 GMT

• 03:00–05:00 US EST

Audio webcast

The presentation for analysts can be followed live on www.ubs.com/quarterlyreporting with a simultaneous slide show.

Webcast playback

An audio playback of the results presentation will be made available at www.ubs.com/investors later in the day.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations 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. These factors include, but are not limited to: (i) the degree to which UBS is successful in executing its announced strategic plans, including its cost reduction and efficiency initiatives and its targets for risk-weighted assets (RWA) and leverage ratio denominator (LRD), and the degree to which UBS is successful in implementing changes to its wealth management businesses to meet changing market, regulatory and other conditions; (ii) continuing low or negative interest rate environment, 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, and currency exchange rates, and the effects of economic conditions, market developments, and geopolitical tensions on the financial position or creditworthiness of UBS’s clients and counterparties as well as on client sentiment and levels of activity; (iii) changes in the availability of capital and funding, including any changes in UBS’s credit spreads and ratings, as well as availability and cost of funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC); (iv) changes in or the implementation of financial legislation and regulation in Switzerland, the US, the UK and other financial centers that may impose, or result in, more stringent capital, TLAC, leverage ratio, liquidity and funding 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 would have on UBS’s business activities; (v) uncertainty as to when and to what degree the Swiss Financial Market Supervisory Authority (FINMA) will approve, or confirm, limited reductions of gone concern requirements due to measures to reduce resolvability risk; (vi) the degree to which UBS is successful in implementing further changes to its legal structure to improve its resolvability and meet related regulatory requirements, including changes in legal structure and reporting required to implement US enhanced prudential standards, implementing a service company model, completing the transfer of the Asset Management business to a holding company, and the potential need to make further changes to the legal structure or booking model of UBS Group in response to legal and regulatory requirements relating to capital requirements, resolvability requirements and proposals in Switzerland and other jurisdictions for mandatory structural reform of banks or systemically important institutions and the extent to which such changes have the intended effects; (vii) the uncertainty arising from the timing and nature of the UK exit from the EU and the potential need to make changes in UBS’s legal structure and operations as a result of it; (viii) changes in UBS’s competitive position, including whether differences in regulatory capital and other requirements among the major financial centers will adversely affect UBS’s ability to compete in certain lines of business; (ix) changes in the standards of conduct applicable to our businesses that may result from new regulation or new enforcement of existing standards, including recently enacted and proposed measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (x) 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 or loss of licenses or privileges as a result of regulatory or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the operational risk component of our RWA; (xi) the effects on UBS’s cross-border banking business of tax or regulatory developments and of possible changes in UBS’s policies and practices relating to this business; (xii) 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 including differences in compensation practices; (xiii) 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; (xiv) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (xv) whether UBS will be successful in keeping pace with competitors in updating its technology, including development of digital channels and tools, and in our trading businesses; (xvi) the occurrence of operational failures, such as fraud, misconduct, unauthorized trading, financial crime, cyber-attacks, and systems failures; (xvii) restrictions on the ability of UBS Group AG to make payments or distributions, including due to restrictions on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by FINMA or the regulators of UBS’s operations in other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation proceedings; (xviii) the degree to which changes in regulation, capital or legal structure, financial results or other factors, including methodology, assumptions and stress scenarios, may affect UBS’s ability to maintain its stated capital return objective; and (xix) the effect that these or other factors or unanticipated events may have on our reputation and the additional consequences that this may have on our business and performance. The sequence in which the factors above are presented is not indicative of their likelihood of occurrence or the potential magnitude of their consequences. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS’s Annual Report on Form 20-F for the year ended 31 December 2015. 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 news release may not add up precisely to the totals provided in the tables and text. Percentages, percent changes and absolute variances are calculated on the basis of rounded figures displayed in the tables and text and may not precisely reflect the percentages, percent changes and absolute variances that would be calculated on the basis of figures that are not rounded.

Tables

Within tables, blank fields generally indicate that the field is not applicable or not 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. Percentage changes are presented as a mathematical calculation of the change between periods.

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UBS Group AG and UBS AGInvestor contactSwitzerland: +41-44-234 41 00orMedia contactSwitzerland: +41-44-234 85 00UK: +44-207-567 47 14Americas: +1-212-882 58 57APAC: +852-297-1 82 00www.ubs.com