Net profit attributable to shareholders CHF 2.1bn; diluted
earnings per share CHF 0.54Adjusted1 profit
before tax CHF 1.0bnFully applied Swiss SRB Basel III CET1
capital ratio of 14.3%Fully applied Swiss SRB leverage ratio
up 30 bps to 5.0%, of which CET1 3.3%14.5% adjusted RoTE
year-to-date, expect to outperform full-year
target2UBS named industry group leader in the Dow
Jones Sustainability Indices
Regulatory News:
UBS (NYSE:UBS)(SWX:UBSN) delivered a solid third-quarter
adjusted1 profit before tax of CHF 979 million in a very
challenging economic environment. Net profit attributable to UBS
Group AG shareholders was CHF 2,068 million, with diluted earnings
per share of CHF 0.54. The third quarter included a net tax benefit
of CHF 1,295 million, mainly related to a net upward revaluation of
deferred tax assets, CHF 592 million of net charges for provisions
for litigation, regulatory and similar matters and CHF 298 million
of net restructuring charges.
“I’m pleased with the quarter. We stayed close to our clients in
a very challenging environment. Disciplined execution and our
diversified business model allowed us to deliver strong returns for
our shareholders while continuing to invest in our future.”
Sergio P. Ermotti, Group Chief Executive
Officer
Business division highlights
- Wealth Management delivered an
adjusted1 profit before tax of CHF 698 million and adjusted net new
money of CHF 3.5 billion, excluding the effects of UBS’s balance
sheet and capital optimization program. Recurring income benefitted
from increased mandate penetration and the continued effects of
pricing initiatives.
- Wealth Management Americas
posted an adjusted1 profit before tax of USD 287 million, with
recurring net fee income and net interest income at record levels.
Productivity per advisor for revenue and invested assets was
industry-leading. Net new money was positive at USD 0.5
billion.
- Retail & Corporate had its
best result for the first nine months of the year since 2010, with
an adjusted1 third-quarter profit before tax of CHF 428 million,
good net new business volume growth for retail clients, and net new
client accounts hitting a new record.
- Asset Management reported an
adjusted1 profit before tax of CHF 137 million. Excluding money
market flows, net new money outflows were CHF 7.6 billion, driven
by client liquidity needs.
- The Investment Bank achieved an
adjusted1 profit before tax of CHF 614 million with a strong
performance in both Equities and FX, Rates and Credit compared to
the prior year quarter. The business maintained its strict risk
profile and resource limit discipline.
Information in this release is presented for UBS Group AG on a
consolidated basis unless otherwise specified. UBS AG will publish
its third quarter 2015 report in electronic form on 6 November 2015
at www.ubs.com/quarterlyreporting.
Results by business division and Corporate Center
CHF million
Total operating income Total operating expenses
Operating profit / (loss) before tax
For the quarter ended
30.9.15 30.6.15
% change
30.9.15 30.6.15
% change
30.9.15 30.6.15 %
change
Wealth Management 1,958 2,080 (6)
1,319
1,324 0
639 756 (15)
Wealth Management Americas
1,871 1,823 3
1,612 1,631 (1)
259 191 36
Retail & Corporate 1,030 952 8
564 555 2
466 397 17
Asset Management 502 476 5
388 346 12
114 130 (12)
Investment Bank
2,088 2,355 (11)
1,592 1,804 (12)
496 551 (10)
Corporate Center (280) 131
906 399 127
(1,186) (267) 344 of which: Services
(38) (41) (7)
219 212 3
(257) (253) 2 of which: Group ALM
(116) 138
(5) 7
(111) 132 of which: Non-core
and Legacy Portfolio
(126) 35
692 180 284
(818) (145) 464
UBS 7,170 7,818 (8)
6,382 6,059 5
788 1,759 (55)
Third quarter 2015: Divisional and Corporate Center
performance overview
Wealth Management delivered a resilient adjusted1 profit
before tax of CHF 698 million against a backdrop of high market
volatility, pronounced deleveraging in Asia and very low client
activity levels. Net interest income rose on higher lending and
deposit revenues. Despite lower average invested assets, recurring
net fee income fell only slightly, as it was partly offset by
increased mandate penetration, up 70 basis points to 27% of
invested assets, and the continued effect of pricing initiatives.
Transaction-based income declined primarily in Asia Pacific and
Europe, mainly reflecting reduced client activity in response to
market volatility. Net new money adjusted for the outflows from the
balance sheet and capital optimization program was CHF 3.5 billion,
driven by inflows from all regions.
Wealth Management Americas delivered a solid adjusted1
profit before tax of USD 287 million, up 24% on the previous
quarter. Overall operating income was broadly unchanged and
productivity per advisor for revenue and invested assets was
industry-leading. Recurring income reached a new record as net fee
income rose on higher managed account fees and net interest income
increased mainly from loan and deposit growth. Costs fell primarily
on lower net charges for provisions for litigation, regulatory and
similar matters and other provisions. Net new money was USD 0.5
billion.
Retail & Corporate had its best result for the first
nine months of the year since 2010 with an adjusted1 third-quarter
profit before tax of CHF 428 million. Net interest income from
lending and deposits increased slightly as did recurring net fee
income, while credit loss expenses were negligible in the quarter.
Annualized net new business volume growth for retail clients was
good at 2.5%, mainly driven by net new client assets and, to a
lesser extent, net new loans, in line with its strategy to grow its
high-quality retail loan business moderately and selectively.
Year-to-date net new client accounts for retail customers hit a new
record level, up 35% year-on-year, solidifying UBS’s position as
the leading bank in its home market.
Asset Management recorded an adjusted1 profit before tax
of CHF 137 million. Management fees increased primarily in
Traditional Investments and Global Real Estate. Performance fees
also rose, predominantly in Global Real Estate. Excluding money
market flows, net new money outflows were CHF 7.6 billion, largely
from lower margin passive products, driven by client liquidity
needs.
The Investment Bank delivered a very strong performance
with an adjusted1 profit before tax of CHF 614 million. Despite the
challenging market conditions, revenues were up 6% year-on-year.
Compared to the prior year, Investor Client Services performed well
with increased revenues in both Equities and FX, Rates and Credit.
Costs were well controlled, with expenses falling compared to both
the prior quarter and the prior year. The adjusted1 return on
attributed equity for the third quarter was 33.6%.
Corporate Center – Services recorded a loss before tax of
CHF 257 million. Corporate Center – Group Asset and Liability
Management reported a loss before tax of CHF 111 million.
Corporate Center – Non-core and Legacy Portfolio recorded a
loss before tax of CHF 818 million, driven by additional net
charges for provisions for litigation, regulatory and similar
matters, while achieving further progress in reducing the Swiss SRB
leverage ratio denominator by CHF 12 billion to CHF 59 billion.
Capital and costs
UBS remains the best-capitalized large global bank, with a fully
applied Swiss SRB Basel III CET1 capital ratio of 14.3% as of 30
September 2015, above the bank’s target of at least 13%. UBS’s
fully applied Swiss SRB leverage ratio increased to 5.0%. The bank
issued CHF 1.5 billion of high-trigger additional tier 1 (AT1)
perpetual capital notes in the third quarter. Also during the
quarter, UBS completed its inaugural issuance of senior unsecured
debt which will contribute to its total loss-absorbing capacity
(TLAC), successfully placing CHF 4.2 billion of senior unsecured
notes in anticipation of international regulatory developments,
including revisions in the Swiss too big to fail framework.
The bank remains fully committed to its cost reduction target of
CHF 2.1 billion and made good progress in the third quarter, while
continuing to carry significant regulatory costs. Improved
efficiency allows UBS to continue its investments in technology,
compliance and risk control, while creating the right cost
structure to support long-term growth, particularly in Asia and the
Americas.
Changes to UBS annual performance targets and key
expectations
In light of actual and forecasted changes in macroeconomic
conditions and the announcement of a newly proposed too big to fail
regulation, UBS has amended certain external performance targets
and expectations for the Group and the business divisions for 2016
and future years. An overview of amended annual performance targets
and expectations is provided below. These performance targets
exclude, where applicable, items that management believes are not
representative of the underlying performance of UBS’s businesses,
such as restructuring charges and gains and losses on sales of
businesses and real estate. The performance targets assume constant
foreign currency translation rates unless otherwise indicated. The
following performance targets and expectations have been
amended:
- Adjusted cost/income ratio target
remains 60–70%, with a short- to medium-term expectation of
65–75%.
- UBS expects to achieve an adjusted
return on tangible equity (RoTE) in 2016 at approximately the same
level as 2015, an adjusted RoTE of approximately 15% in 2017 and
targets an adjusted RoTE of above 15% from 2018 onwards.
- Group risk-weighted assets (RWA) are
expected to trend around CHF 250 billion in the short to medium
term mainly due to regulatory inflation.
- Group BIS Basel III leverage ratio
denominator (LRD) is expected to trend around CHF 950 billion in
the short to medium term.
- The RWA limit for the Investment Bank
has been replaced with an RWA expectation of around CHF 85 billion
in the short to medium term.
- The funded assets limit for the
Investment Bank has been replaced with a BIS Basel III LRD
expectation of around CHF 325 billion in the short to medium
term.
- The Investment Bank will continue to
represent no more than 30–35% of the Group’s total LRD and
RWA.
- The separate aggregate net cost
reduction targets for Corporate Center – Services and Corporate
Center – Non-core and Legacy Portfolio have been replaced with an
equal Corporate Center aggregate net cost reduction target of CHF
2.1 billion by year-end 2017, of which CHF 1.4 billion by year-end
2015.
Awards and achievements
UBS was honored to be named "Outstanding Global Private Bank –
Overall" as well as "Outstanding Global Private Bank – Asia
Pacific" by Private Banker International. Additionally, UBS was
awarded Private Banker International’s Most Innovative Digital
Offering award. UBS was also named "Most Innovative Investment Bank
for Financial Institutions" by The Banker in the Investment Banking
Awards 2015. Staying at the forefront of innovation and providing
best-in-class digital solutions for clients is a key priority for
UBS. As part of this effort, the bank launched The UBS Future of
Finance Challenge, a competition for entrepreneurs and technology
startups seeking ideas and solutions that will support the
transformation of the industry. Over 600 entries were received from
startups in over 50 countries. Regional finals are taking place in
Singapore, London, New York and Zurich and three winners from each
region will be invited to the Global Final in Zurich in
December.
Sustainable performance is one of UBS’s key principles. During
the quarter, the bank was named the industry group leader in the
Dow Jones Sustainability Indices (DJSI), which acknowledged the
bank’s support for clients and communities and the integration of
societal and financial performance. UBS also joined the RE100
initiative, which urges the world’s most influential companies to
use only renewable power. UBS has committed to source 100% of its
electricity from renewable sources by 2020. This will lead to a 75%
reduction of its greenhouse gas footprint by 2020 compared with
2004 levels. In Switzerland, Germany and the UK, 100% of the
electricity UBS uses is already from renewable sources. In its home
market, UBS has increased energy efficiency by more than 30% since
2000.
During the third quarter, UBS launched its first global brand
campaign in five years. The campaign illustrates how UBS works with
clients to achieve their goals and ambitions. The campaign’s
tagline "For some of life’s questions you’re not alone. Together,
we can find an answer," reflects UBS’s promise to embrace client
goals as its own and work together to help find the best answers.
UBS will also support an international exhibition of portraits by
Annie Leibovitz entitled "Women". The tour will launch in London in
January 2016 and travel to 10 global cities over 12 months. The
photographs from the exhibition will form part of the UBS Art
Collection.
Outlook
Many of the underlying macroeconomic challenges and geopolitical
issues that we have highlighted in previous quarters remain and are
unlikely to be resolved in the foreseeable future. In addition,
recently proposed changes to the too big to fail regulatory
framework in Switzerland will cause substantial ongoing interest
costs for the firm. We also continue to see headwinds from
interest rates which have not increased in line with market
expectations, negative market performance in certain asset classes
and the weak performance of the euro versus the Swiss franc during
the year. We are executing the measures already announced to
mitigate these effects as we progress towards our targeted return
on tangible equity in the short to medium term.
Our strategy has proven successful in a variety of market
conditions. We remain committed to our strategy and its disciplined
execution in order to ensure the firm’s long-term success and
deliver sustainable returns for our shareholders.
Additional information
In the fourth quarter of 2015, UBS expects to recognize net
additional deferred tax assets (DTA) of approximately CHF 500
million, following the third quarter DTA net upward movement of CHF
1,513 million mainly related to the US, reflecting updated profit
forecasts and an extension of the relevant taxable profit forecast
period used in valuing its DTA.
As a result of ongoing efforts to optimize our legal entity
structure, we anticipate that some foreign currency translation
gains and losses previously booked directly into equity through
other comprehensive income will be released into profit and loss
due to the sale or closure of UBS AG branches and subsidiaries. As
a result, we currently expect to record net foreign currency
translation losses of around CHF 30 million in the fourth quarter
of 2015 and of around CHF 180 million in 2016, although gains and
losses could be recognized in different periods. Consistent with
past practice, these gains and losses will be treated as adjusting
items and recorded in Corporate Center – Group Asset and Liability
Management (Group ALM). The release of foreign currency translation
losses to profit and loss will not affect shareholders’ equity or
regulatory capital.
UBS Group AG key figures (as reported)
As of or for the quarter
ended As of or year-to-date CHF million, except where indicated
30.9.15 30.6.15 31.12.14
30.9.14 30.9.15 30.9.14
Group results
Operating income
7,170 7,818 6,746 6,876 23,829 21,281
Operating expenses
6,382 6,059 6,342 7,430 18,575 19,224
Operating profit / (loss) before tax
788 1,759 404 (554)
5,254 2,057 Net profit / (loss) attributable to UBS Group AG
shareholders
2,068 1,209 858 762 5,255 2,609 Diluted
earnings per share (CHF)1
0.54 0.32 0.23 0.20 1.40 0.68
Key performance indicators2 Profitability
Return on tangible equity (%)
18.3 11.0 8.0 7.1 15.7 8.3
Return on assets, gross (%)
3.0 3.1 2.6 2.7 3.2 2.8 Cost /
income ratio (%)
88.7 77.4 93.2 107.5 77.8 90.3
Growth Net profit growth (%)
71.1 (38.8) 12.6 (3.8)
101.4 15.7 Net new money growth for combined wealth management
businesses (%)3
0.8 1.5 1.7 3.1 2.0 2.7
Resources
Common equity tier 1 capital ratio (fully applied, %)4
14.3
14.4 13.4 13.7 14.3 13.7 Leverage ratio (phase-in, %)5
5.8
5.4 5.4 5.4 5.8 5.4
Additional information
Profitability Return on equity (RoE) (%)
15.9 9.4 6.8
6.1 13.6 7.1 Return on risk-weighted assets, gross (%)6
13.3
14.5 12.3 12.2 14.6 12.4
Resources Total assets
979,746 950,168 1,062,478 1,044,899 979,746 1,044,899 Equity
attributable to UBS Group AG shareholders
54,077 50,211
50,608 50,824 54,077 50,824 Common equity tier 1 capital (fully
applied)4
30,948 30,265 28,941 30,047 30,948 30,047 Common
equity tier 1 capital (phase-in)4
40,488 38,706 42,863
42,464 40,488 42,464 Risk-weighted assets (fully applied)4
216,314 209,777 216,462 219,296 216,314 219,296
Risk-weighted assets (phase-in)4
220,755 212,088 220,877
222,648 220,755 222,648 Common equity tier 1 capital ratio
(phase-in, %)4
18.3 18.2 19.4 19.1 18.3 19.1 Total capital
ratio (fully applied, %)4
22.0 21.2 18.9 18.7 22.0 18.7
Total capital ratio (phase-in, %)4
25.8 25.0 25.5 24.9 25.8
24.9 Leverage ratio (fully applied, %)5
5.0 4.7 4.1 4.2 5.0
4.2 Leverage ratio denominator (fully applied)5
946,476
944,422 997,822 980,669 946,476 980,669 Leverage ratio denominator
(phase-in)5
952,156 949,134 1,004,869 987,327 952,156
987,327 Liquidity coverage ratio (%)7
127 121 123 128 127
128
Other Invested assets (CHF billion)8
2,577 2,628
2,734 2,640 2,577 2,640 Personnel (full-time equivalents)
60,088 59,648 60,155 60,292 60,088 60,292 Market
capitalization9
69,324 74,547 63,526 64,047 69,324 64,047
Total book value per share (CHF)9
14.41 13.71 13.94 13.54
14.41 13.54 Tangible book value per share (CHF)9
12.69 12.04
12.14 11.78 12.69 11.78
1 Refer to “Note 9 Earnings per
share (EPS) and shares outstanding” in the “UBS Group financial
statements”
section of the third quarter 2015 report
for more information.
2 Refer to the “Measurement of
performance” section of our Annual Report 2014 for the definitions
of our key
performance indicators.
3 Based on adjusted net new money
which excludes the negative effect on net new money (third quarter
of 2015:
CHF 3.3 billion, second quarter 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 systemically relevant banks (SRB). Refer to
the
“Capital management” section of the third
quarter 2015 report for more information.
5 In accordance with Swiss SRB
rules. Refer to the “Capital management” section of the third
quarter 2015
report for more information.
6 Based on phase-in Basel III
risk-weighted assets.
7 Refer to the “Liquidity and
funding management” section of the third quarter 2015 report for
more
information. Data for periods prior to 31
March 2015 are on a pro-forma basis.
8 Includes invested assets for
Retail & Corporate.
9 Refer to the “UBS shares” section
of the third quarter 2015 report for more information.
Income statement
For the
quarter ended % change from Year-to-date CHF million, except per
share data
30.9.15 30.6.15
30.9.14 2Q15 3Q14 30.9.15 30.9.14
Interest income
3,233 3,409 3,352 (5) (4) 9,814 9,880
Interest expense
(1,387) (1,918) (1,478) (28) (6) (4,841)
(5,192) Net interest income
1,846 1,490 1,874 24 (1) 4,973
4,688 Credit loss (expense) / recovery
(28) (13) (32) 115
(13) (58) (18) Net interest income after credit loss expense
1,817 1,478 1,842 23 (1) 4,915 4,670 Net fee and commission
income
4,111 4,409 4,273 (7) (4) 12,921 12,680 Net trading
income
1,063 1,647 700 (35) 52 4,844 3,404 Other income
179 285 61 (37) 193 1,148 526 Total operating income
7,170 7,818 6,876 (8) 4 23,829 21,281 Personnel expenses
3,841 4,124 3,739 (7) 3 12,138 11,548 General and
administrative expenses
2,285 1,695 3,468 35 (34) 5,694
7,018 Depreciation and impairment of property, equipment and
software
230 209 203 10 13 660 598 Amortization and
impairment of intangible assets
25 30 20 (17) 25 84 60 Total
operating expenses
6,382 6,059 7,430 5 (14) 18,575 19,224
Operating profit / (loss) before tax
788 1,759 (554) (55)
5,254 2,057 Tax expense / (benefit)
(1,295) 443 (1,317) (2)
(182) (665) Net profit / (loss)
2,083 1,316 763 58 173 5,437
2,722 Net profit / (loss) attributable to preferred noteholders 0
111 Net profit / (loss) attributable to non-controlling interests
14 106 1 (87) 182 2
Net profit / (loss) attributable to
UBS Group AG shareholders 2,068 1,209 762 71 171 5,255
2,609
Earnings per share (CHF) Basic
0.56 0.33
0.20 70 180 1.43 0.69 Diluted
0.54 0.32 0.20 69 170 1.40
0.68
Comparison UBS Group AG (consolidated) versus UBS AG
(consolidated)
As of or for the quarter ended 30.9.15
As of or for the quarter ended 30.6.15
As of or for the quarter ended 31.12.14 CHF million, except where
indicated
UBS Group AG (consolidated) UBS
AG
(consolidated)
Difference
(absolute)
Difference
(%)
UBS Group AG
(consolidated)
UBS AG
(consolidated)
Difference
(absolute)
Difference
(%)
UBS Group AG
(consolidated)
UBS AG
(consolidated)
Difference
(absolute)
Difference
(%)
Income statement Operating income
7,170 7,189
(19) 0 7,818 7,784 34 0 6,746 6,745 1 0 Operating expenses
6,382 6,401 (19) 0 6,059 6,087 (28) 0 6,342 6,333 9 0
Operating profit / (loss)before tax
788 788 0 0 1,759
1,698 61 4 404 412 (8) (2) of which: Wealth Management
639
636 3 0 756 752 4 1 646 646 0 0 of which: Wealth Management
Americas
259 252 7 3 191 185 6 3 211 211 0 0 of
which: Retail & Corporate
466 466 0 0 397 397 0 0
340 340 0 0 of which: Asset Management
114 114 0 0
130 129 1 1 85 85 0 0 of which: Investment Bank
496
485 11 2 551 538 13 2 217 217 0 0 of which: Corporate Center
(1,186) (1,165) (21) 2 (267) (303) 36 (12) (1,096)
(1,087) (9) 1 of which: Services
(257) (259) 2 (1)
(253) (247) (6) 2 (249) (241) (8) 3 of which: Group ALM
(111) (90) (21) 23 132 89 43 48 (106) (106) 0 0 of
which: Non-core and Legacy Portfolio
(818) (817) (1)
0 (145) (145) 0 0 (741) (741) 0 0 Net profit / (loss)
2,083
2,085 (2) 0 1,316 1,255 61 5 919 927 (8) (1) of which:
attributable to shareholders
2,068 2,083 (15) (1)
1,209 1,178 31 3 858 893 (35) (4) of which: attributable to
preferred noteholders
1 (1) 0 76 (76) 31 31 0 0 of which:
attributable to non-controlling interests
14 1 13 106
1 105 29 2 27
Statement of comprehensive income Other
comprehensive income
1,393 1,393 0 0 (1,900) (1,900)
0 0 424 424 0 0 of which: attributable to shareholders
1,291
1,314 (23) (2) (1,805) (1,849) 44 (2) 368 374 (6) (2) of
which: attributable to preferred noteholders
79 (79) (49) 49
11 50 (39) (78) of which: attributable to non-controlling interests
102 0 102 (96) (2) (94) 45 0 45 Total comprehensive
income
3,475 3,478 (3) 0 (584) (645) 61 (9) 1,343
1,352 (9) (1) of which: attributable to shareholders
3,360
3,397 (37) (1) (595) (671) 76 (11) 1,226 1,268 (42) (3) of
which: attributable to preferred noteholders
80 (80) 26 (26)
42 81 (39) (48) of which: attributable to non-controlling interests
116 0 116 11 (1) 12 74 3 71
Balance sheet
Total assets
979,746 981,891 (2,145) 0 950,168
951,528 (1,360) 0 1,062,478 1,062,327 151 0 Total liabilities
923,712 925,808 (2,096) 0 896,915 897,966 (1,051) 0
1,008,110 1,008,162 (52) 0 Total equity
56,034 56,083
(49) 0 53,253 53,562 (309) (1) 54,368 54,165 203 0 of which:
attributable to shareholders
54,077 54,126 (49) 0
50,211 51,685 (1,474) (3) 50,608 52,108 (1,500) (3) of which:
attributable to preferred noteholders
1,919 (1,919) 1,840
(1,840) 2,013 (2,013) of which: attributable to non-controlling
interests
1,957 38 1,919 3,042 38 3,004 3,760 45
3,715
Capital information (fully applied) Common equity tier
1 capital
30,948 33,183 (2,235) (7) 30,265 32,834
(2,569) (8) 28,941 30,805 (1,864) (6) Additional tier 1 capital
5,578 0 5,578 3,777 0 3,777 467 0 467 Tier 2 capital
11,114 10,198 916 9 10,531 9,613 918 10 11,398 10,451
947 9 Total capital
47,640 43,381 4,259 10 44,573
42,447 2,126 5 40,806 41,257 (451) (1) Risk-weighted assets
216,314 217,472 (1,158) (1) 209,777 210,400 (623) 0
216,462 217,158 (696) 0
Common equity tier 1 capital ratio (%)
14.3 15.3 (1.0) 14.4 15.6 (1.2) 13.4 14.2 (0.8) Total
capital ratio (%)
22.0 19.9 2.1 21.2 20.2 1.0 18.9
19.0 (0.1) Leverage ratio denominator
946,476 949,548
(3,072) 0 944,422 946,457 (2,035) 0 997,822 999,124 (1,302) 0
Leverage ratio (%)
5.0 4.6 0.4 4.7 4.5 0.2 4.1 4.1
0.0
UBS’s Third Quarter 2015 Report, letter to shareholders and
slide presentation will be available from 06:45 CEST on Tuesday, 3
November 2015 at www.ubs.com/quarterlyreporting.
UBS will hold a presentation of its third quarter 2015 results
on Tuesday, 3 November 2015. The results will be presented by
Sergio P. Ermotti, Group Chief Executive Officer, Tom Naratil,
Group Chief Financial Officer and Group Chief Operating Officer,
Caroline Stewart, Global Head of Investor Relations, 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 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 planned further reduction in its Basel III
risk-weighted assets (RWA) and leverage ratio denominator (LRD),
and the degree to which UBS is successful in implementing changes
to its business to meet changing market, regulatory and other
conditions; (ii) developments 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 and interest
rates and the effect of economic conditions and market developments
on the financial position or creditworthiness of UBS’s clients and
counterparties; (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 bail-in debt or loss-absorbing capital; (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 (including leverage
ratio), liquidity and funding requirements, incremental tax
requirements, additional levies, limitations on permitted
activities, constraints on remuneration or other measures; (v)
uncertainty as to when and to what degree the Swiss Financial
Market Supervisory Authority (FINMA) will approve reductions to the
incremental RWA resulting from the supplemental operational risk
capital analysis mutually agreed to by UBS and FINMA, or will
approve a limited reduction of capital requirements due to measures
to reduce resolvability risk; (vi) the degree to which UBS is
successful in implementing 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, 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
countries for mandatory structural reform of banks; (vii) 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; (viii) changes in the standards of conduct
applicable to our businesses that may result from new regulation or
new enforcement of existing standards, including measures to impose
new or enhanced duties when interacting with customers or in the
execution and handling of customer transactions; (ix) 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; (x) 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;
(xi) 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; (xii) 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;
(xiii) limitations on the effectiveness of UBS’s internal processes
for risk management, risk control, measurement and modeling, and of
financial models generally; (xiv) whether UBS will be successful in
keeping pace with competitors in updating its technology,
particularly in trading businesses; (xv) the occurrence of
operational failures, such as fraud, misconduct, unauthorized
trading and systems failures; (xvi) restrictions to the ability of
subsidiaries of the Group to make loans or distributions of any
kind, directly or indirectly, to UBS Group AG; (xvii) 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; and (xviii) 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. 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 2014. 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.
Adjusted results
Unless otherwise indicated, third-quarter 2015 "adjusted"
figures exclude each of the following items, to the extent
applicable, on a Group and business division level: a gain of CHF
81 million related to our investment in the SIX Group, an own
credit gain of CHF 32 million, foreign currency translation losses
of CHF 27 million from the disposal of a subsidiary, as well as net
restructuring charges of CHF 298 million and a credit related to a
change to retiree benefit plans in the US of CHF 21 million. For
the second quarter of 2015, the items we excluded were an own
credit gain of CHF 259 million, a gain of CHF 56 million on the
sale of the Belgian domestic Wealth Management business, a gain
from a further partial sale of our investment in Markit of CHF 11
million, as well as net restructuring charges of CHF 191 million
and an impairment of an intangible asset of CHF 11 million.
Adjusted results are non-GAAP financial measures as defined by SEC
regulations. Please refer to the "Group performance" section of the
Third Quarter 2015 Report for more information on adjusted
results.
Rounding
Numbers presented throughout this release may not add up
precisely to the totals provided in the tables and text.
Percentages, percent changes and absolute variances are calculated
based on rounded figures displayed in the tables and text and may
not precisely reflect the percentages, percent changes and absolute
variances that would be derived based on 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.
1 Please refer to the "Adjusted results" section at the end of
this news release for information.
2 Full-year adjusted RoTE target of around 10%.
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