|
Regional breakdown of
performance measures
|
|
|
|
|
As of or for the quarter ended 31.3.22
USD billion, except where indicated
|
Americas1
|
Switzerland
|
EMEA2
|
Asia Pacific
|
Global Wealth Management3
|
|
Total operating income (USD million)
|
2,705
|
514
|
988
|
709
|
4,912
|
|
Operating profit / (loss) before tax (USD million)
|
439
|
249
|
347
|
288
|
1,310
|
|
Cost / income ratio (%)4
|
84.1
|
51.3
|
64.9
|
59.3
|
73.4
|
|
Loans, gross
|
95.75
|
43.5
|
45.4
|
45.1
|
230.3
|
|
Net new loans
|
3.7
|
0.9
|
(1.0)
|
(3.1)
|
0.5
|
|
Fee-generating assets4
|
864
|
125
|
313
|
110
|
1,414
|
|
Net new fee-generating assets4
|
12.0
|
3.0
|
4.0
|
0.4
|
19.4
|
|
Net new fee-generating asset growth rate (%)4
|
5.4
|
9.2
|
4.8
|
1.3
|
5.2
|
|
Invested assets4
|
1,772
|
270
|
605
|
494
|
3,145
|
|
Advisors (full-time equivalents)
|
6,199
|
686
|
1,472
|
861
|
9,300
|
|
1 Including the
following business units: United States and Canada; and Latin America. 2
Including the following business units: Europe; Central & Eastern Europe,
Greece and Israel; and Middle East and Africa. 3 Including minor
functions, which are not included in the four regions individually presented
in this table, with total operating income of negative USD 5 million, USD 13
million of operating loss before tax, USD 0.6 billion of loans, USD 0.0
billion of net new loan inflows, USD 0.9 billion of fee-generating assets,
USD 0.0 billion of net new fee-generating asset outflows, USD 3 billion of
invested assets and 82 advisors in the first quarter of 2022. 4 Refer to
“Alternative performance measures” in the appendix to this report for the
definition and calculation method. 5 Loans include customer brokerage
receivables, which are presented in a separate reporting line on the balance
sheet.
|
Regional comments 1Q22 vs 1Q21,
except where indicated
Americas
Profit before tax decreased by
USD 28 million to USD 439 million. Total operating income increased
by USD 158 million, or 6%, to USD 2,705 million, mainly driven by
higher recurring net fee and net interest income. The cost / income ratio
increased to 84.1% from 81.7%. Loans increased 4% compared with the fourth
quarter of 2021, to USD 96 billion, reflecting USD 3.7 billion of net
new loans, which were mostly mortgages and Lombard loans. Net new
fee-generating assets were USD 12.0 billion, resulting in an annualized
net new fee-generating asset growth rate of 5.4%.
Switzerland
Profit before tax increased by USD 58 million to
USD 249 million. Total operating income increased by USD 49 million,
or 11%, to USD 514 million, mainly driven by higher net interest, recurring
net fee and transaction-based income. The cost / income ratio decreased to
51.3% from 59.0%. Loans increased 1% compared with the fourth quarter of 2021,
to USD 43 billion, reflecting USD 0.9 billion of net new loans. Net
new fee-generating assets were USD 3.0 billion, resulting in an annualized
net new fee-generating asset growth rate of 9.2%.
EMEA
Profit before tax increased by USD 60 million to
USD 347 million. Total operating income increased by USD 36 million,
or 4%, to USD 988 million, mainly driven by higher net interest and
recurring net fee income. The cost / income ratio decreased to 64.9% from
69.9%. Loans decreased 8% compared with the fourth
quarter of 2021, to USD 45 billion, reflecting a reduction in Lombard
lending, net new loan outflows and negative foreign exchange effects. Net new
fee-generating assets were USD 4.0 billion, resulting in an annualized net
new fee-generating asset growth rate of 4.8%.
Asia Pacific
Profit before tax decreased by USD 180 million to
USD 288 million. Total operating income decreased by USD 172 million,
or 20%, to USD 709 million, mainly driven by lower transaction-based
income. The cost / income ratio increased to 59.3% from 46.9%. Loans decreased
7% compared with the fourth quarter of 2021, to USD 45 billion, reflecting
USD 3.1 billion of net new loan outflows as the current market uncertainty
led to clients deleveraging. Net new fee-generating assets were USD 0.4
billion, resulting in an annualized net new fee-generating asset growth rate of
1.3%.
Personal & Corporate Banking
|
Personal & Corporate Banking – in Swiss francs1
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
% change from
|
|
CHF million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
4Q21
|
1Q21
|
|
|
|
|
|
|
|
|
|
|
Results
|
|
|
|
|
|
|
|
|
Net interest income
|
|
493
|
497
|
470
|
|
(1)
|
5
|
|
Recurring net fee income2
|
|
210
|
205
|
182
|
|
2
|
15
|
|
Transaction-based income2
|
|
300
|
271
|
239
|
|
10
|
25
|
|
Other income
|
|
(1)
|
12
|
38
|
|
|
|
|
Income
|
|
1,002
|
985
|
929
|
|
2
|
8
|
|
Credit loss (expense) / release
|
|
(21)
|
9
|
22
|
|
|
|
|
Total operating income
|
|
981
|
995
|
950
|
|
(1)
|
3
|
|
Total operating expenses
|
|
586
|
660
|
593
|
|
(11)
|
(1)
|
|
Business division operating profit / (loss) before tax
|
|
395
|
335
|
358
|
|
18
|
10
|
|
|
|
|
|
|
|
|
|
|
Performance measures and other information
|
|
|
|
|
|
|
|
|
Pre-tax profit growth (year-on-year, %)2
|
|
10.4
|
5.1
|
11.0
|
|
|
|
|
Cost / income ratio (%)2
|
|
58.5
|
67.0
|
63.8
|
|
|
|
|
Average attributed equity (CHF billion)3
|
|
8.7
|
8.5
|
8.3
|
|
2
|
5
|
|
Return on attributed equity (%)2,3
|
|
18.2
|
15.8
|
17.3
|
|
|
|
|
Net interest margin (bps)2
|
|
141
|
143
|
137
|
|
|
|
|
Fee and trading income for Corporate & Institutional Clients2
|
|
221
|
190
|
192
|
|
17
|
16
|
|
Investment products for Personal Banking (CHF billion)2
|
|
23.1
|
23.5
|
20.9
|
|
(2)
|
10
|
|
Net new investment products for Personal Banking (CHF billion)2
|
|
0.97
|
0.26
|
0.85
|
|
|
|
|
Active Digital Banking clients in Personal Banking (%)2,4
|
|
73.2
|
71.7
|
69.4
|
|
|
|
|
Active Mobile Banking clients in Personal Banking (%)2
|
|
52.1
|
49.6
|
44.2
|
|
|
|
|
Active Digital Banking clients in Corporate & Institutional
Clients (%)2
|
|
80.2
|
79.7
|
79.3
|
|
|
|
|
Loans, gross (CHF billion)
|
|
141.3
|
139.3
|
138.1
|
|
1
|
2
|
|
Customer deposits (CHF billion)
|
|
161.5
|
162.1
|
162.5
|
|
0
|
(1)
|
|
Impaired loan portfolio as a percentage of total loan portfolio,
gross (%)2,5
|
|
0.8
|
0.9
|
1.1
|
|
|
|
|
1 Comparatives may
differ as a result of 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
Refer to “Alternative performance measures” in the appendix to this report
for the definition and calculation method. 3 Refer to the “Capital
management” section of this report for more information. 4 In the
first quarter of 2022, 84.8% of clients of Personal Banking were “activated
users” of Digital Banking (i.e., clients who had logged into Digital Banking
at least once in the course of their relationship with UBS). 5 Refer
to the “Risk management and control” section of this report for more
information about (credit)-impaired exposures.
|
Personal & Corporate Banking
Results: 1Q22 vs 1Q21
Profit before tax increased by
CHF 37 million, or 10%, to CHF 395 million, reflecting higher
operating income and lower operating expenses.
Operating income
Total operating
income increased by CHF 31 million, or 3%, to CHF 981 million,
reflecting a CHF 112 million increase from strong business momentum, with
higher transaction-based, recurring net fee and net interest income, partly
offset by a CHF 16 million valuation loss compared with a CHF 26
million gain in the first quarter of 2021. The first quarter of 2022 included net
credit loss expenses of CHF 21 million, compared with CHF 22
million net credit loss releases in the same quarter of the prior year.
Net interest income increased by
CHF 23 million to CHF 493 million, mainly driven by deposit
management actions that led to higher deposit fees and a decrease in liquidity
and funding costs. Growth in loans more than offset the impact from pressure on margins.
Recurring net fee income increased by CHF 28 million to
CHF 210 million, mostly driven by higher revenues from mandate, custody
and investment fund fees, mainly due to an increase in average custody assets
largely reflecting net new investment product inflows, as well as higher
revenues from account fees.
Transaction-based income increased by CHF 61 million to
CHF 300 million, mainly driven by higher revenues from credit card and
foreign exchange transactions, including the effects of a continued increase in
spending on travel and leisure by clients following the easing of
COVID-19-related restrictions in certain countries.
Other income was negative CHF 1 million, compared with
positive CHF 38 million, mostly due to a valuation loss of CHF 16
million on our equity ownership of SIX Group, compared with a gain of CHF 26
million in the first quarter of 2021.
Net credit loss expenses were CHF 21 million, compared
with net releases of CHF 22 million for the first quarter of 2021.
Operating expenses
Total operating expenses decreased by CHF 7
million, or 1%, to CHF 586 million, mainly due to lower real estate expenses
for our branch network, as the first quarter of 2021 included accelerated
depreciation resulting from the closure of 44 branches in that quarter. This
decrease was partly offset by higher investments in technology.
|
Personal & Corporate Banking – in US dollars1
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
% change from
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
4Q21
|
1Q21
|
|
|
|
|
|
|
|
|
|
|
Results
|
|
|
|
|
|
|
|
|
Net interest income
|
|
535
|
543
|
513
|
|
(2)
|
4
|
|
Recurring net fee income2
|
|
227
|
224
|
198
|
|
2
|
15
|
|
Transaction-based income2
|
|
325
|
296
|
261
|
|
10
|
25
|
|
Other income
|
|
(1)
|
13
|
41
|
|
|
|
|
Income
|
|
1,086
|
1,077
|
1,013
|
|
1
|
7
|
|
Credit loss (expense) / release
|
|
(23)
|
10
|
23
|
|
|
|
|
Total operating income
|
|
1,064
|
1,086
|
1,037
|
|
(2)
|
3
|
|
Total operating expenses
|
|
635
|
721
|
647
|
|
(12)
|
(2)
|
|
Business division operating profit / (loss) before tax
|
|
428
|
365
|
389
|
|
17
|
10
|
|
|
|
|
|
|
|
|
|
|
Performance measures and other information
|
|
|
|
|
|
|
|
|
Pre-tax profit growth (year-on-year, %)2
|
|
10.0
|
3.5
|
16.5
|
|
|
|
|
Cost / income ratio (%)2
|
|
58.5
|
67.0
|
63.9
|
|
|
|
|
Average attributed equity (USD billion)3
|
|
9.4
|
9.2
|
9.1
|
|
2
|
3
|
|
Return on attributed equity (%)2,3
|
|
18.2
|
15.9
|
17.1
|
|
|
|
|
Net interest margin (bps)2
|
|
140
|
144
|
137
|
|
|
|
|
Fee and trading income for Corporate & Institutional Clients2
|
|
240
|
207
|
209
|
|
16
|
15
|
|
Investment products for Personal Banking (USD billion)2
|
|
25.0
|
25.8
|
22.2
|
|
(3)
|
13
|
|
Net new investment products for Personal Banking (USD billion)2
|
|
1.05
|
0.28
|
0.92
|
|
|
|
|
Active Digital Banking clients in Personal Banking (%)2,4
|
|
73.2
|
71.7
|
69.4
|
|
|
|
|
Active Mobile Banking clients in Personal Banking (%)2
|
|
52.1
|
49.6
|
44.2
|
|
|
|
|
Active Digital Banking clients in Corporate & Institutional
Clients (%)2
|
|
80.2
|
79.7
|
79.3
|
|
|
|
|
Loans, gross (USD billion)
|
|
152.9
|
152.8
|
146.0
|
|
0
|
5
|
|
Customer deposits (USD billion)
|
|
174.8
|
177.8
|
171.9
|
|
(2)
|
2
|
|
Impaired loan portfolio as a percentage of total loan portfolio,
gross (%)2,5
|
|
0.8
|
0.9
|
1.1
|
|
|
|
|
1 Comparatives may
differ as a result of 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
Refer to “Alternative performance measures” in the appendix to this report
for the definition and calculation method. 3 Refer to the “Capital
management” section of this report for more information. 4 In the
first quarter of 2022, 84.8% of clients of Personal Banking were “activated
users” of Digital Banking (i.e., clients who had logged into Digital Banking
at least once in the course of their relationship with UBS). 5 Refer
to the “Risk management and control” section of this report for more
information about (credit)-impaired exposures.
|
Asset Management
|
Asset Management1
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
% change from
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
4Q21
|
1Q21
|
|
|
|
|
|
|
|
|
|
|
Results
|
|
|
|
|
|
|
|
|
Net management fees2
|
|
561
|
627
|
545
|
|
(11)
|
3
|
|
Performance fees
|
|
17
|
94
|
92
|
|
(82)
|
(82)
|
|
Credit loss (expense) / release
|
|
0
|
(1)
|
0
|
|
|
|
|
Total operating income
|
|
578
|
721
|
637
|
|
(20)
|
(9)
|
|
Total operating expenses
|
|
404
|
387
|
410
|
|
4
|
(2)
|
|
Business division operating profit / (loss) before tax
|
|
174
|
334
|
227
|
|
(48)
|
(23)
|
|
|
|
|
|
|
|
|
|
|
Performance measures and other information
|
|
|
|
|
|
|
|
|
Pre-tax profit growth (year-on-year, %)3
|
|
(23.1)
|
(16.7)
|
44.7
|
|
|
|
|
Cost / income ratio (%)3
|
|
69.8
|
53.6
|
64.4
|
|
|
|
|
Average attributed equity (USD billion)4
|
|
1.8
|
1.8
|
2.2
|
|
(1)
|
(21)
|
|
Return on attributed equity (%)3,4
|
|
39.5
|
74.6
|
40.8
|
|
|
|
|
Gross margin on invested assets (bps)3
|
|
20
|
24
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information by business line / asset class
|
|
|
|
|
|
|
|
|
Net new money (USD billion)3
|
|
|
|
|
|
|
|
|
Equities
|
|
(2.4)
|
5.8
|
6.4
|
|
|
|
|
Fixed Income
|
|
4.1
|
7.5
|
13.5
|
|
|
|
|
of which: money market
|
|
(6.5)
|
(1.1)
|
4.3
|
|
|
|
|
Multi-asset & Solutions
|
|
4.0
|
1.1
|
3.7
|
|
|
|
|
Hedge Fund Businesses
|
|
1.6
|
1.3
|
2.0
|
|
|
|
|
Real Estate & Private Markets
|
|
0.4
|
(0.7)
|
0.6
|
|
|
|
|
Total net new money
|
|
7.7
|
15.1
|
26.2
|
|
|
|
|
of which: net new money excluding money market
|
|
14.2
|
16.2
|
21.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invested assets (USD billion)3
|
|
|
|
|
|
|
|
|
Equities
|
|
537
|
580
|
526
|
|
(7)
|
2
|
|
Fixed Income
|
|
277
|
285
|
279
|
|
(3)
|
(1)
|
|
of which: money market
|
|
86
|
92
|
101
|
|
(7)
|
(15)
|
|
Multi-asset & Solutions
|
|
185
|
193
|
175
|
|
(4)
|
5
|
|
Hedge Fund Businesses
|
|
56
|
55
|
50
|
|
2
|
11
|
|
Real Estate & Private Markets
|
|
99
|
98
|
92
|
|
1
|
8
|
|
Total invested assets
|
|
1,154
|
1,211
|
1,121
|
|
(5)
|
3
|
|
of which: passive strategies
|
|
516
|
540
|
469
|
|
(5)
|
10
|
|
|
|
|
|
|
|
|
|
|
Information by region
|
|
|
|
|
|
|
|
|
Invested assets (USD billion)3
|
|
|
|
|
|
|
|
|
Americas
|
|
278
|
287
|
267
|
|
(3)
|
4
|
|
Asia Pacific
|
|
175
|
190
|
185
|
|
(8)
|
(5)
|
|
Europe, Middle East and Africa (excluding Switzerland)
|
|
315
|
334
|
305
|
|
(6)
|
3
|
|
Switzerland
|
|
386
|
399
|
364
|
|
(3)
|
6
|
|
Total invested assets
|
|
1,154
|
1,211
|
1,121
|
|
(5)
|
3
|
|
|
|
|
|
|
|
|
|
|
Information by channel
|
|
|
|
|
|
|
|
|
Invested assets (USD billion)3
|
|
|
|
|
|
|
|
|
Third-party institutional
|
|
672
|
707
|
656
|
|
(5)
|
2
|
|
Third-party wholesale
|
|
137
|
145
|
133
|
|
(6)
|
3
|
|
UBS’s wealth management businesses
|
|
345
|
359
|
332
|
|
(4)
|
4
|
|
Total invested assets
|
|
1,154
|
1,211
|
1,121
|
|
(5)
|
3
|
|
1 Comparatives may
differ as a result of 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
Net management fees include transaction fees, fund administration revenues
(including net interest and trading income from lending activities and
foreign exchange hedging as part of the fund services offering), distribution
fees, incremental fund-related expenses, gains or losses from seed money and
co-investments, funding costs, the negative pass-through impact of
third-party performance fees, and other items that are not Asset Management’s
performance fees. 3 Refer to “Alternative performance measures” in the
appendix to this report for the definition and calculation method. 4 Refer
to the “Capital management” section of this report for more information.
|
Results: 1Q22 vs 1Q21
Profit before tax decreased by
USD 53 million, or 23%, to USD 174 million, reflecting lower
performance fees, only partly offset by higher net management fees and lower
operating expenses.
Operating income
Total operating income decreased by USD 59
million, or 9%, to USD 578 million.
Net management fees increased by
USD 16 million, or 3%, to USD 561 million, reflecting net new money
generation over the last twelve months, partly offset by a decline in market
valuations.
Performance fees decreased by USD 75 million to
USD 17 million, as the first quarter of 2021 included particularly high
levels of performance fees, mainly in our Hedge Fund Businesses.
Operating expenses
Total operating expenses decreased by USD 6
million, or 2%, to USD 404 million, mainly driven by lower personnel
expenses.
Invested assets: 1Q22 vs 4Q21
Invested assets decreased by USD 57 billion to
USD 1,154 billion, reflecting both negative market performance of USD 53
billion and foreign currency effects of USD 11 billion, partly offset by
net new money inflows of USD 8 billion.
Excluding money market flows, net new money inflows were
USD 14 billion.
Investment Bank
|
Investment Bank1
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
% change from
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
4Q21
|
1Q21
|
|
|
|
|
|
|
|
|
|
|
Results
|
|
|
|
|
|
|
|
|
Advisory
|
|
216
|
196
|
223
|
|
10
|
(3)
|
|
Capital Markets
|
|
334
|
501
|
565
|
|
(33)
|
(41)
|
|
Global Banking
|
|
550
|
696
|
788
|
|
(21)
|
(30)
|
|
Execution Services
|
|
496
|
452
|
555
|
|
10
|
(11)
|
|
Derivatives & Solutions
|
|
1,418
|
622
|
1,246
|
|
128
|
14
|
|
Financing
|
|
444
|
448
|
(319)
|
|
(1)
|
|
|
Global Markets
|
|
2,358
|
1,523
|
1,483
|
|
55
|
59
|
|
of which: Equities
|
|
1,705
|
1,107
|
920
|
|
54
|
85
|
|
of which: Foreign Exchange, Rates and Credit
|
|
653
|
415
|
563
|
|
57
|
16
|
|
Income
|
|
2,908
|
2,219
|
2,271
|
|
31
|
28
|
|
Credit loss (expense) / release
|
|
(4)
|
16
|
2
|
|
|
|
|
Total operating income
|
|
2,905
|
2,235
|
2,273
|
|
30
|
28
|
|
Total operating expenses
|
|
1,976
|
1,522
|
1,862
|
|
30
|
6
|
|
Business division operating profit / (loss) before tax
|
|
929
|
713
|
412
|
|
30
|
126
|
|
|
|
|
|
|
|
|
|
|
Performance measures and other information
|
|
|
|
|
|
|
|
|
Pre-tax profit growth (year-on-year, %)2
|
|
125.6
|
34.7
|
(41.9)
|
|
|
|
|
Cost / income ratio (%)2
|
|
67.9
|
68.6
|
82.0
|
|
|
|
|
Average attributed equity (USD billion)3
|
|
13.2
|
13.2
|
13.0
|
|
(1)
|
2
|
|
Return on attributed equity (%)2,3
|
|
28.2
|
21.5
|
12.7
|
|
|
|
|
Average VaR (1-day, 95% confidence, 5 years of historical data)
|
|
10
|
10
|
11
|
|
2
|
(1)
|
|
1 Comparative
figures in this table may differ as a result of 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 Refer to “Alternative performance measures” in the
appendix to this report for the definition and calculation method. 3 Refer
to the “Capital management” section of this report for more information.
|
Results: 1Q22
vs 1Q21
Profit before tax increased by
USD 517 million, or 126%, to USD 929 million, driven by higher
operating income, partly offset by higher operating expenses.
Operating income
Total operating income
increased by USD 632 million, or 28%, to USD 2,905 million, mainly
reflecting higher revenues in Global Markets, partly offset by lower revenues
in Global Banking.
Global Banking
Global
Banking revenues decreased by USD 238 million, or 30%, to USD 550
million, mostly driven by lower Capital Markets revenues, compared with a 36%
decrease in the overall global fee pool.
Advisory revenues decreased by USD 7 million, or 3%, to
USD 216 million, as higher revenues from merger and acquisition
transactions were more than offset by lower other advisory fee revenues, while
the global fee pool size was broadly unchanged.
Capital Markets revenues decreased by USD 231 million, or
41%, to USD 334 million, reflecting a challenging market environment. Equity
Capital Markets (ECM) revenues decreased by USD 191 million, or 66%,
compared with a 72% decrease in the global ECM fee pool, and Leveraged Capital
Markets (LCM) revenues decreased by USD 29 million, or 24%, compared with
a 34% decrease in the global LCM fee pool.
Global Markets
Global
Markets revenues increased by USD 875 million, or 59%, to USD 2,358
million, mainly due to the first quarter of 2021 including a USD 774
million loss on the default of a US-based client of our prime brokerage business.
Excluding that loss, revenues increased by USD 101 million, or 4%,
primarily driven by higher revenues in Equity Derivatives, Rates and Foreign
Exchange, partly offset by lower Capital Market Financing revenues.
Execution Services revenues decreased by USD 59 million,
or 11%, to USD 496 million, partly driven by lower Cash Equities revenues.
Derivatives & Solutions revenues increased by USD 172
million, or 14%, to USD 1,418 million, driven by Equity Derivatives, Rates
and Foreign Exchange, benefiting from elevated volatility, partly offset by
lower revenues in Credit.
Financing revenues were positive USD 444 million,
compared with negative USD 319 million. Excluding the aforementioned loss,
revenues decreased by USD 11 million, or 2%, as increases in Clearing
revenues were more than offset by lower Capital Market Financing revenues.
Equities
Global Markets Equities
revenues increased by USD 785 million, or 85%, to USD 1,705 million,
as the first quarter of 2021 included the aforementioned loss in our prime
brokerage business. Excluding that loss, Equities revenues were marginally
higher.
Foreign Exchange, Rates and Credit
Global Markets Foreign
Exchange, Rates and Credit revenues increased by USD 90 million, or 16%,
to USD 653 million, driven by Rates and Foreign Exchange products, which
benefited from a constructive market environment, partly offset by decreases in
Credit revenues.
Credit loss expense / release
Net credit loss expenses were
USD 4 million, compared with net credit loss releases of USD 2
million.
Operating expenses
Total operating expenses
increased by USD 114 million, or 6%, to USD 1,976 million, mainly
driven by an increase in variable compensation.
Group
Functions
|
Group Functions1
|
|
|
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
% change from
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
4Q21
|
1Q21
|
|
|
|
|
|
|
|
|
|
|
Results
|
|
|
|
|
|
|
|
|
Total operating income
|
|
(95)
|
(134)
|
(90)
|
|
(29)
|
5
|
|
Total operating expenses
|
|
18
|
113
|
49
|
|
(84)
|
(64)
|
|
Operating profit / (loss) before tax
|
|
(112)
|
(246)
|
(139)
|
|
(54)
|
(19)
|
|
of which: Group Treasury
|
|
(162)
|
(142)
|
(104)
|
|
14
|
55
|
|
of which: Non-core and Legacy Portfolio
|
|
45
|
(35)
|
5
|
|
|
860
|
|
of which: Group Services
|
|
5
|
(69)
|
(39)
|
|
|
|
|
1 Comparatives may
differ as a result of 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.
|
Results: 1Q22 vs 1Q21
Group Functions recorded a loss before tax of USD 112
million, compared with a loss of USD 139 million.
Group Treasury
The Group Treasury result was negative USD 162
million, compared with negative USD 104 million.
Income from accounting asymmetries, including hedge accounting
ineffectiveness, was net negative USD 138 million, compared with net negative
income of USD 92 million. Accounting asymmetries are generally expected to
mean revert to zero over time.
Income related to centralized Group Treasury risk management
was negative USD 17 million, compared with negative USD 2 million.
Operating expenses decreased by USD 6 million to USD 7 million.
Non-core
and Legacy Portfolio
The Non-core and Legacy
Portfolio result was positive USD 45 million, compared with positive USD 5
million. This result was mainly due to valuation gains of USD 51 million
on our USD 1.6 billion portfolio of auction rate securities (ARS). Our
remaining exposures to ARS were all rated investment grade as of 31 March 2022.
Group Services
The Group Services result was
positive USD 5 million, compared with negative USD 39 million, mainly
related to lower expenses relating to our legal entity transformation program.
Selected financial information of our business
divisions and Group Functions
Selected financial information of our business divisions and
Group Functions
|
Performance of our business divisions and Group Functions1
|
|
|
|
For the quarter ended 31.3.22
|
|
USD million
|
|
Global Wealth Management
|
Personal &
Corporate
Banking
|
Asset
Manage-
ment
|
Investment Bank
|
Group Functions
|
Total
|
|
Operating income
|
|
4,912
|
1,064
|
578
|
2,905
|
(95)
|
9,363
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
3,602
|
635
|
404
|
1,976
|
18
|
6,634
|
|
of which: net restructuring expenses
|
|
17
|
7
|
1
|
23
|
0
|
49
|
|
|
|
|
|
|
|
|
|
|
Operating profit / (loss) before tax
|
|
1,310
|
428
|
174
|
929
|
(112)
|
2,729
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31.12.21
|
|
USD million
|
|
Global Wealth Management
|
Personal &
Corporate
Banking
|
Asset
Manage-
ment
|
Investment Bank
|
Group Functions
|
Total
|
|
Operating income
|
|
4,824
|
1,086
|
721
|
2,235
|
(134)
|
8,732
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
4,261
|
721
|
387
|
1,522
|
113
|
7,003
|
|
of which: net restructuring expenses
|
|
23
|
4
|
4
|
27
|
2
|
60
|
|
|
|
|
|
|
|
|
|
|
Operating profit / (loss) before tax
|
|
563
|
365
|
334
|
713
|
(246)
|
1,729
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31.3.21
|
|
USD million
|
|
Global Wealth Management
|
Personal &
Corporate
Banking
|
Asset
Manage-
ment
|
Investment Bank
|
Group Functions
|
Total
|
|
Operating income
|
|
4,848
|
1,037
|
637
|
2,273
|
(90)
|
8,705
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
3,439
|
647
|
410
|
1,862
|
49
|
6,407
|
|
|
|
|
|
|
|
|
|
|
Operating profit / (loss) before tax
|
|
1,409
|
389
|
227
|
412
|
(139)
|
2,298
|
|
1 The “of which”
components of operating income and operating expenses disclosed in this table
are items that are not recurring or necessarily representative of the underlying
business performance for the reporting period specified.
|
Risk,
capital,
liquidity and funding, and balance sheet
Management report
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 our Annual Report 2021.
Credit risk
|
Credit loss (expense) / release
|
|
|
|
|
|
|
|
USD million
|
Global
Wealth
Management
|
Personal &
Corporate
Banking
|
Asset
Management
|
Investment
Bank
|
Group
Functions
|
Total
|
|
For the quarter ended 31.3.22
|
|
|
|
|
|
|
|
Stages 1 and 2
|
5
|
(13)
|
0
|
(3)
|
0
|
(11)
|
|
Stage 3
|
2
|
(10)
|
0
|
0
|
0
|
(7)
|
|
Total credit loss (expense) / release
|
7
|
(23)
|
0
|
(4)
|
0
|
(18)
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31.12.21
|
|
|
|
|
|
|
|
Stages 1 and 2
|
2
|
(4)
|
0
|
2
|
0
|
(1)
|
|
Stage 3
|
1
|
14
|
(1)
|
14
|
0
|
28
|
|
Total credit loss (expense) / release
|
2
|
10
|
(1)
|
16
|
0
|
27
|
|
|
Credit loss expense / release
Total net credit loss expenses
were USD 18 million, reflecting net expenses of USD 11 million
related to stage 1 and 2 positions and net expenses of USD 7 million
related to stage 3 positions.
›
Refer to “Note 7 Expected credit loss
measurement” in the “Consolidated financial statements” section of this report
for more information about credit loss expense / release
›
Refer to “Note 1 Summary of material
accounting policies,” “Note 9 Financial assets at amortized cost and other positions
in scope of expected credit loss measurement” and “Note 20 Expected credit loss
measurement” in the “Consolidated financial statements” section of our Annual
Report 2021 for information about scenario updates
Overall banking products exposures
Overall banking products
exposure increased by USD 13 billion, to USD 706 billion as of 31 March
2022, driven by a USD 14 billion increase in balances at central banks.
This was partially offset as total loans and advances to customers in Global Wealth
Management decreased by USD 3.9 billion, to USD 225 billion, driven
by our Lombard portfolio, mainly due to clients in Asia Pacific deleveraging and
a reduction of exposures to Russia-related borrowers.
Credit-impaired gross exposure decreased by USD 116
million to USD 2,494 million, with decreases across Global Wealth
Management and Personal & Corporate Banking.
In aggregate, exposure related to
traded products increased by USD 6.7 billion to USD 53.0 billion
during the first quarter of 2022, mainly due to higher levels of market
volatility impacting existing portfolios in the Investment Bank.
Loan underwriting
In the Investment Bank, the loan underwriting business
experienced a lower level of origination activity compared with prior quarters
in 2021. As of 31 March 2022, mandated loan underwriting commitments
totaled USD 3.0 billion on a notional basis (compared with USD 6.6
billion as of 31 December 2021). As of 31 March 2022, USD 0.4 billion
of commitments had not yet been distributed as originally planned.
Loan underwriting exposures are classified as held for
trading, with fair values reflecting the market conditions at the end of the
quarter. Credit hedges are in place to help protect against fair value
movements in the portfolio.
Credit exposure to commodity
markets
Russia’s invasion of Ukraine has implications for the
global economy and markets, with upward pressure on energy and other commodity
prices, as well as heightened concerns about disruptions to supply chains
beyond direct impacts on Russia or Ukraine.
Our commodity trade finance portfolio in Personal &
Corporate Banking focuses on energy and base-metal trading companies, where the
related commodity price risk is hedged to a large extent by the commodity
trader. The majority of limits in this business are uncommitted, transactional
and short-term in nature. Our portfolio size was USD 9 billion (CHF 8
billion) as of 31 March 2022, compared with USD 8 billion (CHF 7
billion) as of 31 December 2021, with the change mainly driven by the
appreciation of commodity prices.
UBS is monitoring the situation closely. While the unusually
high market volatility impacted some commodity traders’ liquidity in early
March, they took additional measures to secure their liquidity position. Meanwhile,
the situation for commodity traders has further stabilized following a
reduction in commodity prices and volatility levels.
Risk, capital, liquidity and funding, and
balance sheet | Risk management and control
|
Banking and traded
products exposure in our business divisions and Group Functions
|
|
|
|
31.3.22
|
|
USD million
|
|
Global Wealth
Management
|
Personal &
Corporate
Banking
|
Asset
Management
|
Investment
Bank
|
Group
Functions
|
Total
|
|
Banking products1
|
|
|
|
|
|
|
|
|
Gross exposure
|
|
343,285
|
233,355
|
1,680
|
76,267
|
51,780
|
706,367
|
|
of which: loans and advances to customers (on-balance sheet)
|
|
224,675
|
152,898
|
0
|
13,555
|
1,862
|
392,990
|
|
of which: guarantees and loan commitments (off-balance sheet)
|
|
10,303
|
28,794
|
5
|
14,380
|
7,053
|
60,535
|
|
Traded products2,3
|
|
|
|
|
|
|
|
|
Gross exposure
|
|
10,109
|
505
|
0
|
42,382
|
52,997
|
|
of which: over-the-counter derivatives
|
|
7,687
|
485
|
0
|
14,622
|
22,793
|
|
of which: securities financing transactions
|
|
0
|
0
|
0
|
20,331
|
20,331
|
|
of which: exchange-traded derivatives
|
|
2,423
|
20
|
0
|
7,429
|
9,872
|
|
Other credit lines, gross4
|
|
12,220
|
22,686
|
0
|
6,380
|
110
|
41,396
|
|
|
|
|
|
|
|
|
|
|
Total credit-impaired exposure, gross (stage 3)
|
|
685
|
1,550
|
0
|
259
|
0
|
2,494
|
|
Total allowances and provisions for expected credit losses
(stages 1 to 3)
|
|
253
|
703
|
0
|
189
|
3
|
1,148
|
|
of which: stage 1
|
|
82
|
127
|
0
|
62
|
3
|
275
|
|
of which: stage 2
|
|
42
|
153
|
0
|
39
|
0
|
234
|
|
of which: stage 3 (allowances and provisions for credit-impaired
exposures)
|
|
130
|
422
|
0
|
88
|
0
|
639
|
|
|
|
|
|
|
|
|
|
|
|
|
31.12.21
|
|
USD million
|
|
Global Wealth Management
|
Personal &
Corporate
Banking
|
Asset
Management
|
Investment
Bank
|
Group
Functions
|
Total
|
|
Banking products1
|
|
|
|
|
|
|
|
|
Gross exposure
|
|
337,266
|
229,334
|
1,520
|
59,352
|
65,514
|
692,985
|
|
of which: loans and advances to customers (on-balance sheet)
|
|
228,598
|
152,847
|
0
|
13,720
|
3,445
|
398,611
|
|
of which: guarantees and loan commitments (off-balance sheet)
|
|
10,772
|
29,737
|
0
|
14,994
|
4,947
|
60,450
|
|
Traded products2,3
|
|
|
|
|
|
|
|
|
Gross exposure
|
|
9,582
|
783
|
0
|
35,950
|
46,314
|
|
of which: over-the-counter derivatives
|
|
7,186
|
766
|
0
|
9,767
|
17,719
|
|
of which: securities financing transactions
|
|
0
|
0
|
0
|
18,566
|
18,566
|
|
of which: exchange-traded derivatives
|
|
2,396
|
17
|
0
|
7,617
|
10,030
|
|
Other credit lines, gross4
|
|
12,947
|
24,174
|
0
|
3,629
|
28
|
40,778
|
|
|
|
|
|
|
|
|
|
|
Total credit-impaired exposure, gross (stage 3)
|
|
729
|
1,617
|
0
|
264
|
0
|
2,610
|
|
Total allowances and provisions for expected credit losses
(stages 1 to 3)
|
|
264
|
709
|
0
|
188
|
4
|
1,165
|
|
of which: stage 1
|
|
89
|
126
|
0
|
64
|
4
|
282
|
|
of which: stage 2
|
|
41
|
146
|
0
|
34
|
0
|
220
|
|
of which: stage 3 (allowances and provisions for credit-impaired
exposures)
|
|
135
|
438
|
0
|
90
|
0
|
662
|
|
1 IFRS 9 gross
exposure including other financial assets at amortized cost, but excluding
cash, receivables from securities financing transactions, cash collateral
receivables on derivative instruments, financial assets at FVOCI, irrevocable
committed prolongation of existing loans and unconditionally revocable
committed credit lines, and forward starting reverse repurchase and
securities borrowing agreements. 2 Internal management view of credit
risk, which differs in certain respects from IFRS. 3 As counterparty risk
for traded products is managed at counterparty level, no further split
between exposures in the Investment Bank and Group Functions is provided.
4 Unconditionally revocable committed credit lines.
|
|
Global Wealth Management and Personal & Corporate Banking
loans and advances to customers, gross1
|
|
|
|
Global Wealth Management
|
|
Personal & Corporate Banking
|
|
USD million
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
Secured by residential real estate
|
|
59,894
|
58,655
|
|
109,484
|
110,041
|
|
Secured by commercial / industrial real estate
|
|
3,877
|
3,338
|
|
18,701
|
18,878
|
|
Secured by cash
|
|
36,286
|
34,175
|
|
3,007
|
3,114
|
|
Secured by securities
|
|
108,809
|
115,901
|
|
2,048
|
2,214
|
|
Secured by guarantees and other collateral
|
|
13,725
|
14,138
|
|
7,136
|
7,435
|
|
Unsecured loans and advances to customers
|
|
2,084
|
2,391
|
|
12,521
|
11,166
|
|
Total loans and advances to customers, gross
|
|
224,675
|
228,598
|
|
152,898
|
152,847
|
|
Allowances
|
|
(153)
|
(168)
|
|
(542)
|
(574)
|
|
Total loans and advances to customers, net of allowances
|
|
224,522
|
228,431
|
|
152,356
|
152,273
|
|
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.
|
Market risk
We continued to maintain
generally low levels of management value-at-risk (VaR). Average management VaR
(1‑day, 95% confidence level) was unchanged, at USD 11 million,
compared with the fourth quarter of 2021.
There were no
new Group VaR negative backtesting exceptions in the first quarter of 2022,
and the total number of negative backtesting exceptions within the most recent
250-business-day window decreased to 2 from 4. The Swiss Financial Market
Supervisory Authority (FINMA) VaR multiplier derived from backtesting
exceptions for market risk risk-weighted assets was unchanged compared with the
prior quarter, at 3.0.
|
Management value-at-risk (1-day, 95% confidence, 5 years of
historical data) of our business divisions and
Group Functions by general market risk type1
|
|
|
|
|
|
|
|
Average by risk type
|
|
USD million
|
|
Min.
|
Max.
|
Period end
|
Average
|
Equity
|
Interest
rates
|
Credit
spreads
|
Foreign
exchange
|
Commodities
|
|
Global Wealth Management
|
|
1
|
2
|
1
|
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
|
|
6
|
17
|
10
|
10
|
6
|
9
|
6
|
3
|
3
|
|
Group Functions
|
|
3
|
5
|
4
|
4
|
1
|
3
|
3
|
1
|
0
|
|
Diversification effect2,3
|
|
|
|
(4)
|
(5)
|
(1)
|
(3)
|
(4)
|
(1)
|
0
|
|
Total as of 31.3.22
|
|
8
|
18
|
11
|
11
|
6
|
9
|
6
|
4
|
3
|
|
Total as of 31.12.21
|
|
7
|
15
|
12
|
11
|
5
|
10
|
8
|
3
|
3
|
|
1 Statistics at
individual levels may not be summed to deduce the corresponding aggregate
figures. The minima and maxima for each level may occur on different days,
and, likewise, the VaR for each business line or risk type, being driven by
the extreme loss tail of the corresponding distribution of simulated profits
and losses for that business line or risk type, may well be driven by
different days in the historical time series, rendering invalid the simple
summation of figures to arrive at the aggregate total. 2 The difference
between the sum of the standalone VaR for the business divisions and Group
Functions and the VaR for the Group as a whole. 3 As the minima and maxima
for different business divisions and Group Functions occur on different days,
it is not meaningful to calculate a portfolio diversification effect.
|
As of 31 March 2022, the sensitivity of our interest
rate risk in the banking book to a +1-basis-point parallel shift in yield
curves, calculated as changes in the present value of future cash flows
irrespective of accounting treatment, was negative USD 28.3 million, compared
with negative USD 29.9 million as of 31 December 2021. The change in
the interest rate sensitivity was driven by a shorter asset repricing duration
of floating-rate Swiss franc mortgages, following the cessation of CHF LIBOR, normal
business activities and an increase in market rates. As per specific FINMA
Pillar 3 disclosure requirements, the reported interest rate sensitivity
excludes additional tier 1 (AT1) capital instruments, with a sensitivity of
USD 4.8 million. The majority of our interest rate risk in the banking
book of USD 23.5 million reflected our modeled sensitivity of
USD 20.9 million to our equity, goodwill and real estate, of which
USD 14.9 million and USD 5.2 million are attributable to the US
dollar and the Swiss franc portfolios, respectively.
In addition to the sensitivity mentioned above, we calculate
the six interest rate shock scenarios prescribed by FINMA, as shown in the
table below. The “Parallel up” scenario was the most severe and would have resulted
in a change in economic value of equity, assuming all positions were fair
valued, of negative USD 5.5 billion, representing a pro forma reduction of
9.1% of tier 1 capital, which is well below the regulatory outlier test of
15% of tier 1 capital. The immediate effect of the “Parallel up” scenario on
our tier 1 capital as of 31 March 2022 arising from the part of our
banking book that is measured at fair value through profit or loss and from the
financial assets measured at fair value through other comprehensive income, would
have been a reduction of 1.7%, or USD 1.0 billion. This scenario would,
however, have a positive effect on net interest income.
In addition to the prescribed FINMA scenarios, UBS also
applies granular internal interest rate shock scenarios to its banking book
positions to monitor its specific risk profile.
›
Refer to “Interest rate risk in the banking
book” in the “Market risk” section of our Annual Report 2021 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 Global Wealth Management and Personal & Corporate
Banking
|
Interest rate risk – banking book
|
|
USD million
|
+1 bp
|
Parallel up1
|
Parallel down1
|
Steepener2
|
Flattener3
|
Short-term up4
|
Short-term down5
|
|
CHF
|
(3.8)
|
(528.9)
|
604.9
|
(325.7)
|
219.7
|
(7.2)
|
10.0
|
|
EUR
|
(1.1)
|
(204.1)
|
239.8
|
(78.1)
|
45.2
|
(19.0)
|
22.1
|
|
GBP
|
0.1
|
13.7
|
(18.7)
|
(23.9)
|
24.8
|
28.8
|
(28.7)
|
|
USD
|
(23.2)
|
(4,674.4)
|
4,251.2
|
(951.0)
|
(170.1)
|
(1,944.1)
|
2,236.6
|
|
Other
|
(0.3)
|
(81.8)
|
65.3
|
(6.1)
|
(23.6)
|
(52.1)
|
30.0
|
|
Total effect on economic value of equity as per Pillar 3
requirement as of 31.3.22
|
(28.3)
|
(5,475.5)
|
5,142.5
|
(1,384.7)
|
96.0
|
(1,993.6)
|
2,270.0
|
|
Additional tier 1 (AT1) capital instruments
|
4.8
|
903.5
|
(979.9)
|
(14.4)
|
213.8
|
565.7
|
(588.8)
|
|
Total including AT1 capital instruments as of 31.3.22
|
(23.5)
|
(4,572.0)
|
4,162.6
|
(1,399.1)
|
309.8
|
(1,428.0)
|
1,681.2
|
|
Total effect on economic value of equity as per Pillar 3
requirement as of 31.12.21
|
(29.9)
|
(6,041.4)
|
5,149.5
|
(1,179.6)
|
(207.0)
|
(2,362.9)
|
2,465.6
|
|
Total including AT1 capital instruments as of 31.12.21
|
(25.4)
|
(5,188.0)
|
4,221.1
|
(1,189.2)
|
(10.0)
|
(1,831.4)
|
1,912.3
|
|
1 Rates across all
tenors move by ±150 bps for Swiss franc, ±200 bps for euro and US dollar, and
±250 bps for pound sterling. 2 Short-term rates decrease and long-term
rates increase. 3 Short-term rates increase and long-term rates
decrease. 4 Short-term rates increase more than long-term rates. 5
Short-term rates decrease more than long-term rates.
|
Risk, capital, liquidity and funding, and
balance sheet | Risk management and control
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 Russia’s
invasion of Ukraine. As described in the “Recent developments” section of this
report, our direct exposure to Russia, Belarus and Ukraine is limited, and we
continue to monitor potential second-order impacts. We do have significant country
risk exposure to major European economies, including Germany, the UK and
France.
There continue to be concerns regarding a resurgence in global
inflation, and the timing and extent of central bank policy responses (e.g.,
interest rate hikes and tapering of quantitative easing) will be an area of
focus in the coming months. There are related concerns about increasing energy
prices in a number of countries, and global supply chain stresses and tight
labor markets are creating negative pressure on growth. China is facing several
challenges, including a slowing economy following the post-pandemic boom, as
well as recent COVID-19-related lockdowns. We expect measures taken by
governments and central banks that are intended to support their economies to
give rise to increased sovereign risk as the COVID-19 pandemic remains a
concern for a number of countries.
We continue to monitor potential trade policy disputes, as
well as economic and political developments in addition to those mentioned
above. A number of emerging markets are facing economic, political and market
pressures, particularly in light of challenges related to the COVID-19 pandemic,
but our exposure to emerging market countries is diversified.
›
Refer to the “Risk management and control”
section of our Annual Report 2021 for more information
›
Refer to the “Recent developments” section
of this report for more information about our exposure
and response to Russia’s invasion of Ukraine
Non-financial risk
Operational resilience continues to be
a focus area for us, as well as for regulators globally. We have a global
program to enhance our operational-resilience capabilities, including
addressing developing regulatory requirements.
Increases in the sophistication of cyberattacks and fraud are
noted worldwide, especially with regard to ransomware attacks. To date, our
security controls, regular communications to help employees to stay alert to
cyber threats while working remotely, and enhanced monitoring of cyber threats
have been effective. No cybersecurity incidents had a material effect on our
operations during the first quarter of 2022. UBS continues to be vigilant,
particularly in view of the potential for cyber threats to intensify, both in
volume and sophistication, driven by Russia’s invasion of Ukraine.
Our response to the COVID-19 pandemic has relied upon our
business continuity management and operational risk processes. They have
enabled us to: maintain stable operations while complying with governmental
measures to contain COVID-19; continue to serve our clients without material
impact; and support the safety and well-being of our staff.
Hybrid working arrangements and the introduction of agile ways
of working can lead to increased conduct risk, challenges regarding supervision
and monitoring, inherent risk of fraudulent activities, potential increases in
the number of suspicious transactions and increased information security risks.
We have implemented additional monitoring and supervision intended to mitigate
these risks and continue to review the effectiveness of these measures.
Achieving fair outcomes for our clients, upholding market
integrity and cultivating the highest standards of employee conduct are of
critical importance to the firm. We maintain a conduct risk framework across
our activities, which is designed to align our standards and conduct with these
objectives and to retain momentum on fostering a strong culture.
We are continuing our efforts regarding innovation and
digitalization to create value for our clients. As part of the resulting transformation,
we focus on timely changes to frameworks, including consideration of new or
revised controls, working practices and oversight, with the aim of mitigating
any new risks introduced, including those related to data ethics.
Competition to find new business opportunities across the
financial services industry, both for firms and for customers, is increasing.
Thus suitability risk, product selection, cross-divisional service offerings,
quality of advice and price transparency also remain areas of heightened focus
for UBS and for the industry as a whole, as market volatility and major
legislative change programs (such as the Swiss Financial Services Act (FIDLEG)
in Switzerland, Regulation Best Interest (Reg BI) in the US and the revised Markets
in Financial Instruments Directive (MiFID II) in the EU), along with new
requirements for sustainable investments, all significantly impact the industry
and require adjustments to control processes. We regularly monitor our
suitability, product and conflicts-of-interest control frameworks to assess
whether they are reasonably designed to facilitate adherence to applicable laws
and regulatory expectations.
Cross-border risk remains an area of regulatory attention for
global financial institutions, with a strong focus on fiscal transparency, as
well as market access, particularly third-country market access into the
European Economic Area (the EEA). There is also an ongoing high level of
attention regarding the risk that tax authorities may, on the basis of new
interpretations of existing law, seek to impose taxation based on the existence
of a permanent establishment. We maintain a series of controls designed to
address these risks.
Financial crime, including money
laundering, terrorist financing, sanctions violations, fraud, bribery and
corruption, continues to present a major risk, as technological innovation and
geopolitical developments increase the complexity of doing business and
heightened regulatory attention continues. An effective financial crime
prevention program therefore remains essential for UBS. Money laundering and
financial fraud techniques are becoming increasingly sophisticated, and
geopolitical volatility makes the sanctions landscape more complex, as new or
novel sanctions may be imposed that require complex implementation in a short
time frame. This was evidenced by the extensive sanctions arising from Russia’s
invasion of Ukraine. New risks continue to emerge, such as virtual currencies
and related activities or investments.
The Office of the Comptroller of the Currency issued a Cease
and Desist Order against the firm in May 2018 relating to our US branch
know-your-client (KYC) and anti-money-laundering (AML) programs. In response,
we initiated an extensive program for the purpose of ensuring sustainable
remediation of US-relevant Bank Secrecy Act / AML issues across all our US legal
entities. We introduced significant improvements to the
framework between 2019 and 2021 and are continuing to implement these. We
believe they will yield the planned enhancements to our AML controls.
We continued to focus on strategic enhancements to our global
AML / KYC and sanctions programs to address evolving risk profiles and
regulatory expectations, including the exploration of new technologies and more
sophisticated monitoring.
›
Refer to ”Russia’s invasion of Ukraine” in
the ”Recent developments” section of this report for more information about the
effects of Russia’s invasion of Ukraine
Risk, capital, liquidity and funding, and
balance sheet | Capital management
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 our Annual Report 2021, which provides more information about
our capital management objectives, planning and activities, as well as the
Swiss SRB total loss-absorbing capacity framework.
Additional regulatory disclosures for UBS Group AG on a
consolidated basis are provided in our 31 March 2022 Pillar 3 report.
The Pillar 3 report also includes information relating to our significant
regulated subsidiaries and sub-groups (UBS AG standalone, UBS Switzerland
AG standalone, UBS Europe SE consolidated and UBS Americas Holding LLC
consolidated) as of 31 March 2022 and is available under “Pillar 3
disclosures” at ubs.com/investors.
Capital and other regulatory information for UBS AG
consolidated in accordance with the Basel III framework, as applicable to
Swiss SRBs, will be provided in the UBS AG first quarter 2022 report,
which will be available as of 29 April 2022 under “Quarterly reporting” at ubs.com/investors.
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 have contributed a significant
portion of their respective capital to, and provide substantial liquidity to,
such subsidiaries. Many of these subsidiaries are subject to regulations
requiring compliance with minimum capital, liquidity and similar requirements.
Swiss SRB
requirements and information
We are subject to the going and gone concern requirements
of the Swiss Capital Adequacy Ordinance (the CAO) that include the too-big-to-fail
provisions applicable to Swiss SRBs. Information
about the Swiss SRB capital framework, and about Swiss SRB going and gone
concern requirements, is provided under “Capital management” in the “Capital,
liquidity and funding, and balance sheet” section of our Annual Report 2021.
The
applicable gone concern requirement floor as of 31 March 2022 was 10% for risk-weighted assets (RWA) and 3.75% for leverage ratio denominator (LRD) purposes. This floor
was increased by 1.4% for RWA and 0.75% for LRD in the first quarter of 2022.
The aforementioned requirements are
also applicable to UBS AG consolidated. UBS Switzerland AG and UBS AG
are subject to going and gone concern requirements on a standalone basis, as detailed
in our 31 March 2022 Pillar 3 report, which is available under “Pillar 3
disclosures” at ubs.com/investors.
The table below provides the RWA- and LRD-based requirements and information
as of 31 March 2022.
|
Swiss SRB going and gone concern requirements and information
|
|
As of 31.3.22
|
|
RWA
|
|
LRD
|
|
USD million, except where indicated
|
|
in %
|
|
|
in %
|
|
|
Required going concern capital
|
|
|
|
|
|
|
|
Total going concern capital
|
|
14.321
|
44,691
|
|
5.001
|
53,648
|
|
Common equity tier 1 capital
|
|
10.02
|
31,273
|
|
3.502
|
37,553
|
|
of which: minimum capital
|
|
4.50
|
14,042
|
|
1.50
|
16,094
|
|
of which: buffer capital
|
|
5.50
|
17,162
|
|
2.00
|
21,459
|
|
of which: countercyclical buffer
|
|
0.02
|
69
|
|
|
|
|
Maximum additional tier 1 capital
|
|
4.30
|
13,418
|
|
1.50
|
16,094
|
|
of which: additional tier 1 capital
|
|
3.50
|
10,921
|
|
1.50
|
16,094
|
|
of which: additional tier 1 buffer capital
|
|
0.80
|
2,496
|
|
|
|
|
|
|
|
|
|
|
|
|
Eligible going concern capital
|
|
|
|
|
|
|
|
Total going concern capital
|
|
19.25
|
60,053
|
|
5.60
|
60,053
|
|
Common equity tier 1 capital
|
|
14.29
|
44,593
|
|
4.16
|
44,593
|
|
Total loss-absorbing additional tier 1 capital3
|
|
4.95
|
15,460
|
|
1.44
|
15,460
|
|
of which: high-trigger loss-absorbing additional tier 1 capital
|
|
4.56
|
14,223
|
|
1.33
|
14,223
|
|
of which: low-trigger loss-absorbing additional tier 1 capital
|
|
0.40
|
1,236
|
|
0.12
|
1,236
|
|
|
|
|
|
|
|
|
|
Required gone concern capital
|
|
|
|
|
|
|
|
Total gone concern loss-absorbing capacity4
|
|
10.76
|
33,585
|
|
3.78
|
40,592
|
|
of which: base requirement5
|
|
12.86
|
40,128
|
|
4.50
|
48,283
|
|
of which: additional requirement for market share and LRD
|
|
1.44
|
4,493
|
|
0.50
|
5,365
|
|
of which: applicable reduction on requirements
|
|
(3.54)
|
(11,036)
|
|
(1.22)
|
(13,056)
|
|
of which: rebate granted
|
|
(3.14)
|
(9,782)
|
|
(1.10)
|
(11,802)
|
|
of which: reduction for usage of low-trigger tier 2 capital
instruments
|
|
(0.40)
|
(1,253)
|
|
(0.12)
|
(1,253)
|
|
|
|
|
|
|
|
|
|
Eligible gone concern capital
|
|
|
|
|
|
|
|
Total gone concern loss-absorbing capacity
|
|
14.91
|
46,520
|
|
4.34
|
46,520
|
|
Total tier 2 capital
|
|
0.98
|
3,050
|
|
0.28
|
3,050
|
|
of which: low-trigger loss-absorbing tier 2 capital
|
|
0.80
|
2,507
|
|
0.23
|
2,507
|
|
of which: non-Basel III-compliant tier 2 capital
|
|
0.17
|
543
|
|
0.05
|
543
|
|
TLAC-eligible senior unsecured debt
|
|
13.93
|
43,470
|
|
4.05
|
43,470
|
|
|
|
|
|
|
|
|
|
Total loss-absorbing capacity
|
|
|
|
|
|
|
|
Required total loss-absorbing capacity
|
|
25.09
|
78,276
|
|
8.78
|
94,239
|
|
Eligible total loss-absorbing capacity
|
|
34.15
|
106,573
|
|
9.93
|
106,573
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets / leverage ratio denominator
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
|
312,037
|
|
|
|
|
Leverage ratio denominator
|
|
|
|
|
|
1,072,953
|
|
1 Includes
applicable add-ons of 1.44% for RWA and 0.50% for LRD. 2 Our minimum CET1
leverage ratio requirement of 3.5% 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 (AT1) capital instruments, which are available under the Swiss SRB
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 The gone concern requirement after the application
of the rebate for resolvability measures and the reduction for the use of
higher quality capital instruments is floored at 10% and 3.75% for the RWA-
and LRD-based requirements, respectively. This means that the combined
reduction may not exceed 4.3 percentage points for the RWA-based requirement
of 14.3% and 1.25 percentage points for the LRD-based requirement of 5.0%.
|
Risk, capital, liquidity and funding, and
balance sheet | Capital management
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 our Annual Report 2021.
|
Swiss SRB going and gone concern information
|
|
|
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
|
|
|
|
|
|
Eligible going concern capital
|
|
|
|
|
Total going concern capital
|
|
60,053
|
60,488
|
|
Total tier 1 capital
|
|
60,053
|
60,488
|
|
Common equity tier 1 capital
|
|
44,593
|
45,281
|
|
Total loss-absorbing additional tier 1 capital
|
|
15,460
|
15,207
|
|
of which: high-trigger loss-absorbing additional tier 1 capital
|
|
14,223
|
12,783
|
|
of which: low-trigger loss-absorbing additional tier 1 capital
|
|
1,236
|
2,425
|
|
|
|
|
|
|
Eligible gone concern capital
|
|
|
|
|
Total gone concern loss-absorbing capacity
|
|
46,520
|
44,264
|
|
Total tier 2 capital
|
|
3,050
|
3,144
|
|
of which: low-trigger loss-absorbing tier 2 capital
|
|
2,507
|
2,596
|
|
of which: non-Basel III-compliant tier 2 capital
|
|
543
|
547
|
|
TLAC-eligible senior unsecured debt
|
|
43,470
|
41,120
|
|
|
|
|
|
|
Total loss-absorbing capacity
|
|
|
|
|
Total loss-absorbing capacity
|
|
106,573
|
104,752
|
|
|
|
|
|
|
Risk-weighted assets / leverage ratio denominator
|
|
|
|
|
Risk-weighted assets
|
|
312,037
|
302,209
|
|
Leverage ratio denominator
|
|
1,072,953
|
1,068,862
|
|
|
|
|
|
|
Capital and loss-absorbing capacity ratios (%)
|
|
|
|
|
Going concern capital ratio
|
|
19.2
|
20.0
|
|
of which: common equity tier 1 capital ratio
|
|
14.3
|
15.0
|
|
Gone concern loss-absorbing capacity ratio
|
|
14.9
|
14.6
|
|
Total loss-absorbing capacity ratio
|
|
34.2
|
34.7
|
|
|
|
|
|
|
Leverage ratios (%)
|
|
|
|
|
Going concern leverage ratio
|
|
5.6
|
5.7
|
|
of which: common equity tier 1 leverage ratio
|
|
4.16
|
4.24
|
|
Gone concern leverage ratio
|
|
4.3
|
4.1
|
|
Total loss-absorbing capacity leverage ratio
|
|
9.9
|
9.8
|
|
|
Total
loss-absorbing capacity and movement
Our total loss-absorbing capacity (TLAC) increased by USD 1.8
billion to USD 106.6 billion in the first quarter of 2022.
Going concern capital and movement
Our going concern
capital decreased by USD 0.4 billion
to USD 60.1 billion. Our common equity tier 1 (CET1) capital decreased by USD 0.7 billion to USD 44.6 billion, mainly as
operating profit before tax of USD 2.7 billion was more than offset by share
repurchases of USD 1.7 billion, dividend accruals of USD 0.4 billion,
a USD 0.4 billion negative effect from financial
assets at fair value through other comprehensive income (OCI) with a life-to-date
OCI loss, current tax expenses of USD 0.4 billion and negative effects
from foreign currency translation and defined benefit plans of USD 0.3
billion and USD 0.1 billion, respectively. The negative effect from financial
assets at fair value through OCI was driven by significant increases in the
relevant US dollar long-term interest rates.
Our additional tier 1 (AT1)
capital increased by USD 0.3 billion
to USD 15.5 billion, mainly reflecting two issuances of AT1 capital
instruments denominated in US dollars and Swiss
francs amounting to USD 1.8 billion equivalent, partly offset by the call
of a USD 1.1 billion equivalent AT1 capital instrument denominated in euro and interest rate risk
hedge, foreign currency translation and other effects.
Gone concern loss-absorbing capacity
and movement
Our total gone concern loss-absorbing capacity increased
by USD 2.3 billion to USD 46.5 billion, mainly due to five new
issuances of TLAC-eligible senior unsecured debt denominated in US dollars,
euro and Australian dollars amounting to USD 4.8 billion equivalent,
partly offset by 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 0.7 percentage
points to 14.3%, reflecting a USD 9.8 billion increase in RWA and a
decrease in CET1 capital of USD 0.7
billion.
Our CET1 leverage ratio decreased to 4.16% from 4.24%, due to the
aforementioned decrease in CET1 capital and a USD 4.1 billion increase in
LRD.
Our gone concern loss-absorbing capacity ratio increased to 14.9%
from 14.6%, due to the increase in gone concern
loss-absorbing capacity of USD 2.3 billion, partly offset by the
aforementioned increase in RWA.
Our gone concern leverage ratio increased to 4.3% from 4.1%,
reflecting the aforementioned increase in gone concern loss-absorbing capacity,
partly offset by the aforementioned increase in LRD.
|
Reconciliation of IFRS equity to Swiss SRB common equity tier 1
capital
|
|
|
|
|
USD million
|
|
31.3.22
|
31.12.21
|
|
Total IFRS equity
|
|
59,212
|
61,002
|
|
Equity attributable to non-controlling interests
|
|
(356)
|
(340)
|
|
Defined benefit plans, net of tax
|
|
(446)
|
(270)
|
|
Deferred tax assets recognized for tax loss carry-forwards
|
|
(4,520)
|
(4,565)
|
|
Deferred tax assets on temporary differences, excess over
threshold
|
|
(81)
|
(49)
|
|
Goodwill, net of tax1
|
|
(5,822)
|
(5,838)
|
|
Intangible assets, net of tax
|
|
(191)
|
(180)
|
|
Compensation-related components (not recognized in net profit)
|
|
(1,744)
|
(1,700)
|
|
Expected losses on advanced internal ratings-based portfolio
less provisions
|
|
(518)
|
(482)
|
|
Unrealized (gains) / losses from cash flow hedges, net of tax
|
|
1,556
|
(628)
|
|
Own credit related to gains / losses on financial liabilities
measured at fair value that existed at the balance sheet date
|
|
(114)
|
315
|
|
Own credit related to gains / losses on derivative financial
instruments that existed at the balance sheet date
|
|
(84)
|
(50)
|
|
Unrealized gains related to financial assets at fair value
through OCI, net of tax
|
|
(1)
|
(68)
|
|
Prudential valuation adjustments
|
|
(183)
|
(167)
|
|
Accruals for dividends to shareholders for 2021
|
|
(1,668)
|
(1,700)
|
|
Other2
|
|
(448)
|
1
|
|
Total common equity tier 1 capital
|
|
44,593
|
45,281
|
|
1 Includes
goodwill related to significant investments in financial institutions of USD
22 million as of 31 March 2022 (31 December 2021: USD 22 million) presented
on the balance sheet line Investments in associates. 2 Includes dividend
accruals for the current year and other items.
|
Risk, capital, liquidity and funding, and
balance sheet | Capital management
|
Swiss SRB total
loss-absorbing capacity movement
|
|
|
USD million
|
|
|
|
|
|
Going concern capital
|
Swiss SRB
|
|
Common equity tier 1 capital as of 31.12.21
|
45,281
|
|
Operating profit before tax
|
2,729
|
|
Current tax (expense) / benefit
|
(364)
|
|
Share repurchase programs
|
(1,685)
|
|
Effect from financial assets at fair value through OCI with a
life-to-date OCI loss
|
(372)
|
|
Foreign currency translation effects before tax
|
(265)
|
|
Defined benefit plans1
|
(134)
|
|
Other2
|
(595)
|
|
Common equity tier 1 capital as of 31.3.22
|
44,593
|
|
Loss-absorbing additional tier 1 capital as of 31.12.21
|
15,207
|
|
Issuance of high-trigger loss-absorbing additional tier 1
capital
|
1,789
|
|
Call of low-trigger loss-absorbing additional tier 1 capital
|
(1,121)
|
|
Interest rate risk hedge, foreign currency translation and other
effects
|
(415)
|
|
Loss-absorbing additional tier 1 capital as of 31.3.22
|
15,460
|
|
Total going concern capital as of 31.12.21
|
60,488
|
|
Total going concern capital as of 31.3.22
|
60,053
|
|
|
|
|
Gone concern loss-absorbing capacity
|
|
|
Tier 2 capital as of 31.12.21
|
3,144
|
|
Interest rate risk hedge, foreign currency translation and other
effects
|
(94)
|
|
Tier 2 capital as of 31.3.22
|
3,050
|
|
TLAC-eligible senior unsecured debt as of 31.12.21
|
41,120
|
|
Issuance of TLAC-eligible senior unsecured debt
|
4,766
|
|
Interest rate risk hedge, foreign currency translation and other
effects
|
(2,416)
|
|
TLAC-eligible senior unsecured debt as of 31.3.22
|
43,470
|
|
Total gone concern loss-absorbing capacity as of 31.12.21
|
44,264
|
|
Total gone concern loss-absorbing capacity as of 31.3.22
|
46,520
|
|
|
|
|
Total loss-absorbing capacity
|
|
|
Total loss-absorbing capacity as of 31.12.21
|
104,752
|
|
Total loss-absorbing capacity as of 31.3.22
|
106,573
|
|
1 Includes a USD
209 million payment of the third and final installment to employees’
retirement assets in the Swiss pension fund, as announced in 2018. Refer to
“Note 27 Post-employment benefit plans” in the “Consolidated financial statements”
section of our Annual Report 2021 for more information. 2 Includes
dividend accruals for the current year (negative USD 0.4 billion), eligible
deferred tax assets on temporary differences (negative USD 0.1 billion), and
movements related to other items.
|
Additional information
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10%
depreciation of the US dollar against other currencies would have increased our
RWA by USD 13 billion and our CET1 capital by USD 1.3 billion
as of 31 March 2022 (31 December 2021: USD 13 billion and
USD 1.4 billion, respectively) and decreased our CET1 capital ratio 17 basis
points (31 December 2021: 15 basis points). Conversely, we estimate
that a 10% appreciation of the US dollar against other currencies would have
decreased our RWA by USD 12 billion and our CET1 capital by USD 1.2 billion
(31 December 2021: USD 11 billion and USD 1.3 billion,
respectively) and increased our CET1 capital ratio 16 basis
points (31 December 2021: 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 64 billion as of 31 March 2022 (31 December
2021: USD 63 billion) and decreased our Swiss SRB going concern
leverage ratio 18 basis points (31 December 2021: 15 basis points).
Conversely, we estimate that a 10% appreciation of the US dollar against other
currencies would have decreased our LRD by USD 58 billion (31 December
2021: USD 57 billion) and increased our Swiss SRB going concern
leverage ratio 18 basis points (31 December 2021: 16 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 currency movements” under “Capital management” in the “Capital, liquidity
and funding, and balance sheet” section of our Annual Report 2021 for more
information
Estimated
effect on capital from litigation, regulatory and similar matters subject to
provisions and contingent liabilities
We have estimated the loss in capital that we could
incur as a result of the risks associated with the matters described in “Note 14
Provisions and contingent liabilities” in the “Consolidated financial
statements” section of this report. We have employed for this purpose the
advanced measurement approach (AMA) methodology that we use when determining
the capital requirements associated with operational risks, based on a 99.9%
confidence level over a 12-month horizon. The methodology takes into
consideration UBS and industry experience for the AMA operational risk
categories to which those matters correspond, as well as the external environment
affecting risks of these types, in isolation from other areas. On this basis,
we estimate the maximum loss in capital that we could incur over a 12-month
period as a result of our risks associated with these operational risk
categories at USD 4.3 billion as of
31 March 2022. This estimate is
not related to and does not take into account any provisions recognized for any
of these matters and does not constitute a subjective assessment of our actual
exposure in any of these matters.
›
Refer to “Non-financial risk” in the “Risk
management and control” section of our Annual Report 2021 for more information
›
Refer to “Note 14 Provisions
and contingent liabilities” in the “Consolidated financial statements” section
of this report for more information
Risk, capital, liquidity and funding, and balance
sheet | Capital management
Risk-weighted assets
During
the first quarter of 2022, RWA increased by USD 9.8 billion to USD 312.0 billion, driven by increases from asset size
and other movements of USD 7.7 billion, model updates of USD 3.1
billion, and regulatory add-ons of USD 0.7 billion, partly offset by a decrease
from currency effects of USD 1.7 billion.
|
Movement in risk-weighted assets by key driver
|
|
USD billion
|
|
RWA as of 31.12.21
|
Currency
effects
|
Methodology and policy changes
|
Model updates / changes
|
Regulatory add-ons
|
Asset size and other1
|
RWA as of 31.3.22
|
|
Credit and counterparty credit risk2
|
|
190.1
|
(1.6)
|
|
1.6
|
|
5.4
|
195.4
|
|
Non-counterparty-related risk3
|
|
24.3
|
(0.1)
|
|
|
|
(0.3)
|
23.9
|
|
Market risk
|
|
11.1
|
|
|
(0.5)
|
0.7
|
2.6
|
13.9
|
|
Operational risk
|
|
76.7
|
|
|
2.1
|
|
|
78.8
|
|
Total
|
|
302.2
|
(1.7)
|
|
3.1
|
0.7
|
7.7
|
312.0
|
|
1 Includes the
Pillar 3 categories “Asset size,” “Credit quality of counterparties,”
“Acquisitions and disposals” and “Other.” For more information, refer to our
31 March 2022 Pillar 3 report, available under “Pillar 3 disclosures” at
ubs.com/investors. 2 Includes settlement risk, credit valuation
adjustments, equity exposures in the banking book, investments in funds 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 was USD 195.4 billion as of 31 March 2022. The increase of
USD 5.3 billion included negative currency effects of USD 1.6 billion.
Asset size and other
movements resulted in a USD 5.4 billion increase in RWA.
– Investment Bank RWA increased by USD 1.7
billion, mainly driven by higher client activity and market-driven movements in
derivatives, partly offset by a reduction in loans and securities financing
transactions.
–
Global Wealth Management RWA
increased by USD 1.4 billion, mainly driven by increases in loans and
derivatives.
– Personal & Corporate Banking RWA increased by USD 1.2
billion, mainly driven by higher loans to corporate
clients.
–
Group Functions RWA
increased by USD 0.8 billion, mainly driven by higher RWA from the high-quality
liquid assets (HQLA) portfolio and nostro accounts.
–
Asset Management RWA
increased by USD 0.2 billion, driven by an increase in investments in
funds.
Model updates resulted
in an RWA increase of USD 1.6 billion, primarily due to a USD 0.7
billion quarterly phase-in impact for structured margin loans and similar
products in Global Wealth Management, a USD 0.4 billion increase related
to the implementation of a new model for structured margin loans in the
Investment Bank, and a USD 0.3 billion
increase due to an LGD model update for leveraged finance clients in the
Investment Bank.
We expect that further methodology changes, model updates and
regulatory add-ons will increase credit and counterparty credit risk RWA by
around USD 4 billion in the second quarter of 2022.
The extent and timing of RWA changes may vary as methodology
changes and model updates are completed and receive regulatory approval. In
addition, changes in the composition of the relevant portfolios and other
market factors will affect RWA.
›
Refer to the “Risk management and control”
section of this report and our 31 March 2022 Pillar 3 report,
available under “Pillar 3 disclosures” at ubs.com/investors, for more information
›
Refer to “Credit risk models” in the “Risk
management and control” section of our Annual Report 2021 for more information
Market risk
Market risk RWA increased by USD 2.8 billion to
USD 13.9 billion in the first quarter of 2022, mainly due to a USD 2.6
billion increase in asset size and other movements, primarily related to higher
average regulatory and stressed value-at-risk levels in the Investment Bank’s
Global Markets business on the back of heightened market volatility compared with
the previous quarter, as well as an increase of USD 0.7 billion in regulatory
add-ons that reflected updates from the monthly risks-not-in-VaR assessment.
This was partially offset by a decrease of USD 0.5 billion that was mainly
related to the ongoing parameter updates of our VaR model. The integration of
time decay into the regulatory VaR model is subject to further discussions
between FINMA and UBS.
›
Refer to the “Risk management and control”
section of this report and our 31 March 2022 Pillar 3 report,
available under “Pillar 3 disclosures” at ubs.com/investors,
for more information
›
Refer to ”Market risk” in the “Risk
management and control” section of our Annual Report 2021 for more information
Operational risk
Operational risk RWA increased by USD 2.1 billion
to USD 78.8 billion as of 31 March 2022. Following
a review with FINMA, we have reflected an operational risk RWA increase of USD 2.1
billion in the first quarter of 2022 relating to the French cross-border matter.
An additional operational risk RWA increase of USD 2.0 billion will be
reflected in the second quarter of 2022, resulting in a total operational risk
RWA increase related to the matter of USD 4.1 billion.
›
Refer to “Note 14 Provisions and
contingent liabilities” in the “Consolidated financial statements” section of
this report for more information about the French cross-border matter
›
Refer to “Non-financial risk” in the “Risk
management and control” section of our Annual Report 2021 for information about
the AMA model
|
Risk-weighted assets by business division and Group Functions
|
|
USD billion
|
|
Global Wealth
Management
|
Personal &
Corporate
Banking
|
Asset
Manage-
ment
|
Investment
Bank
|
Group Functions
|
Total
RWA
|
|
|
|
31.3.22
|
|
Credit and counterparty credit risk1
|
|
58.6
|
63.6
|
3.4
|
62.7
|
7.1
|
195.4
|
|
Non-counterparty-related risk2
|
|
6.0
|
1.9
|
0.6
|
3.7
|
11.7
|
23.9
|
|
Market risk
|
|
2.3
|
0.0
|
0.0
|
10.5
|
1.0
|
13.9
|
|
Operational risk
|
|
36.5
|
8.8
|
3.1
|
20.7
|
9.8
|
78.8
|
|
Total
|
|
103.4
|
74.4
|
7.0
|
97.6
|
29.6
|
312.0
|
|
|
|
|
|
|
|
|
|
|
|
|
31.12.21
|
|
Credit and counterparty credit risk1
|
|
56.9
|
63.0
|
3.2
|
60.5
|
6.4
|
190.1
|
|
Non-counterparty-related risk2
|
|
6.2
|
2.0
|
0.6
|
3.5
|
12.0
|
24.3
|
|
Market risk
|
|
1.6
|
0.0
|
0.0
|
8.1
|
1.5
|
11.1
|
|
Operational risk
|
|
35.2
|
8.1
|
3.0
|
20.2
|
10.3
|
76.7
|
|
Total
|
|
99.8
|
73.2
|
6.9
|
92.2
|
30.1
|
302.2
|
|
|
|
|
|
|
|
|
|
|
|
|
31.3.22 vs 31.12.21
|
|
Credit and counterparty credit risk1
|
|
1.7
|
0.6
|
0.2
|
2.2
|
0.6
|
5.3
|
|
Non-counterparty-related risk2
|
|
(0.2)
|
(0.1)
|
0.0
|
0.2
|
(0.3)
|
(0.4)
|
|
Market risk
|
|
0.8
|
0.0
|
0.0
|
2.4
|
(0.4)
|
2.8
|
|
Operational risk
|
|
1.3
|
0.8
|
0.0
|
0.5
|
(0.5)
|
2.1
|
|
Total
|
|
3.5
|
1.3
|
0.2
|
5.4
|
(0.5)
|
9.8
|
|
1 Includes
settlement risk, credit valuation adjustments, equity exposures in the
banking book and securitization exposures in the banking book. 2 Non-counterparty-related
risk includes deferred tax assets recognized for temporary differences
(31 March 2022: USD 11.2 billion; 31 December 2021: USD 11.4
billion), property, equipment, software and other items (31 March 2022:
USD 12.7 billion; 31 December 2021: USD 12.9 billion).
|
Leverage ratio denominator
During the first quarter of 2022, LRD increased by USD 4.1 billion to USD 1,073.0 billion,
reflecting an increase in asset size and other movements of USD 14.1 billion,
partly offset by a decrease due to currency effects of USD 10.0 billion.
|
Movement in leverage ratio denominator by key driver
|
|
USD billion
|
|
LRD as of
31.12.21
|
Currency
effects
|
Asset size and
other
|
LRD as of
31.3.22
|
|
On-balance sheet exposures (excluding derivative exposures and
SFTs)1
|
|
847.4
|
(8.1)
|
5.8
|
845.1
|
|
Derivative exposures
|
|
90.9
|
(0.9)
|
11.7
|
101.8
|
|
Securities financing transactions
|
|
109.2
|
(0.7)
|
(2.4)
|
106.0
|
|
Off-balance sheet items
|
|
32.8
|
(0.3)
|
(0.8)
|
31.7
|
|
Deduction items
|
|
(11.5)
|
0.0
|
(0.1)
|
(11.6)
|
|
Total
|
|
1,068.9
|
(10.0)
|
14.1
|
1,073.0
|
|
1 The
exposures exclude derivative financial instruments, cash collateral
receivables on derivative instruments, receivables from SFTs, and margin
loans, as well as prime brokerage receivables and financial assets at fair
value not held for trading, both related to SFTs. These exposures are
presented separately under Derivative exposures and Securities financing
transactions in this table.
|
The LRD movements described below exclude currency
effects.
On-balance sheet exposures increased by
USD 5.8 billion, mainly driven by higher central bank balances and
high-quality liquid asset (HQLA) securities, partly offset by a decrease in trading
portfolio assets in the Investment Bank.
Derivative exposures increased by USD 11.7 billion,
mainly reflecting higher margin requirements and market-driven movements in the
Investment Bank.
Securities financing transactions (SFTs) decreased by
USD 2.4 billion, mainly due to lower collateral sourcing requirements in
Group Treasury and client-driven reductions in the Investment Bank.
›
Refer to the “Balance sheet and off-balance
sheet” section of this report for more information about balance sheet
movements
|
Leverage ratio
denominator by business division and Group Functions
|
|
USD billion
|
|
Global Wealth
Management
|
Personal &
Corporate
Banking
|
Asset
Management
|
Investment
Bank
|
Group Functions
|
Total
|
|
|
|
31.3.22
|
|
Total IFRS assets
|
|
407.9
|
231.9
|
23.0
|
381.3
|
95.9
|
1,139.9
|
|
Difference in scope of consolidation1
|
|
0.0
|
0.0
|
(18.7)
|
(0.1)
|
0.0
|
(18.8)
|
|
Less: derivative exposures and SFTs2
|
|
(27.9)
|
(12.1)
|
(0.1)
|
(189.3)
|
(46.7)
|
(276.0)
|
|
On-balance sheet exposures
|
|
380.0
|
219.8
|
4.2
|
191.9
|
49.2
|
845.1
|
|
Derivative exposures
|
|
7.0
|
1.3
|
0.0
|
87.2
|
6.2
|
101.8
|
|
Securities financing transactions
|
|
23.7
|
11.2
|
0.1
|
42.8
|
28.2
|
106.0
|
|
Off-balance sheet items
|
|
6.6
|
16.6
|
0.0
|
7.5
|
0.9
|
31.7
|
|
Items deducted from Swiss SRB tier 1 capital
|
|
(5.3)
|
(0.2)
|
(1.3)
|
(0.4)
|
(4.4)
|
(11.6)
|
|
Total
|
|
412.0
|
248.8
|
3.0
|
329.1
|
80.0
|
1,073.0
|
|
|
|
|
|
|
|
|
|
|
|
|
31.12.21
|
|
Total IFRS assets
|
|
395.2
|
225.4
|
25.6
|
346.4
|
124.5
|
1,117.2
|
|
Difference in scope of consolidation1
|
|
0.0
|
0.0
|
(21.5)
|
(0.1)
|
0.0
|
(21.6)
|
|
Less: derivative exposures and SFTs2
|
|
(25.9)
|
(11.8)
|
(0.1)
|
(159.2)
|
(51.2)
|
(248.2)
|
|
On-balance sheet exposures
|
|
369.3
|
213.6
|
4.1
|
187.1
|
73.3
|
847.4
|
|
Derivative exposures
|
|
5.8
|
1.4
|
0.0
|
79.0
|
4.7
|
90.9
|
|
Securities financing transactions
|
|
22.6
|
10.9
|
0.0
|
45.7
|
29.9
|
109.2
|
|
Off-balance sheet items
|
|
7.2
|
17.5
|
0.0
|
7.6
|
0.5
|
32.8
|
|
Items deducted from Swiss SRB tier 1 capital
|
|
(5.3)
|
(0.2)
|
(1.2)
|
(0.3)
|
(4.4)
|
(11.5)
|
|
Total
|
|
399.6
|
243.2
|
2.9
|
319.2
|
104.0
|
1,068.9
|
|
|
|
|
|
31.3.22 vs 31.12.21
|
|
Total IFRS assets
|
|
12.6
|
6.6
|
(2.6)
|
34.8
|
(28.7)
|
22.7
|
|
Difference in scope of consolidation1
|
|
0.0
|
0.0
|
2.8
|
0.0
|
0.0
|
2.8
|
|
Less: derivative exposures and SFTs2
|
|
(1.9)
|
(0.3)
|
0.0
|
(30.1)
|
4.5
|
(27.9)
|
|
On-balance sheet exposures
|
|
10.7
|
6.2
|
0.1
|
4.8
|
(24.2)
|
(2.3)
|
|
Derivative exposures
|
|
1.1
|
(0.1)
|
0.0
|
8.2
|
1.5
|
10.8
|
|
Securities financing transactions
|
|
1.1
|
0.3
|
0.0
|
(2.9)
|
(1.7)
|
(3.1)
|
|
Off-balance sheet items
|
|
(0.6)
|
(0.9)
|
0.0
|
(0.1)
|
0.4
|
(1.1)
|
|
Items deducted from Swiss SRB tier 1 capital
|
|
0.0
|
0.0
|
0.0
|
(0.1)
|
0.1
|
(0.1)
|
|
Total
|
|
12.4
|
5.6
|
0.2
|
9.9
|
(23.9)
|
4.1
|
|
1 Represents
the difference between the IFRS and the regulatory scope of consolidation,
which is the applicable scope for the LRD calculation. 2 The
exposures consist of derivative financial instruments, cash collateral
receivables on derivative instruments, receivables from SFTs, and margin
loans, as well as prime brokerage receivables and financial assets at fair
value not held for trading, both related to SFTs, all of which are in
accordance with the regulatory scope of consolidation. These exposures are
presented separately under Derivative exposures and Securities financing
transactions in this table.
|
Risk, capital, liquidity and funding, and
balance sheet | Capital management
Equity attribution and return on attributed equity
Under our equity attribution framework, tangible
equity is attributed based on a weighting of 50% each for average risk-weighted
assets (RWA) and average leverage ratio denominator (LRD), which both include
resource allocations from Group Functions to the business divisions (the BDs).
Average RWA and LRD are converted to common equity tier 1 (CET1) capital
equivalents using capital ratios of 12.5% and 3.75%, respectively. 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 BD,
the CET1 capital equivalent of RBC is used as a floor for that BD.
In addition to tangible equity, we allocate equity to the BDs
to support goodwill and intangible assets.
We also allocate to the BDs attributed equity related to
certain CET1 deduction items, such as compensation-related components and
expected losses on the advanced internal ratings-based portfolio, less general
provisions.
We attribute all remaining Basel III capital deduction
items to Group Functions. These items include deferred tax assets (DTAs)
recognized for tax loss carry-forwards, DTAs on temporary differences in excess
of the threshold, accruals for shareholder returns and unrealized gains from
cash flow hedges.
›
Refer to the “Capital, liquidity and
funding, and balance sheet” section of our Annual Report 2021 for more
information about the equity attribution framework
›
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
|
|
USD billion
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Global Wealth Management
|
|
19.9
|
19.3
|
18.3
|
|
Personal & Corporate Banking
|
|
9.4
|
9.2
|
9.1
|
|
Asset Management
|
|
1.8
|
1.8
|
2.2
|
|
Investment Bank
|
|
13.2
|
13.2
|
13.0
|
|
Group Functions
|
|
15.5
|
16.8
|
16.1
|
|
of which: deferred tax assets1
|
|
5.4
|
5.5
|
6.3
|
|
of which: related to retained RWA and LRD2
|
|
3.1
|
3.2
|
3.3
|
|
of which: accruals for shareholder returns and others3
|
|
7.1
|
8.1
|
6.5
|
|
Average equity attributed to business divisions and Group
Functions
|
|
59.8
|
60.4
|
58.7
|
|
1 Includes average
attributed equity related to the Basel III capital deduction items for
deferred tax assets (deferred tax assets recognized for tax loss
carry-forwards and deferred tax assets on temporary differences, excess over
threshold), as well as retained RWA and LRD related to deferred tax
assets. 2 Excludes average attributed equity related to retained RWA and
LRD related to deferred tax assets. 3 Includes attributed equity related
to dividend accruals, share repurchase reserves built up in 2020, unrealized
gains from cash flow hedges, and a balancing item for capital held in excess
of the 12.5% / 3.75% capital and leverage ratio calibration thresholds for
equity attribution.
|
|
Return on attributed equity1
|
|
|
|
For the quarter ended
|
|
in %
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Global Wealth Management
|
|
26.3
|
11.6
|
30.8
|
|
Personal & Corporate Banking
|
|
18.2
|
15.9
|
17.1
|
|
Asset Management
|
|
39.5
|
74.6
|
40.8
|
|
Investment Bank
|
|
28.2
|
21.5
|
12.7
|
|
1 Return on
attributed equity for Group Functions is not shown, as it is not meaningful.
|
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 our Annual Report 2021,
which provides more information about the Group’s strategy, objectives and
governance in connection with liquidity and funding management.
|
Liquidity coverage ratio
|
|
|
|
|
USD billion, except where indicated
|
|
Average 1Q221
|
Average 4Q211
|
|
High-quality liquid assets
|
|
253
|
228
|
|
Net cash outflows
|
|
158
|
147
|
|
Liquidity coverage ratio (%)2
|
|
160
|
155
|
|
1 Calculated based
on an average of 64 data points in the first quarter of 2022 and 66 data
points in the fourth quarter of 2021. 2 Calculated after the application
of haircuts and inflow and outflow rates, as well as, where applicable, caps
on Level 2 assets and cash inflows.
|
Liquidity coverage
ratio
The UBS Group quarterly
average liquidity coverage ratio (the LCR) increased 5 percentage points
to 160%, remaining above the prudential requirement communicated by the Swiss
Financial Market Supervisory Authority (FINMA).
The movement in the average LCR was driven by an increase in high-quality
liquid assets of USD 25 billion to USD 253 billion, reflecting higher
average cash balances driven by a decrease in funding consumption by the
business divisions. Average net cash outflows increased by USD 12 billion
to USD 158 billion, due to higher cash outflows from securities financing
transactions and debt issued.
›
Refer to our 31
March 2022 Pillar 3 report, available under “Pillar 3
disclosures” at ubs.com/investors, and to “Liquidity and funding
management” in the “Capital, liquidity and funding, and balance sheet” section
of our Annual Report 2021 for more information about the LCR
Net stable funding ratio
As of
31 March 2022, our net stable funding ratio (the NSFR) was 122%, an
increase of 3 percentage points compared with the NSFR as of 31 December
2021. This reflected USD 20 billion lower required stable funding, mainly due
to decreases in trading portfolio assets and securities financing transactions,
partly offset by USD 9 billion lower available stable funding, mainly
driven by a decrease in debt issued.
›
Refer to our 31 March
2022 Pillar 3 report, available under “Pillar 3 disclosures”
at ubs.com/investors, and to “Liquidity and funding management” in the
“Capital, liquidity and funding, and balance sheet” section of our Annual
Report 2021 for more information about the NSFR
|
Net stable funding ratio
|
|
|
|
|
USD billion, except where indicated
|
|
31.3.22
|
31.12.21
|
|
Available stable funding
|
|
569
|
578
|
|
Required stable funding
|
|
468
|
488
|
|
Net stable funding ratio (%)
|
|
122
|
119
|
|
|
Risk, capital, liquidity and funding, and balance
sheet | Balance sheet and off-balance sheet
Balance
sheet and off-balance sheet
Strategy, objectives and
governance
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 our Annual Report 2021, which provides more information about the
Group’s 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 (31 March 2022 vs
31 December 2021)
Total assets were USD 1,140
billion as of 31 March 2022. The increase of USD 23 billion included negative
currency effects of approximately USD 10 billion.
Derivatives and cash collateral receivables on derivative
instruments increased by USD 31 billion, mainly in our Derivatives & Solutions
and Financing businesses in the Investment Bank, primarily reflecting
market-driven movements on foreign currency and interest rate contracts amid
volatility in exchange rates and increases in interest rates. Cash and balances
at central banks increased by USD 14 billion, mainly driven by lower
funding consumption in the Investment Bank, net roll-offs of securities
financing transactions and inflows from customer deposits in Global Wealth
Management, partly offset by net redemptions of short-
and long-term debt. Other financial assets measured at amortized cost and
fair value increased by USD 7 billion, mainly driven by an increase in
securities financing transactions measured at fair value and purchases of
securities in the high-quality liquid asset portfolio.
These increases were partly offset by a decrease in Trading
portfolio assets of USD 16 billion, primarily reflecting lower inventory
levels held to hedge client positions in our Financing business in the
Investment Bank. Securities financing transactions at amortized cost decreased
by USD 6 billion, predominantly reflecting lower collateral sourcing
requirements in Group Treasury and client-driven decreases in the Investment
Bank. Lending assets decreased by USD 3 billion, primarily reflecting
lower Lombard loans in Global Wealth Management in Asia Pacific and Switzerland.
Non-financial assets and financial assets for unit-linked investment contracts
decreased by USD 3 billion, mainly reflecting market-driven decreases and
outflows from unit-linked investment contracts in Asset Management.
›
Refer to the “Consolidated financial
statements” section of this report for more information
|
Assets
|
|
|
|
|
|
|
|
|
As of
|
|
% change from
|
|
USD billion
|
|
31.3.22
|
31.12.21
|
|
31.12.21
|
|
Cash and balances at central banks
|
|
206.8
|
192.8
|
|
7
|
|
Lending1
|
|
410.1
|
413.2
|
|
(1)
|
|
Securities financing transactions at amortized cost
|
|
69.5
|
75.0
|
|
(7)
|
|
Trading portfolio2
|
|
114.7
|
130.8
|
|
(12)
|
|
Derivatives and cash collateral receivables on derivative
instruments
|
|
179.6
|
148.7
|
|
21
|
|
Brokerage receivables
|
|
20.8
|
21.8
|
|
(5)
|
|
Other financial assets measured at amortized cost and fair value3
|
|
80.3
|
73.8
|
|
9
|
|
Non-financial assets and financial assets for unit-linked
investment contracts
|
|
58.2
|
61.0
|
|
(5)
|
|
Total assets
|
|
1,139.9
|
1,117.2
|
|
2
|
|
1 Consists of
loans and advances to customers and banks. 2 Consists of financial assets
at fair value held for trading. 3 Consists of financial assets at fair
value not held for trading, financial assets measured at fair value through
other comprehensive income and other financial assets measured at amortized
cost, but excludes financial assets for unit-linked investment contracts.
|
Balance sheet liabilities (31 March 2022 vs 31 December
2021)
Total liabilities
were USD 1,081 billion as of 31 March 2022. The increase of
USD 25 billion included negative currency effects of approximately
USD 9 billion.
Derivatives and cash collateral payables on derivative
instruments increased by USD 25 billion, mainly reflecting market-driven
movements in line with the asset side. Other financial liabilities measured at
amortized cost and fair value increased by USD 4 billion, mainly reflecting
higher securities financing transactions measured at fair value in Group
Treasury.
Brokerage payables increased by USD 4 billion, primarily in our Financing
business in the Investment Bank, with lower lending resulting in a decrease in netting
effects. Trading portfolio liabilities increased by USD 3 billion, driven
by our Financing business, mainly reflecting an increase in short positions to
hedge client swaps.
These increases were partly offset by a USD 6 billion
decrease in Non-financial liabilities and financial liabilities related to
unit-linked investment contracts, mainly reflecting decreases in unit-linked
investment contracts in line with the asset side, as well as lower
compensation-related liabilities.
Debt issued designated at fair value
and long-term debt issued measured at amortized cost decreased by USD 5
billion, as net issuances of senior unsecured debt were more than offset by
hedge accounting effects in Group Treasury and market-driven movements on debt
measured at fair value in our Derivatives & Solutions business. Short-term
borrowings decreased by USD 2 billion, mainly driven by net maturities of certificates
of deposit and commercial paper in Group Treasury, partly offset by higher amounts
due to banks in Personal & Corporate Banking and Group Treasury.
The “Liabilities by product and currency” table in this
section provides more information about our 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
Equity (31 March 2022 vs 31 December
2021)
Equity attributable to shareholders decreased by
USD 1,807 million to USD 58,855 million as of 31 March 2022.
The decrease of USD 1,807 million was mainly driven by
net treasury share activity, which reduced equity by USD 1,910 million.
This was mainly due to repurchases of USD 1,637 million of shares under
our 2021 share repurchase program, which concluded on 29 March 2022, and
the purchase of USD 295 million of shares in relation to employee
share-based compensation plans. Shares repurchased under our 2021 program until
18 February 2022 will be canceled in the second quarter of 2022 by means
of a capital reduction, as approved by shareholders at the 2022 Annual General
Meeting (the AGM) on 6 April 2022.
Total comprehensive income attributable to shareholders was negative
USD 98 million, reflecting net profit of USD 2,136 million and negative
other comprehensive income (OCI) of USD 2,234 million. OCI mainly included
negative cash flow hedge OCI of USD 2,184 million, negative OCI associated
with financial assets measured at fair value through OCI of USD 327
million, negative OCI related to foreign currency translation of USD 263
million and positive OCI related to own credit on financial liabilities
designated at fair value of USD 423 million.
These decreases were partly offset by deferred share-based
compensation awards of USD 193 million, which were expensed in the income
statement, increasing share premium.
The payment of the 2021 dividend of USD 0.50 per share,
approved by the 2022 AGM, reduced equity attributable to shareholders by USD 1.7
billion in April 2022.
›
Refer to the “Share information and earnings
per share” section of this report for more information about our share
repurchase programs
›
Refer to the “Group performance” and
“Consolidated financial statements” sections of this report for more
information
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
As of
|
|
% change from
|
|
USD billion
|
|
31.3.22
|
31.12.21
|
|
31.12.21
|
|
Short-term borrowings1
|
|
54.2
|
56.2
|
|
(4)
|
|
Securities financing transactions at amortized cost
|
|
7.1
|
5.5
|
|
29
|
|
Customer deposits
|
|
541.5
|
542.0
|
|
0
|
|
Debt issued designated at fair value and long-term debt issued
measured at amortized cost2
|
|
165.4
|
169.9
|
|
(3)
|
|
Trading portfolio3
|
|
34.7
|
31.7
|
|
9
|
|
Derivatives and cash collateral payables on derivative
instruments
|
|
178.1
|
153.1
|
|
16
|
|
Brokerage payables
|
|
48.0
|
44.0
|
|
9
|
|
Other financial liabilities measured at amortized cost and fair
value4
|
|
21.3
|
17.6
|
|
21
|
|
Non-financial liabilities and financial liabilities related to
unit-linked investment contracts
|
|
30.5
|
36.1
|
|
(16)
|
|
Total liabilities
|
|
1,080.7
|
1,056.2
|
|
2
|
|
Share capital
|
|
0.3
|
0.3
|
|
0
|
|
Share premium
|
|
15.4
|
15.9
|
|
(4)
|
|
Treasury shares
|
|
(5.8)
|
(4.7)
|
|
24
|
|
Retained earnings
|
|
46.5
|
43.9
|
|
6
|
|
Other comprehensive income5
|
|
2.5
|
5.2
|
|
(52)
|
|
Total equity attributable to shareholders
|
|
58.9
|
60.7
|
|
(3)
|
|
Equity attributable to non-controlling interests
|
|
0.4
|
0.3
|
|
5
|
|
Total equity
|
|
59.2
|
61.0
|
|
(3)
|
|
Total liabilities and equity
|
|
1,139.9
|
1,117.2
|
|
2
|
|
1 Consists of
short-term debt issued measured at amortized cost and amounts due to
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 Consists of financial liabilities at fair
value held for trading. 4 Consists of other financial liabilities measured
at amortized cost and other financial liabilities designated at fair value,
but excludes financial liabilities related to unit-linked investment
contracts. 5 Excludes other comprehensive income related to defined
benefit plans and own credit, which is recorded directly in Retained
earnings.
|
Risk, capital, liquidity and funding, and
balance sheet | Balance sheet and off-balance sheet
|
Liabilities by
product and currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD billion
|
|
As a percentage of total liabilities
|
|
|
|
All currencies
|
|
All currencies
|
|
USD
|
|
CHF
|
|
EUR
|
|
Other
|
|
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
Short-term borrowings
|
|
54.2
|
56.2
|
|
5.0
|
5.3
|
|
2.8
|
3.1
|
|
0.5
|
0.4
|
|
0.7
|
0.6
|
|
1.1
|
1.3
|
|
of which: amounts due to banks
|
|
16.6
|
13.1
|
|
1.5
|
1.2
|
|
0.5
|
0.3
|
|
0.4
|
0.4
|
|
0.2
|
0.1
|
|
0.4
|
0.4
|
|
of which: short-term debt issued1
|
|
37.5
|
43.1
|
|
3.5
|
4.1
|
|
2.3
|
2.7
|
|
0.0
|
0.0
|
|
0.5
|
0.5
|
|
0.7
|
0.8
|
|
Securities financing transactions at amortized cost
|
|
7.1
|
5.5
|
|
0.7
|
0.5
|
|
0.5
|
0.5
|
|
0.0
|
0.0
|
|
0.0
|
0.0
|
|
0.1
|
0.0
|
|
Customer deposits
|
|
541.5
|
542.0
|
|
50.1
|
51.3
|
|
23.5
|
23.9
|
|
17.4
|
18.0
|
|
5.0
|
5.2
|
|
4.3
|
4.3
|
|
of which: demand deposits
|
|
244.8
|
246.4
|
|
22.6
|
23.3
|
|
8.6
|
8.7
|
|
6.4
|
6.7
|
|
4.3
|
4.4
|
|
3.4
|
3.5
|
|
of which: retail savings / deposits
|
|
246.8
|
247.2
|
|
22.8
|
23.4
|
|
11.6
|
11.9
|
|
10.7
|
11.0
|
|
0.5
|
0.5
|
|
0.0
|
0.0
|
|
of which: time deposits
|
|
49.9
|
48.4
|
|
4.6
|
4.6
|
|
3.4
|
3.2
|
|
0.2
|
0.3
|
|
0.2
|
0.3
|
|
0.9
|
0.8
|
|
Debt issued designated at fair value and long-term debt issued
measured at amortized cost2
|
|
165.4
|
169.9
|
|
15.3
|
16.1
|
|
9.2
|
9.5
|
|
1.6
|
1.7
|
|
3.1
|
3.3
|
|
1.4
|
1.5
|
|
Trading portfolio3
|
|
34.7
|
31.7
|
|
3.2
|
3.0
|
|
1.0
|
1.3
|
|
0.1
|
0.1
|
|
0.8
|
0.6
|
|
1.3
|
1.0
|
|
Derivatives and cash collateral payables on derivative
instruments
|
|
178.1
|
153.1
|
|
16.5
|
14.5
|
|
13.4
|
12.0
|
|
0.3
|
0.2
|
|
1.4
|
1.4
|
|
1.4
|
0.9
|
|
Brokerage payables
|
|
48.0
|
44.0
|
|
4.4
|
4.2
|
|
3.3
|
3.1
|
|
0.0
|
0.0
|
|
0.3
|
0.3
|
|
0.8
|
0.8
|
|
Other financial liabilities measured at amortized cost and fair
value4
|
|
21.3
|
17.6
|
|
2.0
|
1.7
|
|
0.9
|
0.9
|
|
0.2
|
0.1
|
|
0.5
|
0.4
|
|
0.3
|
0.3
|
|
Non-financial liabilities and financial liabilities related to
unit-linked investment contracts
|
|
30.5
|
36.1
|
|
2.8
|
3.4
|
|
0.4
|
0.6
|
|
0.1
|
0.2
|
|
0.4
|
0.3
|
|
2.0
|
2.3
|
|
Total liabilities
|
|
1,080.7
|
1,056.2
|
|
100.0
|
100.0
|
|
55.0
|
54.7
|
|
20.2
|
20.8
|
|
12.2
|
12.1
|
|
12.6
|
12.4
|
|
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. 3 Consists
of financial liabilities at fair value held for trading. 4 Consists of
other financial liabilities measured at amortized cost and other financial
liabilities designated at fair value, but excludes financial liabilities
related to unit-linked investment contracts.
|
Off-balance
sheet (31 March 2022 vs 31 December 2021)
Guarantees increased by USD 2 billion, mainly in
Group Treasury, relating to guarantees issued to corporate clients. Loan
commitments decreased by USD 2 billion, mainly in the Investment Bank and
Global Wealth Management. Committed unconditionally revocable credit lines were
broadly unchanged as of 31 March 2022 compared with 31 December 2021.
Forward starting reverse repurchase agreements and forward starting repurchase
agreements increased by USD 5 billion and USD 2 billion, respectively,
primarily in Group Treasury, reflecting fluctuations in business division
activity in short-dated securities financing transactions.
|
Off-balance sheet
|
|
|
|
|
|
|
|
|
As of
|
|
% change from
|
|
USD billion
|
|
31.3.22
|
31.12.21
|
|
31.12.21
|
|
Guarantees1,2
|
|
20.8
|
18.9
|
|
10
|
|
Loan commitments1,3
|
|
38.0
|
39.5
|
|
(4)
|
|
Committed unconditionally revocable credit lines
|
|
41.4
|
40.8
|
|
2
|
|
Forward starting reverse repurchase agreements3
|
|
6.4
|
1.4
|
|
345
|
|
Forward starting repurchase agreements3
|
|
3.4
|
1.0
|
|
229
|
|
1 Guarantees and
loan commitments are shown net of sub-participations. 2 Includes
guarantees measured at fair value through profit or loss. 3 Derivative
loan commitments, as well as forward starting repurchase and reverse repurchase
agreements, measured at fair value through profit or loss are not included.
Refer to “Note 9 Derivative instruments” in the “Consolidated financial
statements” section of this report for more information.
|
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 CHF 0.10
per share. Shares issued were unchanged in the first quarter of 2022.
We held 353 million shares as of 31 March 2022, of which
240 million shares had been acquired under our 2021 share repurchase program
for cancelation purposes. The remaining 113 million shares are primarily held
to hedge our share delivery obligations related to employee share-based
compensation and participation plans.
Treasury shares held increased by 50 million shares in the first
quarter of 2022. This mainly reflected repurchases of 87.7 million shares
under our 2021 program, partly offset by the delivery of treasury shares under
our share-based compensation plans.
Shares acquired under our 2021 program
totaled 240 million as of 31 March 2022 for a total acquisition cost of
CHF 3,810 million (USD 4,137 million). This program concluded on
29 March 2022 and the 178 million shares repurchased under this program
until 18 February 2022 for a total acquisition cost of CHF 2,775
million (USD 3,022 million) will be canceled by means of a capital
reduction in the second quarter of 2022, as approved by shareholders at the
2022 Annual General Meeting (the AGM). We also intend to cancel the remaining
shares purchased under the 2021 program, subject to shareholder approval.
On 31 March 2022, we commenced a new two-year share
repurchase program of up to USD 6 billion. Two
million shares were acquired under this program on 31 March 2022 for a
total acquisition cost of CHF 45 million (USD 48 million) and
settled in April 2022.
›
Refer to the “Return on equity and CET1
capital” 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
|
|
% change from
|
|
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
31.12.21
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (USD million)
|
|
|
|
|
|
|
|
Net profit / (loss) attributable to shareholders for basic EPS
|
|
2,136
|
1,348
|
1,824
|
|
58
|
|
Less: (profit) / loss on own equity derivative contracts
|
|
0
|
0
|
(1)
|
|
(100)
|
|
Net profit / (loss) attributable to shareholders for diluted EPS
|
|
2,136
|
1,348
|
1,823
|
|
58
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Weighted average shares outstanding for basic EPS1
|
|
3,380,254,237
|
3,427,381,797
|
3,538,422,488
|
|
(1)
|
|
Effect of dilutive potential shares resulting from notional
employee shares, in-the-money options and warrants outstanding2
|
|
148,405,048
|
146,571,659
|
150,824,304
|
|
1
|
|
Weighted average shares outstanding for diluted EPS
|
|
3,528,659,285
|
3,573,953,456
|
3,689,246,792
|
|
(1)
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic earnings per share (USD)
|
|
0.63
|
0.39
|
0.52
|
|
61
|
|
Basic earnings per share (CHF)3
|
|
0.58
|
0.36
|
0.47
|
|
62
|
|
Diluted earnings per share (USD)
|
|
0.61
|
0.38
|
0.49
|
|
61
|
|
Diluted earnings per share (CHF)3
|
|
0.56
|
0.35
|
0.45
|
|
61
|
|
|
|
|
|
|
|
|
|
Shares outstanding and potentially dilutive instruments
|
|
|
|
|
|
|
|
Shares issued
|
|
3,702,422,995
|
3,702,422,995
|
3,859,055,395
|
|
0
|
|
Treasury shares4
|
|
353,284,628
|
302,815,328
|
335,907,722
|
|
17
|
|
of which: related to the 2018–2021 share repurchase program
|
|
|
|
156,632,400
|
|
|
|
of which: related to the 2021 share repurchase program5
|
|
240,335,273
|
152,596,273
|
56,269,500
|
|
57
|
|
Shares outstanding
|
|
3,349,138,367
|
3,399,607,667
|
3,523,147,673
|
|
(1)
|
|
Potentially dilutive instruments6
|
|
12,337,848
|
12,056,662
|
11,605,954
|
|
2
|
|
|
|
|
|
|
|
|
|
Other key figures
|
|
|
|
|
|
|
|
Total book value per share (USD)
|
|
17.57
|
17.84
|
16.47
|
|
(2)
|
|
Tangible book value per share (USD)
|
|
15.67
|
15.97
|
14.65
|
|
(2)
|
|
Share price (USD)7
|
|
19.64
|
18.01
|
15.48
|
|
9
|
|
Market capitalization (USD million)
|
|
65,775
|
61,230
|
54,536
|
|
7
|
|
1 The weighted
average shares outstanding for basic 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. 2 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. 3 Basic and diluted earnings per share in Swiss
francs are calculated based on a translation of net profit / (loss) under our
US dollar presentation currency. 4 Based on a settlement date view. 5
This share repurchase program of up to CHF 4 billion was started in February
2021. The program was initially planned to run over a three-year period, but
it concluded in March 2022. We therefore refer to this program as “2021 share
repurchase program” throughout this report. 6 Reflects potential shares
that could dilute basic earnings per share in the future, but were not
dilutive for the periods presented. It mainly includes equity derivative
contracts and equity-based awards subject to absolute and relative
performance conditions. 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.
|
|
Ticker symbols UBS Group AG
|
|
|
|
|
|
|
Trading exchange
|
SIX / NYSE
|
Bloomberg
|
Reuters
|
|
SIX Swiss Exchange
|
UBSG
|
UBSG SW
|
UBSG.S
|
|
New York Stock Exchange
|
UBS
|
UBS UN
|
UBS.N
|
|
Security identification codes
|
|
ISIN
|
|
CH0244767585
|
|
Valoren
|
|
24 476 758
|
|
CUSIP
|
|
CINS H42097 10 7
|
Consolidated financial statements
Unaudited
UBS Group AG interim
consolidated financial statements (unaudited)
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended
|
|
USD million
|
|
Note
|
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Interest income from financial instruments measured at amortized
cost and fair value through
other comprehensive income
|
|
3
|
|
|
2,144
|
2,152
|
2,097
|
|
Interest expense from financial instruments measured at
amortized cost
|
|
3
|
|
|
(781)
|
(768)
|
(833)
|
|
Net interest income from financial instruments measured at fair
value through profit or loss
|
|
3
|
|
|
408
|
387
|
349
|
|
Net interest income
|
|
3
|
|
|
1,771
|
1,770
|
1,613
|
|
Other net income from financial instruments measured at fair
value through profit or loss
|
|
|
|
|
2,226
|
1,365
|
1,309
|
|
Credit loss (expense) / release
|
|
7
|
|
|
(18)
|
27
|
28
|
|
Fee and commission income
|
|
4
|
|
|
5,837
|
6,042
|
6,169
|
|
Fee and commission expense
|
|
4
|
|
|
(484)
|
(513)
|
(478)
|
|
Net fee and commission income
|
|
4
|
|
|
5,353
|
5,529
|
5,691
|
|
Other income
|
|
|
|
|
32
|
40
|
64
|
|
Total operating income
|
|
|
|
|
9,363
|
8,732
|
8,705
|
|
Personnel expenses
|
|
5
|
|
|
4,920
|
4,216
|
4,801
|
|
General and administrative expenses
|
|
6
|
|
|
1,208
|
2,212
|
1,089
|
|
Depreciation, amortization and impairment of non-financial
assets
|
|
|
|
|
506
|
574
|
517
|
|
Total operating expenses
|
|
|
|
|
6,634
|
7,003
|
6,407
|
|
Operating profit / (loss) before tax
|
|
|
|
|
2,729
|
1,729
|
2,298
|
|
Tax expense / (benefit)
|
|
|
|
|
585
|
370
|
471
|
|
Net profit / (loss)
|
|
|
|
|
2,144
|
1,359
|
1,827
|
|
Net profit / (loss) attributable to non-controlling interests
|
|
|
|
|
8
|
11
|
3
|
|
Net profit / (loss) attributable to shareholders
|
|
|
|
|
2,136
|
1,348
|
1,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (USD)
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
0.63
|
0.39
|
0.52
|
|
Diluted
|
|
|
|
|
0.61
|
0.38
|
0.49
|
UBS Group AG interim consolidated financial
statements (unaudited)
|
Statement of comprehensive income
|
|
|
|
|
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
|
|
|
|
|
|
Comprehensive income attributable to shareholders1
|
|
|
|
|
|
Net profit / (loss)
|
|
2,136
|
1,348
|
1,824
|
|
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
|
|
(482)
|
315
|
(1,463)
|
|
Effective portion of changes in fair value of hedging instruments
designated as net investment hedges, before tax
|
|
217
|
(183)
|
708
|
|
Foreign currency translation differences on foreign operations
reclassified to the income statement
|
|
0
|
0
|
1
|
|
Effective portion of changes in fair value of hedging instruments
designated as net investment hedges reclassified to
the income statement
|
|
0
|
3
|
0
|
|
Income tax relating to foreign currency translations, including
the impact of net investment hedges
|
|
2
|
(24)
|
10
|
|
Subtotal foreign currency translation, net of tax
|
|
(263)
|
111
|
(744)
|
|
Financial assets measured at fair value through other
comprehensive income
|
|
|
|
|
|
Net unrealized gains / (losses), before tax
|
|
(439)
|
(49)
|
(131)
|
|
Net realized gains / (losses) reclassified to the income statement
from equity
|
|
0
|
0
|
(6)
|
|
Income tax relating to net unrealized gains / (losses)
|
|
112
|
13
|
35
|
|
Subtotal financial assets measured at fair value through other
comprehensive income, net of tax
|
|
(327)
|
(37)
|
(102)
|
|
Cash flow hedges of interest rate risk
|
|
|
|
|
|
Effective portion of changes in fair value of derivative
instruments designated as cash flow hedges, before tax
|
|
(2,465)
|
(250)
|
(1,172)
|
|
Net (gains) / losses reclassified to the income statement from
equity
|
|
(237)
|
(269)
|
(254)
|
|
Income tax relating to cash flow hedges
|
|
518
|
98
|
266
|
|
Subtotal cash flow hedges, net of tax
|
|
(2,184)
|
(421)
|
(1,160)
|
|
Cost of hedging
|
|
|
|
|
|
Cost of hedging, before tax
|
|
77
|
(14)
|
(6)
|
|
Income tax relating to cost of hedging
|
|
0
|
6
|
0
|
|
Subtotal cost of hedging, net of tax
|
|
77
|
(8)
|
(6)
|
|
Total other comprehensive income that may be reclassified to the
income statement, net of tax
|
|
(2,697)
|
(355)
|
(2,012)
|
|
|
|
|
|
|
|
Other comprehensive income that will not be reclassified to the
income statement
|
|
|
|
|
|
Defined benefit plans
|
|
|
|
|
|
Gains / (losses) on defined benefit plans, before tax
|
|
41
|
149
|
(136)
|
|
Income tax relating to defined benefit plans
|
|
(1)
|
(25)
|
23
|
|
Subtotal defined benefit plans, net of tax
|
|
40
|
124
|
(113)
|
|
Own credit on financial liabilities designated at fair value
|
|
|
|
|
|
Gains / (losses) from own credit on financial liabilities
designated at fair value, before tax
|
|
423
|
55
|
(29)
|
|
Income tax relating to own credit on financial liabilities
designated at fair value
|
|
0
|
0
|
0
|
|
Subtotal own credit on financial liabilities designated at fair
value, net of tax
|
|
423
|
55
|
(29)
|
|
Total other comprehensive income that will not be reclassified
to the income statement, net of tax
|
|
463
|
178
|
(142)
|
|
|
|
|
|
|
|
Total other comprehensive income
|
|
(2,234)
|
(177)
|
(2,154)
|
|
Total comprehensive income attributable to shareholders
|
|
(98)
|
1,171
|
(330)
|
|
|
|
|
|
|
|
Comprehensive income attributable to non-controlling interests
|
|
|
|
|
|
Net profit / (loss)
|
|
8
|
11
|
3
|
|
Total other comprehensive income that will not be reclassified
to the income statement, net of tax
|
|
18
|
(4)
|
(12)
|
|
Total comprehensive income attributable to non-controlling
interests
|
|
26
|
7
|
(9)
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
|
|
|
Net profit / (loss)
|
|
2,144
|
1,359
|
1,827
|
|
Other comprehensive income
|
|
(2,216)
|
(181)
|
(2,166)
|
|
of which: other comprehensive income that may be reclassified to
the income statement
|
|
(2,697)
|
(355)
|
(2,012)
|
|
of which: other comprehensive income that will not be reclassified
to the income statement
|
|
481
|
175
|
(155)
|
|
Total comprehensive income
|
|
(72)
|
1,178
|
(339)
|
|
1 Refer to the
“Group performance” section of this report for more information.
|
|
Balance sheet
|
|
|
|
|
|
|
USD million
|
|
Note
|
|
31.3.22
|
31.12.21
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and balances at central banks
|
|
|
|
206,773
|
192,817
|
|
Loans and advances to banks
|
|
|
|
17,914
|
15,480
|
|
Receivables from securities financing transactions
|
|
|
|
69,452
|
75,012
|
|
Cash collateral receivables on derivative instruments
|
|
9
|
|
39,253
|
30,514
|
|
Loans and advances to customers
|
|
7
|
|
392,189
|
397,761
|
|
Other financial assets measured at amortized cost
|
|
10
|
|
28,697
|
26,209
|
|
Total financial assets measured at amortized cost
|
|
|
|
754,279
|
737,794
|
|
Financial assets at fair value held for trading
|
|
8
|
|
114,744
|
130,821
|
|
of which: assets pledged as collateral that may be sold or
repledged by counterparties
|
|
|
|
40,217
|
43,397
|
|
Derivative financial instruments
|
|
8, 9
|
|
140,309
|
118,142
|
|
Brokerage receivables
|
|
8
|
|
20,762
|
21,839
|
|
Financial assets at fair value not held for trading
|
|
8
|
|
60,999
|
60,080
|
|
Total financial assets measured at fair value through profit or
loss
|
|
|
|
336,814
|
330,882
|
|
Financial assets measured at fair value through other
comprehensive income
|
|
8
|
|
9,093
|
8,844
|
|
Investments in associates
|
|
|
|
1,150
|
1,243
|
|
Property, equipment and software
|
|
|
|
12,491
|
12,888
|
|
Goodwill and intangible assets
|
|
|
|
6,383
|
6,378
|
|
Deferred tax assets
|
|
|
|
9,131
|
8,876
|
|
Other non-financial assets
|
|
10
|
|
10,581
|
10,277
|
|
Total assets
|
|
|
|
1,139,922
|
1,117,182
|
|
Liabilities
|
|
|
|
|
|
|
Amounts due to banks
|
|
|
|
16,649
|
13,101
|
|
Payables from securities financing transactions
|
|
|
|
7,110
|
5,533
|
|
Cash collateral payables on derivative instruments
|
|
9
|
|
39,609
|
31,798
|
|
Customer deposits
|
|
|
|
541,470
|
542,007
|
|
Debt issued measured at amortized cost
|
|
12
|
|
131,492
|
139,155
|
|
Other financial liabilities measured at amortized cost
|
|
10
|
|
9,641
|
9,001
|
|
Total financial liabilities measured at amortized cost
|
|
|
|
745,971
|
740,595
|
|
Financial liabilities at fair value held for trading
|
|
8
|
|
34,687
|
31,688
|
|
Derivative financial instruments
|
|
8, 9
|
|
138,443
|
121,309
|
|
Brokerage payables designated at fair value
|
|
8
|
|
48,015
|
44,045
|
|
Debt issued designated at fair value
|
|
8, 11
|
|
71,470
|
73,799
|
|
Other financial liabilities designated at fair value
|
|
8, 10
|
|
30,325
|
30,074
|
|
Total financial liabilities measured at fair value through
profit or loss
|
|
|
|
322,940
|
300,916
|
|
Provisions
|
|
14
|
|
3,478
|
3,518
|
|
Other non-financial liabilities
|
|
10
|
|
8,322
|
11,151
|
|
Total liabilities
|
|
|
|
1,080,711
|
1,056,180
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Share capital
|
|
|
|
322
|
322
|
|
Share premium
|
|
|
|
15,355
|
15,928
|
|
Treasury shares
|
|
|
|
(5,811)
|
(4,675)
|
|
Retained earnings
|
|
|
|
46,451
|
43,851
|
|
Other comprehensive income recognized directly in equity, net of
tax
|
|
|
|
2,538
|
5,236
|
|
Equity attributable to shareholders
|
|
|
|
58,855
|
60,662
|
|
Equity attributable to non-controlling interests
|
|
|
|
356
|
340
|
|
Total equity
|
|
|
|
59,212
|
61,002
|
|
Total liabilities and equity
|
|
|
|
1,139,922
|
1,117,182
|
UBS Group AG interim consolidated financial
statements (unaudited)
|
Statement of changes in equity
|
|
|
|
|
|
USD million
|
Share
capital
|
Share
premium
|
Treasury
shares
|
Retained
earnings
|
|
Balance as of 1 January 2021
|
338
|
16,753
|
(4,068)
|
38,776
|
|
Acquisition of treasury shares
|
|
|
(1,274)2
|
|
|
Delivery of treasury shares under share-based compensation plans
|
|
(652)
|
697
|
|
|
Other disposal of treasury shares
|
|
3
|
232
|
|
|
Share-based compensation expensed in the income statement
|
|
166
|
|
|
|
Tax (expense) / benefit
|
|
4
|
|
|
|
Dividends
|
|
|
|
|
|
Equity classified as obligation to purchase own shares
|
|
(56)
|
|
|
|
Translation effects recognized directly in retained earnings
|
|
|
|
23
|
|
Share of changes in retained earnings of associates and joint
ventures
|
|
|
|
2
|
|
New consolidations / (deconsolidations) and other increases /
(decreases)
|
|
(1)
|
|
|
|
Total comprehensive income for the period
|
|
|
|
1,682
|
|
of which: net profit / (loss)
|
|
|
|
1,824
|
|
of which: OCI, net of tax
|
|
|
|
(142)
|
|
Balance as of 31 March 2021
|
338
|
16,217
|
(4,623)
|
40,482
|
|
|
|
|
|
|
|
Balance as of 1 January 2022
|
322
|
15,928
|
(4,675)
|
43,851
|
|
Acquisition of treasury shares
|
|
|
(1,960)2
|
|
|
Delivery of treasury shares under share-based compensation plans
|
|
(735)
|
777
|
|
|
Other disposal of treasury shares
|
|
2
|
482
|
|
|
Share-based compensation expensed in the income statement
|
|
193
|
|
|
|
Tax (expense) / benefit
|
|
2
|
|
|
|
Dividends
|
|
|
|
|
|
Equity classified as obligation to purchase own shares
|
|
(41)
|
|
|
|
Translation effects recognized directly in retained earnings
|
|
|
|
1
|
|
Share of changes in retained earnings of associates and joint
ventures
|
|
|
|
0
|
|
New consolidations / (deconsolidations) and other increases /
(decreases)
|
|
5
|
|
|
|
Total comprehensive income for the period
|
|
|
|
2,599
|
|
of which: net profit / (loss)
|
|
|
|
2,136
|
|
of which: OCI, net of tax
|
|
|
|
463
|
|
Balance as of 31 March 2022
|
322
|
15,355
|
(5,811)
|
46,451
|
|
1 Excludes
other comprehensive income related to defined benefit plans and own credit
that is recorded directly in Retained earnings. 2 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.
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income recognized
directly in equity,
net of tax1
|
of which:
foreign currency translation
|
of which:
financial assets
measured at fair value through OCI
|
of which:
cash flow hedges
|
of which:
cost of hedging
|
Total equity
attributable to
shareholders
|
Non-controlling
interests
|
Total equity
|
|
7,647
|
5,188
|
151
|
2,321
|
(13)
|
59,445
|
319
|
59,765
|
|
|
|
|
|
|
(1,274)
|
|
(1,274)
|
|
|
|
|
|
|
44
|
|
44
|
|
|
|
|
|
|
26
|
|
26
|
|
|
|
|
|
|
166
|
|
166
|
|
|
|
|
|
|
4
|
|
4
|
|
|
|
|
|
|
0
|
(3)
|
(3)
|
|
|
|
|
|
|
(56)
|
|
(56)
|
|
(23)
|
|
0
|
(23)
|
0
|
0
|
|
0
|
|
|
|
|
|
|
2
|
|
2
|
|
|
|
|
|
|
(1)
|
0
|
(1)
|
|
(2,012)
|
(744)
|
(102)
|
(1,160)
|
(6)
|
(330)
|
(9)
|
(339)
|
|
|
|
|
|
|
1,824
|
3
|
1,827
|
|
(2,012)
|
(744)
|
(102)
|
(1,160)
|
(6)
|
(2,154)
|
(12)
|
(2,166)
|
|
5,612
|
4,444
|
49
|
1,138
|
(19)
|
58,026
|
307
|
58,333
|
|
|
|
|
|
|
|
|
|
|
5,236
|
4,653
|
(7)
|
628
|
(39)
|
60,662
|
340
|
61,002
|
|
|
|
|
|
|
(1,960)
|
|
(1,960)
|
|
|
|
|
|
|
42
|
|
42
|
|
|
|
|
|
|
50
|
|
50
|
|
|
|
|
|
|
193
|
|
193
|
|
|
|
|
|
|
2
|
|
2
|
|
|
|
|
|
|
0
|
(3)
|
(3)
|
|
|
|
|
|
|
(41)
|
|
(41)
|
|
(1)
|
|
0
|
(1)
|
0
|
0
|
|
0
|
|
|
|
|
|
|
0
|
|
0
|
|
|
|
|
|
|
5
|
(7)
|
(3)
|
|
(2,697)
|
(263)
|
(327)
|
(2,184)
|
77
|
(98)
|
26
|
(72)
|
|
|
|
|
|
|
2,136
|
8
|
2,144
|
|
(2,697)
|
(263)
|
(327)
|
(2,184)
|
77
|
(2,234)
|
18
|
(2,216)
|
|
2,538
|
4,390
|
(334)
|
(1,556)
|
38
|
58,855
|
356
|
59,212
|
|
|
|
|
|
|
|
|
|
UBS Group AG interim consolidated financial
statements (unaudited)
|
Statement of cash flows
|
|
|
|
|
|
|
Year-to-date
|
|
USD million
|
|
31.3.22
|
31.3.21
|
|
|
|
|
|
|
Cash flow from / (used in) operating activities
|
|
|
|
|
Net profit / (loss)
|
|
2,144
|
1,827
|
|
Non-cash items included in net profit and other adjustments:
|
|
|
|
|
Depreciation, amortization and impairment of non-financial
assets
|
|
506
|
517
|
|
Credit loss expense / (release)
|
|
18
|
(28)
|
|
Share of net (profit) / loss of associates and joint ventures
and impairment related to associates
|
|
4
|
(53)
|
|
Deferred tax expense / (benefit)
|
|
221
|
65
|
|
Net loss / (gain) from investing activities
|
|
19
|
(146)
|
|
Net loss / (gain) from financing activities
|
|
(4,597)
|
(1,571)
|
|
Other net adjustments
|
|
1,925
|
6,628
|
|
Net change in operating assets and liabilities:
|
|
|
|
|
Loans and advances to banks and amounts due to banks
|
|
3,869
|
1,995
|
|
Securities financing transactions
|
|
7,011
|
(8,614)
|
|
Cash collateral on derivative instruments
|
|
(955)
|
(3,063)
|
|
Loans and advances to customers
|
|
1,614
|
(10,952)
|
|
Customer deposits
|
|
4,312
|
(2,823)
|
|
Financial assets and liabilities at fair value held for trading
and derivative financial instruments
|
|
8,215
|
1,745
|
|
Brokerage receivables and payables
|
|
5,081
|
7,329
|
|
Financial assets at fair value not held for trading and other
financial assets and liabilities
|
|
252
|
9,218
|
|
Provisions and other non-financial assets and liabilities
|
|
(1,691)
|
(1,499)
|
|
Income taxes paid, net of refunds
|
|
(670)
|
(212)
|
|
Net cash flow from / (used in) operating activities
|
|
27,279
|
362
|
|
|
|
|
|
|
Cash flow from / (used in) investing activities
|
|
|
|
|
Purchase of subsidiaries, associates and intangible assets
|
|
0
|
(1)
|
|
Purchase of property, equipment and software
|
|
(402)
|
(432)
|
|
Purchase of financial assets measured at fair value through
other comprehensive income
|
|
(1,645)
|
(1,376)
|
|
Disposal and redemption of financial assets measured at fair
value through other comprehensive income
|
|
1,092
|
1,412
|
|
Net (purchase) / redemption of debt securities measured at
amortized cost
|
|
(2,547)
|
4
|
|
Net cash flow from / (used in) investing activities
|
|
(3,502)
|
(393)
|
|
Statement of cash
flows (continued)
|
|
|
|
|
|
|
Year-to-date
|
|
USD million
|
|
31.3.22
|
31.3.21
|
|
|
|
|
|
|
Cash flow from / (used in) financing activities
|
|
|
|
|
Net short-term debt issued / (repaid)
|
|
(5,188)
|
1,054
|
|
Net movements in treasury shares and own equity derivative
activity
|
|
(1,886)
|
(1,225)
|
|
Issuance of debt designated at fair value and long-term debt
measured at amortized cost
|
|
24,381
|
35,995
|
|
Repayment of debt designated at fair value and long-term debt
measured at amortized cost
|
|
(21,201)
|
(23,013)
|
|
Net cash flows from other financing activities
|
|
(224)
|
(155)
|
|
Net cash flow from / (used in) financing activities
|
|
(4,119)
|
12,654
|
|
|
|
|
|
|
Total cash flow
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
|
207,875
|
173,531
|
|
Net cash flow from / (used in) operating, investing and
financing activities
|
|
19,658
|
12,623
|
|
Effects of exchange rate differences on cash and cash
equivalents
|
|
(2,731)
|
(7,983)
|
|
Cash and cash equivalents at the end of the period1
|
|
224,802
|
178,171
|
|
of which: cash and balances at central banks2
|
|
206,666
|
158,769
|
|
of which: loans and advances to banks
|
|
16,618
|
17,151
|
|
of which: money market paper
|
|
1,518
|
2,252
|
|
|
|
|
|
|
Additional information
|
|
|
|
|
Net cash flow from / (used in) operating activities includes:
|
|
|
|
|
Interest received in cash
|
|
2,887
|
2,756
|
|
Interest paid in cash
|
|
1,387
|
1,638
|
|
Dividends on equity investments, investment funds and associates
received in cash
|
|
456
|
624
|
|
1 USD 4,359
million and USD 4,064 million of cash and cash equivalents (mainly reflected
in Loans and advances to banks) were restricted as of 31 March 2022 and
31 March 2021, respectively. Refer to “Note 23 Restricted and transferred
financial assets” in the “Consolidated financial statements” section of the
Annual Report 2021 for more information. 2 Includes only balances with an
original maturity of three months or less.
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
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 International Financial Reporting Standards (IFRS), as issued
by the International Accounting Standards Board (the IASB), and are presented
in US dollars (USD). 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 2021. These interim financial
statements are unaudited and should be read in conjunction with UBS Group AG’s
audited consolidated financial statements in the Annual Report 2021 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 Annual Report 2021.
UBS’s
businesses are organized globally into four business divisions: Global Wealth
Management, Personal & Corporate Banking, Asset Management and the
Investment Bank. All four business divisions are supported by Group Functions
and qualify as reportable segments for the purpose of segment reporting.
Together with Group Functions they reflect the management structure of the
Group.
›
Refer to “Note 2 Segment reporting” in
the “Consolidated financial statements” section of the Annual Report 2021 for
more information about the Group’s reporting segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD million
|
|
Global Wealth Management
|
|
Personal &
Corporate
Banking
|
|
Asset
Management
|
|
Investment Bank
|
|
Group Functions
|
|
UBS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31 March 2022
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
1,141
|
|
535
|
|
(4)
|
|
133
|
|
(34)
|
|
1,771
|
|
Non-interest income
|
|
3,763
|
|
552
|
|
582
|
|
2,775
|
|
(61)
|
|
7,611
|
|
Income
|
|
4,904
|
|
1,086
|
|
578
|
|
2,908
|
|
(95)
|
|
9,382
|
|
Credit loss (expense) / release
|
|
7
|
|
(23)
|
|
0
|
|
(4)
|
|
0
|
|
(18)
|
|
Total operating income
|
|
4,912
|
|
1,064
|
|
578
|
|
2,905
|
|
(95)
|
|
9,363
|
|
Total operating expenses
|
|
3,602
|
|
635
|
|
404
|
|
1,976
|
|
18
|
|
6,634
|
|
Operating profit / (loss) before tax
|
|
1,310
|
|
428
|
|
174
|
|
929
|
|
(112)
|
|
2,729
|
|
Tax expense / (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
585
|
|
Net profit / (loss)
|
|
|
|
|
|
|
|
|
|
|
|
2,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 31 March 2022
|
|
|
|
|
|
|
|
|
|
Total assets1
|
|
407,856
|
|
231,938
|
|
23,002
|
|
381,276
|
|
95,851
|
|
1,139,922
|
|
|
|
USD million
|
|
Global Wealth Management
|
|
Personal &
Corporate
Banking
|
|
Asset
Management
|
|
Investment Bank
|
|
Group Functions
|
|
UBS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31 March 2021
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
997
|
|
513
|
|
(4)
|
|
114
|
|
(6)
|
|
1,613
|
|
Non-interest income
|
|
3,848
|
|
500
|
|
641
|
|
2,158
|
|
(84)
|
|
7,063
|
|
Income
|
|
4,845
|
|
1,013
|
|
637
|
|
2,271
|
|
(90)
|
|
8,677
|
|
Credit loss (expense) / release
|
|
3
|
|
23
|
|
0
|
|
2
|
|
0
|
|
28
|
|
Total operating income
|
|
4,848
|
|
1,037
|
|
637
|
|
2,273
|
|
(90)
|
|
8,705
|
|
Total operating expenses
|
|
3,439
|
|
647
|
|
410
|
|
1,862
|
|
49
|
|
6,407
|
|
Operating profit / (loss) before tax
|
|
1,409
|
|
389
|
|
227
|
|
412
|
|
(139)
|
|
2,298
|
|
Tax expense / (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
471
|
|
Net profit / (loss)
|
|
|
|
|
|
|
|
|
|
|
|
1,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 31 December 2021
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
395,235
|
|
225,370
|
|
25,639
|
|
346,431
|
|
124,507
|
|
1,117,182
|
|
1 In the first
quarter of 2022, UBS refined the methodology applied to allocate balance
sheet resources from Group Functions to the business divisions, with
prospective effect. If the new methodology had been applied as of 31 December
2021, balance sheet assets allocated to business divisions would have been
USD 17 billion higher, of which USD 14 billion related to the Investment
Bank.
|
Notes to the UBS Group AG interim consolidated financial
statements (unaudited)
Note 3 Net
interest income
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Net interest income from financial instruments measured at
amortized cost and fair value through other comprehensive income
|
|
|
|
|
|
Interest income from loans and deposits1
|
|
1,660
|
1,647
|
1,584
|
|
Interest income from securities financing transactions2
|
|
118
|
120
|
135
|
|
Interest income from other financial instruments measured at
amortized cost
|
|
72
|
71
|
73
|
|
Interest income from debt instruments measured at fair value
through other comprehensive income
|
|
41
|
31
|
35
|
|
Interest income from derivative instruments designated as cash
flow hedges
|
|
253
|
284
|
268
|
|
Total interest income from financial instruments measured at
amortized cost and fair value through other comprehensive income
|
|
2,144
|
2,152
|
2,097
|
|
Interest expense on loans and deposits3
|
|
139
|
122
|
137
|
|
Interest expense on securities financing transactions4
|
|
224
|
252
|
258
|
|
Interest expense on debt issued
|
|
396
|
370
|
411
|
|
Interest expense on lease liabilities
|
|
23
|
24
|
27
|
|
Total interest expense from financial instruments measured at
amortized cost
|
|
781
|
768
|
833
|
|
Total net interest income from financial instruments measured at
amortized cost and fair value through other comprehensive income
|
|
1,363
|
1,384
|
1,264
|
|
Net interest income from financial instruments measured at fair
value through profit or loss
|
|
408
|
387
|
349
|
|
Total net interest income
|
|
1,771
|
1,770
|
1,613
|
|
1 Consists of
interest income from cash and balances at central banks, loans and advances
to banks and customers, 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. 2
Includes interest income on receivables from securities financing
transactions and negative interest, including fees, on payables from
securities financing transactions. 3 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, loans and advances to banks, and cash collateral receivables
on derivative instruments. 4 Includes interest expense on payables from
securities financing transactions and negative interest, including fees, on
receivables from securities financing transactions.
|
Note 4 Net fee and
commission income
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Underwriting fees
|
|
172
|
335
|
392
|
|
M&A and corporate finance fees
|
|
237
|
218
|
238
|
|
Brokerage fees
|
|
1,077
|
971
|
1,358
|
|
Investment fund fees
|
|
1,388
|
1,520
|
1,436
|
|
Portfolio management and related services
|
|
2,463
|
2,535
|
2,284
|
|
Other
|
|
501
|
462
|
461
|
|
Total fee and commission income1
|
|
5,837
|
6,042
|
6,169
|
|
of which: recurring
|
|
3,860
|
4,015
|
3,620
|
|
of which: transaction-based
|
|
1,958
|
1,928
|
2,454
|
|
of which: performance-based
|
|
19
|
99
|
94
|
|
Fee and commission expense
|
|
484
|
513
|
478
|
|
Net fee and commission income
|
|
5,353
|
5,529
|
5,691
|
|
1 Reflects
third-party fee and commission income for the first quarter of 2022 of USD
3,637 million for Global Wealth Management (fourth quarter of 2021: USD 3,624
million; first quarter of 2021: USD 3,673 million), USD 446 million for Personal
& Corporate Banking (fourth quarter of 2021: USD 427 million; first
quarter of 2021: USD 389 million), USD 762 million for Asset Management
(fourth quarter of 2021: USD 902 million; first quarter of 2021: USD 815
million), USD 988 million for the Investment Bank (fourth quarter of 2021:
USD 1,084 million; first quarter of 2021: USD 1,278 million) and USD 4
million for Group Functions (fourth quarter of 2021: USD 6 million; first
quarter of 2021: USD 15 million).
|
Note 5 Personnel expenses
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Salaries and variable compensation
|
|
2,948
|
2,283
|
2,871
|
|
Financial advisor compensation1
|
|
1,220
|
1,269
|
1,170
|
|
Contractors
|
|
83
|
93
|
98
|
|
Social security
|
|
285
|
211
|
268
|
|
Post-employment benefit plans
|
|
249
|
189
|
265
|
|
Other personnel expenses
|
|
135
|
172
|
128
|
|
Total personnel expenses
|
|
4,920
|
4,216
|
4,801
|
|
1 Financial
advisor compensation consists of formulaic compensation based directly on
compensable revenues generated by financial advisors and supplemental
compensation calculated on the basis of financial advisor productivity, firm
tenure, new assets and other variables. It also includes expenses related to
compensation commitments with financial advisors entered into at the time of
recruitment that are subject to vesting requirements.
|
Note 6 General and administrative expenses
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Outsourcing costs
|
|
227
|
262
|
201
|
|
IT expenses
|
|
289
|
277
|
266
|
|
Consulting, legal and audit fees
|
|
129
|
187
|
99
|
|
Real estate and logistics costs
|
|
147
|
170
|
152
|
|
Market data services
|
|
106
|
109
|
102
|
|
Marketing and communication
|
|
40
|
95
|
42
|
|
Travel and entertainment
|
|
20
|
32
|
9
|
|
Litigation, regulatory and similar matters1
|
|
57
|
826
|
9
|
|
Other
|
|
192
|
255
|
210
|
|
of which: UK and German bank levies
|
|
33
|
38
|
41
|
|
Total general and administrative expenses
|
|
1,208
|
2,212
|
1,089
|
|
1 Reflects the net
increase in provisions for litigation, regulatory and similar matters
recognized in the income statement. Refer to Note 14b for more information.
|
Note 7 Expected credit loss measurement
a)
Credit loss expense /
release
Total net credit loss expenses in the first
quarter of 2022 were USD 18 million, reflecting USD 11 million net credit
loss expenses related to stage 1 and 2 positions and USD 7 million net
credit loss expenses related to stage 3 positions.
Stage 1
and 2 net expenses included scenario-related net expenses of USD 18
million, model change-related net releases of USD 14 million, and net
expenses of USD 7 million including additional effects from book quality
and size changes.
Stage 3 net credit loss expenses were USD 7 million,
including USD 10 million net expenses in Personal & Corporate Banking,
across various corporate lending positions.
|
Credit loss (expense) / release
|
|
|
|
|
|
|
|
USD million
|
Global
Wealth
Management
|
Personal &
Corporate
Banking
|
Asset
Management
|
Investment
Bank
|
Group
Functions
|
Total
|
|
For the quarter ended 31.3.22
|
|
|
|
|
|
|
|
Stages 1 and 2
|
5
|
(13)
|
0
|
(3)
|
0
|
(11)
|
|
Stage 3
|
2
|
(10)
|
0
|
0
|
0
|
(7)
|
|
Total credit loss (expense) / release
|
7
|
(23)
|
0
|
(4)
|
0
|
(18)
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31.12.21
|
|
|
|
|
|
|
|
Stages 1 and 2
|
2
|
(4)
|
0
|
2
|
0
|
(1)
|
|
Stage 3
|
1
|
14
|
(1)
|
14
|
0
|
28
|
|
Total credit loss (expense) / release
|
2
|
10
|
(1)
|
16
|
0
|
27
|
|
|
|
|
|
|
|
|
|
For the quarter ended 31.3.21
|
|
|
|
|
|
|
|
Stages 1 and 2
|
4
|
16
|
0
|
5
|
0
|
26
|
|
Stage 3
|
(2)
|
8
|
0
|
(4)
|
0
|
3
|
|
Total credit loss (expense) / release
|
3
|
23
|
0
|
2
|
0
|
28
|
|
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 7 Expected
credit loss measurement (continued)
b) Changes
to ECL models, scenarios, scenario weights and post-model adjustments
Scenarios
The
expected credit loss (ECL) scenarios, along with the related macroeconomic
factors, were reviewed in light of the economic and political conditions
prevailing in the first quarter of 2022 through a series of governance
meetings, with input and feedback from UBS Risk and Finance experts across the
business divisions and regions.
As a response to inflationary developments and Russia’s
invasion of Ukraine, UBS has replaced the mild global interest rate steepening
scenario with a severe global interest rate steepening scenario, applied more
adverse weightings and reflected updated scenario data as of the end of the
first quarter of 2022 in the calculations.
The baseline scenario assumptions on a calendar-year basis are
included in the table below and imply a weaker economic forecast for 2022
compared with 2021.
The shocks in the newly adopted severe global interest rate
steepening scenario are more severe compared with the previously applied mild
global interest rate steepening scenario; for example, inflation and interest
rates are higher and GDP growth substantially lower.
The global crisis scenario remains materially unchanged.
Scenario weights and post-model
adjustments
In response to recent developments,
UBS changed the scenario weights for the first quarter of 2022: upside at 0%
(31 December 2021: 5%), baseline at 55% (unchanged), severe
global interest rate steepening scenario at 25%
(31 December 2021: mild global interest rate steepening scenario 10%) and the global crisis scenario at 20% (31 December 2021:
30%).
The post-model adjustment amounted to
USD 204 million as of 31 March 2022 (31 December 2021: USD 224
million) and includes effects from the uncertainty caused by the continued
COVID-19 pandemic and heightened geopolitical tensions, which cannot be fully
and reliably modeled due to a lack of sufficiently supportable data. The post-model adjustment was reduced during the first
quarter of 2022 following the scenario substitution and weighting changes noted
above, which resulted in higher modeled ECL and addressed some of the
uncertainties that had not been reflected in the modeling approach in
prior periods.
|
Comparison on shock factors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baseline
|
|
Key parameters
|
|
2021
|
2022
|
2023
|
|
Real GDP growth (annual percentage change)
|
|
|
|
|
|
United States
|
|
5.5
|
3.5
|
2.4
|
|
Eurozone
|
|
5.1
|
2.9
|
2.2
|
|
Switzerland
|
|
3.1
|
2.5
|
1.5
|
|
Unemployment rate (%, annual average)
|
|
|
|
|
|
United States
|
|
5.4
|
3.5
|
3.3
|
|
Eurozone
|
|
7.7
|
7.0
|
6.9
|
|
Switzerland
|
|
3.0
|
2.3
|
2.1
|
|
Real estate (annual percentage change, Q4)
|
|
|
|
|
|
United States
|
|
16.1
|
2.0
|
1.7
|
|
Eurozone
|
|
7.9
|
5.0
|
1.7
|
|
Switzerland
|
|
6.0
|
3.0
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic scenarios and weights applied
|
|
|
|
|
|
|
|
Assigned weights in %
|
|
ECL scenario
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Upside
|
|
0.0
|
5.0
|
0.0
|
|
Baseline
|
|
55.0
|
55.0
|
60.0
|
|
Mild global interest rate steepening
|
|
-
|
10.0
|
0.0
|
|
Severe global interest rate steepening
|
|
25.0
|
-
|
-
|
|
Global crisis
|
|
20.0
|
30.0
|
40.0
|
|
|
|
|
|
|
Note 7 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 million
|
|
31.3.22
|
|
|
|
Carrying amount1 / Total exposure
|
|
ECL allowances / provisions
|
|
Financial instruments measured at amortized cost
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Cash and balances at central banks
|
|
206,773
|
206,728
|
46
|
0
|
|
(6)
|
(0)
|
(6)
|
0
|
|
Loans and advances to banks
|
|
17,914
|
17,850
|
65
|
0
|
|
(9)
|
(8)
|
(1)
|
(0)
|
|
Receivables from securities financing transactions
|
|
69,452
|
69,452
|
(0)
|
0
|
|
(2)
|
(2)
|
(0)
|
0
|
|
Cash collateral receivables on derivative instruments
|
|
39,253
|
39,253
|
0
|
0
|
|
(0)
|
(0)
|
0
|
0
|
|
Loans and advances to customers
|
|
392,189
|
375,198
|
15,513
|
1,478
|
|
(801)
|
(121)
|
(155)
|
(525)
|
|
of which: Private clients with mortgage
|
|
153,645
|
145,272
|
7,702
|
671
|
|
(126)
|
(27)
|
(71)
|
(28)
|
|
of which: Real estate financing
|
|
43,920
|
40,006
|
3,907
|
7
|
|
(57)
|
(17)
|
(40)
|
(0)
|
|
of which: Large corporate clients
|
|
13,432
|
11,966
|
1,169
|
296
|
|
(143)
|
(21)
|
(14)
|
(108)
|
|
of which: SME clients
|
|
13,911
|
11,995
|
1,508
|
407
|
|
(260)
|
(22)
|
(20)
|
(218)
|
|
of which: Lombard
|
|
144,398
|
144,374
|
0
|
24
|
|
(34)
|
(7)
|
0
|
(27)
|
|
of which: Credit cards
|
|
1,709
|
1,341
|
341
|
28
|
|
(36)
|
(10)
|
(9)
|
(17)
|
|
of which: Commodity trade finance
|
|
4,441
|
4,425
|
7
|
9
|
|
(103)
|
(6)
|
(0)
|
(96)
|
|
Other financial assets measured at amortized cost
|
|
28,697
|
28,228
|
302
|
168
|
|
(109)
|
(27)
|
(7)
|
(75)
|
|
of which: Loans to financial advisors
|
|
2,388
|
2,164
|
86
|
138
|
|
(86)
|
(20)
|
(3)
|
(63)
|
|
Total financial assets measured at amortized cost
|
|
754,279
|
736,708
|
15,925
|
1,646
|
|
(927)
|
(158)
|
(170)
|
(600)
|
|
Financial assets measured at fair value through other
comprehensive income
|
|
9,093
|
9,093
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Total on-balance sheet financial assets in scope of ECL
requirements
|
|
763,371
|
745,800
|
15,925
|
1,646
|
|
(927)
|
(158)
|
(170)
|
(600)
|
|
Off-balance sheet (in scope of ECL)
|
|
|
|
|
|
|
|
|
|
|
|
Guarantees
|
|
22,496
|
21,264
|
1,072
|
159
|
|
(66)
|
(17)
|
(10)
|
(39)
|
|
of which: Large corporate clients
|
|
3,459
|
2,621
|
736
|
102
|
|
(32)
|
(3)
|
(4)
|
(26)
|
|
of which: SME clients
|
|
1,318
|
1,154
|
107
|
57
|
|
(11)
|
(1)
|
(1)
|
(9)
|
|
of which: Financial intermediaries and hedge funds
|
|
11,428
|
11,307
|
121
|
0
|
|
(16)
|
(12)
|
(5)
|
0
|
|
of which: Lombard
|
|
2,545
|
2,545
|
0
|
0
|
|
(1)
|
(0)
|
0
|
(1)
|
|
of which: Commodity trade finance
|
|
2,680
|
2,680
|
0
|
0
|
|
(1)
|
(1)
|
(0)
|
0
|
|
Irrevocable loan commitments
|
|
38,039
|
35,827
|
2,123
|
89
|
|
(112)
|
(68)
|
(44)
|
0
|
|
of which: Large corporate clients
|
|
23,698
|
21,723
|
1,916
|
58
|
|
(98)
|
(63)
|
(35)
|
0
|
|
Forward starting reverse repurchase and securities borrowing
agreements
|
|
6,432
|
6,432
|
0
|
0
|
|
(0)
|
(0)
|
0
|
0
|
|
Committed unconditionally revocable credit lines
|
|
41,396
|
38,616
|
2,715
|
65
|
|
(40)
|
(30)
|
(10)
|
0
|
|
of which: Real estate financing
|
|
9,621
|
9,343
|
278
|
0
|
|
(7)
|
(5)
|
(2)
|
0
|
|
of which: Large corporate clients
|
|
4,618
|
3,862
|
733
|
23
|
|
(5)
|
(2)
|
(3)
|
0
|
|
of which: SME clients
|
|
4,793
|
4,254
|
503
|
37
|
|
(15)
|
(12)
|
(3)
|
0
|
|
of which: Lombard
|
|
8,216
|
8,216
|
0
|
0
|
|
0
|
(0)
|
0
|
0
|
|
of which: Credit cards
|
|
9,398
|
8,941
|
453
|
4
|
|
(6)
|
(5)
|
(2)
|
0
|
|
of which: Commodity trade finance
|
|
280
|
280
|
0
|
0
|
|
(0)
|
(0)
|
0
|
0
|
|
Irrevocable committed prolongation of existing loans
|
|
5,355
|
5,342
|
12
|
2
|
|
(2)
|
(2)
|
(0)
|
0
|
|
Total off-balance sheet financial instruments and other credit
lines
|
|
113,718
|
107,482
|
5,922
|
314
|
|
(221)
|
(117)
|
(64)
|
(39)
|
|
Total allowances and provisions
|
|
|
|
|
|
|
(1,148)
|
(275)
|
(234)
|
(639)
|
|
1 The carrying
amount of financial assets measured at amortized cost represents the total
gross exposure net of the respective ECL allowances.
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 7 Expected credit
loss measurement (continued)
|
USD million
|
|
31.12.21
|
|
|
|
Carrying amount¹ / Total exposure
|
|
ECL allowances / provisions
|
|
Financial instruments measured at amortized cost
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Cash and balances at central banks
|
|
192,817
|
192,817
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Loans and advances to banks
|
|
15,480
|
15,453
|
26
|
1
|
|
(8)
|
(7)
|
(1)
|
0
|
|
Receivables from securities financing transactions
|
|
75,012
|
75,012
|
0
|
0
|
|
(2)
|
(2)
|
0
|
0
|
|
Cash collateral receivables on derivative instruments
|
|
30,514
|
30,514
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Loans and advances to customers
|
|
397,761
|
380,564
|
15,620
|
1,577
|
|
(850)
|
(126)
|
(152)
|
(572)
|
|
of which: Private clients with mortgages
|
|
152,479
|
143,505
|
8,262
|
711
|
|
(132)
|
(28)
|
(71)
|
(33)
|
|
of which: Real estate financing
|
|
43,945
|
40,463
|
3,472
|
9
|
|
(60)
|
(19)
|
(40)
|
0
|
|
of which: Large corporate clients
|
|
13,990
|
12,643
|
1,037
|
310
|
|
(170)
|
(22)
|
(16)
|
(133)
|
|
of which: SME clients
|
|
14,004
|
12,076
|
1,492
|
436
|
|
(259)
|
(19)
|
(15)
|
(225)
|
|
of which: Lombard
|
|
149,283
|
149,255
|
0
|
27
|
|
(33)
|
(6)
|
0
|
(28)
|
|
of which: Credit cards
|
|
1,716
|
1,345
|
342
|
29
|
|
(36)
|
(10)
|
(9)
|
(17)
|
|
of which: Commodity trade finance
|
|
3,813
|
3,799
|
7
|
7
|
|
(114)
|
(6)
|
0
|
(108)
|
|
Other financial assets measured at amortized cost
|
|
26,209
|
25,718
|
302
|
189
|
|
(109)
|
(27)
|
(7)
|
(76)
|
|
of which: Loans to financial advisors
|
|
2,453
|
2,184
|
106
|
163
|
|
(86)
|
(19)
|
(3)
|
(63)
|
|
Total financial assets measured at amortized cost
|
|
737,794
|
720,079
|
15,948
|
1,767
|
|
(969)
|
(161)
|
(160)
|
(647)
|
|
Financial assets measured at fair value through other
comprehensive income
|
|
8,844
|
8,844
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Total on-balance sheet financial assets in scope of ECL
requirements
|
|
746,638
|
728,923
|
15,948
|
1,767
|
|
(969)
|
(161)
|
(160)
|
(647)
|
|
Off-balance sheet (in scope of ECL)
|
|
|
|
|
|
|
|
|
|
|
|
Guarantees
|
|
20,972
|
19,695
|
1,127
|
150
|
|
(41)
|
(18)
|
(8)
|
(15)
|
|
of which: Large corporate clients
|
|
3,464
|
2,567
|
793
|
104
|
|
(6)
|
(3)
|
(3)
|
0
|
|
of which: SME clients
|
|
1,353
|
1,143
|
164
|
46
|
|
(8)
|
(1)
|
(1)
|
(7)
|
|
of which: Financial intermediaries and hedge funds
|
|
9,575
|
9,491
|
84
|
0
|
|
(17)
|
(13)
|
(4)
|
0
|
|
of which: Lombard
|
|
2,454
|
2,454
|
0
|
0
|
|
(1)
|
0
|
0
|
(1)
|
|
of which: Commodity trade finance
|
|
3,137
|
3,137
|
0
|
0
|
|
(1)
|
(1)
|
0
|
0
|
|
Irrevocable loan commitments
|
|
39,478
|
37,097
|
2,335
|
46
|
|
(114)
|
(72)
|
(42)
|
0
|
|
of which: Large corporate clients
|
|
23,922
|
21,811
|
2,102
|
9
|
|
(100)
|
(66)
|
(34)
|
0
|
|
Forward starting reverse repurchase and securities borrowing
agreements
|
|
1,444
|
1,444
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Committed unconditionally revocable credit lines
|
|
40,778
|
38,207
|
2,508
|
63
|
|
(38)
|
(28)
|
(10)
|
0
|
|
of which: Real estate financing
|
|
7,328
|
7,046
|
281
|
0
|
|
(5)
|
(4)
|
(1)
|
0
|
|
of which: Large corporate clients
|
|
5,358
|
4,599
|
736
|
23
|
|
(7)
|
(4)
|
(3)
|
0
|
|
of which: SME clients
|
|
5,160
|
4,736
|
389
|
35
|
|
(15)
|
(11)
|
(3)
|
0
|
|
of which: Lombard
|
|
8,670
|
8,670
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
of which: Credit cards
|
|
9,466
|
9,000
|
462
|
4
|
|
(6)
|
(5)
|
(2)
|
0
|
|
of which: Commodity trade finance
|
|
117
|
117
|
0
|
0
|
|
0
|
0
|
0
|
0
|
|
Irrevocable committed prolongation of existing loans
|
|
5,611
|
5,527
|
36
|
48
|
|
(3)
|
(3)
|
0
|
0
|
|
Total off-balance sheet financial instruments and other credit
lines
|
|
108,284
|
101,971
|
6,006
|
307
|
|
(196)
|
(121)
|
(60)
|
(15)
|
|
Total allowances and provisions
|
|
|
|
|
|
|
(1,165)
|
(282)
|
(220)
|
(662)
|
|
1 The carrying
amount of financial assets measured at amortized cost represents the total
gross exposure net of the respective ECL allowances.
|
Note 7
Expected credit loss measurement (continued)
The table
below provides information about the ECL gross exposure 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, Loans and advances to 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.
|
Coverage ratios for core loan portfolio
|
|
31.3.22
|
|
|
|
Gross carrying amount (USD million)
|
|
ECL coverage (bps)
|
|
On-Balance sheet
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 1&2
|
Stage 3
|
|
Private clients with mortgages
|
|
153,771
|
145,299
|
7,773
|
699
|
|
8
|
2
|
91
|
6
|
403
|
|
Real estate financing
|
|
43,977
|
40,023
|
3,947
|
7
|
|
13
|
4
|
102
|
13
|
455
|
|
Total real estate lending
|
|
197,748
|
185,321
|
11,720
|
707
|
|
9
|
2
|
95
|
8
|
404
|
|
Large corporate clients
|
|
13,574
|
11,987
|
1,184
|
404
|
|
105
|
17
|
122
|
27
|
2,666
|
|
SME clients
|
|
14,170
|
12,017
|
1,528
|
626
|
|
183
|
18
|
130
|
31
|
3,489
|
|
Total corporate lending
|
|
27,745
|
24,004
|
2,712
|
1,029
|
|
145
|
18
|
127
|
29
|
3,166
|
|
Lombard
|
|
144,432
|
144,381
|
0
|
51
|
|
2
|
0
|
0
|
0
|
5,326
|
|
Credit cards
|
|
1,745
|
1,351
|
350
|
44
|
|
204
|
72
|
256
|
110
|
3,803
|
|
Commodity trade finance
|
|
4,544
|
4,432
|
7
|
105
|
|
226
|
14
|
2
|
14
|
9,157
|
|
Other loans and advances to customers
|
|
16,776
|
15,831
|
879
|
66
|
|
25
|
8
|
9
|
8
|
4,517
|
|
Loans to financial advisors
|
|
2,473
|
2,184
|
88
|
201
|
|
347
|
92
|
322
|
101
|
3,132
|
|
Total other lending
|
|
169,970
|
168,178
|
1,325
|
468
|
|
18
|
3
|
95
|
4
|
4,986
|
|
Total1
|
|
395,463
|
377,503
|
15,757
|
2,204
|
|
22
|
4
|
100
|
8
|
2,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross exposure (USD million)
|
|
ECL coverage (bps)
|
|
Off-balance sheet
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 1&2
|
Stage 3
|
|
Private clients with mortgages
|
|
7,972
|
7,733
|
236
|
3
|
|
3
|
3
|
7
|
3
|
241
|
|
Real estate financing
|
|
10,787
|
10,499
|
287
|
0
|
|
9
|
6
|
118
|
9
|
0
|
|
Total real estate lending
|
|
18,759
|
18,232
|
523
|
3
|
|
7
|
5
|
68
|
7
|
241
|
|
Large corporate clients
|
|
31,774
|
28,206
|
3,384
|
183
|
|
43
|
24
|
124
|
35
|
1,410
|
|
SME clients
|
|
7,512
|
6,693
|
700
|
119
|
|
48
|
23
|
159
|
36
|
791
|
|
Total corporate lending
|
|
39,286
|
34,899
|
4,084
|
303
|
|
44
|
24
|
130
|
35
|
1,166
|
|
Lombard
|
|
13,761
|
13,761
|
0
|
0
|
|
1
|
0
|
0
|
0
|
0
|
|
Credit cards
|
|
9,398
|
8,941
|
453
|
4
|
|
7
|
5
|
34
|
7
|
0
|
|
Commodity trade finance
|
|
2,960
|
2,960
|
0
|
0
|
|
4
|
4
|
0
|
4
|
0
|
|
Financial intermediaries and hedge funds
|
|
10,739
|
10,141
|
598
|
0
|
|
16
|
12
|
83
|
16
|
0
|
|
Other off-balance sheet commitments
|
|
12,384
|
12,115
|
265
|
4
|
|
9
|
5
|
40
|
6
|
0
|
|
Total other lending
|
|
49,241
|
47,918
|
1,315
|
8
|
|
8
|
5
|
58
|
7
|
0
|
|
Total2
|
|
107,286
|
101,049
|
5,922
|
314
|
|
21
|
12
|
108
|
17
|
1,255
|
|
1 Includes Loans
and advances to customers of USD 392,990 million and Loans to financial
advisors of USD 2,473 million, which are presented on the balance sheet line
Other assets measured at amortized cost. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements.
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 7 Expected credit
loss measurement (continued)
|
Coverage ratios for core loan portfolio
|
|
31.12.21
|
|
|
|
|
Gross carrying amount (USD million)
|
|
ECL coverage (bps)
|
|
|
On-balance sheet
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 1&2
|
Stage 3
|
|
Private clients with mortgages
|
|
152,610
|
143,533
|
8,333
|
744
|
|
9
|
2
|
85
|
6
|
446
|
|
Real estate financing
|
|
44,004
|
40,483
|
3,512
|
10
|
|
14
|
5
|
114
|
14
|
231
|
|
Total real estate lending
|
|
196,615
|
184,016
|
11,845
|
754
|
|
10
|
3
|
94
|
8
|
443
|
|
Large corporate clients
|
|
14,161
|
12,665
|
1,053
|
443
|
|
120
|
18
|
148
|
28
|
2,997
|
|
SME clients
|
|
14,263
|
12,095
|
1,507
|
661
|
|
182
|
16
|
103
|
25
|
3,402
|
|
Total corporate lending
|
|
28,424
|
24,760
|
2,560
|
1,104
|
|
151
|
17
|
121
|
26
|
3,240
|
|
Lombard
|
|
149,316
|
149,261
|
0
|
55
|
|
2
|
0
|
0
|
0
|
5,026
|
|
Credit cards
|
|
1,752
|
1,355
|
351
|
46
|
|
204
|
72
|
255
|
109
|
3,735
|
|
Commodity trade finance
|
|
3,927
|
3,805
|
7
|
115
|
|
290
|
15
|
3
|
15
|
9,388
|
|
Other loans and advances to customers
|
|
18,578
|
17,493
|
1,010
|
75
|
|
25
|
9
|
15
|
10
|
3,730
|
|
Loans to financial advisors
|
|
2,539
|
2,203
|
109
|
226
|
|
338
|
88
|
303
|
99
|
2,791
|
|
Total other lending
|
|
176,111
|
174,117
|
1,477
|
517
|
|
18
|
3
|
93
|
4
|
4,718
|
|
Total1
|
|
401,150
|
382,893
|
15,882
|
2,374
|
|
23
|
4
|
98
|
8
|
2,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross exposure (USD million)
|
|
ECL coverage (bps)
|
|
|
Off-balance sheet
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
|
Total
|
Stage 1
|
Stage 2
|
Stage 1&2
|
Stage 3
|
|
Private clients with mortgages
|
|
9,123
|
8,798
|
276
|
49
|
|
3
|
3
|
9
|
3
|
15
|
|
Real estate financing
|
|
8,766
|
8,481
|
285
|
0
|
|
9
|
7
|
88
|
9
|
0
|
|
Total real estate lending
|
|
17,889
|
17,278
|
562
|
49
|
|
6
|
5
|
49
|
6
|
15
|
|
Large corporate clients
|
|
32,748
|
28,981
|
3,630
|
136
|
|
34
|
25
|
110
|
35
|
1
|
|
SME clients
|
|
8,077
|
7,276
|
688
|
114
|
|
38
|
19
|
151
|
30
|
585
|
|
Total corporate lending
|
|
40,826
|
36,258
|
4,318
|
250
|
|
35
|
24
|
117
|
34
|
266
|
|
Lombard
|
|
14,438
|
14,438
|
0
|
0
|
|
1
|
0
|
0
|
0
|
0
|
|
Credit cards
|
|
9,466
|
9,000
|
462
|
4
|
|
7
|
5
|
34
|
7
|
0
|
|
Commodity trade finance
|
|
3,262
|
3,262
|
0
|
0
|
|
4
|
4
|
0
|
4
|
0
|
|
Financial intermediaries and hedge funds
|
|
12,153
|
11,784
|
369
|
0
|
|
15
|
12
|
120
|
15
|
0
|
|
Other off-balance sheet commitments
|
|
8,806
|
8,507
|
296
|
4
|
|
15
|
6
|
30
|
7
|
0
|
|
Total other lending
|
|
48,126
|
46,991
|
1,127
|
8
|
|
9
|
5
|
61
|
7
|
0
|
|
Total2
|
|
106,840
|
100,527
|
6,006
|
307
|
|
18
|
12
|
100
|
17
|
486
|
|
1 Includes Loans and advances to customers of USD 398,611
million and Loans to financial advisors of USD 2,539 million, which are
presented on the balance sheet line Other assets measured at amortized
cost. 2 Excludes Forward starting reverse repurchase and securities
borrowing agreements.
|
Note 8 Fair value
measurement
This Note
provides fair value measurement information for both financial and
non-financial instruments and should be read in conjunction with “Note 21 Fair
value measurement” in the “Consolidated financial statements” section of the
Annual Report 2021, which provides more information about valuation principles,
valuation governance, fair value hierarchy classification, valuation
adjustments, valuation techniques and inputs, sensitivity of fair value
measurements, and methods applied to calculate fair values for financial
instruments not measured at fair value.
›
Refer to the “Balance sheet and off-balance
sheet” section of this report for more information about quarter-on-quarter
balance sheet movements
All financial and
non-financial assets and liabilities measured or disclosed at fair value are
categorized into one of three fair value hierarchy levels. When the inputs used
to measure fair value may fall within different levels of the fair value hierarchy,
the level in the hierarchy within which each instrument is classified in its
entirety is based on the lowest-level input that is significant to the
position’s fair value measurement:
–
Level 1 – quoted prices (unadjusted) in active
markets for identical assets and liabilities;
–
Level 2 – valuation techniques for which all
significant inputs are, or are based on, observable market data; or
–
Level 3 – valuation techniques for which
significant inputs are not based on observable market data.
Note 8
Fair value measurement (continued)
The fair
value hierarchy classification of financial and non-financial assets and
liabilities measured at fair value is summarized in the table below.
|
Determination of fair values from quoted market prices or
valuation techniques1
|
|
|
|
31.3.22
|
|
31.12.21
|
|
USD million
|
|
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
|
|
97,078
|
15,044
|
2,623
|
114,744
|
|
113,697
|
14,825
|
2,299
|
130,821
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Equity instruments
|
|
82,256
|
512
|
278
|
83,047
|
|
97,958
|
1,090
|
149
|
99,197
|
|
Government bills / bonds
|
|
7,579
|
1,491
|
10
|
9,080
|
|
7,135
|
1,351
|
10
|
8,496
|
|
Investment fund units
|
|
6,495
|
2,030
|
16
|
8,541
|
|
7,843
|
1,364
|
21
|
9,229
|
|
Corporate and municipal bonds
|
|
741
|
8,949
|
611
|
10,301
|
|
708
|
7,604
|
556
|
8,868
|
|
Loans
|
|
0
|
1,726
|
1,577
|
3,303
|
|
0
|
3,099
|
1,443
|
4,542
|
|
Asset-backed securities
|
|
6
|
336
|
131
|
473
|
|
53
|
317
|
120
|
489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
1,511
|
137,115
|
1,683
|
140,309
|
|
522
|
116,479
|
1,140
|
118,142
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
749
|
66,803
|
6
|
67,558
|
|
255
|
53,043
|
7
|
53,305
|
|
Interest rate contracts
|
|
0
|
36,372
|
772
|
37,144
|
|
0
|
32,747
|
494
|
33,241
|
|
Equity / index contracts
|
|
0
|
29,477
|
450
|
29,927
|
|
0
|
27,861
|
384
|
28,245
|
|
Credit derivative contracts
|
|
0
|
1,392
|
338
|
1,730
|
|
0
|
1,179
|
236
|
1,414
|
|
Commodity contracts
|
|
0
|
2,886
|
58
|
2,944
|
|
0
|
1,590
|
16
|
1,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage receivables
|
|
0
|
20,762
|
0
|
20,762
|
|
0
|
21,839
|
0
|
21,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets at fair value not held for trading
|
|
25,704
|
31,262
|
4,033
|
60,999
|
|
27,278
|
28,622
|
4,180
|
60,080
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets for unit-linked investment contracts
|
|
18,475
|
0
|
1
|
18,476
|
|
21,110
|
187
|
6
|
21,303
|
|
Corporate and municipal bonds
|
|
137
|
12,665
|
288
|
13,090
|
|
123
|
13,937
|
306
|
14,366
|
|
Government bills / bonds
|
|
6,713
|
4,561
|
0
|
11,274
|
|
5,624
|
3,236
|
0
|
8,860
|
|
Loans
|
|
0
|
3,815
|
869
|
4,684
|
|
0
|
4,982
|
892
|
5,874
|
|
Securities financing transactions
|
|
0
|
9,677
|
100
|
9,776
|
|
0
|
5,704
|
100
|
5,804
|
|
Auction rate securities
|
|
0
|
0
|
1,635
|
1,635
|
|
0
|
0
|
1,585
|
1,585
|
|
Investment fund units
|
|
291
|
544
|
112
|
947
|
|
338
|
574
|
117
|
1,028
|
|
Equity instruments
|
|
89
|
0
|
699
|
788
|
|
83
|
2
|
681
|
765
|
|
Other
|
|
0
|
0
|
329
|
329
|
|
0
|
0
|
495
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value through other
comprehensive income on a recurring basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair value through other
comprehensive income
|
|
2,341
|
6,751
|
0
|
9,093
|
|
2,704
|
6,140
|
0
|
8,844
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Asset-backed securities
|
|
0
|
4,639
|
0
|
4,639
|
|
0
|
4,849
|
0
|
4,849
|
|
Government bills / bonds
|
|
2,293
|
19
|
0
|
2,312
|
|
2,658
|
27
|
0
|
2,686
|
|
Corporate and municipal bonds
|
|
48
|
2,093
|
0
|
2,141
|
|
45
|
1,265
|
0
|
1,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-financial assets measured at fair value on a recurring basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precious metals and other physical commodities
|
|
4,626
|
0
|
0
|
4,626
|
|
5,258
|
0
|
0
|
5,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-financial assets measured at fair value on a non-recurring
basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-financial assets2
|
|
0
|
0
|
24
|
24
|
|
0
|
0
|
26
|
26
|
|
Total assets measured at fair value
|
|
131,261
|
210,934
|
8,363
|
350,557
|
|
149,459
|
187,905
|
7,645
|
345,010
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 8
Fair value measurement (continued)
|
Determination of fair values from quoted market prices or
valuation techniques (continued)1
|
|
|
|
31.3.22
|
|
31.12.21
|
|
USD million
|
|
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
|
|
26,770
|
7,841
|
76
|
34,687
|
|
25,413
|
6,170
|
105
|
31,688
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Equity instruments
|
|
19,390
|
328
|
61
|
19,778
|
|
18,328
|
513
|
83
|
18,924
|
|
Corporate and municipal bonds
|
|
32
|
5,728
|
15
|
5,775
|
|
30
|
4,219
|
17
|
4,266
|
|
Government bills / bonds
|
|
6,857
|
1,047
|
0
|
7,905
|
|
5,883
|
826
|
0
|
6,709
|
|
Investment fund units
|
|
491
|
695
|
1
|
1,187
|
|
1,172
|
555
|
6
|
1,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
1,505
|
135,069
|
1,869
|
138,443
|
|
509
|
118,558
|
2,242
|
121,309
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
737
|
65,303
|
33
|
66,073
|
|
258
|
53,800
|
21
|
54,078
|
|
Interest rate contracts
|
|
0
|
33,518
|
221
|
33,739
|
|
0
|
28,398
|
278
|
28,675
|
|
Equity / index contracts
|
|
0
|
32,182
|
1,142
|
33,324
|
|
0
|
33,438
|
1,511
|
34,949
|
|
Credit derivative contracts
|
|
0
|
1,421
|
370
|
1,791
|
|
0
|
1,412
|
341
|
1,753
|
|
Commodity contracts
|
|
0
|
2,530
|
74
|
2,604
|
|
0
|
1,503
|
63
|
1,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities designated at fair value on a recurring
basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokerage payables designated at fair value
|
|
0
|
48,015
|
0
|
48,015
|
|
0
|
44,045
|
0
|
44,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issued designated at fair value
|
|
0
|
58,798
|
12,672
|
71,470
|
|
0
|
59,606
|
14,194
|
73,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities designated at fair value
|
|
0
|
29,346
|
979
|
30,325
|
|
0
|
29,258
|
816
|
30,074
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities related to unit-linked investment
contracts
|
|
0
|
18,661
|
0
|
18,661
|
|
0
|
21,466
|
0
|
21,466
|
|
Securities financing transactions
|
|
0
|
9,386
|
2
|
9,388
|
|
0
|
6,375
|
2
|
6,377
|
|
Over-the-counter debt instruments
|
|
0
|
1,299
|
970
|
2,269
|
|
0
|
1,334
|
794
|
2,128
|
|
Total liabilities measured at fair value
|
|
28,275
|
279,069
|
15,596
|
322,940
|
|
25,922
|
257,637
|
17,357
|
300,916
|
|
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.
|
The table
below summarizes the valuation adjustment reserves recognized on the balance
sheet. Details about each category are provided further below.
|
Valuation adjustment reserves on the balance sheet
|
|
|
|
|
|
|
As of
|
|
Life-to-date gain / (loss), USD million
|
|
31.3.22
|
31.12.21
|
|
Deferred day-1 profit or loss reserves
|
|
425
|
418
|
|
Own credit adjustments on financial liabilities designated at
fair value
|
|
114
|
(315)
|
|
CVAs, FVAs, DVAs and other valuation adjustments
|
|
(969)
|
(1,004)
|
Deferred day-1 profit or loss reserves
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 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
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Reserve balance at the beginning of the period
|
|
418
|
429
|
269
|
|
Profit / (loss) deferred on new transactions
|
|
75
|
78
|
181
|
|
(Profit) / loss recognized in the income statement
|
|
(69)
|
(88)
|
(63)
|
|
Foreign currency translation
|
|
0
|
0
|
(1)
|
|
Reserve balance at the end of the period
|
|
425
|
418
|
387
|
Note 8
Fair value measurement (continued)
Own credit
The valuation of financial liabilities designated at
fair value requires consideration of the own credit component of fair value.
Own credit risk is reflected in the valuation of UBS’s fair value option
liabilities where this component is considered relevant for valuation purposes
by UBS’s counterparties and other market participants. However, own credit risk
is not reflected in the valuation of UBS’s liabilities that are fully
collateralized or for other obligations for which it is established market
practice to not include an own credit component.
A description of
UBS’s methodology to estimate own credit and the related accounting principles
is included in “Note 21 Fair value measurement” in the “Consolidated financial
statements” section of the Annual Report 2021.
In the first quarter of 2022, other comprehensive income
related to own credit on financial liabilities designated at fair value was
positive USD 423 million, primarily due to
a widening of UBS’s credit spreads.
|
Own credit adjustments on financial liabilities designated at
fair value
|
|
|
|
|
|
|
|
Included in Other comprehensive income
|
|
|
|
For the quarter ended
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Recognized during the period:
|
|
|
|
|
|
Realized gain / (loss)
|
|
(7)
|
0
|
(6)
|
|
Unrealized gain / (loss)
|
|
430
|
55
|
(23)
|
|
Total gain / (loss), before tax
|
|
423
|
55
|
(29)
|
|
|
|
|
|
|
|
|
|
As of
|
|
USD million
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Recognized on the balance sheet as of the end of the period:
|
|
|
|
|
|
Unrealized life-to-date gain / (loss)
|
|
114
|
(315)
|
(400)
|
Credit, funding, debit and other
valuation adjustments
A description of UBS’s methodology for estimating
credit valuation adjustments (CVAs), funding valuation adjustments (FVAs),
debit valuation adjustments (DVAs) and other valuation adjustments is included
in “Note 21 Fair value measurement” in the “Consolidated financial statements”
section of the Annual Report 2021.
|
Valuation adjustments on financial instruments
|
|
|
|
|
|
|
As of
|
|
Life-to-date gain / (loss), USD million
|
|
31.3.22
|
31.12.21
|
|
Credit valuation adjustments1
|
|
(45)
|
(44)
|
|
Funding valuation adjustments
|
|
(41)
|
(49)
|
|
Debit valuation adjustments
|
|
4
|
2
|
|
Other valuation adjustments
|
|
(887)
|
(913)
|
|
of which: liquidity
|
|
(343)
|
(341)
|
|
of which: model uncertainty
|
|
(544)
|
(571)
|
|
1 Amounts do not
include reserves against defaulted counterparties.
|
c) Transfers between Level 1
and Level 2
Assets and liabilities that were held
for the entire reporting period and transferred from Level 2 to level 1
or from Level 1 to Level 2 during the first quarter of 2022 were not
material.
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 8
Fair value measurement (continued)
d) 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, the inputs used in a given
valuation technique that are considered significant as of 31 March 2022
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 ranges will
therefore vary from period to period and parameter to parameter based on
characteristics of the instruments held at each balance sheet date. Furthermore,
the ranges of unobservable inputs may differ across other financial
institutions, reflecting the diversity of the products in each firm’s
inventory.
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 Annual Report 2021. A
description of the potential effect that a change in each unobservable input in
isolation may have on a fair value measurement, including information to
facilitate an understanding of factors that give rise to the input ranges
shown, is also provided in “Note 21 Fair value measurement” in the
“Consolidated financial statements” section of the Annual Report 2021.
|
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)
|
|
31.3.22
|
|
31.12.21
|
|
|
USD billion
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
|
low
|
high
|
weighted average2
|
|
low
|
high
|
weighted average2
|
unit1
|
|
Financial assets and liabilities at fair value held for trading
and Financial assets at fair value not held for trading
|
|
Corporate and municipal bonds
|
0.9
|
0.9
|
|
0.0
|
0.0
|
|
Relative value to market comparable
|
|
Bond price equivalent
|
13
|
102
|
93
|
|
16
|
143
|
98
|
points
|
|
|
|
|
|
|
|
|
Discounted expected cash flows
|
|
Discount margin
|
447
|
447
|
|
|
434
|
434
|
|
basis points
|
|
Traded loans, loans measured at fair value, loan commitments and
guarantees
|
2.8
|
2.8
|
|
0.0
|
0.0
|
|
Relative value to market comparable
|
|
Loan price equivalent
|
0
|
100
|
99
|
|
0
|
101
|
99
|
points
|
|
|
|
|
|
|
|
|
Discounted expected cash flows
|
|
Credit spread
|
200
|
800
|
294
|
|
175
|
800
|
436
|
basis points
|
|
|
|
|
|
|
|
|
Market comparable and securitization model
|
|
Credit spread
|
70
|
1,490
|
236
|
|
28
|
1,544
|
241
|
basis points
|
|
Auction rate securities
|
1.6
|
1.6
|
|
|
|
|
Discounted expected cash flows
|
|
Credit spread
|
115
|
184
|
149
|
|
115
|
197
|
153
|
basis points
|
|
Investment fund units3
|
0.1
|
0.1
|
|
0.0
|
0.0
|
|
Relative value to market comparable
|
|
Net asset value
|
|
|
|
|
|
|
|
|
|
Equity instruments3
|
1.0
|
0.8
|
|
0.1
|
0.1
|
|
Relative value to market comparable
|
|
Price
|
|
|
|
|
|
|
|
|
|
Debt issued designated at fair value4
|
|
|
|
12.7
|
14.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities designated at fair value
|
|
|
|
1.0
|
0.8
|
|
Discounted expected cash flows
|
|
Funding spread
|
25
|
175
|
|
|
24
|
175
|
|
basis points
|
|
Derivative financial instruments
|
|
Interest rate contracts
|
0.8
|
0.5
|
|
0.2
|
0.3
|
|
Option model
|
|
Volatility of interest rates
|
74
|
136
|
|
|
65
|
81
|
|
basis points
|
|
Credit derivative contracts
|
0.3
|
0.2
|
|
0.4
|
0.3
|
|
Discounted expected cash flows
|
|
Credit spreads
|
3
|
541
|
|
|
1
|
583
|
|
basis points
|
|
|
|
|
|
|
|
|
|
|
Bond price equivalent
|
3
|
145
|
|
|
2
|
136
|
|
points
|
|
Equity / index contracts
|
0.4
|
0.4
|
|
1.1
|
1.5
|
|
Option model
|
|
Equity dividend yields
|
0
|
12
|
|
|
0
|
11
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Volatility of equity stocks, equity and other indices
|
3
|
97
|
|
|
4
|
98
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Equity-to-FX correlation
|
(26)
|
84
|
|
|
(29)
|
76
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Equity-to-equity correlation
|
(25)
|
100
|
|
|
(25)
|
100
|
|
%
|
|
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, rates-linked and credit-linked notes, all of which have embedded
derivative parameters that are considered to be unobservable. The equivalent
derivative instrument parameters are presented in the respective derivative
financial instruments lines in this table.
|
Note 8
Fair value measurement (continued)
e) 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 table presents the
favorable and unfavorable effects for each class of financial assets and
liabilities for which the potential change in fair value is considered
significant. The sensitivity of fair value measurements for debt issued
designated at fair value and over-the-counter debt instruments designated at
fair value is reported together with the equivalent derivative or securities
financing instrument.
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 interdepend-encies
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 assumptions1
|
|
|
|
|
|
|
31.3.22
|
|
31.12.21
|
|
USD million
|
|
Favorable
changes
|
Unfavorable
changes
|
|
Favorable
changes
|
Unfavorable
changes
|
|
Traded loans, loans designated at fair value, loan commitments
and guarantees
|
|
15
|
(20)
|
|
19
|
(13)
|
|
Securities financing transactions
|
|
47
|
(52)
|
|
41
|
(53)
|
|
Auction rate securities
|
|
79
|
(79)
|
|
66
|
(66)
|
|
Asset-backed securities
|
|
25
|
(18)
|
|
20
|
(20)
|
|
Equity instruments
|
|
170
|
(144)
|
|
173
|
(146)
|
|
Interest rate derivative contracts, net
|
|
69
|
(62)
|
|
29
|
(19)
|
|
Credit derivative contracts, net
|
|
8
|
(7)
|
|
5
|
(8)
|
|
Foreign exchange derivative contracts, net
|
|
16
|
(9)
|
|
19
|
(11)
|
|
Equity / index derivative contracts, net
|
|
410
|
(367)
|
|
368
|
(335)
|
|
Other
|
|
53
|
(81)
|
|
50
|
(73)
|
|
Total
|
|
892
|
(839)
|
|
790
|
(744)
|
|
1 Sensitivity of
issued and over-the-counter debt instruments is reported with the equivalent
derivative or securities financing instrument.
|
f) Level 3 instruments: movements
during the period
Significant changes in Level 3
instruments
The table on the following pages 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 at the
beginning of the year.
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 8
Fair value measurement (continued)
|
Movements of Level 3 instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gains / losses included in comprehensive income
|
|
|
|
|
|
|
|
|
|
USD billion
|
Balance
as of
31 December
2020
|
Net gains / losses included in income1
|
of which: related to Level 3 instruments held at the end of
the reporting period
|
Purchases
|
Sales
|
Issuances
|
Settlements
|
Transfers
into
Level 3
|
Transfers
out of
Level 3
|
Foreign currency translation
|
Balance
as of
31 March
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets at fair value held for trading
|
2.3
|
0.0
|
0.0
|
0.2
|
(0.6)
|
0.3
|
0.0
|
0.2
|
(0.2)
|
0.0
|
2.2
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment fund units
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Corporate and municipal bonds
|
0.8
|
0.0
|
0.0
|
0.2
|
(0.1)
|
0.0
|
0.0
|
0.0
|
(0.1)
|
0.0
|
0.8
|
|
Loans
|
1.1
|
0.0
|
0.0
|
0.0
|
(0.3)
|
0.3
|
0.0
|
0.0
|
(0.2)
|
0.0
|
1.1
|
|
Other
|
0.4
|
0.0
|
0.0
|
0.0
|
(0.2)
|
0.0
|
0.0
|
0.2
|
0.0
|
0.0
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments – assets
|
1.8
|
(0.1)
|
(0.1)
|
0.0
|
0.0
|
0.4
|
(0.4)
|
0.0
|
(0.1)
|
0.0
|
1.6
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts
|
0.5
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.4
|
|
Equity / index contracts
|
0.9
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.3
|
(0.2)
|
0.0
|
0.0
|
0.0
|
0.8
|
|
Credit derivative contracts
|
0.3
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.4
|
|
Other
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets at fair value not held for trading
|
3.9
|
0.0
|
0.0
|
0.5
|
(0.3)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
4.2
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
0.9
|
(0.1)
|
0.0
|
0.4
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
1.1
|
|
Auction rate securities
|
1.5
|
0.1
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
1.6
|
|
Equity instruments
|
0.5
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.5
|
|
Other
|
1.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments – liabilities
|
3.5
|
0.1
|
0.0
|
0.0
|
0.0
|
0.6
|
(0.8)
|
0.0
|
(0.2)
|
0.0
|
3.1
|
|
of which:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts
|
0.5
|
0.0
|
0.0
|
0.0
|
0.0
|
0.3
|
(0.1)
|
0.0
|
(0.1)
|
0.0
|
0.5
|
|
Equity / index contracts
|
2.3
|
0.2
|
0.1
|
0.0
|
0.0
|
0.3
|
(0.6)
|
0.0
|
(0.1)
|
0.0
|
2.1
|
|
Credit derivative contracts
|
0.5
|
(0.1)
|
(0.1)
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.4
|
|
Other
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issued designated at fair value
|
11.0
|
0.0
|
0.0
|
0.0
|
0.0
|
3.8
|
(1.8)
|
0.2
|
(0.3)
|
(0.2)
|
12.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities designated at fair value
|
0.7
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
(0.2)
|
0.0
|
0.0
|
0.0
|
0.5
|
|
1 Net gains /
losses included in comprehensive income are composed of Net interest income,
Other net income from financial instruments measured at fair value through
profit or loss and Other income. 2 Total Level 3 assets as of
31 March 2022 were USD 8.4 billion (31 December 2021: USD 7.6
billion). Total Level 3 liabilities as of 31 March 2022 were USD 15.6
billion (31 December 2021: USD 17.4 billion).
|
Note 8
Fair value measurement (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gains / losses
included in
comprehensive income
|
|
|
|
|
|
|
|
|
|
Balance
as of
31 December
20212
|
Net gains / losses included in income1
|
of which: related to Level 3 instruments held at the end of
the reporting period
|
Purchases
|
Sales
|
Issuances
|
Settlements
|
Transfers
into
Level 3
|
Transfers
out of
Level 3
|
Foreign
currency
translation
|
Balance
as of
31 March
20222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.3
|
0.0
|
0.0
|
0.2
|
(0.8)
|
1.0
|
0.0
|
0.2
|
(0.3)
|
0.0
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
|
0.6
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.6
|
|
1.4
|
0.0
|
0.0
|
0.0
|
(0.7)
|
1.0
|
0.0
|
0.0
|
(0.2)
|
0.0
|
1.6
|
|
0.3
|
0.0
|
0.0
|
0.1
|
0.0
|
0.0
|
0.0
|
0.2
|
(0.1)
|
0.0
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.1
|
0.5
|
0.5
|
0.0
|
0.0
|
0.4
|
(0.3)
|
0.0
|
0.0
|
0.0
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.5
|
0.4
|
0.4
|
0.0
|
0.0
|
0.0
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.8
|
|
0.4
|
0.1
|
0.0
|
0.0
|
0.0
|
0.2
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.4
|
|
0.2
|
0.1
|
0.1
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.3
|
|
0.0
|
0.1
|
0.0
|
0.0
|
0.0
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
0.0
|
0.0
|
0.3
|
(0.5)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
0.0
|
0.0
|
0.2
|
(0.2)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.9
|
|
1.6
|
0.1
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
1.6
|
|
0.7
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.7
|
|
1.0
|
0.0
|
0.0
|
0.1
|
(0.2)
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.2
|
(0.3)
|
(0.4)
|
0.0
|
0.0
|
0.8
|
(0.8)
|
0.0
|
0.0
|
0.0
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
(0.2)
|
(0.2)
|
0.0
|
0.0
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.2
|
|
1.5
|
(0.1)
|
(0.1)
|
0.0
|
0.0
|
0.4
|
(0.6)
|
0.0
|
0.0
|
0.0
|
1.1
|
|
0.3
|
(0.1)
|
(0.1)
|
0.0
|
0.0
|
0.2
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.4
|
|
0.1
|
0.0
|
0.0
|
0.0
|
0.0
|
0.1
|
(0.1)
|
0.0
|
0.0
|
0.0
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.2
|
(1.0)
|
(1.0)
|
0.0
|
0.0
|
2.5
|
(2.4)
|
0.1
|
(0.6)
|
(0.1)
|
12.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
0.0
|
0.0
|
0.0
|
0.0
|
0.4
|
(0.2)
|
0.0
|
0.0
|
0.0
|
1.0
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 8
Fair value measurement (continued)
g) Financial instruments not measured
at fair value
The table
below reflects the estimated fair values of financial instruments not measured
at fair value.
|
Financial instruments not measured at fair value
|
|
|
|
31.3.22
|
|
31.12.21
|
|
USD billion
|
|
Carrying amount
|
Fair value
|
|
Carrying amount
|
Fair value
|
|
Assets
|
|
|
|
|
|
|
|
Cash and balances at central banks
|
|
206.8
|
206.8
|
|
192.8
|
192.8
|
|
Loans and advances to banks
|
|
17.9
|
17.9
|
|
15.5
|
15.5
|
|
Receivables from securities financing transactions
|
|
69.5
|
69.5
|
|
75.0
|
75.0
|
|
Cash collateral receivables on derivative instruments
|
|
39.3
|
39.3
|
|
30.5
|
30.5
|
|
Loans and advances to customers
|
|
392.2
|
386.2
|
|
397.8
|
396.9
|
|
Other financial assets measured at amortized cost
|
|
28.7
|
28.2
|
|
26.2
|
26.5
|
|
Liabilities
|
|
|
|
|
|
|
|
Amounts due to banks
|
|
16.6
|
16.6
|
|
13.1
|
13.1
|
|
Payables from securities financing transactions
|
|
7.1
|
7.1
|
|
5.5
|
5.5
|
|
Cash collateral payables on derivative instruments
|
|
39.6
|
39.6
|
|
31.8
|
31.8
|
|
Customer deposits
|
|
541.5
|
541.4
|
|
542.0
|
542.0
|
|
Debt issued measured at amortized cost
|
|
131.5
|
132.2
|
|
139.2
|
141.1
|
|
Other financial liabilities measured at amortized cost1
|
|
6.2
|
6.2
|
|
5.4
|
5.4
|
|
1 Excludes
lease liabilities.
|
The fair
values included in the table above have been calculated for disclosure purposes
only. The valuation techniques and assumptions relate only to UBS’s financial
instruments not otherwise measured at fair value. Other institutions may use different methods and assumptions for
their fair value estimation, and therefore such fair value disclosures cannot
necessarily be compared from one financial institution to another.
Note 9 Derivative instruments
a) Derivative instruments
|
As of 31.3.22, USD billion
|
|
Derivative
financial
assets
|
Notional values
related to derivative
financial assets1
|
Derivative
financial
liabilities
|
Notional values
related to derivative
financial liabilities1
|
Other
notional
values2
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
Interest rate contracts
|
|
37.1
|
1,080
|
33.7
|
1,055
|
9,569
|
|
Credit derivative contracts
|
|
1.7
|
50
|
1.8
|
48
|
0
|
|
Foreign exchange contracts
|
|
67.6
|
3,315
|
66.1
|
3,183
|
20
|
|
Equity / index contracts
|
|
29.9
|
477
|
33.3
|
566
|
80
|
|
Commodity contracts
|
|
2.9
|
82
|
2.6
|
65
|
17
|
|
Loan commitments measured at FVTPL
|
|
0.0
|
1
|
0.0
|
5
|
|
|
Unsettled purchases of non-derivative financial instruments3
|
|
0.3
|
26
|
0.5
|
30
|
|
|
Unsettled sales of non-derivative financial instruments3
|
|
0.7
|
45
|
0.4
|
18
|
|
|
Total derivative financial instruments, based on IFRS netting4
|
|
140.3
|
5,075
|
138.4
|
4,971
|
9,686
|
|
Further netting potential not recognized on the balance sheet5
|
|
(126.6)
|
|
(121.4)
|
|
|
|
of which: netting of recognized financial liabilities / assets
|
|
(101.7)
|
|
(101.7)
|
|
|
|
of which: netting with collateral received / pledged
|
|
(25.0)
|
|
(19.7)
|
|
|
|
Total derivative financial instruments, after consideration of
further netting potential
|
|
13.7
|
|
17.0
|
|
|
|
|
|
|
|
|
|
|
|
As of 31.12.21, USD billion
|
|
|
|
|
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
Interest rate contracts
|
|
33.2
|
991
|
28.7
|
943
|
8,675
|
|
Credit derivative contracts
|
|
1.4
|
45
|
1.8
|
46
|
0
|
|
Foreign exchange contracts
|
|
53.3
|
3,031
|
54.1
|
2,939
|
1
|
|
Equity / index contracts
|
|
28.2
|
457
|
34.9
|
604
|
80
|
|
Commodity contracts
|
|
1.6
|
58
|
1.6
|
56
|
15
|
|
Loan commitments measured at FVTPL
|
|
0.0
|
1
|
0.0
|
8
|
|
|
Unsettled purchases of non-derivative financial instruments3
|
|
0.1
|
13
|
0.2
|
11
|
|
|
Unsettled sales of non-derivative financial instruments3
|
|
0.2
|
18
|
0.1
|
9
|
|
|
Total derivative financial instruments, based on IFRS netting4
|
|
118.1
|
4,614
|
121.3
|
4,617
|
8,771
|
|
Further netting potential not recognized on the balance sheet5
|
|
(107.4)
|
|
(107.0)
|
|
|
|
of which: netting of recognized financial liabilities / assets
|
|
(88.9)
|
|
(88.9)
|
|
|
|
of which: netting with collateral received / pledged
|
|
(18.5)
|
|
(18.1)
|
|
|
|
Total derivative financial instruments, after consideration of
further netting potential
|
|
10.7
|
|
14.3
|
|
|
|
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. 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 Changes in the fair value of purchased and sold
non-derivative financial instruments 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 Annual Report 2021 for more information.
|
b) Cash
collateral on derivative instruments
|
USD billion
|
|
Receivables
31.3.22
|
Payables
31.3.22
|
|
Receivables
31.12.21
|
Payables
31.12.21
|
|
Cash collateral on derivative instruments, based on IFRS netting1
|
|
39.3
|
39.6
|
|
30.5
|
31.8
|
|
Further netting potential not recognized on the balance sheet2
|
|
(19.0)
|
(21.4)
|
|
(18.4)
|
(16.4)
|
|
of which: netting of recognized financial liabilities / assets
|
|
(15.8)
|
(18.2)
|
|
(15.2)
|
(13.1)
|
|
of which: netting with collateral received / pledged
|
|
(3.2)
|
(3.2)
|
|
(3.3)
|
(3.3)
|
|
Cash collateral on derivative instruments, after consideration
of further netting potential
|
|
20.3
|
18.2
|
|
12.1
|
15.4
|
|
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 Annual Report 2021 for more information.
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 10 Other assets
and liabilities
a) Other
financial assets measured at amortized cost
|
USD million
|
31.3.22
|
31.12.21
|
|
Debt securities
|
21,192
|
18,858
|
|
of which: government bills / bonds
|
10,085
|
9,833
|
|
Loans to financial advisors
|
2,388
|
2,453
|
|
Fee- and commission-related receivables
|
1,953
|
1,972
|
|
Finance lease receivables
|
1,325
|
1,356
|
|
Settlement and clearing accounts
|
492
|
455
|
|
Accrued interest income
|
547
|
520
|
|
Other
|
801
|
594
|
|
Total other financial assets measured at amortized cost
|
28,697
|
26,209
|
b) Other
non-financial assets
|
USD million
|
31.3.22
|
31.12.21
|
|
Precious metals and other physical commodities
|
4,626
|
5,258
|
|
Deposits and collateral provided in connection with litigation,
regulatory and similar matters1
|
2,280
|
1,526
|
|
Prepaid expenses
|
1,143
|
1,108
|
|
VAT and other tax receivables
|
469
|
638
|
|
Properties and other non-current assets held for sale
|
313
|
32
|
|
Assets of disposal groups held for sale
|
1,018
|
1,093
|
|
Other
|
731
|
621
|
|
Total other non-financial assets
|
10,581
|
10,277
|
|
1 Refer to Note 14
for more information.
|
c) Other
financial liabilities measured at amortized cost
|
USD million
|
31.3.22
|
31.12.21
|
|
Other accrued expenses
|
1,780
|
1,876
|
|
Accrued interest expenses
|
822
|
1,094
|
|
Settlement and clearing accounts
|
1,691
|
1,304
|
|
Lease liabilities
|
3,422
|
3,558
|
|
Other
|
1,925
|
1,167
|
|
Total other financial liabilities measured at amortized cost
|
9,641
|
9,001
|
d) Other
financial liabilities designated at fair value
|
USD million
|
31.3.22
|
31.12.21
|
|
Financial liabilities related to unit-linked investment
contracts
|
18,661
|
21,466
|
|
Securities financing transactions
|
9,388
|
6,377
|
|
Over-the-counter debt instruments
|
2,269
|
2,128
|
|
Other
|
8
|
103
|
|
Total other financial liabilities designated at fair value
|
30,325
|
30,074
|
|
of which: life-to-date own credit (gain) / loss
|
(85)
|
(32)
|
Note 10 Other assets and liabilities (continued)
e) Other non-financial liabilities
|
USD million
|
31.3.22
|
31.12.21
|
|
Compensation-related liabilities
|
4,818
|
7,257
|
|
of which: Deferred Contingent Capital Plan
|
1,350
|
1,628
|
|
of which: financial advisor compensation plans
|
1,193
|
1,512
|
|
of which: other compensation plans
|
1,179
|
2,846
|
|
of which: net defined benefit liability
|
576
|
633
|
|
of which: other compensation-related liabilities1
|
520
|
638
|
|
Deferred tax liabilities
|
174
|
300
|
|
Current tax liabilities
|
947
|
1,398
|
|
VAT and other tax payables
|
772
|
590
|
|
Deferred income
|
260
|
240
|
|
Liabilities of disposal groups held for sale
|
1,289
|
1,298
|
|
Other
|
61
|
68
|
|
Total other non-financial liabilities
|
8,322
|
11,151
|
|
1 Includes liabilities
for payroll taxes and untaken vacation.
|
Note 11 Debt issued designated at fair value
|
USD million
|
|
31.3.22
|
31.12.21
|
|
Issued debt instruments
|
|
|
|
|
Equity-linked1
|
|
44,252
|
47,059
|
|
Rates-linked
|
|
14,933
|
16,369
|
|
Credit-linked
|
|
1,951
|
1,723
|
|
Fixed-rate
|
|
3,727
|
2,868
|
|
Commodity-linked
|
|
3,995
|
2,911
|
|
Other
|
|
2,612
|
2,868
|
|
of which: debt that contributes to total loss-absorbing capacity
|
|
1,990
|
2,136
|
|
Total debt issued designated at fair value
|
|
71,470
|
73,799
|
|
of which: life-to-date own credit (gain) / loss
|
|
(29)
|
347
|
|
1 Includes
investment fund unit-linked instruments issued.
|
|
|
|
Note 12 Debt
issued measured at amortized cost
|
USD million
|
|
31.3.22
|
31.12.21
|
|
Certificates of deposit and commercial paper
|
|
33,727
|
40,640
|
|
Other short-term debt
|
|
3,812
|
2,458
|
|
Short-term debt1
|
|
37,539
|
43,098
|
|
Senior unsecured debt that contributes to total loss-absorbing
capacity (TLAC)
|
|
41,479
|
38,984
|
|
Senior unsecured debt other than TLAC
|
|
23,024
|
27,590
|
|
Covered bonds
|
|
1,351
|
1,389
|
|
Subordinated debt
|
|
18,664
|
18,640
|
|
of which: high-trigger loss-absorbing additional tier 1 capital
instruments
|
|
12,372
|
11,052
|
|
of which: low-trigger loss-absorbing additional tier 1 capital
instruments
|
|
1,236
|
2,425
|
|
of which: low-trigger loss-absorbing tier 2 capital instruments
|
|
2,507
|
2,596
|
|
of which: non-Basel III-compliant tier 2 capital instruments
|
|
543
|
547
|
|
Debt issued through the Swiss central mortgage institutions
|
|
9,435
|
9,454
|
|
Long-term debt2
|
|
93,953
|
96,057
|
|
Total debt issued measured at amortized cost3
|
|
131,492
|
139,155
|
|
1 Debt with an original contractual maturity of less than
one year. 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.
|
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 13
Interest rate benchmark reform
During the
first quarter of 2022, UBS continued to manage the transition to alternative reference
rates (ARRs) under the oversight of the dedicated Group-wide forum, with an
increased US regional focus. The transition of non-USD interbank offered rates
(IBORs) is largely complete, with efforts now focused on managing the
transition of remaining USD LIBOR exposures.
On 15 March 2022, the US enacted federal legislation, the
“Adjustable Interest Rate (LIBOR) Act,” which is substantially based on, and
supersedes, the New York State London Interbank Offered Rate (LIBOR) legislation.
The Adjustable Interest Rate (LIBOR) Act provides a legislative solution for
legacy products governed by any US state law should such products fail to
transition prior to the USD LIBOR cessation date of 30 June 2023.
Non-derivative instruments
During the first quarter of 2022, most of the
USD 21 billion mortgages linked to CHF LIBOR that were outstanding as of 31 December 2021 were automatically
transitioned to Swiss Average Rate Overnight (SARON), with only an insignificant
amount remaining, which will transition later in 2022, on their next roll date.
Substantially all of the US securities-based lending
outstanding as of 31 December 2021 was transitioned to Secured Overnight
Financing Rate (SOFR) during the first quarter of 2022, with transition of the
remaining USD 2 billion currently in progress.
In January 2022, UBS completed the transition of USD LIBOR-linked
non-derivative balances related to brokerage accounts to SOFR. No other
material transitions of USD LIBOR-linked contracts occurred in the first
quarter of 2022. UBS plans to transition USD 10 billion of US mortgages
linked to USD LIBOR to SOFR in 2022 and 2023.
Derivative instruments
UBS successfully transitioned the remaining non-USD IBOR derivatives
not transacted through clearing houses or exchanges, which ensured an orderly
transition when converting high volumes of transactions at the time of rate
cessation. No material USD LIBOR-linked derivatives transitioned in the
first quarter of 2022.
Note 14 Provisions and contingent
liabilities
The table below presents an overview
of total provisions.
|
USD million
|
|
31.3.22
|
31.12.21
|
|
Provisions other than provisions for expected credit losses
|
|
3,257
|
3,322
|
|
Provisions for expected credit losses1
|
|
221
|
196
|
|
Total provisions
|
|
3,478
|
3,518
|
|
1 Refer to
Note 7c for more information.
|
The following table presents
additional information for provisions other than provisions for expected credit
losses.
|
USD million
|
Litigation, regulatory and similar matters1
|
Restructuring
|
Other3
|
Total
|
|
Balance as of 31 December 2021
|
2,798
|
172
|
352
|
3,322
|
|
Increase in provisions recognized in the income statement
|
58
|
58
|
5
|
121
|
|
Release of provisions recognized in the income statement
|
(1)
|
(6)
|
(5)
|
(11)
|
|
Provisions used in conformity with designated purpose
|
(54)
|
(63)
|
(7)
|
(125)
|
|
Foreign currency translation / unwind of discount
|
(43)
|
(2)
|
(5)
|
(49)
|
|
Balance as of 31 March 2022
|
2,758
|
1592
|
340
|
3,257
|
|
1 Consists of
provisions for losses resulting from legal, liability and compliance
risks. 2 Primarily consists of personnel-related restructuring
provisions of USD 114 million as of 31 March 2022 (31 December 2021: USD
125 million) and provisions for onerous contracts of USD 45 million as
of 31 March 2022 (31 December 2021: USD 47 million). 3 Mainly
includes provisions related to real estate, employee benefits and operational
risks.
|
Restructuring
provisions primarily relate to personnel-related provisions and onerous contracts.
Personnel-related restructuring provisions are used within a short period of time
but potential changes in amount may be triggered when natural staff attrition
reduces the number of people affected by a restructuring event and therefore
the estimated costs. Onerous contracts for property are recognized when UBS is
committed to pay for
non‑lease components, such as
utilities, service charges, taxes and maintenance, when a property is vacated
or not fully recovered from sub-tenants.
Information about provisions and contingent liabilities in
respect of litigation, regulatory and similar matters, as a class, is included
in Note 14b. 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.
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 14 Provisions and contingent
liabilities (continued)
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 due to potential financial, reputational and
other effects. The amount of damages claimed, the size of a transaction or
other information is provided where available and appropriate in order to
assist users in considering the magnitude of potential exposures.
In the case of
certain matters below, we state that we have established a provision, and for
the other matters, we make no such statement. When we make this statement and
we expect disclosure of the amount of a provision to prejudice seriously our
position with other parties in the matter because it would reveal what UBS
believes to be the probable and reliably estimable outflow, we do not disclose
that amount. In some cases we are subject to confidentiality obligations that
preclude such disclosure. With respect to the matters for which we do not state
whether we have established a provision, either: (a) we have not established a
provision, in which case the matter is treated as a contingent liability under
the applicable accounting standard; 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 14a above. It is not practicable to provide an
aggregate estimate of liability for our litigation, regulatory and similar matters
as a class of contingent liabilities. Doing so would require UBS to provide
speculative legal assessments as to claims and proceedings that involve unique
fact patterns or novel legal theories, that have not yet been initiated or are
at early stages of adjudication, or as to which alleged damages have not been
quantified by the claimants. Although UBS therefore cannot provide a numerical
estimate of the future losses that could arise from litigation, regulatory and
similar matters, UBS believes that the aggregate amount of possible future
losses from this class that are more than remote substantially exceeds the
level of current provisions.
Litigation, regulatory and similar matters may also result in
non-monetary penalties and consequences. A guilty plea to, or conviction of, a
crime could have material consequences for UBS. Resolution of regulatory
proceedings may require UBS to obtain waivers of regulatory disqualifications
to maintain certain operations, may entitle regulatory authorities to limit,
suspend or terminate licenses and regulatory authorizations, and may permit
financial market utilities to limit, suspend or terminate UBS’s participation
in such utilities. Failure to obtain such waivers, or any limitation,
suspension or termination of licenses, authorizations or participations, could
have material consequences for UBS.
The risk of loss associated with litigation, regulatory and
similar matters is a component of operational risk for purposes of determining
capital requirements. Information concerning our capital requirements and the
calculation of operational risk for this purpose is included in the “Capital
management” section of this report.
|
Provisions for litigation, regulatory and similar matters by
business division and in Group Functions1
|
|
USD million
|
Global Wealth
Manage-
ment
|
Personal & Corporate Banking
|
Asset
Manage-
ment
|
Investment Bank
|
Group Functions
|
Total
|
|
Balance as of 31 December 2021
|
1,338
|
181
|
8
|
310
|
962
|
2,798
|
|
Increase in provisions recognized in the income statement
|
54
|
0
|
0
|
4
|
0
|
58
|
|
Release of provisions recognized in the income statement
|
(1)
|
0
|
0
|
0
|
0
|
(1)
|
|
Provisions used in conformity with designated purpose
|
(49)
|
0
|
0
|
(5)
|
0
|
(54)
|
|
Reclassifications
|
0
|
0
|
0
|
4
|
(4)
|
0
|
|
Foreign currency translation / unwind of discount
|
(33)
|
(5)
|
0
|
(5)
|
0
|
(43)
|
|
Balance as of 31 March 2022
|
1,309
|
176
|
8
|
307
|
958
|
2,758
|
|
1 Provisions, if
any, for the matters described in items 3 and 4 of this Note are recorded in
Global Wealth Management, and provisions, if any, for the matters described
in item 2 are recorded in Group Functions. Provisions, if any, for the
matters described in items 1 and 6 of this Note are allocated between Global
Wealth Management and Personal & Corporate Banking, and provisions, if
any, for the matters described in item 5 are allocated between the
Investment Bank and Group Functions.
|
Note 14 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. It is possible that the implementation of automatic tax
information exchange and other measures relating to cross-border provision of
financial services could give rise to further inquiries in the future. UBS has
received disclosure orders from the Swiss Federal Tax Administration (FTA) to
transfer information based on requests for international administrative assistance
in tax matters. The requests concern a number of UBS account numbers pertaining
to current and former clients and are based on data from 2006 and 2008. UBS has
taken steps to inform affected clients about the administrative assistance
proceedings and their procedural rights, including the right to appeal. The
requests are based on data received from the German authorities, who seized
certain data related to UBS clients booked in Switzerland during their
investigations and have apparently shared this data with other European
countries. UBS expects additional countries to file similar requests.
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 1.1 billion.
On 20 February 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 3.7 billion on UBS AG and UBS
(France) S.A. and awarded EUR 800 million of civil damages
to the French state. A trial in the French Court of Appeal took place in March
2021. On 13 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 3.75 million, the confiscation
of EUR 1 billion, and awarded civil
damages to the French state of EUR 800 million. The court also
found UBS (France) SA guilty of the aiding and abetting of unlawful
solicitation and ordered it to pay a fine of EUR 1.875 million. UBS AG has filed
an appeal with the French Supreme Court to preserve its rights. The notice of
appeal enables UBS AG to thoroughly assess the verdict of the Court of Appeal
and to determine next steps in the best interest of its stakeholders. The fine
and confiscation imposed by the Court of Appeal are suspended during the
appeal. The civil damages award has been paid to the French state (EUR 99 million of which was
deducted from the bail), subject to the result of UBS’s appeal.
Our balance sheet at 31 March 2022 reflected provisions
with respect to this matter in an amount of EUR 1.1 billion (USD 1.2 billion at 31 March
2022). The wide range of possible outcomes in this case contributes to a high
degree of estimation uncertainty and the provision reflects our best estimate
of possible financial implications, although actual penalties and civil damages
could exceed (or may be less than) the provision amount.
Our balance sheet at 31 March 2022 reflected provisions
with respect to matters described in this item 1 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. Claims related to sales of residential mortgage-backed
securities and mortgages
From 2002 through 2007, prior to the crisis in the US
residential loan market, UBS was a substantial issuer and underwriter of US
residential mortgage-backed securities (RMBS) and was a purchaser and seller of
US residential mortgages.
In November 2018, the DOJ filed a civil complaint in the
District Court for the Eastern District of New York. The complaint seeks
unspecified civil monetary penalties under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 related to UBS’s issuance, underwriting
and sale of 40 RMBS transactions in 2006 and 2007. UBS moved to dismiss the
civil complaint on 6 February 2019. On 10 December 2019, the district
court denied UBS’s motion to dismiss.
Our balance sheet at 31 March 2022 reflected a provision
with respect to matters described in this item 2 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 this matter 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.
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 14 Provisions and contingent
liabilities (continued)
3. Madoff
In relation to the Bernard L. Madoff Investment
Securities LLC (BMIS) investment fraud, UBS AG, UBS (Luxembourg) S.A. (now UBS
Europe SE, Luxembourg branch) and certain other UBS subsidiaries have been
subject to inquiries by a number of regulators, including the Swiss Financial
Market Supervisory Authority (FINMA) and the Luxembourg Commission de Surveillance
du Secteur Financier. Those inquiries concerned two third-party funds
established under Luxembourg law, substantially all assets of which were with
BMIS, as well as certain funds established in offshore jurisdictions with
either direct or indirect exposure to BMIS. These funds faced severe losses,
and the Luxembourg funds are in liquidation. The documentation establishing
both funds identifies UBS entities in various roles, including custodian,
administrator, manager, distributor and promoter, and indicates that UBS
employees serve as board members.
In 2009 and 2010, the liquidators of the two Luxembourg funds
filed claims against UBS entities, non-UBS entities and certain individuals,
including current and former UBS employees, seeking amounts totaling
approximately EUR 2.1 billion, 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 2 billion. In 2014, the US
Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions
dismissing all claims except those for the recovery of approximately
USD 125 million of payments alleged to be fraudulent conveyances and
preference payments. In 2016, the bankruptcy court dismissed these claims
against the UBS entities. In February 2019, the Court of Appeals reversed the
dismissal of the BMIS Trustee’s remaining claims, and the US Supreme Court
subsequently denied a petition seeking review of the Court of Appeals’
decision. The case has been remanded to the Bankruptcy Court for further
proceedings.
4. Puerto Rico
Declines since 2013 in the market prices of Puerto
Rico municipal bonds and of closed-end funds (funds) that are sole-managed and
co-managed by UBS Trust Company of Puerto Rico and distributed by UBS Financial
Services Incorporated of Puerto Rico (UBS PR) led to multiple regulatory
inquiries, which in 2014 and 2015, led to settlements with the Office of the
Commissioner of Financial Institutions for the Commonwealth of Puerto Rico, the
US Securities and Exchange Commission (SEC) and the Financial Industry
Regulatory Authority.
Since then, UBS
clients in Puerto Rico who own the funds or Puerto Rico municipal bonds and/or
who used their UBS account assets as collateral for UBS non-purpose loans filed
customer complaints and arbitration demands seeking aggregate damages of
USD 3.4 billion, of which
USD 3.1 billion have been resolved through settlements, arbitration or
withdrawal of claims. Allegations include fraud, misrepresentation and
unsuitability of the funds and of the loans.
A shareholder derivative action was filed in 2014 against
various UBS entities and current and certain former directors of the funds,
alleging hundreds of millions of US dollars in losses in the funds. In 2021,
the parties reached an agreement to settle this matter for USD 15 million, subject to court
approval.
In 2011, a purported derivative action was filed on behalf of
the Employee Retirement System of the Commonwealth of Puerto Rico (System)
against over 40 defendants, including UBS PR, which was named in connection
with its underwriting and consulting services. Plaintiffs alleged that
defendants violated their purported fiduciary duties and contractual
obligations in connection with the issuance and underwriting of USD 3 billion of bonds by
the System in 2008 and sought damages of over USD 800 million. In 2016, the
court granted the System’s request to join the action as a plaintiff. In 2017,
the court denied defendants’ motion to dismiss the complaint. In 2020, the
court denied plaintiffs’ motion for summary judgment.
Beginning in 2015, certain agencies and public corporations of
the Commonwealth of Puerto Rico (Commonwealth) defaulted on certain interest
payments on Puerto Rico bonds. In 2016, US federal legislation created an
oversight board with power to oversee Puerto Rico’s finances and to restructure
its debt. The oversight board has imposed a stay on the exercise of certain
creditors’ rights. In 2017, the oversight board placed certain of the bonds
into a bankruptcy-like proceeding under the supervision of a Federal District
Judge.
In May 2019, the oversight board filed complaints in Puerto
Rico federal district court bringing claims against financial, legal and
accounting firms that had participated in Puerto Rico municipal bond offerings,
including UBS, seeking a return of underwriting and swap fees paid in
connection with those offerings. UBS estimates that it received approximately
USD 125 million in fees in the
relevant offerings.
In August 2019, and February and November 2020, four US
insurance companies that insured issues of Puerto Rico municipal bonds sued UBS
and several other underwriters of Puerto Rico municipal bonds in three separate
cases. The actions collectively seek recovery of an aggregate of USD 955 million in damages from
the defendants. The plaintiffs in these cases claim that defendants failed to
reasonably investigate financial statements in the offering materials for the
insured Puerto Rico bonds issued between 2002 and 2007, which plaintiffs argue
they relied upon in agreeing to insure the bonds notwithstanding that they had
no contractual relationship with the underwriters. Defendants’ motions to
dismiss were granted in two of the cases; those decisions are being appealed by
the plaintiffs. In the third case, defendants’ motion to dismiss was denied,
but on appeal that ruling was reversed and the motion to dismiss was granted.
Note 14 Provisions and contingent
liabilities (continued)
Our balance sheet
at 31 March 2022 reflected provisions with respect to matters
described in this item 4 in amounts 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 provisions that we have recognized.
5. Foreign exchange, LIBOR and benchmark rates, and other
trading practices
Foreign
exchange-related regulatory matters: Beginning in 2013, numerous
authorities commenced investigations concerning possible manipulation of
foreign exchange markets and precious metals prices. As a result of these
investigations, UBS entered into resolutions with Swiss, US and United Kingdom
regulators and the European Commission. UBS was granted conditional immunity by
the Antitrust Division of the DOJ and by authorities in other jurisdictions in
connection with potential competition law violations relating to foreign
exchange and precious metals businesses.
Foreign exchange-related civil litigation: Putative
class actions have been filed since 2013 in US federal courts and in other
jurisdictions against UBS and other banks on behalf of putative classes of
persons who engaged in foreign currency transactions with any of the defendant
banks. UBS has resolved US federal court class actions relating to foreign
currency transactions with the defendant banks and persons who transacted in
foreign exchange futures contracts and options on such futures under a
settlement agreement that provides for UBS to pay an aggregate of USD 141 million and provide
cooperation to the settlement classes. Certain class members have excluded
themselves from that settlement and have filed individual actions in US and
English courts against UBS and other banks, alleging violations of US and
European competition laws and unjust enrichment.
In 2015, a putative class action was filed in federal court
against UBS and numerous other banks on behalf of persons and businesses in the
US who directly purchased foreign currency from the defendants and alleged
co-conspirators for their own end use. In March 2017, the court granted UBS’s
(and the other banks’) motions to dismiss the complaint. The plaintiffs filed
an amended complaint in August 2017. In March 2018, the court denied the
defendants’ motions to dismiss the amended complaint. In March 2022, the court
denied plaintiffs’ motion for class certification.
LIBOR and other benchmark-related regulatory matters:
Numerous government agencies conducted investigations regarding potential
improper attempts by UBS, among others, to manipulate LIBOR and other benchmark
rates at certain times. UBS reached settlements or otherwise concluded
investigations relating to benchmark interest rates with the investigating
authorities. UBS was granted conditional leniency or conditional immunity from
authorities in certain jurisdictions, including the Antitrust Division of the
DOJ and the Swiss Competition Commission (WEKO), in connection with potential
antitrust or competition law violations related to certain rates. However, UBS
has not reached a final settlement with WEKO, as the Secretariat of WEKO has
asserted that UBS does not qualify for full immunity.
LIBOR
and other benchmark-related civil litigation: A number of putative class
actions and other actions are pending in the federal courts in New York against
UBS and numerous other banks on behalf of parties who transacted in certain
interest rate benchmark-based derivatives. Also pending in the US and in other
jurisdictions are a number of other actions asserting losses related to various
products whose interest rates were linked to LIBOR and other benchmarks,
including adjustable rate mortgages, preferred and debt securities, bonds
pledged as collateral, loans, depository accounts, investments and other
interest-bearing instruments. The complaints allege manipulation, through
various means, of certain benchmark interest rates, including USD LIBOR,
Euroyen TIBOR, Yen LIBOR, EURIBOR, CHF LIBOR, GBP LIBOR, SGD SIBOR and SOR
and Australian BBSW, and seek unspecified compensatory and other damages under
varying legal theories.
USD LIBOR class and individual actions in the
US: In 2013 and 2015, the district court in the USD LIBOR actions
dismissed, in whole or in part, certain plaintiffs’ antitrust claims, federal
racketeering claims, CEA claims, and state common law claims, and again
dismissed the antitrust claims in 2016 following an appeal. In December 2021,
the Second Circuit affirmed the district court’s dismissal in part and reversed
in part and remanded to the district court for further proceedings. The Second
Circuit, among other things, held that there was personal jurisdiction over UBS
and other foreign defendants based on allegations that at least one alleged
co-conspirator undertook an overt act in the United States. Separately, in
2018, the Second Circuit reversed in part the district court’s 2015 decision
dismissing certain individual plaintiffs’ claims and certain of these actions
are now proceeding. In 2018, the district court denied plaintiffs’ motions for
class certification in the USD class actions for claims pending against
UBS, and plaintiffs sought permission to appeal that ruling to the Second
Circuit. In July 2018, the Second Circuit denied the petition to appeal of the
class of USD lenders and in November 2018 denied the petition of the
USD exchange class. In January 2019, a putative class action was filed in
the District Court for the Southern District of New York against UBS and
numerous other banks on behalf of US residents who, since 1 February 2014,
directly transacted with a defendant bank in USD LIBOR instruments. The
complaint asserts antitrust claims. The defendants moved to dismiss the
complaint in August 2019. On 26 March 2020 the court granted defendants’ motion
to dismiss the complaint in its entirety. Plaintiffs have appealed the
dismissal. On 7 March 2022, the Second Circuit dismissed the appeal because
appellants, who had been substituted in to replace the original plaintiffs who
had withdrawn, lacked standing to pursue the appeal. In August 2020, an
individual action was filed in the Northern District of California against UBS
and numerous other banks alleging that the defendants conspired to fix the
interest rate used as the basis for loans to consumers by jointly setting the
USD LIBOR rate and monopolized the market for LIBOR-based consumer loans
and credit cards. Defendants moved to dismiss the complaint in September 2021.
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 14 Provisions and contingent
liabilities (continued)
Other benchmark class actions in the
US:
Yen LIBOR / Euroyen
TIBOR – In 2014, 2015 and 2017, the court in one of the Yen LIBOR / Euroyen
TIBOR lawsuits dismissed certain of the plaintiffs’ claims, including the
plaintiffs’ federal antitrust and racketeering claims. In August 2020, the
court granted defendants’ motion for judgment on the pleadings and dismissed
the lone remaining claim in the action as impermissibly extraterritorial.
Plaintiffs have appealed. In 2017, the court dismissed the other Yen LIBOR /
Euroyen TIBOR action in its entirety on standing grounds. In April 2020, the
appeals court reversed the dismissal and in August 2020 plaintiffs in that
action filed an amended complaint focused on Yen LIBOR. The court granted in
part and denied in part defendants’ motion to dismiss the amended complaint in
September 2021 and plaintiffs and the remaining defendants have moved for
reconsideration.
CHF LIBOR – In 2017, the court dismissed the
CHF LIBOR action on standing grounds and failure to state a claim.
Plaintiffs filed an amended complaint, and the court granted a renewed motion
to dismiss in September 2019. Plaintiffs appealed. In September 2021, the
Second Circuit granted the parties’ joint motion to vacate the dismissal and
remand the case for further proceedings.
EURIBOR – In 2017, the court in the EURIBOR lawsuit dismissed
the case as to UBS and certain other foreign defendants for lack of personal
jurisdiction. Plaintiffs have appealed.
SIBOR / SOR – In October 2018, the court in the SIBOR
/ SOR action dismissed all but one of plaintiffs’ claims against UBS. Plaintiffs
filed an amended complaint, and the court granted a renewed motion to dismiss
in July 2019. Plaintiffs appealed. In March 2021, the Second Circuit reversed
the dismissal. Plaintiffs filed an amended complaint in October 2021, which
defendants have moved to dismiss.
BBSW – In November 2018, the court dismissed the BBSW
lawsuit as to UBS and certain other foreign defendants for lack of personal
jurisdiction. Plaintiffs filed an amended complaint in April 2019, which UBS
and other defendants moved to dismiss. In February 2020, the court granted in
part and denied in part defendants’ motions to dismiss the amended complaint.
In August 2020, UBS and other BBSW defendants joined a motion for judgment on
the pleadings, which the court denied in May 2021.
GBP LIBOR – The court dismissed the GBP LIBOR action in
August 2019. Plaintiffs have appealed.
Government bonds: Putative class actions have been filed since 2015
in US federal courts against UBS and other banks on behalf of persons who
participated in markets for US Treasury securities since 2007. A consolidated
complaint was filed in 2017 in the US District Court for the Southern District
of New York alleging that the banks colluded with respect to, and manipulated
prices of, US Treasury securities sold at auction and in the secondary market
and asserting claims under the antitrust laws and for unjust enrichment.
Defendants’ motions to dismiss the consolidated complaint was granted in March
2021. Plaintiffs filed an amended complaint, which defendants moved to dismiss
in June 2021. In March 2022, the court granted defendants’ motion to dismiss
that complaint. Similar class actions have been filed concerning European
government bonds and other government bonds.
In May 2021, the European
Commission issued a decision finding that UBS and six other banks breached
European Union antitrust rules in 2007–2011 relating to European government
bonds. The European Commission fined UBS EUR 172 million. UBS is appealing
the amount of the fine.
With respect to additional matters and jurisdictions not
encompassed by the settlements and orders referred to above, our balance sheet
at 31 March 2022 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.
6. Swiss retrocessions
The Federal Supreme Court of Switzerland ruled in
2012, in a test case against UBS, that distribution fees paid to a firm for
distributing third-party and intra-group investment funds and structured
products must be disclosed and surrendered to clients who have entered into a
discretionary mandate agreement with the firm, absent a valid waiver. FINMA
issued a supervisory note to all Swiss banks in response to the Supreme Court
decision. UBS has met the FINMA requirements and has notified all potentially
affected clients.
The Supreme Court decision has resulted, and continues to
result, in a number of client requests for UBS to disclose and potentially
surrender retrocessions. Client requests are assessed on a case-by-case basis.
Considerations taken into account when assessing these cases include, among
other things, the existence of a discretionary mandate and whether or not the
client documentation contained a valid waiver with respect to distribution
fees.
Our balance sheet at 31 March 2022 reflected a provision
with respect to matters described in this item 6 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.
Note 15
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 rate1
|
|
|
|
As of
|
|
For the quarter ended
|
|
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
1 CHF
|
|
1.08
|
1.10
|
1.06
|
|
1.08
|
1.09
|
1.09
|
|
1 EUR
|
|
1.11
|
1.14
|
1.17
|
|
1.12
|
1.14
|
1.20
|
|
1 GBP
|
|
1.31
|
1.35
|
1.38
|
|
1.33
|
1.35
|
1.38
|
|
100 JPY
|
|
0.82
|
0.87
|
0.90
|
|
0.85
|
0.88
|
0.93
|
|
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 AG interim consolidated financial
information (unaudited)
UBS AG interim
consolidated financial information (unaudited)
This section contains a
comparison of selected financial and capital information between UBS Group AG
consolidated and UBS AG consolidated. Refer to the UBS AG first quarter 2022
report, which will be available as of 29 April 2022 under “Quarterly
reporting” at ubs.com/investors, for the interim consolidated financial statements of UBS
AG.
Comparison between UBS
Group AG consolidated and UBS AG consolidated
The
accounting policies applied under International Financial Reporting Standards
(IFRS) to both the UBS Group AG and the UBS AG consolidated financial
statements are identical. However, there are certain scope and presentation
differences as noted below.
–
Assets, liabilities, operating income, operating
expenses and tax expenses / (benefits) relating to UBS Group AG and its
directly held subsidiaries, including UBS Business Solutions AG, are reflected
in the consolidated financial statements of UBS Group AG but not of UBS AG. UBS
AG’s assets, liabilities, operating income and operating expenses related to transactions
with UBS Group AG and its directly held subsidiaries, including UBS Business
Solutions AG and other shared services subsidiaries, are not subject to
elimination in the UBS AG consolidated financial statements, but are eliminated
in the UBS Group AG consolidated financial statements.
–
Differences in net profit between UBS Group AG
consolidated and UBS AG consolidated mainly arise as UBS Business Solutions AG
and other shared services subsidiaries of UBS Group AG charge other legal
entities within the UBS AG consolidation scope for services provided, including
a markup on costs incurred. In addition, and to a lesser extent, differences
arise as a result of certain compensation-related matters, including pensions.
–
The equity of UBS Group AG consolidated was USD 0.9
billion higher than the equity of UBS AG consolidated as of 31 March 2022.
This difference was mainly driven by higher dividends paid by UBS AG to UBS
Group AG compared with the dividend distributions of UBS Group AG, as well as
higher retained earnings in the UBS Group AG consolidated financial
statements, largely related to the aforementioned markup charged by shared
services subsidiaries of UBS Group AG to other legal entities in the UBS AG
scope of consolidation. In addition, UBS Group AG is the grantor of the
majority of the compensation plans of the Group and recognizes share premium
for equity-settled awards granted. These effects were partly offset by treasury
shares acquired as part of our share repurchase programs and those held to
hedge share delivery obligations associated with Group compensation plans, as
well as additional share premium recognized at the UBS AG consolidated
level related to the establishment of UBS Group AG and UBS Business Solutions
AG, a wholly owned subsidiary of UBS Group AG.
–
The going concern capital of UBS Group AG
consolidated was USD 4.1 billion higher than the going concern capital of
UBS AG consolidated as of 31 March 2022, reflecting higher common
equity tier 1 (CET1) capital of USD 3.0 billion and going concern
loss-absorbing additional tier 1 (AT1) capital of USD 1.1 billion.
–
The CET1 capital of UBS Group AG consolidated was
USD 3.0 billion higher than that of UBS AG consolidated as of 31 March
2022. The higher CET1 capital of UBS Group AG consolidated was primarily due to
lower UBS Group AG accruals for dividends to shareholders and higher UBS Group
AG consolidated IFRS equity of USD 0.9 billion. The aforementioned factors
were partly offset by compensation-related regulatory capital accruals at the
UBS Group AG level.
–
The going concern loss-absorbing AT1 capital
of UBS Group AG consolidated was USD 1.1 billion higher than that of
UBS AG consolidated as of 31 March 2022, mainly reflecting deferred
contingent capital plan awards granted at the Group level to eligible employees
for the performance years 2017 to 2021, partly offset by four loss-absorbing
AT1 capital instruments on-lent by UBS Group AG to UBS AG.
In April 2022, UBS AG distributed a
dividend of USD 4.2 billion to UBS Group AG and UBS Group AG paid the
2021 dividend of USD 1.7 billion to its shareholders. These dividends
reduced the equity of UBS AG and UBS Group AG in April 2022 by USD 4.2
billion and USD 1.7 billion, respectively, and had no impact on their CET1
capital.
|
Comparison between UBS Group AG consolidated and UBS AG consolidated
|
|
|
|
|
|
|
|
As of or for the quarter ended 31.3.22
|
|
As of or for the quarter ended 31.12.21
|
|
USD million, except where indicated
|
|
UBS Group AG
consolidated
|
UBS AG
consolidated
|
Difference
(absolute)
|
|
UBS Group AG
consolidated
|
UBS AG
consolidated
|
Difference
(absolute)
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
9,363
|
9,475
|
(112)
|
|
8,732
|
8,846
|
(114)
|
|
Operating expenses
|
|
6,634
|
6,916
|
(282)
|
|
7,003
|
7,227
|
(224)
|
|
Operating profit / (loss) before tax
|
|
2,729
|
2,559
|
170
|
|
1,729
|
1,619
|
109
|
|
of which: Global Wealth Management
|
|
1,310
|
1,283
|
27
|
|
563
|
541
|
22
|
|
of which: Personal & Corporate Banking
|
|
428
|
420
|
8
|
|
365
|
362
|
3
|
|
of which: Asset Management
|
|
174
|
176
|
(2)
|
|
334
|
328
|
6
|
|
of which: Investment Bank
|
|
929
|
908
|
21
|
|
713
|
710
|
3
|
|
of which: Group Functions
|
|
(112)
|
(227)
|
115
|
|
(246)
|
(321)
|
75
|
|
Net profit / (loss)
|
|
2,144
|
2,012
|
132
|
|
1,359
|
1,266
|
93
|
|
of which: net profit / (loss) attributable to shareholders
|
|
2,136
|
2,004
|
132
|
|
1,348
|
1,255
|
93
|
|
of which: net profit / (loss) attributable to non-controlling
interests
|
|
8
|
8
|
0
|
|
11
|
11
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Statement of comprehensive income
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
(2,216)
|
(2,134)
|
(82)
|
|
(181)
|
(197)
|
16
|
|
of which: attributable to shareholders
|
|
(2,234)
|
(2,152)
|
(82)
|
|
(177)
|
(194)
|
16
|
|
of which: attributable to non-controlling interests
|
|
18
|
18
|
0
|
|
(4)
|
(4)
|
0
|
|
Total comprehensive income
|
|
(72)
|
(121)
|
50
|
|
1,178
|
1,069
|
109
|
|
of which: attributable to shareholders
|
|
(98)
|
(148)
|
50
|
|
1,171
|
1,062
|
109
|
|
of which: attributable to non-controlling interests
|
|
26
|
26
|
0
|
|
7
|
7
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
1,139,922
|
1,139,876
|
46
|
|
1,117,182
|
1,116,145
|
1,037
|
|
Total liabilities
|
|
1,080,711
|
1,081,558
|
(847)
|
|
1,056,180
|
1,057,702
|
(1,522)
|
|
Total equity
|
|
59,212
|
58,319
|
893
|
|
61,002
|
58,442
|
2,559
|
|
of which: equity attributable to shareholders
|
|
58,855
|
57,962
|
893
|
|
60,662
|
58,102
|
2,559
|
|
of which: equity attributable to non-controlling interests
|
|
356
|
356
|
0
|
|
340
|
340
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Capital information
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital
|
|
44,593
|
41,577
|
3,016
|
|
45,281
|
41,594
|
3,687
|
|
Going concern capital
|
|
60,053
|
55,956
|
4,097
|
|
60,488
|
55,434
|
5,054
|
|
Risk-weighted assets
|
|
312,037
|
309,374
|
2,664
|
|
302,209
|
299,005
|
3,204
|
|
Common equity tier 1 capital ratio (%)
|
|
14.3
|
13.4
|
0.9
|
|
15.0
|
13.9
|
1.1
|
|
Going concern capital ratio (%)
|
|
19.2
|
18.1
|
1.2
|
|
20.0
|
18.5
|
1.5
|
|
Total loss-absorbing capacity ratio (%)
|
|
34.2
|
33.1
|
1.0
|
|
34.7
|
33.3
|
1.3
|
|
Leverage ratio denominator
|
|
1,072,953
|
1,072,766
|
186
|
|
1,068,862
|
1,067,679
|
1,183
|
|
Common equity tier 1 leverage ratio (%)
|
|
4.16
|
3.88
|
0.28
|
|
4.24
|
3.90
|
0.34
|
|
Going concern leverage ratio (%)
|
|
5.6
|
5.2
|
0.4
|
|
5.7
|
5.2
|
0.5
|
|
Total loss-absorbing capacity leverage ratio (%)
|
|
9.9
|
9.6
|
0.4
|
|
9.8
|
9.3
|
0.5
|
|
|
|
|
|
|
Significant regulated subsidiary and sub-group information
Unaudited
Significant regulated
subsidiary and sub-group information
Financial and regulatory key figures for our
significant regulated subsidiaries and sub-groups
|
|
|
UBS AG
(standalone)
|
|
UBS Switzerland AG
(standalone)
|
|
UBS Europe SE
(consolidated)
|
|
UBS Americas Holding LLC
(consolidated)
|
|
All values in million, except where indicated
|
|
USD
|
|
CHF
|
|
EUR
|
|
USD
|
|
Financial and regulatory requirements
|
|
Swiss GAAP
Swiss SRB rules
|
|
Swiss GAAP
Swiss SRB rules
|
|
IFRS
EU regulatory rules
|
|
US GAAP
US Basel III rules
|
|
As of or for the quarter ended
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
31.3.22
|
31.12.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial information1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
3,476
|
5,813
|
|
2,209
|
2,134
|
|
241
|
237
|
|
3,632
|
3,729
|
|
Total operating expenses
|
|
2,247
|
3,536
|
|
1,447
|
1,332
|
|
217
|
182
|
|
3,199
|
3,121
|
|
Operating profit / (loss) before tax
|
|
1,229
|
2,277
|
|
763
|
802
|
|
24
|
55
|
|
433
|
608
|
|
Net profit / (loss)
|
|
1,182
|
2,192
|
|
621
|
653
|
|
18
|
37
|
|
225
|
392
|
|
Balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
516,195
|
509,851
|
|
327,902
|
320,656
|
|
52,231
|
46,411
|
|
211,142
|
209,718
|
|
Total liabilities
|
|
460,608
|
455,446
|
|
312,545
|
305,919
|
|
48,495
|
42,664
|
|
184,712
|
182,633
|
|
Total equity
|
|
55,587
|
54,405
|
|
15,357
|
14,736
|
|
3,736
|
3,747
|
|
26,430
|
27,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital
|
|
52,218
|
52,818
|
|
12,786
|
12,609
|
|
2,751
|
2,764
|
|
12,926
|
13,002
|
|
Additional tier 1 capital
|
|
14,379
|
13,840
|
|
5,393
|
5,387
|
|
290
|
290
|
|
4,049
|
4,049
|
|
Total going concern capital / Tier 1 capital
|
|
66,597
|
66,658
|
|
18,178
|
17,996
|
|
3,041
|
3,054
|
|
16,975
|
17,051
|
|
Tier 2 capital
|
|
3,036
|
3,129
|
|
|
|
|
|
|
|
133
|
125
|
|
Total capital
|
|
|
|
|
|
|
|
3,041
|
3,054
|
|
17,108
|
17,176
|
|
Total gone concern loss-absorbing capacity
|
|
46,505
|
44,250
|
|
10,866
|
10,853
|
|
2,4213
|
2,4143
|
|
7,4004
|
7,0004
|
|
Total loss-absorbing capacity
|
|
113,102
|
110,908
|
|
29,045
|
28,849
|
|
5,463
|
5,468
|
|
24,375
|
24,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets and leverage ratio denominator2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
330,401
|
317,913
|
|
108,071
|
106,399
|
|
12,538
|
12,328
|
|
72,646
|
72,979
|
|
Leverage ratio denominator
|
|
594,893
|
593,868
|
|
346,097
|
339,788
|
|
52,302
|
46,660
|
|
197,541
|
188,1305
|
|
Supplementary leverage ratio denominator
|
|
|
|
|
|
|
|
|
|
|
223,482
|
212,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and leverage ratios (%)2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio
|
|
15.8
|
16.6
|
|
11.8
|
11.9
|
|
21.9
|
22.4
|
|
17.8
|
17.8
|
|
Going concern capital ratio / Tier 1 capital ratio
|
|
20.2
|
21.0
|
|
16.8
|
16.9
|
|
24.3
|
24.8
|
|
23.4
|
23.4
|
|
Total capital ratio
|
|
|
|
|
|
|
|
24.3
|
24.8
|
|
23.6
|
23.5
|
|
Total loss-absorbing capacity ratio
|
|
|
|
|
26.9
|
27.1
|
|
43.6
|
44.4
|
|
33.6
|
33.0
|
|
Tier 1 leverage ratio
|
|
|
|
|
|
|
|
5.8
|
6.5
|
|
8.6
|
9.1
|
|
Supplementary tier 1 leverage ratio
|
|
|
|
|
|
|
|
|
|
|
7.6
|
8.0
|
|
Going concern leverage ratio
|
|
11.2
|
11.2
|
|
5.3
|
5.3
|
|
|
|
|
|
|
|
Total loss-absorbing capacity leverage ratio
|
|
|
|
|
8.4
|
8.5
|
|
10.5
|
11.7
|
|
12.3
|
12.8
|
|
Gone concern capital coverage ratio
|
|
112.0
|
112.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity coverage ratio2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-quality liquid assets (billion)
|
|
103
|
89
|
|
95
|
91
|
|
18
|
17
|
|
34
|
32
|
|
Net cash outflows (billion)
|
|
55
|
52
|
|
67
|
64
|
|
11
|
10
|
|
25
|
22
|
|
Liquidity coverage ratio (%)6,7
|
|
188
|
173
|
|
142
|
143
|
|
168
|
170
|
|
139
|
147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net stable funding ratio2,8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available stable funding
|
|
249,760
|
257,992
|
|
228,789
|
225,239
|
|
14,721
|
15,358
|
|
|
|
|
Total required stable funding
|
|
275,424
|
289,195
|
|
159,876
|
158,072
|
|
8,624
|
8,963
|
|
|
|
|
Net stable funding ratio (%)
|
|
919
|
89
|
|
1439
|
142
|
|
171
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint and several liability between UBS AG and UBS Switzerland
AG (billion)10
|
|
|
|
|
5
|
5
|
|
|
|
|
|
|
|
1 The
financial information disclosed does not represent financial statements under
the respective GAAP / IFRS. 2 Refer to the 31 March 2022
Pillar 3 Report, available under “Pillar 3 disclosures” at
ubs.com/investors, for more information. 3 Consists of positions that
meet the conditions laid down in Art. 72a–b of the Capital Requirements
Regulation (CRR) II with regard to contractual, structural or legal
subordination. 4 Consists of eligible long-term debt that meets the
conditions specified in 12 CFR 252.162 of the final TLAC rules.
TLAC is the sum of tier 1 capital and eligible long-term debt.
5 The leverage ratio denominator as of 31 December 2021 has been
aligned with UBS Americas Holding LLC’s reported figure in the FR Y-9C
report, which was filed with the Board of Governors of the Federal
Reserve. 6 In the first quarter of 2022, the liquidity coverage ratio
(the LCR) of UBS AG was 188%, remaining above the prudential
requirements communicated by FINMA. 7 In the first quarter of 2022,
the LCR of UBS Switzerland AG, which is a Swiss SRB, was 142%,
remaining above the prudential requirement communicated by FINMA in
connection with the Swiss Emergency Plan. 8 For UBS Americas Holding
LLC consolidated, the NSFR requirement became effective as of 1 July
2021 and related disclosures will come into effect in the second quarter of
2023. 9 In accordance with Art. 17h para. 3 and 4 of the
Liquidity Ordinance, UBS AG standalone is required to maintain a minimum
NSFR of at least 80% without taking into account excess funding of UBS
Switzerland AG and 100% after taking into account such excess funding.
10 Refer to the “Capital, liquidity and funding, and balance sheet”
section of our Annual Report 2021 for more information about the joint and
several liability. Under certain circumstances, the Swiss Banking Act and
FINMA’s Banking Insolvency Ordinance authorize FINMA to modify, extinguish or
convert to common equity liabilities of a bank in connection with
a resolution or insolvency of such bank.
|
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 have contributed a significant portion of their respective
capital to, and provide substantial liquidity to, such subsidiaries. Many of
these subsidiaries are subject to regulations requiring compliance with minimum
capital, liquidity and similar requirements. The tables in this section
summarize the regulatory capital components and capital ratios of our significant
regulated subsidiaries and sub-groups determined under the regulatory framework
of each subsidiary’s or sub-group’s home jurisdiction.
Supervisory authorities generally have discretion to impose
higher requirements or to otherwise limit the activities of subsidiaries.
Supervisory authorities also may require entities to measure capital and
leverage ratios on a stressed basis and may limit the ability of an entity to
engage in new activities or take capital actions based on the results of those
tests.
Standalone regulatory information for UBS AG and
UBS Switzerland AG, as well as consolidated regulatory information for UBS Europe
SE and UBS Americas Holding LLC, is provided in
the 31 March 2022 Pillar 3 report, which is available under “Pillar 3
disclosures” at ubs.com/investors.
Selected financial and regulatory information for UBS AG
consolidated is included in the key figures table below. Refer also to the UBS AG
first quarter 2022 report, which will be available as of 29 April 2022 under
“Quarterly reporting” at ubs.com/investors.
|
UBS AG consolidated key figures
|
|
|
|
|
|
|
|
As of or for the quarter ended
|
|
USD million, except where indicated
|
|
31.3.22
|
31.12.21
|
31.3.21
|
|
Results
|
|
|
|
|
|
Operating income
|
|
9,475
|
8,846
|
8,836
|
|
Operating expenses
|
|
6,916
|
7,227
|
6,684
|
|
Operating profit / (loss) before tax
|
|
2,559
|
1,619
|
2,151
|
|
Net profit / (loss) attributable to shareholders
|
|
2,004
|
1,255
|
1,710
|
|
Profitability and growth
|
|
|
|
|
|
Return on equity (%)
|
|
13.8
|
8.7
|
11.9
|
|
Return on tangible equity (%)
|
|
15.5
|
9.8
|
13.4
|
|
Return on common equity tier 1 capital (%)
|
|
19.3
|
12.1
|
17.8
|
|
Return on risk-weighted assets, gross (%)
|
|
12.5
|
11.8
|
12.3
|
|
Return on leverage ratio denominator, gross (%)
|
|
3.5
|
3.3
|
3.4
|
|
Cost / income ratio (%)
|
|
72.8
|
81.9
|
75.9
|
|
Net profit growth (%)
|
|
17.2
|
(19.7)
|
20.3
|
|
Resources
|
|
|
|
|
|
Total assets
|
|
1,139,876
|
1,116,145
|
1,109,234
|
|
Equity attributable to shareholders
|
|
57,962
|
58,102
|
57,446
|
|
Common equity tier 1 capital1
|
|
41,577
|
41,594
|
38,826
|
|
Risk-weighted assets1
|
|
309,374
|
299,005
|
285,119
|
|
Common equity tier 1 capital ratio (%)1
|
|
13.4
|
13.9
|
13.6
|
|
Going concern capital ratio (%)1
|
|
18.1
|
18.5
|
18.7
|
|
Total loss-absorbing capacity ratio (%)1
|
|
33.1
|
33.3
|
34.2
|
|
Leverage ratio denominator1
|
|
1,072,766
|
1,067,679
|
1,039,736
|
|
Common equity tier 1 leverage ratio (%)1
|
|
3.88
|
3.90
|
3.73
|
|
Going concern leverage ratio (%)1
|
|
5.2
|
5.2
|
5.1
|
|
Total loss-absorbing capacity leverage ratio (%)1
|
|
9.6
|
9.3
|
9.4
|
|
Other
|
|
|
|
|
|
Invested assets (USD billion)2
|
|
4,380
|
4,596
|
4,306
|
|
Personnel (full-time equivalents)
|
|
47,139
|
47,067
|
47,592
|
|
1 Based on
the Swiss systemically relevant bank framework as of 1 January 2020. Refer to
the “Capital management” section of this report for more information.
2 Consists of invested assets for Global Wealth Management, Asset
Management and Personal & Corporate Banking. Refer to “Note 32
Invested assets and net new money” in the “Consolidated financial statements”
section of our Annual Report 2021 for more information.
|
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. We report a number of APMs in the discussion of
the financial and operating performance of the Group, our business divisions
and our Group Functions. 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 in alphabetical order in
the table below. Our APMs may qualify as non-GAAP measures as defined by US
Securities and Exchange Commission (SEC) regulations.
|
APM
label
|
Calculation
|
Information
content
|
|
Active Digital Banking
clients in Corporate & Institutional Clients (%)
– P&C
|
Calculated as
the average number of active clients for each month in the relevant period
divided by the average number of total clients. “Clients” refers to the number of unique business
relationships or legal entities operated by Corporate & Institutional
Clients, excluding clients that do not have an account, mono-product clients
and clients that have defaulted on loans or credit facilities. At the end of
each month, any client that has logged on at least once in that month is
determined to be “active” (a log-in time stamp is allocated to all business
relationship numbers or per legal entity in a digital banking contract).
|
This measure provides
information about the proportion of active Digital Banking clients in the
total number of UBS clients (within the aforementioned meaning) which are
serviced by Corporate & Institutional Clients.
|
|
Active Digital Banking
clients in Personal Banking (%)
– P&C
|
Calculated as
the average number of active clients for each month in the relevant period
divided by the average number of total clients. “Clients” refers to the number of unique business
relationships operated by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account, clients domiciled outside
Switzerland and clients who have defaulted on loans or credit facilities. At
the end of each month, any client that has logged on at least once in that
month is determined to be “active” (a log-in time stamp is allocated to all
business relationship numbers in a digital banking contract).
|
This measure provides
information about the proportion of active Digital Banking clients in the
total number of UBS clients (within the aforementioned meaning) who are
serviced by Personal Banking.
|
|
Active Mobile Banking
clients in Personal Banking (%)
– P&C
|
Calculated as
the average number of active clients for each month in the relevant period
divided by the average number of total clients. “Clients” refers to the number of unique business
relationships operated by Personal Banking, excluding persons under the age
of 15, clients who do not have a private account, clients domiciled outside
Switzerland and clients who have defaulted on loans or credit facilities. At
the end of each month, any client that has logged on via the mobile app at
least once in that month is determined to be “active” (a log-in time stamp is
allocated to all business relationship numbers in a digital banking
contract).
|
This measure provides
information about the proportion of active Mobile Banking clients in the
total number of UBS clients (within the aforementioned meaning) who are
serviced by Personal Banking.
|
|
Cost / income ratio (%)
|
Calculated as operating
expenses divided by operating income before credit loss expense or release.
|
This measure provides
information about the efficiency of the business by comparing operating
expenses with gross income.
|
|
Fee and trading income
for Corporate & Institutional Clients (USD and CHF)
– P&C
|
Calculated as the total of
recurring net fee and transaction-based income for Corporate & Institutional
Clients.
|
This measure provides
information about the amount of fee and trading income for Corporate &
Institutional Clients.
|
|
APM label
|
Calculation
|
Information
content
|
|
Fee-generating assets
(USD)
– GWM
|
Calculated as the sum of
discretionary and non-discretionary wealth management portfolios (mandate
volume) and assets where generated revenues are predominantly of a recurring
nature, i.e., mainly investment and mutual funds, including hedge funds and
private markets, where we have a distribution agreement. Assets of sanctioned
clients are excluded from fee-generating assets.
|
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-generating asset
margin (bps)
– GWM
|
Calculated as revenues from
fee-generating assets (a portion of which is included in recurring fee income
and a portion of which is included in transaction-based income, annualized as
applicable) divided by average fee-generating assets for the relevant mandate
fee billing period. For the US, fees have been billed on daily balances since
the fourth quarter of 2020 and average fee-generating assets are calculated
as the average of the monthly average balances. Prior to the fourth quarter of
2020, billing was based on prior quarter-end balances, and the average
fee-generating assets were thus the prior quarter-end balance. For balances
outside of the US, billing is based on prior month-end balances and average
fee-generating assets are thus the average of the prior month-end balances.
|
This measure provides
information about the revenues from fee-generating assets in relation to
their average volume during the
relevant mandate fee billing period.
|
|
Gross margin on invested
assets (bps)
– AM
|
Calculated as operating
income before credit loss expense or release (annualized as applicable)
divided by average invested assets.
|
This measure provides
information about the operating income before credit loss expense or release
of the business in relation to invested assets.
|
|
Impaired loan portfolio
as a percentage of total loan portfolio, gross (%)
– GWM, P&C
|
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.
|
|
Invested assets (USD and
CHF)
– GWM, P&C, AM
|
Calculated as the sum of
managed fund assets, managed institutional assets, discretionary and advisory
wealth management portfolios, fiduciary deposits, time deposits, savings
accounts, and wealth management securities or brokerage accounts.
|
This measure provides
information about the volume of client assets managed by or deposited with
UBS for investment purposes.
|
|
Investment products for Personal
Banking (USD and CHF)
– P&C
|
Calculated as the sum of
investment funds (including UBS Vitainvest third-pillar pension funds),
mandates and third-party life insurance operated in Personal Banking.
|
This measure provides
information about the volume of investment funds (including UBS Vitainvest
third-pillar pension funds), mandates and third-party life insurance operated
in Personal Banking.
|
|
Net interest margin
(bps)
– P&C
|
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 fee-generating assets (USD)
– GWM
|
Calculated as the sum of
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 fee-generating
asset
growth rate (%)
– GWM
|
Calculated as the sum of the
net amount of fee-generating asset inflows and outflows recorded during a specific period (annualized as applicable) divided by total
fee-generating assets at the beginning of the period.
|
This measure provides
information about the growth of fee-generating assets during a specific
period as a result of net new fee-generating asset flows.
|
|
Net new investment
products for Personal Banking (USD and CHF)
– P&C
|
Calculated as the sum of the
net amount of inflows and outflows of investment products during a specific
period.
|
This measure provides
information about the development of investment products during a specific
period as a result of net new investment product flows.
|
|
APM label
|
Calculation
|
Information
content
|
|
Net new money (USD)
– GWM, AM
|
Calculated as the sum of
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 the
effects on invested assets of strategic decisions by UBS to exit markets or
services. Net new money for Global Wealth
Management is disclosed on an annual basis. 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 and excludes 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 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 in comparison with the prior period.
|
|
Pre-tax profit growth
(%)
|
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 in comparison with the prior period.
|
|
Recurring net fee income
(USD and CHF)
– GWM, P&C
|
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 (%)
|
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 (%)
|
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 (%)
|
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 (%)
|
Calculated as annualized
operating income before credit loss expense or release divided by average
leverage ratio denominator.
|
This measure provides
information about the revenues of the business in relation to leverage ratio
denominator.
|
|
Return on risk-weighted
assets, gross (%)
|
Calculated as annualized
operating income before credit loss expense or release divided by average
risk-weighted assets.
|
This measure provides
information about the revenues of the business in relation to risk-weighted
assets.
|
|
Return on tangible
equity (%)
|
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 and CHF1)
|
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 and CHF1)
|
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.
|
|
Transaction-based income
(USD and CHF)
– GWM, P&C
|
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.
|
|
1 Total book value per share and
tangible book value per share in Swiss francs are calculated based on a
translation of equity under our US dollar presentation currency.
|
Abbreviations
frequently used in our financial reports
A
ABS asset-backed securities
AGM Annual
General Meeting of shareholders
A-IRB advanced internal ratings-based
AIV alternative investment vehicle
ALCO Asset and Liability Committee
AMA advanced measurement approach
AML anti-money laundering
AoA Articles of Association
APM alternative performance measure
ARR alternative reference rate
ARS auction rate securities
ASF available stable funding
AT1 additional tier 1
AuM assets under management
B
BCBS Basel Committee on Banking
Supervision
BIS Bank for International
Settlements
BoD Board of Directors
C
CAO Capital Adequacy Ordinance
CCAR Comprehensive Capital Analysis and
Review
CCF credit conversion factor
CCP central counterparty
CCR counterparty credit risk
CCRC Corporate Culture and Responsibility
Committee
CDS credit default swap
CEA Commodity Exchange Act
CEO Chief Executive Officer
CET1 common equity tier 1
CFO Chief Financial Officer
CFTC US Commodity Futures Trading Commission
CGU cash-generating unit
CHF Swiss franc
CIO Chief Investment Office
CLS Continuous Linked Settlement
C&ORC Compliance & Operational Risk
Control
CRD IV EU Capital Requirements Directive of
2013
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
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
ETD exchange-traded derivatives
ETF exchange-traded fund
EU European Union
EUR euro
EURIBOR Euro Interbank Offered Rate
ESR environmental and social risk
EVE economic value of equity
EY Ernst & Young Ltd
F
FA financial advisor
FCA UK Financial Conduct Authority
FCT foreign currency translation
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
GMD Group Managing Director
GRI Global Reporting Initiative
G-SIB global systemically important bank
H
Hong Kong Hong Kong Special
SAR Administrative
Region of the People’s Republic of
China
HQLA high-quality
liquid assets
I
IAS International Accounting
Standards
IASB International Accounting Standards
Board
IBOR interbank offered rate
IFRIC International Financial Reporting
Interpretations Committee
IFRS International Financial Reporting
Standards
IRB internal ratings-based
IRRBB interest rate risk in the banking
book
ISDA International Swaps and
Derivatives Association
ISIN International Securities
Identification Number
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
MiFID
II Markets in Financial Instruments Directive II
MRT Material
Risk Taker
N
NAV net asset value
NII net interest income
NSFR net stable funding ratio
NYSE New York Stock Exchange
O
OCA own credit adjustment
OCI other comprehensive income
ORF operational risk framework
OTC over-the-counter
P
PD probability of default
PIT point in time
P&L profit or loss
POCI purchased or originated
credit-impaired
PRA UK Prudential Regulation Authority
PRV positive replacement value
R
RBA role-based
allowance
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
RoTE return on tangible equity
RoU right-of-use
rTSR relative total shareholder return
RWA risk-weighted assets
S
SA standardized approach
SA-CCR standardized approach for counterparty
credit risk
SAR Special Administrative Region
SBC Swiss Bank Corporation
SDG Sustainable Development Goal
SE structured entity
SEC US Securities and Exchange
Commission
SEEOP Senior Executive Equity Ownership
Plan
SFT securities financing transaction
SI sustainable investing or
sustainable
investments
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
U
UoM units of measure
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.
Information sources
Reporting publications
Annual publications
Annual Report (SAP No. 80531):
Published in English, this single-volume report provides descriptions of: our
Group strategy and performance; the strategy and performance of the business
divisions and Group Functions; risk, treasury and capital management; corporate
governance, corporate responsibility and our compensation framework, including
information about compensation for the Board of Directors and the Group
Executive Board members; and financial information, including the financial
statements.
Geschäftsbericht (SAP No. 80531):
This publication provides a German translation of selected sections of our
Annual Report.
Annual Review (SAP No. 80530):
This booklet contains key information about our strategy and performance, with
a focus on corporate responsibility at UBS. It is published in English, German,
French and Italian.
Compensation Report (SAP No.
82307): This report discusses our 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.
Quarterly publications
The quarterly financial report provides an update on our
strategy and performance for the respective quarter. It is available in
English.
How to order publications
The annual and quarterly publications are available in
.pdf format at ubs.com/investors, under “Financial
information,” and printed copies can be requested from UBS free of charge. For
annual publications, refer to the “Investor services” section at ubs.com/investors. Alternatively,
they can be ordered by quoting the SAP number and the language preference,
where applicable, from UBS AG, F4UK–AUL, P.O. Box, CH-8098 Zurich, Switzerland.
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 UBS 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
Our 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
We file periodic reports and submit other information
about UBS to the SEC. Principal among these filings is the annual report on
Form 20-F, filed pursuant to the US Securities Exchange Act of 1934. The filing
of Form 20-F is structured as a wraparound document. Most sections of the
filing can be satisfied by referring to the combined UBS Group AG and UBS AG
annual report. However, there is a small amount of additional information in
Form 20-F that is not presented elsewhere and is particularly targeted at
readers in the US. Readers are encouraged to refer to this additional
disclosure. Any document that we file with the SEC is available on the SEC’s
website: sec.gov. Refer to ubs.com/investors
for more information.
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. Russia’s invasion of Ukraine has led to heightened
volatility across global markets, to the coordinated implementation of
sanctions on Russia and Belarus, Russian and Belarusian entities and nationals,
and to heightened political tensions across the globe. In addition, the war has
caused significant population displacement, and if the conflict continues, the
scale of disruption will increase and may come to include wide-scale shortages
of vital commodities, including causing food insecurity. The speed of
implementation and extent of sanctions, as well as the uncertainty as to how the
situation will develop, may have significant adverse effects on the market and
macroeconomic conditions, including in ways that cannot be anticipated. This
creates significantly greater uncertainty about forward-looking statements. The
COVID-19 pandemic and the measures taken to manage it have had and may also continue
to have a significant adverse effect on global and regional economic activity,
including disruptions to global supply chains, inflationary pressures, and
labor market displacements. Factors that may affect our performance and ability
to achieve our plans, outlook and other objectives also include, but are not
limited to: (i) the degree to which UBS is successful in the ongoing 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; (ii) the degree to which UBS is successful in implementing
changes to its businesses to meet changing market, regulatory and other
conditions; (iii) the continuing low or negative interest rate environment
in Switzerland and other jurisdictions; (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, and
currency exchange rates, and the effects of economic conditions, market
developments, and 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
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); (vi) changes in central bank policies or the implementation of
financial legislation and regulation in Switzerland, the US, the UK, the
European Union 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 Group in
response to legal and regulatory requirements, or other external developments;
(viii) UBS’s ability to maintain and improve its systems and controls for complying
with sanctions and for the detection and prevention of money laundering to meet
evolving regulatory requirements and expectations, in particular in current
geopolitical turmoil; (ix) the uncertainty arising from domestic stresses in
certain major economies; (x) changes in UBS’s competitive position, including
whether differences in regulatory capital and other requirements among the
major financial centers adversely affect UBS’s ability to compete in certain
lines of business; (xi) changes in the standards of conduct applicable to our
businesses that may result from new regulations or new enforcement of existing
standards, including measures to impose new and enhanced duties when
interacting with customers and in the execution and handling of customer
transactions; (xii) the liability to which UBS may be exposed, or possible
constraints or sanctions that regulatory authorities might impose on UBS, due
to litigation, contractual claims and regulatory investigations, including the
potential for disqualification from certain businesses, potentially large fines
or monetary penalties, or the loss of licenses or privileges as a result of
regulatory or other governmental sanctions, as well as the effect that
litigation, regulatory and similar matters have on the operational risk
component of our RWA, as well as the amount of capital available for return to
shareholders; (xiii) the effects on UBS’s cross-border banking business of sanctions,
tax or regulatory developments and of possible changes in UBS’s policies and
practices relating to this business; (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 nation states and while COVID-19 control measures
require large portions of the staff of both UBS and its service providers to
work remotely; (xix) restrictions on the ability of UBS Group AG to make
payments or distributions, including due to restrictions on the ability of its
subsidiaries to make loans or distributions, directly or indirectly, or, in the
case of financial difficulties, due to the exercise by FINMA or the regulators
of UBS’s operations in other countries of their broad statutory powers in
relation to protective measures, restructuring and liquidation proceedings;
(xx) the degree to which changes in regulation, capital or legal structure,
financial results or other factors may affect UBS’s ability to maintain its
stated capital return objective; (xxi) uncertainty over the scope of actions
that may be required by UBS, governments and others to achieve goals relating
to climate, environmental and social matters, as well as the evolving nature of
underlying science and industry and governmental standards; and (xxii) 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 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 UBS’s Annual Report on Form
20-F for the year ended 31 December 2021. 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.
UBS Group AG
P.O.
Box
CH-8098 Zurich
ubs.com
This Form 6-K is hereby
incorporated by reference into (1) each of the registration statements of UBS
AG on Form F-3 (Registration Numbers 333-253432 and 333-263376),
and of UBS Group AG on Form S-8 (Registration Numbers 333-200634; 333-200635;
333-200641; 333-200665; 333-215254; 333-215255;
333-228653; 333-230312; and 333-249143), 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/ Ralph Hamers _______________
Name: Ralph Hamers
Title: Group Chief Executive Officer
By: _/s/ Kirt Gardner__________________
Name: Kirt Gardner
Title: Group Chief Financial Officer
By: _/s/ Christopher Castello ___________
Name: Christopher Castello
Title: Group Controller and
Chief Accounting Officer
UBS AG
By: /s/ Ralph Hamers ________________
Name: Ralph Hamers
Title: President of the Executive Board
By: /s/ Kirt Gardner _________________
Name: Kirt Gardner
Title: Chief Financial Officer
By: /s/ Christopher Castello _____
Name: Christopher Castello
Title: Controller and Chief Accounting Officer
Date: April 26, 2022
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