Report of Foreign Issuer (6-k)

Date : 03/15/2019 @ 1:35PM
Source : Edgar (US Regulatory)
Stock : Ubs (PC) (OUBS)
Quote : 16.16  0.0 (0.00%) @ 12:00AM
UBS AG share price Chart

Report of Foreign Issuer (6-k)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

 

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

Date: March 15, 2019

 

UBS Group AG

Commission File Number: 1-36764

 

UBS AG

Commission File Number: 1-15060

 

 

(Registrants' Name)

 

Bahnhofstrasse 45, Zurich, Switzerland and
Aeschenvorstadt 1, Basel, Switzerland

(Address of principal executive offices)

 

Indicate by check mark whether the registrants file or will file annual reports under cover of Form 20‑F or Form 40-F.

 

Form 20-F                         Form 40-F 

 


 

This Form 6-K consists of the UBS AG audited standalone financial statements for the year ended 31 December 2018, as well as the consent of Ernst & Young Ltd. with respect thereto, which appear immediately following this page.

  

 


 

UBS AG

Standalone financial statements and regulatory information
for the year ended 31 December 2018

 


 

  

 



 

UBS AG standalone financial statements
(audited)

Income statement

 

 

 

 

 

 

 

 

 

 

 

 

USD million

 

CHF million

 

 

 

 

For the year ended

 

For the year ended

 

 

Note

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Interest and discount income 1

 

 

 

 6,439 

 5,635 

 

 6,347 

 5,493 

Interest and dividend income from trading portfolio 2

 

 

 

 2,708 

 2,214 

 

 2,666 

 2,158 

Interest and dividend income from financial investments

 

 

 

 401 

 229 

 

 395 

 224 

Interest expense 3

 

 

 

 (9,240) 

 (6,551) 

 

 (9,106) 

 (6,386) 

Gross interest income

 

 

 

 308 

 1,528 

 

 301 

 1,489 

Credit loss (expense) / recovery

 

 

 

 (54) 

 (118) 

 

 (54) 

 (115) 

Net interest income

 

 

 

 254 

 1,410 

 

 248 

 1,374 

Fee and commission income from securities and investment business and other fee and commission income

 

 

 

 2,491 

 2,415 

 

 2,454 

 2,354 

Credit-related fees and commissions

 

 

 

 152 

 200 

 

 150 

 194 

Fee and commission expense

 

 

 

 (844) 

 (972) 

 

 (832) 

 (948) 

Net fee and commission income

 

 

 

 1,799 

 1,642 

 

 1,772 

 1,601 

Net trading income

 

 3 

 

 4,443 

 3,274 

 

 4,381 

 3,192 

Net income from disposal of financial investments

 

 

 

 7 

 87 

 

 7 

 85 

Dividend income from investments in subsidiaries and other participations

 

 4 

 

 3,712 

 1,293 

 

 3,645 

 1,261 

Income from real estate holdings

 

 

 

 645 

 595 

 

 635 

 580 

Sundry ordinary income

 

 5 

 

 1,779 

 2,760 

 

 1,754 

 2,690 

Sundry ordinary expenses

 

 5 

 

 (599) 

 (498) 

 

 (590) 

 (485) 

Other income from ordinary activities

 

 

 

 5,544 

 4,237 

 

 5,452 

 4,131 

Total operating income

 

 

 

 12,040 

 10,563 

 

 11,853 

 10,297 

Personnel expenses

 

 6 

 

 3,456 

 4,234 

 

 3,407 

 4,128 

General and administrative expenses

 

 7 

 

 4,212 

 4,671 

 

 4,151 

 4,553 

Subtotal operating expenses

 

 

 

 7,667 

 8,905 

 

 7,558 

 8,680 

Impairment of investments in subsidiaries and other participations

 

 

 

 760 

 274 

 

 747 

 267 

Depreciation, amortization and impairment of property, equipment, software and intangible assets

 

 

 

 712 

 677 

 

 702 

 660 

Changes in provisions and other allowances and losses

 

 

 

 399 

 235 

 

 394 

 229 

Total operating expenses

 

 

 

 9,539 

 10,091 

 

 9,400 

 9,837 

Operating profit

 

 

 

 2,501 

 472 

 

 2,452 

 460 

Extraordinary income

 

 8 

 

 170 

 391 

 

 167 

 382 

Extraordinary expenses

 

 8 

 

 0 

 4 

 

 0 

 4 

Tax expense / (benefit)

 

 9 

 

 (663) 

 (72) 

 

 (651) 

 (70) 

Net profit / (loss)

 

 

 

 3,333 

 932 

 

 3,269 

 909 

1 Interest and discount income includes negative interest income on financial assets of USD 364 million (CHF 358 million) for the year ended 31 December 2018 (USD 486 million (CHF 473 million) for the year ended 31 December 2017).    2 Interest and dividend income from trading portfolio includes negative interest income on trading portfolio assets of USD 70 million (CHF 69 million) for the year ended 31 December 2018 (USD 1 million (CHF 1 million) for the year ended 31 December 2017).    3 Includes negative interest expense on financial liabilities of USD 354 million (CHF 349 million) for the year ended 31 December 2018 (USD 410 million (CHF 399 million) for the year ended 31 December 2017).

 

1  


UBS AG standalone financial statements (audited)

Balance sheet

 

 

 

 

 

 

 

 

 

 

USD million

 

CHF million

 

 

Note

 

31.12.18

31.12.17

 

31.12.18

31.12.17

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Cash and balances at central banks

 

 

 

 36,297 

 37,459 

 

 35,688 

 36,514 

Due from banks

 

 24 

 

 46,092 

 42,038 

 

 45,319 

 40,978 

of which: total loss-absorbing capacity eligible at significant regulated subsidiary level

 

 2 

 

 16,331 

 12,620 

 

 16,057 

 12,301 

Receivables from securities financing transactions

 

10, 24

 

 77,893 

 62,945 

 

 76,587 

 61,358 

Due from customers

 

11, 12, 24

 

 117,417 

 132,900 

 

 115,448 

 129,550 

of which: total loss-absorbing capacity eligible at significant regulated sub-group level

 

 2 

 

 600 

 600 

 

 590 

 585 

Mortgage loans

 

11, 12

 

 4,727 

 4,978 

 

 4,648 

 4,853 

Trading portfolio assets

 

 13 

 

 95,612 

 107,355 

 

 94,009 

 104,649 

Derivative financial instruments

 

 14 

 

 15,139 

 15,182 

 

 14,885 

 14,799 

Financial investments

 

 15 

 

 25,666 

 25,048 

 

 25,235 

 24,417 

Accrued income and prepaid expenses

 

 

 

 1,410 

 1,292 

 

 1,387 

 1,259 

Investments in subsidiaries and other participations

 

 16 

 

 49,528 

 49,202 

 

 48,698 

 47,962 

Property, equipment and software

 

 

 

 6,546 

 6,550 

 

 6,437 

 6,384 

Goodwill and other intangible assets

 

 

 

 22 

 6 

 

 22 

 6 

Other assets

 

 17 

 

 3,888 

 4,358 

 

 3,822 

 4,248 

Total assets

 

 

 

 480,238 

 489,313 

 

 472,184 

 476,977 

of which: subordinated assets

 

 

 

 6,009 

 5,486 

 

 5,908 

 5,348 

of which: subject to mandatory conversion and / or debt waiver

 

 

 

 4,332 

 3,091 

 

 4,260 

 3,013 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Due to banks

 

 24 

 

 42,482 

 29,915 

 

 41,769 

 29,161 

Payables from securities financing transactions

 

10, 24

 

 44,016 

 49,563 

 

 43,278 

 48,313 

Due to customers

 

 24 

 

 112,794 

 121,580 

 

 110,903 

 118,515 

Funding received from UBS Group AG and UBS Group Funding (Switzerland) AG

 

2, 24

 

 41,782 

 33,472 

 

 41,081 

 32,629 

Trading portfolio liabilities

 

 13 

 

 23,453 

 24,988 

 

 23,060 

 24,358 

Derivative financial instruments

 

 14 

 

 17,268 

 18,765 

 

 16,979 

 18,292 

Financial liabilities designated at fair value

 

13, 20

 

 56,226 

 52,495 

 

 55,283 

 51,171 

of which: debt issued designated at fair value

 

 

 

 54,203 

 48,023 

 

 53,294 

 46,812 

of which: other financial liabilities designated at fair value

 

 

 

 2,023 

 4,472 

 

 1,989 

 4,359 

Bonds issued

 

 

 

 83,743 

 99,086 

 

 82,339 

 96,588 

of which: total loss-absorbing capacity eligible at UBS AG level

 

 

 

 7,468 

 9,080 

 

 7,343 

 8,851 

Accrued expenses and deferred income

 

 

 

 3,350 

 3,434 

 

 3,294 

 3,347 

Other liabilities

 

 17 

 

 2,601 

 3,650 

 

 2,557 

 3,558 

Provisions

 

 12 

 

 1,416 

 1,125 

 

 1,392 

 1,097 

Total liabilities

 

 

 

 429,130 

 438,074 

 

 421,934 

 427,030 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Share capital

 

 21 

 

 393 

 396 

 

 386 

 386 

General reserve

 

 

 

 36,326 

 36,571 

 

 35,649 

 35,649 

of which: statutory capital reserve

 

 

 

 36,326 

 36,571 

 

 35,649 

 35,649 

of which: capital contribution reserve 1

 

 

 

 36,326 

 36,571 

 

 35,649 

 35,649 

Voluntary earnings reserve

 

 

 

 11,054 

 13,340 

 

 10,946 

 13,004 

Net profit / (loss) for the period

 

 

 

 3,333 

 932 

 

 3,269 

 909 

Total equity

 

 

 

 51,107 

 51,239 

 

 50,250 

 49,947 

Total liabilities and equity

 

 

 

 480,238 

 489,313 

 

 472,184 

 476,977 

of which: subordinated liabilities

 

 

 

 18,446 

 14,687 

 

 18,137 

 14,317 

of which: subject to mandatory conversion and / or debt waiver

 

 

 

 17,721 

 13,947 

 

 17,423 

 13,596 

 

2


 

 

Balance sheet (continued)

 

 

 

 

 

 

 

 

USD million

 

CHF million

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

 

 

 

 

 

 

 

Off-balance sheet items

 

 

 

 

 

 

Contingent liabilities, gross

 

 16,019 

 22,380 

 

 15,750 

 21,815 

Sub-participations

 

 (1,675) 

 (1,898) 

 

 (1,647) 

 (1,850) 

Contingent liabilities, net

 

 14,344 

 20,481 

 

 14,103 

 19,965 

of which: guarantees to third parties related to subsidiaries

 

 7,480 

 14,380 

 

 7,355 

 14,017 

Irrevocable loan commitments, gross

 

 25,664 

 34,367 

 

 25,234 

 33,500 

Sub-participations

 

 (643) 

 (1,098) 

 

 (632) 

 (1,070) 

Irrevocable loan commitments, net

 

 25,021 

 33,269 

 

 24,601 

 32,430 

Forward starting transactions 2

 

 8,536 

 13,320 

 

 8,393 

 12,984 

of which: reverse repurchase agreements

 

 4,766 

 8,016 

 

 4,686 

 7,814 

of which: securities borrowing agreements

 

 12 

 24 

 

 12 

 23 

of which: repurchase agreements

 

 3,758 

 5,280 

 

 3,695 

 5,147 

Liabilities for calls on shares and other equity instruments

 

 5 

 5 

 

 5 

 5 

1 Effective 1 January 2011, the Swiss withholding tax law provides that payments out of the capital contribution reserve are not subject to withholding tax. This law has led to interpretational differences between the Swiss Federal Tax Administration and companies about the qualifying amounts of capital contribution reserve and the disclosure in the financial statements. In view of this, the Swiss Federal Tax Administration has confirmed that UBS AG would be able to repay shareholders CHF 20.5 billion of disclosed capital contribution reserve without being subject to the withholding tax deduction that applies to dividends paid out of retained earnings. The confirmation by the Swiss Tax Administration was dated 7 June 2018. The decision about the remaining amount has been deferred to a future point in time.    2 Cash to be paid in the future by either UBS AG or the counterparty.

 

 

Off-balance sheet items

Off-balance sheet items include indemnities and guarantees issued by UBS AG for the benefit of subsidiaries and creditors of subsidiaries.

Where the indemnity amount issued by UBS AG is not specifically defined, the indemnity relates to the solvency or minimum capitalization of a subsidiary, and therefore no amount is included in the table above.

Joint and several liability – Value added tax (VAT)

UBS AG is jointly and severally liable for the combined VAT liability of UBS entities that belong to the VAT group of UBS in Switzerland. This contingent liability is not included in the table above.

Guarantees – UBS Limited and UBS Europe SE

In 2003 UBS AG issued a guarantee for the benefit of each counterparty of UBS Limited. Under this guarantee, UBS AG irrevocably and unconditionally guarantees each and every obligation that UBS Limited entered into prior to the combined UK business transfer and cross-border merger of UBS Limited into UBS Europe SE. This guarantee is included in the off-balance sheet items table above. Effective after the merger in March 2019, UBS AG issued a similar guarantee for the benefit of each counterparty of UBS Europe SE acting out of its Investment Bank, covering transactions subject to master netting agreements. UBS AG promises to pay to beneficiary counterparties on demand any unpaid balance of such liabilities under the terms of the guarantees.

®    Refer to Note 27 for more information

 


Indemnities – UBS Europe SE

In connection with the establishment of UBS Europe SE in 2016, UBS AG entered into an agreement with UBS Europe SE under which UBS AG would provide UBS Europe SE with limited indemnification of payment obligations that may arise from certain litigation, regulatory and similar matters.

As of 31 December 2018, the amount of such potential payment obligations could not be reliably estimated and the table above does therefore not include any amount related to this limited indemnification.

In addition, in accordance with the bylaws of the Deposit Protection Fund of the Association of German Banks, UBS AG issued on behalf of UBS Europe SE an indemnity in favor of this fund. The probability of an outflow was assessed to be remote, and as a result, the table above does not include any exposure arising under this indemnity.

 

3  


UBS AG standalone financial statements (audited)

 

Statement of changes in equity

 

 

 

 

 

 

 

 

 

 

USD million

 

Share capital

 

Statutory capital reserve

 

Voluntary earnings reserve and

profit / (loss)

carried forward

 

Net profit / (loss)

for the period

 

Total equity

 

 

 

 

 

 

 

 

 

 

 

Balance as of 1 January 2018

 

 396 

 

 36,571 

 

 13,340 

 

 932 

 

 51,239 

Reconciliation of USD balance as of 1 Jan 2018 to reflect CHF / USD rate at conversion date 1 October 2018

 

 (3) 

 

 (244) 

 

 (89) 

 

 (6) 

 

 (342) 

Balance as of 1 January 2018, translated at conversion date rate 1 October 2018 1

 

 393 

 

 36,326 

 

 13,251 

 

 926 

 

 50,897 

Dividends and other distributions

 

 

 

 

 

 (3,123) 

 

 

 

 (3,123) 

Net profit / (loss) appropriation

 

 

 

 

 

 926 

 

 (926) 

 

 0 

Net profit / (loss) for the period before conversion

 

 

 

 

 

 

 

 3,768 

 

 3,768 

USD equity opening balance at conversion date 1 October 2018

 

 393 

 

 36,326 

 

 11,054 

 

 3,768 

 

 51,542 

Net profit / (loss) for the period after conversion

 

 

 

 

 

 

 

 (435) 

 

 (435) 

Balance as of 31 December 2018

 

 393 

 

 36,326 

 

 11,054 

 

 3,333 

 

 51,107 

1 Conversion date rate as of 1 October 2018 represents the closing exchange rate as of 30 September 2018 (CHF / USD 1.02).

 

 

 

 

 

 

 

 

 

 

 

CHF million

 

Share capital

 

Statutory capital reserve

 

Voluntary earnings reserve and

profit / (loss)

carried forward

 

Net profit / (loss)

for the period

 

Total equity

 

 

 

 

 

 

 

 

 

 

 

Balance as of 1 January 2018

 

 386 

 

 35,649 

 

 13,004 

 

 909 

 

 49,947 

Dividends and other distributions

 

 

 

 

 

 (3,065) 

 

 

 

 (3,065) 

Net profit / (loss) appropriation

 

 

 

 

 

 909 

 

 (909) 

 

 0 

Net profit / (loss) for the period before conversion

 

 

 

 

 

 

 

 3,698 

 

 3,698 

CHF equity at conversion date 1 October 2018

 

 386 

 

 35,649 

 

 10,848 

 

 3,698 

 

 50,580 

Net profit / (loss) for the period after conversion

 

 

 

 

 

 

 

 (428) 

 

 (428) 

Currency translation difference

 

 

 

 

 

 98 

 

 

 

 98 

Balance as of 31 December 2018

 

 386 

 

 35,649 

 

 10,946 

 

 3,269 

 

 50,250 

 

The following table includes a reconciliation of equity from the former Swiss franc presentation currency to the new US dollar presentation currency.

 

In million

 

Share capital

 

Statutory capital reserve

 

Voluntary earnings reserve and

profit / (loss)

carried forward

 

Net profit / (loss)

for the period

 

Total equity

 

 

 

 

 

 

 

 

 

 

 

Balance as of 1 January 2018, CHF

 

 386 

 

 35,649 

 

 13,004 

 

 909 

 

 49,947 

Dividends and other distributions

 

 

 

 

 

 (3,065) 

 

 

 

 (3,065) 

Net profit / (loss) appropriation

 

 

 

 

 

 909 

 

 (909) 

 

 0 

Net profit / (loss) for the period before conversion, CHF

 

 

 

 

 

 

 

 3,698 

 

 3,698 

CHF equity at conversion date 1 October 2018

 

 386 

 

 35,649 

 

 10,848 

 

 3,698 

 

 50,580 

USD equity opening balance at conversion date 1 October 2018

 

 393 

 

 36,326 

 

 11,054 

 

 3,768 

 

 51,542 

Net profit / (loss) for the period after conversion, USD

 

 

 

 

 

 

 

 (435) 

 

 (435) 

Balance as of 31 December 2018, USD

 

 393 

 

 36,326 

 

 11,054 

 

 3,333 

 

 51,107 

 

4


 

 

Statement of appropriation of total profit / (loss) carried forward

The Board of Directors proposes that the Annual General Meeting of Shareholders (AGM) on 18 April 2019 approve an ordinary dividend distribution of USD 3,250 million. Dividends are declared and paid in US dollars. The total amount of the dividends will be capped at CHF 4,062 million (Cap ). To the extent that the CHF dividend calculated based on USD 3,250 million would exceed the Cap on the day of the AGM, due to the exchange rate determined by the Board of Directors in its reasonable opinion, the USD amount of the dividend will be reduced on a pro-rata basis so that the total CHF amount does not exceed the Cap.

Proposed appropriation of total profit / (loss) carried forward if Cap is not triggered

The Board of Directors proposes that the AGM on 18 April 2019 approve the following appropriation of total profit / (loss) carried forward and dividend distribution.

 

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

 

31.12.18

Net profit for the period

 

 3,333 

 

 3,269 

Profit / (loss) carried forward

 

 0 

 

 0 

Total profit / (loss) carried forward available for appropriation

 

 3,333 

 

 3,269 

 

 

 

 

 

Appropriation of total profit / (loss) carried forward

 

 

 

 

Appropriation to voluntary earnings reserve

 

 (83) 

 

 (74) 

Dividend distribution

 

 (3,250) 

 

 (3,196) 1

Profit / (loss) carried forward

 

 0 

 

 0 

1 Translated at closing exchange rate as of 31 December 2018 (CHF / USD 1.02).

Proposed appropriation of total profit / (loss) carried forward and proposed dividend distribution out of voluntary earnings reserve if Cap is triggered

The Board of Directors proposes that the AGM on 18 April 2019 approve the following appropriation of total profit / (loss) carried forward and dividend distribution.

 

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

 

31.12.18

Net profit for the period

 

 3,333 

 

 3,269 

Profit / (loss) carried forward

 

 0 

 

 0 

Total profit / (loss) carried forward available for appropriation

 

 3,333 

 

 3,269 

 

 

 

 

 

Appropriation of total profit / (loss) carried forward

 

 

 

 

Appropriation to voluntary earnings reserve

 

 (83) 

 

 0 

Dividend distribution

 

 (3,250) 

 

 (3,269) 

Profit / (loss) carried forward

 

 0 

 

 0 

 

 

 

 

 

Proposed dividend distribution out of voluntary earnings reserve

 

 

 

 

Total voluntary earnings reserve before distribution

 

 11,054 

 

 10,946 

Dividend distribution

 

 0 

 

 (793) 

Total voluntary earnings reserve after distribution

 

 11,054 

 

 10,153 

 

The total CHF dividend is capped at CHF 4,062 million. The USD amount (3,250 million) will be reduced to CHF 4,062 million multiplied by the exchange rate determined by the Board of Directors on the day of the AGM.

5  


UBS AG standalone financial statements (audited)

Note 1  Name, legal form and registered office

UBS AG is incorporated and domiciled in Switzerland. Its registered offices are at Bahnhofstrasse 45, CH-8001 Zurich and Aeschenvorstadt 1, CH-4051 Basel, Switzerland. UBS AG operates under art. 620ff. of the Swiss Code of Obligations and Swiss banking law as an Aktiengesellschaft, a corporation limited by shares.

     UBS AG is a regulated bank in Switzerland and is 100% owned by UBS Group AG, the ultimate parent of the UBS Group. UBS AG holds investments in and provides funding to subsidiaries, including the other banking subsidiaries of the UBS Group. In addition, UBS AG operates globally, including business activities from all four UBS business divisions and Corporate Center. In the ordinary course of business, main contributors to the profitability of UBS AG are the Investment Bank, Wealth Management business booked outside of Switzerland and Corporate Center – Group Asset and Liability Management (Group ALM). The balance sheet is mainly composed of financial assets and liabilities from the Investment Bank, Corporate Center – Group ALM and Wealth Management business booked outside of Switzerland as well as investments in subsidiaries and other participations in Corporate Center – Group ALM and fixed assets of Corporate Center – Services.

During 2017, shared services functions previously provided by UBS AG to subsidiaries and self-consumed in Switzerland, the UK and US were substantially transferred to Group service companies. UBS AG employed 11,099 personnel on a full-time equivalent basis as of 31 December 2018 compared with 10,551 personnel as of 31 December 2017.

®    Refer to Note 2b of the UBS AG standalone Annual Report 2017 for more information

  

Note 2  Accounting policies

 

a) Significant accounting policies

UBS AG standalone financial statements are prepared in accordance with Swiss GAAP (FINMA Circular 2015 / 1 and the Banking Ordinance) and represent “reliable assessment statutory single-entity financial statements.” The accounting policies are principally the same as for the consolidated financial statements of UBS AG outlined in Note 1 to the consolidated financial statements of UBS AG included in the UBS Group AG and UBS AG Annual Report 2018. Major differences between the Swiss GAAP requirements and International Financial Reporting Standards are described in Note 39 of the consolidated financial statements of UBS AG. The significant accounting policies applied for the standalone financial statements of UBS AG are discussed below.

®    Refer to the UBS Group AG and UBS AG Annual Report 2018 for more information

Risk management

UBS AG is fully integrated into the Group-wide risk management process described in the audited part of the “Risk management and control” section of the UBS Group AG and UBS AG Annual Report 2018.

Further information on the use of derivative instruments and hedge accounting is provided in Notes 1, 11 and 28 to the consolidated financial statements of UBS AG.

®    Refer to the UBS Group AG and UBS AG Annual Report 2018 for more information

 

Compensation policy

The compensation structure and processes of UBS AG conform to the compensation principles and framework of UBS Group AG. For detailed information, refer to the Compensation Report of UBS Group AG.

Foreign currency translation

Transactions denominated in foreign currency are translated into US dollars at the spot exchange rate on the date of the transaction. At the balance sheet date, all monetary assets and liabilities, as well as equity instruments recorded in Trading portfolio assets and Financial investments denominated in foreign currency, are translated into US dollars using the closing exchange rate. Non-monetary items measured at historic cost are translated at the spot exchange rate on the date of the transaction. Assets and liabilities of branches with functional currencies other than the US dollar are translated into US dollars at the closing exchange rate. Income and expense items of such branches are translated at weighted average exchange rates for the period. All currency translation effects are recognized in the income statement.

The main currency translation rates used by UBS AG are provided in Note 37 of the consolidated financial statements of UBS AG.

®    Refer to the UBS Group AG and UBS AG Annual Report 2018 for more information

 

6


 

Note 2  Accounting policies (continued)

Structured debt instruments

Structured debt instruments comprise structured debt instruments issued and transacted over-the-counter and include a host contract and one or more embedded derivatives that do not relate to UBS AG’s own equity. By applying the fair value option, the vast majority of structured debt instruments are measured at fair value as a whole and recognized in Financial liabilities designated at fair value. The fair value option for structured debt instruments can be applied only if the following criteria are cumulatively met:

     The structured debt instrument is measured on a fair value basis and is subject to risk management that is equivalent to risk management for trading activities;

     The application of the fair value option eliminates or significantly reduces an accounting mismatch that would otherwise arise.

     Changes in fair value attributable to changes in unrealized own credit are not recognized.

 

Fair value changes related to Financial liabilities designated at fair value, excluding changes in unrealized own credit, are recognized in Net trading income. Interest expense on Financial liabilities designated at fair value is recognized in Interest expense.

Where the designation criteria for the fair value option are not met, the embedded derivatives are assessed for bifurcation for measurement purposes. Bifurcated embedded derivatives are measured at fair value through profit or loss and presented in the same balance sheet line as the host contract.

®    Refer to Note 20 for more information

Group-internal funding

UBS AG obtains funding from UBS Group AG and UBS Group Funding (Switzerland) AG in the form of loans that qualify as going concern additional tier 1 capital at the UBS AG consolidated and standalone levels and as gone concern loss-absorbing capacity at the UBS AG consolidated level. A portion of Group-internal funding obtained is further on-lent by UBS AG to certain subsidiaries in the form of loans.

Where such Group-internal funding is eligible to meet the requirements for total loss-absorbing capacity (TLAC) at the level of UBS AG consolidated or standalone, or at the levels of significant regulated subsidiaries as defined for Pillar 3 disclosure purposes, the aggregate amounts of the respective obligations and claims are separately disclosed on the balance sheet. For those TLAC instruments that are eligible to meet the going concern capital requirements (i.e., are subordinated and subject to mandatory conversion and / or debt waiver, as explained below), the aggregate corresponding amounts are disclosed on the balance sheet.

UBS AG obligations arising from Group-internal funding it has received are presented as Funding received from UBS Group AG and UBS Group Funding (Switzerland) AG and measured at amortized cost. UBS AG claims arising from Group-internal funding it has provided are presented as Due from banks and Due from customers and measured at amortized cost less any allowance for credit losses. Further information on the assessment and recognition of credit losses of claims is provided in Note 1 to the consolidated financial statements of UBS AG.

®    Refer to the UBS Group AG and UBS AG Annual Report 2018 for more information

Subordinated assets and liabilities

Subordinated assets are comprised of claims that, based on an irrevocable written declaration, in the event of liquidation, bankruptcy or composition concerning the debtor, rank after the claims of all other creditors and may not be offset against amounts payable to the debtor nor be secured by its assets. Subordinated liabilities are comprised of corresponding obligations.

Subordinated assets and liabilities that contain a point-of-non-viability clause in accordance with Swiss capital requirements per articles 29 and 30 of the Capital Adequacy Ordinance are disclosed as being Subject to mandatory conversion and / or debt waiver and provide for the claim or the obligation to be written off or converted into equity in the event that the issuing bank reaches a point of non-viability.

Investments in subsidiaries and other participations

Investments in subsidiaries and other participations are equity interests that are held to carry on the business of UBS AG or for other strategic purposes. They include all subsidiaries directly held by UBS AG through which UBS AG conducts its business on a global basis. The investments are measured individually and carried at cost less impairment. The carrying value is tested for impairment annually and when indications for a decrease in value exist, which include incurrence of significant operating losses or a severe depreciation of the currency in which the investment is denominated. If an investment in a subsidiary is impaired, its value is generally written down to the net asset value. Subsequent recoveries in value are recognized up to the original cost value based on either the increased net asset value or a value above the net asset value if, in the opinion of management, forecasts of future profitability provide sufficient evidence that a carrying value above net asset value is supported. Management may exercise its discretion as to what extent and in which period a recovery in value is recognized.

Impairments of investments are presented as  Impairment of investments in subsidiaries and other participations. Reversals of impairments are presented as Extraordinary income in the income statement. Impairments and partial or full reversals of impairments for a subsidiary during the same annual period are determined on a net basis.

®    Refer to Note 16 for more information

7  


UBS AG standalone financial statements (audited)

 

Note 2  Accounting policies (continued)

Services received from and provided to Group entities

UBS AG receives services from UBS Business Solutions AG, the main Group service company, mainly relating to Group Technology, Group Operations and Group Corporate Services, as well as certain other services from other Group entities. UBS AG provides services to Group entities mainly relating to real estate and selected other Corporate Center – Services functions. Services received from and provided to Group entities are settled in cash as hard cost transfers or hard revenue transfers paid or received.

When the nature of the underlying transaction between UBS AG and the Group entity contains a single, clearly identifiable service element, related income and expenses are presented in the respective income statement line item, e.g., Fee and commission income from securities and investment business and other fee and commission income, Fee and commission expense, Net trading income or General and administrative expenses. To the extent the nature of the underlying transaction contains various service elements and is not clearly attributable to a particular income statement line item, related income and expenses are presented in Sundry ordinary income and Sundry ordinary expenses

®    Refer to Notes 5 and 7 for more information

Pension and other post-employment benefit plans

Swiss GAAP permits the use of IFRS or Swiss accounting standards for pension and other post-employment benefit plans, with the election made on a plan-by-plan basis.

UBS AG has elected to apply Swiss GAAP (FER 16) for the Swiss pension plan in its standalone financial statements. The requirements of Swiss GAAP are better aligned with the specific nature of Swiss pension plans, which are hybrid in that they combine elements of defined contribution and defined benefit plans, but are treated as defined benefit plans under IFRS. Swiss GAAP requires that the employer contributions to the pension fund are recognized as Personnel expenses in the income statement. The employer contributions to the Swiss pension fund are determined as a percentage of contributory compensation. Furthermore, Swiss GAAP requires an assessment as to whether, based on the financial statements of the pension fund prepared in accordance with Swiss accounting standards (FER 26), an economic benefit to, or obligation of, UBS AG arises from the pension fund which is recognized in the balance sheet when conditions are met. Conditions for recording a pension asset or liability would be met if, for example, an employer contribution reserve is available or UBS AG is required to contribute to the reduction of a pension deficit (on a FER 26 basis).

Key differences between Swiss GAAP and IFRS include the treatment of dynamic elements, such as future salary increases and future interest credits on retirement savings, which are not considered under the static method used in accordance with Swiss GAAP. Also, the discount rate used to determine the defined benefit obligation in accordance with IFRS is based on the yield of high-quality corporate bonds of the market in the respective pension plan country. The discount rate used in accordance with Swiss GAAP, i.e., the technical interest rate, is determined by the Pension Foundation Board based on the expected returns of the Board’s investment strategy.

®    Refer to Note 22 for more information

 

UBS AG has elected to apply IFRS (IAS 19) for its non-Swiss defined benefit plans. However, remeasurements of the defined benefit obligation and the plan assets are recognized in the income statement rather than directly in equity. For corresponding disclosures in accordance with IAS 19 requirements, refer to Note 29 of the consolidated financial statements of UBS AG.

®    Refer to the UBS Group AG and UBS AG Annual Report 2018 for more information

 

After the transfer of shared services functions to UBS Business Solutions AG as further outlined in Note 2c, UBS AG ceased to make direct contributions to the respective pension plans for transferred employees. Instead, UBS AG receives a service charge from the Group service companies including their respective pension costs, which is recognized as General and administrative expenses .  

Deferred taxes

Deferred tax assets are not recognized in UBS AG’s standalone financial statements. However, deferred tax liabilities may be recognized for taxable temporary differences. Changes in the deferred tax liability balance are recognized in the income statement.

Dispensations in the standalone financial statements

As UBS AG prepares consolidated financial statements in accordance with IFRS, UBS AG is exempt from various disclosures in the standalone financial statements. The dispensations include the management report, the statement of cash flows and various note disclosures, as well as the publication of full interim financial statements. As a Swiss issuer of debt, in order to validly issue debt throughout the year, UBS AG discloses interim mid-year financial information as per the requirements of Article 1156 in conjunction with Article 652a of the Swiss Code of Obligations, including an income statement, a balance sheet and a note on the basis of accounting.

 

 

8


 

 

Note 2  Accounting policies (continued) 

b) Changes in accounting policies

Change in functional and presentation currency

As of 1 October 2018 (the conversion date) UBS AG Head office, which comprises the entity’s Swiss operations except for its Swiss Real Estate operation, prospectively changed its functional currency from Swiss francs to US dollars. UBS AG London Branch prospectively changed its functional currency from British pounds to US dollars.

UBS AG also prospectively changed the presentation currency of its financial statements from Swiss francs to US dollars. The interim Swiss franc financial information of UBS AG as of 30 September 2018, including the balance sheet, year-to-date income statement, year-to-date statement of changes in equity, including all components, and all related notes, was translated into US dollars at the closing rate on 30 September 2018 (the conversion date rate), except for Notes 26a and 26b. This conversion had no effect on the income statement or equity.

As the primary presentation currency of the financial statements of UBS AG is US dollars, amounts in Swiss francs are additionally presented for each component of the financial statements. UBS AG applies the modified closing rate method for translating the US dollar amounts into Swiss francs: assets and liabilities are translated at the closing rate, equity positions at historic rates and income and expense items at the weighted average rate for the period. All resulting currency translation effects are recognized separately in Voluntary earnings reserve, amounting to a positive currency translation effect of CHF 98 million as of 31 December 2018. Under Swiss GAAP, prior period financial statements are not restated. All comparative prior period information as of and for the year ended 31 December 2017 is translated at the closing rate as of 31 December 2017.

c) Other events affecting comparability

Asset transfer from UBS Limited to UBS AG

In the fourth quarter of 2018, the previously announced business transfer in connection with the UK withdrawal from the EU was largely completed. Clients and other counterparties of UBS Limited who can be serviced by UBS AG, London Branch were generally migrated in 2018.

This business transfer included a transfer of net assets against cash consideration of USD 0.7 billion (CHF 0.7 billion), with no effect on the equity or profit or loss of UBS AG. Total assets increased by USD 4.4 billion (CHF 4.3 billion) (primarily Due from banks, Due from customers, Trading portfolio assets and Derivative financial instruments), and total liabilities increased by USD 3.7 billion (CHF 3.6 billion) (primarily Due to Banks, Due to customers, Trading portfolio liabilities and Derivative financial instruments).

The business transfer also resulted in a decrease of contingent liabilities in connection with the guarantee issued by UBS AG for the benefit of UBS Limited of USD 4.5 billion (CHF 4.4 billion).

®    Refer to Note 27 for information on the combined UK business transfer and cross-border merger of UBS Limited into UBS Europe SE


Increase of stake in UBS Securities China

In December 2018, UBS AG increased its shareholding in UBS Securities China from 24.99% to 51% by completing a share purchase from existing shareholders. As a consequence of market changes, an impairment charge of USD 276 million (CHF 271 million) has been booked against the increased cost of the investment arising from the acquisition.

 

Transfers of shared services functions to UBS Business Solutions AG and UBS Business Solutions US LLC

The comparative figures presented as of and for the year ended 31 December 2017 include the financial effect of shared services functions in Switzerland, the UK and the US. These functions were substantially transferred to Group service companies in 2017. The transfer in Switzerland to UBS Business Solutions AG, the main Group service company and a wholly owned subsidiary of UBS Group AG, was executed in the second quarter of 2017. For UK shared services, a similar transfer to the UK branch of UBS Business Solutions AG was completed in the fourth quarter of 2017. In the second quarter of 2017, UBS also completed the transfer of the shared services functions in the US, which started in 2016, to its US service company, UBS Business Solutions US LLC, a wholly owned subsidiary of UBS Americas Holding LLC.

®    Refer to Note 2b of the UBS AG standalone Annual Report 2017 for more information

 

  

9  


UBS AG standalone financial statements (audited)

Note 3a  Net trading income by business

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Investment Bank

 

 4,079 

 3,397 

 

 4,024 

 3,311 

of which: Corporate Client Solutions

 

 634 

 553 

 

 621 

 539 

of which: Investor Client Services

 

 3,446 

 2,844 

 

 3,403 

 2,772 

Other business divisions and Corporate Center

 

 364 

 (123) 

 

 358 

 (120) 

Total net trading income

 

 4,443 

 3,274 

 

 4,381 

 3,192 

 

 

Note 3b  Net trading income by underlying risk category

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Interest rate instruments (including funds)

 

 499 

 293 

 

 483 

 286 

Foreign exchange instruments

 

 1,164 

 573 

 

 1,145 

 559 

Equity instruments (including funds)

 

 2,374 

 2,098 

 

 2,353 

 2,045 

Credit instruments

 

 343 

 239 

 

 334 

 233 

Precious metals / commodities

 

 63 

 71 

 

 66 

 69 

Total net trading income

 

 4,443 

 3,274 

 

 4,381 

 3,192 

of which: net gains / (losses) from financial liabilities designated at fair value 1

 

 6,999 

 (4,073) 

 

 6,956 

 (3,971) 

1 Excludes fair value changes of hedges related to financial liabilities designated at fair value and foreign currency effects arising from translating foreign currency transactions into the respective functional currency, both of which are reported within Net trading income.

 

 

Note 4  Dividend income from investments in subsidiaries

 

UBS AG received dividends from UBS Switzerland AG of USD 2,396 million (CHF 2,351 million) in 2018, compared with USD 196 million (CHF 191 million) in 2017, resulting in an increase in the total Dividend income from investments in subsidiaries and other participations

 

 

Note 5  Sundry ordinary income and expenses

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Income from hard cost transfers 1

 

 1,746 

 2,667 

 

 1,722 

 2,600 

Other

 

 33 

 92 

 

 32 

 90 

Total sundry ordinary income

 

 1,779 

 2,760 

 

 1,754 

 2,690 

Expenses from hard revenue transfers

 

 (516) 

 (383) 

 

 (509) 

 (373) 

Other

 

 (83) 

 (115) 

 

 (81) 

 (112) 

Total sundry ordinary expenses

 

 (599) 

 (498) 

 

 (590) 

 (485) 

1 Represents income received from UBS Group AG and subsidiaries in the UBS Group for services provided by UBS AG. Services provided by UBS AG primarily related to Corporate Center functions. The decrease mainly arose as UBS AG is no longer charging other Group entities for the shared services functions that were transferred in 2017. Refer to Note 2c for more information.

 

10


 

 

Note 6  Personnel expenses

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Salaries

 

 1,748 

 2,132 

 

 1,722 

 2,078 

Variable compensation – performance awards

 

 1,218 

 1,438 

 

 1,199 

 1,401 

Variable compensation – other

 

 74 

 92 

 

 73 

 90 

Contractors

 

 70 

 207 

 

 69 

 202 

Social security

 

 199 

 274 

 

 196 

 267 

Pension and other post-employment benefit plans

 

 9 

 (83) 

 

 12 

 (81) 

of which: value adjustments for economic benefits or obligations from pension funds 1

 

 (131) 

 (306) 

 

 (126) 

 (298) 

Other personnel expenses

 

 139 

 175 

 

 136 

 170 

Total personnel expenses 2

 

 3,456 

 4,234 

 

 3,407 

 4,128 

1 Reflects the remeasurement of the defined benefit obligation and return on plan assets excluding amounts included in interest income for the non-Swiss defined benefit plans, for which IAS 19 is applied.    2 The decrease is partly due to the transfer of shared services functions from UBS AG to UBS Business Solutions AG and UBS Business Solutions US LLC in 2017. Refer to Note 2c for more information.

 

Note 7  General and administrative expenses

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Occupancy

 

 510 

 537 

 

 503 

 524 

Rent and maintenance of IT equipment

 

 38 

 210 

 

 37 

 205 

Communication and market data services

 

 150 

 219 

 

 147 

 213 

Administration

 

 2,857 

 2,313 

 

 2,817 

 2,255 

of which: hard cost transfers paid 1

 

 2,543 

 2,004 

 

 2,507 

 1,954 

Marketing and public relations

 

 80 

 121 

 

 79 

 118 

Travel and entertainment

 

 115 

 135 

 

 113 

 132 

Fees to audit firms

 

 28 

 33 

 

 28 

 32 

of which: financial and regulatory audits

 

 24 

 27 

 

 24 

 26 

of which: audit-related services

 

 4 

 6 

 

 4 

 6 

Other professional fees

 

 285 

 448 

 

 281 

 436 

Outsourcing of IT and other services

 

 149 

 654 

 

 147 

 638 

Total general and administrative expenses 2

 

 4,212 

 4,671 

 

 4,151 

 4,553 

1 Represents expenses for services provided by UBS Group AG and subsidiaries in the UBS Group to UBS AG.    2 The increase in hard cost transfers paid and the decrease in direct costs are mainly due to the transfer of shared services functions from UBS AG to UBS Business Solutions AG and UBS Business Solutions US LLC in 2017. Refer to Note 2c for more information.

 

11  


UBS AG standalone financial statements (audited)

 

Note 8  Extraordinary income and expenses

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Gains from disposals of subsidiaries and other participations

 

 30 

 199 

 

 29 

 194 

Reversal of impairments and provisions of subsidiaries and other participations

 

 63 

 186 

 

 62 

 181 

Net gains from disposals of properties

 

 40 

 0 

 

 39 

 0 

Other extraordinary income

 

 37 

 6 

 

 36 

 6 

Total extraordinary income

 

 170 

 391 

 

 167 

 382 

Total extraordinary expenses

 

 0 

 4 

 

 0 

 4 

 

In 2018, UBS recorded gains of USD 31 million (CHF 30 million) on the sale of real estate and USD 25 million (CHF 25 million) on the sale of subsidiaries and businesses, both related to the sale of Widder Hotel.

In 2017, UBS recorded a gain of USD 110 million (CHF 107 million) on the sale of its remaining investment in IHS Markit. Also in 2017, UBS completed the sale of a life insurance subsidiary, which resulted in a gain of USD 58 million (CHF 57 million).

 

Note 9  Taxes

 

 

USD million

 

CHF million

 

 

For the year ended

 

For the year ended

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

Income tax expense / (benefit)

 

 (708) 

 (121) 

 

 (696) 

 (118) 

of which: current

 

 (715) 

 (151) 

 

 (703) 

 (148) 

of which: deferred

 

 7 

 30 

 

 7 

 29 

Capital tax

 

 45 

 49 

 

 45 

 48 

Total tax expense / (benefit)

 

 (663) 

 (72) 

 

 (651) 

 (70) 

 

There was an income tax benefit of USD 708 million (CHF 696 million) for the year ended 31 December 2018, compared with an income tax benefit of USD 121 million (CHF 118 million) for the year ended 31 December 2017. The income tax benefit for the year ended 31 December 2018 reflected a benefit of USD 26 million (CHF 26 million) (2017: USD 154 million / CHF 150 million) from the utilization of tax losses carried forward in UBS AG’s main tax jurisdictions and also a benefit of USD 809 million (CHF 795 million) (2017: USD 250 million / CHF 244 million) as compensation received from other Group companies in respect of tax losses that were utilized by those companies. The benefit of USD 809 million was mainly driven by a one-time election by UBS Securities LLC to capitalize real estate costs for US tax purposes resulting in a significant amount of taxable income, which was offset by the utilization of UBS AG’s tax losses. UBS AG agreed to waive the payment of the related benefit resulting in a capital contribution by UBS AG into UBS Americas Holding LLC.

For the year ended 31 December 2018, the average tax rate, defined as income tax expense divided by the sum of operating profit and extraordinary income minus extraordinary expenses and capital tax, was negative 27.0% (2017: negative 14.9%).

 

12


 

 

Note 10  Securities financing transactions

 

 

USD billion

 

CHF billion

 

 

31.12.18

31.12.17

 

31.12.18

31.12.17

 

 

 

 

 

 

 

On-balance sheet

 

 

 

 

 

 

Receivables from securities financing transactions, gross

 

 139.7 

 115.6 

 

 137.4 

 112.7 

Netting of securities financing transactions

 

 (61.8) 

 (52.7) 

 

 (60.8) 

 (51.4) 

Receivables from securities financing transactions, net

 

 77.9 

 62.9 

 

 76.6 

 61.4 

Payables from securities financing transactions, gross

 

 105.8 

 102.3 

 

 104.1 

 99.7 

Netting of securities financing transactions

 

 (61.8) 

 (52.7) 

 

 (60.8) 

 (51.4) 

Payables from securities financing transactions, net

 

 44.0 

 49.6 

 

 43.3 

 48.3 

Assets pledged as collateral in connection with securities financing transactions

 

 49.8 

 59.7 

 

 49.0 

 58.2 

of which: trading portfolio assets

 

 49.7 

 59.1 

 

 48.9 

 57.6 

of which: assets that may be sold or repledged by counterparties

 

 48.1 

 58.2 

 

 47.3 

 56.7 

of which: financial investments

 

 0.1 

 0.5 

 

 0.1 

 0.5 

of which: assets that may be sold or repledged by counterparties

 

 0.1 

 0.5 

 

 0.1 

 0.5 

 

 

 

 

 

 

 

Off-balance sheet

 

 

 

 

 

 

Fair value of assets received as collateral in connection with securities financing transactions

 

 302.5 

 294.4 

 

 297.5 

 287.0 

of which: repledged

 

 224.9 

 220.1 

 

 221.1 

 214.6 

of which: sold in connection with short sale transactions

 

 23.5 

 25.0 

 

 23.1 

 24.4 

 

Note 11a  Collateral for loans and off-balance sheet transactions

 

 

31.12.18

 

31.12.17

 

 

Secured

 

Unsecured

 

Total

 

Secured

 

Unsecured

 

Total

 

 

Secured by collateral

 

Secured by

other credit

enhancements 2

 

 

 

 

 

Secured by collateral

 

Secured by

other credit

enhancements 2

 

 

 

 

USD million

 

Real estate

 

Other

collateral 1

 

 

 

 

 

 

Real estate

 

Other

collateral 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On-balance sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due from customers, gross 3

 

 0 

 

 81,070 

 

 81 

 

 36,404 4

 

 117,555 

 

 0 

 

 91,948 

 

 175 

 

 40,963 4

 

 133,087 

Mortgage loans, gross

 

 4,737 

 

 0 

 

 0 

 

 0 

 

 4,737 

 

 4,985 

 

 0 

 

 0 

 

 0 

 

 4,985 

of which: residential mortgages

 

 4,580 

 

 

 

 

 

 

 

 4,580 

 

 4,890 

 

 

 

 

 

 

 

 4,890 

of which: office and business premises mortgages

 

 59 

 

 

 

 

 

 

 

 59 

 

 34 

 

 

 

 

 

 

 

 34 

of which: industrial premises mortgages

 

 29 

 

 

 

 

 

 

 

 29 

 

 29 

 

 

 

 

 

 

 

 29 

of which: other mortgages

 

 69 

 

 

 

 

 

 

 

 69 

 

 32 

 

 

 

 

 

 

 

 32 

Total on-balance sheet, gross

 

 4,737 

 

 81,070 

 

 81 

 

 36,404 

 

 122,292 

 

 4,985 

 

 91,948 

 

 175 

 

 40,963 

 

 138,071 

Allowances

 

 (10) 

 

 (5) 

 

 0 

 

 (133) 

 

 (149) 

 

 (6) 

 

 (27) 

 

 0 

 

 (160) 

 

 (193) 

Total on-balance sheet, net

 

 4,727 

 

 81,065 

 

 81 

 

 36,271 

 

 122,144 

 

 4,978 

 

 91,921 

 

 175 

 

 40,804 

 

 137,878 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Off-balance sheet

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

 

 

Contingent liabilities, gross

 

 0 

 

 2,954 

 

 1,779 

 

 11,286 

 

 16,019 

 

 13 

 

 1,967 

 

 1,929 

 

 18,472 

 

 22,380 

Irrevocable commitments, gross

 

 557 

 

 9,525 

 

 1,071 

 

 14,511 

 

 25,664 

 

 376 

 

 10,637 

 

 1,970 

 

 21,384 

 

 34,367 

Forward starting reverse repurchase and securities borrowing transactions

 

 0 

 

 4,745 

 

 0 

 

 33 

 

 4,778 

 

 0 

 

 7,800 

 

 0 

 

 240 

 

 8,040 

Liabilities for calls on shares and other equities

 

 0 

 

 0 

 

 0 

 

 5 

 

 5 

 

 0 

 

 0 

 

 0 

 

 5 

 

 5 

Total off-balance sheet

 

 557 

 

 17,225 

 

 2,850 

 

 25,835 

 

 46,466 

 

 389 

 

 20,404 

 

 3,898 

 

 40,100 

 

 64,791 

1 Mainly comprised of cash and securities.    2 Includes credit default swaps and guarantees.    3 Includes prime brokerage margin lending receivables and prime brokerage receivables relating to securities financing transactions.    4 Primarily comprised of amounts due from subsidiaries.

 

13  


UBS AG standalone financial statements (audited)

 

Note 11a  Collateral for loans and off-balance sheet transactions (continued)

 

 

31.12.18

 

31.12.17

 

 

Secured

 

Unsecured

 

Total

 

Secured

 

Unsecured

 

Total

 

 

Secured by collateral

 

Secured by

other credit

enhancements 2

 

 

 

 

 

Secured by collateral

 

Secured by

other credit

enhancements 2

 

 

 

 

CHF million

 

Real estate

 

Other

collateral 1

 

 

 

 

 

 

Real estate

 

Other

collateral 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On-balance sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due from customers, gross 3

 

 0 

 

 79,711 

 

 79 

 

 35,794 4

 

 115,584 

 

 0 

 

 89,630 

 

 171 

 

 39,931 4

 

 129,731 

Mortgage loans, gross

 

 4,658 

 

 0 

 

 0 

 

 0 

 

 4,658 

 

 4,859 

 

 0 

 

 0 

 

 0 

 

 4,859 

of which: residential mortgages

 

 4,503 

 

 

 

 

 

 

 

 4,503 

 

 4,767 

 

 

 

 

 

 

 

 4,767 

of which: office and business premises mortgages

 

 58 

 

 

 

 

 

 

 

 58 

 

 33 

 

 

 

 

 

 

 

 33 

of which: industrial premises mortgages

 

 29 

 

 

 

 

 

 

 

 29 

 

 28 

 

 

 

 

 

 

 

 28 

of which: other mortgages

 

 68 

 

 

 

 

 

 

 

 68 

 

 31 

 

 

 

 

 

 

 

 31 

Total on-balance sheet, gross

 

 4,658 

 

 79,711 

 

 79 

 

 35,794 

 

 120,242 

 

 4,859 

 

 89,630 

 

 171 

 

 39,931 

 

 134,590 

Allowances

 

 (10) 

 

 (5) 

 

 0 

 

 (131) 

 

 (146) 

 

 (6) 

 

 (26) 

 

 0 

 

 (156) 

 

 (188) 

Total on-balance sheet, net

 

 4,648 

 

 79,706 

 

 79 

 

 35,663 

 

 120,096 

 

 4,853 

 

 89,603 

 

 171 

 

 39,775 

 

 134,402 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Off-balance sheet

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Contingent liabilities, gross

 

 0 

 

 2,905 

 

 1,749 

 

 11,096 

 

 15,750 

 

 12 

 

 1,917 

 

 1,880 

 

 18,006 

 

 21,815 

Irrevocable commitments, gross

 

 548 

 

 9,366 

 

 1,053 

 

 14,267 

 

 25,234 

 

 367 

 

 10,369 

 

 1,920 

 

 20,845 

 

 33,500 

Forward starting reverse repurchase and securities borrowing transactions

 

 0 

 

 4,666 

 

 0 

 

 32 

 

 4,698 

 

 0 

 

 7,603 

 

 0 

 

 234 

 

 7,837 

Liabilities for calls on shares and other equities

 

 0 

 

 0 

 

 0 

 

 5 

 

 5 

 

 0 

 

 0 

 

 0 

 

 5 

 

 5 

Total off-balance sheet

 

 548 

 

 16,936 

 

 2,802 

 

 25,401 

 

 45,687 

 

 379 

 

 19,889 

 

 3,800 

 

 39,089 

 

 63,158 

1 Mainly comprised of cash and securities.    2 Includes credit default swaps and guarantees.    3 Includes prime brokerage margin lending receivables and prime brokerage receivables relating to securities financing transactions.    4 Primarily comprised of amounts due from subsidiaries.

 

 

Note 11b  Impaired financial instruments

 

 

31.12.18

 

31.12.17

USD million

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

Amounts due from customers

 

 381 

 138 

 155 

 87 

 

 268 

 192 

 65 

 10 

Mortgage loans

 

 65 

 10 

 55 

 0 

 

 2 

 1 

 1 

 0 

Other assets

 

 365 

 24 

 0 

 341 

 

 359 

 18 

 0 

 342 

Guarantees and loan commitments

 

 14 

 0 

 14 

 0 

 

 29 

 0 

 0 

 29 

Total impaired financial instruments

 

 825 

 173 

 224 

 428 

 

 658 

 211 

 66 

 381 

 

 

 

 

31.12.18

 

31.12.17

CHF million

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

Amounts due from customers

 

 374 

 136 

 153 

 86 

 

 261 

 187 

 63 

 10 

Mortgage loans

 

 64 

 10 

 54 

 0 

 

 2 

 1 

 1 

 0 

Other assets

 

 359