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.
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).
|
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
|
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.
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
|
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.
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
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
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.
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
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.
|
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.
|
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).
|
|
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%).
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.
|
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
|
23
|
0
|
335
|
|
350
|
17
|
0
|
333
|
Guarantees and loan commitments
|
|
14
|
0
|
14
|
0
|
|
28
|
0
|
0
|
28
|
Total impaired financial instruments
|
|
811
|
170
|
221
|
421
|
|
641
|
205
|
64
|
371
|
|
USD million
|
Specific allowances for amounts due from customers and mortgage
loans
|
Allowances for other assets
|
Total allowances
|
Balance as of 1 January 2018
|
193
|
18
|
211
|
Reconciliation of USD balance as of 1 January 2018 to reflect
CHF / USD rate at conversion date 1 October 2018
|
(1)
|
0
|
(1)
|
Balance as of 31 December 2017, translated at conversion date
rate 1 October 2018
1
|
192
|
18
|
209
|
Increase recognized in the income statement
2
|
52
|
16
|
69
|
Release recognized in the income statement
2
|
(32)
|
(8)
|
(39)
|
Write-offs
2
|
(5)
|
(2)
|
(7)
|
Recoveries and past due interest
2
|
25
|
0
|
24
|
Reclassifications / other
2
|
(26)
|
0
|
(26)
|
Foreign currency translation
2
|
(2)
|
0
|
(2)
|
Balance as of 1 October 2018
|
203
|
24
|
228
|
Increase recognized in the income statement
|
25
|
0
|
25
|
Release recognized in the income statement
|
(2)
|
0
|
(2)
|
Write-offs
|
(79)
|
0
|
(79)
|
Recoveries and past due interest
|
(16)
|
0
|
(16)
|
Reclassifications / other
|
20
|
0
|
20
|
Foreign currency translation
|
(2)
|
0
|
(2)
|
Balance as of 31 December 2018
|
149
|
24
|
173
|
1 Conversion
date rate as of 1 October 2018 represents the closing exchange rate as of 30
September 2018 (CHF / USD 1.02). 2 Movements from 1 January 2018 to 30
September 2018 translated at conversion date rate.
|
CHF million
|
Specific allowances for amounts due from customers and mortgage
loans
|
Allowances for other assets
|
Total allowances
|
Balance as of 1 January 2018
|
188
|
17
|
205
|
Increase recognized in the income statement
|
51
|
16
|
67
|
Release recognized in the income statement
|
(31)
|
(7)
|
(38)
|
Write-offs
|
(5)
|
(2)
|
(7)
|
Recoveries and past due interest
|
24
|
0
|
24
|
Reclassifications / other
|
(26)
|
0
|
(26)
|
Foreign currency translation
|
(2)
|
0
|
(2)
|
Balance as of 1 October 2018
|
200
|
24
|
223
|
Increase recognized in the income statement
|
26
|
0
|
26
|
Release recognized in the income statement
|
(2)
|
0
|
(2)
|
Write-offs
|
(78)
|
0
|
(78)
|
Recoveries and past due interest
|
(16)
|
0
|
(16)
|
Reclassifications / other
|
20
|
0
|
20
|
Foreign currency translation
|
(3)
|
0
|
(3)
|
Balance as of 31 December 2018
|
146
|
23
|
170
|
UBS
AG standalone financial statements (audited)
USD million
|
Default risk related to loan commitments and guarantees
|
Operational risks
|
Litigation, regulatory and similar matters
3
|
Restructuring
|
Real estate
4
|
Employee benefits
|
Deferred taxes
|
Other
|
Total provisions
|
Balance as of 1 January 2018
|
0
|
14
|
828
|
62
|
77
|
32
|
45
|
67
|
1,125
|
Reconciliation of USD balance as of 1 January 2018 to reflect
CHF / USD rate at conversion date 1 October 2018
|
0
|
0
|
(6)
|
0
|
(1)
|
0
|
0
|
0
|
(8)
|
Balance as of 31 December 2017, translated at conversion date
rate 1 October 2018
1
|
0
|
13
|
822
|
62
|
77
|
32
|
45
|
67
|
1,118
|
Increase recognized in the income statement
2
|
5
|
2
|
78
|
28
|
1
|
3
|
5
|
22
|
145
|
Release recognized in the income statement
2
|
(6)
|
(2)
|
(103)
|
(11)
|
(1)
|
(5)
|
0
|
(4)
|
(132)
|
Provisions used in conformity with designated purpose
2
|
0
|
(2)
|
(54)
|
(42)
|
(7)
|
0
|
0
|
(16)
|
(121)
|
Recoveries
2
|
0
|
0
|
5
|
0
|
0
|
0
|
0
|
0
|
5
|
Reclassifications / other
2
|
0
|
0
|
0
|
0
|
(1)
|
0
|
0
|
0
|
(1)
|
Foreign currency translation
2
|
0
|
0
|
(7)
|
(1)
|
0
|
(1)
|
0
|
0
|
(9)
|
Balance as of 1 October 2018
|
0
|
11
|
742
|
36
|
68
|
29
|
50
|
68
|
1,005
|
Increase recognized in the income statement
|
0
|
1
|
503
|
31
|
3
|
1
|
2
|
7
|
549
|
Release recognized in the income statement
|
0
|
0
|
(93)
|
(4)
|
0
|
(1)
|
0
|
(9)
|
(108)
|
Provisions used in conformity with designated purpose
|
0
|
(1)
|
(2)
|
(10)
|
(2)
|
0
|
0
|
(12)
|
(27)
|
Recoveries
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Reclassifications / other
|
0
|
0
|
0
|
(4)
|
2
|
0
|
0
|
0
|
(3)
|
Foreign currency translation
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(1)
|
Balance as of 31 December 2018
|
0
|
11
|
1,149
|
50
|
71
|
29
|
52
|
54
|
1,416
|
1 Conversion
date rate as of 1 October 2018 represents the closing exchange rate as of 30
September 2018 (CHF / USD 1.02). 2 Movements from 1 January 2018 to 30
September 2018 translated at conversion date rate. 3 Includes provisions
for litigation resulting from security risks. 4 Includes provisions for
onerous lease contracts of USD 12 million as of 31 December 2018 (31 December
2017: USD 12 million) and reinstatement cost provisions for leasehold
improvements of USD 59 million as of 31 December 2018 (31 December 2017:
USD 65 million).
|
CHF million
|
Default risk related to loan commitments and guarantees
|
Operational risks
|
Litigation, regulatory and similar matters
1
|
Restructuring
|
Real estate
2
|
Employee benefits
|
Deferred taxes
|
Other
|
Total provisions
|
Balance as of 1 January 2018
|
0
|
13
|
807
|
61
|
75
|
31
|
44
|
66
|
1,097
|
Increase recognized in the income statement
|
5
|
2
|
77
|
28
|
1
|
3
|
5
|
21
|
142
|
Release recognized in the income statement
|
(5)
|
(2)
|
(101)
|
(11)
|
(1)
|
(5)
|
0
|
(4)
|
(129)
|
Provisions used in conformity with designated purpose
|
0
|
(2)
|
(53)
|
(41)
|
(7)
|
0
|
0
|
(16)
|
(118)
|
Recoveries
|
0
|
0
|
5
|
0
|
0
|
0
|
0
|
0
|
5
|
Reclassifications / other
|
0
|
0
|
0
|
0
|
(1)
|
0
|
0
|
0
|
(1)
|
Foreign currency translation
|
0
|
0
|
(6)
|
(1)
|
0
|
(1)
|
0
|
0
|
(9)
|
Balance as of 1 October 2018
|
0
|
11
|
729
|
35
|
67
|
29
|
49
|
67
|
986
|
Increase recognized in the income statement
|
0
|
1
|
495
|
31
|
3
|
1
|
2
|
7
|
540
|
Release recognized in the income statement
|
0
|
0
|
(90)
|
(4)
|
0
|
(1)
|
0
|
(9)
|
(105)
|
Provisions used in conformity with designated purpose
|
0
|
(1)
|
0
|
(10)
|
(2)
|
0
|
0
|
(12)
|
(24)
|
Recoveries
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Reclassifications / other
|
0
|
0
|
0
|
(4)
|
1
|
0
|
0
|
0
|
(3)
|
Foreign currency translation
|
0
|
0
|
(3)
|
0
|
0
|
0
|
0
|
(1)
|
(4)
|
Balance as of 31 December 2018
|
0
|
11
|
1,130
|
49
|
70
|
29
|
51
|
53
|
1,392
|
1 Includes
provisions for litigation resulting from security risks. 2 Includes
provisions for onerous lease contracts of CHF 12 million as of 31 December
2018 (31 December 2017: CHF 12 million) and reinstatement cost provisions for
leasehold improvements of CHF 58 million as of 31 December 2018 (31 December
2017: CHF 63 million).
|
Note
13 Trading
portfolio and other financial instruments measured at fair value
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Trading portfolio assets
|
|
95,612
|
107,355
|
|
94,009
|
104,649
|
of which: debt instruments
1
|
|
17,802
|
19,235
|
|
17,503
|
18,750
|
of which: listed
|
|
12,835
|
13,676
|
|
12,620
|
13,331
|
of which: equity instruments
|
|
75,079
|
85,109
|
|
73,820
|
82,963
|
of which: precious metals and other physical commodities
|
|
2,732
|
3,012
|
|
2,686
|
2,936
|
Total assets measured at fair value
|
|
95,612
|
107,355
|
|
94,009
|
104,649
|
of which: fair value derived using a valuation model
|
|
13,099
|
12,915
|
|
12,879
|
12,590
|
of which: securities eligible for repurchase transactions in
accordance with liquidity regulations
2
|
|
10,434
|
11,620
|
|
10,259
|
11,327
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Trading portfolio liabilities
|
|
23,453
|
24,988
|
|
23,060
|
24,358
|
of which: debt instruments
1
|
|
3,474
|
4,896
|
|
3,416
|
4,773
|
of which: listed
|
|
3,193
|
4,615
|
|
3,140
|
4,498
|
of which: equity instruments
|
|
19,979
|
20,091
|
|
19,644
|
19,585
|
Financial liabilities designated at fair value
3
|
|
56,226
|
52,495
|
|
55,283
|
51,171
|
Total liabilities measured at fair value
|
|
79,679
|
77,482
|
|
78,342
|
75,529
|
of which: fair value derived using a valuation model
|
|
59,645
|
55,274
|
|
58,645
|
53,880
|
1 Includes money
market paper. 2 Consists of high-quality liquid debt securities that are
eligible for repurchase transactions at the Swiss National Bank or other
central banks. 3 Refer to Note 20 for more information.
|
UBS
AG standalone financial statements (audited)
Note
14 Derivative instruments
1
|
|
31.12.18
|
|
31.12.17
|
USD billion
|
|
PRV
3
|
NRV
4
|
|
Total notional values
|
|
PRV
3
|
NRV
4
|
|
Total notional values
|
Interest rate contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
2
|
|
0.1
|
0.3
|
|
2,890
|
|
0.2
|
0.3
|
|
2,418
|
Swaps
|
|
30.8
|
24.7
|
|
8,077
|
|
37.9
|
30.3
|
|
8,741
|
of which: designated in hedge accounting relationships
|
|
0.0
|
0.0
|
|
102
|
|
0.1
|
0.0
|
|
99
|
Futures
|
|
0.0
|
0.0
|
|
510
|
|
0.0
|
0.0
|
|
461
|
Over-the-counter (OTC) options
|
|
7.6
|
9.0
|
|
1,113
|
|
8.7
|
10.1
|
|
1,134
|
Exchange-traded options
|
|
0.0
|
0.0
|
|
254
|
|
0.0
|
0.0
|
|
218
|
Total
|
|
38.5
|
34.0
|
|
12,843
|
|
46.8
|
40.7
|
|
12,972
|
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
20.2
|
20.9
|
|
1,441
|
|
17.6
|
18.3
|
|
1,407
|
Interest and currency swaps
|
|
25.0
|
24.7
|
|
2,533
|
|
24.6
|
22.7
|
|
2,479
|
Futures
|
|
0.0
|
0.0
|
|
0
|
|
0.0
|
0.0
|
|
0
|
Over-the-counter (OTC) options
|
|
8.4
|
7.8
|
|
1,192
|
|
6.3
|
6.0
|
|
846
|
Exchange-traded options
|
|
0.1
|
0.1
|
|
9
|
|
0.0
|
0.1
|
|
11
|
Total
|
|
53.7
|
53.6
|
|
5,176
|
|
48.5
|
47.0
|
|
4,743
|
Equity / index contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
0.3
|
0.2
|
|
28
|
|
0.1
|
0.1
|
|
19
|
Swaps
|
|
4.8
|
5.6
|
|
171
|
|
4.0
|
5.7
|
|
173
|
Futures
|
|
0.0
|
0.0
|
|
62
|
|
0.0
|
0.0
|
|
43
|
Over-the-counter (OTC) options
|
|
5.6
|
7.4
|
|
246
|
|
6.0
|
8.4
|
|
226
|
Exchange-traded options
|
|
12.9
|
14.0
|
|
516
|
|
7.6
|
7.6
|
|
500
|
Total
|
|
23.7
|
27.3
|
|
1,024
|
|
17.7
|
21.8
|
|
962
|
Credit derivative contracts
|
|
|
|
|
|
|
|
|
|
|
Credit default swaps
|
|
1.7
|
2.1
|
|
141
|
|
2.6
|
2.9
|
|
185
|
Total return swaps
|
|
0.3
|
0.8
|
|
7
|
|
0.2
|
0.9
|
|
7
|
Other
|
|
0.0
|
0.0
|
|
4
|
|
0.0
|
0.0
|
|
4
|
Total
|
|
2.0
|
2.9
|
|
152
|
|
2.8
|
3.8
|
|
197
|
Commodity, precious metals and other contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
0.1
|
0.1
|
|
7
|
|
0.1
|
0.1
|
|
7
|
Swaps
|
|
0.7
|
0.4
|
|
25
|
|
0.2
|
0.4
|
|
22
|
Futures
|
|
0.0
|
0.0
|
|
8
|
|
0.0
|
0.0
|
|
8
|
Over-the-counter (OTC) options
|
|
0.4
|
0.3
|
|
35
|
|
0.3
|
0.1
|
|
20
|
Exchange-traded options
|
|
0.4
|
0.7
|
|
19
|
|
0.6
|
0.5
|
|
24
|
Total
|
|
1.7
|
1.4
|
|
94
|
|
1.2
|
1.1
|
|
81
|
Total before netting
|
|
119.6
|
119.1
|
|
19,289
|
|
117.0
|
114.4
|
|
18,955
|
of which: trading derivatives
|
|
119.6
|
119.1
|
|
|
|
116.9
|
114.4
|
|
|
of which: fair value derived using a valuation model
|
|
118.9
|
118.5
|
|
|
|
116.6
|
114.0
|
|
|
of which: derivatives designated in hedge accounting
relationships
|
|
0.0
|
0.0
|
|
|
|
0.1
|
0.0
|
|
|
of which: fair value derived using a valuation model
|
|
0.0
|
0.0
|
|
|
|
0.1
|
0.0
|
|
|
Netting with cash collateral payables / receivables
|
|
(14.9)
|
(12.3)
|
|
|
|
(16.1)
|
(9.9)
|
|
|
Replacement value netting
|
|
(89.6)
|
(89.6)
|
|
|
|
(85.7)
|
(85.7)
|
|
|
Total after netting
|
|
15.1
|
17.3
|
|
|
|
15.2
|
18.8
|
|
|
of which: with central clearing counterparties
|
|
0.5
|
0.6
|
|
|
|
0.0
|
0.2
|
|
|
of which: with bank and broker-dealer counterparties
|
|
6.0
|
6.3
|
|
|
|
5.7
|
6.6
|
|
|
of which: other client counterparties
|
|
8.6
|
10.4
|
|
|
|
9.5
|
12.0
|
|
|
1 Bifurcated
embedded derivatives are presented on the same balance sheet lines as their
host contracts and are excluded from this table. The replacement values and
related notional values of these derivatives were not material for the
periods presented. 2 Includes forward rate agreements. 3 PRV: positive
replacement values. 4 NRV: negative replacement values.
|
Note
14 Derivative instruments
(continued)
1
|
|
31.12.18
|
|
31.12.17
|
CHF billion
|
|
PRV
3
|
NRV
4
|
|
Total notional values
|
|
PRV
3
|
NRV
4
|
|
Total notional values
|
Interest rate contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
2
|
|
0.1
|
0.3
|
|
2,842
|
|
0.2
|
0.3
|
|
2,357
|
Swaps
|
|
30.2
|
24.3
|
|
7,941
|
|
36.9
|
29.5
|
|
8,520
|
of which: designated in hedge accounting relationships
|
|
0.0
|
0.0
|
|
100
|
|
0.1
|
0.0
|
|
96
|
Futures
|
|
0.0
|
0.0
|
|
501
|
|
0.0
|
0.0
|
|
449
|
Over-the-counter (OTC) options
|
|
7.5
|
8.9
|
|
1,094
|
|
8.5
|
9.8
|
|
1,106
|
Exchange-traded options
|
|
0.0
|
0.0
|
|
249
|
|
0.0
|
0.0
|
|
212
|
Total
|
|
37.9
|
33.5
|
|
12,628
|
|
45.6
|
39.7
|
|
12,645
|
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
19.9
|
20.6
|
|
1,417
|
|
17.2
|
17.9
|
|
1,371
|
Interest and currency swaps
|
|
24.6
|
24.3
|
|
2,490
|
|
23.9
|
22.1
|
|
2,417
|
Futures
|
|
0.0
|
0.0
|
|
0
|
|
0.0
|
0.0
|
|
0
|
Over-the-counter (OTC) options
|
|
8.2
|
7.7
|
|
1,172
|
|
6.2
|
5.8
|
|
825
|
Exchange-traded options
|
|
0.1
|
0.1
|
|
9
|
|
0.0
|
0.1
|
|
10
|
Total
|
|
52.8
|
52.7
|
|
5,089
|
|
47.3
|
45.9
|
|
4,624
|
Equity / index contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
0.3
|
0.2
|
|
28
|
|
0.1
|
0.1
|
|
19
|
Swaps
|
|
4.7
|
5.5
|
|
168
|
|
3.9
|
5.6
|
|
169
|
Futures
|
|
0.0
|
0.0
|
|
61
|
|
0.0
|
0.0
|
|
42
|
Over-the-counter (OTC) options
|
|
5.5
|
7.3
|
|
242
|
|
5.8
|
8.2
|
|
220
|
Exchange-traded options
|
|
12.7
|
13.8
|
|
508
|
|
7.4
|
7.4
|
|
488
|
Total
|
|
23.3
|
26.9
|
|
1,007
|
|
17.3
|
21.2
|
|
938
|
Credit derivative contracts
|
|
|
|
|
|
|
|
|
|
|
Credit default swaps
|
|
1.7
|
2.1
|
|
139
|
|
2.5
|
2.8
|
|
181
|
Total return swaps
|
|
0.3
|
0.8
|
|
7
|
|
0.2
|
0.9
|
|
7
|
Other
|
|
0.0
|
0.0
|
|
4
|
|
0.0
|
0.0
|
|
4
|
Total
|
|
1.9
|
2.8
|
|
150
|
|
2.7
|
3.7
|
|
192
|
Commodity, precious metals and other contracts
|
|
|
|
|
|
|
|
|
|
|
Forwards
|
|
0.1
|
0.1
|
|
6
|
|
0.1
|
0.1
|
|
7
|
Swaps
|
|
0.7
|
0.4
|
|
25
|
|
0.2
|
0.4
|
|
22
|
Futures
|
|
0.0
|
0.0
|
|
8
|
|
0.0
|
0.0
|
|
8
|
Over-the-counter (OTC) options
|
|
0.4
|
0.3
|
|
34
|
|
0.3
|
0.1
|
|
19
|
Exchange-traded options
|
|
0.4
|
0.6
|
|
18
|
|
0.6
|
0.5
|
|
23
|
Total
|
|
1.7
|
1.3
|
|
92
|
|
1.2
|
1.0
|
|
79
|
Total before netting
|
|
117.6
|
117.1
|
|
18,965
|
|
114.1
|
111.5
|
|
18,477
|
of which: trading derivatives
|
|
117.6
|
117.1
|
|
|
|
114.0
|
111.5
|
|
|
of which: fair value derived using a valuation model
|
|
116.9
|
116.5
|
|
|
|
113.6
|
111.2
|
|
|
of which: derivatives designated in hedge accounting
relationships
|
|
0.0
|
0.0
|
|
|
|
0.1
|
0.0
|
|
|
of which: fair value derived using a valuation model
|
|
0.0
|
0.0
|
|
|
|
0.1
|
0.0
|
|
|
Netting with cash collateral payables / receivables
|
|
(14.6)
|
(12.1)
|
|
|
|
(15.7)
|
(9.7)
|
|
|
Replacement value netting
|
|
(88.1)
|
(88.1)
|
|
|
|
(83.5)
|
(83.5)
|
|
|
Total after netting
|
|
14.9
|
17.0
|
|
|
|
14.8
|
18.3
|
|
|
of which: with central clearing counterparties
|
|
0.5
|
0.6
|
|
|
|
0.0
|
0.2
|
|
|
of which: with bank and broker-dealer counterparties
|
|
5.9
|
6.2
|
|
|
|
5.5
|
6.4
|
|
|
of which: other client counterparties
|
|
8.5
|
10.2
|
|
|
|
9.2
|
11.7
|
|
|
1 Bifurcated
embedded derivatives are presented on the same balance sheet lines as their
host contracts and are excluded from this table. The replacement values and
related notional values of these derivatives were not material for the
periods presented. 2 Includes forward rate agreements. 3 PRV: positive
replacement values. 4 NRV: negative replacement values.
|
UBS
AG standalone financial statements (audited)
Note
15a Financial investments by instrument type
|
|
31.12.18
|
|
31.12.17
|
USD million
|
|
Carrying value
|
Fair value
|
|
Carrying value
|
Fair value
|
Debt instruments
|
|
25,442
|
25,460
|
|
24,847
|
24,846
|
of which: held to maturity
|
|
1,983
|
1,981
|
|
975
|
966
|
of which: available-for-sale
|
|
23,460
|
23,479
|
|
23,872
|
23,880
|
Equity instruments
|
|
222
|
257
|
|
193
|
218
|
of which: qualified participations
1
|
|
61
|
64
|
|
52
|
57
|
Property
|
|
2
|
2
|
|
9
|
9
|
Total financial investments
|
|
25,666
|
25,718
|
|
25,048
|
25,072
|
of which: securities eligible for repurchase transactions in
accordance with liquidity regulations
2
|
|
25,421
|
25,436
|
|
23,563
|
23,589
|
1 Qualified
participations are investments in which UBS AG holds 10% or more of the total
capital or has at least 10% of total voting rights. 2 Consists of
high-quality liquid debt securities that are eligible for repurchase
transactions at the Swiss National Bank or other central banks.
|
|
|
31.12.18
|
|
31.12.17
|
CHF million
|
|
Carrying value
|
Fair value
|
|
Carrying value
|
Fair value
|
Debt instruments
|
|
25,016
|
25,033
|
|
24,221
|
24,220
|
of which: held until maturity
|
|
1,949
|
1,948
|
|
950
|
942
|
of which: available-for-sale
|
|
23,066
|
23,085
|
|
23,270
|
23,278
|
Equity instruments
|
|
218
|
252
|
|
188
|
212
|
of which: qualified participations
1
|
|
60
|
63
|
|
51
|
56
|
Property
|
|
2
|
2
|
|
8
|
8
|
Total financial investments
|
|
25,235
|
25,287
|
|
24,417
|
24,440
|
of which: securities eligible for repurchase transactions in
accordance with liquidity regulations
2
|
|
24,995
|
25,009
|
|
22,969
|
22,994
|
1 Qualified participations
are investments in which UBS AG holds 10% or more of the total capital or has
at least 10% of total voting rights. 2 Consists of high-quality liquid
debt securities that are eligible for repurchase transactions at the Swiss
National Bank or other central banks.
|
Note
15b
Financial investments by counterparty rating – debt instruments
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Internal UBS rating
1
|
|
|
|
|
|
|
0–1
|
|
17,204
|
17,794
|
|
16,916
|
17,345
|
2–3
|
|
8,237
|
7,052
|
|
8,099
|
6,875
|
4–5
|
|
0
|
0
|
|
0
|
0
|
6–8
|
|
0
|
0
|
|
0
|
0
|
9–13
|
|
0
|
0
|
|
0
|
0
|
Non-rated
|
|
2
|
1
|
|
2
|
1
|
Total financial investments
|
|
25,442
|
24,847
|
|
25,016
|
24,221
|
1 Refer to Note
19 for more information.
|
|
|
|
Note
16 Investments in subsidiaries and other participations
|
Registered office
|
Equity interest accumulated in %
|
|
Carrying amount in USD million
|
|
Carrying amount in CHF million
|
|
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
UBS Americas Holding LLC
1
|
Wilmington, Delaware, USA
|
100
|
|
31,935
|
31,316
|
|
31,400
|
30,527
|
UBS Switzerland AG
|
Zurich, Switzerland
|
100
|
|
7,982
|
8,034
|
|
7,848
|
7,832
|
UBS Limited
2
|
London, United Kingdom
|
100
|
|
|
3,828
|
|
|
3,731
|
UBS Asset Management AG
|
Zurich, Switzerland
|
100
|
|
1,528
|
1,532
|
|
1,503
|
1,493
|
UBS Europe SE
2
|
Frankfurt, Germany
|
100
|
|
5,015
|
1,060
|
|
4,931
|
1,033
|
Other
|
|
|
|
3,069
|
3,432
|
|
3,017
|
3,345
|
Total investments in subsidiaries and other participations
|
|
|
|
49,528
|
49,202
|
|
48,698
|
47,962
|
1 Includes the
effects of a capital contribution by UBS AG into UBS Americas Holding LLC
related to a waiver agreement. Refer to Note 9 for more information. 2 As
of 31 December 2018, UBS Europe SE holding reflects the combined UK business
transfer and cross-border merger of UBS Limited into UBS Europe SE, which was
formally concluded on 1 March 2019. Refer to Note 27 for more information.
|
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Deferral position for hedging instruments
|
|
464
|
0
|
|
456
|
0
|
Settlement and clearing accounts
|
|
304
|
80
|
|
299
|
78
|
VAT and other indirect tax receivables
|
|
99
|
156
|
|
97
|
152
|
Bail deposit
1
|
|
1,300
|
1,359
|
|
1,278
|
1,325
|
Other
|
|
1,722
|
2,763
|
|
1,692
|
2,693
|
of which: other receivables due from UBS Group AG and
subsidiaries in the UBS Group
|
|
1,047
|
1,776
|
|
1,030
|
1,731
|
Total other assets
|
|
3,888
|
4,358
|
|
3,822
|
4,248
|
1 Refer to item
1 in Note 21b to the UBS AG consolidated financial statements in the UBS
Group AG and UBS AG Annual Report 2018 for more information.
|
Note
17b Other
liabilities
|
|
USD million
|
|
CHF milion
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Deferral position for hedging instruments
|
|
0
|
213
|
|
0
|
208
|
Settlement and clearing accounts
|
|
344
|
513
|
|
339
|
500
|
Net defined benefit liabilities
|
|
279
|
429
|
|
274
|
418
|
VAT and other indirect tax payables
|
|
72
|
74
|
|
71
|
72
|
Other
|
|
1,906
|
2,421
|
|
1,873
|
2,360
|
of which: other payables due to UBS Group AG and subsidiaries in
the UBS Group
|
|
1,461
|
1,960
|
|
1,436
|
1,910
|
Total other liabilities
|
|
2,601
|
3,650
|
|
2,557
|
3,558
|
|
|
|
|
The table below provides information on assets that
are primarily pledged in connection with derivative transactions and
properties. The table excludes securities financing transactions.
®
Refer to Note
10 for more information on securities financing transactions
|
|
31.12.18
|
|
31.12.17
|
USD million
|
|
Carrying value of
pledged assets
|
|
Effective
commitment
|
|
Carrying value of
pledged assets
|
|
Effective
commitment
|
Securities
|
|
4,532
|
|
187
|
|
2,469
|
|
162
|
Pledges of property, equipment and software
2
|
|
2,636
|
|
0
|
|
0
|
|
0
|
Total pledged assets
|
|
7,168
|
|
187
|
|
2,469
|
|
162
|
1 Excludes
assets placed with central banks related to undrawn credit lines and for
payment, clearing and settlement purposes (31 December 2018: USD 0.8 billion;
31 December 2017: USD 2.7 billion). 2 These pledged properties serve as
collateral for an existing mortgage loan from UBS Switzerland AG.
|
|
|
31.12.18
|
|
31.12.17
|
CHF million
|
|
Carrying value of
pledged assets
|
|
Effective
commitment
|
|
Carrying value of
pledged assets
|
|
Effective
commitment
|
Securities
|
|
4,456
|
|
183
|
|
2,407
|
|
158
|
Pledges of property, equipment and software
2
|
|
2,592
|
|
0
|
|
0
|
|
0
|
Total pledged assets
|
|
7,048
|
|
183
|
|
2,407
|
|
158
|
1 Excludes
assets placed with central banks related to undrawn credit lines and for
payment, clearing and settlement purposes (31 December 2018:
CHF 0.8 billion; 31 December 2017: CHF 2.7 billion). 2 These
pledged properties serve as collateral for an existing mortgage loan from UBS
Switzerland AG.
|
UBS
AG standalone financial statements (audited)
Note
19 Country risk of total assets
The table below provides a breakdown of total
non-Swiss assets by credit rating. These credit ratings reflect the sovereign
credit rating of the country to which the ultimate risk of the underlying asset
is related. The ultimate country of risk for unsecured loan positions is the
domicile of the immediate borrower or, in the case of a legal entity, the
domicile of the ultimate parent entity. For collateralized or guaranteed
positions, the ultimate country of risk is the domicile of the provider of the
collateral or guarantor or, if applicable, the domicile of the ultimate parent
entity of the provider of the collateral or guarantor. For mortgage loans, the
ultimate country of risk is the country where the real estate is located.
Similarly, the ultimate country of risk for property and equipment is the
country where the property and equipment is located. Assets for which
Switzerland is the ultimate country of risk are provided separately in order to
reconcile them to total balance sheets assets.
®
Refer to the
“Risk management and control” section of the UBS Group AG and UBS AG Annual
Report 2018 for more information
|
|
|
|
|
|
|
31.12.18
|
|
31.12.17
|
Classification
|
Internal UBS rating
|
Description
|
Moody’s Investors
Service
|
Standard & Poor’s
|
Fitch
|
|
USD million
|
%
|
|
USD million
|
%
|
|
0 and 1
|
Investment grade
|
Aaa
|
AAA
|
AAA
|
|
210,209
|
44
|
|
212,964
|
44
|
Low risk
|
2
|
|
Aa1 to Aa3
|
AA+ to AA–
|
AA+ to AA–
|
|
130,270
|
27
|
|
147,027
|
30
|
3
|
|
A1 to A3
|
A+ to A–
|
A+ to AA–
|
|
56,410
|
12
|
|
50,213
|
10
|
Medium risk
|
4
|
|
Baa1 to Baa2
|
BBB+ to BBB
|
BBB+ to BBB
|
|
11,928
|
2
|
|
15,810
|
3
|
5
|
|
Baa3
|
BBB–
|
BBB–
|
|
5,073
|
1
|
|
5,201
|
1
|
High risk
|
6
|
Sub-investment grade
|
Ba1
|
BB+
|
BB+
|
|
1,412
|
0
|
|
1,575
|
0
|
7
|
|
Ba2
|
BB
|
BB
|
|
2,512
|
1
|
|
2,057
|
0
|
8
|
|
Ba3
|
BB–
|
BB–
|
|
10
|
0
|
|
49
|
0
|
9
|
|
B1
|
B+
|
B+
|
|
679
|
0
|
|
894
|
0
|
Very high risk
|
10
|
|
B2
|
B
|
B
|
|
715
|
0
|
|
1,002
|
0
|
11
|
|
B3
|
B–
|
B–
|
|
163
|
0
|
|
358
|
0
|
12
|
|
Caa
|
CCC
|
CCC
|
|
66
|
0
|
|
150
|
0
|
13
|
|
Ca to C
|
CC to C
|
CC to C
|
|
72
|
0
|
|
113
|
0
|
Distressed
|
Default
|
Defaulted
|
D
|
D
|
D
|
|
17
|
0
|
|
1
|
0
|
Subtotal
|
|
|
|
|
|
|
419,536
|
87
|
|
437,415
|
89
|
Switzerland
|
|
|
|
|
|
|
60,701
|
13
|
|
51,898
|
11
|
Total assets
|
|
|
|
|
|
|
480,238
|
100
|
|
489,313
|
100
|
|
|
|
|
|
|
|
31.12.18
|
|
31.12.17
|
Classification
|
Internal UBS rating
|
Description
|
Moody’s Investors
Service
|
Standard & Poor’s
|
Fitch
|
|
CHF million
|
%
|
|
CHF million
|
%
|
|
0 and 1
|
Investment grade
|
Aaa
|
AAA
|
AAA
|
|
206,648
|
44
|
|
207,595
|
44
|
Low risk
|
2
|
|
Aa1 to Aa3
|
AA+ to AA–
|
AA+ to AA–
|
|
128,095
|
27
|
|
143,320
|
30
|
3
|
|
A1 to A3
|
A+ to A–
|
A+ to AA–
|
|
55,464
|
12
|
|
48,947
|
10
|
Medium risk
|
4
|
|
Baa1 to Baa2
|
BBB+ to BBB
|
BBB+ to BBB
|
|
11,726
|
2
|
|
15,411
|
3
|
5
|
|
Baa3
|
BBB–
|
BBB–
|
|
4,988
|
1
|
|
5,070
|
1
|
High risk
|
6
|
Sub-investment grade
|
Ba1
|
BB+
|
BB+
|
|
1,389
|
0
|
|
1,536
|
0
|
7
|
|
Ba2
|
BB
|
BB
|
|
2,470
|
1
|
|
2,005
|
0
|
8
|
|
Ba3
|
BB–
|
BB–
|
|
10
|
0
|
|
48
|
0
|
9
|
|
B1
|
B+
|
B+
|
|
668
|
0
|
|
872
|
0
|
Very high risk
|
10
|
|
B2
|
B
|
B
|
|
703
|
0
|
|
976
|
0
|
11
|
|
B3
|
B–
|
B–
|
|
160
|
0
|
|
349
|
0
|
12
|
|
Caa
|
CCC
|
CCC
|
|
65
|
0
|
|
146
|
0
|
13
|
|
Ca to C
|
CC to C
|
CC to C
|
|
71
|
0
|
|
110
|
0
|
Distressed
|
Default
|
Defaulted
|
D
|
D
|
D
|
|
17
|
0
|
|
1
|
0
|
Subtotal
|
|
|
|
|
|
|
412,472
|
87
|
|
426,387
|
89
|
Switzerland
|
|
|
|
|
|
|
59,712
|
13
|
|
50,590
|
11
|
Total assets
|
|
|
|
|
|
|
472,184
|
100
|
|
476,977
|
100
|
Note
20 Structured debt instruments
The table below provides a
breakdown of financial liabilities designated at fair value that are considered
structured debt instruments.
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Fixed-rate bonds with structured features
|
|
3,510
|
2,949
|
|
3,451
|
2,875
|
Structured debt instruments issued:
|
|
|
|
|
|
|
Equity-linked
|
|
34,528
|
35,073
|
|
33,949
|
34,189
|
Rates-linked
|
|
11,785
|
5,837
|
|
11,587
|
5,689
|
Credit-linked
|
|
2,331
|
1,685
|
|
2,292
|
1,642
|
Commodities-linked
1
|
|
1,774
|
2,038
|
|
1,745
|
1,986
|
FX-linked
|
|
274
|
442
|
|
270
|
431
|
Structured over-the-counter (OTC) debt instruments
|
|
2,023
|
4,472
|
|
1,989
|
4,359
|
Total financial liabilities designated at fair value
|
|
56,226
|
52,495
|
|
55,283
|
51,171
|
1 Includes
precious metals-linked debt instruments issued.
|
In addition to
Financial
liabilities designated at fair value
, certain structured debt instruments
were reported within the balance sheet lines
Due to
banks, Due to customers
and
Bonds issued.
These instruments
were bifurcated for measurement purposes. As of 31 December 2018, the total
carrying value of the host instruments was USD 4,465 million (CHF 4,390
million) (31 December 2017: USD 4,034 million (CHF 3,932 million)) and the
total carrying value of the bifurcated embedded
derivatives was positive USD 76 million (CHF 75 million) (31 December 2017:
positive USD 70 million (CHF 68 million)).
UBS AG shares
As of 31 December 2018, UBS AG’s share capital of CHF
386 million
(31 December 2017: CHF 386 million)
consisted of fully paid up registered issued shares with a par value of CHF
0.10, which entitle the holder to one vote at the UBS AG shareholders’ meeting,
if entered into the share register as having the right to vote, as well as a
proportionate share of distributed dividends. UBS AG’s shares are not subject
to any restrictions or limitations on their transferability.
As of 31 December 2018, shares issued by UBS AG totaled
3,858,408,466 shares (unchanged from 31 December 2017). The shares were all
dividend bearing and held by UBS Group AG.
Additionally, as of 31 December 2018, 380,000,000 registered
shares with a par value of CHF 0.10 each were available to be issued out of
conditional capital (31 December 2017: 516,200,312 registered
shares). During 2018, 136,200,312 conditional capital shares available upon the
exercise of employee options were cancelled.
During 2018 and 2017, there were no new share issuances out of
conditional capital.
Non-cash dividend
There was no non-cash dividend in
2018. With the transfer of shared services functions in Switzerland, UBS AG transferred
its participation in a service center subsidiary to UBS Group AG in June 2017
by way of distribution of a dividend in kind, which resulted in a USD 256
million (CHF 250 million) reduction in the capital contribution reserve.
®
Refer to Note
2c for more information on the transfer of shared services functions
Non-distributable reserves
Non-distributable reserves consist of 50% of the share
capital of UBS AG, amounting to USD 197 million (CHF 193 million) as of 31
December 2018 (USD 198 million / CHF 193 million as of 31 December 2017).
UBS
AG standalone financial statements (audited)
Note
21b
Significant shareholders
The sole direct shareholder of UBS AG is UBS Group AG,
which holds 100% of UBS AG shares. These shares are entitled to voting rights.
Indirect shareholders of UBS AG included in the table below comprise direct
shareholders of UBS Group AG (acting in their own name or in their capacity as
nominees for other investors or beneficial owners) that were registered in the
UBS Group AG share register with 3% or more of the share capital of UBS Group
AG as of 31 December 2018 or as of 31 December 2017. The shares and share
capital of UBS AG held by indirect shareholders, as shown in the table below,
represent their relative holding of UBS Group AG shares. They do not have
voting rights in UBS AG.
®
Refer to Note
23 of the UBS Group AG standalone financial statements in the UBS Group AG Annual
Report 2018 for more information on significant shareholders of UBS Group AG
|
|
31.12.18
|
|
31.12.17
|
USD million, except where indicated
|
|
Share capital held
|
Shares held (%)
|
|
Share capital held
|
Shares held (%)
|
Significant direct shareholder of UBS AG
|
|
|
|
|
|
|
UBS Group AG
|
|
393
|
100
|
|
396
|
100
|
Significant indirect shareholders of UBS AG
|
|
|
|
|
|
|
Chase Nominees Ltd., London
|
|
48
|
12
|
|
44
|
11
|
DTC (Cede & Co.), New York
1
|
|
28
|
7
|
|
27
|
7
|
Nortrust Nominees Ltd., London
|
|
16
|
4
|
|
16
|
4
|
1 DTC (Cede
& Co.), New York, “The Depository Trust Company,” is a US securities
clearing organization.
|
|
|
31.12.18
|
|
31.12.17
|
CHF million, except where indicated
|
|
Share capital held
|
Shares held (%)
|
|
Share capital held
|
Shares held (%)
|
Significant direct shareholder of UBS AG
|
|
|
|
|
|
|
UBS Group AG
|
|
386
|
100
|
|
386
|
100
|
Significant indirect shareholders of UBS AG
|
|
|
|
|
|
|
Chase Nominees Ltd., London
|
|
47
|
12
|
|
43
|
11
|
DTC (Cede & Co.), New York
1
|
|
28
|
7
|
|
26
|
7
|
Nortrust Nominees Ltd., London
|
|
16
|
4
|
|
16
|
4
|
1 DTC (Cede
& Co.), New York, “The Depository Trust Company,” is a US securities
clearing organization.
|
Note
22 Swiss pension plan and non-Swiss defined benefit plans
a) Liabilities related to Swiss pension plan and non-Swiss
defined benefit plans
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Provision for Swiss pension plan
|
|
0
|
0
|
|
0
|
0
|
Net defined benefit liabilities for non-Swiss defined benefit
plans
1
|
|
279
|
429
|
|
274
|
418
|
Total provision for Swiss pension plan and net defined benefit
liabilities for non-Swiss defined benefit plans
|
|
279
|
429
|
|
274
|
418
|
Bank accounts at UBS and UBS debt instruments held by Swiss
pension fund
|
|
18
|
15
|
|
18
|
15
|
UBS derivative financial instruments held by Swiss pension fund
|
|
5
|
5
|
|
5
|
5
|
Total liabilities related to Swiss pension plan and non-Swiss defined
benefit plans
|
|
302
|
449
|
|
297
|
438
|
1 As of 31
December 2018, USD 160 million (CHF 157 million) related to the UK defined
benefit pension plan and USD 22 million (CHF 22 million) related to the UK
post-employment medical insurance plan. As of 31 December 2017, USD 275
million (CHF 268 million) related to the UK defined benefit pension plan and
USD 27 million (CHF 26 million) related to the UK post-employment medical
insurance plan.
|
|
|
|
|
b) Swiss pension plan
|
|
|
|
|
|
|
|
|
USD million
|
|
CHF million
|
|
|
As of or for the year ended
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Pension plan surplus
1
|
|
637
|
806
|
|
626
|
786
|
Economic benefit / (obligation) of UBS AG
|
|
0
|
0
|
|
0
|
0
|
Change in economic benefit / (obligation) recognized in the
income statement
|
|
0
|
0
|
|
0
|
0
|
Employer contributions in the period recognized in the income
statement
|
|
48
|
92
|
|
47
|
90
|
Performance awards-related employer contributions accrued
|
|
10
|
13
|
|
10
|
12
|
Total pension expense recognized in the income statement within
Personnel expenses
|
|
58
|
105
|
|
57
|
102
|
1 The pension
plan surplus is determined in accordance with FER 26 and consists of the
reserve for the fluctuation in asset value. The surplus did not represent an
economic benefit for UBS AG in accordance with FER 16 both as of 31 December
2018 and 31 December 2017.
|
UBS AG has elected to apply FER 16 for its Swiss
pension plan and IFRS (IAS 19) for its UK and other non-Swiss defined benefit
plans. However, remeasurements of the defined benefit obligations for UK and
other non-Swiss defined benefit plans are recognized in the income statement
rather than directly in equity.
®
Refer to Note 2
for more information
®
Refer to Note
29 of the UBS AG consolidated financial statements in the UBS Group AG and UBS
AG Annual Report 2018 for more information on non-Swiss defined benefit plans
in accordance with IFRS
The Swiss pension plan had no employer contribution reserve as
of both 31 December 2018 and 31 December 2017.
Note
23
Share-based compensation
Expenses for awards under employee share, option,
notional fund and deferred cash compensation plans granted to UBS AG employees
are generally charged by UBS Group AG to UBS AG. Obligations related to other
compensation vehicles, such as local awards, are held by the relevant employing
and / or sponsoring subsidiaries, such as UBS AG.
®
Refer to Note
30 of the UBS AG consolidated financial statements in the UBS Group AG and UBS
AG Annual Report 2018 for more information
UBS
AG standalone financial statements (audited)
Transactions with related parties are conducted at
internally agreed transfer prices, at arm’s length or, with respect to loans,
fixed advances and mortgages to non-independent members of the governing bodies
in the ordinary course of business, on substantially the same terms and
conditions that are available to other employees, including interest rates and
collateral, and neither involve more than the normal risk of collectability nor
contain any other unfavorable features for the firm. Independent members of the
governing bodies are granted loans and mortgages in the ordinary course of
business at general market conditions.
|
|
31.12.18
|
|
31.12.17
|
USD million
|
|
Amounts due from
|
|
Amounts due to
|
|
Amounts due from
|
|
Amounts due to
|
Qualified shareholders
1
|
|
639
|
|
2,087
|
|
1,843
|
|
11,099
|
of which: due from / to customers
|
|
627
|
|
1,819
|
|
1,839
|
|
5,357
|
of which: funding received from UBS Group AG
|
|
|
|
|
|
|
|
5,050
|
Subsidiaries
|
|
97,219
|
|
74,413
|
|
94,920
|
|
74,069
|
of which: due from / to banks
|
|
39,180
|
|
35,114
|
|
37,895
|
|
25,105
|
of which: due from / to customers
|
|
27,210
|
|
1,544
|
|
33,498
|
|
1,908
|
of which: receivables / payables from securities financing transactions
|
|
26,453
|
|
32,558
|
|
17,938
|
|
42,251
|
Affiliated entities
2
|
|
570
|
|
42,793
|
|
433
|
|
29,245
|
of which: due from / to customers
|
|
474
|
|
125
|
|
315
|
|
25
|
of which: funding received from UBS Group Funding (Switzerland)
AG
|
|
|
|
41,782
|
|
|
|
28,422
|
Members of governing bodies
3
|
|
34
|
|
|
|
42
|
|
|
External auditors
|
|
|
|
12
|
|
|
|
11
|
Other related parties
|
|
2
|
|
|
|
13
|
|
|
1 The qualified
shareholder of UBS AG is UBS Group AG. 2 Affiliated entities of
UBS AG are all direct subsidiaries of UBS Group AG. 3 Members
of governing bodies consist of members of the Board of Directors and Group
Executive Board of UBS Group AG and members of the Board of Directors and
Executive Board of UBS AG.
|
|
|
31.12.18
|
|
31.12.17
|
CHF million
|
|
Amounts due from
|
|
Amounts due to
|
|
Amounts due from
|
|
Amounts due to
|
Qualified shareholders
1
|
|
628
|
|
2,052
|
|
1,797
|
|
10,819
|
of which: due from / to customers
|
|
616
|
|
1,788
|
|
1,793
|
|
5,222
|
of which: funding received from UBS Group AG
|
|
|
|
|
|
|
|
4,923
|
Subsidiaries
|
|
95,588
|
|
73,166
|
|
92,527
|
|
72,202
|
of which: due from / to banks
|
|
38,523
|
|
34,525
|
|
36,940
|
|
24,472
|
of which: due from / to customers
|
|
26,754
|
|
1,518
|
|
32,654
|
|
1,860
|
of which: receivables / payables from securities financing
transactions
|
|
26,010
|
|
32,012
|
|
17,486
|
|
41,186
|
Affiliated entities
2
|
|
560
|
|
42,076
|
|
422
|
|
28,508
|
of which: due from / to customers
|
|
466
|
|
123
|
|
307
|
|
24
|
of which: funding received from UBS Group Funding (Switzerland)
AG
|
|
|
|
41,081
|
|
|
|
27,706
|
Members of governing bodies
3
|
|
34
|
|
|
|
41
|
|
|
External auditors
|
|
|
|
12
|
|
|
|
10
|
Other related parties
|
|
2
|
|
|
|
13
|
|
|
1 The qualified
shareholder of UBS AG is UBS Group AG. 2 Affiliated entities of
UBS AG are all direct subsidiaries of UBS Group AG. 3
Members of governing bodies consist of members of the Board of Directors and
Group Executive Board of UBS Group AG and members of the Board of Directors
and Executive Board of UBS AG.
|
As of 31 December 2018, off-balance sheet positions related
to subsidiaries amounted to USD 13.3 billion (CHF 13.0 billion)
(31 December 2017: USD 21.6 billion (CHF 21.1 billion)), of which USD
7.5 billion (CHF 7.4 billion) were guarantees to third parties (31 December
2017: USD 14.4 billion (CHF 14.0 billion)) and USD 3.3 billion (CHF 3.2
billion) were loan commitments (31 December 2017: USD 5.7 billion (CHF 5.6
billion)).
Note
25 Fiduciary transactions
|
|
USD million
|
|
CHF million
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Fiduciary deposits
|
|
145
|
211
|
|
143
|
205
|
of which: placed with third-party banks
|
|
145
|
211
|
|
143
|
205
|
of which: placed with subsidiaries and affiliated entities
|
|
0
|
0
|
|
0
|
0
|
Total fiduciary transactions
|
|
145
|
211
|
|
143
|
205
|
Fiduciary transactions encompass transactions entered
into or granted by UBS AG that result in holding or placing assets on behalf of
individuals, trusts, defined benefit plans and other institutions. Unless the
recognition criteria for the assets are satisfied, these assets and the related
income are excluded from UBS AG’s balance sheet and income statement but disclosed
in this Note as off-balance sheet fiduciary transactions. Client deposits that
are initially placed as fiduciary transactions with UBS AG may be recognized on
UBS AG’s balance sheet in situations in which the deposit is subsequently
placed within UBS AG. In such cases, these deposits are not reported in the
table above.
Note
26a
Invested assets and net new money
1
|
|
USD billion
|
|
CHF billion
|
|
|
For the year ended
|
|
For the year ended
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Fund assets managed
|
|
25
|
23
|
|
25
|
23
|
Discretionary assets
|
|
184
|
203
|
|
180
|
198
|
Other invested assets
|
|
379
|
420
|
|
373
|
409
|
Total invested assets
|
|
588
|
646
|
|
578
|
630
|
of which: double counts
|
|
6
|
5
|
|
6
|
5
|
Net new money
|
|
9
|
47
|
|
9
|
46
|
1 The US dollar
amounts disclosed in Notes 26a and 26b have been recalculated on a
retrospective basis, as if the conversion to the new US dollar presentation
currency had occurred on 1 January 2017.
|
Note
26b
Development of invested assets
1
|
|
USD billion
|
|
CHF billion
|
|
|
For the year ended
|
|
For the year ended
|
|
|
31.12.18
|
31.12.17
|
|
31.12.18
|
31.12.17
|
Total invested assets at the beginning of the year
2
|
|
646
|
500
|
|
630
|
509
|
Net new money
|
|
9
|
47
|
|
9
|
46
|
Market movements
3
|
|
(51)
|
87
|
|
(50)
|
84
|
Foreign currency translation
|
|
(7)
|
13
|
|
(1)
|
(9)
|
Other effects
|
|
(10)
|
(1)
|
|
(10)
|
(1)
|
of which: acquisitions / (divestments)
|
|
0
|
0
|
|
0
|
0
|
Total invested assets at the end of the year
2
|
|
588
|
646
|
|
578
|
630
|
1 The US dollar
amounts disclosed in Notes 26a and 26b have been recalculated on a
retrospective basis, as if the conversion to the new US dollar presentation
currency had occurred on 1 January 2017. 2 Includes double
counts. 3 Includes interest and dividend income.
|
®
Refer to Note
36 of the UBS AG consolidated financial statements in the UBS Group AG and UBS
AG Annual Report 2018 for more information
UBS
AG standalone financial statements (audited)
Note
27
Events after the reporting period
Merger of UBS Limited into UBS Europe SE
On 1 March 2019, the previously announced combined UK
business transfer and cross-border merger of UBS Limited into UBS Europe SE was
formally concluded. As a result of this transaction the impairment loss of the
investment in UBS Limited for the year 2018 was reduced by USD 0.2 billion
(CHF 0.2 billion). As the transaction was substantially completed in 2018,
the effect of the transaction was recognized in the UBS AG standalone financial
statements for the year ended 31 December 2018.
Provisions for litigation,
regulatory and similar matters
Provisions for litigation, regulatory and similar
matters reflect the effects of adjusting events after the balance sheet date of
USD 340 million (CHF 334 million).
®
Refer to Note
21 of the UBS AG consolidated financial statements in the UBS Group AG and UBS
AG Annual Report 2018 and to Note 12b of this report for more information
UBS
AG standalone financial statements (audited)
UBS
AG standalone financial statements (audited)
UBS AG
standalone
regulatory information
UBS AG standalone
regulatory information
Key metrics
The table below is based on BCBS Basel
III phase-in rules. During the fourth quarter of 2018, CET1 capital remained
largely stable. RWA increased USD 4.8 billion to USD 292.9 billion, mainly
reflecting a USD 7.2 billion increase in market risk RWA due to higher average
regulatory and stressed value-at-risk levels, partly offset by a USD 3.0
billion decrease in operational risk RWA after the recalibration of the
advanced measurement approach model used for calculation of operational risk
capital.
Leverage ratio exposure decreased by
USD 19 billion to USD 601 billion, mainly due to on-balance sheet exposures
(excluding derivative exposures and SFT).
Effective from 31 December 2018,
UBS opted to phase in the effects from IFRS 9 expected credit loss (ECL) on CET1
capital, if any, over a five-year transitional period. This conclusion did not
have an effect on our CET1 capital as of 31 December 2018.
KM1: Key metrics
|
|
|
|
|
|
|
|
|
|
USD million, except where indicated
|
|
|
|
31.12.18
|
30.9.18
|
|
30.6.18
|
|
31.3.18
|
|
31.12.17
|
Available capital (amounts)
1
|
|
|
|
|
|
|
|
|
|
1
|
Common equity tier 1 (CET1)
|
|
49,411
|
49,810
|
|
49,583
|
|
49,833
|
|
49,625
|
1a
|
Fully loaded ECL accounting model
|
|
49,411
|
49,810
|
|
49,583
|
|
49,833
|
|
|
2
|
Tier 1
|
|
59,595
|
59,341
|
|
59,161
|
|
59,537
|
|
54,600
|
2a
|
Fully loaded ECL accounting model Tier 1
|
|
59,595
|
59,341
|
|
59,161
|
|
59,537
|
|
|
3
|
Total capital
|
|
66,295
|
66,005
|
|
66,258
|
|
68,329
|
|
63,471
|
3a
|
Fully loaded ECL accounting model total capital
|
|
66,295
|
66,005
|
|
66,258
|
|
68,329
|
|
|
Risk-weighted assets (amounts)
|
|
|
|
|
|
|
|
|
|
4
|
Total risk-weighted assets (RWA)
|
|
292,888
|
288,045
|
|
286,457
|
|
302,296
|
|
284,707
1
|
4a
|
Total risk-weighted assets (pre-floor)
|
|
292,888
|
288,045
|
|
286,457
|
|
302,296
|
|
284,707
|
Risk-based capital ratios as a percentage of RWA
1
|
|
|
|
|
|
|
|
|
|
5
|
Common equity tier 1 ratio (%)
|
|
16.87
|
17.29
|
|
17.31
|
|
16.48
|
|
17.43
|
5a
|
Fully loaded ECL accounting model Common Equity Tier 1 (%)
|
|
16.87
|
17.29
|
|
17.31
|
|
16.48
|
|
|
6
|
Tier 1 ratio (%)
|
|
20.35
|
20.60
|
|
20.65
|
|
19.69
|
|
19.18
|
6a
|
Fully loaded ECL accounting model Tier 1 ratio (%)
|
|
20.35
|
20.60
|
|
20.65
|
|
19.69
|
|
|
7
|
Total capital ratio (%)
|
|
22.63
|
22.91
|
|
23.13
|
|
22.60
|
|
22.29
|
7a
|
Fully loaded ECL accounting model total capital ratio (%)
|
|
22.63
|
22.91
|
|
23.13
|
|
22.60
|
|
|
Additional CET1 buffer requirements as a percentage of RWA
|
|
|
|
|
|
|
|
|
|
8
|
Capital conservation buffer requirement (2.5% from 2019) (%)
|
|
1.88
|
1.88
|
|
1.88
|
|
1.88
|
|
1.25
|
9
|
Countercyclical buffer requirement (%)
|
|
0.07
|
0.05
|
|
0.08
|
|
0.04
|
|
0.02
|
9a
|
Additional countercyclical buffer for Swiss mortgage loans (%)
|
|
0.00
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
10
|
Bank G-SIB and/or D-SIB additional requirements (%)
2
|
|
|
|
|
|
|
|
|
|
11
|
Total of bank CET1 specific buffer requirements (%)
|
|
1.95
|
1.92
|
|
1.96
|
|
1.91
|
|
1.27
|
12
|
CET1 available after meeting the bank’s minimum capital
requirements (%)
1
|
|
12.37
|
12.79
|
|
12.81
|
|
11.98
|
|
12.93
|
Basel III leverage ratio
|
|
|
|
|
|
|
|
|
|
13
|
Total Basel III leverage ratio exposure measure
|
|
601,013
|
619,741
|
|
620,074
|
|
620,353
|
|
615,238
1
|
14
|
Basel III leverage ratio (%)
1
|
|
9.92
|
9.58
|
|
9.54
|
|
9.60
|
|
8.87
|
14a
|
Fully loaded ECL accounting model Basel III leverage ratio (%)
1
|
|
9.92
|
9.58
|
|
9.54
|
|
9.60
|
|
|
Liquidity coverage ratio
|
|
|
|
|
|
|
|
|
|
15
|
Total HQLA
|
|
76,456
|
81,214
|
|
83,473
|
|
89,631
|
|
87,800
|
16
|
Total net cash outflow
|
|
55,032
|
59,450
|
|
60,786
|
|
70,367
|
|
66,505
|
17
|
LCR ratio (%)
|
|
139
|
137
|
|
137
|
|
127
|
|
132
|
1 Based on BCBS
Basel III phase-in rules. 2 Swiss SRB going concern requirements and
information for UBS AG standalone is provided in the following pages in this
section.
|
UBS
AG standalone regulatory information
Swiss SRB
going concern requirements and information
UBS AG standalone is
considered a systemically relevant bank (SRB)
under Swiss banking law and is subject to capital regulations on a standalone
basis. Under Swiss SRB regulations, article 125 “Reliefs for financial groups
and individual institutions” of the Capital Adequacy Ordinance stipulates that
the Swiss Financial Market Supervisory Authority (FINMA) may grant, under
certain conditions, capital relief to individual institutions to ensure that an
individual institution’s compliance with the capital requirements does not lead
to a de facto overcapitalization of the group of which it is a part.
FINMA granted relief concerning the regulatory capital
requirements of UBS AG on a standalone basis by means of decrees issued on
20 December 2013 and 20 October 2017, the latter effective
as of 1 July 2017 and partly replacing the former.
The FINMA decree issued in 2017 established the measure of total
going concern capital for UBS AG. Common equity tier 1 (CET1) and
high-trigger additional tier 1 capital instruments are eligible as going
concern capital, and low-trigger tier 2 capital instruments remain eligible
until the earlier of
(i) their maturity or the first call date or (ii) 31 December 2019.
Capital requirements based on risk-weighted assets (RWA) and
leverage ratio denominator (LRD) are the same under both the phase-in and fully
applied rules. The capital requirements based on RWA include a minimum CET1
capital requirement of 10% plus the effects from countercyclical buffers
(CCBs), and a total going concern capital requirement of 14.3% plus the effects
from CCBs. The capital requirements based on LRD include a minimum CET1 capital
requirement of 3.5% and a total going concern leverage ratio requirement of
5.0%. For direct and indirect investments, including holding of regulatory
capital instruments of UBS AG in subsidiaries that are active in banking and
finance, the FINMA decree introduced a risk-weighting approach, with a phase-in
period until 1 January 2028. Starting 1 July 2017, these
investments have been risk-weighted at 200%. As of 1 January 2019,
the risk weights will gradually be raised by 5 percentage points per year
for Swiss-domiciled investments and by 20 percentage points per year for
foreign-domiciled investments until the fully applied risk weights are 250% and
400%, respectively.
More information on this change is provided in “Section 2 UBS
AG standalone” of the UBS Group AG and significant
regulated subsidiaries and sub-groups third quarter 2017 Pillar 3 report available
under “Pillar 3 disclosures” at
www.ubs.com/investors
.
Swiss SRB going concern
requirements and information
Swiss SRB going concern requirements and information
|
As of 31.12.18
|
|
Swiss SRB, including transitional arrangements
|
|
Swiss SRB after transition
|
USD million, except where indicated
|
|
RWA
|
|
LRD
|
|
RWA
|
|
LRD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Required going concern capital
|
|
in %
1
|
|
|
in %
1
|
|
|
in %
|
|
|
in %
|
|
Common equity tier 1 capital
|
|
10.07
|
29,497
|
|
3.50
|
21,035
|
|
10.07
|
38,630
|
|
3.50
|
21,035
|
of which: minimum capital
|
|
4.50
|
13,180
|
|
1.50
|
9,015
|
|
4.50
|
17,261
|
|
1.50
|
9,015
|
of which: buffer capital
|
|
5.50
|
16,109
|
|
2.00
|
12,020
|
|
5.50
|
21,097
|
|
2.00
|
12,020
|
of which: countercyclical buffer
2
|
|
0.07
|
208
|
|
|
|
|
0.07
|
273
|
|
|
|
Maximum additional tier 1 capital
|
|
4.30
|
12,594
|
|
1.50
|
9,015
|
|
4.30
|
16,494
|
|
1.50
|
9,015
|
of which: high-trigger loss-absorbing additional tier 1 minimum
capital
|
|
3.50
|
10,251
|
|
1.50
|
9,015
|
|
3.50
|
13,425
|
|
1.50
|
9,015
|
of which: high-trigger loss-absorbing additional tier 1 buffer
capital
|
|
0.80
|
2,343
|
|
|
|
|
0.80
|
3,069
|
|
|
|
Total going concern capital
|
|
14.37
3
|
42,091
|
|
5.00
3
|
30,051
|
|
14.37
3
|
55,124
|
|
5.00
3
|
30,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eligible going concern capital
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital
|
|
16.87
|
49,411
|
|
8.22
|
49,411
|
|
12.88
|
49,411
|
|
8.22
|
49,411
|
High-trigger loss-absorbing additional tier 1 capital
4
|
|
4.72
|
13,813
|
|
2.30
|
13,813
|
|
2.03
|
7,805
|
|
1.30
|
7,805
|
of which: high-trigger loss-absorbing additional tier 1 capital
|
|
2.66
|
7,805
|
|
1.30
|
7,805
|
|
2.03
|
7,805
|
|
1.30
|
7,805
|
of which: low-trigger loss-absorbing tier 2 capital
|
|
2.05
|
6,008
|
|
1.00
|
6,008
|
|
|
|
|
|
|
Total going concern capital
|
|
21.59
|
63,225
|
|
10.52
|
63,225
|
|
14.92
|
57,217
|
|
9.52
|
57,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets / leverage ratio denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
|
292,888
|
|
|
|
|
|
383,578
|
|
|
|
Leverage ratio denominator
|
|
|
|
|
|
601,013
|
|
|
|
|
|
601,013
|
1 By FINMA
decree, requirements exceed those based on the transitional arrangements of
the Swiss Capital Adequacy Ordinance, i.e., a total going concern capital
ratio requirement of 12.86% plus the effect of countercyclical buffer (CCB)
requirements of 0.07%, of which 9.46% plus the effect of CCB requirements of
0.07% must be satisfied with CET1 capital, and a total going concern leverage
ratio requirement of 4%, of which 2.9% must be satisfied with CET1
capital. 2 Going concern capital ratio requirements as of 31 December 2018
include CCB requirements of 0.07%. 3 Includes applicable add-ons of 1.44%
for RWA and 0.5% for LRD. 4 Includes outstanding low-trigger
loss-absorbing tier 2 capital instruments, which are available under the
transitional rules of the Swiss SRB framework to meet the going concern
requirements until the earlier of (i) their maturity or first call date or
(ii) 31 December 2019. Outstanding low-trigger loss-absorbing tier 2 capital
instruments are subject to amortization starting five years prior to their
maturity.
|
UBS
AG standalone regulatory information
Swiss SRB going concern information
|
|
|
|
Swiss SRB, including transitional arrangements
|
|
Swiss SRB after transition
|
USD million, except where indicated
|
|
31.12.18
|
|
31.12.17
|
|
31.12.18
|
31.12.17
|
|
|
|
|
|
|
|
|
Going concern capital
|
|
|
|
|
|
|
|
Common equity tier 1 capital
|
|
49,411
|
|
49,625
|
|
49,411
|
49,424
|
High-trigger loss-absorbing additional tier 1 capital
|
|
7,805
|
|
3,761
|
|
7,805
|
3,761
|
Total loss-absorbing additional tier 1 capital
|
|
7,805
|
|
3,761
|
|
7,805
|
3,761
|
Total tier 1 capital
|
|
57,217
|
|
53,386
|
|
57,217
|
53,185
|
Low-trigger loss-absorbing tier 2 capital
1
|
|
6,008
|
|
8,077
|
|
|
|
Total tier 2 capital
|
|
6,008
|
|
8,077
|
|
|
|
Total going concern capital
|
|
63,225
|
|
61,464
|
|
57,217
|
53,185
|
|
|
|
|
|
|
|
|
Risk-weighted assets / leverage ratio denominator
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
292,888
|
|
284,707
|
|
383,578
|
374,811
|
of which: direct and indirect investments in Swiss-domiciled
subsidiaries
2
|
|
31,711
|
|
29,335
|
|
39,639
|
36,668
|
of which: direct and indirect investments in foreign-domiciled
subsidiaries
2
|
|
82,762
|
|
82,771
|
|
165,525
|
165,542
|
Leverage ratio denominator
|
|
601,013
|
|
615,238
|
|
601,013
|
615,037
|
|
|
|
|
|
|
|
|
Capital ratios (%)
|
|
|
|
|
|
|
|
Total going concern capital ratio
|
|
21.6
|
|
21.6
|
|
14.9
|
14.2
|
of which: CET1 capital ratio
|
|
16.9
|
|
17.4
|
|
12.9
|
13.2
|
|
|
|
|
|
|
|
|
Leverage ratios (%)
|
|
|
|
|
|
|
|
Total going concern leverage ratio
|
|
10.5
|
|
10.0
|
|
9.5
|
8.6
|
of which: CET1 leverage ratio
|
|
8.2
|
|
8.1
|
|
8.2
|
8.0
|
1 Outstanding
low-trigger loss-absorbing tier 2 capital instruments qualify as going
concern capital until the earlier of (i) their maturity or first call date or
(ii) 31 December 2019, and are subject to amortization starting five years
prior to their maturity. 2 Carrying value for direct and indirect
investments including holding of regulatory capital instruments in
Swiss-domiciled subsidiaries (31 December 2018: USD 15,856 million; 31 December
2017: USD 14,668 million), and for direct and indirect investments including
holding of regulatory capital instruments in foreign-domiciled subsidiaries
(31 December 2018: USD 41,381 million; 31 December 2017: USD 41,386
million), is currently risk weighted at 200%. Risk weights are gradually
increased by 5% per year for Swiss-domiciled investments and 20% per year for
foreign-domiciled investments starting 1 January 2019 until the fully applied
risk weights of 250% and 400%, respectively, are applied.
|
Reconciliation of Swiss banking law equity to Swiss SRB common
equity tier 1 capital
|
USD billion
|
31.12.18
|
31.12.17
|
Equity – Swiss banking law
1
|
51.1
|
51.2
|
Deferred tax assets
|
0.5
|
0.6
|
Valuation differences for investments in subsidiaries
|
1.6
|
1.8
|
Goodwill and intangible assets
|
0.0
|
(0.4)
|
Accruals for proposed dividends to shareholders
|
(3.3)
|
(3.1)
|
Other
|
(0.5)
|
(0.4)
|
Common equity tier 1 capital
|
49.4
|
49.6
2
|
1 Equity under
Swiss banking law is adjusted to derive equity in accordance with IFRS and
then further adjusted to derive common equity tier 1 (CET1) capital in
accordance with Swiss SRB requirements. 2 Based on Swiss SRB requirements,
including transitional arrangements.
|
Leverage ratio information
Swiss SRB leverage ratio denominator
|
|
|
LRD (fully applied)
|
|
LRD (phase-in)
|
USD billion
|
|
31.12.18
|
|
31.12.17
|
|
31.12.17
|
|
|
|
|
|
|
|
Leverage ratio denominator
|
|
|
|
|
|
|
Swiss GAAP total assets
|
|
480.0
|
|
489.3
|
|
489.3
|
Difference between Swiss GAAP and IFRS total assets
|
|
118.6
|
|
115.5
|
|
115.5
|
Less: derivative exposures and SFTs
1
|
|
(236.7)
|
|
(221.6)
|
|
(221.6)
|
On-balance sheet exposures (excluding derivative exposures and
SFTs)
|
|
361.9
|
|
383.2
|
|
383.2
|
Derivative exposures
|
|
99.3
|
|
97.0
|
|
97.0
|
Securities financing transactions
|
|
114.2
|
|
104.4
|
|
104.4
|
Off-balance sheet items
|
|
26.1
|
|
32.4
|
|
32.4
|
Items deducted from Swiss SRB tier 1 capital
|
|
(0.5)
|
|
(2.0)
|
|
(1.8)
|
Total exposures (leverage ratio denominator)
|
|
601.0
|
|
615.0
|
|
615.2
|
1 Consists of
derivative financial instruments, cash collateral receivables on derivative
instruments, receivables from securities financing transactions, and margin
loans as well as prime brokerage receivables and financial assets at fair
value not held for trading, both related to securities financing
transactions, in accordance with the regulatory scope of consolidation, which
are presented separately under Derivative exposures and Securities financing
transactions in this table.
|
BCBS Basel III leverage ratio (phase-in)
|
USD million, except where indicated
|
|
31.12.18
|
30.9.18
|
30.6.18
|
31.3.18
|
31.12.17
|
Total tier 1 capital
|
|
59,595
|
59,341
|
59,161
|
59,537
|
54,600
|
Total exposures (leverage ratio denominator)
|
|
601,013
|
619,741
|
620,074
|
620,353
|
615,238
|
BCBS Basel III leverage ratio (%)
|
|
9.9
|
9.6
|
9.5
|
9.6
|
8.9
|
Liquidity coverage ratio
UBS AG is required to maintain a
minimum liquidity coverage ratio of 105% as communicated by FINMA.
Liquidity coverage ratio
|
|
|
Weighted value
1
|
USD billion, except where indicated
|
|
Average 4Q18
2
|
Average 4Q17
2
|
High-quality liquid assets
|
|
76
|
88
|
Total net cash outflows
|
|
55
|
67
|
of which: cash outflows
|
|
169
|
191
|
of which: cash inflows
|
|
114
|
124
|
Liquidity coverage ratio (%)
|
|
139
|
132
|
1 Calculated
after the application of haircuts and inflow and outflow rates. 2
Calculated based on an average of 64 data points in the fourth quarter of
2018 and 63 data points in the fourth quarter of 2017.
|
Notice to investors |
This document and the
information contained herein are provided solely for information purposes, and
are not to be construed as solicitation of an offer to buy or sell any
securities or other financial instruments in Switzerland, the United States or
any other jurisdiction. No investment decision relating to securities of or
relating to UBS Group AG, UBS AG or their affiliates should be made on the
basis of this document. Refer to UBS’s Annual Report 2018 for additional
information. This report is available at
www.ubs.com/investors
.
Rounding |
Numbers presented
throughout this report may not add up precisely to the totals provided in the
tables and text. Starting in 2018, percentages, percent changes, and adjusted
results are calculated on the basis of unrounded figures. Information on
absolute changes between reporting periods, which is provided in text and that
can be derived from figures displayed in the tables, is calculated on a rounded
basis.
Tables |
Within tables, blank
fields generally indicate that the field is not applicable or not meaningful,
or that information is not available as of the relevant date or for the
relevant period. Zero values generally indicate that the respective figure is
zero on an actual or rounded basis. Percentage changes are presented as a
mathematical calculation of the change between periods.
UBS Group AG
P.O. Box
CH-8098
Zurich
www.
ubs.com
Zurich, 15 March 2019
Consent of
Independent Registered Public Accounting Firm
We consent to the
incorporation by reference in each of the following registration statements of
UBS Group AG, UBS AG and their affiliates:
(1)
on Form F-3
(Registration Number 333-225551), and each related prospectus currently
outstanding under such registration statement,
(2)
on Form S-8
(Registration Numbers 333-200634; 333-200635; 333-200641; 333-200665;
333-215254; 333-215255; and 333-228653), and each related prospectus currently
outstanding under any of the aforementioned registration statements,
(3)
the base prospectus of
Corporate Asset Backed Corporation (CABCO) dated 23 June 2004 (Registration
Number 333-111572),
(4)
the Form 8-K of CABCO
dated 23 June 2004 (SEC File Number 001-13444), and
(5)
the Prospectus
Supplements relating to the CABCO Series 2004-101 Trust dated 10 May 2004
(Registration Number 033-91744) and 17 May 2004 (Registration Number
033-91744-05),
of our report
dated 14 March 2019, with respect to the standalone financial statements of UBS
AG for the year ended 31 December 2018 included in this Report of Foreign
Private Issuer (Form 6-K) dated March 15, 2019, filed with the Securities and
Exchange Commission.
Ernst & Young
Ltd
/s/
Marie-Laure Delarue
Marie-Laure
Delarue
Licensed
Audit Expert
|
/s/ Ira
S. Fitlin
Ira S.
Fitlin
Certified
Public Accountant (U.S.)
|
This Form 6-K is hereby incorporated by reference into
(1) each of the registration statements of UBS AG on Form F-3
(Registration Number 333-225551) and of UBS Group AG on Form S-8
(Registration Numbers 333-200634; 333-200635; 333-200641; 333-200665;
333-215254; 333-215255; and 333-228653), 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 Form 6-K’s 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/ Todd Tuckner
___________
Name: Todd Tuckner
Title: Group Controller and
Chief Accounting Officer
By:
_/s/ David Kelly _____________
Name: David Kelly
Title: Managing Director
UBS AG
By:
_/s/ Todd Tuckner
___________
Name: Todd Tuckner
Title: Group Controller and
Chief Accounting Officer
By:
_/s/ David Kelly _____________
Name: David Kelly
Title: Managing Director
Date: March 15, 2019