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Cautionary statement regarding
forward-looking statements |
This document
contains statements
that constitute
“forward-looking statements,”
including but
not limited
to management’s
outlook for
UBS’s financial
performance, statements
relating to
the anticipated
effect
of transactions
and
strategic initiatives on UBS’s business and
future development and goals or
intentions to achieve climate, sustainability and other social
objectives. While
these forward-looking
statements represent
UBS’s judgments,
expectations and
objectives concerning
the matters
described, a
number of
risks, uncertainties
and other important
factors could cause actual
developments and results
to differ materially
from UBS’s expectations.
In particular,
terrorist activity and
conflicts in the Middle East, as
well as the continuing Russia–Ukraine war,
may have significant impacts on global markets, exacerbate global
inflationary
pressures, and slow global growth. In addition, the ongoing conflicts may continue to cause significant population displacement,
and lead to shortages of
vital commodities, including
energy shortages and food
insecurity outside the areas immediately
involved in armed conflict.
Governmental responses to the
armed
conflicts, including,
with
respect
to
the Russia–Ukraine
war,
coordinated
successive sets
of
sanctions on
Russia and
Belarus, and
Russian and
Belarusian entities and nationals,
and the uncertainty
as to whether the
ongoing conflicts will
widen and intensify, may continue to
have significant adverse
effects on
the market
and macroeconomic
conditions, including
in ways
that cannot
be anticipated.
UBS’s acquisition
of the
Credit Suisse
Group has
materially changed its outlook and
strategic direction and introduced new operational
challenges. The integration of
the Credit Suisse entities into the UBS
structure is expected to take between three and five years and presents significant risks, including the risks that UBS Group
AG may be unable to achieve
the cost reductions
and other benefits contemplated
by the transaction. This
creates significantly greater
uncertainty about forward-looking statements.
Other factors that may
affect UBS’s performance and ability
to achieve its plans,
outlook and other objectives also
include, but are not
limited to: (i) the
degree to which UBS
is successful in the execution of
its strategic plans, including its cost
reduction and efficiency initiatives and
its ability to manage its
levels of risk-weighted assets
(RWA) and leverage ratio denominator
(LRD), liquidity coverage ratio
and other financial resources, including
changes in RWA
assets and liabilities arising
from higher market volatility and
the size of the
combined Group; (ii) the
degree to which UBS
is successful in implementing
changes to its businesses to meet changing
market, regulatory and other conditions, including
as a result of the acquisition of the Credit Suisse Group; (iii)
increased inflation and interest rate volatility in major markets; (iv) developments in the macroeconomic climate
and in the markets in which UBS operates
or to which
it is exposed, including
movements in securities prices
or liquidity,
credit spreads, currency
exchange rates, deterioration or
slow recovery in
residential
and
commercial
real
estate
markets,
the
effects
of
economic
conditions,
including
elevated
inflationary
pressures,
market
developments,
increasing geopolitical tensions, and changes to national trade policies on the financial position or creditworthiness of UBS’s clients and counterparties,
as
well as on client sentiment
and levels of activity; (v)
changes in the availability of capital
and funding, including any adverse
changes in UBS’s credit spreads
and credit ratings of UBS, Credit Suisse, sovereign issuers, structured credit products or credit-related exposures, as well as availability and cost of funding
to meet requirements
for debt
eligible for total
loss-absorbing capacity
(TLAC), in particular
in light of
the acquisition
of the Credit
Suisse Group; (vi)
changes
in central bank policies or the implementation
of financial legislation and regulation in Switzerland,
the US, the UK, the EU and other financial
centers that
have imposed, or resulted
in, or may do
so in the
future, more stringent or
entity-specific capital, TLAC, leverage ratio, net stable
funding ratio, liquidity
and
funding
requirements,
heightened
operational
resilience
requirements,
incremental
tax
requirements,
additional
levies,
limitations
on
permitted
activities, constraints on
remuneration, constraints on
transfers of capital
and liquidity and sharing
of operational costs
across the Group or other
measures,
and
the
effect
these
will
or
would
have
on
UBS’s
business
activities;
(vii)
UBS’s
ability
to
successfully
implement
resolvability
and
related
regulatory
requirements
and
the
potential
need
to
make
further
changes
to
the
legal
structure
or
booking model
of
UBS
in
response
to
legal
and
regulatory
requirements and any additional requirements due to its acquisition of the Credit Suisse Group, or other developments; (viii) UBS’s ability to maintain and
improve its
systems and
controls for
complying with
sanctions in
a timely
manner and
for the
detection and
prevention of
money laundering
to meet
evolving regulatory requirements and expectations, in particular in
current geopolitical turmoil; (ix) the uncertainty
arising from domestic stresses in certain
major economies; (x) changes in UBS’s competitive position, including whether differences in regulatory capital and other requirements
among the major
financial centers adversely affect UBS’s ability to compete in certain lines
of business; (xi) changes in the standards of conduct applicable to
its businesses
that may result from new regulations or new
enforcement of existing standards, including
measures to impose new and enhanced
duties when interacting
with customers
and in
the execution
and handling
of customer
transactions; (xii)
the liability
to which
UBS may
be exposed,
or possible
constraints or
sanctions that regulatory authorities
might impose on UBS,
due to litigation, contractual
claims and regulatory investigations,
including the potential for
disqualification from
certain businesses, potentially large fines or monetary penalties, or the
loss of licenses or privileges as a
result of regulatory or other
governmental sanctions, as well as the effect that litigation, regulatory and
similar matters have on the operational risk component of its
RWA, including
as a
result of
its acquisition
of the
Credit Suisse
Group, as
well as
the amount
of capital available
for return
to shareholders;
(xiii) the
effects on
UBS’s
business, in particular
cross-border banking, of sanctions,
tax or regulatory developments
and of possible
changes in UBS’s
policies and practices;
(xiv) UBS’s
ability to retain and
attract the employees necessary to generate
revenues and to manage, support and
control its businesses, which may
be affected by
competitive factors; (xv) changes in accounting or tax standards or policies, and determinations
or interpretations affecting the recognition of gain or loss,
the valuation of
goodwill, the recognition
of deferred tax
assets and other
matters; (xvi) UBS’s
ability to implement
new technologies and
business methods,
including digital services and technologies, and ability to successfully compete with both existing and new financial
service providers, some of which may
not be regulated to the same extent; (xvii) limitations on the
effectiveness of UBS’s internal processes for risk management,
risk control, measurement and
modeling, and of financial models generally;
(xviii) the occurrence of operational failures, such as fraud,
misconduct, unauthorized trading, financial crime,
cyberattacks, data leakage and systems
failures, the risk of which is increased
with cyberattack threats from both nation states
and non-nation-state actors
targeting financial institutions;
(xix) restrictions on the
ability of UBS Group
AG and UBS AG to
make payments or distributions,
including due to restrictions
on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or,
in the case of financial difficulties, due to the exercise by FINMA or
the regulators
of UBS’s
operations in
other countries
of their
broad statutory
powers in
relation to
protective measures,
restructuring and
liquidation
proceedings; (xx) the degree to which changes in regulation, capital
or legal structure, financial results or other factors may affect UBS’s
ability to maintain
its stated capital return objective;
(xxi) uncertainty over the
scope of actions that
may be required by UBS, governments
and others for UBS to
achieve goals
relating to climate,
environmental and
social matters, as
well as the
evolving nature of
underlying science
and industry
and the possibility
of conflict between
different governmental standards and regulatory regimes; (xxii) the ability of UBS to access capital markets; (xxiii) the ability
of UBS to successfully recover
from a
disaster or other
business continuity problem due
to a hurricane,
flood, earthquake, terrorist attack,
war,
conflict (e.g., the
Russia–Ukraine war),
pandemic, security
breach, cyberattack,
power loss,
telecommunications failure
or other
natural or
man-made event,
including the
ability to
function
remotely during long-term disruptions such
as the COVID-19 (coronavirus) pandemic;
(xxiv) the level of
success in the absorption of
Credit Suisse, in the
integration of the two groups and their businesses, and in the
execution of the planned strategy regarding cost reduction and divestment
of any non-core
assets,
the existing
assets and
liabilities of
Credit Suisse,
the
level of
resulting impairments
and write-downs,
the effect
of
the consummation
of
the
integration on
the operational
results, share
price and
credit rating
of UBS
– delays,
difficulties, or
failure in
closing the
transaction may
cause market
disruption and
challenges for
UBS
to
maintain business,
contractual and
operational relationships;
and
(xxv)
the effect
that these
or
other factors
or
unanticipated events,
including media reports
and speculations, may
have on
its reputation
and the
additional consequences that
this may
have on
its
business and
performance. The
sequence in
which the
factors above
are presented
is not
indicative of
their likelihood
of occurrence
or the
potential
magnitude of their consequences. UBS’s business and financial performance could be affected by other factors identified in its past and future filings and
reports, including
those filed
with the
US Securities and
Exchange Commission (the
SEC). More
detailed information about
those factors
is set
forth in
documents furnished by UBS and filings made by UBS with the SEC, including the UBS Group AG and UBS AG Annual Reports on Form 20-
F for the year
ended 31 December 2023. UBS
is not under any
obligation to (and expressly disclaims any
obligation to) update or alter
its forward-looking statements,
whether as a result of new information, future events,
or otherwise.
