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: October 30, 2024
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrants file or will file annual reports under cover of Form 20-F or Form
40-
F.
Form 20-F
☒
☐
This Form 6-K consists of the Third Quarter 2024 Report of UBS Group AG, which appears immediately following
this page.
Third quarter
Corporate calendar UBS Group
Publication of the UBS Group fourth quarter 2024 report Tuesday, 4 February 2025
Information about future publication dates is available at
ubs.com/global/en/investor-relations/events/calendar.html
Publication of the UBS AG third quarter 2024 report Friday, 8 November 2024
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Publisher: UBS Group AG, Zurich, Switzerland | ubs.com
Language: English
© UBS 2024. The key symbol and UBS are among the registered and unregistered
trademarks of UBS. All rights reserved.
1.
UBS
Group
4
6
2.
UBS business divisions
and Group Items
18
22
25
28
31
33
3.
Risk, capital, liquidity and funding,
and balance sheet
35
40
50
51
54
4.
Consolidated
financial statements
56
Appendix
97
101
103
104
UBS Group third quarter 2024 report
Terms used in this report, unless the context requires otherwise
“UBS”, “UBS Group”, “UBS Group AG consolidated”, “Group”, “we”, “us” and “our”
UBS Group AG and its consolidated subsidiaries
“UBS AG” and “UBS AG consolidated”
UBS AG and its consolidated subsidiaries
“Credit Suisse AG” and “Credit Suisse AG consolidated”
Credit Suisse AG and its consolidated subsidiaries before the merger
with UBS AG
“Credit Suisse Group“ and “Credit Suisse Group AG consolidated”
Pre-acquisition Credit Suisse Group
”Credit Suisse”
Credit Suisse AG and its consolidated subsidiaries before the merger
with UBS AG, Credit Suisse Services AG, and other small former
Credit Suisse Group entities now directly held by UBS Group AG
“UBS Group AG” and “UBS Group AG standalone”
UBS Group AG on a standalone basis
“UBS AG standalone”
UBS AG on a standalone basis
“UBS Switzerland AG” and “UBS Switzerland AG standalone”
UBS Switzerland AG on a standalone basis
“UBS Europe SE consolidated”
UBS Europe SE and its consolidated subsidiaries
“UBS Americas Holding LLC” and “UBS Americas Holding LLC consolidated”
UBS Americas Holding LLC and its consolidated subsidiaries
“1m”
One million, i.e. 1,000,000
“1bn”
One billion, i.e. 1,000,000,000
“1trn”
One trillion, i.e. 1,000,000,000,000
In this report, unless the context requires otherwise, references to any gender shall apply to all genders.
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. We report a number of APMs in the discussion of the
financial and operating performance of the Group, our business divisions and Group Items. We use APMs to provide
a more complete picture of our operating performance and to reflect management’s view of the fundamental
drivers of our business results. A definition of each APM, the method used to calculate it and the information
content are presented under “Alternative performance measures” in the appendix to this report. Our APMs may
qualify as non-GAAP measures as defined by US Securities and Exchange Commission (SEC) regulations. Our
underlying results are APMs and are non-GAAP financial measures.
›
Refer to the “Group performance” section of this report and to “Alternative performance measures” in the
appendix to this report for additional information about underlying results
Comparability
Comparative information in this report is presented as follows.
Profit and loss information for all quarters covered by this report and for 2024 year-to-date information is based
entirely on consolidated data following the acquisition of the Credit Suisse Group. Comparative year-to-date
information for 2023 includes four months (June to September 2023) of post-acquisition consolidated data and
five months of UBS Group data only (January to May 2023).
All balance sheet information presented in this report includes only post-acquisition consolidated information.
Significant regulated subsidiary and sub-group information
Financial and regulatory key figures for our significant regulated subsidiaries and sub-groups will be published on
8 November 2024 and will be available under “Holding company and significant regulated subsidiaries and sub-
groups” at
ubs.com/investors
.
UBS Group third quarter 2024 report
Our key figures
As of or for the quarter ended
As of or year-to-date
USD m, except where indicated
30.9.24
30.6.24
31.12.23
1
30.9.23
1
30.9.24
30.9.23
1
Group results
Total revenues
Negative goodwill
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Net profit / (loss) attributable to shareholders
Diluted earnings per share (USD)
2
Profitability and growth
3,4
Return on equity (%)
Return on tangible equity (%)
Underlying return on tangible equity (%)
5
Return on common equity tier 1 capital (%)
Underlying return on common equity tier 1 capital (%)
5
Return on leverage ratio denominator, gross (%)
Cost / income ratio (%)
6
Underlying cost / income ratio (%)
5,6
Effective tax rate (%)
n.m.
7
n.m.
7
Net profit growth (%)
n.m.
n.m.
n.m.
Resources
3
Total assets
Equity attributable to shareholders
Common equity tier 1 capital
8
Risk-weighted assets
8
Common equity tier 1 capital ratio (%)
8
Going concern capital ratio (%)
8
Total loss-absorbing capacity ratio (%)
8
Leverage ratio denominator
8
Common equity tier 1 leverage ratio (%)
8
Liquidity coverage ratio (%)
9
Net stable funding ratio (%)
Other
Invested assets (USD bn)
4,10
Personnel (full-time equivalents)
Market capitalization
2,11
Total book value per share (USD)
2
Tangible book value per share (USD)
2
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
2 Refer to the “Share information and earnings per share” section of this report for more information. 3 Refer to the “Targets, capital guidance and ambitions” section of the UBS Group Annual Report 2023,
available under “Annual reporting” at ubs.com/investors, for more information about our performance targets. 4 Refer to “Alternative performance measures” in the appendix to this report for the definition and
calculation method. 5 Refer to the “Group performance” section of this report for more information about underlying results. 6 Negative goodwill is not used in the calculation as it is presented in a separate
reporting line and is not part of total revenues. 7 The effective tax rate for the fourth and third quarters of 2023 is not a meaningful measure, due to the distortive effect of current unbenefited tax losses at the
former Credit Suisse entities. 8 Based on the Swiss systemically relevant bank fram ework as of 1 January 2020. Refer to the “Capital management” section of this report for more information. 9 The disclosed
ratios represent quarterly averages for the quarters presented and are calculated based on an average of 65 data points in the third quarter of 2024, 61 data points in the second quarter of 2024, 63 data points in
the fourth quarter of 2023 and 63 data points in the third quarter of 2023. Refer to the “Liquidity and funding management” section of this report for more information. 10 Consists of invested assets for Global
Wealth Management, Asset Management (including invested assets from associates) and Personal & Corporate Banking. Refer to “Note 32 Invested assets and net new money” in the “Consolidated financial
statements” section of the UBS Group Annual Report 2023, available under “Annual reporting” at ubs.com/investors, for more information. 11 The calculation of market capitalization reflects total shares issued
multiplied by the share price at the end of the period.
UBS Group third quarter 2024 report |
UBS Group | Recent developments 4
UBS Group
Management report
Recent developments
Regulatory capital developments and capital returns guidance
In the third quarter of 2024, reflecting our strong capital position, completion of legal entity mergers, overall
progress on the integration and the winding down of Non-core and Legacy, we voluntarily accelerated the
amortization of the remaining transitional purchase price allocation (PPA) adjustments for common equity tier 1
(CET1) capital purposes. This resulted in a USD 3.4bn decrease in CET1 capital and a CET1 capital ratio of 14.3%.
Excluding this adjustment, the CET1 capital ratio would have been 14.9%. In connection with the acquisition of
the Credit Suisse Group in 2023, the Swiss Financial Market Supervisory Authority (FINMA) had approved
neutralizing a CET1 capital effect of USD 5.0bn (net of tax) of interest-rate- and own-credit-driven fair value
adjustments for UBS Group AG that are expected to fully reverse into income and be accretive to CET1 capital over
time. The transitional treatment was subject to linear amortization at the rate of USD 0.3bn per quarter through
30 June 2027. This quarterly amortization was eliminated upon fully amortizing the transitional treatment in the
third quarter of 2024. As these transitional adjustments only applied to UBS Group AG, the regulatory capital
position of UBS AG was not impacted by the decision to fully amortize them. On a standalone basis as of
30 September 2024, UBS AG’s fully applied CET1 capital ratio is expected to be around 13.3%.
We expect that the adoption of the final Basel III standards in January 2025 will lead to a low single-digit percentage
increase in the UBS Group’s RWA, reducing the CET1 capital ratio by around 30 basis points. This estimate is based
on our current understanding of the relevant standards as we are in an active dialogue with FINMA regarding
various aspects of the final rules. We continue to expect to operate with a CET1 capital ratio of around 14% after
the implementation of the final Basel III standards.
We expect to complete our planned USD 1bn of share repurchases in the fourth quarter of 2024. Our ambition to
continue share repurchases in 2025 and for our capital returns in 2026 to exceed pre-acquisition levels is
unchanged. Our ambitions beyond 2025 are subject to our assessment of any proposed requirements from
Switzerland’s ongoing review of its capital regime.
›
Refer to “Amortization of transitional purchase price allocation adjustments for regulatory capital” in the “Capital
management” section of this report for more information.
Integration of Credit Suisse
We continue to make progress related to the integration of Credit Suisse, with the current focus on client account
and platform migrations.
Following the merger of UBS AG and Credit Suisse AG in May 2024 and the transition to a single US intermediate
holding company in June 2024, the merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG was completed
on 1 July 2024 and was another critical step on our integration roadmap.
In October 2024, we completed the migration of our Global Wealth Management client accounts in Luxembourg
and Hong Kong to UBS platforms and we plan to migrate our Global Wealth Management client accounts booked
in Singapore and Japan before the end of 2024. In Switzerland, we expect the next phase of Global Wealth
Management and Personal & Corporate Banking client account migrations in the second quarter of 2025.
In the third quarter of 2024, we realized an additional USD 0.8bn in gross cost savings, for a total of around
USD 6.8bn in annualized exit rate gross cost savings compared with the 2022 combined cost base of Credit Suisse
and UBS. We expect to achieve around USD 7.5bn of gross cost savings by the end of 2024, or approximately 58%
of our ambition of around USD 13bn by the end of 2026.
UBS Group third quarter 2024 report |
UBS Group | Recent developments 5
Our Non-core and Legacy business division continues to actively exit positions and reduce its exposures. On
13 August 2024, UBS entered into an agreement to sell Select Portfolio Servicing, the US mortgage-servicing
business of Credit Suisse managed in the Non-core and Legacy business division. Completion of the transaction is
subject to regulatory approvals and other customary closing conditions. The transaction is expected to close in the
first quarter of 2025. UBS does not expect to recognize a material profit or loss upon completion of the transaction.
Based on balances as of 30 September 2024, the completion of the transaction would reduce the Group’s risk-
weighted assets (RWA) by around USD 1.4bn and the Group’s leverage ratio denominator (LRD) by around
USD 1.7bn.
In October 2024, UBS entered into an agreement to sell to American Express Swiss Holdings GmbH (American
Express) its 50% interest in Swisscard AECS GmbH (Swisscard), a joint venture between UBS and American Express
in Switzerland. In addition, UBS and Swisscard entered into an agreement to transition the Credit Suisse-branded
card portfolios to UBS. Both transactions are subject to certain closing conditions and are not expected to have a
material impact for UBS.
Regulatory and legal developments
Withholding tax exemption period for too-big-to-fail instruments
In August 2024, the Swiss Federal Council launched a consultation related to the existing withholding tax exemption
that applies to too-big-to-fail instruments issued by no later than 31 December 2026. The Federal Council had
recommended an unlimited extension of the exemption as part of a broader reform package in its April 2024 report
on banking stability. As these reforms are not expected to enter into force before the expiry of the existing special
rules, the Swiss Federal Council proposes to extend the current exemption, from 31 December 2026 to
31 December 2031, to ensure that banks can continue to issue capital instruments on competitive terms.
Swiss legislators postpone the review of a public liquidity backstop
In August 2024, the Swiss Economic Affairs and Taxation Committee of the Council of States deferred further
deliberations on the introduction of a public liquidity backstop until the Swiss parliamentary investigation committee
publishes its report on the failure of the Credit Suisse Group, which is expected to be released by the end of 2024.
FINMA suspends annual approval of UBS’s recovery and emergency plans
In October 2024, FINMA published its 2024 resolution reporting for UBS. FINMA noted that if the preferred
resolution strategy was applied, UBS would be resolvable by means of a single point of entry recapitalization.
Considering the ongoing integration activities and the additional requirements for alternative resolution strategies
following the Credit Suisse crisis, including the need for legislative changes, FINMA announced that it had
suspended the annual approval of UBS’s recovery and emergency plans. UBS has started working on the new plans
in close dialogue with FINMA.
Switzerland implements the Income Inclusion Rule
In September 2024, the Swiss Federal Council introduced the Income Inclusion Rule (the IIR), a measure developed
by the Organisation for Economic Co-operation and Development (the OECD) as part of the minimum corporate
taxation rules applicable to corporate groups with a worldwide turnover of at least EUR 750m. Under the IIR, the
profits of foreign subsidiaries and branches of Swiss corporate groups will be taxed at a minimum rate of 15% on
the OECD global minimum tax base with respect to each jurisdiction in which the corporate groups operate. The
IIR complements the Swiss supplementary tax that was introduced in January 2024. The IIR will apply from 1 January
2025, and UBS expects the overall tax impact from the IIR will be limited, given that UBS is subject to a corporate
tax burden of more than 15% in the vast majority of countries in which it operates.
Mutual recognition agreement with the UK submitted to the Swiss Parliament
In September 2024, the Swiss Federal Council submitted for parliamentary approval a mutual recognition
agreement (an MRA) with the UK regarding financial services. The agreement facilitates cross-border financial
activities based on a new model for regulatory cooperation and an outcomes-based mutual recognition of domestic
rules. The MRA is supplemented by an enhanced and closer supervisory process and additional supervisory
arrangements where new market access is granted. It is expected that the Parliaments in Switzerland and the UK
will grant approval for the MRA in 2025.
Developments related to the final Basel III implementation
In Switzerland, the amendments to the Capital Adequacy Ordinance that will incorporate the final Basel III standards
into Swiss law are still scheduled to enter into force on 1 January 2025, as confirmed by the Swiss Federal Council
in June 2024.
UBS Group third quarter 2024 report |
UBS Group | Recent developments 6
We expect that the adoption of the final Basel III standards in January 2025 will lead to low single-digit percentage
increases in the UBS Group’s RWA and LRD, reducing the CET1 capital ratio by around 30 basis points and the CET1
leverage ratio by around 10 basis points. This estimate is based on our current understanding of the relevant
standards, as we are in an active dialogue with FINMA regarding various aspects of the final rules. Our estimate for
the RWA and CET1 capital ratio does not take into account the impact of the output floor, which is to be phased
in over time.
In September 2024, the UK Prudential Regulatory Authority (the PRA) published its final rules covering the
implementation of the final Basel III standards. As part of the package, the PRA announced the pushing back of the
implementation date, from 1 July 2025 to 1 January 2026, with full phase-in of the output floor by 1 January 2030.
The overall impact on UBS is expected to be limited.
In the US, the banking agencies, including the Federal Reserve Board, have been discussing amendments to their
original proposals regarding the implementation of the final Basel III standards. The banking agencies have indicated
that they plan to issue a revised proposal before issuing the final rules.
The Federal Reserve Board stress capital buffer requirements
In August 2024, the Federal Reserve Board assigned UBS Americas Holding LLC a stress capital buffer (an SCB) of
9.3% as of 1 October 2024 (previously 9.1%) under the Federal Reserve Board’s SCB rule, resulting in a total CET1
capital requirement of 13.8%. The SCB for our US-based intermediate holding company is based on the previously
released results of the Federal Reserve Board’s 2024 Dodd–Frank Act Stress Test (DFAST), where UBS Americas
Holding LLC exceeded the minimum capital requirements under the severely adverse scenario.
Group performance
Income statement
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
2Q24
3Q23
30.9.24
30.9.23
1
Net interest income
Other net income from financial instruments measured at fair value through profit or loss
Net fee and commission income
Other income
Total revenues
Negative goodwill
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Comprehensive income
Total comprehensive income
Total comprehensive income attributable to non-controlling interests
Total comprehensive income attributable to shareholders
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
UBS Group third quarter 2024 report |
UBS Group | Group performance 7
Selected financial information of the business divisions and Group Items
For the quarter ended 30.9.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: PPA effects and other integration items
1
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
2
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
For the quarter ended 30.6.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: PPA effects and other integration items
1
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
2
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
For the quarter ended 30.9.23
3
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: PPA effects and other integration items
1
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
2
of which: acquisition-related costs
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
1 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental items directly related to the integration. 2 Includes temporary, incremental operating
expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group. 3 Comparative-period information has been restated for
changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report.
UBS Group third quarter 2024 report |
UBS Group | Group performance 8
Selected financial information of the business divisions and Group Items (continued)
Year-to-date 30.9.24
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
Total revenues as reported
of which: PPA effects and other integration items
1
Total revenues (underlying)
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
2
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
Year-to-date 30.9.23
3,4
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Negative
goodwill
Total
Total revenues as reported
of which: PPA effects and other integration items
1
Total revenues (underlying)
Negative goodwill
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
2
of which: acquisition-related costs
Operating expenses (underlying)
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
1 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental items directly related to the integration. 2 Includes temporary, incremental operating
expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group. 3 Comparative-period information has been restated for
changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report.
4 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
Integration-related expenses, by business division and Group Items
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total integration-related expenses
of which: total revenues
of which: operating expenses
of which: personnel expenses
of which: general and administrative expenses
of which: depreciation, amortization and impairment of non-financial assets
1 Comparative-period information has been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to “Note 3 Segment reporting” in the
“Consolidated financial statements” section of this report.
UBS Group third quarter 2024 report |
UBS Group | Group performance 9
Underlying results
In addition to reporting our results in accordance with IFRS Accounting Standards, we report underlying results that
exclude items of profit or loss that management believes are not representative of the underlying performance.
In the third quarter of 2024, underlying revenues exclude purchase price allocation (PPA) effects and other
integration items. PPA effects mainly consist of PPA adjustments on financial instruments measured at amortized
cost, including off-balance sheet positions, arising from the acquisition of the Credit Suisse Group. Accretion of PPA
adjustments on financial instruments is accelerated when the related financial instrument is derecognized before
its contractual maturity. No adjustment is made for accretion of PPA on financial instruments within Non-core and
Legacy, due to the nature of its business model.
Underlying expenses exclude integration-related expenses that are temporary, incremental and directly related to
the integration of Credit Suisse into UBS, including costs of internal staff and contractors substantially dedicated to
integration activities, retention awards, redundancy costs, incremental expenses from the shortening of useful lives
of property, equipment and software, and impairment charges relating to these assets. Classification as integration-
related expenses does not affect the timing of recognition and measurement of those expenses or the presentation
thereof in the income statement.
Results: 3Q24 vs 3Q23
Reported operating profit before tax was USD 1,929m, compared with an operating loss before tax of USD 184m,
reflecting lower operating expenses, an increase in total revenues and lower net credit loss expenses. Total revenues
increased by USD 639m, or 5%, to USD 12,334m, and included a decrease of USD 296m in accretion impacts
resulting from PPA adjustments on financial instruments and other PPA effects. The increase in total revenues was
driven by a USD 461m increase in net fee and commission income, a USD 142m increase in net interest income and
other net income from financial instruments measured at fair value through profit or loss, and a USD 36m increase
in other income. Operating expenses decreased by USD 1,357m, or 12%, to USD 10,283m and included a
USD 913m decrease in integration-related expenses. The decrease in operating expenses was mainly driven by a
USD 735m decrease in general and administrative expenses and a USD 678m decrease in personnel expenses, partly
offset by a USD 56m increase in depreciation, amortization and impairment of non-financial assets. Net credit loss
expenses were USD 121m, compared with USD 239m in the third quarter of 2023.
Underlying results 3Q24 vs 3Q23
Underlying results for the third quarter of 2024 excluded PPA effects and other integration items of USD 662m
from total revenues and also excluded integration-related expenses and PPA effects of USD 1,119m from operating
expenses.
On an underlying basis, profit before tax increased by USD 1,472m to USD 2,386m, reflecting a USD 935m increase
in underlying total revenues, a USD 418m decrease in underlying operating expenses and a USD 118m decrease in
net credit loss expenses.
Total revenues: 3Q24 vs 3Q23
Net interest income and other net income from financial instruments measured at fair value through profit or loss
Total combined net interest income and other net income from financial instruments measured at fair value through
profit or loss increased by USD 142m to USD 5,476m and included a decrease of USD 156m in accretion impacts
resulting from PPA adjustments on financial instruments and other PPA effects.
Global Wealth Management decreased by USD 136m to USD 2,232m, which included USD 221m of accretion of
PPA adjustments on financial instruments and other PPA effects, compared with USD 371m in the third quarter of
2023. Excluding the aforementioned effects, net interest income decreased, reflecting lower deposit margins,
including the effects of shifts to lower-margin deposit products and the effects of liquidity and funding costs, partly
offset by higher deposit volumes. The decrease was also due to lower loan revenues, reflecting lower average
volumes. These decreases were partly offset by an increase in transaction-based income, mainly driven by higher
levels of client activity.
Personal & Corporate Banking decreased by USD 106m to USD 1,638m, which included USD 255m of accretion of
PPA adjustments on financial instruments and other PPA effects, compared with USD 290m in the third quarter of
2023. The remaining decrease was mainly due to higher liquidity and funding costs, as well as lower deposit margins
resulting from both lower reinvestment rates and shifts to lower-margin deposit products.
UBS Group third quarter 2024 report |
UBS Group | Group performance 10
The Investment Bank increased by USD 401m to USD 1,518m, mainly due to higher revenues in Derivatives &
Solutions, reflecting increases mostly in Equity Derivatives, Foreign Exchange and Rates revenues, as well as an
increase in Global Banking, mainly from higher revenues across Public Capital Markets. These increases were partly
offset by lower revenues in Financing, particularly in the Capital Markets Financing business.
Non-core and Legacy decreased by USD 174m to USD 98m, mainly as a result of portfolio reductions.
Group Items was negative USD 32m compared with negative USD 166m, mainly as a result of positive effects in
Group hedging and own debt, including hedge accounting ineffectiveness, within Group Treasury. Higher gains in
Group hedging and own debt during the third quarter of 2024 were driven by mark-to-market effects on portfolio-
level economic hedges, mainly due to the impact of decreasing interest rates.
›
Refer to the relevant business division commentary in the “UBS business divisions and Group Items” section of this
report for more information about business-division-specific revenues
›
Refer to “Note 4 Net interest income” in the “Consolidated financial statements” section of this report for more
information about net interest income
Net interest income and other net income from financial instruments measured at fair value through profit or loss
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1,2
2Q24
3Q23
30.9.24
30.9.23
1,2
Net interest income from financial instruments measured at amortized cost and fair
value through other comprehensive income
Net interest income from financial instruments measured at fair value through profit or
loss and other
Other net income from financial instruments measured at fair value through profit or
loss
Total
Global Wealth Management
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary
activity
2
Personal & Corporate Banking
of which: net interest income
of which: transaction-based income from foreign exchange and other intermediary
activity
2
Asset Management
Investment Bank
Non-core and Legacy
3
Group Items
3
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
2 Comparative-period information has been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to “Note 3 Segment reporting” in the
“Consolidated financial statements” section of this report. 3 Mainly includes spread-related income in connection with client-driven transactions, foreign currency translation effects and income and expenses from
precious metals, which are included in the income statement line Other net income from financial instruments measured at fair value through profit or loss. The amounts reported on this line are one component of
Transaction-based income in the management discussion and analysis in the “Global Wealth Management” and “Personal & Corporate Banking” sections of this report.
Net fee and commission income
Net fee and commission income increased by USD 461m to USD 6,517m and included a decrease of USD 118m in
accretion of PPA adjustments on financial instruments and other PPA effects, which was reflected in other fee and
commission income, predominantly in the Investment Bank.
Investment fund fees increased by USD 291m to USD 1,530m, and there was a USD 106m increase to USD 3,117m
in fees from portfolio management and related services, predominantly in Global Wealth Management. These
increases were largely attributable to positive market performance.
Net brokerage fees increased by USD 117m to USD 1,042m, reflecting an increase across all regions in Cash Equities
in Execution Services in the Investment Bank, as well as an increase in Global Wealth Management that was due to
higher levels of client activity, particularly in the Americas, Asia Pacific and Switzerland regions.
Underwriting fee income increased by USD 54m to USD 153m, largely driven by a USD 40m increase in debt
underwriting revenues, mainly due to higher deal volumes in the Global Banking business in the Investment Bank.
›
Refer to “Note 5 Net fee and commission income” in the “Consolidated financial statements” section of this report
for more information
UBS Group third quarter 2024 report |
UBS Group | Group performance 11
Other income
Other income was USD 341m, compared with USD 305m in the third quarter of 2023. Revenues included a
USD 135m gain related to the sale of our investment in an associate, with half of the gain being recognized within
the Investment Bank and the other half in Non-core and Legacy, as well as a USD 72m net gain in Asset
Management from both the closing of the remaining portion of the sale of our Brazilian real estate fund
management business and the sale of our shareholding in Credit Suisse Insurance Linked Strategies Ltd (CSILS).
These gains were partly offset by a USD 35m decrease in gains recognized on repurchases of UBS’s own debt
instruments.
›
Refer to “Note 6 Other income” in the “Consolidated financial statements” section of this report for more
information
›
Refer to “Asset Management”, “Investment Bank” and “Non-core and Legacy” in the “UBS business divisions and
Group Items” section of this report for more information about the sale of businesses
Credit loss expense / release: 3Q24 vs 3Q23
Total net credit loss expenses in the third quarter of 2024 were USD 121m, reflecting net releases of USD 15m
related to performing positions and net expenses of USD 136m on credit-impaired positions. Credit loss expenses
were USD 239m in the prior-year quarter.
›
Refer to “Note 9 Expected credit loss measurement” in the “Consolidated financial statements” section of this
report for more information
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
Total
For the quarter ended 30.9.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 30.6.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 30.9.23
1
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
1 Comparative-period information has been restated for changes in business division perimeters. Refer to “Changes to segment reporting in 2024” in the “UBS business divisions and Group Items” section of the
UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, and “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report for more information.
UBS Group third quarter 2024 report |
UBS Group | Group performance 12
Operating expenses: 3Q24 vs 3Q23
Operating expenses
For the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
2Q24
3Q23
30.9.24
30.9.23
1
Personnel expenses
of which: salaries and variable compensation
of which: variable compensation – financial advisors
2
General and administrative expenses
of which: net expenses for litigation, regulatory and similar matters
Depreciation, amortization and impairment of non-financial assets
Total operating expenses
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
2 Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. Also includes expenses related to compensation commitments with financial
advisors entered into at the time of recruitment that are subject to vesting requirements.
Personnel expenses
Personnel expenses decreased by USD 678m to USD 6,889m, which included a USD 478m decrease in integration-
related expenses, which was mainly due to awards granted to employees to support retention and operational
stability in 2023. Salaries and variable compensation decreased by USD 619m, mainly due to the aforementioned
effects and decreases in salaries as a result of a smaller workforce. These decreases were partly offset by annual
salary increases, unfavorable foreign currency exchange impacts and higher accruals for performance awards on
an underlying basis. In addition, there was a USD 185m increase in financial advisor compensation, which reflected
higher compensable revenues.
›
Refer to “Note 7 Personnel expenses” in the “Consolidated financial statements” section of this report for more
information
General and administrative expenses
General and administrative expenses decreased by USD 735m to USD 2,389m, largely due to a USD 445m decrease
in integration-related expenses, which was mainly attributable to lower real estate and consulting costs. In addition,
there was a release of USD 84m of IFRS 3 acquisition-related contingent liabilities following settlements reached in
the third quarter of 2024. In the third quarter of 2023, integration-related expenses included a one-time fee of
USD 289m related to a provision for an onerous contract.
›
Refer to “Note 8 General and administrative expenses” in the “Consolidated financial statements” section of this
report for more information
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information about litigation, regulatory and similar matters
›
Refer to the “Regulatory and legal developments” and “Risk factors” sections of the UBS Group Annual Report
2023, available under “Annual reporting” at
ubs.com/investors
, for more information about litigation, regulatory
and similar matters
Depreciation, amortization and impairment of non-financial assets
Depreciation, amortization and impairment of non-financial assets increased by USD 56m to USD 1,006m, including
a USD 9m increase in integration-related expenses. The increase was mainly attributable to depreciation of internally
generated capitalized software, reflecting a higher level of capitalized cost and accelerated depreciation of own
used buildings, partly offset by a decrease in depreciation of leasehold improvements.
Tax: 3Q24 vs 3Q23
The Group had a net income tax expense of USD 502m in the third quarter of 2024, compared with USD 526m in
the prior-year quarter.
The net current tax expense was USD 378m, compared with USD 643m, and primarily related to the taxable profits
of UBS Switzerland AG and other entities.
There was a net deferred tax expense of USD 124m, compared with a net benefit of USD 116m in the prior-year
quarter. This included a net expense of USD 222m that primarily related to the amortization of deferred tax assets
(DTAs) previously recognized in relation to tax losses carried forward and deductible temporary differences. This
was partly offset by benefits of USD 98m from increases in recognized DTAs, of which USD 41m reflected updated
expectations of future profits available to utilize tax losses carried forward, and USD 57m in respect of an increase
in tax credits carried forward in relation to US corporate alternative minimum tax.
UBS Group third quarter 2024 report |
UBS Group | Group performance 13
The Group’s effective tax rate for the quarter was 26.0%, although it would have been 28.1% without the
aforementioned deferred tax benefit from updated expectations of future profits. This is higher than the Group’s
structural rate of 23%, mainly because its net profit includes operating losses of certain entities, mostly reflecting
integration-related expenses and restructuring costs, that did not result in any tax benefits because they cannot be
offset with profits of other entities in the Group, and did not result in any DTA recognition. The Group’s effective
tax rate for the fourth quarter of 2024 may be higher than the Group’s structural rate if further such operating
losses are incurred in these entities, and the amount of that impact will depend on the amount of those losses. The
Group’s effective tax rate is expected to decrease toward the structural rate in subsequent years.
Total comprehensive income attributable to shareholders
In the third quarter of 2024, total comprehensive income attributable to shareholders was USD 3,883m, reflecting
a net profit of USD 1,425m and other comprehensive income (OCI), net of tax, of USD 2,459m.
OCI related to cash flow hedges was USD 1,593m, mainly reflecting net unrealized gains on US dollar hedging
derivatives resulting from decreases in the relevant US dollar long-term interest rates.
Foreign currency translation OCI was USD 1,333m, mainly resulting from the Swiss franc and the euro both
strengthening against the US dollar.
OCI related to own credit on financial liabilities designated at fair value was negative USD 323m, primarily due to
a tightening of our own credit spreads.
Defined benefit plan OCI was negative USD 128m, primarily reflecting negative pre-tax OCI in our non-Swiss plans
of USD 107m, mainly driven by the Credit Suisse UK plan following a buy-in insurance transaction to mitigate
inherent risks.
›
Refer to “Statement of comprehensive income” in the “Consolidated financial statements” section of this report for
more information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to “Note 21 Fair value measurement” in the “Consolidated financial statements” section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about own
credit on financial liabilities designated at fair value
›
Refer to “Note 27 Post-employment benefit plans” in the “Consolidated financial statements” section of the UBS
Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about
OCI related to defined benefit plans
Sensitivity to interest rate movements
As of 30 September 2024, it is estimated that a parallel shift in yield curves by +100 basis points could lead to a
combined increase in annual net interest income from our banking book of approximately USD 1.7bn in the first
year after such a shift. Of this increase, approximately USD 1.0bn, USD 0.4bn and USD 0.1bn would result from
changes in Swiss franc, US dollar and euro interest rates, respectively.
A parallel shift in yield curves by –100 basis points could lead to a combined decrease in annual net interest income
of approximately
USD 0.3bn. Of this decrease, approximately USD 0.4bn and USD 0.1bn would result from changes
in US dollar and euro interest rates, respectively. Swiss franc interest rates would provide an offsetting increase of
approximately USD 0.3bn, driven by both contractual and assumed flooring benefits under negative interest rates.
These estimates are based on a hypothetical scenario of an immediate change in interest rates, equal across all
currencies and relative to implied forward rates as of 30 September 2024
applied to our banking book. These
estimates further assume no change to balance sheet size and product mix, stable foreign exchange rates, and no
specific management action. These estimates do not represent a forecast of net interest income variability.
›
Refer to the “Risk management and control” section of this report for information about interest rate risk in the
banking book
UBS Group third quarter 2024 report |
UBS Group | Group performance 14
Key figures and personnel
Below is an overview of selected key figures of the Group. For further information about key figures related to
capital management, refer to the “Capital management” section of this report.
Cost / income ratio: 3Q24 vs 3Q23
The cost / income ratio was 83.4%, compared with 99.5%, and on an underlying basis the cost / income ratio was
78.5%, compared with 89.3%. These decreases were a result of higher total revenues and a decrease in operating
expenses.
Personnel: 3Q24 vs 2Q24
The number of internal and external personnel employed was 131,677 (workforce count) as of 30 September 2024,
a net decrease of 1,361 compared with 30 June 2024. The number of internal personnel employed as of
30 September 2024 was 109,396 (full-time equivalents), a net decrease of 595 compared with 30 June 2024. The
number of external staff was approximately 22,281 (workforce count) as of 30 September 2024, a net decrease of
approximately 766 compared with 30 June 2024.
Equity, CET1 capital and returns
As of or for the quarter ended
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Net profit
Net profit / (loss) attributable to shareholders
Equity
Equity attributable to shareholders
less: goodwill and intangible assets
Tangible equity attributable to shareholders
less: other CET1 adjustments
CET1 capital
Returns
Return on equity (%)
Return on tangible equity (%)
Underlying return on tangible equity (%)
Return on CET1 capital (%)
Underlying return on CET1 capital (%)
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
Common equity tier 1 capital: 3Q24 vs 2Q24
During the third quarter of 2024, our common equity tier 1 (CET1) capital decreased by USD 1.9bn to USD 74.2bn,
mainly as operating profit before tax of USD 1.9bn and foreign currency translation gains of USD 1.3bn were more
than offset by the effect of our voluntary acceleration of the amortization of the remaining transitional CET1 capital
PPA adjustments of USD 3.4bn (net of tax) and the regular amortization of these adjustments during the quarter
of USD 0.3bn (net of tax), as well as dividend accruals of USD 0.6bn, current tax expenses of USD 0.4bn, and a
negative effect from compensation- and own-share-related capital components of USD 0.3bn. Share repurchases
of USD 0.5bn carried out in the third quarter of 2024 under our 2024 share repurchase program did not affect our
CET1 capital position, as there was an equal reduction in the capital reserve for potential share repurchases.
Return on common equity tier 1 capital: 3Q24 vs 3Q23
The annualized return on CET1 capital was 7.6%, compared with negative 3.7%, driven by net profit attributable
to shareholders compared with a loss attributable to shareholders in the prior-year quarter, as well as a decrease in
average CET1 capital. On an underlying basis the return on CET1 capital was 9.4%, compared with 1.5%.
Risk-weighted assets: 3Q24 vs 2Q24
During the third quarter of 2024, RWA increased by USD 8.0bn to USD 519.4bn, driven by an USD 11.2bn increase
in currency effects, partly offset by decreases of USD 1.7bn resulting from asset size and other movements, as well
as USD 1.6bn resulting from model updates and methodology changes.
Common equity tier 1 capital ratio: 3Q24 vs 2Q24
Our CET1 capital ratio decreased to 14.3% from 14.9%, reflecting a USD 1.9bn decrease in CET1 capital and the
aforementioned increase in RWA.
UBS Group third quarter 2024 report |
UBS Group | Group performance 15
Leverage ratio denominator: 3Q24 vs 2Q24
The leverage ratio denominator (the LRD) increased by USD 44.1bn to USD 1,608.3bn, driven by currency effects
of USD 53.6bn, partly offset by asset size and other movements of USD 9.5bn.
Common equity tier 1 leverage ratio: 3Q24 vs 2Q24
Our CET1 leverage ratio decreased to 4.6% from 4.9%, reflecting the aforementioned increase in the LRD and a
USD 1.9bn decrease in CET1 capital.
Results 9M24 vs 9M23
Operating profit before tax decreased by USD 23,233m, or 80%, to USD 5,773m, as the prior-year period included
negative goodwill of USD 27,264m relating to the acquisition of the Credit Suisse Group. Total revenues increased
by USD 6,997m and included an increase of USD 886m in accretion impacts resulting from PPA adjustments on
financial instruments and other PPA effects. This increase was partly offset by a USD 3,544m increase in operating
expenses, including a USD 699m increase in integration-related expenses. Net credit loss expenses were USD 322m,
compared with USD 901m in the first nine months of 2023.
Total combined net interest income and other net income from financial instruments measured at fair value through
profit or loss increased by USD 3,191m to USD 16,817m and included an increase of USD 514m in accretion impacts
resulting from PPA adjustments on financial instruments and other PPA effects. Global Wealth Management
revenues increased by USD 598m, largely as a result of the consolidation of Credit Suisse revenues for the full
period, and included USD 717m of accretion of PPA adjustments on financial instruments and other PPA effects,
compared with USD 552m in the first nine months of 2023. The remaining variance was largely driven by lower
deposit revenues, mainly as a result of lower margins and including the effects of shifts to lower-margin deposit
products. The remaining variance was also due to higher liquidity and funding costs, as well as lower loan revenues,
reflecting lower average volumes. Personal & Corporate Banking increased by USD 1,073m, mainly due to higher
net interest income, largely attributable to the consolidation of Credit Suisse net interest income for the full period,
which included USD 717m of accretion of PPA adjustments on financial instruments and other PPA effects,
compared with USD 418m in the first nine months of 2023. Non-core and Legacy increased by USD 969m, mainly
due to the consolidation of Credit Suisse revenues for the full period. Non-core and Legacy revenues reflected net
gains from position exits, along with net interest income from securitized products and credit products, as well as
a net gain of USD 272m, after the accounting for the PPA adjustments at the closing of the acquisition of the Credit
Suisse Group, from the sale of assets from the former Credit Suisse securitized products group to Apollo
Management Holdings and certain other entities (collectively, Apollo).
›
Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial
statements” section of this report for information about the conclusion of an investment management agreement
with Apollo and the transfer of senior secured asset-based financing
Net fee and commission income increased by USD 3,750m to USD 19,540m and included a USD 394m increase in
accretion of PPA adjustments on financial instruments and other PPA effects, which was reflected in other fee and
commission income, mainly in the Investment Bank. Portfolio management and related service fees increased by
USD 1,531m, and investment fund fees increased by USD 575m, predominantly in Global Wealth Management
and Asset Management, respectively, due to positive market performance and the consolidation of Credit Suisse
revenues for the full period. Net brokerage fees increased by USD 531m, reflecting an increase in Execution Services
in the Investment Bank, mainly driven by increases in Cash Equities across all regions, as well as an increase in Global
Wealth Management, mainly due to higher levels of client activity and also due to the consolidation of Credit Suisse.
Underwriting fee income increased by USD 200m, largely driven by a USD 152m increase in debt underwriting
revenues, mainly due to increased deal volumes in the Global Banking business in the Investment Bank. M&A and
corporate finance fees increased by USD 156m, predominantly reflecting an increase in advisory revenues in our
Global Banking business within the Investment Bank.
UBS Group third quarter 2024 report |
UBS Group | Group performance 16
Other income was USD 619m, compared with USD 563m in the first nine months of 2023. This was mainly due to
a USD 135m gain related to the sale of our investment in an associate, as well as a USD 100m net gain in Asset
Management from both the sale of our Brazilian real estate fund management business and the sale of our
shareholding in CSILS. In addition, the share of net profits of associates and joint ventures increased by USD 59m,
mainly as a result of the consolidation of Credit Suisse revenues for the full period. These gains were partly offset
by a USD 93m decrease in gains recognized on repurchases of UBS’s own debt instruments compared with the first
nine months of 2023.
Personnel expenses increased by USD 3,119m to USD 20,957m, largely due to the consolidation of Credit Suisse
expenses for the full period, and included an increase of USD 543m of integration-related expenses, which were
largely related to salaries, severance and variable compensation. Salaries and variable compensation increased by
USD 2,612m, due to the aforementioned effects, and included a USD 521m increase in financial advisor
compensation due to higher compensable revenues.
General and administrative expenses decreased by USD 37m to USD 7,120m. Litigation, regulatory and similar
matters reflected a release of USD 227m, predominantly due to releases of USD 234m of IFRS 3 acquisition-related
contingent liabilities following settlements of the relevant matter in 2024, compared with expenses of USD 802m
in the first nine months of 2023, which included a USD 665m increase in provisions recognized in the first quarter
of 2023 related to the US residential mortgage-backed securities litigation matter. The nine-month period ended
30 September 2023 also included a one-time expense of USD 289m related to a provision for an onerous contract.
In addition, the prior-year period included USD 202m of acquisition costs. These decreases were partly offset by the
consolidation of Credit Suisse expenses, higher technology costs and an increase in integration-related expenses,
mainly related to consulting, legal and outsourcing costs.
Depreciation, amortization and impairment of non-financial assets increased by USD 463m to USD 2,804m, largely
due to the consolidation of Credit Suisse expenses for the full period, a USD 173m increase in internally generated
capitalized software, reflecting a higher level of capitalized cost, and a USD 136m increase in accelerated
depreciation of real estate as a result of decisions to vacate certain leased and owned properties. This was partly
offset by the recognition of a USD 206m impairment in the second quarter of 2023 related to software projects in
progress resulting from a reprioritization of software development activity in the context of the acquisition of the
Credit Suisse Group.
Outlook
In the third quarter of 2024 we saw strong client activity against a market backdrop that, while constructive, still
exhibited periods of high volatility and dislocation.
Entering the fourth quarter, we see a continuation of these market conditions sustained by the prospects of a soft
landing in the US economy. However, the macroeconomic outlook in the rest of the world remains clouded. In
addition to seasonality, the ongoing geopolitical conflicts and the upcoming US elections are creating uncertainties
that are likely to affect investor behavior.
In the fourth quarter, we anticipate a mid-single digit decline in net interest income in Global Wealth Management
and a low single-digit decline in Personal & Corporate Banking. Non-core and Legacy is expected to generate a
quarterly pre-tax loss in line with our earlier guidance.
The Group’s non-personnel costs are expected to show a seasonal sequential uptick. The Group’s quarterly tax rate
is expected to be around 35%. Integration-related expenses are expected to be around USD 1.2bn and accretion
of PPA effects to contribute around USD 0.5bn to the Group’s total revenues.
As we stay close to clients, helping them navigate this environment, and execute on our priorities, we will continue
to invest to drive sustainable long-term value for our stakeholders while maintaining a balance sheet for all seasons.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items 17
UBS business divisions and
Group Items
Management report
Our businesses
We report five business divisions, each of which qualifies as an operating segment pursuant to IFRS Accounting
Standards: Global Wealth Management, Personal & Corporate Banking, Asset Management, the Investment Bank,
and Non-core and Legacy. Non-core and Legacy includes positions and businesses not aligned with our strategy
and policies. Those consist of the assets and liabilities reported as part of the former Capital Release Unit (Credit
Suisse) and certain assets and liabilities of the former Investment Bank (Credit Suisse), the former Corporate Center
(Credit Suisse) and other former Credit Suisse business divisions. Non-core and Legacy also includes the remaining
assets and liabilities of UBS’s Non-core and Legacy Portfolio, previously reported in Group Functions (which has
been renamed Group Items), and smaller amounts of assets and liabilities of UBS’s business divisions that have been
assessed as not strategic in light of the acquisition of the Credit Suisse Group.
Our Group functions are support and control functions that provide services to the Group. Virtually all costs and
revenues incurred by the support and control functions are allocated to the business divisions, leaving a residual
amount, mainly related to certain Group funding and hedging items, that we refer to as Group Items in our segment
reporting.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Global Wealth Management 18
Global Wealth Management
Global Wealth Management
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
Recurring net fee income
3
Transaction-based income
3
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: PPA effects and other integration items
4
of which: PPA effects recognized in net interest income
of which: PPA effects and other integration items recognized in transaction-based income
Total revenues (underlying)
3
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
3,5
Operating expenses (underlying)
3
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
3
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Average attributed equity (USD bn)
6
Return on attributed equity (%)
3,6
Financial advisor compensation
7
Net new fee-generating assets (USD bn)
3
Fee-generating assets (USD bn)
3
Net new assets (USD bn)
3
Invested assets (USD bn)
3
Loans, gross (USD bn)
8
Customer deposits (USD bn)
8
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,9
Advisors (full-time equivalents)
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Return on attributed equity (%)
3,6
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method. We started to report fee-generating assets and net new fee-generating assets on a consolidated basis, including Credit Suisse data,
from the fourth quarter of 2023 onward. 4 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental items directly related to the integration.
5 Includes temporary, incremental operating expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition of the Credit Suisse Group. 6 Refer to
the “Equity attribution” section of this report for more information about the equity attribution framework. 7 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas.
Consists of cash and deferred compensation awards and is based on compensable revenues and firm tenure using a formulaic approach. Also includes expenses related to compensation commitments with financial
advisors entered into at the time of recruitment that are subject to vesting requirements. Recruitment loans to financial advisors were USD 1,749m as of 30 September 2024. 8 Loans and Customer deposits in this
table include customer brokerage receivables and payables, respectively, which are presented in separate reporting lines on the balance sheet. 9 Refer to the “Risk management and control” section of this report
for more information about (credit-)impaired exposures. Excludes loans to financial advisors.
Results: 3Q24 vs 3Q23
Profit before tax increased by USD 159m, or 17%, to USD 1,085m, mainly due to higher total revenues, partly
offset by higher operating expenses. Underlying profit before tax was USD 1,280m, an increase of 30%, after
excluding USD 419m of integration-related expenses and purchase price allocation (PPA) effects from operating
expenses, as well as USD 224m of PPA effects and other integration items from total revenues.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Global Wealth Management 19
Total revenues
Total revenues increased by USD 246m, or 4%, to USD 6,199m, largely driven by higher recurring net fee and
transaction-based income, partly offset by lower net interest income. Total revenues included the aforementioned
USD 224m of PPA effects and other integration items, which represented a USD 164m decrease compared with
the USD 388m recorded for such effects and items in the third quarter of 2023. Excluding these PPA effects and
other integration items, underlying total revenues were USD 5,975m, an increase of 7%.
Net interest income decreased by USD 180m, or 9%, to USD 1,811m and included USD 221m of accretion of PPA
adjustments on financial instruments and other PPA effects, compared with USD 371m in the third quarter of 2023.
The remaining decrease was largely driven by lower deposit margins, including the effects of shifts to lower-margin
deposit products and the effects of liquidity and funding costs, partly offset by higher deposit volumes. The
remaining decrease was also due to lower loan revenues, reflecting lower average volumes. Excluding the
aforementioned accretion and other effects, underlying net interest income was USD 1,590m, a decrease of 2%.
Recurring net fee income increased by USD 270m, or 9%, to USD 3,235m, mainly driven by positive market
performance.
Transaction-based income increased by USD 167m, or 17%, to USD 1,144m, mainly driven by higher levels of client
activity, particularly in the Americas, Asia Pacific and Switzerland regions. Transaction-based income included
USD 6m of accretion of PPA adjustments on financial instruments and other PPA effects, compared with USD 17m
in the third quarter of 2023; the third quarter of 2024 also included negative USD 3m of temporary and incremental
items directly related to the integration of Credit Suisse. Excluding USD 3m resulting from the aforementioned
accretion and other effects and temporary and incremental items, underlying transaction-based income was
USD 1,140m, an increase of 19%.
Credit loss expense / release
Net credit loss expenses decreased by USD 8m to USD 2m.
Operating expenses
Operating expenses increased by USD 95m, or 2%, to USD 5,112m, largely due to an increase in personnel
expenses, which resulted from higher financial advisor compensation reflecting an increase in compensable
revenues. Operating expenses included integration-related expenses of USD 417m, which represented a USD 29m
decrease compared with the USD 446m of integration-related expenses recorded for the third quarter of 2023.
Excluding integration-related expenses and PPA effects of USD 419m, underlying operating expenses were
USD 4,693m, an increase of 3%.
Invested assets: 3Q24 vs 2Q24
Invested assets increased by USD 221bn to USD 4,259bn, mainly driven by positive market performance of
USD 146.7bn, positive foreign currency effects of USD 53.7bn and net new asset inflows of USD 24.7bn.
Loans: 3Q24 vs 2Q24
Loans increased by USD 6.3bn to USD 311.5bn, driven by positive foreign currency effects, partly offset by negative
net new loans of USD 3.0bn.
Customer deposits: 3Q24 vs 2Q24
Customer deposits increased by USD 5.7bn to USD 481.9bn, mainly driven by positive foreign currency effects,
partly offset by net new deposit outflows of USD 3.9bn.
Results: 9M24 vs 9M23
Profit before tax decreased by USD 108m, or 3%, to USD 3,057m, mainly due to higher operating expenses, partly
offset by the impact from the acquisition of the Credit Suisse Group and by higher total revenues. Underlying profit
before tax was USD 3,713m, an increase of 20%, after excluding USD 1,347m of integration-related expenses and
PPA effects from operating expenses, as well as USD 691m of PPA effects and other integration items from total
revenues.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Global Wealth Management 20
Total revenues increased by USD 2,393m, or 15%, to USD 18,395m, largely driven by the consolidation of Credit
Suisse revenues for the full period, as well as higher recurring net fee and transaction-based income. Total revenues
included the aforementioned USD 691m of PPA effects and other integration items, which represented a USD 117m
increase compared with the USD 574m recorded for such effects and items in the nine months of 2023. Excluding
these PPA effects and other integration items, underlying total revenues were USD 17,705m, an increase of 15%.
Net interest income increased by USD 298m, or 6%, to USD 5,509m, largely attributable to the consolidation of
Credit Suisse net interest income for the full period, and included USD 717m of accretion of PPA adjustments on
financial instruments and other PPA effects, compared with USD 552m in the first nine months of 2023. The
remaining variance was largely driven by lower deposit revenues, mainly as a result of lower margins and including
the effects of shifts to lower-margin deposit products. The remaining variance was also due to higher liquidity and
funding costs, as well as lower loan revenues, reflecting lower average volumes. Excluding the aforementioned
accretion and other effects, underlying net interest income was USD 4,791m, an increase of 3%.
Recurring net fee income increased by USD 1,275m, or 16%, to USD 9,363m, mainly driven by positive market
performance and the consolidation of Credit Suisse recurring net fee income for the full period.
Transaction-based income increased by USD 792m, or 30%, to USD 3,461m, mainly driven by higher levels of client
activity, particularly in the Americas and Asia Pacific regions, and the consolidation of Credit Suisse transaction-
based income for the full period. Transaction-based income included USD 21m of accretion of PPA adjustments on
financial instruments and other PPA effects, compared with USD 22m in the first nine months of 2023; the first
nine months of 2024 also included negative USD 48m of temporary and incremental items directly related to the
integration of Credit Suisse. Excluding negative USD 27m resulting from the aforementioned accretion and other
effects and temporary and incremental items, underlying transaction-based income was USD 3,488m, an increase
of 32%.
Other income increased by USD 29m to USD 63m, mainly due to the consolidation of Credit Suisse other income
for the full period.
Net credit loss releases were USD 2m, compared with net credit loss expenses of USD 174m in the first nine months
of 2023. Prior-year period net credit loss expenses were largely driven by the initial recognition of expected credit
loss allowances and provisions with respect to Credit-Suisse-related positions.
Operating expenses increased by USD 2,677m, or 21%, to USD 15,340m, largely due to the consolidation of Credit
Suisse expenses for the full period. Operating expenses included integration-related expenses of USD 1,340m,
which represented an USD 827m increase compared with the USD 513m of integration-related expenses recorded
for the first nine months of 2023. The remaining variance was due to higher personnel expenses, primarily reflecting
an increase in financial advisor compensation reflecting higher compensable revenues, and also due to increased
technology expenses. Excluding integration-related expenses and PPA effects of USD 1,347m, underlying operating
expenses were USD 13,993m, an increase of 15%.
Regional breakdown of performance measures
As of or for the quarter ended 30.9.24
USD bn, except where indicated
Americas
1
Switzerland
EMEA
Asia Pacific
Global
2
Global Wealth
Management
Total revenues (USD m)
Operating profit / (loss) before tax (USD m)
Operating profit / (loss) before tax (underlying) (USD m)
3
Cost / income ratio (%)
3
Cost / income ratio (underlying) (%)
3
Loans, gross
4
Net new loans
Net new fee-generating assets
3
Fee-generating assets
3
Net new assets
3
Net new assets growth rate (%)
3
Invested assets
3
Advisors (full-time equivalents)
1 Including the following business units: United States and Canada; and Latin America. 2 Includes minor functions, which are not included in the four regions individually presented in this table, and also includes
impacts from accretion of PPA adjustments on financial instruments and other PPA effects and integration-related expenses. 3 Refer to “Alternative performance measures” in the appendix to this report for the
definition and calculation method. 4 Loans include customer brokerage receivables, which are presented in a separate reporting line on the balance sheet.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Global Wealth Management 21
Regional comments 3Q24 vs 3Q23, except where indicated
Americas
Profit before tax increased by USD 32m to USD 330m. Total revenues increased by USD 236m, or 9%, to
USD 2,838m, mainly driven by higher recurring net fee income and transaction-based income, partly offset by lower
net interest income. The cost / income ratio decreased to 88.1% from 89.1%. Loans were broadly stable compared
with the second quarter of 2024, at USD 96.5bn. Net new asset inflows were USD 8.0bn.
Switzerland
Profit before tax increased by USD 51m to USD 368m. Total revenues increased by USD 48m, or 5%, to
USD 1,043m, mostly driven by higher transaction-based income and recurring net fee income. The cost / income
ratio decreased to 65.0% from 66.2%. Loans increased 5% compared with the second quarter of 2024, to
USD 111.5bn, mainly reflecting positive foreign currency effects, partly offset by USD 1.3bn of negative net new
loans. Net new asset inflows were USD 9.4bn.
EMEA
Profit before tax increased by USD 75m to USD 304m. Total revenues increased by USD 31m, or 3%, to
USD 1,169m, mainly driven by higher recurring net fee income and transaction-based income. The cost / income
ratio decreased to 74.2% from 79.1%. Loans increased 1% compared with the second quarter of 2024, to
USD 59.7bn, mainly driven by positive foreign currency effects, partly offset by USD 1.5bn of negative net new
loans. Net new asset inflows were USD 0.7bn.
Asia Pacific
Profit before tax increased by USD 154m to USD 286m. Total revenues increased by USD 106m, or 13%, to
USD 919m, mainly driven by increases in transaction-based income, recurring net fee income and net interest
income. The cost / income ratio decreased to 69.4% from 84.2%. Loans increased 1% compared with the second
quarter of 2024, to USD 42.8bn, mainly driven by positive foreign currency effects. Net new asset inflows were
USD 7.3bn.
Global
Operating loss before tax was USD 204m, mainly including USD 419m of the aforementioned integration-related
expenses and PPA effects in operating expenses, partly offset by the aforementioned USD 224m related to PPA
effects and other integration items in total revenues.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Personal & Corporate Banking 22
Personal & Corporate Banking
Personal & Corporate Banking – in Swiss francs
1
As of or for the quarter ended
% change from
Year-to-date
CHF m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
Recurring net fee income
3
Transaction-based income
3
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: PPA effects and other integration items
4
of which: PPA effects recognized in net interest income
of which: PPA effects and other integration items recognized in transaction-based income
Total revenues (underlying)
3
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
3,5
Operating expenses (underlying)
3
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
3
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Average attributed equity (CHF bn)
6
Return on attributed equity (%)
3,6
Net interest margin (bps)
3
Loans, gross (CHF bn)
Customer deposits (CHF bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,7
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Return on attributed equity (%)
3,6
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method. 4 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental
items directly related to the integration. 5 Includes temporary, incremental operating expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition
of the Credit Suisse Group. 6 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework. 7 Refer to the “Risk management and control” section of this
report for more information about (credit-)impaired exposures.
Results
:
3Q24 vs 3Q23
Profit before tax decreased by CHF 121m, or 14%, to CHF 728m, mainly due to lower total revenues, partly offset
by lower net credit loss expenses. Underlying profit before tax was CHF 659m, a decrease of 7%, after excluding
CHF 239m of purchase price allocation (PPA) effects and other integration items from total revenues, as well as
excluding integration-related expenses and PPA effects of CHF 170m from operating expenses.
Total revenues
Total revenues decreased by CHF 186m, or 8%, to CHF 2,056m, largely reflecting lower net interest income. Total
revenues included the aforementioned CHF 239m of PPA effects and other integration items, which represented a
CHF 58m decrease compared with the CHF 297m recorded for such effects and items in the third quarter of 2023.
Excluding the aforementioned PPA effects and other integration items, underlying total revenues were
CHF 1,818m, a decrease of 7%.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Personal & Corporate Banking 23
Net interest income decreased by CHF 160m, or 12%, to CHF 1,227m and included CHF 219m of accretion of PPA
adjustments on financial instruments and other PPA effects, compared with CHF 259m in the third quarter of 2023.
The remaining decrease was mainly due to higher liquidity and funding costs, as well as lower deposit margins
resulting from both lower reinvestment rates and shifts to lower-margin deposit products. Excluding the
aforementioned accretion and other effects, underlying net interest income was CHF 1,008m, a decrease of 11%.
Recurring net fee income increased by CHF 18m, or 5%, to CHF 363m, mainly due to higher custody asset levels.
Transaction-based income decreased by CHF 40m, or 8%, to CHF 439m, and included an CHF 18m decrease in
accretion of PPA adjustments on financial instruments and other PPA effects, which were CHF 20m compared with
CHF 38m in the third quarter of 2023. The decrease in transaction-based income was also due to lower trade
finance revenues, partly offset by higher card fees. Excluding the aforementioned accretion and other effects,
underlying transaction-based income was CHF 419m, a decrease of 5%.
Other income was broadly stable at CHF 29m.
Credit loss expense / release
Net credit loss expenses were CHF 71m, mainly reflecting net credit loss expenses of CHF 80m on credit-impaired
positions with a small number of corporate counterparties, partly offset by net credit loss releases of CHF 9m related
to performing positions. These compared with net credit loss expenses of CHF 147m in the third quarter of 2023,
which reflected both performing and credit-impaired positions.
Operating expenses
Operating expenses increased by CHF 12m, or 1%, to CHF 1,258m and included integration-related expenses of
CHF 148m, which represented a CHF 16m increase compared with the CHF 132m of integration-related expenses
recorded for the third quarter of 2023. Excluding integration-related expenses and PPA effects of CHF 170m,
underlying operating expenses were CHF 1,088m,
broadly stable year over year.
Results: 9M24 vs 9M23
Profit before tax increased by CHF 299m, or 15%, to CHF 2,290m, mainly due to the acquisition of the Credit
Suisse Group. Underlying profit before tax was CHF 2,079m, an increase of 19%, after excluding CHF 688m of PPA
effects and other integration items from total revenues, as well as excluding integration-related expenses and PPA
effects of CHF 477m from operating expenses.
Total revenues increased by CHF 1,209m, or 24%, to CHF 6,257m, mainly due to the consolidation of Credit Suisse
revenues for the full period. Total revenues included the aforementioned CHF 688m of PPA effects and other
integration items, which represented a CHF 263m increase compared with the CHF 425m recorded for such effects
and items in the first nine months of 2023. Excluding the aforementioned PPA effects and other integration items,
underlying total revenues were CHF 5,569m, an increase of 20%.
Net interest income increased by CHF 753m, or 25%, to CHF 3,783m, largely as a result of the consolidation of
Credit Suisse net interest income for the full period, and included CHF 632m of accretion of PPA adjustments on
financial instruments and other PPA effects, compared with CHF 374m in the first nine months of 2023. Excluding
the aforementioned accretion and other effects, underlying net interest income was CHF 3,151m, an increase of
19%.
Recurring net fee income increased by CHF 263m, or 33%, to CHF 1,068m, mainly due to the consolidation of
Credit Suisse recurring net fee income for the full period, with the remaining increase including higher revenues
from increased custody asset levels.
Transaction-based income increased by CHF 191m, or 16%, to CHF 1,350m, largely as a result of the consolidation
of Credit Suisse transaction-based income for the full period. Transaction-based income included CHF 63m of
accretion of PPA adjustments on financial instruments and other PPA effects, compared with CHF 52m in the first
nine months of 2023; the first nine months of 2024 also included negative CHF 7m of temporary and incremental
items directly related to the integration of Credit Suisse. Excluding CHF 56m resulting from the aforementioned
accretion and other effects and temporary and incremental items, underlying transaction-based income was
CHF 1,294m, an increase of 17%.
Other income was broadly stable at CHF 56m.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Personal & Corporate Banking 24
Net credit loss expenses were CHF 202m, mainly reflecting net credit loss expenses on credit-impaired positions
with a small number of corporate counterparties, partly offset by net credit loss releases related to performing
positions. These compared with net credit loss expenses of CHF 359m in the first nine months of 2023, largely
driven by the initial recognition of expected credit loss allowances and provisions with respect to Credit-Suisse-
related positions.
Operating expenses increased by CHF 1,067m, or 40%, to CHF 3,765m, largely due to the consolidation of Credit
Suisse expenses for the full period. Operating expenses included integration-related expenses of CHF 409m, which
represented a CHF 251m increase compared with the CHF 158m of integration-related expenses recorded for the
first nine months of 2023. Excluding integration-related expenses and PPA effects of CHF 477m, underlying
operating expenses were CHF 3,288m, an increase of 31%.
Personal & Corporate Banking – in US dollars
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net interest income
Recurring net fee income
3
Transaction-based income
3
Other income
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: PPA effects and other integration items
4
of which: PPA effects recognized in net interest income
of which: PPA effects and other integration items recognized in transaction-based income
Total revenues (underlying)
3
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses and PPA effects
3,5
Operating expenses (underlying)
3
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
3
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Average attributed equity (USD bn)
6
Return on attributed equity (%)
3,6
Net interest margin (bps)
3
Loans, gross (USD bn)
Customer deposits (USD bn)
Impaired loan portfolio as a percentage of total loan portfolio, gross (%)
3,7
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
3
Cost / income ratio (%)
3
Return on attributed equity (%)
3,6
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method. 4 Includes accretion of PPA adjustments on financial instruments and other PPA effects, as well as temporary and incremental
items directly related to the integration. 5 Includes temporary, incremental operating expenses directly related to the integration, as well as amortization of newly recognized intangibles resulting from the acquisition
of the Credit Suisse Group. 6 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework. 7 Refer to the “Risk management and control” section of this
report for more information about (credit-)impaired exposures.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Asset Management 25
Asset Management
Asset Management
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Net management fees
3
Performance fees
Net gain from disposals
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
Total revenues (underlying)
4
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
4
Operating expenses (underlying)
4
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
4
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
4
Cost / income ratio (%)
4
Average attributed equity (USD bn)
5
Return on attributed equity (%)
4,5
Gross margin on invested assets (bps)
4
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
4
Cost / income ratio (%)
4
Return on attributed equity (%)
4,5
Information by business line / asset class
Net new money (USD bn)
4
Equities
Fixed Income
of which: money market
Multi-asset & Solutions
Hedge Fund Businesses
Real Estate & Private Markets
Total net new money excluding associates
of which: net new money excluding money market
Associates
6
Total net new money
Invested assets (USD bn)
4
Equities
Fixed Income
of which: money market
Multi-asset & Solutions
Hedge Fund Businesses
Real Estate & Private Markets
Total invested assets excluding associates
of which: passive strategies
Associates
6
Total invested assets
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Asset Management 26
Asset Management (continued)
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Information by region
Invested assets (USD bn)
4
Americas
Asia Pacific
7
EMEA (excluding Switzerland)
Switzerland
Total invested assets
Information by channel
Invested assets (USD bn)
4
Third-party institutional
Third-party wholesale
UBS’s wealth management businesses
Associates
6
Total invested assets
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Net management fees include
transaction fees, fund administration revenues (including net interest and trading income from lending activities and foreign-exchange hedging as part of the fund services offering), distribution fees, incremental fund-
related expenses, gains or losses from seed money and co-investments, funding costs, the negative pass-through impact of third-party performance fees, and other items that are not Asset Management’s performance
fees. 4 Refer to “Alternative performance measures” in the appendix to this report for the definition and calculation method. 5 Refer to the “Equity attribution” section of this report for more information about
the equity attribution framework. 6 The invested assets and net new money amounts reported for associates are prepared in accordance with their local regulatory requirements and practices. 7 Includes invested
assets from associates.
Results: 3Q24 vs 3Q23
Profit before tax increased by USD 114m, or 309%, to USD 151m, mainly due to a USD 72m net gain from both
the closing of the remaining portion of the sale of our Brazilian real estate fund management business and the sale
of our shareholding in Credit Suisse Insurance Linked Strategies Ltd (CSILS). Underlying profit before tax was
USD 237m, an increase of 46%, after excluding integration-related expenses of USD 86m.
Total revenues
Total revenues increased by USD 98m, or 13%, to USD 873m, mainly reflecting the total net gain from the
aforementioned sales.
Net management fees decreased by USD 2m to USD 755m, mainly reflecting continued margin compression, partly
offset by positive market performance and foreign currency effects. In addition, net management fees in the third
quarter of 2024 included a revaluation of USD 19m related to a real estate fund co-investment.
Performance fees increased by USD 28m, or 157%, to USD 46m, mostly due to increases in Hedge Fund Businesses
and Fixed Income.
Operating expenses
Operating expenses decreased by USD 16m, or 2%, to USD 722m and included integration-related expenses of
USD 86m, which represented a USD 40m decrease compared with the USD 126m of integration-related expenses
recorded for the third quarter of 2023. This decrease was almost entirely offset by higher personnel expenses,
reflecting higher revenues, and higher expenses for litigation, regulatory and similar matters. Excluding the
aforementioned integration-related expenses, underlying operating expenses were USD 636m, an increase of 4%.
Invested assets: 3Q24 vs 2Q24
Invested assets increased by USD 96bn to USD 1,797bn, mainly reflecting favorable foreign currency effects of
USD 53bn, positive market performance of USD 45bn and net new money of USD 2bn. There was also a USD 4bn
decrease in invested assets mainly related to both the sale of our shareholding in CSILS and the sale of our Brazilian
real estate fund management business. Excluding money market flows and associates, net new money was negative
USD 5bn.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Asset Management 27
Results: 9M24 vs 9M23
Profit before tax increased by USD 181m, or 86%, to USD 392m, mainly reflecting a USD 100m net gain from both
the sale of our Brazilian real estate fund management business and the sale of our shareholding in CSILS, as well
as the consolidation of Credit Suisse for the full period. Underlying profit before tax was USD 647m, an increase of
84%, after excluding integration-related expenses of USD 255m.
Total revenues increased by USD 555m, or 30%, to USD 2,416m, primarily reflecting the consolidation of Credit
Suisse revenues for the full period. Total revenues in the first nine months of 2024 included the USD 100m total
net gain from the aforementioned sales.
Net management fees increased by USD 403m, or 22%, to USD 2,212m, largely attributable to the consolidation
of Credit Suisse net management fees for the full period, positive market performance and foreign currency effects,
as well as the revaluation of a real estate fund co-investment, partly offset by continued margin compression. In
addition, the first nine months of 2023 included the fee income of the former UBS Hana Asset Management Co.,
Ltd. and negative pass-through fees, with the corresponding offset in performance fees.
Performance fees increased by USD 52m, or 101%, to USD 104m, mostly due to increases in Hedge Fund Businesses
and Fixed Income, as well as the consolidation of Credit Suisse performance fees for the full period. These increases
were partly offset by lower performance fees related to the aforementioned pass-through fees in 2023.
Operating expenses increased by USD 376m, or 23%, to USD 2,025m, mainly reflecting the consolidation of Credit
Suisse expenses for the full period. Operating expenses included integration-related expenses of USD 255m, which
represented a USD 115m increase compared with the USD 140m of integration-related expenses recorded for the
first nine months of 2023. Excluding the aforementioned integration-related expenses, underlying operating
expenses were USD 1,770m, an increase of 17%.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Investment Bank 28
Investment Bank
Investment Bank
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Advisory
Capital Markets
Global Banking
Execution Services
3
Derivatives & Solutions
3
Financing
Global Markets
of which: Equities
of which: Foreign Exchange, Rates and Credit
Total revenues
Credit loss expense / (release)
Operating expenses
Business division operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: PPA effects
4
of which: PPA effects recognized in Global Banking revenue line
Total revenues (underlying)
5
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
5
Operating expenses (underlying)
5
of which: expenses for litigation, regulatory and similar matters
Business division operating profit / (loss) before tax as reported
Business division operating profit / (loss) before tax (underlying)
5
Performance measures and other information
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
n.m.
Cost / income ratio (%)
5
Average attributed equity (USD bn)
6
Return on attributed equity (%)
5,6
Underlying performance measures
Pre-tax profit growth (year-on-year, %)
5
n.m.
n.m.
n.m.
Cost / income ratio (%)
5
Return on attributed equity (%)
5,6
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Comparative figures for the quarter
ended 30 September 2023 and for the nine-month period ended 30 September 2023 have been restated as a result of the shift of the foreign exchange products that are traded over electronic platforms from Execution
Services to Derivatives & Solutions. The restatement had no effect on total Global Markets revenues. 4 Includes accretion of PPA adjustments on financial instruments and other PPA effects. 5 Refer to “Alternative
performance measures” in the appendix to this report for the definition and calculation method. 6 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Investment Bank 29
Results: 3Q24 vs 3Q23
Profit before tax was USD 405m, compared with a loss before tax of USD 254m in the third quarter of 2023, mainly
due to higher total revenues and lower operating expenses. Underlying profit before tax was USD 377m, after
excluding USD 185m of purchase price allocation (PPA) effects and USD 156m of integration-related expenses.
Total revenues
Total revenues increased by USD 483m, or 22%, to USD 2,645m, due to higher Global Markets and Global Banking
revenues, and included USD 185m of PPA effects, which represented a USD 66m decrease compared with the
USD 251m recorded for such effects in the third quarter of 2023. Excluding these effects, underlying total revenues
were USD 2,461m, an increase of 29%.
Global Banking
Global Banking revenues increased by USD 28m, or 4%, to USD 736m and included a decrease of USD 71m of
accretion of PPA adjustments on financial instruments and other PPA effects. Excluding these accretion and other
effects, underlying Global Banking revenues increased by USD 98m, or 21%.
Advisory revenues increased by USD 25m, or 13%, to USD 220m, mainly due to higher merger and acquisition
transaction revenues, which increased by USD 24m, or 13%.
Capital Markets revenues increased by USD 2m to USD 516m and included a decrease of USD 71m of accretion of
PPA adjustments on financial instruments and other PPA effects. Excluding these accretion and other effects,
underlying Capital Markets revenues increased by USD 73m, or 28%, with increases across all products. Debt
Capital Markets revenues increased by USD 10m, or 12%, Equity Capital Markets revenues increased by USD 5m,
or 9%, and Leveraged Capital Markets revenues increased by USD 4m, or 4%.
Global Markets
Global Markets revenues increased by USD 457m, or 31%, to USD 1,910m, primarily driven by higher Derivatives
& Solutions and Execution Services revenues.
Execution Services revenues increased by USD 123m, or 39%, to USD 440m, mainly due to increases in Cash
Equities across all regions.
Derivatives & Solutions revenues increased by USD 293m, or 44%, to USD 964m, with increases across all products,
led by Equity Derivatives, Foreign Exchange and Rates.
Financing revenues increased by USD 41m, or 9%, to USD 506m and included a USD 67m gain from the sale of
our investment in an associate.
Equities
Global Markets Equities revenues increased by USD 356m, or 33%, to USD 1,432m, mostly driven by increases in
Equity Derivatives and Cash Equities, as well as by the aforementioned gain from sale.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues increased by USD 100m, or 27%, to USD 477m,
primarily driven by increases in Foreign Exchange and Rates.
Credit loss expense / release
Net credit loss expenses increased by USD 5m to USD 9m.
Operating expenses
Operating expenses decreased by USD 181m, or 7%, to USD 2,231m, largely due to a decrease in integration-
related expenses, which totaled USD 156m, representing a USD 212m decrease compared with the USD 368m of
integration-related expenses recorded for the third quarter of 2023. Excluding integration-related expenses,
underlying operating expenses were USD 2,076m, an increase of 2%.
Results: 9M24 vs 9M23
Profit before tax increased by USD 1,319m to USD 1,437m, mainly due to higher total revenues, partly offset by
higher operating expenses. Underlying profit before tax was USD 1,193m, after excluding USD 787m of PPA effects
and USD 543m of integration-related expenses.
Total revenues
Total revenues increased by USD 1,637m, or 25%, to USD 8,199m, mainly due to higher Global Banking and Global
Markets revenues. The consolidation of Credit Suisse revenues included USD 787m of PPA effects, which
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Investment Bank 30
represented a USD 481m increase compared with the USD 306m recorded for such effects in the first nine months
of 2023. Excluding these effects, underlying total revenues were USD 7,412m, an increase of 18%.
Global Banking
Global Banking revenues increased by USD 1,004m, or 64%, to USD 2,582m, including an increase of USD 469m
of accretion of PPA adjustments on financial instruments and other PPA effects. Excluding these accretion and other
effects, underlying Global Banking revenues were USD 1,808m, an increase of 42%.
Advisory revenues increased by USD 88m, or 16%, to USD 648m, mainly due to higher merger and acquisition
transaction revenues, which increased by USD 71m, or 14%.
Capital Markets revenues increased by USD 916m, or 90%, to USD 1,935m, including an increase of USD 469m of
accretion of PPA adjustments on financial instruments and other PPA effects. Excluding these accretion and other
effects, underlying Capital Markets revenues increased by USD 447m, or 63%, with increases across all products.
Leveraged Capital Markets revenues increased by USD 215m, or 129%, Debt Capital Markets revenues increased
by USD 72m, or 32%, and Equity Capital Markets revenues increased by USD 57m, or 33%.
Global Markets
Global Markets revenues increased by USD 632m, or 13%, to USD 5,616m, primarily driven by higher Derivatives
& Solutions and Execution Services revenues.
Execution Services revenues increased by USD 245m, or 24%, to USD 1,247m, mainly driven by increases in Cash
Equities across all regions.
Derivatives & Solutions revenues increased by USD 351m, or 14%, to USD 2,795m, with increases largely in Equity
Derivatives and Foreign Exchange revenues.
Financing revenues increased by USD 36m, or 2%, to USD 1,574m and included a USD 67m gain from the
aforementioned sale of our investment in an associate.
Equities
Global Markets Equities revenues increased by USD 595m, or 17%, to USD 4,140m, mainly driven by increases in
Equity Derivatives and Cash Equities, as well as by the aforementioned gain from sale.
Foreign Exchange, Rates and Credit
Global Markets Foreign Exchange, Rates and Credit revenues increased by USD 37m, or 3%, to USD 1,476m.
Credit loss expense / release
Net credit loss expenses were USD 34m, mainly reflecting net credit loss expenses on performing and credit-
impaired positions. This compared with net credit loss expenses of USD 142m in the first nine months of 2023,
largely driven by the initial recognition of expected credit loss allowances and provisions with respect to Credit-
Suisse-related positions.
Operating expenses
Operating expenses increased by USD 426m, or 7%, to USD 6,728m, and included integration-related expenses of
USD 543m, which represented a USD 14m increase compared with the USD 529m of integration-related expenses
recorded for the first nine months of 2023. Excluding integration-related expenses, underlying operating expenses
were USD 6,185m, an increase of 7%, mainly due to the consolidation of Credit Suisse expenses for the full period,
increases in technology expenses and higher variable compensation.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Non-core and Legacy 31
Non-core and Legacy
Non-core and Legacy
1
As of or for the quarter ended
% change from
Year-to-date
USD m, except where indicated
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Underlying results
Total revenues as reported
Total revenues (underlying)
3
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
3
Operating expenses (underlying)
3
of which: expenses for litigation, regulatory and similar matters
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
3
Performance measures and other information
Average attributed equity (USD bn)
4
Risk-weighted assets (USD bn)
Leverage ratio denominator (USD bn)
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Refer to “Alternative performance
measures” in the appendix to this report for the definition and calculation method. 4 Refer to the “Equity attribution” section of this report for more information about the equity attribution framework.
Composition of Non-core and Legacy
USD bn
RWA
Total assets
LRD
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
Exposure category
Equities
Macro
Loans
Securitized products
Credit
High-quality liquid assets
Operational risk
Other
Total
Results: 3Q24 vs 3Q23
Loss before tax was USD 603m, compared with a loss before tax of USD 1,762m in the third quarter of 2023.
Underlying loss before tax was USD 333m, a decrease of 60%, after excluding integration-related expenses of
USD 270m.
Total revenues
Total revenues decreased by USD 104m, or 29%, to USD 262m, mainly due to lower net interest income and
trading revenues as a result of portfolio reductions. Total revenues in the third quarter of 2024 included a USD 67m
gain from the sale of our investment in an associate.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Non-core and Legacy 32
Credit loss expense / release
Net credit loss expenses decreased by USD 31m to USD 28m and mainly reflected net credit loss expenses on credit-
impaired positions with a small number of corporate counterparties.
Operating expenses
Operating expenses decreased by USD 1,231m, or 60%, to USD 837m, mainly due to decreases in integration-
related expenses, professional fees, outsourcing expenses and personnel expenses. Operating expenses included
integration-related expenses of USD 270m, which was USD 650m lower than the amount recorded for the third
quarter of 2023, which included a one-time fee of USD 289m related to a provision for an onerous contract, and
also real estate expenses. In addition, operating expenses in the third quarter of 2024 included releases of USD 84m
of IFRS 3 acquisition-related contingent liabilities following settlements reached in that quarter. Excluding the
aforementioned integration-related expenses, underlying operating expenses in the third quarter of 2024 were
USD 567m, a decrease of 51%.
Risk-weighted assets and leverage ratio denominator: 3Q24 vs 2Q24
Risk-weighted assets (RWA) decreased by USD 4.8bn to USD 44.8bn, and the leverage ratio denominator (the LRD)
decreased by USD 11.0bn to USD 69.0bn. The active unwinding of Non-core and Legacy assets resulted in a
decrease in RWA, mainly related to the loan and securitized products portfolios, and a decrease in the LRD, mainly
driven by the equity, macro and securitized products portfolios.
Results: 9M24 vs 9M23
Loss before tax was USD 1,054m, compared with loss before tax of USD 2,930m. Underlying loss before tax was
USD 216m, a decrease of 89%, after excluding integration-related expenses of USD 837m.
Total revenues
Total revenues were USD 1,664m, which was USD 1,113m higher than the total revenues recorded for the first
nine months of 2023, and included the impact of the consolidation of Credit Suisse revenues for the full period.
Total revenues reflected net gains from position exits, along with net interest income from securitized products and
credit products. Total revenues also included a net gain of USD 272m, after the accounting for the PPA adjustments
at the closing of the acquisition of the Credit Suisse Group, from the sale of assets from the former Credit Suisse
securitized products group to Apollo Management Holdings and certain other entities (collectively, Apollo). In
addition, total revenues included the aforementioned USD 67m gain from the sale of our investment in an associate.
›
Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial
statements” section of this report for information about the conclusion of an investment management agreement
with Apollo and the transfer of senior secured asset-based financing
Credit loss expense / release
Net credit loss expenses were USD 63m, mainly reflecting net credit loss expenses on credit-impaired positions with
a small number of corporate counterparties, partly offset by net credit loss releases related to performing positions.
These compared with net credit loss expenses of USD 178m in the first nine months of 2023, largely driven by the
initial recognition of expected credit loss allowances and provisions with respect to Credit-Suisse-related positions.
Operating expenses
Operating expenses were USD 2,655m, which was USD 649m lower than the amount recorded for the first nine
months of 2023, mainly due to decreases in integration-related expenses and outsourcing expenses. Operating
expenses included integration-related expenses of USD 837m, which was USD 187m lower than the amount
recorded for the first nine months of 2023. In addition, operating expenses in the first nine months of 2024 included
releases of USD 234m of IFRS 3 acquisition-related contingent liabilities following settlements reached in the second
and third quarters of 2024. The first nine months of 2023 included a USD 665m increase in provisions related to
the US residential mortgage-backed securities litigation matter, which was settled in the third quarter of 2023.
Excluding the aforementioned integration-related expenses, underlying operating expenses in the first nine months
of 2024 were USD 1,817m, a decrease of 20%.
UBS Group third quarter 2024 report |
UBS business divisions and Group Items | Group Items 33
Group Items
Group Items
1
As of or for the quarter ended
% change from
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
2
2Q24
3Q23
30.9.24
30.9.23
2
Results
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Underlying results
Total revenues as reported
of which: PPA effects and other integration items
3
Total revenues (underlying)
4
Credit loss expense / (release)
Operating expenses as reported
of which: integration-related expenses
4
of which: acquisition-related costs
Operating expenses (underlying)
4
of which: expenses for litigation, regulatory and similar matters
Operating profit / (loss) before tax as reported
Operating profit / (loss) before tax (underlying)
4
1 Comparatives may differ due to adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the
reporting period. 2 Comparative figures have been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations, as well as changes in the equity
attribution framework. Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of this report and to “Changes to segment reporting in 2024” in the “UBS business divisions and Group
Items” section and the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, for more information. 3 Includes accretion of PPA
adjustments on financial instruments and other PPA effects, as well as temporary and incremental items directly related to the integration. 4 Refer to “Alternative performance measures” in the appendix to this
report for the definition and calculation method.
Results: 3Q24 vs 3Q23
Profit before tax was USD 45m, mainly driven by mark-to-market gains in Group hedging and own debt, compared
with a loss before tax of USD 89m. Underlying profit before tax was USD 60m, after excluding negative USD 25m
of purchase price allocation (PPA) effects and other integration items from total revenues, and negative USD 11m
of integration-related expenses from operating expenses, compared with an underlying loss before tax of USD 55m,
after excluding USD 26m of acquisition-related costs and negative USD 5m of integration-related expenses from
operating expenses and negative USD 14m of PPA effects and other integration items from total revenues.
Income from Group hedging and own debt, including hedge accounting ineffectiveness, was net USD 200m,
compared with net income of USD 100m. The gains in the third quarter of 2024 were driven by mark-to-market
effects on portfolio-level economic hedges, mainly due to decreasing interest rates.
Results: 9M24 vs 9M23
Loss before tax decreased by USD 379m, or 37%, to USD 652m, mainly driven by mark-to-market losses in Group
hedging and own debt. Underlying loss before tax was USD 627m, after excluding negative USD 37m of PPA effects
and other integration items from total revenues and negative USD 12m of integration-related expenses from
operating expenses, compared with an underlying loss before tax of USD 467m, after excluding USD 342m of
integration-related expenses and USD 202m of acquisition-related costs from operating expenses and negative
USD 20m of PPA effects and other integration items from total revenues.
Income from Group hedging and own debt, including hedge accounting ineffectiveness, was net negative
USD 185m, compared with net negative income of USD 23m. The losses in the first nine months of 2024 were
driven by mark-to-market effects on portfolio-level economic hedges, mainly due to cross-currency-basis widening.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet 34
Risk, capital, liquidity and
funding, and balance sheet
Management report
Table of contents
35
35
37
38
39
40
42
Total loss-absorbing capacity
45
47
49
50
50
50
50
51
51
51
52
53
54
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 35
Risk management and control
This section provides information about key developments during the reporting period and should be read in
conjunction with the “Risk management and control” section of the UBS Group Annual Report 2023, available
under “Annual reporting” at
ubs.com/investors
, and the “Recent developments” section of this report for more
information about the integration of Credit Suisse.
Credit risk
Overall banking products exposure
Overall banking products exposure increased by USD 12bn to USD 1,065bn as of 30 September 2024, primarily
reflecting currency effects, partly offset by negative net new loans in Personal & Corporate Banking and Global
Wealth Management and a decrease in balances at central banks.
Total net credit loss expenses in the third quarter of 2024 were USD 121m, reflecting net releases of USD 15m
related to performing positions and net expenses of USD 136m on credit-impaired positions.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
›
Refer to the “Group performance” section and “Note 9 Expected credit loss measurement” in the “Consolidated
financial statements” section of this report for more information about credit loss expense / release
Loan underwriting
In the Investment Bank, mandated loan underwriting commitments on a notional basis increased by USD 1.5bn to
USD 4.3bn as of 30 September 2024, driven by new mandates, partly offset by deal syndications and cancellations.
As of 30 September 2024, USD 0.1bn of these commitments had not been distributed as originally planned. As of
30 September 2024, Non-core and Legacy had no loan underwriting commitments.
Loan underwriting exposures in the Investment Bank are classified as held for trading, with fair values reflecting the
market conditions at the end of the quarter. Credit hedges are in place to help protect against fair value movements
in the portfolio.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 36
Banking and traded products exposure in the business divisions and Group Items
30.9.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1,2
Gross exposure
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
4
Total credit-impaired exposure, gross
of which: stage 3
of which: PCI
Total allowances and provisions for expected credit losses
of which: stage 1
of which: stage 2
of which: stage 3
of which: PCI
30.6.24
USD m
Global
Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group
Items
Total
Banking products
1,2
Gross exposure
of which: loans and advances to customers (on-balance sheet)
of which: guarantees and loan commitments (off-balance sheet)
Traded products
2,3
Gross exposure
of which: over-the-counter derivatives
of which: securities financing transactions
of which: exchange-traded derivatives
Other credit lines, gross
4
Total credit-impaired exposure, gross
of which: stage 3
of which: PCI
Total allowances and provisions for expected credit losses
5
of which: stage 1
of which: stage 2
of which: stage 3
of which: PCI
1 IFRS 9 gross exposure for banking products includes the following financial instruments in scope of expected credit loss requirements: balances at central banks, amounts due from banks, loans and advances to
customers, other financial assets at amortized cost, guarantees and irrevocable loan commitments. 2 Internal management view of credit risk, which differs in certain respects from IFRS Accounting Standards. 3 As
counterparty risk for traded products is managed at counterparty level, no further split between exposures in the Investment Bank, Non-core and Legacy, and Group Items is provided. 4 Unconditionally revocable
committed credit lines. 5 Negative balances are representative of a net improvement in credit quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
Collateralization of Loans and advances to customers
1
Global Wealth Management
Personal & Corporate Banking
USD m, except where indicated
30.9.24
30.6.24
30.9.24
30.6.24
Secured by collateral
Residential real estate
Commercial / industrial real estate
Cash
Equity and debt instruments
Other collateral
2
Subject to guarantees
Uncollateralized and not subject to guarantees
Total loans and advances to customers, gross
Allowances
Total loans and advances to customers, net of allowances
Collateralized loans and advances to customers in % of total loans and advances to customers, gross (%)
1 Collateral arrangements generally incorporate a range of collateral, including cash, securities, real estate and other collateral. UBS applies a risk-based approach that generally prioritizes collateral according to its
liquidity profile. In the case of loan facilities with funded and unfunded elements, the collateral is first allocated to the funded element. For legacy Credit Suisse exposure, a risk-based approach is applied that generally
prioritizes real estate collateral and prioritizes other collateral according to its liquidity profile. In the case of loan facilities with funded and unfunded elements, the collateral is proportionately allocated. 2 Includes
but is not limited to life insurance contracts, rights in respect of subscription or capital commitments from fund partners, inventory, gold and other commodities.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 37
Market risk
UBS Group excluding certain legacy Credit Suisse components continued to maintain generally low levels of
management value-at-risk (VaR). Average management VaR (1-day, 95% confidence level) increased to USD 12m
from USD 9m in the third quarter of 2024, mainly driven by the Investment Bank’s Rates business. There were no
new VaR negative backtesting exceptions in the third quarter of 2024. The number of negative backtesting
exceptions within the most recent 250-business-day window remained at zero.
Average management VaR (1-day, 98% confidence level) of the legacy Credit Suisse components decreased to
USD 11m from USD 15m in the third quarter of 2024, driven by continued strategic migration of positions to UBS
from the former Investment Bank (Credit Suisse) and reductions in Non-core and Legacy. In the third quarter of
2024, the aforementioned legacy Credit Suisse components had three new negative backtesting exceptions driven
by Non-core and Legacy. Two backtesting exceptions were caused by market moves and one backtesting exception
was due to valuation adjustments related to additional exit cost reserves. The number of negative backtesting
exceptions within the most recent 250-business-day window increased to four from one.
As the number of negative backtesting exceptions for the legacy Credit Suisse components also remained below
five, the Swiss Financial Market Supervisory Authority (FINMA) VaR multiplier derived from negative backtesting
exceptions for market risk risk-weighted assets was unchanged compared with the prior quarter, at 3.0, for both
the UBS Group excluding certain legacy Credit Suisse components and the aforementioned legacy Credit Suisse
components.
Management value-at-risk (1-day, 95% confidence, 5 years of historical data) of the business divisions and Group Items
excluding certain legacy Credit Suisse components, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
Total as of 30.9.24
Total as of 30.6.24
Management value-at-risk (1-day, 98% confidence, 2 years of historical data) of certain legacy Credit Suisse
components of the business divisions and Group Items, by general market risk type
1,2
Average by risk type
USD m
Min.
Max.
Period end
Average
Equity
Interest
rates
Credit
spreads
Foreign
exchange
Commodities
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Diversification effect
3,4
Total as of 30.9.24
Total as of 30.6.24
1 Legacy Credit Suisse components not included in the UBS Group management VaR predominantly reflect the portfolio in Non-core and Legacy and the transition portfolio in the Investment Bank. These positions
continue to be managed on legacy Credit Suisse infrastructure based on legacy Credit Suisse management VaR methodology until full migration of these positions to the UBS infrastructure or liquidation of the
positions. This process is ongoing, and the management VaR of the legacy Credit Suisse components is expected to continue decreasing over time. 2 Statistics at individual levels may not be summed to deduce the
corresponding aggregate figures. The minima and maxima for each level may occur on different days, and, likewise, the VaR for each business line or risk type, being driven by the extreme loss tail of the corresponding
distribution of simulated profits and losses for that business line or risk type, may well be driven by different days in the historical time series, rendering invalid the simple summation of figures to arrive at the aggregate
total. 3 The difference between the sum of the standalone VaR for the business divisions and Group Items and the total VaR. 4 As the minima and maxima for different business divisions and Group Items occur
on different days, it is not meaningful to calculate a portfolio diversification effect.
Economic value of equity and net interest income sensitivity
The economic value of equity (EVE) sensitivity in the UBS Group banking book to a parallel shift in yield curves of
+1 basis point was negative USD 37.2m as of 30 September 2024, compared with negative USD 32.1m as of
30 June 2024. This excluded the sensitivity of USD 6.1m from additional tier 1 (AT1) capital instruments (as per
specific FINMA requirements) in contrast to general Basel Committee on Banking Supervision (BCBS) guidance.
Exposure in the banking book of the UBS Group increased during the third quarter of 2024, driven by net interest
income stabilization initiatives.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 38
The majority of our interest rate risk in the banking book was a reflection of the net asset duration that we ran to
offset our modeled sensitivity of net USD 28.0m (30 June 2024: USD 24.6m) assigned to our equity, goodwill and
real estate, with the aim of generating a stable net interest income contribution. Of this, USD 17.2m and USD 9.0m
were attributable to the US dollar and the Swiss franc portfolios, respectively, (30 June 2024: USD 16.1m and
USD 7.5m, respectively).
In addition to the aforementioned sensitivity, we calculate the six interest rate shock scenarios prescribed by FINMA.
The “Parallel up” scenario, assuming all positions were fair valued, was the most severe and would have resulted
in a change in EVE of negative USD 6.8bn, or 7.5%, of our tier 1 capital (30 June 2024: negative USD 6.0bn, or
6.5%), which is well below the 15% threshold set in the BCBS supervisory outlier test for high levels of interest rate
risk in the banking book.
The immediate effect on our tier 1 capital in the “Parallel up” scenario as of 30 September 2024 would have been
a decrease of approximately USD 0.7bn, or 0.8%, (30 June 2024: USD 0.8bn, or 0.9%), reflecting the fact that the
vast majority of our banking book is accrual accounted or subject to hedge accounting. The “Parallel up” scenario
would subsequently have a positive effect on net interest income, assuming a constant balance sheet.
As the overall interest rate risk sensitivity shows a greater impact from slower asset repricing compared with faster
liabilities repricing, the “Parallel down“ scenario was the most beneficial and would have resulted in a change in
EVE of positive USD 7.3bn (30 June 2024: positive USD 6.2bn) and a small positive immediate effect on our tier 1
capital.
›
Refer to “Interest rate risk in the banking book” in the “Risk management and control” section of the UBS Group
Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more information about the
management of interest rate risk in the banking book
›
Refer to “Sensitivity to interest rate movements” in the “Group performance” section of this report for more
information about the effects of increases in interest rates on the net interest income of our banking book
Interest rate risk – banking book
30.9.24
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
30.6.24
USD m
Effect on EVE
1
Effect on EVE
1
Scenarios
CHF
EUR
GBP
USD
Other
Total
Additional tier 1 (AT1) capital
instruments
Total
+1 bp
Parallel up
2
Parallel down
2
Steepener
3
Flattener
4
Short-term up
5
Short-term down
6
1 Economic value of equity. 2 Rates across all tenors move by ±150 bps for Swiss franc, ±200 bps for euro and US dollar, and ±250 bps for pound sterling. 3 Short-term rates decrease and long-term rates increase.
4 Short-term rates increase and long-term rates decrease. 5 Short-term rates increase more than long-term rates. 6 Short-term rates decrease more than long-term rates.
Country risk
We remain watchful of a range of geopolitical developments and political changes in a number of countries, as
well as international tensions arising from the Russia–Ukraine war, the escalation of conflicts in the Middle East,
and global trade relations. As of 30 September 2024, our direct exposure to Israel was less than USD 0.5bn and
our direct exposure to Gulf Cooperation Council countries was less than USD 5bn, while direct exposure to Egypt
and Jordan was limited, and there was no direct exposure to Iran, Iraq, Lebanon or Syria. Our direct exposure to
Russia as of 30 September 2024 was less than USD 0.5bn, and our direct exposure to Belarus and Ukraine remained
immaterial. Potential second-order impacts, such as European energy security, continue to be monitored.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 39
Inflation has abated to some extent in major Western economies, although there are still concerns regarding future
developments, and central banks’ monetary policies are in the spotlight. In China, stress in the property sector and
strained local government finances continue to have an adverse impact on economic growth, raising the risk of
financial instability. This combination of factors translates into a more uncertain and volatile environment, which
increases the risk of financial market disruption.
We continue to monitor potential trade policy disputes, as well as economic and political developments in addition
to those mentioned above. We are closely watching elections and their aftermath in a number of key markets in
2024. As of 30 September 2024, our exposure to emerging market countries was less than 10% of our total country
exposure and mainly to certain countries in Asia.
›
Refer to the “Risk management and control” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
Non-financial risk
We continue to actively manage the non-financial risks emerging from the acquisition of the Credit Suisse Group.
Progress continues to be made regarding the legal entity mergers, client account migrations to UBS platforms, the
integration of policies, systems and controls, and operational integration. These activities continue to be managed
via the program run by our Group Integration Office.
Through this period of change, we place an increased focus on maintaining and enhancing our control environment
and continue to cooperate with regulators in relation to the submission and execution of implementation plans to
meet regulatory requirements, including remediation requirements applicable to Credit Suisse AG. In addition, the
Group is closely monitoring non-financial risk indicators, to detect any potential for adverse impacts on the control
environment.
The integration of Credit Suisse requires data to be migrated to the UBS environment, and we aim to ensure that
we have robust controls to preserve data integrity, quality and availability, to mitigate data migration risks, and to
meet regulatory expectations.
There is an increased risk of cyber-related operational disruption to business activities at our locations and those of
third-party suppliers due to operating an enlarged group of entities. This is combined with the increasingly dynamic
threat environment, which is intensified by current geopolitical factors and evidenced by the increased volumes and
sophistication of cyberattacks against financial institutions globally. We continue to invest in improving our
technology infrastructure and information security governance in order to improve our cyberattack defense,
detection and response capabilities.
Cyberattacks on third-party vendors have affected our operations in the past and continue to be a source of residual
risk to our business. No cyber events occurred in the third quarter of 2024 related to our own infrastructure, or the
infrastructure of any third party, that had material financial or operational effects on us. We remain on heightened
alert to respond to and mitigate elevated cybersecurity and information-security threats. We maintain a program to
advance our frameworks for managing third parties that support our important business services, and we are
continuing with actions to enhance our cyber-risk assessments and controls over third-party vendors.
In addition, we are working to enhance our operational resilience to address these heightened risks and to meet
regulatory deadlines through 2026. We have implemented a global framework designed to drive enhancements in
operational resilience across all business divisions and relevant jurisdictions, and we are working with the third
parties, including vendors, that are of critical importance to our operations, to assess their operational resilience
against our standards.
The increasing interest in data-driven advisory processes, and use of artificial intelligence (AI) and machine learning,
is opening up new questions related to the fairness of AI algorithms, data life cycle management, data ethics, data
privacy and security, and records management. In addition, new risks continue to emerge, such as those that result
from the demand from our clients for distributed ledger technology, blockchain-based assets and cryptocurrencies;
however, we currently have limited exposure to such risks, and relevant control frameworks are implemented and
reviewed on a regular basis as these risks evolve.
Competition to find new business opportunities, products and services across the financial services sector, both for
firms and for customers, is increasing, particularly during periods of market volatility and economic uncertainty.
Thus, suitability risk, product selection, cross-divisional service offerings, quality of advice and price transparency
remain areas of heightened focus for UBS and for the industry as a whole.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Risk management and control 40
Evolving regulations, such as those relating to environmental, social and governance matters and the upcoming EU
Markets in Financial Instruments Directive III (MiFID
III), as well as the EU Artificial Intelligence Act, are expected to
have significant impacts on the financial sector and to require ongoing adjustments to policies, processes, controls
and surveillance.
Cross-border risk (including unintended permanent establishment) remains an area of regulatory attention for
global financial institutions, including a focus on market access, such as third-country market access into the
European Economic Area, and taxation of US persons. We maintain a series of controls designed to address these
risks, and we are increasing the number of controls that are automated.
Financial crime, including money laundering, terrorist financing, sanctions violations, fraud, bribery and corruption,
continues to present a major risk, as technological innovation and geopolitical developments increase the
complexity of doing business and heightened regulatory attention continues. Money laundering and financial fraud
techniques are becoming increasingly sophisticated, including growing use of AI, and geopolitical volatility makes
the sanctions landscape more complex. The extensive and continuously evolving sanctions arising from the Russia–
Ukraine war require constant attention to prevent circumvention risks, while the conflicts in the Middle East may
increase terrorist financing risks. An effective financial crime prevention program therefore remains essential for us.
We are focused on strategic enhancements to our global anti-money-laundering (AML), know-your-client (KYC)
and sanctions programs to respond to new and existing regulatory requirements and to respond to developing
threats, as well as alignment of standards and processes as Credit Suisse client accounts are migrated to UBS
platforms.
In the US, UBS AG has been subject to a Consent Order with the Office of the Comptroller of the Currency (the
OCC) since May 2018 relating to our US branch AML and KYC programs. In response, we have introduced
significant improvements to our framework for the purpose of ensuring sustainable remediation of US-relevant
Bank Secrecy Act / AML issues across relevant US legal entities.
Achieving fair outcomes for our clients, upholding market integrity and cultivating the highest standards of
employee conduct are of critical importance to us. We maintain a conduct risk framework, which we continue to
refine, across our activities, and which is designed to align our standards and conduct with these objectives and to
retain momentum on fostering a strong culture.
Capital management
The disclosures in this section are provided for UBS Group AG on a consolidated basis and focus on key
developments during the reporting period and information in accordance with the Basel III framework, as applicable
to Swiss systemically relevant banks (SRBs). They should be read in conjunction with “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, which provides more information about our capital management
objectives, planning and activities, as well as the Swiss SRB total loss-absorbing capacity (TLAC) framework.
UBS Group AG is a holding company and conducts substantially all of its operations through UBS AG and
subsidiaries thereof. UBS Group AG and UBS AG contribute a significant portion of their respective capital to, and
provide substantial liquidity to, such subsidiaries. Many of these subsidiaries are subject to regulations requiring
compliance with minimum capital, liquidity and similar requirements.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about additional regulatory disclosures for UBS Group AG
on a consolidated basis, as well as the significant regulated subsidiaries and sub-groups of UBS Group AG
›
Refer to the UBS AG third quarter 2024 report, which will be available as of 8 November 2024 under “Quarterly
reporting” at
ubs.com/investors
, for more information about capital and other regulatory information for UBS AG
consolidated, in accordance with the Basel III framework, as applicable to Swiss SRBs
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 41
We are subject to the going and gone concern requirements of the Swiss Capital Adequacy Ordinance, which
include the too-big-to-fail (TBTF) provisions applicable to Swiss SRBs. The table below provides the risk-weighted
asset (RWA)- and leverage ratio denominator (LRD)-based requirements and information as of 30 September 2024.
Swiss SRB going and gone concern requirements and information
As of 30.9.24
RWA
LRD
USD m, except where indicated
in %
in %
Required going concern capital
Total going concern capital
1
1
Common equity tier 1 capital
2
of which: minimum capital
of which: buffer capital
of which: countercyclical buffer
Maximum additional tier 1 capital
of which: additional tier 1 capital
of which: additional tier 1 buffer capital
Eligible going concern capital
Total going concern capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
3
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Required gone concern capital
Total gone concern loss-absorbing capacity
4,5,6
7
7
of which: base requirement including add-ons for market share and LRD
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible senior unsecured debt
Total loss-absorbing capacity
Required total loss-absorbing capacity
Eligible total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
1 Includes applicable add-ons of 1.44% for risk-weighted assets (RWA) and 0.50% for leverage ratio denominator (LRD). 2 Our minimum CET1 leverage ratio requirement of 3.50% consists of a 1.5% base
requirement, a 1.5% base buffer capital requirement, a 0.25% LRD add-on requirement and a 0.25% market share add-on requirement based on our Swiss credit business. 3 Includes outstanding low-trigger loss-
absorbing additional tier 1 capital instruments, which are available under the Swiss systemically relevant bank framework to meet the going concern requirements until their first call date. As of their first call date,
these instruments are eligible to meet the gone concern requirements. 4 A maximum of 25% of the gone concern requirements can be met with instruments that have a remaining maturity of between one and two
years. Once at least 75% of the minimum gone concern requirement has been met with instruments that have a remaining maturity of greater than two years, all instruments that have a remaining maturity of between
one and two years remain eligible to be included in the total gone concern capital. 5 From 1 January 2023, the resolvability discount on the gone concern capital requirements for systemically important banks has
been replaced with reduced base gone concern capital requirements equivalent to 75% of the total going concern requirements (excluding countercyclical buffer requirements). 6 As of July 2024, the Swiss Financial
Market Supervisory Authority (FINMA) has the authority to impose a surcharge of up to 25% of the total going concern capital requirements should obstacles to an SIB’s resolvability be identified in future resolvability
assessments. 7 Includes applicable add-ons of 1.08% for RWA and 0.38% for LRD.
Amortization of transitional purchase price allocation adjustments for regulatory capital
As part of the acquisition of the Credit Suisse Group in 2023, the assets acquired and liabilities assumed, including
contingent liabilities, were recognized at fair value as of the acquisition date in accordance with IFRS 3,
Business
Combinations
. The purchase price allocation (PPA) fair value adjustments required under IFRS 3 were recognized as
part of negative goodwill and included effects on financial instruments measured at amortized cost, such as fair
value impacts from interest rates and own credit, that are expected to accrete back to par through the income
statement as the instruments are held to maturity. The Swiss Financial Market Supervisory Authority (FINMA)
approved a transitional common equity tier 1 (CET1) capital treatment for certain of these fair value adjustments,
given the substantially temporary nature of the IFRS-3-accounting-driven effects, which neutralized equity
reductions under IFRS Accounting Standards of USD 5.9bn (before tax) and USD 5.0bn (net of tax) as of the
acquisition date. The transitional treatment was subject to linear amortization through 30 June 2027.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 42
In the third quarter of 2024, we voluntarily accelerated the amortization of the remaining transitional CET1 capital
PPA adjustments, resulting in a USD 3.4bn decrease in CET1 capital and a reduction in our CET1 capital ratio of
approximately 65 basis points. As these transitional adjustments only applied to UBS Group AG, the regulatory
capital position of UBS AG was not impacted by the decision to fully amortize them. On a standalone basis as of
30 September 2024, UBS AG’s fully applied CET1 capital ratio is expected to be around 13.3%. Additional capital
information and final capital figures for UBS AG standalone will be published with our 30 September 2024 Pillar 3
report, which will be available as of 8 November 2024 under “Pillar 3 disclosures” at
ubs.com/investors
.
Additional capital requirements for UBS Group AG consolidated under current requirements
As a result of the acquisition of the Credit Suisse Group in 2023, the capital add-on for UBS Group AG consolidated
that reflects the Group’s degree of systemic importance and is based on market share and LRD will increase
commensurate with the higher market share and LRD of UBS Group AG consolidated after the acquisition. We
currently estimate that this will add around USD 10bn to the Group’s tier 1 capital requirement, when fully phased
in. The phase-in of the increased capital requirements will commence from the end of 2025 and will be completed
by the beginning of 2030, at the latest.
Total loss-absorbing capacity
The table below provides Swiss SRB going and gone concern information based on the Swiss SRB framework and
requirements that are discussed under “Capital management” in the “Capital, liquidity and funding, and balance
sheet” section of the UBS Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
.
Swiss SRB going and gone concern information
USD m, except where indicated
30.9.24
30.6.24
31.12.23
Eligible going concern capital
Total going concern capital
Total tier 1 capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible senior unsecured debt
Total loss-absorbing capacity
Total loss-absorbing capacity
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio
of which: common equity tier 1 capital ratio
Gone concern loss-absorbing capacity ratio
Total loss-absorbing capacity ratio
Leverage ratios (%)
Going concern leverage ratio
of which: common equity tier 1 leverage ratio
Gone concern leverage ratio
Total loss-absorbing capacity leverage ratio
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 43
Total loss-absorbing capacity and movement
Our TLAC decreased by USD 2.8bn to USD 194.9bn in the third quarter of 2024.
Going concern capital and movement
Our going concern capital decreased by USD 0.8bn to USD 91.0bn. Our CET1 capital decreased by USD 1.9bn to
USD 74.2bn, mainly as operating profit before tax of USD 1.9bn and foreign currency translation gains of
USD 1.3bn were more than offset by the effect of our voluntary acceleration of the amortization of the remaining
transitional CET1 capital PPA adjustments of USD 3.4bn (net of tax) and the regular amortization of these
adjustments during the quarter of USD 0.3bn (net of tax), as well as dividend accruals of USD 0.6bn, current tax
expenses of USD 0.4bn, and a negative effect from compensation- and own-share-related capital components of
USD 0.3bn. Share repurchases of USD 0.5bn carried out in the third quarter of 2024 under our 2024 share
repurchase program did not affect our CET1 capital position, as there was an equal reduction in the capital reserve
for potential share repurchases.
Our loss-absorbing additional tier 1 (AT1) capital increased by USD 1.1bn to USD 16.8bn, reflecting the issuance of
new AT1 capital instruments equivalent to USD 1.6bn and positive impacts from interest rate risk hedge, foreign
currency translation and other effects, partly offset by the call of AT1 capital instruments equivalent to USD 1.0bn.
Following the approval of a maximum amount of conversion capital by UBS Group AG’s shareholders at the 2024
Annual General Meeting, AT1 capital instruments issued from the beginning of the fourth quarter of 2023 are,
upon the occurrence of a trigger event or a viability event, subject to conversion into UBS Group AG ordinary shares
rather than a write-down. AT1 capital instruments issued prior to the fourth quarter of 2023 remain subject to a
write-down.
Gone concern loss-absorbing capacity and movement
Our total gone concern loss-absorbing capacity decreased by USD 2.0bn to USD 103.9bn and included
USD 103.6bn of TLAC-eligible senior unsecured debt instruments. The decrease of USD 2.0bn mainly reflected the
call of USD 6.4bn equivalent of TLAC-eligible senior unsecured debt instruments, as well as USD 3.1bn equivalent
of TLAC-eligible senior unsecured debt instruments and a USD 0.3bn tier 2 instrument ceasing to be eligible as
gone concern capital, as they entered the final year before maturity. These effects were partly offset by new
issuances of TLAC-eligible senior unsecured debt instruments totaling USD 1.8bn equivalent and positive impacts
from interest rate risk hedge, foreign currency translation and other effects.
›
Refer to “Bondholder information” at
for more information about the eligibility of capital and
senior unsecured debt instruments and about key features and terms and conditions of capital instruments
Loss-absorbing capacity and leverage ratios
Our CET1 capital ratio decreased to 14.3% from 14.9%, reflecting a USD 1.9bn decrease in CET1 capital and an
USD 8.0bn increase in RWA.
Our CET1 leverage ratio decreased to 4.6% from 4.9%, reflecting a USD 44.1bn increase in the LRD and a
USD 1.9bn decrease in CET1 capital.
Our gone concern loss-absorbing capacity ratio decreased to 20.0% from 20.7%, due to a decrease in gone
concern loss-absorbing capacity of USD 2.0bn and the aforementioned increase in RWA.
Our gone concern leverage ratio decreased to 6.5% from 6.8%, due to the aforementioned increase in the LRD
and a decrease in gone concern loss-absorbing capacity of USD 2.0bn.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 44
Swiss SRB total loss-absorbing capacity movement
USD m
Going concern capital
Swiss SRB
Common equity tier 1 capital as of 30.6.24
Operating profit / (loss) before tax
Current tax (expense) / benefit
Foreign currency translation effects, before tax
Share repurchase program
Capital reserve for potential share repurchases
Voluntary acceleration of the amortization of the remaining transitional CET1 capital PPA adjustments, net of tax
Regular amortization of the transitional CET1 capital PPA adjustments, net of tax
Compensation- and own-share-related capital components
Other
1
Common equity tier 1 capital as of 30.9.24
Loss-absorbing additional tier 1 capital as of 30.6.24
Issuance of high-trigger loss-absorbing additional tier 1 capital
Call of high-trigger loss-absorbing additional tier 1 capital
Interest rate risk hedge, foreign currency translation and other effects
Loss-absorbing additional tier 1 capital as of 30.9.24
Total going concern capital as of 30.6.24
Total going concern capital as of 30.9.24
Gone concern loss-absorbing capacity
Tier 2 capital as of 30.6.24
Debt no longer eligible as gone concern loss-absorbing capacity due to residual tenor falling to below one year
Interest rate risk hedge, foreign currency translation and other effects
Tier 2 capital as of 30.9.24
TLAC-eligible unsecured debt as of 30.6.24
Issuance of TLAC-eligible senior unsecured debt
Call of TLAC-eligible senior unsecured debt
Debt no longer eligible as gone concern loss-absorbing capacity due to residual tenor falling to below one year
Interest rate risk hedge, foreign currency translation and other effects
TLAC-eligible unsecured debt as of 30.9.24
Total gone concern loss-absorbing capacity as of 30.6.24
Total gone concern loss-absorbing capacity as of 30.9.24
Total loss-absorbing capacity
Total loss-absorbing capacity as of 30.6.24
Total loss-absorbing capacity as of 30.9.24
1 Includes dividend accruals for 2024 (negative USD 0.6bn) and movements related to other items.
Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital
USD m
30.9.24
30.6.24
31.12.23
Total equity under IFRS Accounting Standards
Equity attributable to non-controlling interests
Defined benefit plans, net of tax
Deferred tax assets recognized for tax loss carry-forwards
Deferred tax assets for unused tax credits
Goodwill, net of tax
1
Intangible assets, net of tax
Compensation-related components (not recognized in net profit)
Expected losses on advanced internal ratings-based portfolio less provisions
Unrealized (gains) / losses from cash flow hedges, net of tax
Own credit related to (gains) / losses on financial liabilities measured at fair value that existed at the balance sheet date, net of tax
Own credit related to (gains) / losses on derivative financial instruments that existed at the balance sheet date
Prudential valuation adjustments
Accruals for dividends to shareholders for 2023
Capital reserve for potential share repurchases
Transitional CET1 capital PPA adjustments, net of tax
Other
2
2
Total common equity tier 1 capital
1 Includes goodwill related to significant investments in financial institutions of USD 20m as of 30 September 2024 (USD 19m as of 30 June 2024, USD 20m as of 31 December 2023) presented on the balance sheet
line Investments in associates. 2 Includes dividend accruals for 2024 and other items.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 45
Additional information
Sensitivity to currency movements
Risk-weighted assets
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our RWA by
USD 24bn and our CET1 capital by USD 2.4bn as of 30 September 2024 (30 June 2024: USD 22bn and USD 2.5bn,
respectively) and decreased our CET1 capital ratio by 18 basis points (30 June 2024: 15 basis points). Conversely, a
10% appreciation of the US dollar against other currencies would have decreased our RWA by USD 21bn and our
CET1 capital by USD 2.2bn (30 June 2024: USD 20bn and USD 2.3bn, respectively) and increased our CET1 capital
ratio by 18 basis points (30 June 2024: 14 basis points).
Leverage ratio denominator
We estimate that a 10% depreciation of the US dollar against other currencies would have increased our LRD by
USD 109bn as of 30 September 2024 (30 June 2024: USD 101bn) and decreased our CET1 leverage ratio by
15 basis points (30 June 2024: 14 basis points). Conversely, a 10% appreciation of the US dollar against other
currencies would have decreased our LRD by USD 99bn (30 June 2024: USD 91bn) and increased our CET1 leverage
ratio by 16 basis points (30 June 2024: 15 basis points).
The aforementioned sensitivities do not consider foreign currency translation effects related to defined benefit plans
other than those related to the currency translation of the net equity of foreign operations.
›
Refer to “Active management of sensitivity to foreign exchange movements” under “Capital management” in the
“Capital, liquidity and funding, and balance sheet” section of the UBS Group Annual Report 2023, available under
“Annual reporting” at
ubs.com/investors
, for more information
Risk-weighted assets
During the third quarter of 2024, RWA increased by USD 8.0bn to USD 519.4bn, driven by an USD 11.2bn increase
in currency effects, partly offset by decreases of USD 1.7bn resulting from asset size and other movements, as well
as USD 1.6bn resulting from model updates and methodology changes.
Movement in risk-weighted assets, by key driver
USD bn
RWA as of
30.6.24
Currency
effects
Model updates
and
methodology
changes
Asset size and
other
1
RWA as of
30.9.24
Credit and counterparty credit risk
2
Non-counterparty-related risk
3
Market risk
Operational risk
Total
1 Includes the Pillar 3 categories “Asset size”, “Credit quality of counterparties”, “Acquisitions and disposals” and “Other”. For more information, refer to the 30 September 2024 Pillar 3 Report, which will be
available as of 8 November 2024 under “Pillar 3 disclosures” at ubs.com/investors. 2 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and
securitization exposures in the banking book. 3 Non-counterparty-related risk includes deferred tax assets recognized for temporary differences, property, equipment, software and other items.
Credit and counterparty credit risk
Credit and counterparty credit risk RWA increased by USD 3.9bn to USD 314.1bn as of 30 September 2024,
including currency effects of USD 10.6bn.
Asset size and other movements resulted in a USD 3.7bn decrease in RWA:
–
Non-core and Legacy RWA decreased by USD 4.0bn, mainly driven by our actions to actively unwind the portfolio,
in addition to the natural roll-off.
–
Personal & Corporate Banking RWA decreased by USD 0.9bn, mainly driven by negative net new loans.
–
Asset Management RWA decreased by USD 0.4bn, mainly due to lower RWA from equity investments in funds.
–
Global Wealth Management RWA decreased by USD 0.1bn, mainly driven by negative net new loans.
–
Investment Bank RWA increased by USD 1.4bn, mainly due to higher RWA from loans and loan commitments.
–
Group Items RWA increased by USD 0.4bn.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 46
Model updates and methodology changes resulted in a RWA decrease of USD 3.0bn, mainly reflecting an RWA
decrease of USD 2.3bn related to the recalibration of certain multipliers as a result of improvements to models and
an RWA reduction of USD 0.7bn related to model updates and harmonizations for structured margin loans and
similar products in Global Wealth Management.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information
›
Refer to “Credit risk” in the “Risk management and control” section of this report for more information
Market risk
Market risk RWA increased by USD 2.4bn to USD 25.0bn in the third quarter of 2024, mainly driven by an increase
of USD 1.4bn from a capital buffer newly introduced by FINMA to capitalize potential maturity mismatches between
positions and hedges in the incremental risk charge (the IRC). The IRC, including the capital buffer, will no longer
be applicable with the adoption of the final Basel III standards (including the Fundamental Review of the Trading
Book) in January 2025. Additionally, in the third quarter of 2024, we observed an increase of USD 1.0bn from asset
size and other movements that reflected updates from the monthly risks-not-in-value-at-risk assessment, which was
partially offset by the de-risking within Non-core and Legacy.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
›
Refer to “Market risk” in the “Risk management and control” section of this report for more information
Operational risk
Operational risk RWA were unchanged at USD 145.4bn.
›
Refer to “Note 15 Provisions and contingent liabilities” in the “Consolidated financial statements” section of this
report for more information
›
Refer to “Non-financial risk” in the “Risk management and control” section of the UBS Group Annual Report 2023,
available under “Annual reporting” at
ubs.com/investors
, for information about the AMA models
Outlook
We expect that the adoption of the final Basel III standards in January 2025 will lead to a low single-digit percentage
increase in the UBS Group’s RWA, reducing the CET1 capital ratio by around 30 basis points. This estimate is based
on our current understanding of the relevant standards as we are in an active dialogue with FINMA regarding
various aspects of the final rules. Our estimate for the RWA and CET1 capital ratio does not take into account the
impact of the output floor, which is to be phased in over time.
We expect RWA from credit and counterparty credit risk model updates and methodology changes to decrease by
around USD 2bn in the fourth quarter of 2024, mainly reflecting a decrease related to the recalibration of certain
multipliers as a result of improvements to models and other model updates, which is expected to be partly offset
by increases due to the migration of Credit Suisse portfolios to UBS models, as well as methodology changes.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 47
Risk-weighted assets, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Manage-
ment
Investment
Bank
Non-core and
Legacy
Group
Items
Total
RWA
30.9.24
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
30.6.24
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
30.9.24 vs 30.6.24
Credit and counterparty credit risk
1
Non-counterparty-related risk
2
Market risk
Operational risk
Total
1 Includes settlement risk, credit valuation adjustments, equity and investments in funds exposures in the banking book, and securitization exposures in the banking book. 2 Non-counterparty-related risk includes
deferred tax assets recognized for temporary differences (30 September 2024: USD 18.0bn; 30 June 2024: USD 16.6bn), as well as property, equipment, software and other items (30 September 2024: USD 16.8bn;
30 June 2024: USD 16.6bn).
Leverage ratio denominator
During the third quarter of 2024, the LRD increased by USD 44.1bn to USD 1,608.3bn, driven by currency effects
of USD 53.6bn, partly offset by asset size and other movements of USD 9.5bn.
Movement in leverage ratio denominator, by key driver
USD bn
LRD as of
30.6.24
Currency
effects
Asset size and
other
LRD as of
30.9.24
On-balance sheet exposures (excluding derivatives and securities financing transactions)
Derivatives
Securities financing transactions
Off-balance sheet items
Deduction items
Total
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 48
The LRD movements described below exclude currency effects.
On-balance sheet exposures (excluding derivatives and securities financing transactions) decreased by USD 9.2bn,
mainly reflecting a decrease in cash and balances at central banks, as well as decreases in lending balances due to
negative net new loans mainly in Personal & Corporate Banking and Global Wealth Management. There was also
a decrease in trading portfolio assets in Non-core and Legacy driven by our actions to actively unwind the portfolio,
in addition to the natural roll-off. These decreases were partly offset by increases in other financial assets in Group
Treasury and trading portfolio assets, primarily driven by an increase in positions held in the Investment Bank to
hedge client positions, as well as market-driven increases.
Derivative exposures increased by USD 6.1bn, mainly due to client-driven increases in the Investment Bank.
Securities financing transactions decreased by USD 0.9bn.
Off-balance sheet items decreased by USD 1.9bn, primarily driven by lower commitments.
Deduction items increased by USD 3.6bn to USD 11.0bn from USD 7.5bn, due to our voluntary acceleration of the
amortization of the remaining transitional CET1 capital PPA adjustments in the third quarter of 2024.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about balance sheet
movements
›
Refer to “Amortization of transitional purchase price allocation adjustments for regulatory capital” in this section
for more information about the change in deduction items
Outlook
We expect that the adoption of the final Basel III standards in January 2025 will lead to a low single-digit percentage
increase in the UBS Group’s LRD, reducing the CET1 leverage ratio by around 10 basis points. This estimate is based
on our current understanding of the relevant standards.
Leverage ratio denominator, by business division and Group Items
USD bn
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Total
30.9.24
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
30.6.24
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
30.9.24 vs 30.6.24
On-balance sheet exposures
Derivatives
Securities financing transactions
Off-balance sheet items
Items deducted from Swiss SRB tier 1 capital
Total
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Capital management 49
Equity attribution
Under our equity attribution framework, tangible equity is attributed based on equally weighted average RWA and
average LRD, which both include resource allocations from our Group functions to the business divisions. Average
RWA and LRD are converted to CET1 capital equivalents using target capital ratios. If the attributed tangible equity
calculated under the weighted-driver approach is less than the CET1 capital equivalent of risk-based capital (RBC)
for any business division, the CET1 capital equivalent of RBC is used as a floor for that business division.
In addition to tangible equity, we allocate equity to the business divisions to support goodwill and intangible assets.
We also allocate to the business divisions attributed equity related to CET1 capital deduction items that are
attributable to divisional activities, such as compensation-related components or expected losses on the
advanced internal ratings-based portfolio less provisions. We attribute all remaining capital deduction items to
Group Items. These primarily include equity related to deferred tax assets, accruals for shareholder returns, and
unrealized gains / losses from cash flow hedges.
›
Refer to the “Balance sheet and off-balance sheet” section of this report for more information about movements in
equity attributable to shareholders
Average attributed equity
For the quarter ended
Year-to-date
USD bn
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
2
Average equity attributed to business divisions and Group Items
1 Comparative figures have been restated to reflect the changes to the equity attribution framework. Refer to the “Equity attribution” section of the UBS Group first quarter 2024 report, available under “Quarterly
reporting” at ubs.com/investors, for more information. 2 Includes average attributed equity related to capital deduction items for deferred tax assets, accruals for shareholder returns and unrealized gains / losses
from cash flow hedges.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Liquidity and funding management 50
Liquidity and funding management
Strategy, objectives and governance
This section provides liquidity and funding management information and should be read in conjunction with
“Liquidity and funding management” in the “Capital, liquidity and funding, and balance sheet” section of the UBS
Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, which provides more
information about the Group’s strategy, objectives and governance in connection with liquidity and funding
management.
Liquidity coverage ratio
The quarterly average liquidity coverage ratio (the LCR) of the UBS Group decreased 12.7 percentage points to
199.2%, remaining above the prudential requirement communicated by the Swiss Financial Market Supervisory
Authority (FINMA). The movement in the quarterly average LCR was primarily driven by a decrease in high-quality
liquid assets of USD 17.6bn to USD 360.6bn, mainly reflecting lower cash available, due to the funding of trading
assets and an increase in Swiss regulatory minimum reserve requirements. The average net cash outflows increased
by USD 2.6bn to USD 181.1bn, reflecting higher net outflows from derivatives and higher outflows from deposits,
partly offset by lower outflows from irrevocable loan commitments.
›
Refer to the
30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the LCR
Liquidity coverage ratio
USD bn, except where indicated
Average 3Q24
1
Average 2Q24
1
High-quality liquid assets
Net cash outflows
2
Liquidity coverage ratio (%)
3
1 Calculated based on an average of 65 data points in the third quarter of 2024 and 61 data points in the second quarter of 2024. 2 Represents the net cash outflows expected over a stress period of 30 calendar
days. 3 Calculated after the application of haircuts and inflow and outflow rates, as well as, where applicable, caps on Level 2 assets and cash inflows.
Net stable funding ratio
As of 30 September 2024, the net stable funding ratio (the NSFR) of the UBS Group decreased 1.2 percentage
points to 126.9%, remaining above the prudential requirement communicated by FINMA.
Available stable funding increased by USD 22.0bn to USD 904.3bn, mainly driven by higher customer deposits,
largely due to currency effects.
Required stable funding increased by USD 23.8bn to USD 712.8bn, primarily reflecting increases in trading assets
and in lending assets, with the latter increase mainly driven by currency effects.
›
Refer to the 30 September 2024 Pillar 3 Report, which will be available as of 8 November 2024 under “Pillar 3
disclosures” at
ubs.com/investors
, for more information about the NSFR
Net stable funding ratio
USD bn, except where indicated
30.9.24
30.6.24
Available stable funding
Required stable funding
Net stable funding ratio (%)
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 51
Balance sheet and off-balance sheet
This section provides balance sheet and off-balance sheet information and should be read in conjunction with
“Balance sheet and off-balance sheet” in the “Capital, liquidity and funding, and balance sheet” section of the
UBS Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, which provides more
information about the balance sheet and off-balance sheet positions.
Balances disclosed in this report represent quarter-end positions, unless indicated otherwise. Intra-quarter balances
fluctuate in the ordinary course of business and may differ from quarter-end positions.
Balance sheet assets (30 September 2024 vs 30 June 2024)
Total assets were USD 1,623.9bn as of 30 September 2024, an increase of USD 62.9bn compared with 30 June
2024, largely reflecting currency effects as a result of the depreciation of the US dollar.
Derivatives and cash collateral receivables on derivative instruments increased by USD 23.1bn, predominantly in
Derivatives & Solutions and Financing in the Investment Bank, primarily reflecting increases in foreign currency
contracts, where the contracts in place at the end of September 2024 had a higher fair value compared with the
contracts in place at the end of June 2024, and in equity contracts, reflecting market-driven increases. Lending
assets increased by USD 16.4bn, primarily reflecting currency effects of approximately USD 25.8bn, partly offset by
negative net new loans in Personal & Corporate Banking and Global Wealth Management. Securities financing
transactions at amortized cost increased by USD 10.1bn, mainly reflecting net new excess cash reinvestment in
Group Treasury. Trading assets increased by USD 10.0bn, primarily driven by an increase in inventory held in the
Investment Bank to hedge client positions, as well as market-driven increases, partly offset by the unwinding of the
Credit Suisse business in Non-core and Legacy. Other financial assets measured at fair value increased by USD 6.2bn,
mainly reflecting currency effects and increases in securities financing transactions measured at fair value.
These increases were partly offset by a USD 5.0bn decrease in Cash and balances at central banks, mainly due to
net redemptions of debt issued, net increases in securities financing transactions and net new customer deposit
outflows, partly offset by inflows reflecting negative net new loans and by currency effects of approximately
USD 10.2bn.
Assets
As of
% change from
USD bn
30.9.24
30.6.24
30.6.24
Cash and balances at central banks
Lending
1
Securities financing transactions at amortized cost
Trading assets
Derivatives and cash collateral receivables on derivative instruments
Brokerage receivables
Other financial assets measured at amortized cost
Other financial assets measured at fair value
2
Non-financial assets
Total assets
1 Consists of Loans and advances to customers and Amounts due from banks. 2 Consists of Financial assets at fair value not held for trading and Financial assets measured at fair value through other comprehensive
income.
Balance sheet liabilities (30 September 2024 vs 30 June 2024)
Total liabilities were USD 1,536.4bn as of 30 September 2024, an increase of USD 59.6bn compared with 30 June
2024, largely reflecting currency effects as a result of the depreciation of the US dollar.
Derivatives and cash collateral payables on derivative instruments increased by USD 26.2bn, predominantly in the
Investment Bank, primarily reflecting the same drivers as on the asset side. Customer deposits increased by
USD 19.2bn, primarily driven by currency effects of approximately USD 24.6bn, partly offset by net new deposit
outflows. Brokerage payables increased by USD 6.2bn, mainly reflecting increases in client activity levels.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 52
These increases were partly offset by a USD 2.0bn decrease in Debt issued designated at fair value and long-term
debt issued measured at amortized cost, mainly driven by net redemptions of debt issued measured at amortized
cost in Group Treasury, which were largely offset by currency effects of approximately USD 6.6bn.
The “Liabilities, by product and currency” table in this section provides more information about the Group’s funding
sources.
›
Refer to “Bondholder information” at
for more information about capital and senior debt
instruments
›
Refer to the “Consolidated financial statements” section of this report for more information
Liabilities and equity
As of
% change from
USD bn
30.9.24
30.6.24
30.6.24
Short-term borrowings
1,2
Securities financing transactions at amortized cost
Customer deposits
Debt issued designated at fair value and long-term debt issued measured at amortized cost
2
Trading liabilities
Derivatives and cash collateral payables on derivative instruments
Brokerage payables
Other financial liabilities measured at amortized cost
Other financial liabilities designated at fair value
Non-financial liabilities
Total liabilities
Share capital
Share premium
Treasury shares
Retained earnings
Other comprehensive income
3
Total equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Consists of short-term debt issued measured at amortized cost and amounts due to banks, which includes amounts due to central banks. 2 The classification of debt issued measured at amortized cost into short-
term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any early
redemption features. 3 Excludes other comprehensive income related to defined benefit plans and own credit, which is recorded directly in Retained earnings.
Equity (30 September 2024 vs 30 June 2024)
Equity attributable to shareholders increased by USD 3,342m to USD 87,025m as of 30 September 2024.
The net increase of USD 3,342m was mainly driven by positive total comprehensive income attributable to
shareholders of USD 3,883m, reflecting a net profit of USD 1,425m and other comprehensive income (OCI) of
USD 2,459m. OCI mainly included cash flow hedge OCI of USD 1,593m, OCI related to foreign currency translation
of USD 1,333m and negative OCI related to own credit on financial liabilities designated at fair value of USD 323m.
This increase was partly offset by net treasury share activity, which reduced equity by USD 798m, predominantly
due to the repurchasing of USD 549m of shares under our 2024 share repurchase program and the purchasing of
USD 254m of shares in relation to employee share-based compensation plans.
›
Refer to the “Group performance” and “Consolidated financial statements” sections of this report for more
information
›
Refer to “Reconciliation of equity under IFRS Accounting Standards to Swiss SRB common equity tier 1 capital” in
the “Capital management” section of this report for more information about the effects of OCI on common equity
tier 1 capital
›
Refer to the “Share information and earnings per share” section of this report for more information about our
share repurchase programs
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Balance sheet and off-balance sheet 53
Liabilities, by product and currency
All currencies
of which: USD
of which: CHF
of which: EUR
USD bn
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
30.9.24
30.6.24
Short-term borrowings
61.9
61.7
28.9
32.0
7.9
8.0
11.2
8.6
of which: amounts due to banks
28.1
26.8
10.0
10.0
7.4
7.5
3.5
3.2
of which: short-term debt issued
1,2
33.9
34.9
18.9
22.0
0.5
0.5
7.7
5.4
Securities financing transactions at amortized cost
16.4
14.9
8.8
8.5
3.3
2.7
3.6
2.5
Customer deposits
776.0
756.8
310.0
307.2
320.0
301.9
75.8
76.8
of which: demand deposits
228.2
220.1
55.4
54.8
109.1
101.3
34.8
35.3
of which: retail savings / deposits
189.1
177.8
33.7
31.0
151.2
142.7
4.2
4.0
of which: sweep deposits
34.5
35.7
34.5
35.7
0.0
0.0
0.0
0.0
of which: time deposits
324.2
323.3
186.4
185.8
59.7
57.9
36.8
37.5
Debt issued designated at fair value and long-term debt issued measured at amortized
cost
2
305.5
307.5
167.6
174.8
45.0
42.6
67.6
64.5
Trading liabilities
36.4
33.5
14.5
12.7
1.7
1.1
10.4
9.7
Derivatives and cash collateral payables on derivative instruments
208.1
181.9
167.2
145.0
4.2
3.5
21.9
21.0
Brokerage payables
52.4
46.2
41.7
35.4
0.7
0.7
2.6
2.9
Other financial liabilities measured at amortized cost
21.2
21.4
11.0
11.5
4.2
4.2
2.0
1.5
Other financial liabilities designated at fair value
35.3
31.9
6.3
6.1
0.1
0.1
6.9
4.9
Non-financial liabilities
23.2
21.0
13.0
11.5
4.0
3.8
3.0
2.9
Total liabilities
1,536.4
1,476.8
769.1
744.8
391.0
368.6
205.0
195.0
1 Short-term debt issued consists of certificates of deposit, commercial paper, acceptances and promissory notes, and other money market paper. 2 The classification of debt issued measured at amortized cost into
short-term and long-term is based on original contractual maturity and therefore long-term debt also includes debt with a remaining time to maturity of less than one year. This classification does not consider any early
redemption features.
Off-balance sheet (30 September 2024 vs 30 June 2024)
Committed unconditionally revocable credit lines increased by USD 4.2bn, driven by currency effects. Forward
starting reverse repurchase and securities borrowing agreements increased by USD 6.4bn, reflecting an increase in
levels of business division activity in short-dated securities financing transactions.
Off-balance sheet
As of
% change from
USD bn
30.9.24
30.6.24
30.6.24
Guarantees
1,2
Irrevocable loan commitments
1
Committed unconditionally revocable credit lines
Forward starting reverse repurchase and securities borrowing agreements
1 Guarantees and irrevocable loan commitments are shown net of sub-participations. 2 Includes guarantees measured at fair value through profit or loss.
UBS Group third quarter 2024 report |
Risk, capital, liquidity and funding, and balance sheet | Share information and earnings per share 54
Share information and earnings per share
UBS Group AG shares are listed on the SIX Swiss Exchange (SIX). They are also listed on the New York Stock
Exchange (the NYSE) as global registered shares. Each share has a nominal value of USD 0.10. Shares issued were
unchanged in the third quarter of 2024 compared with the second quarter of 2024.
We held 276m shares as of 30 September 2024, of which 144m shares had been acquired under our 2022 and
2024 share repurchase programs for cancellation purposes. The remaining 132m shares are primarily held to hedge
our share delivery obligations related to employee share-based compensation and participation plans.
Treasury shares held increased by 16m shares in the third quarter of 2024. This mainly reflected 19.1m shares
repurchased under our 2024 program and 7.2m shares purchased from the market to hedge future share delivery
obligations related to employee share-based compensation awards, partly offset by the delivery of treasury shares
under our share-based compensation plans.
Shares acquired under our 2024 program totaled 23m as of 30 September 2024 for a total acquisition cost of
USD 700m (CHF 610m). As previously communicated, we expect to repurchase a total of up to USD 1bn of our
shares in 2024.
Shares acquired under our 2022 program totaled 121m as of 30 September 2024 for a total acquisition cost of
USD 2,277m (CHF 2,138m). This program concluded on 28 March 2024, and the 121m shares repurchased under
this program will be canceled by means of a capital reduction, subject to approval by the shareholders at a future
Annual General Meeting.
›
Refer to the “Equity, CET1 capital and returns” table in the “Group performance” section of this report for more
information about equity attributable to shareholders and tangible equity attributable to shareholders
As of or for the quarter ended
As of or year-to-date
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Basic and diluted earnings (USD m)
Net profit / (loss) attributable to shareholders for basic EPS
less: (profit) / loss on own equity derivative contracts
Net profit / (loss) attributable to shareholders for diluted EPS
.
Weighted average shares outstanding
Weighted average shares outstanding for basic EPS
2
Effect of dilutive potential shares resulting from notional employee shares, in-the-money
options and warrants outstanding
3
4
Weighted average shares outstanding for diluted EPS
.
Earnings per share (USD)
Basic
Diluted
.
Shares outstanding and potentially dilutive instruments
Shares issued
Treasury shares
5
of which: related to the 2022 share repurchase program
of which: related to the 2024 share repurchase program
Shares outstanding
Potentially dilutive instruments
6
4
.
Other key figures
Total book value per share (USD)
Tangible book value per share (USD)
Share price (USD)
7
Market capitalization (USD m)
8
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
2 The weighted average shares outstanding for basic earnings per share (EPS) are calculated by taking the number of shares at the beginning of the period, adjusted by the number of shares acquired or issued during
the period, multiplied by a time-weighted factor for the period outstanding. As a result, balances are affected by the timing of acquisitions and issuances during the period. 3 The weighted average number of shares
for notional employee awards with performance conditions reflects all potentially dilutive shares that are expected to vest under the terms of the awards. 4 Due to the net loss in the third quarter of 2023,
148,423,317 weighted average potential shares from unvested notional share awards were not included in the calculation of diluted EPS as they were not dilutive for the quarter ended 30 September 2023. Such
shares are only taken into account for the diluted EPS calculation when their conversion to ordinary shares would decrease earnings per share or increase the loss per share, in accordance with IAS 33, Earnings per
Share. 5 Based on a settlement date view. 6 Reflects potential shares that could dilute basic EPS in the future but were not dilutive for any of the periods presented. Mainly includes equity-based awards subject
to absolute and relative performance conditions and equity derivative contracts. For the quarter ended 30 September 2023, it also includes 148,423,317 weighted average potential shares from unvested notional
share awards that were not included in the calculation of diluted EPS as they were not dilutive. 7 Represents the share price as listed on the SIX Swiss Exchange, translated to US dollars using the closing exchange
rate as of the respective date. 8 The calculation of market capitalization reflects total shares issued multiplied by the share price at the end of the period.
Ticker symbols UBS Group AG
Security identification codes
Trading exchange
SIX / NYSE
Bloomberg
Reuters
ISIN
CH0244767585
SIX Swiss Exchange
UBSG
UBSG SW
UBSG.S
Valoren
24 476 758
New York Stock Exchange
UBS
UBS UN
UBS.N
CUSIP
CINS H42097 10 7
UBS Group third quarter 2024 report |
Consolidated financial statements 55
Consolidated financial
statements
Unaudited
Table of contents
56
57
58
59
60
61
1
63
2
67
3
68
4
69
5
69
6
69
7
70
8
70
9
78
10
84
11
85
12
86
13
86
14
86
15
96
16
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group AG interim consolidated financial statements (unaudited) 56
UBS Group AG interim consolidated financial
statements (unaudited)
Income statement
For the quarter ended
Year-to-date
USD m
Note
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Interest income from financial instruments measured at amortized cost and fair value through
other comprehensive income
4
Interest expense from financial instruments measured at amortized cost
4
Net interest income from financial instruments measured at fair value through profit or loss and other
4
Net interest income
4
Other net income from financial instruments measured at fair value through profit or loss
Fee and commission income
5
Fee and commission expense
5
Net fee and commission income
5
Other income
6
Total revenues
Negative goodwill
2
Credit loss expense / (release)
9
Personnel expenses
7
General and administrative expenses
8
Depreciation, amortization and impairment of non-financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling interests
Net profit / (loss) attributable to shareholders
Earnings per share (USD)
Basic
Diluted
1 Comparative-period information has been revised. Refer to Note 2 for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group AG interim consolidated financial statements (unaudited) 57
Statement of comprehensive income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Comprehensive income attributable to shareholders
2
Net profit / (loss)
Other comprehensive income that may be reclassified to the income statement
Foreign currency translation
Foreign currency translation movements related to net assets of foreign operations, before tax
Effective portion of changes in fair value of hedging instruments designated as net investment hedges, before tax
Foreign currency translation differences on foreign operations reclassified to the income statement
Effective portion of changes in fair value of hedging instruments designated as net investment hedges reclassified to
the income statement
Income tax relating to foreign currency translations, including the effect of net investment hedges
Subtotal foreign currency translation, net of tax
Financial assets measured at fair value through other comprehensive income
Net unrealized gains / (losses), before tax
Net realized (gains) / losses reclassified to the income statement from equity
Income tax relating to net unrealized gains / (losses)
Subtotal financial assets measured at fair value through other comprehensive income, net of tax
Cash flow hedges of interest rate risk
Effective portion of changes in fair value of derivative instruments designated as cash flow hedges, before tax
Net (gains) / losses reclassified to the income statement from equity
Income tax relating to cash flow hedges
Subtotal cash flow hedges, net of tax
Cost of hedging
Cost of hedging, before tax
Income tax relating to cost of hedging
Subtotal cost of hedging, net of tax
Total other comprehensive income that may be reclassified to the income statement, net of tax
Other comprehensive income that will not be reclassified to the income statement
Defined benefit plans
Gains / (losses) on defined benefit plans, before tax
Income tax relating to defined benefit plans
Subtotal defined benefit plans, net of tax
Own credit on financial liabilities designated at fair value
Gains / (losses) from own credit on financial liabilities designated at fair value, before tax
Income tax relating to own credit on financial liabilities designated at fair value
Subtotal own credit on financial liabilities designated at fair value, net of tax
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total other comprehensive income
Total comprehensive income attributable to shareholders
Comprehensive income attributable to non-controlling interests
Net profit / (loss)
Total other comprehensive income that will not be reclassified to the income statement, net of tax
Total comprehensive income attributable to non-controlling interests
Total comprehensive income
Net profit / (loss)
Other comprehensive income
of which: other comprehensive income that may be reclassified to the income statement
of which: other comprehensive income that will not be reclassified to the income statement
Total comprehensive income
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Refer to the “Group performance” section of this report for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group AG interim consolidated financial statements (unaudited) 58
Balance sheet
USD m
Note
30.9.24
30.6.24
31.12.23
1
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
11
Loans and advances to customers
9
Other financial assets measured at amortized cost
12
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
10
of which: assets pledged as collateral that may be sold or repledged by counterparties
Derivative financial instruments
10, 11
Brokerage receivables
10
Financial assets at fair value not held for trading
10
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
10
Investments in associates
Property, equipment and software
Goodwill and intangible assets
Deferred tax assets
Other non-financial assets
12
Total assets
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
Derivative financial instruments
10, 11
Brokerage payables designated at fair value
Debt issued designated at fair value
10, 13
Other financial liabilities designated at fair value
10, 12
Total financial liabilities measured at fair value through profit or loss
Provisions and contingent liabilities
Other non-financial liabilities
Total liabilities
Equity
Share capital
Share premium
Treasury shares
Retained earnings
Other comprehensive income recognized directly in equity, net of tax
Equity attributable to shareholders
Equity attributable to non-controlling interests
Total equity
Total liabilities and equity
1 Comparative-period information has been revised. Refer to Note 2 for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group AG interim consolidated financial statements (unaudited) 59
Statement of changes in equity
USD m
Share
capital and
share
premium
Treasury
shares
Retained
earnings
OCI
recognized
directly in
equity,
net of tax
1
of which:
foreign
currency
translation
of which:
cash flow
hedges
Total equity
attributable to
shareholders
Balance as of 1 January 2024
2,3
Acquisition of treasury shares
4
Delivery of treasury shares under share-based compensation plans
Other disposal of treasury shares
4
Share-based compensation expensed in the income statement
Tax (expense) / benefit
Dividends
5
5
Equity classified as obligation to purchase own shares
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
New consolidations / (deconsolidations) and other increases / (decreases)
Total comprehensive income for the period
of which: net profit / (loss)
of which: OCI, net of tax
Balance as of 30 September 2024
2
Non-controlling interests as of 30 September 2024
Total equity as of 30 September 2024
Balance as of 1 January 2023
2
Purchase price consideration for Credit Suisse Group acquisition, before consideration of
share-based compensation awards
6
Impact of share-based compensation awards from Credit Suisse Group acquisition
6
Impact of the settlement of pre-existing relationships from Credit Suisse Group acquisition
6
Acquisition of treasury shares
4
Delivery of treasury shares under share-based compensation plans
Other disposal of treasury shares
4
Cancellation of treasury shares related to the 2021 share repurchase program
7
Share-based compensation expensed in the income statement
Tax (expense) / benefit
Dividends
5
5
Equity classified as obligation to purchase own shares
Translation effects recognized directly in retained earnings
Share of changes in retained earnings of associates and joint ventures
New consolidations / (deconsolidations) and other increases / (decreases)
Total comprehensive income for the period
of which: net profit / (loss)
of which: OCI, net of tax
Balance as of 30 September 2023
2,3
Non-controlling interests as of 30 September 2023
8
Total equity as of 30 September 2023
3
1 Excludes other comprehensive income related to defined benefit plans and own credit that is recorded directly in Retained earnings. 2 Excludes non-controlling interests. 3 Comparative-period information has
been revised. Refer to Note 2 for more information. 4 Includes treasury shares acquired and disposed of by the Investment Bank in its capacity as a market maker with regard to UBS shares and related derivatives,
and to hedge certain issued structured debt instruments. These acquisitions and disposals are reported based on the sum of the net monthly movements. 5 Reflects the payment of an ordinary cash dividend of
USD 0.70 per dividend-bearing share in May 2024 (2023: USD 0.55 per dividend-bearing share paid in April 2023). Swiss tax law requires Switzerland-domiciled companies with shares listed on a Swiss stock exchange
to pay no more than 50% of dividends from capital contribution reserves, with the remainder required to be paid from retained earnings. 6 Refer to Note 2 for more information. 7 Reflects the cancellation of
62,548,000 shares purchased under UBS’s 2021 share repurchase program as approved by shareholders at the 2023 Annual General Meeting. Swiss tax law requires Switzerland-domiciled companies with shares
listed on a Swiss stock exchange to reduce capital contribution reserves by at least 50% of the total capital reduction amount exceeding the nominal value upon cancellation of the shares. 8 Includes an increase of
USD 285m in the second quarter of 2023 due to the acquisition of the Credit Suisse Group.
UBS Group third quarter 2024 report |
Consolidated financial statements | UBS Group AG interim consolidated financial statements (unaudited) 60
Statement of cash flows
Year-to-date
USD m
30.9.24
30.9.23
1
Cash flow from / (used in) operating activities
Net profit / (loss)
Non-cash items included in net profit and other adjustments
Depreciation, amortization and impairment of non-financial assets
Credit loss expense / (release)
Share of net (profits) / loss of associates and joint ventures and impairment related to associates
Deferred tax expense / (benefit)
Net loss / (gain) from investing activities
Net loss / (gain) from financing activities
Negative goodwill
Other net adjustments
2
Net change in operating assets and liabilities
2
Amounts due from banks and amounts due to banks
Receivables from securities financing transactions measured at amortized cost
Payables from securities financing transactions measured at amortized cost
Cash collateral on derivative instruments
Loans and advances to customers
Customer deposits
Financial assets and liabilities at fair value held for trading and derivative financial instruments
Brokerage receivables and payables
Financial assets at fair value not held for trading and other financial assets and liabilities
Provisions and other non-financial assets and liabilities
Income taxes paid, net of refunds
Net cash flow from / (used in) operating activities
3
Cash flow from / (used in) investing activities
Cash and cash equivalents acquired upon the acquisition of the Credit Suisse Group
Purchase of subsidiaries, associates and intangible assets
Disposal of subsidiaries, associates and intangible assets
Purchase of property, equipment and software
Disposal of property, equipment and software
Net (purchase) / redemption of financial assets measured at fair value through other comprehensive income
Purchase of debt securities measured at amortized cost
Disposal and redemption of debt securities measured at amortized cost
Net cash flow from / (used in) investing activities
Cash flow from / (used in) financing activities
Repayment of Swiss National Bank funding
Net issuance (repayment) of short-term debt measured at amortized cost
Net movements in treasury shares and own equity derivative activity
Distributions paid on UBS shares
Issuance of debt designated at fair value and long-term debt measured at amortized cost
Repayment of debt designated at fair value and long-term debt measured at amortized cost
Inflows from securities financing transactions measured at amortized cost
4
Outflows from securities financing transactions measured at amortized cost
4
Net cash flows from other financing activities
Net cash flow from / (used in) financing activities
Total cash flow
Cash and cash equivalents at the beginning of the period
Net cash flow from / (used in) operating, investing and financing activities
Effects of exchange rate differences on cash and cash equivalents
2
Cash and cash equivalents at the end of the period
5
6
of which: cash and balances at central banks
5
of which: amounts due from banks
5
of which: money market paper
5,7
Additional information
Net cash flow from / (used in) operating activities includes:
Interest received in cash
Interest paid in cash
Dividends on equity investments, investment funds and associates received in cash
8
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Foreign currency translation and foreign exchange effects on operating assets and liabilities and on cash and cash
equivalents are presented within the Other net adjustments line. Does not include foreign currency hedge effects related to foreign exchange swaps. 3 Includes cash receipts from the sale of loans and loan
commitments of USD 11,957m and USD 2,758m within Non-core and Legacy for the nine-month periods ended 30 September 2024 and 30 September 2023, respectively. 4 Reflects cash flows from securities
financing transactions measured at amortized cost that use UBS debt instruments as the underlying. 5 Includes only balances with an original maturity of three months or less. 6 The balance includes USD 0.2bn
related to cash held in Assets of disposal groups held for sale, recognized within Other non-financial assets. 7 Money market paper is included in the balance sheet under Financial assets at fair value not held for
trading (30 September 2024: USD 11,130m; 30 September 2023: USD 10,158m), Other financial assets measured at amortized cost (30 September 2024: USD 457m; 30 September 2023: USD 393m) and Financial
assets at fair value held for trading (30 September 2024: USD 331m; 30 September 2023: USD 583m). 8 Includes dividends received from associates reported within Net cash flow from / (used in) investing activities.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 61
Notes to the UBS Group AG interim consolidated
financial statements (unaudited)
Note 1 Basis of accounting
Basis of preparation
The consolidated financial statements (the financial statements) of UBS Group AG and its subsidiaries (together,
UBS or the Group) are prepared in accordance with IFRS Accounting Standards, as issued by the International
Accounting Standards Board (the IASB), and are presented in US dollars. These interim financial statements are
prepared in accordance with IAS 34,
Interim Financial Reporting
.
In preparing these interim financial statements, the same accounting policies and methods of computation have
been applied as in the UBS Group AG consolidated annual financial statements for the period ended 31 December
2023, except for the changes described in this Note and changes in segment reporting as set out in Note 3. These
interim financial statements are unaudited and should be read in conjunction with UBS Group AG’s audited
consolidated financial statements in the UBS Group Annual Report 2023 and the “Management report” sections
of this report. In the opinion of management, all necessary adjustments have been made for a fair presentation of
the Group’s financial position, results of operations and cash flows.
Preparation of these interim financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and
liabilities. These estimates and assumptions are based on the best available information. Actual results in the future
could differ from such estimates and differences may be material to the financial statements. Revisions to estimates,
based on regular reviews, are recognized in the period in which they occur. For more information about areas of
estimation uncertainty that are considered to require critical judgment, refer to “Note 1a Material accounting
policies” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023.
Amendments to IAS 12,
UBS has applied for the purposes of these financial statements the exception that was introduced by the
amendments to IAS 12,
Income Taxes
, issued in May 2023 in relation to top-up taxes on income under Global Anti-
Base Erosion Rules that have been imposed under legislation that has been enacted or substantively enacted to
implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development.
The exception requires that deferred tax assets and deferred tax liabilities be neither recognized nor disclosed in
respect of such top-up taxes.
Other amendments to IFRS Accounting Standards
A number of minor amendments to IFRS Accounting Standards became effective from 1 January 2024 or later and
have had no material effect on the Group.
IFRS 18,
Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued a new standard, IFRS 18,
Presentation and Disclosure in Financial Statements,
replaces IAS 1,
Presentation of Financial Statements
. The main changes introduced by IFRS 18 relate to:
–
the structure of income statements;
–
new disclosure requirements for management performance measures; and
–
enhanced guidance on aggregation and disaggregation of information on the face of financial statements and
in the notes thereto.
IFRS 18 is effective from 1 January 2027 and will also apply to comparative information. UBS will first apply these
new requirements in the Annual Report 2027 and, for interim reporting, in the first quarter 2027 interim report.
UBS is assessing the impact of the new requirements on its reporting but expects it to be limited. UBS will take the
opportunity to refine the grouping of items in the primary financial statements and in the notes thereto based on
new principles of aggregation and disaggregation in IFRS 18.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 62
Note 1 Basis of accounting (continued)
Amendments to IFRS 9,
Financial Instruments
, and IFRS 7,
Financial Instruments: Disclosures
In May 2024, the IASB issued
Amendments to the Classification and Measurement of Financial Instruments –
Amendments to IFRS 9 and IFRS 7
The Amendments relate to:
–
derecognition of financial liabilities settled through electronic transfer systems;
–
assessment of contractual cash flow characteristics in classifying financial assets, including those with
environmental, social and corporate governance and similar features, non-recourse features, and contractually
linked instruments; and
–
disclosure of information about financial instruments with contingent features that can change the amount of
contractual cash flows, as well as equity instruments designated at fair value through other comprehensive
income.
The Amendments are effective from 1 January 2026, with early application permitted either for the entire set of
amendments or for only those that relate to classification of financial instruments. UBS is currently assessing the
impact of the new requirements on its financial statements.
Currency translation rates
The following table shows the rates of the main currencies used to translate the financial information of UBS’s
operations with a functional currency other than the US dollar into US dollars.
Closing exchange rate
Average rate
1
As of
For the quarter ended
Year-to-date
30.9.24
30.6.24
31.12.23
30.9.23
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
1 CHF
1 EUR
1 GBP
100 JPY
1 Monthly income statement items of operations with a functional currency other than the US dollar are translated into US dollars using month-end rates. Disclosed average rates for a quarter represent an average of
three month-end rates, weighted according to the income and expense volumes of all operations of the Group with the same functional currency for each month. Weighted average rates for individual business divisions
may deviate from the weighted average rates for the Group.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 63
Note 2 Accounting for the acquisition of the Credit Suisse Group
The transaction
On 12 June 2023, UBS Group AG acquired Credit Suisse Group AG, succeeding by operation of Swiss law to all
assets and liabilities of Credit Suisse Group AG, and became the direct or indirect shareholder of all of the former
direct and indirect subsidiaries of Credit Suisse Group AG. The acquisition of Credit Suisse Group AG constituted a
business combination under IFRS 3,
Business Combinations
, and was required to be accounted for by applying the
acquisition method of accounting.
IFRS 3 measurement period adjustments for the acquisition of the Credit Suisse Group
The acquisition of Credit Suisse Group AG was made without the ordinary due diligence procedures and outside
the conventional time frame for an acquisition of this scale and nature. As such, complete information about all
relevant facts and circumstances as of the acquisition date was not practically available to UBS at the time when
the initial acquisition accounting was applied for the purpose of the UBS Group second quarter 2023 report, with
the amounts that form part of the business combination accounting therefore considered provisional and subject
to further measurement period adjustments if new information about facts and circumstances existing on the date
of the acquisition were to be obtained within one year from the acquisition date. The acquisition of Credit Suisse
Group AG resulted in provisional negative goodwill of USD 27.7bn reported in the UBS Group Annual Report 2023.
For details of the accounting for the acquisition, including measurement period adjustments effected during the
year ended 31 December 2023, refer to “Note 1a Material accounting policies” and “Note 2 Accounting for the
acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of the UBS Group Annual
Report 2023.
In the second quarter of 2024, in light of the additional information about circumstances existing on the acquisition
date that became available to management, IFRS 3 measurement period adjustments of USD 0.2bn were made in
relation to
Provisions and contingent liabilities
“Change in provisions and contingent liabilities” below). In
addition, fair value measurement adjustments of USD 0.3bn were made to the acquisition date fair values of
exposures associated with Russia, as well as other positions in Non-core and Legacy, following the completion of a
detailed review. The adjustments reflect management’s final conclusions on critical assumptions and judgments,
which are within a range of reasonably possible outcomes, relating to significant uncertainties that existed on the
acquisition date. Comparative-period information has been revised accordingly.
The measurement period adjustments effected in the second quarter of 2024 resulted in a decrease in negative
goodwill to USD 27.3bn from the provisional amount of USD 27.7bn previously reported in the UBS Group Annual
Report 2023. Retained earnings have been revised to reflect the impact on the prior-period income statement of
net USD 0.5bn. With the measurement period adjustments effected in the second quarter of 2024 and the
finalization of the amount of negative goodwill, the acquisition accounting for the transaction is complete.
Change in provisions and contingent liabilities
In addition to the existing USD 1.3bn litigation provisions previously recorded by the Credit Suisse Group, UBS
recognized on the acquisition date USD 5.6bn in
Provisions and contingent liabilities
provisions and contingent liabilities, which includes USD 1.6bn for litigation provisions to reflect management’s
assessment of the associated probability, timing and amount considering new information, and USD 4.0bn
contingent liabilities for certain obligations in respect of litigation, regulatory and similar matters identified in the
purchase price allocation. The timing and actual amount of outflows associated with litigation matters are
uncertain. UBS has continued to assess the development of these obligations and the amount and timing of
potential outflows. The USD 4.0bn of contingent liabilities reflect an increase of USD 0.2bn in the second quarter
of 2024 from the USD 3.8bn previously reported in the UBS Group Annual Report 2023.
Effect of measurement period adjustments on the acquisition date balance sheet
The table below sets out the identifiable net assets attributable to the acquisition of the Credit Suisse Group as
adjusted to reflect the effects of measurement period adjustments made in the second quarter of 2024, as detailed
above.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 64
Note 2 Accounting for the acquisition of the Credit Suisse Group (continued)
USD m
Purchase price consideration, after consideration of share-based compensation awards
Credit Suisse Group net identifiable assets on the acquisition date
Assets
As previously
reported in the UBS
Group Annual Report
2023
Measurement period
adjustments made in
the second quarter
2024
Revised
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
Total financial assets measured at amortized cost
Financial assets at fair value held for trading
Derivative financial instruments
Brokerage receivables
Financial assets at fair value not held for trading
Total financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
Investments in associates
Property, equipment and software
Intangible assets
Deferred tax assets
Other non-financial assets
Total assets
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
Total financial liabilities measured at amortized cost
Financial liabilities at fair value held for trading
Derivative financial instruments
Brokerage payables designated at fair value
Debt issued designated at fair value
Other financial liabilities designated at fair value
Total financial liabilities measured at fair value through profit or loss
Provisions and contingent liabilities
Other non-financial liabilities
Total liabilities
Non-controlling interests
Fair value of net assets acquired
Settlement of pre-existing relationships
Negative goodwill resulting from the acquisition
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 65
Note 2 Accounting for the acquisition of the Credit Suisse Group (continued)
The tables below set out the consequential impact of the measurement period adjustments on the previously
reported income statements for the nine-month period ended 30 September 2023 and the quarter ended
30 September 2023, the balance sheet as of 31 December 2023, and the cumulative effect of measurement period
adjustments on the statement of cash flows for the nine-month period ended 30 September 2023.
Effect of the measurement period adjustments on the income statement for the nine-month period and the quarter
ended 30 September 2023
For the quarter ended 30 September 2023
For the nine-month period ended 30 September 2023
USD m
As previously
reported in the
UBS Group
third quarter
2023 report
Measurement
period
adjustments
made in the
fourth quarter
of 2023
Revised
As previously
reported in the
UBS Group
third quarter
2023 report
Measurement
period
adjustments
made in the
fourth quarter
of 2023
Measurement
period
adjustment
made in the
UBS Group
Annual Report
2023
Measurement
period
adjustments
made in the
second quarter
of 2024
Revised
Net interest income
Other net income from financial instruments measured
at fair value through profit or loss
Fee and commission income
Fee and commission expense
Net fee and commission income
Other income
Total revenues
Negative goodwill
Credit loss expense / (release)
Personnel expenses
General and administrative expenses
Depreciation, amortization and impairment of non-
financial assets
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
Net profit / (loss) attributable to non-controlling
interests
Net profit / (loss) attributable to shareholders
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 66
Note 2 Accounting for the acquisition of the Credit Suisse Group (continued)
Effect of the measurement period adjustments on the balance sheet as of 31 December 2023
USD m
As of 31 December 2023
Assets
As previously
reported in the
UBS Group first
quarter 2024
report
Measurement
period
adjustment
made in the
second quarter
of 2024
Revised
Total financial assets measured at amortized cost
of which: Cash and balances at central banks
of which: Amounts due from banks
of which: Loans and advances to customers
of which: Other financial assets measured at amortized cost
Total assets
Liabilities
Provisions and contingent liabilities
Total liabilities
Equity
Equity attributable to shareholders
of which: Retained earnings
Total equity
Total liabilities and equity
Effect of the measurement period adjustments on the statement of cash flows for the nine-month period ended
30
September 2023
For the nine-month period ended 30 September 2023
USD m
As previously
reported in the
UBS Group third
quarter 2023
report
Cumulative
measurement
period
adjustment
Revised
Cash flow from / (used in) operating activities
Net profit / (loss)
of which: Credit loss expense / (release)
of which: Negative goodwill
Net cash flow from / (used in) operating activities
of which: Loans and advances to customers and customer deposits
of which: Financial assets and liabilities at fair value held for trading and derivative financial instruments
of which: Financial assets at fair value not held for trading and other financial assets and liabilities
of which: Provisions and other non-financial assets and liabilities
Net cash flow from / (used in) investing activities
��
103,013of which: Cash and cash equivalents acquired upon acquisition of the Credit Suisse Group
Net cash flow from / (used in) financing activities
Total cash flow
Cash and cash equivalents at the beginning of the period
Net cash flow from / (used in) operating, investing and financing
activities
Effects of exchange rate differences on cash and cash equivalents
Cash and cash equivalents at the end of the period
of which: cash and balances at central banks
of which: amounts due from banks
of which: money market paper
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 67
Note 2 Accounting for the acquisition of the Credit Suisse Group (continued)
Conclusion of an investment management agreement with Apollo and the transfer of senior secured
asset-based financing
In the first quarter of 2024, Credit Suisse entered into agreements with entities managed by Atlas Securitized
Products Management Holdings (Atlas) and other affiliates of Apollo Management Holdings (collectively, Apollo)
to conclude the investment management agreement under which Atlas has managed Credit Suisse’s retained
portfolio of assets of its former securitized products group. Following the closure of this agreement, the assets
previously managed by Atlas are to be managed in Non-core and Legacy. The parties also agreed to conclude the
transition services agreement under which Credit Suisse has provided services to Atlas. In addition, Credit Suisse AG
entered into an agreement with Apollo Capital Management (ACM) and other parties managed, controlled and / or
advised by ACM or its affiliates (collectively, the Assignees) to transfer USD 8.0bn of senior secured asset-based
financing, with USD 6.0bn funded as of 31 December 2023 recognized as financial assets at fair value held for
trading at a fair value of USD 5.5bn and the remaining notional of USD 2.0bn recognized as derivative loan
commitments at a fair value of USD 0.15bn, with the fair values of both financing components derecognized from
the Group’s balance sheet as of 31 March 2024. As part of the loan transfer, the Group extended a one-year senior
swingline facility to the Assignees with a total amount as of 30 September 2024 of USD 750m (30 June 2024:
USD 750m), which is accounted for as an off-balance sheet irrevocable commitment. In the first quarter of 2024,
the Group recognized a net gain of USD 0.3bn from the conclusion of the investment management agreement and
the assignment of the loan facilities, after the accounting for the purchase price allocation adjustments at the
closing of the acquisition of the Credit Suisse Group.
Agreement to sell Select Portfolio Servicing
On 13 August 2024, UBS entered into an agreement to sell Select Portfolio Servicing, the US mortgage servicing
business of Credit Suisse, which is managed in Non-core and Legacy. Completion of the transaction is subject to
regulatory approvals and other customary closing conditions. The associated assets and liabilities are disclosed in
Assets of disposal groups held for sale
Liabilities of disposal groups held for sale
, respectively, within Note 12
in these financial statements. The transaction is expected to close in the first quarter of 2025. The UBS Group does
not expect to recognize a material profit or loss upon completion of the transaction.
Note 3 Segment reporting
As part of the continued refinement of UBS’s reporting structure and organizational setup, in the first quarter of
2024 certain changes were made, with an impact on segment reporting for UBS’s business divisions and Group
Items. Prior-period information has been adjusted for comparability. The changes are as follows.
–
Change in business division perimeters:
UBS has transferred certain businesses from Swiss Bank (Credit
Suisse), previously included in Personal & Corporate Banking, to Global Wealth Management. The change
predominantly related to the high net worth client segment and represents approximately USD 72bn in invested
assets and approximately USD 0.6bn in annualized revenues. A number of other smaller business shifts were also
executed between the business divisions in the first quarter of 2024.
–
Changes to Group Treasury allocations:
UBS has allocated to the business divisions nearly all Group Treasury
costs that historically were retained and reported in Group Items. Costs that continue to be retained in Group
Items include costs related to hedging and own debt, and deferred tax asset funding costs. UBS has also aligned
the internal funds transfer pricing methodologies applied by Credit Suisse entities to UBS’s funds transfer pricing
methodology. These changes resulted in funding costs of approximately USD 0.3bn for 2023, moving from Group
Items to the business divisions, predominantly related to the second half of 2023. In parallel with the
aforementioned changes, UBS has increased the allocation of balance sheet resources from Group Treasury to
the business divisions.
–
Updated cost allocations:
UBS has reallocated USD 0.3bn of annualized costs from Non-core and Legacy to
the other business divisions, with the aim of avoiding stranded costs in Non-core and Legacy at the end of the
integration process.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 68
Note 3 Segment reporting (continued)
Following the collective changes outlined above, prior-period information for the nine-month period ended
30 September 2023 has been restated, resulting in decreases in Operating profit / (loss) before tax of USD 42m for
Global Wealth Management, USD 150m for Personal & Corporate Banking and USD 7m for the Investment Bank,
and increases in Operating profit / (loss) before tax of USD 106m for Group Items, USD 84m for Non-core and
Legacy and USD 9m for Asset Management.
Prior-period information as of 31 December 2023 has also been restated, resulting in increases of Total assets of
USD 98.4bn in Global Wealth Management, USD 13.3bn in Personal & Corporate Banking, USD 28.9bn in the
Investment Bank and USD 28.6bn in Non-core and Legacy, with a corresponding decrease of Total assets of
USD 169.2bn in Group Items.
These changes had no effect on the reported results or financial position of the Group.
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
UBS Group
For the nine months ended 30 September 2024
1
Total revenues
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
As of 30 September 2024
Total assets
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core and
Legacy
Group Items
Negative
goodwill
2
UBS Group
For the nine months ended 30 September 2023
1
Total revenues
Negative goodwill
Credit loss expense / (release)
Operating expenses
Operating profit / (loss) before tax
Tax expense / (benefit)
Net profit / (loss)
As of 31 December 2023
2,3
Total assets
1 Refer to “Note 3 Segment reporting” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023 for more information about the Group’s reporting segments. 2 Comparative-period
information has been revised. Refer to Note 2 for more information. 3 Comparative-period information has been restated for Group Treasury allocations.
Note 4 Net interest income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Interest income from loans and deposits
2
Interest income from securities financing transactions measured at amortized cost
3
Interest income from other financial instruments measured at amortized cost
Interest income from debt instruments measured at fair value through other comprehensive income
Interest income from derivative instruments designated as cash flow hedges
Total interest income from financial instruments measured at amortized cost and fair value through other comprehensive
income
Interest expense on loans and deposits
4
Interest expense on securities financing transactions measured at amortized cost
5
Interest expense on debt issued
Interest expense on lease liabilities
Total interest expense from financial instruments measured at amortized cost
Total net interest income from financial instruments measured at amortized cost and fair value through other comprehensive
income
Net interest income from financial instruments measured at fair value through profit or loss and other
Total net interest income
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Consists of interest income from cash and balances at central banks, amounts due from banks, and cash collateral
receivables on derivative instruments, as well as negative interest on amounts due to banks, customer deposits, and cash collateral payables on derivative instruments. 3 Includes interest income on receivables from
securities financing transactions and negative interest, including fees, on payables from securities financing transactions. 4 Consists of interest expense on amounts due to banks, cash collateral payables on derivative
instruments, and customer deposits, as well as negative interest on cash and balances at central banks, amounts due from banks, and cash collateral receivables on derivative instruments. 5 Includes interest expense
on payables from securities financing transactions and negative interest, including fees, on receivables from securities financing transactions.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 69
Note 5 Net fee and commission income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Underwriting fees
M&A and corporate finance fees
Brokerage fees
Investment fund fees
Portfolio management and related services
Other
Total fee and commission income
2
of which: recurring
of which: transaction-based
of which: performance-based
Fee and commission expense
Net fee and commission income
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Includes third-party fee and commission income for the third quarter of 2024 of USD 4,155m for Global Wealth
Management (second quarter of 2024: USD 4,011m; third quarter of 2023: USD 3,732m), USD 726m for Personal & Corporate Banking (second quarter of 2024: USD 876m; third quarter of 2023: USD 734m),
USD 928m for Asset Management (second quarter of 2024: USD 924m; third quarter of 2023: USD 956m), USD 1,297m for the Investment Bank (second quarter of 2024: USD 1,322m; third quarter of 2023:
USD 1,184m), USD 102m for Non-core and Legacy (second quarter of 2024: USD 125m; third quarter of 2023: negative USD 2m) and negative USD 37m for Group Items (second quarter of 2024: negative USD 47m;
third quarter of 2023: USD 64m). Comparative-period information has been restated for changes in business division perimeters, Group Treasury allocations and Non-core and Legacy cost allocations. Refer to Note 3
for more information.
Note 6 Other income
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Associates, joint ventures and subsidiaries
Net gains / (losses) from acquisitions and disposals of subsidiaries
1
Net gains / (losses) from disposals of investments in associates and joint ventures
2
2
Share of net profits of associates and joint ventures
Total
Income from properties
3
Net gains / (losses) from properties held for sale
Other
4
4
Total other income
1 Includes foreign exchange gains / (losses) reclassified from other comprehensive income related to the disposal or closure of foreign operations. 2 Includes a gain of USD 135m related to the sale of our investment
in an associate. 3 Includes rent received from third parties. 4 Includes a USD 72m net gain in Asset Management from the sale of our Brazilian real estate fund management business and from the sale of our
shareholding in Credit Suisse Insurance Linked Strategies Ltd (nine-month period ended 30 September 2024: USD 100m).
Note 7 Personnel expenses
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
1
30.9.24
30.9.23
1
Salaries and variable compensation
2
of which: variable compensation – financial advisors
3
Contractors
Social security
Post-employment benefit plans
Other personnel expenses
Total personnel expenses
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Includes role-based allowances. 3 Consists of cash and deferred compensation awards and is based on compensable
revenues and firm tenure using a formulaic approach. Also includes expenses related to compensation commitments with financial advisors entered into at the time of recruitment that are subject to vesting requirements.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 70
Note 8 General and administrative expenses
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Outsourcing costs
Technology costs
Consulting, legal and audit fees
Real estate and logistics costs
Market data services
Marketing and communication
Travel and entertainment
Litigation, regulatory and similar matters
1
Other
Total general and administrative expenses
1 Reflects the net increase / (decrease) in provisions for litigation, regulatory and similar matters recognized in the income statement, as well as a decrease in acquired contingent liabilities measured under IFRS 3.
Refer to Note 15b for more information.
Note 9 Expected credit loss measurement
a) Credit loss expense / release
Total net credit loss expenses in the third quarter of 2024 were USD 121m, reflecting USD 15m net releases related
to performing positions and USD 136m net expenses on credit-impaired positions.
Stage 1 and 2 net releases of USD 15m included scenario-update-related net releases of USD 8m, mainly from real
estate lending, and portfolio changes.
Credit loss expenses of USD 136m for credit-impaired positions primarily related to Personal & Corporate Banking
and Non-core and Legacy exposures with a small number of corporate counterparties.
Credit loss expense / (release)
Performing positions
Credit-impaired positions
USD m
Stages 1 and 2
Stage 3
Purchased
Total
For the quarter ended 30.9.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 30.6.24
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
For the quarter ended 30.9.23
1
Global Wealth Management
Personal & Corporate Banking
Asset Management
Investment Bank
Non-core and Legacy
Group Items
Total
1 Comparative-period information has been restated for changes in business division perimeters. Refer to “Changes to segment reporting in 2024” in the “UBS business divisions and Group Items” section of the
UBS Group first quarter 2024 report, available under “Quarterly reporting” at ubs.com/investors, and Note 3 for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 71
Note 9 Expected credit loss measurement (continued)
b) Changes to ECL models, scenarios, scenario weights and post-model adjustments
Scenarios and scenario weights
The expected credit loss (ECL) scenarios, along with their related macroeconomic factors and market data, were
reviewed in light of the economic and political conditions prevailing in the third quarter of 2024 through a series
of governance meetings, with input and feedback from UBS Risk and Finance experts across the business divisions
and regions. ECLs for former Credit Suisse positions were calculated based on Credit Suisse’s models, including the
same scenarios and scenario weight inputs as for UBS.
UBS kept the scenarios and scenario weights in line with those applied in the UBS Group second quarter 2024
report.
The baseline scenario was updated with the latest macroeconomic forecasts as of 30 September 2024. The
assumptions on a calendar-year basis are included in the table below.
The mild debt crisis scenario and the stagflationary geopolitical crisis scenario were updated based on the latest
market data, but the assumptions remained broadly unchanged.
The scenario-update-related ECL releases in the third quarter of 2024 mainly stemmed from real estate lending,
driven by the upward revision of Swiss house price and rental income levels, as well as interest rate assumptions in
the stagflation scenario.
Post-model adjustments
Total stage 1 and 2 allowances and provisions were USD 1,015m as of 30 September 2024 and included post-
model adjustments of USD 281m (30 June 2024: USD 300m). Post-model adjustments are intended to cover
uncertainty levels, including the geopolitical situation, and to align outputs from Credit Suisse models with those
from UBS models for dedicated segments.
Comparison of shock factors
Baseline
Key parameters
2023
2024
2025
Real GDP growth (annual percentage change)
US
Eurozone
Switzerland
Unemployment rate (%, annual average)
US
Eurozone
Switzerland
Fixed income: 10-year government bonds (%, Q4)
USD
EUR
CHF
Real estate (annual percentage change, Q4)
US
Eurozone
Switzerland
Economic scenarios and weights applied
Assigned weights in %
ECL scenario
30.9.24
30.6.24
30.9.23
Baseline
Mild debt crisis
Stagflationary geopolitical crisis
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 72
Note 9 Expected credit loss measurement (continued)
c) ECL-relevant balance sheet and off-balance sheet positions including ECL allowances and provisions
The following tables provide information about financial instruments and certain non-financial instruments that are
subject to ECL requirements. For amortized-cost instruments, the carrying amount represents the maximum
exposure to credit risk, taking into account the allowance for credit losses. Financial assets measured at fair value
through other comprehensive income (FVOCI) are also subject to ECL; however, unlike amortized-cost instruments,
the allowance for credit losses for FVOCI instruments does not reduce the carrying amount of these financial assets.
Instead, the carrying amount of financial assets measured at FVOCI represents the maximum exposure to credit risk.
In addition to recognized financial assets, certain off-balance sheet financial instruments and other credit lines are
also subject to ECL. The maximum exposure to credit risk for off-balance sheet financial instruments is calculated
based on the maximum contractual amounts.
USD m
30.9.24
Carrying amount
1
ECL allowances
2
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at
amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
of which: Private clients with mortgages
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
of which: Ship / aircraft financing
of which: Consumer financing
Other financial assets measured at amortized cost
of which: Loans to financial advisors
Total financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive
income
Total on-balance sheet financial assets in scope of ECL requirements
Total exposure
ECL provisions
2
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
of which: Large corporate clients
of which: SME clients
of which: Financial intermediaries and hedge funds
of which: Lombard
of which: Commodity trade finance
Irrevocable loan commitments
of which: Large corporate clients
Forward starting reverse repurchase and securities borrowing
agreements
Unconditionally revocable loan commitments
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
Irrevocable committed prolongation of existing loans
Total off-balance sheet financial instruments and other credit lines
Total allowances and provisions
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Negative balances are representative of a net improvement in
credit quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 73
Note 9 Expected credit loss measurement (continued)
USD m
30.6.24
Carrying amount
1
ECL allowances
2
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at
amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
of which: Private clients with mortgages
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
of which: Ship / aircraft financing
of which: Consumer financing
Other financial assets measured at amortized cost
of which: Loans to financial advisors
Total financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive
income
Total on-balance sheet financial assets in scope of ECL requirements
Total exposure
ECL provisions
2
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
of which: Large corporate clients
of which: SME clients
of which: Financial intermediaries and hedge funds
of which: Lombard
of which: Commodity trade finance
Irrevocable loan commitments
of which: Large corporate clients
Forward starting reverse repurchase and securities borrowing
agreements
Unconditionally revocable loan commitments
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
Irrevocable committed prolongation of existing loans
Total off-balance sheet financial instruments and other credit lines
Total allowances and provisions
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Negative balances are representative of a net improvement in credit
quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 74
Note 9 Expected credit loss measurement (continued)
USD m
31.12.23
Carrying amount
1,2
ECL allowances
3
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at
amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
of which: Private clients with mortgages
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
of which: Commodity trade finance
of which: Ship / aircraft financing
of which: Consumer financing
Other financial assets measured at amortized cost
of which: Loans to financial advisors
Total financial assets measured at amortized cost
Financial assets measured at fair value through other comprehensive
income
Total on-balance sheet financial assets in scope of ECL requirements
Total exposure
ECL provisions
3
Off-balance sheet (in scope of ECL)
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 3
PCI
Guarantees
of which: Large corporate clients
of which: SME clients
of which: Financial intermediaries and hedge funds
of which: Lombard
of which: Commodity trade finance
Irrevocable loan commitments
of which: Large corporate clients
Forward starting reverse repurchase and securities borrowing
agreements
Unconditionally revocable loan commitments
of which: Real estate financing
of which: Large corporate clients
of which: SME clients
of which: Lombard
of which: Credit cards
Irrevocable committed prolongation of existing loans
Total off-balance sheet financial instruments and other credit lines
Total allowances and provisions
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Information has been revised. Refer to Note 2 for more information.
3 Negative balances are representative of a net improvement in credit quality since the acquisition of the respective financial instrument, which is reflected as a negative ECL allowance.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 75
Note 9 Expected credit loss measurement (continued)
The table below provides information about the gross carrying amount of exposures subject to ECL and the ECL
coverage ratio for UBS’s core loan portfolios (i.e.
Loans and advances to customers
)
and relevant off-balance sheet exposures.
Cash and balances at central banks
,
Amounts due from banks
,
Receivables from securities financing transactions
,
Cash collateral receivables on derivative instruments
Financial
assets measured at fair value through other comprehensive income
lower sensitivity to ECL.
ECL coverage ratios are calculated by dividing ECL allowances and provisions by the gross carrying amount of the
related exposures.
The overall coverage ratio for performing positions was unchanged at 11 basis points. Coverage ratios for
performing positions related to real estate lending (on-balance sheet) decreased by 1 basis point to 5 basis points.
Coverage ratios for performing positions related to corporate lending (on-balance sheet)
decreased by 1 basis point
to 56 basis points.
Coverage ratios for core loan portfolio
30.9.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other financial assets measured at amortized cost. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 76
Note 9 Expected credit loss measurement (continued)
Coverage ratios for core loan portfolio
30.6.24
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other financial assets measured at amortized cost. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps).
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 77
Note 9 Expected credit loss measurement (continued)
Coverage ratios for core loan portfolio
31.12.23
Gross carrying amount (USD m)
ECL coverage (bps)
On-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Other loans and advances to customers
Loans to financial advisors
Total other lending
Total
1
Gross exposure (USD m)
ECL coverage (bps)
Off-balance sheet
Total
Stage 1
Stage 2
Stage 3
PCI
Total
Stage 1
Stage 2
Stage 1&2
Stage 3
PCI
Private clients with mortgages
Real estate financing
Total real estate lending
Large corporate clients
SME clients
Total corporate lending
Lombard
Credit cards
Commodity trade finance
Ship / aircraft financing
Consumer financing
Financial intermediaries and hedge funds
Other off-balance sheet commitments
Total other lending
Total
2
Total on- and off-balance sheet
3,4
1 Includes Loans and advances to customers and Loans to financial advisors, which are presented on the balance sheet line Other financial assets measured at amortized cost. 2 Excludes Forward starting reverse
repurchase and securities borrowing agreements. 3 Includes on-balance sheet exposure, gross and off-balance sheet exposure (notional) and the related ECL coverage ratio (bps). 4 Information has been revised.
Refer to Note 2 for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 78
Note 10 Fair value measurement
a) Fair value hierarchy
The fair value hierarchy classification of financial and non-financial assets and liabilities measured at fair value is
summarized in the table below.
During the first nine months of 2024, assets and liabilities that were transferred from Level 2 to Level 1, or from
Level 1 to Level 2, and were held for the entire reporting period were not material.
Determination of fair values from quoted market prices or valuation techniques
1
30.9.24
30.6.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value on a recurring basis
Financial assets at fair value held for trading
136,785
30,051
5,148
171,983
124,602
29,381
8,042
162,025
118,975
28,045
22,613
169,633
of which: Equity instruments
of which: Government bills / bonds
of which: Investment fund units
of which: Corporate and municipal bonds
of which: Loans
of which: Asset-backed securities
Derivative financial instruments
1,484
155,018
2,566
159,068
836
136,437
2,325
139,597
622
172,903
2,559
176,084
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
Brokerage receivables
Financial assets at fair value not held for trading
of which: Financial assets for unit-linked
investment contracts
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Loans
of which: Securities financing transactions
of which: Asset-backed securities
of which: Auction rate securities
of which: Investment fund units
of which: Equity instruments
Financial assets measured at fair value through other comprehensive income on a recurring basis
Financial assets measured at fair value through
other comprehensive income
of which: Commercial paper and certificates
of deposit
of which: Corporate and municipal bonds
Non-financial assets measured at fair value on a recurring basis
Precious metals and other physical commodities
Non-financial assets measured at fair value on a non-recurring basis
Other non-financial assets
2
Total assets measured at fair value
191,203
287,284
15,891
494,378
166,712
273,750
18,354
458,817
156,312
289,015
33,639
478,966
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 79
Note 10 Fair value measurement (continued)
Determination of fair values from quoted market prices or valuation techniques (continued)
1
30.9.24
30.6.24
31.12.23
USD m
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial liabilities measured at fair value on a recurring basis
Financial liabilities at fair value held for trading
of which: Equity instruments
of which: Corporate and municipal bonds
of which: Government bills / bonds
of which: Investment fund units
Derivative financial instruments
1,633
167,309
5,354
174,296
876
143,744
4,448
149,069
771
185,815
5,595
192,181
of which: Foreign exchange
of which: Interest rate
of which: Equity / index
of which: Credit
of which: Commodities
of which: Loan commitments measured at
FVTPL
Financial liabilities designated at fair value on a recurring basis
Brokerage payables designated at fair value
Debt issued designated at fair value
Other financial liabilities designated at fair value
of which: Financial liabilities related to unit-
linked investment contracts
of which: Securities financing transactions
of which: Over-the-counter debt instruments
and others
Total liabilities measured at fair value
27,830
362,156
20,623
410,610
25,352
327,555
20,936
373,844
28,454
374,542
23,638
426,635
1 Bifurcated embedded derivatives are presented on the same balance sheet lines as their host contracts and are not included in this table. The fair value of these derivatives was not material for the periods presented.
2 Other non-financial assets primarily consist of properties and other non-current assets held for sale, which are measured at the lower of their net carrying amount or fair value less costs to sell.
b) Valuation adjustments
The table below summarizes the changes in deferred day-1 profit or loss reserves during the relevant period.
Deferred day-1 profit or loss is generally released into
Other net income from financial instruments measured at fair
value through profit or loss
observable or when the transaction is closed out.
Deferred day-1 profit or loss reserves
For the quarter ended
Year-to-date
USD m
30.9.24
30.6.24
30.9.23
30.9.24
30.9.23
Reserve balance at the beginning of the period
Profit / (loss) deferred on new transactions
(Profit) / loss recognized in the income statement
Foreign currency translation
Reserve balance at the end of the period
The table below summarizes other valuation adjustment reserves recognized on the balance sheet.
Other valuation adjustment reserves on the balance sheet
As of
USD m
30.9.24
30.6.24
31.12.23
Own credit adjustments on financial liabilities designated at fair value
1
of which: debt issued designated at fair value
of which: other financial liabilities designated at fair value
Credit valuation adjustments
2
Funding and debit valuation adjustments
Other valuation adjustments
of which: liquidity
of which: model uncertainty
1 Own credit adjustments on financial liabilities designated at fair value includes amounts for TLAC notes. 2 Amount does not include reserves against defaulted counterparties.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 80
Note 10 Fair value measurement (continued)
c) Level 3 instruments: valuation techniques and inputs
The table below presents material Level 3 assets and liabilities, together with the valuation techniques used to
measure fair value, as well as the inputs used in a given valuation technique that are considered significant as of
30 September 2024 and unobservable, and a range of values for those unobservable inputs.
The range of values represents the highest- and lowest-level inputs used in the valuation techniques. Therefore, the
range does not reflect the level of uncertainty regarding a particular input or an assessment of the reasonableness of
the Group’s estimates and assumptions, but rather the different underlying characteristics of the relevant assets and
liabilities held by the Group.
The significant unobservable inputs disclosed in the table below are consistent with those included in “Note 21 Fair
value measurement” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023.
Valuation techniques and inputs used in the fair value measurement of Level 3 assets and liabilities
Fair value
Significant unobservable
input(s)
1
Range of inputs
Assets
Liabilities
Valuation technique(s)
30.9.24
31.12.23
USD bn
30.9.24
31.12.23
30.9.24
31.12.23
low
high
weighted
average
2
low
high
weighted
average
2
unit
1
Financial assets and liabilities at fair value held for trading and Financial assets at fair value not held for trading
Corporate and municipal
bonds
Relative value to
market comparable
Bond price equivalent
points
Discounted expected
cash flows
Discount margin
basis
points
Traded loans, loans
designated at fair value
and guarantees
Relative value to
market comparable
Loan price equivalent
points
Discounted expected
cash flows
Credit spread
basis
points
Investment fund units
3
Relative value to
market comparable
Net asset value
Equity instruments
3
Relative value to
market comparable
Price
Debt issued designated at
fair value
4
Other financial liabilities
designated at fair value
Discounted expected
cash flows
Funding spread
basis
points
Derivative financial instruments
Interest rate
Option model
Volatility of interest rates
basis
points
Volatility of inflation
%
IR-to-IR correlation
%
Discounted expected
cash flows
Funding spread
basis
points
Credit
Discounted expected
cash flows
Credit spreads
basis
points
Credit correlation
%
Credit volatility
%
Recovery rates
%
Equity / index
Option model
Equity dividend yields
%
Volatility of equity stocks,
equity and other indices
%
Equity-to-FX correlation
%
Equity-to-equity correlation
%
Loan commitments
measured at FVTPL
Relative value to
market comparable
Loan price equivalent
points
1 The ranges of significant unobservable inputs are represented in points, percentages and basis points. Points are a percentage of par (e.g. 100 points would be 100% of par). 2 Weighted averages are provided for
most non-derivative financial instruments and were calculated by weighting inputs based on the fair values of the respective instruments. Weighted averages are not provided for inputs related to Other financial liabilities
designated at fair value and Derivative financial instruments, as this would not be meaningful. 3 The range of inputs is not disclosed, as there is a dispersion of values given the diverse nature of the investments.
4 Debt issued designated at fair value primarily consists of UBS structured notes, which include variable maturity notes with various equity and foreign exchange underlying risks, as well as rates-linked and credit-linked
notes, all of which have embedded derivative parameters that are considered to be unobservable. The equivalent derivative instrument parameters for debt issued or embedded derivatives for over-the-counter debt
instruments are presented in the respective derivative financial instruments lines in this table.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 81
Note 10 Fair value measurement (continued)
d) Level 3 instruments: sensitivity to changes in unobservable input assumptions
The table below summarizes those financial assets and liabilities classified as Level 3 for which a change in one or
more of the unobservable inputs to reflect reasonably possible alternative assumptions would change fair value
significantly, and the estimated effect thereof.
The sensitivity data shown below presents an estimation of valuation uncertainty based on reasonably possible
alternative values for Level 3 inputs at the balance sheet date and does not represent the estimated effect of stress
scenarios. Typically, these financial assets and liabilities are sensitive to a combination of inputs from Levels 1–3.
Although well-defined interdependencies may exist between Level 1 / 2 parameters and Level 3 parameters (e.g.
between interest rates, which are generally Level 1 or Level 2, and prepayments, which are generally Level 3), these
have not been incorporated in the table. Furthermore, direct interrelationships between the Level 3 parameters are
not a significant element of the valuation uncertainty.
Sensitivity of fair value measurements to changes in unobservable input assumptions
1
30.9.24
30.6.24
31.12.23
USD m
Favorable
changes
Unfavorable
changes
Favorable
changes
Unfavorable
changes
Favorable
changes
Unfavorable
changes
Traded loans, loans measured at fair value and guarantees
Securities financing transactions
Auction rate securities
Asset-backed securities
Equity instruments
Investment fund units
Loan commitments measured at FVTPL
Interest rate derivatives, net
Credit derivatives, net
Foreign exchange derivatives, net
Equity / index derivatives, net
Other
Total
1 Sensitivity of issued and over-the-counter debt instruments is reported with the equivalent derivative or Other.
e) Level 3 instruments: movements during the period
The table below presents additional information about material Level 3 assets and liabilities measured at fair value
on a recurring basis. Level 3 assets and liabilities may be hedged with instruments classified as Level 1 or Level 2 in
the fair value hierarchy and, as a result, realized and unrealized gains and losses included in the table may not
include the effect of related hedging activity. Furthermore, the realized and unrealized gains and losses presented
in the table are not limited solely to those arising from Level 3 inputs, as valuations are generally derived from both
observable and unobservable parameters.
Assets and liabilities transferred into or out of Level 3 are presented as if those assets or liabilities had been
transferred on 1 January 2024.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 82
Note 10 Fair value measurement (continued)
Movements of Level 3 instruments
USD bn
Balance
at the
beginning
of the
period
Credit
Suisse
Level 3
assets and
liabilities
acquired
Net gains /
losses
included in
compre-
hensive
income
1
of which:
related to
instruments
held at the
end of the
period
Purchases
Sales
Issuances
Settlements
Transfers
into
Level 3
Transfers
out of
Level 3
Foreign
currency
translation
Balance
at the
end
of the
period
For the nine months ended 30 September 2024
2
Financial assets at fair value held for
trading
of which: Equity instruments
of which: Corporate and municipal
bonds
0.0
of which: Loans
Derivative financial instruments –
assets
of which: Interest rate
0.0
of which: Equity / index
of which: Credit
0.0
Financial assets at fair value not held
for trading
of which: Loans
0.0
of which: Auction rate securities
0.0
0.0
0.0
0.0
0.0
0.0
of which: Equity instruments
0.0
0.0
of which: Investment fund units
0.0
of which: Asset-backed securities
0.0
0.0
Derivative financial instruments –
liabilities
of which: Interest rate
of which: Equity / index
0.0
of which: Credit
0.0
of which: Loan commitments
measured at FVTPL
Debt issued designated at fair value
0.0
0.0
Other financial liabilities designated at
fair value
For the nine months ended 30 September 2023
3
Financial assets at fair value held for
trading
of which: Investment fund units
0.0
of which: Corporate and municipal
bonds
0.0
0.0
of which: Loans
Derivative financial instruments –
assets
of which: Interest rate
0.0
of which: Equity / index
of which: Credit
Financial assets at fair value not held
for trading
of which: Loans
0.0
of which: Auction rate securities
0.0
0.0
0.0
0.0
0.0
0.0
0.0
of which: Equity instruments
0.0
Derivative financial instruments –
liabilities
of which: Interest rate
0.0
of which: Equity / index
of which: Credit
of which: Loan commitments
measured at FVTPL
0.0
0.0
0.0
0.0
0.0
0.0
Debt issued designated at fair value
0.0
0.0
Other financial liabilities designated at
fair value
1 Net gains / losses included in comprehensive income are recognized in Net interest income and Other net income from financial instruments measured at fair value through profit or loss in the Income statement,
and also in Gains / (losses) from own credit on financial liabilities designated at fair value, before tax in the Statement of comprehensive income. 2 Total Level 3 assets as of 30 September 2024 were USD 15.9bn
(31 December 2023: USD 33.6bn). Total Level 3 liabilities as of 30 September 2024 were USD 20.6bn (31 December 2023: USD 23.6bn). 3 Comparative-period information has been revised. Please refer to “Note
2 Accounting for the acquisition of the Credit Suisse Group” in the UBS Group Annual Report 2023 for more information about the IFRS 3 measurement period adjustments.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 83
Note 10 Fair value measurement (continued)
f) Financial instruments not measured at fair value
The table below reflects the estimated fair values of financial instruments not measured at fair value. Valuation
principles applied when determining fair value estimates for financial instruments not measured at fair value are
consistent with those described in “Note 21 Fair value measurement” in the “Consolidated financial statements”
section of the UBS Group Annual Report 2023.
Financial instruments not measured at fair value
30.9.24
30.6.24
31.12.23
USD bn
Carrying
amount
Fair value
Carrying
amount
Fair value
Carrying
amount
1
Fair value
Assets
Cash and balances at central banks
Amounts due from banks
Receivables from securities financing transactions measured at amortized cost
Cash collateral receivables on derivative instruments
Loans and advances to customers
Other financial assets measured at amortized cost
Liabilities
Amounts due to banks
Payables from securities financing transactions measured at amortized cost
Cash collateral payables on derivative instruments
Customer deposits
Debt issued measured at amortized cost
Other financial liabilities measured at amortized cost
2
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Excludes lease liabilities.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 84
Note 11
Derivative instruments
a) Derivative instruments
As of 30.9.24, USD bn
Derivative
financial
assets
Derivative
financial
liabilities
Notional values
related to derivative
financial assets and
liabilities
1
Other
notional
values
2
Derivative financial instruments
Interest rate
Credit derivatives
Foreign exchange
Equity / index
Commodities
Other
3
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
Further netting potential not recognized on the balance sheet
5
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Total derivative financial instruments, after consideration of further netting potential
As of 30.6.24, USD bn
Derivative financial instruments
Interest rate
Credit derivatives
Foreign exchange
Equity / index
Commodities
Other
3
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
Further netting potential not recognized on the balance sheet
5
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Total derivative financial instruments, after consideration of further netting potential
As of 31.12.23, USD bn
Derivative financial instruments
Interest rate
3,524
20,074
Credit derivatives
275
Foreign exchange
6,913
Equity / index
1,397
95
Commodities
143
16
Other
3
117
Total derivative financial instruments, based on netting under IFRS Accounting Standards
4
12,369
20,366
Further netting potential not recognized on the balance sheet
5
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Total derivative financial instruments, after consideration of further netting potential
1 In cases where derivative financial instruments are presented on a net basis on the balance sheet, the respective notional values of the netted derivative financial instruments are still presented on a gross basis.
Notional amounts of client-cleared ETD and OTC transactions through central clearing counterparties are not disclosed, as they have a significantly different risk profile. 2 Other notional values relate to derivatives
that are cleared through either a central counterparty or an exchange and settled on a daily basis (except for OTC derivatives settled through collateralized-to-market arrangements, which are presented under Derivative
financial assets and Derivative financial liabilities). The fair value of these derivatives is presented on the balance sheet net of the corresponding cash margin under Cash collateral receivables on derivative instruments
and Cash collateral payables on derivative instruments and was not material for all periods presented. 3 Includes Loan commitments measured at FVTPL, as well as unsettled purchases and sales of non-derivative
financial instruments for which the changes in the fair value between trade date and settlement date are recognized as derivative financial instruments. 4 Financial assets and liabilities are presented net on the
balance sheet if UBS has the unconditional and legally enforceable right to offset the recognized amounts, both in the normal course of business and in the event of default, bankruptcy or insolvency of UBS or its
counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 5 Reflects the netting potential in accordance with enforceable master netting and similar
arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 22 Offsetting financial assets and financial liabilities” in the “Consolidated financial statements” section
of the UBS Group Annual Report 2023 for more information.
b) Cash collateral on derivative instruments
USD bn
Receivables
30.9.24
Payables
30.9.24
Receivables
30.6.24
Payables
30.6.24
Receivables
31.12.23
Payables
31.12.23
Cash collateral on derivative instruments, based on netting under IFRS Accounting
Standards
1
Further netting potential not recognized on the balance sheet
2
of which: netting of recognized financial liabilities / assets
of which: netting with collateral received / pledged
Cash collateral on derivative instruments, after consideration of further netting potential
1 Financial assets and liabilities are presented net on the balance sheet if UBS has the unconditional and legally enforceable right to offset the recognized amounts, both in the normal course of business and in the
event of default, bankruptcy or insolvency of UBS or its counterparties, and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 2 Reflects the netting potential in
accordance with enforceable master netting and similar arrangements where not all criteria for a net presentation on the balance sheet have been met. Refer to “Note 22 Offsetting financial assets and financial
liabilities” in the “Consolidated financial statements” section of the UBS Group Annual Report 2023 for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 85
Note
12
Other assets and liabilities
a) Other financial assets measured at amortized cost
USD m
30.9.24
30.6.24
31.12.23
1
Debt securities
Loans to financial advisors
Fee- and commission-related receivables
Finance lease receivables
Settlement and clearing accounts
Accrued interest income
Other
2
Total other financial assets measured at amortized cost
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Predominantly includes cash collateral provided to exchanges and clearing houses to secure securities trading activity
through those counterparties.
b) Other non-financial assets
USD m
30.9.24
30.6.24
31.12.23
Precious metals and other physical commodities
Deposits and collateral provided in connection with litigation, regulatory and similar matters
1
Prepaid expenses
Current tax assets
VAT, withholding tax and other tax receivables
Properties and other non-current assets held for sale
Assets of disposal groups held for sale
2
Other
Total other non-financial assets
1 Refer to Note 15 for more information. 2 Refer to Note 2 for more information about the agreement to sell Select Portfolio Servicing.
c) Other financial liabilities measured at amortized cost
USD m
30.9.24
30.6.24
31.12.23
Other accrued expenses
Accrued interest expenses
Settlement and clearing accounts
Lease liabilities
Other
Total other financial liabilities measured at amortized cost
d) Other financial liabilities designated at fair value
USD m
30.9.24
30.6.24
31.12.23
Financial liabilities related to unit-linked investment contracts
Securities financing transactions
Over-the-counter debt instruments and other
Total other financial liabilities designated at fair value
e) Other non-financial liabilities
USD m
30.9.24
30.6.24
31.12.23
Compensation-related liabilities
of which: net defined benefit liability
Current tax liabilities
Deferred tax liabilities
VAT, withholding tax and other tax payables
Deferred income
Liabilities of disposal groups held for sale
1
Other
Total other non-financial liabilities
1 Refer to Note 2 for more information about the agreement to sell Select Portfolio Servicing.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 86
Note
13
Debt issued designated at fair value
USD m
30.9.24
30.6.24
31.12.23
Equity-linked
1
Rates-linked
Credit-linked
Fixed-rate
Commodity-linked
Other
of which: debt that contributes to total loss-absorbing capacity
Total debt issued designated at fair value
2
1 Includes investment fund unit-linked instruments issued. 2 As of 30 September 2024, 99% of Total debt issued designated at fair value was unsecured (30 June 2024: 99%).
Note
14
Debt issued measured at amortized cost
USD m
30.9.24
30.6.24
31.12.23
Short-term debt
1
Senior unsecured debt
of which: contributes to total loss-absorbing capacity
Covered bonds
Subordinated debt
of which: eligible as high-trigger loss-absorbing additional tier 1 capital instruments
of which: eligible as low-trigger loss-absorbing additional tier 1 capital instruments
of which: eligible as non-Basel III-compliant tier 2 capital instruments
Debt issued through the Swiss central mortgage institutions
Other long-term debt
Long-term debt
2
Total debt issued measured at amortized cost
3,4
1 Debt with an original contractual maturity of less than one year, includes mainly certificates of deposit and commercial paper. 2 Debt with an original contractual maturity greater than or equal to one year. The
classification of debt issued into short-term and long-term does not consider any early redemption features. 3 Net of bifurcated embedded derivatives, the fair value of which was not material for the periods
presented. 4 Except for Covered bonds (100% secured), Debt issued through the Swiss central mortgage institutions (100% secured) and Other long-term debt (88% secured), 100% of the balance was unsecured
as of 30 September 2024.
Note 15 Provisions and contingent liabilities
a) Provisions and contingent liabilities
The table below presents an overview of total provisions and contingent liabilities.
USD m
30.9.24
30.6.24
31.12.23
1
Provisions related to expected credit losses (IFRS 9,
Financial Instruments
)
2
Provisions related to Credit Suisse loan commitments (IFRS 3,
Business Combinations
)
Provisions related to litigation, regulatory and similar matters (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
Acquisition-related contingent liabilities (IFRS 3,
Business Combinations
)
Restructuring, real-estate and other provisions (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets
)
Total provisions and contingent liabilities
1 Comparative-period information has been revised. Refer to Note 2 for more information. 2 Refer to Note 9c for more information.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 87
Note 15 Provisions and contingent liabilities (continued)
The table below presents additional information for provisions under IAS 37,
Provisions, Contingent Liabilities and
Contingent Assets
.
USD m
Litigation,
regulatory and
similar matters
1
Restructuring
2
Real estate
3
Other
4
Total
Balance as of 31 December 2023
Balance as of 30 June 2024
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Reclassifications
5
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 30 September 2024
1 Consists of provisions for losses resulting from legal, liability and compliance risks. 2 Includes USD 482m of provisions for onerous contracts related to real estate as of 30 September 2024 (30 June 2024:
USD 461m; 31 December 2023: USD 448m), USD 322m of personnel-related restructuring provisions as of 30 September 2024 (30 June 2024: USD 365m; 31 December 2023: USD 294m) and onerous contracts
related to technology. 3 Mainly includes provisions for reinstatement costs with respect to leased properties. 4 Mainly includes provisions related to employee benefits and operational risks. 5 Mainly includes
reclassifications from IFRS 3 contingent liabilities to IAS 37 provisions and a reclassification from derivative liabilities to IAS 37 provisions in the amount of USD 92m reflecting the funding obligation relating to investors
who did not accept the redemption offer for the Credit Suisse supply chain finance funds.
Information about provisions and contingent liabilities in respect of litigation, regulatory and similar matters, as a
class, is included in Note 15b. There are no material contingent liabilities associated with the other classes of
provisions.
b) Litigation, regulatory and similar matters
The Group operates in a legal and regulatory environment that exposes it to significant litigation and similar risks
arising from disputes and regulatory proceedings. As a result, UBS (which for purposes of this Note may refer to
UBS Group AG and/or one or more of its subsidiaries, as applicable) is involved in various disputes and legal
proceedings, including litigation, arbitration, and regulatory and criminal investigations.
Such matters are subject to many uncertainties, and the outcome and the timing of resolution are often difficult to
predict, particularly in the earlier stages of a case. There are also situations where the Group may enter into a
settlement agreement. This may occur in order to avoid the expense, management distraction or reputational
implications of continuing to contest liability, even for those matters for which the Group believes it should be
exonerated. The uncertainties inherent in all such matters affect the amount and timing of any potential outflows
for both matters with respect to which provisions have been established and other contingent liabilities. The Group
makes provisions for such matters brought against it when, in the opinion of management after seeking legal
advice, it is more likely than not that the Group has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required, and the amount can be reliably estimated. Where
these factors are otherwise satisfied, a provision may be established for claims that have not yet been asserted
against the Group, but are nevertheless expected to be, based on the Group’s experience with similar asserted
claims. If any of those conditions is not met, such matters result in contingent liabilities. If the amount of an
obligation cannot be reliably estimated, a liability exists that is not recognized even if an outflow of resources is
probable. Accordingly, no provision is established even if the potential outflow of resources with respect to such
matters could be significant. Developments relating to a matter that occur after the relevant reporting period, but
prior to the issuance of financial statements, which affect management’s assessment of the provision for such
matter (because, for example, the developments provide evidence of conditions that existed at the end of the
reporting period), are adjusting events after the reporting period under IAS 10 and must be recognized in the
financial statements for the reporting period.
Specific litigation, regulatory and other matters are described below, including all such matters that management
considers to be material and others that management believes to be of significance to the Group due to potential
financial, reputational and other effects. The amount of damages claimed, the size of a transaction or other
information is provided where available and appropriate in order to assist users in considering the magnitude of
potential exposures.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 88
Note 15 Provisions and contingent liabilities (continued)
In the case of certain matters below, we state that we have established a provision, and for the other matters, we
make no such statement. When we make this statement and we expect disclosure of the amount of a provision to
prejudice seriously our position with other parties in the matter because it would reveal what UBS believes to be
the probable and reliably estimable outflow, we do not disclose that amount. In some cases we are subject to
confidentiality obligations that preclude such disclosure. With respect to the matters for which we do not state
whether we have established a provision, either: (a) we have not established a provision; or (b) we have established
a provision but expect disclosure of that fact to prejudice seriously our position with other parties in the matter
because it would reveal the fact that UBS believes an outflow of resources to be probable and reliably estimable.
With respect to certain litigation, regulatory and similar matters for which we have established provisions, we are
able to estimate the expected timing of outflows. However, the aggregate amount of the expected outflows for
those matters for which we are able to estimate expected timing is immaterial relative to our current and expected
levels of liquidity over the relevant time periods.
The aggregate amount provisioned for litigation, regulatory and similar matters as a class is disclosed in the
“Provisions” table in Note 15a above. UBS provides below an estimate of the aggregate liability for our litigation,
regulatory and similar matters as a class of contingent liabilities. Estimates of contingent liabilities are inherently
imprecise and uncertain as these estimates require UBS to make speculative legal assessments as to claims and
proceedings that involve unique fact patterns or novel legal theories, that have not yet been initiated or are at early
stages of adjudication, or as to which alleged damages have not been quantified by the claimants. Taking into
account these uncertainties and the other factors described herein, UBS estimates the future losses that could arise
from litigation, regulatory and similar matters disclosed below for which an estimate is possible, that are not covered
by existing provisions (including provisions established under IFRS 3 in connection with the acquisition of Credit
Suisse), are in the range of USD 0bn to USD 1.8bn.
Litigation, regulatory and similar matters may also result in non-monetary penalties and consequences. A guilty plea
to, or conviction of, a crime could have material consequences for UBS. Resolution of regulatory proceedings may
require UBS to obtain waivers of regulatory disqualifications to maintain certain operations, may entitle regulatory
authorities to limit, suspend or terminate licenses and regulatory authorizations, and may permit financial market
utilities to limit, suspend or terminate UBS’s participation in such utilities. Failure to obtain such waivers, or any
limitation, suspension or termination of licenses, authorizations or participations, could have material consequences
for UBS.
The amounts shown in the table below reflect the provisions recorded under IFRS Accounting Standards. In
connection with the acquisition of Credit Suisse, UBS Group AG additionally has reflected in its purchase accounting
under IFRS 3 a valuation adjustment reflecting an estimate of outflows relating to contingent liabilities for all present
obligations included in the scope of the acquisition at fair value upon closing, even if it is not probable that the
contingent liability will result in an outflow of resources, significantly decreasing the recognition threshold for
litigation liabilities beyond those that generally apply under IFRS Accounting Standards. The IFRS 3 acquisition-
related contingent liabilities of USD 2.4bn at 30 September 2024 reflect reclassifications to provisions under IAS 37
and releases upon resolution of the relevant matter.
Provisions for litigation, regulatory and similar matters, by business division and in Group Items
1
USD m
Global Wealth
Management
Personal &
Corporate
Banking
Asset
Management
Investment
Bank
Non-core
and Legacy
Group Items
UBS Group
Balance as of 31 December 2023
Balance as of 30 June 2024
Increase in provisions recognized in the income statement
Release of provisions recognized in the income statement
Reclassifications
2
Provisions used in conformity with designated purpose
Foreign currency translation and other movements
Balance as of 30 September 2024
1 Provisions, if any, for the matters described in items 2 and 10 of this Note are recorded in Global Wealth Management. Provisions, if any, for the matters described in items 5, 6, 7, 8, 9 and 11 of this Note are
recorded in Non-core and Legacy. Provisions, if any, for the matters described in items 13 and 14 of this Note are recorded in Group Items. Provisions, if any, for the matters described in item 1 of this Note are allocated
between Global Wealth Management, Personal & Corporate Banking and Non-core and Legacy. Provisions, if any, for the matters described in item 3 of this Note are allocated between the Investment Bank, Non-
core and Legacy and Group Items. Provisions, if any, for the matters described in item 4 of this Note are allocated between Global Wealth Management and Personal & Corporate Banking. Provisions, if any, for the
matters described in item 12 of this Note are allocated between the Investment Bank and Non-core and Legacy. 2 Mainly includes reclassifications from IFRS 3 contingent liabilities to IAS 37 provisions and a
reclassification from derivative liabilities to IAS 37 provisions in the amount of USD 92m reflecting the funding obligation relating to investors who did not accept the redemption offer for the Credit Suisse supply chain
finance funds.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 89
Note 15 Provisions and contingent liabilities (continued)
1. Inquiries regarding cross-border wealth management businesses
Tax and regulatory authorities in a number of countries have made inquiries, served requests for information or
examined employees located in their respective jurisdictions relating to the cross-border wealth management
services provided by UBS and other financial institutions. Credit Suisse offices in various locations, including the UK,
the Netherlands, France and Belgium, have been contacted by regulatory and law enforcement authorities seeking
records and information concerning investigations into Credit Suisse’s historical private banking services on a cross-
border basis and in part through its local branches and banks. The UK and French aspects of these issues have been
closed. UBS is continuing to cooperate with the authorities.
Since 2013, UBS (France) S.A., UBS AG and certain former employees have been under investigation in France in
relation to UBS’s cross-border business with French clients. In connection with this investigation, the investigating
judges ordered UBS AG to provide bail (“
caution
”) of EUR 1.1bn.
In 2019, the court of first instance returned a verdict finding UBS AG guilty of unlawful solicitation of clients on
French territory and aggravated laundering of the proceeds of tax fraud, and UBS (France) S.A. guilty of aiding and
abetting unlawful solicitation and of laundering the proceeds of tax fraud. The court imposed fines aggregating
EUR 3.7bn on UBS AG and UBS (France) S.A. and awarded EUR 800m of civil damages to the French state. A trial
in the Paris Court of Appeal took place in March 2021. In December 2021, the Court of Appeal found UBS AG
guilty of unlawful solicitation and aggravated laundering of the proceeds of tax fraud. The court ordered a fine of
EUR 3.75m, the confiscation of EUR 1bn, and awarded civil damages to the French state of EUR 800m. UBS
appealed the decision to the French Supreme Court. The Supreme Court rendered its judgment on 15 November
2023. It upheld the Court of Appeal‘s decision regarding unlawful solicitation and aggravated laundering of the
proceeds of tax fraud, but overturned the confiscation of EUR 1bn, the penalty of EUR 3.75m and the EUR 800m
of civil damages awarded to the French state. The case has been remanded to the Court of Appeal for a retrial
regarding these overturned elements. The French state has reimbursed the EUR 800m of civil damages to UBS AG.
In May 2014, Credit Suisse entered into settlement agreements with the SEC, Federal Reserve and New York
Department of Financial Services and plead guilty to conspiring to aid and abet US taxpayers in filing false tax
returns. Credit Suisse continued to report to and cooperate with US authorities in accordance with its obligations
under the plea and agreements, including by conducting a review of cross-border services provided by Credit Suisse.
In this connection, Credit Suisse provided information to US authorities regarding potentially undeclared US assets
held by clients at Credit Suisse since the May 2014 plea. UBS continues to cooperate with the authorities in their
ongoing reviews. In March 2023, the US Senate Finance Committee issued a report criticizing Credit Suisse AG’s
history regarding US tax compliance. The report called on the DOJ to investigate Credit Suisse AG’s compliance
with the 2014 plea.
In February 2021, a qui tam complaint was filed in the Eastern District of Virginia, alleging that Credit Suisse had
violated the False Claims Act by failing to disclose all US accounts at the time of the 2014 plea, which allegedly
allowed Credit Suisse to pay a criminal fine in 2014 that was purportedly lower than it should have been. The DOJ
moved to dismiss the case, and the Court summarily dismissed the suit. On appeal, the US Court of Appeals for the
Fourth Circuit affirmed the dismissal of the action.
Our balance sheet at 30 September 2024 reflected a provision in an amount that UBS believes to be appropriate
under the applicable accounting standard. As in the case of other matters for which we have established provisions,
the future outflow of resources in respect of such matters cannot be determined with certainty based on currently
available information and accordingly may ultimately prove to be substantially greater (or may be less) than the
provision that we have recognized.
2. Madoff
In relation to the Bernard L. Madoff Investment Securities LLC (BMIS) investment fraud, UBS AG, UBS (Luxembourg)
S.A. (now UBS Europe SE, Luxembourg branch) and certain other UBS subsidiaries have been subject to inquiries
by a number of regulators, including the Swiss Financial Market Supervisory Authority (FINMA) and the Luxembourg
Commission de Surveillance du Secteur Financier. Those inquiries concerned two third-party funds established
under Luxembourg law, substantially all assets of which were with BMIS, as well as certain funds established in
offshore jurisdictions with either direct or indirect exposure to BMIS. These funds faced severe losses, and the
Luxembourg funds are in liquidation. The documentation establishing both funds identifies UBS entities in various
roles, including custodian, administrator, manager, distributor and promoter, and indicates that UBS employees
serve as board members.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 90
Note 15 Provisions and contingent liabilities (continued)
In 2009 and 2010, the liquidators of the two Luxembourg funds filed claims against UBS entities, non-UBS entities
and certain individuals, including current and former UBS employees, seeking amounts totaling approximately
EUR 2.1bn, which includes amounts that the funds may be held liable to pay the trustee for the liquidation of BMIS
(BMIS Trustee).
A large number of alleged beneficiaries have filed claims against UBS entities (and non-UBS entities) for purported
losses relating to the Madoff fraud. The majority of these cases have been filed in Luxembourg, where decisions
that the claims in eight test cases were inadmissible have been affirmed by the Luxembourg Court of Appeal, and
the Luxembourg Supreme Court has dismissed a further appeal in one of the test cases.
In the US, the BMIS Trustee filed claims against UBS entities, among others, in relation to the two Luxembourg
funds and one of the offshore funds. The total amount claimed against all defendants in these actions was not less
than USD 2bn. In 2014, the US Supreme Court rejected the BMIS Trustee’s motion for leave to appeal decisions
dismissing all claims against UBS defendants except those for the recovery of approximately USD 125m of payments
alleged to be fraudulent conveyances and preference payments. Similar claims have been filed against Credit Suisse
entities seeking to recover redemption payments. In 2016, the bankruptcy court dismissed these claims against the
UBS entities and most of the Credit Suisse entities. In 2019, the Court of Appeals reversed the dismissal of the BMIS
Trustee’s remaining claims. The case has been remanded to the Bankruptcy Court for further proceedings.
3. Foreign exchange, LIBOR and benchmark rates, and other trading practices
Foreign exchange-related regulatory matters:
concerning possible manipulation of foreign exchange markets and precious metals prices. As a result of these
investigations, UBS entered into resolutions with Swiss, US and United Kingdom regulators and the European
Commission. UBS was granted conditional immunity by the Antitrust Division of the DOJ and by authorities in other
jurisdictions in connection with potential competition law violations relating to foreign exchange and precious
metals businesses. In December 2021, the European Commission issued a decision imposing a fine of EUR 83.3m
on Credit Suisse entities based on findings of anticompetitive practices in the foreign exchange market. Credit
Suisse has appealed the decision to the European General Court. UBS received leniency and accordingly no fine
was assessed.
Foreign exchange-related civil litigation:
in other jurisdictions against UBS, Credit Suisse and other banks on behalf of putative classes of persons who
engaged in foreign currency transactions with any of the defendant banks. UBS and Credit Suisse have resolved US
federal court class actions relating to foreign currency transactions with the defendant banks and persons who
transacted in foreign exchange futures contracts and options on such futures. Certain class members have excluded
themselves from that settlement and filed individual actions in US and English courts against UBS, Credit Suisse and
other banks, alleging violations of US and European competition laws and unjust enrichment. UBS, Credit Suisse
and the other banks have resolved those individual matters. Credit Suisse and UBS, together with other financial
institutions, were named in a consolidated putative class action in Israel, which made allegations similar to those
made in the actions pursued in other jurisdictions. In April 2022, Credit Suisse entered into an agreement to settle
all claims in this action. In February 2024, UBS entered into an agreement to settle all claims in this action. Both
settlements remain subject to court approval.
A putative class action was filed in federal court against UBS and numerous other banks on behalf of persons and
businesses in the US who directly purchased foreign currency from the defendants and alleged co-conspirators for
their own end use. In May 2024, the Second Circuit upheld the district court’s dismissal of the case.
LIBOR and other benchmark-related regulatory matters:
regarding potential improper attempts by UBS, among others, to manipulate LIBOR and other benchmark rates at
certain times. UBS and Credit Suisse reached settlements or otherwise concluded investigations relating to
benchmark interest rates with the investigating authorities. UBS was granted conditional leniency or conditional
immunity from authorities in certain jurisdictions, including the Antitrust Division of the DOJ and the Swiss
Competition Commission (WEKO), in connection with potential antitrust or competition law violations related to
certain rates. However, UBS has not reached a final settlement with WEKO, as the Secretariat of WEKO has asserted
that UBS does not qualify for full immunity.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 91
Note 15 Provisions and contingent liabilities (continued)
LIBOR and other benchmark-related civil litigation:
in the federal courts in New York against UBS and numerous other banks on behalf of parties who transacted in
certain interest rate benchmark-based derivatives. Also pending in the US and in other jurisdictions are a number
of other actions asserting losses related to various products whose interest rates were linked to LIBOR and other
benchmarks, including adjustable rate mortgages, preferred and debt securities, bonds pledged as collateral, loans,
depository accounts, investments and other interest-bearing instruments. The complaints allege manipulation,
through various means, of certain benchmark interest rates, including USD LIBOR, Yen LIBOR, EURIBOR, CHF LIBOR,
GBP LIBOR and seek unspecified compensatory and other damages under various legal theories.
USD LIBOR class and individual actions in the US:
Beginning in 2013, putative class actions were filed in US federal
district courts (and subsequently consolidated in the SDNY) by plaintiffs who engaged in over-the-counter
instruments, exchange traded Eurodollar futures and options, bonds or loans that referenced USD LIBOR. The
complaints allege violations of antitrust law and the Commodities Exchange Act, as well breach of contract and
unjust enrichment. Following various rulings by the district court and the Second Circuit dismissing certain of the
causes of action and allowing others to proceed, one class action with respect to transactions in over the counter
instruments and several actions brought by individual plaintiffs are proceeding in the district court. UBS and Credit
Suisse have entered into settlement agreements in respect of the class actions relating to exchange traded
instruments, bonds and loans. These settlements have received final court approval and the actions have been
dismissed as to UBS and Credit Suisse. In addition, an individual action was filed in the Northern District of California
against UBS, Credit Suisse and numerous other banks alleging that the defendants conspired to fix the interest rate
used as the basis for loans to consumers by jointly setting the USD ICE LIBOR rate and monopolized the market for
LIBOR-based consumer loans and credit cards. The court dismissed the initial complaint and subsequently dismissed
an amended complaint with prejudice. In January 2024, plaintiffs appealed the dismissal to the Ninth Circuit Court
of Appeals.
Other benchmark class actions in the US:
The Yen LIBOR/Euroyen TIBOR, EURIBOR and GBP LIBOR actions have
been dismissed. Plaintiffs have appealed the dismissals.
In November 2022, defendants have moved to dismiss the complaint in the CHF LIBOR action. In 2023, the court
approved a settlement by Credit Suisse of the claims against it in this matter.
Government bonds:
breached European Union antitrust rules between 2007 and 2011 relating to European government bonds. The
European Commission fined UBS EUR 172m. UBS has appealed the amount of the fine.
Also in 2021, the European
Commission issued a decision finding that Credit Suisse and four other banks had breached European Union
antitrust rules relating to supra-sovereign, sovereign and agency bonds denominated in USD. The European
Commission fined Credit Suisse EUR 11.9m. Credit Suisse has appealed and the European Commission is scheduled
to announce its determination on appeal on 7 November 2024.
Credit Suisse, together with other financial institutions, was named in two Canadian putative class actions, which
allege that defendants conspired to fix the prices of supranational, sub-sovereign and agency bonds sold to and
purchased from investors in the secondary market. One action was dismissed against Credit Suisse in February
2020. In October 2022, Credit Suisse entered into an agreement to settle all claims in the second action. The
settlement remains subject to court approval.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 92
Note 15 Provisions and contingent liabilities (continued)
Credit default swap auction litigation –
In June 2021, Credit Suisse, along with other banks and entities, was named
in a putative class action complaint filed in the US District Court for the District of New Mexico alleging manipulation
of credit default swap (CDS) final auction prices. Defendants filed a motion to enforce a previous CDS class action
settlement in the SDNY. In January 2024, the SDNY ruled that, to the extent claims in the New Mexico action arise
from conduct prior to 30 June 2014, those claims are barred by the SDNY settlement. The plaintiffs have appealed
the SDNY decision.
With respect to additional matters and jurisdictions not encompassed by the settlements and orders referred to
above, our balance sheet at 30 September 2024 reflected a provision in an amount that UBS believes to be
appropriate under the applicable accounting standard. As in the case of other matters for which we have established
provisions, the future outflow of resources in respect of such matters cannot be determined with certainty based
on currently available information and accordingly may ultimately prove to be substantially greater (or may be less)
than the provision that we have recognized.
4. Swiss retrocessions
The Federal Supreme Court of Switzerland ruled in 2012, in a test case against UBS, that distribution fees paid to
a firm for distributing third-party and intra-group investment funds and structured products must be disclosed and
surrendered to clients who have entered into a discretionary mandate agreement with the firm, absent a valid
waiver. FINMA issued a supervisory note to all Swiss banks in response to the Supreme Court decision. UBS has met
the FINMA requirements and has notified all potentially affected clients.
The Supreme Court decision has resulted, and continues to result, in a number of client requests to disclose and
potentially surrender retrocessions. Client requests are assessed on a case-by-case basis. Considerations taken into
account when assessing these cases include, among other things, the existence of a discretionary mandate and
whether or not the client documentation contained a valid waiver with respect to distribution fees.
Our balance sheet at 30 September 2024 reflected a provision with respect to matters described in this item 4 in
an amount that UBS believes to be appropriate under the applicable accounting standard. The ultimate exposure
will depend on client requests and the resolution thereof, factors that are difficult to predict and assess. Hence, as
in the case of other matters for which we have established provisions, the future outflow of resources in respect of
such matters cannot be determined with certainty based on currently available information and accordingly may
ultimately prove to be substantially greater (or may be less) than the provision that we have recognized.
5. Mortgage-related matters
Government and regulatory related matters
:
DOJ RMBS settlement
LLC (CSS LLC) and its current and former US subsidiaries and US affiliates reached a settlement with the US
Department of Justice (DOJ) related to its legacy Residential Mortgage-Backed Securities (RMBS) business, a business
conducted through 2007. The settlement resolved potential civil claims by the DOJ related to certain of those Credit
Suisse entities’ packaging, marketing, structuring, arrangement, underwriting, issuance and sale of RMBS. Pursuant
to the terms of the settlement a civil monetary penalty was paid to the DOJ in January 2017. The settlement also
required the Credit Suisse entities to provide certain levels of consumer relief measures, including affordable
housing payments and loan forgiveness, and the DOJ and Credit Suisse agreed to the appointment of an
independent monitor to oversee the completion of the consumer relief requirements of the settlement. UBS
continues to evaluate its approach toward satisfying the remaining consumer relief obligations. The aggregate
amount of the consumer relief obligation increased after 2021 by 5% per annum of the outstanding amount due
until these obligations are settled. The monitor publishes reports periodically on these consumer relief matters.
Civil litigation: Repurchase litigations
to their roles as issuer, sponsor, depositor, underwriter and/or servicer of RMBS transactions. These cases currently
include repurchase actions by RMBS trusts and/or trustees, in which plaintiffs generally allege breached
representations and warranties in respect of mortgage loans and failure to repurchase such mortgage loans as
required under the applicable agreements. The amounts disclosed below do not reflect actual realized plaintiff
losses to date. Unless otherwise stated, these amounts reflect the original unpaid principal balance amounts as
alleged in these actions.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 93
Note 15 Provisions and contingent liabilities (continued)
DLJ Mortgage Capital, Inc. (DLJ) is a defendant in New York state court in five actions: An action brought by Asset
Backed Securities Corporation Home Equity Loan Trust, Series 2006-HE7 alleges damages of not less than
USD 374m. In December 2023, the court granted in part DLJ’s motion to dismiss, dismissing with prejudice all
notice-based claims; the parties have appealed. An action by Home Equity Asset Trust, Series 2006-8, alleges
damages of not less than USD 436m. An action by Home Equity Asset Trust 2007-1 alleges damages of not less
than USD 420m. A non-jury trial in this action was held between January and February 2023, and a decision is
pending. An action by Home Equity Asset Trust 2007-2 alleges damages of not less than USD 495m. An action by
CSMC Asset-Backed Trust 2007-NC1 does not allege a damages amount.
6. ATA litigation
Since November 2014, a series of lawsuits have been filed against a number of banks, including Credit Suisse, in
the US District Court for the Eastern District of New York (EDNY) and the SDNY alleging claims under the United
States Anti-Terrorism Act (ATA) and the Justice Against Sponsors of Terrorism Act. The plaintiffs in each of these
lawsuits are, or are relatives of, victims of various terrorist attacks in Iraq and allege a conspiracy and/or aiding and
abetting based on allegations that various international financial institutions, including the defendants, agreed to
alter, falsify or omit information from payment messages that involved Iranian parties for the express purpose of
concealing the Iranian parties’ financial activities and transactions from detection by US authorities. The lawsuits
allege that this conduct has made it possible for Iran to transfer funds to Hezbollah and other terrorist organizations
actively engaged in harming US military personnel and civilians. In January 2023, the United States Court of Appeals
for the Second Circuit affirmed a September 2019 ruling by the EDNY granting defendants’ motion to dismiss the
first filed lawsuit. In October 2023, the United States Supreme Court denied plaintiffs’ petition for a writ of
certiorari. In February 2024, plaintiffs filed a motion to vacate the judgment in the first filed lawsuit. Of the other
seven cases, four are stayed, including one that was dismissed as to Credit Suisse and most of the bank defendants
prior to entry of the stay, and in three plaintiffs have filed amended complaints.
7. Customer account matters
Several clients have claimed that a former relationship manager in Switzerland had exceeded his investment
authority in the management of their portfolios, resulting in excessive concentrations of certain exposures and
investment losses. Credit Suisse AG has investigated the claims, as well as transactions among the clients. Credit
Suisse AG filed a criminal complaint against the former relationship manager with the Geneva Prosecutor’s Office
upon which the prosecutor initiated a criminal investigation. Several clients of the former relationship manager also
filed criminal complaints with the Geneva Prosecutor’s Office. In February 2018, the former relationship manager
was sentenced to five years in prison by the Geneva criminal court for fraud, forgery and criminal mismanagement
and ordered to pay damages of approximately USD 130m. On appeal, the Criminal Court of Appeals of Geneva
and, subsequently, the Swiss Federal Supreme Court upheld the main findings of the Geneva criminal court.
Civil lawsuits have been initiated against Credit Suisse AG and/or certain affiliates in various jurisdictions, based on
the findings established in the criminal proceedings against the former relationship manager.
In Singapore, in a civil lawsuit against Credit Suisse Trust Limited, the Singapore International Commercial Court
issued a judgment finding for the plaintiffs and, in September 2023, the court awarded damages of USD 742.73m,
excluding post-judgment interest. This figure does not exclude potential overlap with the Bermuda proceedings
against Credit Suisse Life (Bermuda) Ltd., described below, and the court ordered the parties to ensure that there
shall be no double recovery in relation to this award and the Bermuda proceedings. On appeal from this judgment,
in July 2024, the court ordered some changes to the calculation of damages and directed the parties to agree
adjustments to the award. The court ordered a revised award of USD 461m, including interest and costs, in October
2024.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 94
Note 15 Provisions and contingent liabilities (continued)
In Bermuda, in the civil lawsuit brought against Credit Suisse Life (Bermuda) Ltd., the Supreme Court of Bermuda
issued a judgment finding for the plaintiff and awarded damages of USD 607.35m to the plaintiff. Credit Suisse
Life (Bermuda) Ltd. appealed the decision and in June 2023, the Bermuda Court of Appeal confirmed the award
issued by the Supreme Court of Bermuda and the finding that Credit Suisse Life (Bermuda) Ltd. had breached its
contractual and fiduciary duties, but overturning the finding that Credit Suisse Life (Bermuda) Ltd. had made
fraudulent misrepresentations. In March 2024, the Bermuda Court of Appeal granted a motion by Credit Suisse
Life (Bermuda) Ltd for leave to appeal the judgment to the Judicial Committee of the Privy Council and the notice
of such appeal was filed. The Court of Appeal also ordered that the current stay continue pending determination
of the appeal on the condition that the damages awarded remain within the escrow account plus interest calculated
at the Bermuda statutory rate of 3.5%. In December 2023, USD 75m was released from the escrow account and
paid to plaintiffs.
In Switzerland, civil lawsuits have been commenced against Credit Suisse AG in the Court of First Instance of
Geneva, with statements of claim served in March 2023 and March 2024.
8. Mozambique matter
Credit Suisse was subject to investigations by regulatory and enforcement authorities, as well as civil litigation,
regarding certain Credit Suisse entities’ arrangement of loan financing to Mozambique state enterprises, Proindicus
S.A. and Empresa Moçambicana de Atum S.A. (EMATUM), a distribution to private investors of loan participation
notes (LPN) related to the EMATUM financing in September 2013, and certain Credit Suisse entities’ subsequent
role in arranging the exchange of those LPNs for Eurobonds issued by the Republic of Mozambique. In 2019, three
former Credit Suisse employees pleaded guilty in the EDNY to accepting improper personal benefits in connection
with financing transactions carried out with two Mozambique state enterprises.
In October 2021, Credit Suisse reached settlements with the DOJ, the US Securities and Exchange Commission
(SEC), the UK Financial Conduct Authority (FCA) and FINMA to resolve inquiries by these agencies, including findings
that Credit Suisse failed to appropriately organize and conduct its business with due skill and care, and manage
risks. Credit Suisse Group AG entered into a three-year Deferred Prosecution Agreement (DPA) with the DOJ in
connection with the criminal information charging Credit Suisse Group AG with conspiracy to commit wire fraud
and CSSEL entered into a Plea Agreement and pleaded guilty to one count of conspiracy to violate the US federal
wire fraud statute. Under the terms of the DPA, UBS Group AG (as successor to Credit Suisse Group AG) continued
compliance enhancement and remediation efforts agreed by Credit Suisse, and undertake additional measures as
outlined in the DPA. If the DPA’s conditions are complied with, the charges will be dismissed within six months of
the end of the DPA’s three-year term.
9. ETN-related litigation
XIV litigation:
Since March 2018, three class action complaints were filed in the SDNY on behalf of a putative class
of purchasers of VelocityShares Daily Inverse VIX Short Term Exchange Traded Notes linked to the S&P 500 VIX
Short-Term Futures Index (XIV ETNs). The complaints have been consolidated and asserts claims against Credit
Suisse for violations of various anti-fraud and anti-manipulation provisions of US securities laws arising from a
decline in the value of XIV ETNs in February 2018. On appeal from an order of the SDNY dismissing all claims, the
Second Circuit issued an order that reinstated a portion of the claims. In decisions in March 2023 and March 2024,
the court denied class certification for two of the three classes proposed by plaintiffs and certified the third proposed
class.
UBS Group third quarter 2024 report |
Consolidated financial statements | Notes to the UBS Group AG interim consolidated financial statements (unaudited) 95
Note 15 Provisions and contingent liabilities (continued)
10. Bulgarian former clients matter
In December 2020, the Swiss Office of the Attorney General brought charges against Credit Suisse AG and other
parties concerning the diligence and controls applied to a historical relationship with Bulgarian former clients who
are alleged to have laundered funds through Credit Suisse AG accounts. In June 2022, following a trial, Credit
Suisse AG was convicted in the Swiss Federal Criminal Court of certain historical organizational inadequacies in its
anti-money laundering framework and ordered to pay a fine of CHF 2m. In addition, the court seized certain client
assets in the amount of approximately CHF 12m and ordered Credit Suisse AG to pay a compensatory claim in the
amount of approximately CHF 19m. Credit Suisse AG appealed the decision to the Swiss Federal Court of Appeals.
Following the merger of UBS AG and Credit Suisse AG, UBS AG confirmed the appeal. The trial before the Federal
Court of Appeals occurred in October 2024.
11. Supply chain finance funds
Credit Suisse has received requests for documents and information in connection with inquiries, investigations,
enforcement and other actions relating to the supply chain finance funds (SCFFs) matter by FINMA, the FCA and
other regulatory and governmental agencies. The Luxembourg Commission de Surveillance du Secteur Financier is
reviewing the matter and has commissioned a report from a third party. Credit Suisse is cooperating with these
authorities.
In February 2023, FINMA announced the conclusion of its enforcement proceedings against Credit Suisse in
connection with the SCFFs matter. In its order, FINMA reported that Credit Suisse had seriously breached applicable
Swiss supervisory laws in this context with regard to risk management and appropriate operational structures. While
FINMA recognized that Credit Suisse had already taken extensive organizational measures to strengthen its
governance and control processes, FINMA ordered certain additional remedial measures. These include a
requirement that Credit Suisse documents the responsibilities of approximately 600 of its highest-ranking managers.
This measure has been made applicable to UBS Group. FINMA has also separately opened four enforcement
proceedings against former managers of Credit Suisse.
In May 2023, FINMA opened an enforcement proceeding against Credit Suisse in order to confirm compliance with
supervisory requirements in response to inquiries from FINMA’s enforcement division in the SCFFs matter.
The Attorney General of the Canton of Zurich has initiated a criminal procedure in connection with the SCFFs matter
and several fund investors have joined the procedure as interested parties. Certain former and active Credit Suisse
employees, among others, have been named as accused persons, but Credit Suisse itself was not made a party to
the proceeding.
Certain civil actions have been filed by fund investors and other parties against Credit Suisse and/or certain officers
and directors in various jurisdictions, which make allegations including mis-selling and breaches of duties of care,
diligence and other fiduciary duties. In June 2024, the Credit Suisse SCFFs made a voluntary offer to the SCFFs
investors to redeem all outstanding fund units. The offer expired on 31 July 2024, and fund units representing
around 92% of the SCFFs’ net asset value were tendered in the offer and accepted. Fund units accepted in the
offer were redeemed at 90% of the net asset value determined on 25 February 2021, net of any payments made
by the relevant fund to the fund investors since that time. Investors whose units were redeemed released any claims
they may have had against the SCFFs, Credit Suisse or UBS. The offer was funded by UBS through the purchase of
units of feeder sub-funds.
UBS Group third quarter 2024 report |
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Note 15 Provisions and contingent liabilities (continued)
12. Archegos
Credit Suisse and UBS have received requests for documents and information in connection with inquiries,
investigations and/or actions relating to their relationships with Archegos Capital Management (Archegos),
including from FINMA (assisted by a third party appointed by FINMA), the DOJ, the SEC, the US Federal Reserve,
the US Commodity Futures Trading Commission (CFTC), the US Senate Banking Committee, the Prudential
Regulation Authority (PRA), the FCA, COMCO, the Hong Kong Competition Commission and other regulatory and
governmental agencies. UBS is cooperating with the authorities in these matters. In July 2023, CSI and CSSEL
entered into a settlement agreement with the PRA providing for the resolution of the PRA’s investigation. Also in
July 2023, FINMA issued a decree ordering remedial measures and the Federal Reserve Board issued an Order to
Cease and Desist. Under the terms of the order, Credit Suisse paid a civil money penalty and agreed to undertake
certain remedial measures relating to counterparty credit risk management, liquidity risk management and non-
financial risk management, as well as enhancements to board oversight and governance. UBS Group, as the legal
successor to Credit Suisse Group AG, is a party to the FINMA decree and Federal Reserve Board Cease and Desist
Order.
Civil actions relating to Credit Suisse’s relationship with Archegos have been filed against Credit Suisse and/or
certain officers and directors, including claims for breaches of fiduciary duties.
13. Credit Suisse financial disclosures
Credit Suisse Group AG and certain directors, officers and executives have been named in securities class action
complaints pending in the SDNY. These complaints, filed on behalf of purchasers of Credit Suisse shares, additional
tier 1 capital notes, and other securities in 2023, allege that defendants made misleading statements regarding:
(i) customer outflows in late 2022; (ii) the adequacy of Credit Suisse’s financial reporting controls; and (iii) the
adequacy of Credit Suisse’s risk management processes, and include allegations relating to Credit Suisse
Group AG’s merger with UBS Group AG. Many of the actions have been consolidated, and a motion to dismiss has
been filed and remains pending. One additional action, filed in October 2023, has been stayed pending a
determination on whether it should be consolidated with the earlier actions.
Credit Suisse has received requests for documents and information from regulatory and governmental agencies in
connection with inquiries, investigations and/or actions relating to these matters, as well as for other statements
regarding Credit Suisse’s financial condition, including from the SEC, the DOJ and FINMA. UBS is cooperating with
the authorities in these matters.
14. Merger-related litigation
Certain Credit Suisse Group AG affiliates and certain directors, officers and executives have been named in class
action complaints pending in the SDNY. One complaint, brought on behalf of Credit Suisse shareholders, alleges
breaches of fiduciary duty under Swiss law and civil RICO claims under United States federal law. In February 2024,
the court granted defendants’ motions to dismiss the civil RICO claims and conditionally dismissed the Swiss law
claims pending defendants’ acceptance of jurisdiction in Switzerland. In March 2024, having received consents to
Swiss jurisdiction from all defendants served with the complaint, the court dismissed the Swiss law claims against
those defendants. Additional complaints, brought on behalf of holders of Credit Suisse additional tier 1 capital
notes (AT1 noteholders) allege breaches of fiduciary duty under Swiss law, arising from a series of scandals and
misconduct, which led to Credit Suisse Group AG’s merger with UBS Group AG, causing losses to shareholders and
AT1 noteholders. Motions to dismiss these complaints were granted in March 2024 and September 2024 on the
basis that Switzerland is the most appropriate forum for litigation. Plaintiff in one of these cases has appealed the
dismissal.
Note 16 Events after the reporting period
In October 2024, UBS entered into an agreement to sell to American Express Swiss Holdings GmbH (American
Express) its 50% interest in Swisscard AECS GmbH (Swisscard), a joint venture between UBS and American Express
in Switzerland. In addition, UBS and Swisscard entered into an agreement to transition the Credit Suisse-branded
card portfolios to UBS. Both transactions are subject to certain closing conditions and are not expected to have a
material impact for UBS.
UBS Group third quarter 2024 report |
Appendix 97
Appendix
Alternative performance measures
Alternative performance measures
An alternative performance measure (an APM) is a financial measure of historical or future financial performance,
financial position or cash flows other than a financial measure defined or specified in the applicable recognized
accounting standards or in other applicable regulations. A number of APMs are reported in the discussion of the
financial and operating performance of the external reports (annual, quarterly and other reports). APMs are used
to provide a more complete picture of operating performance and to reflect management’s view of the fundamental
drivers of the business results. A definition of each APM, the method used to calculate it and the information
content are presented in alphabetical order in the table below. These APMs may qualify as non-GAAP measures as
defined by US Securities and Exchange Commission (SEC) regulations.
APM label
Calculation
Information content
Cost / income ratio (%)
Calculated as operating expenses divided by total
revenues.
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues.
Fee-generating assets (USD)
– Global Wealth Management
Calculated as the sum of discretionary and
nondiscretionary wealth management portfolios
(mandate volume) and assets where generated
revenues are predominantly of a recurring nature, i.e.
mainly investment, mutual, hedge and private-market
funds where we have a distribution agreement,
including client commitments into closed-ended
private-market funds from the date that recurring
fees are charged. Assets related to our Global
Financial Intermediaries business are excluded, as are
assets of sanctioned clients.
This measure provides information about the volume
of invested assets that create a revenue stream,
whether as a result of the nature of the contractual
relationship with clients or through the fee structure
of the asset. An increase in the level of fee-generating
assets results in an increase in the associated revenue
stream. Assets of sanctioned clients are excluded from
fee-generating assets.
Fee-pool-comparable revenues (USD)
– the Investment Bank
Calculated as the total of revenues from: merger-and-
acquisition-related transactions; Equity Capital
Markets, excluding derivatives; Leveraged Capital
Markets, excluding the impact of mark-to-market
movements on loan portfolios; and Debt Capital
Markets, excluding revenues related to debt
underwriting of UBS instruments.
This measure provides information about the amount
of revenues in the Investment Bank that are
comparable with the relevant global fee pools.
Gross margin on invested assets (bps)
– Asset Management
Calculated as total revenues (annualized as applicable)
divided by average invested assets.
This measure provides information about the total
revenues of the business in relation to invested assets.
Impaired loan portfolio as a percentage
of total loan portfolio, gross (%)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as impaired loan portfolio divided by total
gross loan portfolio.
This measure provides information about the
proportion of impaired loan portfolio in the total gross
loan portfolio.
Integration-related expenses (USD)
Generally include costs of internal staff and
contractors substantially dedicated to integration
activities, retention awards, redundancy costs,
incremental expenses from the shortening of useful
lives of property, equipment and software, and
impairment charges relating to these assets.
Classification as integration-related expenses does not
affect the timing of recognition and measurement of
those expenses or the presentation thereof in the
income statement. Integration-related expenses
incurred by Credit Suisse also included expenses
associated with restructuring programs that existed
prior to the acquisition.
This measure provides information about expenses
that are temporary, incremental and directly related to
the integration of Credit Suisse into UBS.
Invested assets (USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management
Calculated as the sum of managed fund assets,
managed institutional assets, discretionary and
advisory wealth management portfolios, fiduciary
deposits, time deposits, savings accounts, and wealth
management securities or brokerage accounts.
This measure provides information about the volume
of client assets managed by or deposited with UBS for
investment purposes.
UBS Group third quarter 2024 report |
Appendix 98
APM label
Calculation
Information content
Net interest margin (bps)
– Personal & Corporate Banking
Calculated as net interest income (annualized as
applicable) divided by average loans.
This measure provides information about the
profitability of the business by calculating the
difference between the price charged for lending and
the cost of funding, relative to loan value.
Net new assets (USD)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period, plus interest and dividends.
Excluded from the calculation are movements due to
market performance, foreign exchange translation,
fees, and the effects on invested assets of strategic
decisions by UBS to exit markets or services.
This measure provides information about the
development of invested assets during a specific
period as a result of net new asset flows, plus the
effect of interest and dividends.
Net new assets growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable),
plus interest and dividends, divided by total invested
assets at the beginning of the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new asset flows.
Net new fee-generating assets (USD)
– Global Wealth Management
Calculated as the net amount of fee-generating asset
inflows and outflows, including dividend and interest
inflows into mandates and outflows from mandate
fees paid by clients during a specific period. Excluded
from the calculation are the effects on fee-generating
assets of strategic decisions by UBS to exit markets or
services.
This measure provides information about the
development of fee-generating assets during a
specific period as a result of net flows, excluding
movements due to market performance and foreign
exchange translation, as well as the effects on fee-
generating assets of strategic decisions by UBS to exit
markets or services.
Net new money (USD)
– Global Wealth Management,
Asset Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period. Excluded from the calculation
are movements due to market performance, foreign
exchange translation, dividends, interest and fees, as
well as the effects on invested assets of strategic
decisions by UBS to exit markets or services. Net new
money is not measured for Personal & Corporate
Banking.
This measure provides information about the
development of invested assets during a specific
period as a result of net new money flows.
Net new money growth rate (%)
– Global Wealth Management
Calculated as the net amount of inflows and outflows
of invested assets (as defined in UBS policy) recorded
during a specific period (annualized as applicable)
divided by total invested assets at the beginning of
the period.
This measure provides information about the growth
of invested assets during a specific period as a result
of net new money flows.
Net profit growth (%)
Calculated as the change in net profit attributable to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period.
This measure provides information about profit
growth since the comparison period.
Operating expenses (underlying)
(USD)
Calculated by adjusting operating expenses as
reported in accordance with IFRS Accounting
Standards for items that management believes are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating expenses, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Operating profit / (loss) before tax
(underlying) (USD)
Calculated by adjusting operating profit / (loss) before
tax as reported in accordance with IFRS Accounting
Standards for items that management believes are
not representative of the underlying performance of
the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of operating profit / (loss) before tax, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
Pre-tax profit growth (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period.
This measure provides information about pre-tax
profit growth since the comparison period.
UBS Group third quarter 2024 report |
Appendix 99
APM label
Calculation
Information content
Pre-tax profit growth (underlying) (%)
– Global Wealth Management,
Personal & Corporate Banking,
Asset Management,
the Investment Bank
Calculated as the change in net profit before tax
attributable to shareholders from continuing
operations between current and comparison periods
divided by net profit before tax attributable to
shareholders from continuing operations of the
comparison period. Net profit before tax attributable
to shareholders from continuing operations excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about pre-tax
profit growth since the comparison period, while
excluding items that management believes are not
representative of the underlying performance of the
businesses.
Recurring net fee income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of fees for services provided on
an ongoing basis, such as portfolio management fees,
asset-based investment fund fees and custody fees,
which are generated on client assets, and
administrative fees for accounts.
This measure provides information about the amount
of recurring net fee income.
Return on attributed equity
1
Calculated as annualized business division operating
profit before tax divided by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity.
Return on common equity tier 1
capital
1
Calculated as annualized net profit attributable to
shareholders divided by average common equity tier 1
capital.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital.
Return on equity
1
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders.
This measure provides information about the
profitability of the business in relation to equity.
Return on leverage ratio denominator,
gross
1
Calculated as annualized total revenues divided by
average leverage ratio denominator.
This measure provides information about the revenues
of the business in relation to the leverage ratio
denominator.
Return on tangible equity
1
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders less average goodwill and intangible
assets.
This measure provides information about the
profitability of the business in relation to tangible
equity.
Tangible book value per share
(USD)
Calculated as equity attributable to shareholders less
goodwill and intangible assets divided by the number
of shares outstanding.
This measure provides information about tangible net
assets on a per-share basis.
Total book value per share
(USD)
Calculated as equity attributable to shareholders
divided by the number of shares outstanding.
This measure provides information about net assets
on a per-share basis.
Total revenues (underlying)
(USD)
Calculated by adjusting total revenues as reported in
accordance with IFRS Accounting Standards for items
that management believes are not representative of
the underlying performance of the businesses.
›
Refer to the “Group performance” section of this
report for more information
This measure provides information about the amount
of total revenues, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Transaction-based income
(USD and CHF)
– Global Wealth Management,
Personal & Corporate Banking
Calculated as the total of the non-recurring portion of
net fee and commission income, mainly composed of
brokerage and transaction-based investment fund
fees, and credit card fees, as well as fees for payment
and foreign-exchange transactions, together with
other net income from financial instruments
measured at fair value through profit or loss.
This measure provides information about the amount
of the non-recurring portion of net fee and
commission income, together with other net income
from financial instruments measured at fair value
through profit or loss.
Underlying cost / income ratio (%)
Calculated as underlying operating expenses (as
defined above) divided by underlying total revenues
(as defined above).
This measure provides information about the
efficiency of the business by comparing operating
expenses with total revenues, while excluding items
that management believes are not representative of
the underlying performance of the businesses.
Underlying net profit growth (%)
Calculated as the change in net profit attributable to
shareholders from continuing operations between
current and comparison periods divided by net profit
attributable to shareholders from continuing
operations of the comparison period. Net profit
attributable to shareholders from continuing
operations excludes items that management believes
are not representative of the underlying performance
of the businesses and also excludes related tax
impact.
This measure provides information about profit
growth since the comparison period, while excluding
items that management believes are not
representative of the underlying performance of the
businesses.
UBS Group third quarter 2024 report |
Appendix 100
APM label
Calculation
Information content
Underlying return on attributed equity
1
(%)
Calculated as annualized underlying business division
operating profit before tax (as defined above) divided
by average attributed equity.
This measure provides information about the
profitability of the business divisions in relation to
attributed equity, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on common equity
tier 1 capital
1
Calculated as annualized net profit attributable to
shareholders divided by average common equity tier 1
capital. Net profit attributable to shareholders
excludes items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to common
equity tier 1 capital, while excluding items that
management believes are not representative of the
underlying performance of the businesses.
Underlying return on tangible equity
1
(%)
Calculated as annualized net profit attributable to
shareholders divided by average equity attributable to
shareholders less average goodwill and intangible
assets. Net profit attributable to shareholders excludes
items that management believes are not
representative of the underlying performance of the
businesses and also excludes related tax impact.
This measure provides information about the
profitability of the business in relation to tangible
equity, while excluding items that management
believes are not representative of the underlying
performance of the businesses.
1
Profit or loss information for each of the third quarter of 2024, the second quarter of 2024, the fourth quarter of 2023 and the third quarter of 2023 is based entirely on consolidated data following the acquisition of
the Credit Suisse Group and for the purpose of the calculation of return measures has been annualized by multiplying such by four. Profit or loss information for the first nine months of 2024 is based entirely on
consolidated data following the acquisition of the Credit Suisse Group and for the purpose of the calculation of return measures has been annualized by dividing such by three and then multiplying by four. Profit or loss
information for the first nine months of 2023 includes four months (June to September 2023) of post -acquisition consolidated data and five months of UBS Group data only (January to May 2023) and for the purpose
of the calculation of return measures has been annualized by dividing such by three and then multiplying by four.
This is a general list of the APMs used in our financial reporting. Not all of the APMs listed above may appear in
this particular report.
Information related to underlying return on common equity tier 1 (CET1) capital and underlying return on tangible
equity (%)
As of or for the quarter ended
As of or year-to-date
USD m, except where indicated
30.9.24
30.6.24
31.12.23
1
30.9.23
1
30.9.24
30.9.23
1
Underlying operating profit / (loss) before tax
Underlying tax expense / (benefit)
Net profit / (loss) attributable to non-controlling interests
Underlying net profit / (loss) attributable to shareholders
Underlying net profit / (loss) attributable to shareholders, annualized
Tangible equity
Average tangible equity
CET1 capital
Average CET1 capital
Underlying return on tangible equity (%)
Underlying return on common equity tier 1 capital (%)
1 Comparative-period information has been revised. Refer to “Note 2 Accounting for the acquisition of the Credit Suisse Group” in the “Consolidated financial statements” section of this report for more information.
UBS Group third quarter 2024 report |
Appendix 101
Abbreviations frequently used in our financial reports
A
ABS asset-backed securities
AG Aktiengesellschaft
AGM Annual General Meeting of
shareholders
AI artificial intelligence
A-IRB advanced internal ratings-
based
AIV alternative investment
vehicle
ALCO Asset and Liability
Committee
AMA advanced measurement
approach
AML anti-money laundering
AoA Articles of Association
APM alternative performance
measure
ARR alternative reference rate
ARS auction rate securities
ASF available stable funding
AT1 additional tier 1
AuM assets under management
B
BCBS Basel Committee on
Banking Supervision
BIS Bank for International
Settlements
BoD Board of Directors
C
CAO Capital Adequacy
Ordinance
CCAR Comprehensive Capital
Analysis and Review
CCF credit conversion factor
CCP central counterparty
CCR counterparty credit risk
CCRC Corporate Culture and
Responsibility Committee
CDS credit default swap
CEA Commodity Exchange Act
CEO Chief Executive Officer
CET1 common equity tier 1
CFO Chief Financial Officer
CGU cash-generating unit
CHF Swiss franc
CIO Chief Investment Office
C&ORC Compliance & Operational
Risk Control
CRM credit risk mitigation (credit
risk) or comprehensive risk
measure (market risk)
CST combined stress test
CUSIP Committee on Uniform
Security Identification
Procedures
CVA credit valuation adjustment
D
DBO defined benefit obligation
DCCP Deferred Contingent
Capital Plan
DE&I diversity, equity and
inclusion
DFAST Dodd–Frank Act Stress Test
DM discount margin
DOJ US Department of Justice
DTA deferred tax asset
DVA debit valuation adjustment
E
EAD exposure at default
EB Executive Board
EC European Commission
ECB European Central Bank
ECL expected credit loss
EGM Extraordinary General
Meeting of shareholders
EIR effective interest rate
EL expected loss
EMEA Europe, Middle East and
Africa
EOP Equity Ownership Plan
EPS earnings per share
ESG environmental, social and
governance
ESR environmental and social
risk
ETD exchange-traded derivatives
ETF exchange-traded fund
EU European Union
EUR euro
EURIBOR Euro Interbank Offered Rate
EVE economic value of equity
EY Ernst & Young Ltd
F
FA financial advisor
FCA UK Financial Conduct
Authority
FDIC Federal Deposit Insurance
Corporation
FINMA Swiss Financial Market
Supervisory Authority
FMIA Swiss Financial Market
Infrastructure Act
FSB Financial Stability Board
FTA Swiss Federal Tax
Administration
FVA funding valuation
adjustment
FVOCI fair value through other
comprehensive income
FVTPL fair value through profit or
loss
FX foreign exchange
G
GAAP generally accepted
accounting principles
GBP pound sterling
GCRG Group Compliance,
Regulatory & Governance
GDP gross domestic product
GEB Group Executive Board
GHG greenhouse gas
GIA Group Internal Audit
GRI Global Reporting Initiative
G-SIB global systemically
important bank
H
HQLA
high-quality liquid assets
I
IAS International Accounting
Standards
IASB International Accounting
Standards Board
IBOR interbank offered rate
IFRIC International Financial
Reporting Interpretations
Committee
IFRS accounting standards
Accounting issued by the IASB
Standards
IRB internal ratings-based
IRRBB interest rate risk in the
banking book
ISDA International Swaps and
Derivatives Association
ISIN International Securities
Identification Number
UBS Group third quarter 2024 report |
Appendix 102
Abbreviations frequently used in our financial reports (continued)
K
KRT Key Risk Taker
L
LAS liquidity-adjusted stress
LCR liquidity coverage ratio
LGD loss given default
LIBOR London Interbank Offered
Rate
LLC limited liability company
LoD lines of defense
LRD leverage ratio denominator
LTIP Long-Term Incentive Plan
LTV loan-to-value
M
M&A mergers and acquisitions
MRT Material Risk Taker
N
NII net interest income
NSFR net stable funding ratio
NYSE New York Stock Exchange
O
OCA own credit adjustment
OCI other comprehensive
income
OECD Organisation for Economic
Co-operation and
Development
OTC over-the-counter
P
PCI purchased credit impaired
PD probability of default
PIT point in time
P&L profit or loss
PPA purchase price allocation
Q
QCCP qualifying central
counterparty
R
RBC risk-based capital
RbM risk-based monitoring
REIT real estate investment trust
RMBS residential mortgage-
backed securities
RniV risks not in VaR
RoCET1 return on CET1 capital
RoU right-of-use
rTSR relative total shareholder
return
RWA risk-weighted assets
S
SA standardized approach or
société anonyme
SA-CCR standardized approach for
counterparty credit risk
SAR Special Administrative
Region of the People’s
Republic of China
SDG Sustainable Development
Goal
SEC US Securities and Exchange
Commission
SFT securities financing
transaction
SI sustainable investing or
sustainable investment
SIBOR Singapore Interbank
Offered Rate
SICR significant increase in credit
risk
SIX SIX Swiss Exchange
SME small and medium-sized
entities
SMF Senior Management
Function
SNB Swiss National Bank
SOR Singapore Swap Offer Rate
SPPI solely payments of principal
and interest
SRB systemically relevant bank
SRM specific risk measure
SVaR stressed value-at-risk
T
TBTF too big to fail
TCFD Task Force on Climate-
related Financial Disclosures
TIBOR Tokyo Interbank Offered
Rate
TLAC total loss-absorbing capacity
TTC through the cycle
U
USD US dollar
V
VaR value-at-risk
VAT
value added tax
This is a general list of the abbreviations frequently used in our financial reporting. Not all of the listed abbreviations
may appear in this particular report.
UBS Group third quarter 2024 report |
Appendix 103
Information sources
Reporting publications
Annual publications
UBS Group Annual Report
: Published in English, this report provides descriptions of: the Group strategy and
performance; the strategy and performance of the business divisions and Group Items; risk, treasury and capital
management; corporate governance; the compensation framework, including information about compensation for
the Board of Directors and the Group Executive Board members; and financial information, including the financial
statements.
“Auszug aus dem Geschäftsbericht
”: This publication provides a German translation of selected sections of the UBS
Group Annual Report.
Compensation Report
: This report discusses the compensation framework and provides information about
compensation for the Board of Directors and the Group Executive Board members. It is available in English and
German (
“Vergütungsbericht
”) and represents a component of the UBS Group Annual Report.
Sustainability Report
: Published in English, the Sustainability Report provides disclosures on environmental, social
and governance topics related to the UBS Group. It also provides certain disclosures related to diversity, equity and
inclusion.
Quarterly publications
Quarterly financial report
: This report provides an update on performance and strategy (where applicable) for the
respective quarter. It is available in English.
The annual and quarterly publications are available in .pdf and online formats at
ubs.com/investors
, under “Financial
information”. Starting with the Annual Report 2022, printed copies, in any language, of the aforementioned annual
publications are no longer provided.
Other information
Website
The “Investor Relations” website at
ubs.com/investors
news releases; financial information, including results-related filings with the US Securities and Exchange
Commission (the SEC); information for shareholders, including UBS share price charts, as well as data and dividend
information, and for bondholders; the corporate calendar; and presentations by management for investors and
financial analysts. Information is available online in English, with some information also available in German.
Results presentations
Quarterly results presentations are webcast live. Recordings of most presentations can be downloaded from
ubs.com/presentations
.
Messaging service
Email alerts to news about UBS can be subscribed for under “UBS News Alert” at
ubs.com/global/en/investor-
relations/contact/investor-services.html
. Messages are sent in English, German, French or Italian, with an option to
select theme preferences for such alerts.
Form 20-F and other submissions to the US Securities and Exchange Commission
UBS files periodic reports with and submits other information to the SEC. Principal among these filings is the annual
report on Form 20-F, filed pursuant to the US Securities Exchange Act of 1934. The filing of Form 20-F is structured
as a wraparound document. Most sections of the filing can be satisfied by referring to the UBS Group AG Annual
Report. However, there is a small amount of additional information in Form 20-F that is not presented elsewhere
and is particularly targeted at readers in the US. Readers are encouraged to refer to this additional disclosure. Any
document that filed with the SEC is available on the SEC’s website:
sec.gov
. Refer to
ubs.com/investors
information.
UBS Group third quarter 2024 report |
Appendix 104
Cautionary statement regarding forward-looking statements |
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, the global economy may be negatively affected by
shifting political circumstances, including as a result of elections, increased tension between world powers, growing conflicts in the Middle East, as well as the
continuing Russia–Ukraine war. 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 further 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.
Rounding |
disclosed in text and tables are calculated on the basis of unrounded figures. Absolute changes between reporting periods disclosed in the text, which can be
derived from numbers presented in related tables, are calculated on a rounded basis.
Tables |
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Values
that are zero on a rounded basis can be either negative or positive on an actual basis.
Websites |
of any such websites into this report.
UBS Group AG
PO Box
CH-8098 Zurich
ubs.com
This Form 6-K is hereby incorporated by reference into (1) each of the registration statements on Form F-3
(Registration Numbers 333-263376 and 333-278934), and on Form S-8 (Registration Numbers 333-200634; 333-
200635; 333-200641; 333-200665; 333-215254; 333-215255; 333-228653; 333-230312; 333-249143 and 333-
272975), and into each prospectus outstanding under any of the foregoing registration statements, (2) any outstanding
offering circular or similar document issued or authorized by UBS AG that incorporates by reference any Forms 6-
K of UBS AG that are incorporated into its registration statements filed with the SEC, and (3) the base prospectus of
Corporate Asset Backed Corporation (“CABCO”) dated June 23, 2004 (Registration Number 333-111572), the Form
8-K of CABCO filed and dated June 23, 2004 (SEC File Number 001-13444), and the Prospectus Supplements
relating to the CABCO Series 2004-101 Trust dated May 10, 2004 and May 17, 2004 (Registration Number 033-
91744 and 033-91744-05).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this
report to be signed on their behalf by the undersigned, thereunto duly authorized.
UBS Group AG
By: /s/ Sergio Ermotti
___
Name: Sergio Ermotti
Title: Group Chief Executive Officer
By: /s/ Todd Tuckner
_
Name: Todd Tuckner
Title: Group Chief Financial Officer
By: /s/ Steffen Henrich
____________
Name: Steffen Henrich
Title: Group Controller
UBS AG
By: /s/ Sergio Ermotti
_
Name: Sergio Ermotti
Title: President of the Executive Board
By: /s/ Todd Tuckner
_
Name: Todd Tuckner
Title: Chief Financial Officer
By: /s/ Steffen Henrich
_____________
Name: Steffen Henrich
Title: Controller
Date: October 30, 2024