Slide 1: Fourth quarter 2023 Results and investor update
Fourth quarter 2023 Results and investor update 6 February 2024
Slide 2: Important information
Important information Forward Looking Statements: This presentation contains statements that constitute “Forward looking statements,” including but not limited to management’s outlook for UBS’s financial performance, statements relating to the anticipated effect of transactions and strategic initiat
Slide 3: Agenda
Agenda 4Q23 results Investor update Q&A Sergio P. Ermotti, Group CEO Todd Tuckner, Group CFO 2
Slide 4: Key messages
Key messages Completed first phase of strategic integration, stabilized the franchise with 77bn net new asset inflows and achieved underlying profitability since the acquisition with ~4bn gross cost saves in 2023 Maintained strong capital position with CET1 capital ratio of 14.5%; USD 0.70 dividend
Slide 5: Stabilized Credit Suisse franchise and delivered on 2023 financial priorities
Stabilized Credit Suisse franchise and delivered on 2023 financial priorities Franchise Funding cost Cost base Balance sheet Capital stabilization and efficiencies right-sizing optimization strength client win-back 77bn ~550m ~4bn (12bn) 14.5% Net new assets1,2, Gross funding cost Annualized exit ra
Slide 6: 4Q23 underlying PBT of 0.6bn
4Q23 underlying PBT of 0.6bn Profits 4Q23 m Underlying 944 (751m) 592m PBT PBT, underlying (322) 914 (508) (1.4%) 4.7% 103 592 RoCET1 RoCET1, underlying (318) (107) FY23 472 29.9bn 4.0bn (279) PBT PBT, underlying (1,779) (751) 29.0bn 0.1bn 3Q23 Revenues CLE Opex 4Q23 Pull to par Losses Integration-
Slide 7: 4Q23 underlying total revenues 10.4bn, down 3% QoQ
4Q23 underlying total revenues 10.4bn, down 3% QoQ Total revenues m 944 944m Pull to par and other PPA effects not (3%) 10,855 reflected in underlying in 4Q1 10,737 (508) 50 (141) (92) (39) 91 10,419 ~700m (187) Pull to par and other PPA effects expected in 1Q241,2 (508m) Losses related to investmen
Slide 8: 4Q23 underlying operating expenses 9.7bn, up 1% QoQ
4Q23 underlying operating expenses 9.7bn, up 1% QoQ Operating expenses m 1,779 11,470 17k Headcount reduction vs. Dec-22 pro forma2 1% 210 27 82 9,583 9,690 (42) (111) (58) ~1bn Includes 60m charge related to the FDIC special Integration-related expenses assessment, higher litigation expected in 1Q2
Slide 9: Global Wealth Management
Global Wealth Management Underlying Reported Underlying 4Q23 vs. 3Q23 USD m, except where indicated 4Q23 3Q23 QoQ 4Q23 3Q23 QoQ Total revenues 5,351 5,492 (3%) 5,444 5,810 (6%) PBT 778m, excluding 490m of integration-related Net interest income 1,611 1,648 (2%) 1,872 1,946 (4%) expenses, 284m accret
Slide 10: Personal & Corporate Banking (CHF)
Personal & Corporate Banking (CHF) Underlying Reported Underlying 4Q23 vs. 3Q23 CHF m, except where indicated 4Q23 3Q23 QoQ 4Q23 3Q23 QoQ Total revenues 2,042 2,159 (5%) 2,136 2,556 (16%) PBT 794m, excluding 362m accretion of PPA, 267m losses Net interest income 1,179 1,189 (1%) 1,505 1,550 (3%) rel
Slide 11: Asset Management
Asset Management Underlying Reported Underlying 4Q23 vs. 3Q23 USD m, except where indicated 4Q23 3Q23 QoQ 4Q23 3Q23 QoQ Total revenues 805 755 +7% 805 755 +7% Total revenues 805m, +7% driven by higher performance Net Management fees 725 737 (2%) 725 737 (2%) fees and 27m net gains on disposals Perfo
Slide 12: Investment Bank
Investment Bank Underlying Reported Underlying 4Q23 vs. 4Q22 USD m, except where indicated 4Q23 3Q23 QoQ YoY 4Q23 4Q22 Total revenues 1,861 1,900 (2%) +11% 2,139 1,682 Global Banking revenues +69% Global Banking 561 447 +26% +69% 836 331 − Advisory +11%, outperforming the global M&A fee pool Advisor
Slide 13: Non-core and Legacy
Non-core and Legacy Underlying Reported Underlying 4Q23 vs. 3Q23 PBT (977m), excluding 749m of integration-related USD m, except where indicated 4Q23 3Q23 QoQ 4Q23 3Q23 QoQ expenses Total revenues 162 350 (54%) 162 350 (54%) Total revenues driven by net gains from position marks and unwinds Credit l
Slide 14: Maintained capital strength with CET1 ratio comfortably above guidance
Maintained capital strength with CET1 ratio comfortably above guidance CET1 capital ratio CET1, bn 78.6 (0.8) (0.8) 0.7 n/a 1.6 79.3 14.5% 0.4% CET1 capital ratio 14.5% Guidance: ~14% 14.4% (0.1%) 0.1% (0.2%) (0.1%) Includes +1.6bn impact 4.7% on CET1 capital, offset RWA excl. currency CET1 leverage
Slide 15: Investor update
Investor update 36 UBS
Slide 16: Attractive business model with unique global asset gathering businesses
Attractive business model with unique global asset gathering businesses Revenue mix vs North American and European GSIBs UBS1 North American GSIB average2 European GSIB average 60% 26% 11% WM + AM WM + AM WM + AM Wealth and Asset Management Retail and Commercial Banking Investment Banking Based on 2
Slide 17: Accelerating our strategy by enhancing client franchises, capabilities and scale
Accelerating our strategy by enhancing client franchises, capabilities and scale Global Wealth Personal & Asset Investment Management Corporate Banking Management Bank − 3.8trn invested assets with − Leading bank in Switzerland − 1.6trn invested assets − Reinforcing and accelerating UBS unrivaled ge
Slide 18: Executing to capture long-term growth and value creation
Executing to capture long-term growth and value creation Capturing sustainable growth Restructuring, integrating and long-term value creation and optimizing Stabilizing, restructuring (2024 – 2026) and planning (2023) P Defined operating model and achieved Successfully integrate and restructure Deli
Slide 19: Restructuring and delivering on integration milestones by end-2026
Restructuring and delivering on integration milestones by end-2026 Illustrative key milestone timeline (examples) Work Ongoing Completion date Merge UBS AG and CS AG Merge Swiss bank entities1 Key legal entity transactions Establish single US IHC GWM Singapore, HK, Lux GWM Switzerland and GWM client
Slide 20: Building capacity to invest and achieve <70% cost/income ratio by end-2026
Building capacity to invest and achieve <70% cost/income ratio by end-2026 ~13bn gross cost saves to fund reinvestments Investment priorities ~13bn1 Improving client experience Target: <70% underlying cost income ratio by 2026 exit rate Products, capabilities Digital delivery and and coverage leadin
Slide 21: Optimizing financial resources to enable sustainable growth and higher returns
Optimizing financial resources to enable sustainable growth and higher returns Non-core and Legacy wind-down Group underlying revenues / RWA Pre-impact from B3f and model updates >6bn Capital release by 2026 year-end1 11% ~10% Increased resource discipline in core businesses 8% Reduction of low-retu
Slide 22: GWM – Building on our unrivaled global scale and footprint
GWM – Building on our unrivaled global scale and footprint Invested assets, USD bn +72% Medium-term priorities 385 663 Switzerland: Staying close to clients while growing the platform #1 20221 2023 − Capitalize on win-back opportunity and gain share of wallet − Leverage enhanced product offering and
Slide 23: GWM – Ambition to surpass 5trn of invested assets over next five years
GWM – Ambition to surpass 5trn of invested assets over next five years Invested assets trillion Ambitions Progress on win-back strategy Capture growth and realizing benefits ~100bn counterbalanced by NNA per annum through 2025 as we outflows from optimize for greater capital efficiency, balance shee
Slide 24: P&C – #1 bank in Switzerland with unparalleled reach and strong returns
P&C – #1 bank in Switzerland with unparalleled reach and strong returns Total revenues3 PBT3 Ambition >90% 2H23 2H23 of large Swiss corporations served1 Personal Banking Non-NII >1/3 NII of Swiss Households served2 Corporate & Institutional Clients <50% Underlying cost / income ratio Medium-term pri
Slide 25: AM – Improved positioning across key asset classes and growth markets
AM – Improved positioning across key asset classes and growth markets Invested assets Asset class split trillion % of invested assets excl. associates Ambition Alternatives +52% 1.6 18% in Credit Passive alternatives 1.1 0.4 Suisse vs. 13% Active pre-acquisition 1.2 2022 2023 Traditional <70% Underl
Slide 26: IB – Enhancing client offering while maintaining capital discipline
IB – Enhancing client offering while maintaining capital discipline Revenue mix by region Revenue mix by business Ambition 2022 2026 2022 2026 Americas Global Banking EMEA FX, Rates and Credit APAC Equities ~15% Underlying RoAE, through the cycle Medium-term priorities Clients Integration Productivi
Slide 27: Non-core and Legacy – driving lower costs and efficient capital release
Non-core and Legacy – driving lower costs and efficient capital release Clear mandate Unwind expected to be substantially complete by year-end 2026 Underlying operating expenses Ambitions bn Reduce costs 4.9 4.5 PBT: ~(1.0bn) <1.0 3Q23 4Q23 2026 Release capital annualized annualized exit rate Total
Slide 28: Balancing resiliency, growth and attractive capital returns
Balancing resiliency, growth and attractive capital returns Balance sheet Sustainable Share 1 for all seasons 2 growth 3 Dividends 4 buybacks − ~14% CET1 capital ratio − Ample capacity for return- − USD 0.70 ordinary dividend per − Planning for up to USD 1bn of accretive growth share (+27% YoY) to b
Slide 29: Rebuilding profitability while restructuring for sustainable growth
Rebuilding profitability while restructuring for sustainable growth Group underlying return on CET1 capital Illustrative <70% underlying cost-income ratio ~18% ~15% Double digit Mid-to-high single digit Mid-single digit 3% 2H23 2024 2025 2026 2026 exit rate 2028, reported 28
Slide 30: Investor update: Financials
Investor update: Financials 29
Slide 31: Our path to ~15% underlying RoCET1 by year-end 2026
Our path to ~15% underlying RoCET1 by year-end 2026 Reiterating key levers Underlying RoCET1 bridge ~15% Franchise stabilization, Significant decline in A client win-back and growth D underlying effective tax rate excluding DTA revaluation impacts in 2H23 baseline B Funding cost efficiencies C Cost
Slide 32: Revenue plans reflect enhanced capabilities and improved productivity
Revenue plans reflect enhanced capabilities and improved productivity Underlying revenue bridge to 2026 exit rate (illustrative) bn + 48 + +/- +/- - 42 • Expect 1Q24 to be broadly flat QoQ, • Positive revenues in and for 2024 to be down mid single 2H23 baseline assumed digits vs 4Q23 annualized not
Slide 33: ~13bn of cumulative gross cost saves to be achieved by year-end 2026
~13bn of cumulative gross cost saves to be achieved by year-end 2026 Cumulative gross cost reductions1 Cumulative integration-related expenses % of total saves, exit rates % of total cumulative integration related expenses 100% / ~13bn 100% / ~13bn ~85% ~75% ~67% ~45% ~33% ~30% 2023 2024 2025 2026 2
Slide 34: Non-core and Legacy to be a key contributor to Group net cost saves
Non-core and Legacy to be a key contributor to Group net cost saves Non-core and Legacy underlying cost trajectory Cost mix bn 2H23 Real estate Professional ~5% fees ~15% ~6.5 Personnel ~45% 5.5 ~15% Other Group allocations and G&A 4.5 ~20% ~3.5 IT infrastructure Reducing complexity and infrastructu
Slide 35: Balance sheet for all seasons remains the foundation of our success
Balance sheet for all seasons remains the foundation of our success 36.6% 11.8% Prudent capital and liquidity management 31.12.23 HoldCo 19.6% 6.3% 200bn 216% TLAC: 25.64% TLAC LCR1 TLAC: 8.80% AT1 2.5% 0.8% Going concern: 14.92% Going concern: 5.05% CET1 CET1 capital CET1 leverage 124% 124% CET1: 1
Slide 36: Strong capital position at Group and pro forma combined parent bank level
Strong capital position at Group and pro forma combined parent bank level UBS Group AG capital development 2023-2026 UBS AG (standalone) pro forma post-merger bn, illustrative Capital ratios expected to remain above CET1 ratio to remain ~14% while requirements, even without benefit of regulatory tot
Slide 37: RWA expected to decrease by ~35bn due to optimization and NCL unwind
RWA expected to decrease by ~35bn due to optimization and NCL unwind RWA outlook to 2026 bn Basel III finalization Expected 1.1.25; total estimated day-1 547 Core businesses impact of ~25bn not reflecting mitigating and Group Items actions and based on static balance sheet1 ~14bn related to migratin
Slide 38: Effective tax rate to reduce following key legal entity mergers
Effective tax rate to reduce following key legal entity mergers Expected effective tax rate1 Principal considerations To be higher earlier in the year, prior to legal − 2024 effective tax rate expected to remain elevated, particularly in earlier entity mergers part of the year, due to stranded losse
Slide 39: Delivering on our priorities while creating long-term sustainable value
Delivering on our priorities while creating long-term sustainable value Stabilizing, restructuring Restructuring, integrating Capturing sustainable growth and planning and optimizing and long-term value creation (2023) (2024 – 2026) P Franchise stabilization, 77bn 100bn client win-back and Net new d
Slide 40: Appendix
Appendix 39
Slide 41: Our financial targets and long-term ambitions
Our financial targets and long-term ambitions Financial Capital Ambitions targets guidance long-term Underlying RoCET1 RoCET1, reported ~15% 2026 exit rate ~14% CET1 capital ratio ~18% by 2028 Underlying cost / income GWM invested assets <70% ratio 2026 exit rate >4.0% CET1 leverage ratio >5trn by 2
Slide 42: UBS Group results
UBS Group results USD m, except where indicated 4Q23 3Q23 2Q23 FY23 FY22 Total revenues 10,855 11,695 9,540 40,834 34,563 Negative goodwill 28,925 28,925 Credit loss expense / (release) 136 239 623 1,037 29 Operating expenses 11,470 11,640 8,486 38,806 24,930 Operating profit / (loss) before tax (75
Slide 43: UBS Group 4Q23 underlying results
UBS Group 4Q23 underlying results USD m, except where indicated UBS Group AG GWM P&C AM IB NCL Group Items Operating profit / (loss) before tax as reported (751) 381 788 115 (169) (1,726) (140) o/w: Pull to par and other PPA effects 944 284 414 277 (32) o/w: Losses related to investment in SIX Group
Slide 44: UBS Group FY23 underlying results
UBS Group FY23 underlying results USD m, except where indicated UBS Group AG GWM P&C AM IB NCL Group Negative Items goodwill Operating profit / (loss) before tax as reported 29,916 3,589 3,148 318 (44) (4,741) (1,279) 28,925 o/w: Negative goodwill 28,925 28,925 o/w: Pull to par and other PPA effects
Slide 45: PPA pull to par overview and revenue recognition
PPA pull to par overview and revenue recognition Accretion of PPA adjustments on financial instruments Recognized Estimated amortization profile5 Expected future P&L Opening balance Remaining balance to USD bn 2023 releases at Year End 2024 2025 2026 2027+ as of 12.6.23 (close) be recognized4 FX rat
Slide 46: CET1 capital, RWA and LRD
CET1 capital, RWA and LRD CET1 capital Risk weighted assets bn bn +1% 0% 1.6 546.5 14.8 546.5 79.3 2.7 0.0 (0.1) (14.9) (2.7) 78.6 (0.8) (0.1) 3Q23 Credit and Non- Market Operational Currency 4Q23 counterparty counterparty- risk risk effects credit risk related risk Leverage ratio denominator bn +5%
Slide 47: Capital and leverage ratios
Capital and leverage ratios Total TLAC 200bn 36.6% 11.8% 107bn HoldCo 19.6% 6.3% TLAC: 25.64% TLAC: 8.80% Total T1 capital 93bn 17.0% 5.5% 14bn AT1 2.5% 0.8% Going concern: 14.92% Going concern: 5.05% CET1 capital CET1 leverage ratio guidance: CET1: 10.62% ratio guidance: 14.5% 4.7% CET1: 3.55% 79bn
Slide 48: Invested asset split
Invested asset split Global Wealth Management Asset Management 4Q23 4Q23 3,850bn 3,850bn 1,649bn 1,649bn Associates 4% 12% Others 10% 10 Other Other 17% Real Estate & 5 9% Private Markets 5% 5 GBP 9% CHF 3% Alternatives 5% Hedge Funds 11% EUR 17 10% EUR Multi-asset & 17% Cash 10% Solutions 11 MM ins
Slide 49: Revenue and expense currency mix
Revenue and expense currency mix Total revenues1 Operating expenses1 % % 5 6 9 4 10 1 2 2 12 16 6 17 14 14 7 22 7 7 6 1 2 3 4 3 9 4 8 13 11 4 4 15 7 29 18 25 42 9 29 30 87 82 12 68 63 53 53 57 41 45 45 39 7 10 GWM P&C AM IB Group GWM P&C AM IB NCL Group USD CHF GBP EUR Other 1 Based on estimated cur
Slide 50: Select planned legal entity changes (simplified)
Select planned legal entity changes (simplified) UBS Group AG CS AG Merge parent banks UBS AG UBS Switzerland Switzerland CS (Schweiz) AG Merge Swiss bank entities AG CS Bank (Europe) CS Deutschland CS Luxembourg Establish single IPU EU IPU S.A. AG S.A. CS (Italy) S.p.A structure UBS Europe SE Credi
Slide 51: Cautionary statement regarding Forward looking statements
Cautionary statement regarding Forward looking statements Cautionary Statement Regarding Forward looking Statements | This presentation contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance, statements rela