6-K 1 6kubsgroupag4q19.htm 6kubsgroupag4q19

 



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: January 21, 2020

 

UBS Group AG

Commission File Number: 1-36764

 

UBS AG

Commission File Number: 1-15060

 

 

(Registrants' Name)

 

Bahnhofstrasse 45, Zurich, Switzerland

Aeschenvorstadt 1, Basel, Switzerland

(Address of principal executive offices)

 

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

 

Form 20-F                         Form 40-F 

 


 

This Form 6-K consists of the Fourth Quarter 2019 Report of UBS Group AG, which appears immediately following this page.

 

 


 

  

Our financial results

 

Fourth quarter 2019 report 

 


 

 

 


 

 


 

Corporate calendar UBS Group AG

 

1.

UBS
Group

4

Recent developments

8

Group performance

   

2.

UBS business divisions and
Corporate Center

18

Global Wealth Management

21

Personal & Corporate Banking

26

Asset Management

29

Investment Bank

32

Corporate Center

   

3.

Risk, treasury and capital
management

36

Risk management and control

40

Balance sheet, liquidity and funding management

42

Capital management

   

4.

Consolidated
financial information

56

UBS Group AG interim consolidated financial information (unaudited)

71

UBS AG interim consolidated financial information (unaudited)

   

 

Appendix

 

 

76

Abbreviations frequently used in
our financial reports

79

Information sources

80

Cautionary statement

 

 

   
Publication of the Annual Report 2019:                               Friday, 28 February 2020
Publication of the first quarter 2020 report:                          Tuesday, 28 April 2020
Annual General Meeting 2020:                                           Wednesday, 29 April 2020
Publication of the second quarter 2020 report:                     Tuesday, 21 July 2020
Publication of the third quarter 2020 report:                        Tuesday, 20 October 2020

Corporate calendar UBS AG*

Publication of the Annual Report 2019:                               Friday, 28 February 2020

*Publication dates of further quarterly and annual reports and results will be made available as part of the corporate calendar of UBS AG at www.ubs.com/investors

 

Contacts

Switchboards

For all general inquiries
www.ubs.com/contact

Zurich +41-44-234 1111
London +44-207-567 8000
New York +1-212-821 3000
Hong Kong +852-2971 8888

Singapore +65-6495 8000

Investor Relations

UBS’s Investor Relations team supports
institutional, professional and retail
investors from our offices in Zurich,
London, New York and Krakow.

UBS Group AG, Investor Relations
P.O. Box, CH-8098 Zurich, Switzerland

www.ubs.com/investors

Zurich +41-44-234 4100
New York +1-212-882 5734

Media Relations

UBS’s Media Relations team supports
global media and journalists from our
offices in Zurich, London, New York
and Hong Kong.

www.ubs.com/media

Zurich +41-44-234 8500
mediarelations@ubs.com

London +44-20-7567 4714
ubs-media-relations@ubs.com

New York +1-212-882 5858
mediarelations@ubs.com

Hong Kong +852-2971 8200
sh-mediarelations-ap@ubs.com


Office of the Group Company Secretary

The Group Company Secretary receives
inquiries on compensation and related
issues addressed to members of the
Board of Directors.

UBS Group AG, Office of the Group Company Secretary
P.O. Box, CH-8098 Zurich, Switzerland

sh-company-secretary@ubs.com

+41-44-235 6652

Shareholder Services

UBS’s Shareholder Services team, a unit
of the Group Company Secretary office,
is responsible for the registration of UBS Group AG registered shares.

UBS Group AG, Shareholder Services
P.O. Box, CH-8098 Zurich, Switzerland

sh-shareholder-services@ubs.com

+41-44-235 6652

US Transfer Agent

For global registered share-related
inquiries in the US.

Computershare Trust Company NA
P.O. Box 505000
Louisville, KY 40233-5000, USA

Shareholder online inquiries:
www-us.computershare.com/
investor/Contact

Shareholder website:
www.computershare.com/investor

Calls from the US
+1-866-305-9566
Calls from outside the US
+1-781-575-2623
TDD for hearing impaired
+1-800-231-5469
TDD for foreign shareholders
+1-201-680-6610

Imprint

Publisher: UBS Group AG, Zurich, Switzerland | www.ubs.com
Language: English

© UBS 2020. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

 

 

  

 


Fourth quarter 2019 report 

Our key figures

 

 

As of or for the quarter ended

 

As of or for the year ended

USD million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

31.12.19

31.12.18

Group results

 

 

 

 

 

 

 

Operating income

 

 7,052 

 7,088 

 6,972 

 

 28,889 

 30,213 

Operating expenses

 

 6,124 

 5,743 

 6,492 

 

 23,312 

 24,222 

Operating profit / (loss) before tax

 

 928 

 1,345 

 481 

 

 5,577 

 5,991 

Net profit / (loss) attributable to shareholders

 

 722 

 1,049 

 315 

 

 4,304 

 4,516 

Diluted earnings per share (USD)1

 

 0.19 

 0.28 

 0.08 

 

 1.14 

 1.18 

Profitability and growth2

 

 

 

 

 

 

 

Return on equity (%)3

 

 5.2 

 7.7 

 2.4 

 

 7.9 

 8.6 

Return on tangible equity (%)4

 

 5.9 

 8.7 

 2.7 

 

 9.0 

 9.8 

Return on common equity tier 1 capital (%)5

 

 8.2 

 12.1 

 3.7 

 

 12.4 

 13.1 

Return on risk-weighted assets, gross (%)6

 

 10.8 

 10.8 

 10.8 

 

 11.0 

 11.8 

Return on leverage ratio denominator, gross (%)6

 

 3.1 

 3.1 

 3.1 

 

 3.2 

 3.3 

Cost / income ratio (%)7

 

 86.8 

 80.6 

 92.4 

 

 80.5 

 79.9 

Adjusted cost / income ratio (%)8

 

 82.8 

 79.1 

 92.2 

 

 78.9 

 79.5 

Effective tax rate (%)

 

 21.6 

 21.9 

 34.4 

 

 22.7 

 24.5 

Net profit growth (%)9

 

 129.4 

 (16.2) 

 

 

 (4.7) 

 366.0 

Resources

 

 

 

 

 

 

 

Total assets

 

 972,183 

 973,118 

 958,489 

 

 972,183 

 958,489 

Equity attributable to shareholders

 

 54,533 

 56,187 

 52,928 

 

 54,533 

 52,928 

Common equity tier 1 capital10

 

 35,582 

 34,673 

 34,119 

 

 35,582 

 34,119 

Risk-weighted assets10

 

 259,208 

 264,626 

 263,747 

 

 259,208 

 263,747 

Common equity tier 1 capital ratio (%)10

 

 13.7 

 13.1 

 12.9 

 

 13.7 

 12.9 

Going concern capital ratio (%)10

 

 20.0 

 19.2 

 17.5 

 

 20.0 

 17.5 

Total loss-absorbing capacity ratio (%)10

 

 34.6 

 33.3 

 31.7 

 

 34.6 

 31.7 

Leverage ratio denominator10

 

 911,325 

 901,914 

 904,598 

 

 911,325 

 904,598 

Common equity tier 1 leverage ratio (%)10

 

 3.90 

 3.84 

 3.77 

 

 3.90 

 3.77 

Going concern leverage ratio (%)10

 

 5.7 

 5.6 

 5.1 

 

 5.7 

 5.1 

Total loss-absorbing capacity leverage ratio (%)10

 

 9.8 

 9.8 

 9.3 

 

 9.8 

 9.3 

Liquidity coverage ratio (%)11

 

 134 

 138 

 136 

 

 134 

 136 

Other

 

 

 

 

 

 

 

Invested assets (USD billion)12

 

 3,607 

 3,422 

 3,101 

 

 3,607 

 3,101 

Personnel (full-time equivalents)

 

 68,662 

 67,634 

 66,888 

 

 68,662 

 66,888 

Market capitalization13

 

 45,661 

 41,210 

 45,907 

 

 45,661 

 45,907 

Total book value per share (USD)13

 

 15.08 

 15.47 

 14.35 

 

 15.08 

 14.35 

Total book value per share (CHF)13,14

 

 14.60 

 15.45 

 14.11 

 

 14.60 

 14.11 

Tangible book value per share (USD)13

 

 13.29 

 13.67 

 12.55 

 

 13.29 

 12.55 

Tangible book value per share (CHF)13,14

 

 12.87 

 13.64 

 12.33 

 

 12.87 

 12.33 

1 Refer to “Earnings per share (EPS) and shares outstanding” in the “Consolidated financial information” section of this report for more information.    2 Refer to the “Performance targets and measurement” section of our Annual Report 2018 for more information about our performance targets.    3 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average equity attributable to shareholders.    4 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average equity attributable to shareholders less average goodwill and intangible assets. Effective 1 January 2019, the definition of the numerator for return on tangible equity has been revised to align with numerators for return on equity and return on common equity tier 1 capital; i.e., we no longer adjust for amortization and impairment of goodwill and intangible assets. Prior periods have been restated.    5 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average common equity tier 1 capital.    6 Calculated as operating income before credit loss expense or recovery (annualized as applicable) divided by average risk-weighted assets and average leverage ratio denominator, respectively.    7 Calculated as operating expenses divided by operating income before credit loss expense or recovery.    8 Calculated as adjusted operating expenses divided by adjusted operating income before credit loss expense or recovery.    9 Calculated as 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 comparison period.    10 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to the “Capital management” section of this report for more information.    11 Refer to the “Balance sheet, liquidity and funding management” section of this report for more information.    12 Includes invested assets for Global Wealth Management, Asset Management and Personal & Corporate Banking.    13 Refer to “UBS shares” in the “Capital management” section of this report for more information.    14 Total book value per share and tangible book value per share in Swiss francs are calculated based on a translation of equity under our US dollar presentation currency. As a consequence of the restatement to a US dollar presentation currency, amounts may differ from those originally published in our quarterly and annual reports.

 

 

 

Performance measures: reasons for use

Return on equity                                               This measure provides information about the profitability of the business in relation to equity.

Return on tangible equity                                 This measure provides information about the profitability of the business in relation to tangible equity.

Return on 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 risk-weighted assets, gross              This measure provides information about the revenues of the business in relation to risk-weighted assets.

Return on leverage ratio denominator, gross           This measure provides information about the revenues of the business in relation to leverage ratio denominator.

Cost / income ratio                                           This measure provides information about the efficiency of the business by comparing operating expenses with gross income.

Adjusted cost / income ratio                             This measure provides information about the efficiency of the business by comparing operating expenses with gross income,              while  excluding items that management believes are not representative of the underlying performance of the businesses.

Net profit growth                                             This measure provides information about profit growth in comparison with the prior-year period.

 

2 


 

UBS Group

Management report

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terms used in this report, unless the context requires otherwise

“UBS,” “UBS Group,” “UBS Group AG consolidated,”                                  UBS Group AG and its consolidated subsidiaries
 “Group,” “the Group,” “we,” “us” and “our”                                             

“UBS AG consolidated”                                                                                       UBS AG and its consolidated subsidiaries

“UBS Group AG” and “UBS Group AG standalone”                                       UBS Group AG on a standalone basis

“UBS AG” and “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 Limited” and “UBS Limited standalone”                                                 UBS Limited on a standalone basis

“UBS Americas Holding LLC” and                                                                       UBS Americas Holding LLC and its
“UBS Americas Holding LLC consolidated”                                                       consolidated subsidiaries  

 


Recent developments 

Recent developments

Changes to our performance targets

In connection with the completion of our annual planning process, we are updating our performance targets and capital and resource guidance effective in 2020. These are reflected in the table below.


Our updated performance targets are based on reported results. Therefore, from the first quarter of 2020, we will no longer disclose adjusted results in our financial reports. We will continue to provide disclosure of restructuring and litigation expenses as well as other material profit or loss items that management believes are not representative of underlying business performance in our Management Discussion & Analysis.

 

 

Targets, capital and resource guidelines 2020-2022
(on a reported basis)

 

 

 

Group
returns

 

12–15% return on CET1 capital (RoCET1)

 

 

 

 

 

 

Cost

efficiency

 

Positive operating leverage and 75–78% cost/income ratio

 

 

 

 

 

 

Growth

 

10–15% profit before tax growth in Global Wealth Management

 

 

 

 

 

 

Capital
allocation

 

Up to 1/3 of Group RWA and LRD in Investment Bank

 

 

 

 

 

 

Capital
guidance

 

~13% CET1 capital ratio
~3.7% CET1 leverage ratio

 

 

4 


 

Capital returns

For 2019, the Board of Directors intends to propose a dividend to UBS Group AG shareholders of USD 0.73 per share. Subject to approval by shareholders at the Annual General Meeting scheduled for 29 April 2020, the dividend will be paid on 7 May 2020 to holders of record on 6 May 2020. The ex-dividend date will be 5 May 2020.

Shareholders whose shares are held through SIX (ISIN CH0244767585) will receive dividends in Swiss francs, based on a published exchange rate calculated to five decimal places, immediately before the ex-dividend date. Shareholders holding shares through DTC (ISIN: CH0244767585; CUSIP: H42097107) will be paid dividends in US dollars.

As newly required under Swiss tax law, 50% of the dividend will be paid out of retained earnings and the balance will be paid out of capital contribution reserves. Dividends paid out of capital contribution reserves are not subject to Swiss withholding tax. The portion of the dividend paid out of retained earnings will be subject to a 35% Swiss withholding tax. For US federal income tax purposes, we expect that the dividend will be paid out of current or accumulated earnings and profits.

In 2019, we purchased a total of USD 0.8 billion of shares under our share repurchase program. For the first half of 2020, we expect to repurchase an additional USD 0.45 billion of shares. We will assess further repurchases in the second half of 2020 considering business conditions and any idiosyncratic developments.

Global Wealth Management organization changes

In January 2020, we announced several initiatives designed to accelerate Global Wealth Management’s growth ambitions and elevate the quality and value of the service we deliver to our clients. First, we are reframing our offering around each client's needs to deliver even more tailored services and solutions. Second, we are making it easier for advisors to spend more time with clients and to better understand their needs and preferences, and we are taking measures to improve our responsiveness and speed to market. Finally, we intend to deliver the firm's full strength through expanded strategic partnerships with the Investment Bank and Asset Management. To implement these initiatives, we will make our Global Family Office capabilities available to 1,500 clients. Ultra high net worth client relationships and advisors will be integrated into regional business units to increase speed and proximity to clients.

We are also creating three distinct business units in EMEA – Europe, Central and Eastern Europe, and Middle East and Africa – to better capture the diverse opportunities in these markets. In our newly established Global Capital Markets team we combine our Investment Product Services unit and Investment Bank teams and their respective expertise. The Global Capital Markets team is expected to provide clients with an enhanced offering, faster execution, and more competitive conditions.

Strategic partnerships and initiatives

Sale of majority stake in UBS Fondcenter

We have agreed to sell a majority stake in UBS Fondcenter to Clearstream, Deutsche Börse Group’s post-trade services provider. UBS will retain a minority (48.8%) shareholding in the business and will enter into an agreement under which it may sell its remaining shareholding to Clearstream at a later date. As part of the transaction, UBS and Clearstream will enter into long-term commercial cooperation arrangements for the provision of services to our Global Wealth Management, Asset Management and the Corporate and Institutional Clients unit of Personal & Corporate Banking. Upon closing of the transaction, UBS Fondcenter will be combined with Clearstream’s Fund Desk, creating a top two B2B fund distribution platform with a presence in Europe, Switzerland and Asia. The transaction is subject to customary closing conditions and is expected to close in the second half of 2020. We expect to record a post-tax gain of around USD 600 million and an increase in CET1 capital of around USD 400 million upon closing of the transaction. We will deconsolidate UBS Fondcenter and account for our minority interest as an investment in an associate.

Strategic partnership with Banco do Brasil

In November 2019, we signed a binding agreement with Banco do Brasil to establish a strategic investment banking partnership that will provide investment banking services and institutional securities brokerage in Brazil and selected countries in South America. By building on the complementary strengths of both firms, UBS and Banco do Brasil believe that the formation of a strategic long-term partnership will create a leading investment bank platform in South America with global coverage.

The partnership is expected to be established through a combination of assets from both stakeholders. We intend to contribute our operational investment banking platform in Brazil and Argentina, as well as our institutional brokerage business in Brazil. Banco do Brasil intends to contribute the exclusive access rights to its corporate clients. UBS will hold a controlling interest of 50.01% in the entity and be entitled to 50% of the economic returns, requiring us to consolidate it for accounting and regulatory reporting. Closing of the transaction is subject to regulatory approvals and is currently expected in the first half of 2020.

 

5 


Recent developments 

Strategic partnership with Sumitomo Mitsui Trust Holdings

In June 2019, we entered into a strategic wealth management partnership in Japan with Sumitomo Mitsui Trust Holdings, Inc. (SuMi Trust Holdings). In January 2020, the first phase was launched, with operations commencing in the newly established joint venture, UBS SuMi TRUST Wealth Advisory, which is owned equally by UBS Japan Securities and SuMi Trust Holdings and is accounted for as an investment in a joint venture by UBS. UBS and SuMi Trust Holdings have also started offering each other’s products and services to their respective current clients.

The second phase of the partnership is expected to launch in 2021 with the establishment of a new entity which will be 51% owned and controlled by UBS, requiring us to consolidate this entity for accounting and regulatory reporting.

Regulatory and legal developments

Swiss Federal Council adopts new rules on gone concern capital for G-SIBs

In November 2019, the Swiss Federal Council adopted amendments to the Capital Adequacy Ordinance, which became effective 1 January 2020. The revisions introduce gone concern capital requirements for Switzerland-based intermediate parent banks of global systemically important banks (G-SIBs) on a standalone basis. As a consequence, UBS AG will be subject to (i) a gone concern capital requirement on its third-party exposure on a standalone basis, (ii) an additional gone concern capital buffer requirement equal to 30% of the Group’s gone concern capital requirement on UBS AG’s consolidated exposure, and (iii) a gone concern capital requirement equal to the nominal value of the gone concern instruments issued by UBS entities and held by the parent bank. A transitional period until 2024 will be granted for the buffer requirement.

Based on current estimates, and once the new requirements have been fully phased in, we expect UBS Group to be required to maintain a gone concern leverage ratio of around 75 to 100 basis points higher than what would be required to meet the Group requirements alone. The actual total loss absorbing capital Group requirement at the end of the transition phase will depend on a number of components, including the subsidiaries’ loss absorbing capacity at the time.


The revisions also reduced the gone concern requirement of UBS Switzerland AG to 62% of the Group’s gone concern requirement (before rebate) and increased the minimum gone concern requirement for the Group (after rebate) from 3% to 3.75% (based on leverage ratio denominator), effective 1 January 2022.

Finally, instruments available to meet gone concern requirements remain eligible until one year before maturity; however, the current haircut of 50% in the last year of eligibility is no longer applied under the revised rules.

®   Please refer to the “Capital management” section of this report for more information about the currently applicable requirements

Swiss Federal Council communicated its intention to bring NSFR into force by mid-2021

Having delayed the introduction of Net Stable Funding Ratio (NSFR) requirements in Switzerland over the previous two years to align with developments in the EU and the US, the Swiss Federal Council communicated its intention in November 2019 to adopt the associated ordinance amendments in early summer 2020, and bring them into force by mid-2021. The Federal Department of Finance was mandated to finalize the regulatory texts jointly with relevant stakeholders, including affected banks, in the coming months. If implemented as originally proposed in the 2017 consultation, the introduction of NSFR could result in a significant increase in long-term funding requirements on a legal entity level.

Swiss investor protection rules entered into force

The Financial Services Act (FinSA) and the Financial Institutions Act (FinlA), together with implementing ordinances, entered into force on 1 January 2020. The acts, together with the ordinances, introduce new investor protection rules and new code of conduct provisions for financial services and product providers. The new provisions significantly enhance information and documentation duties. UBS has made changes to its processes and client documentation to comply with FinSA and FinIA and the implementing ordinances.

 

6 


 

Update on the UK’s withdrawal from the EU

Based on recent developments, the UK and EU are expected to negotiate the terms of their future relationship during a transition period intended to end 31 December 2020, including the granting of equivalence determinations for the UK under existing EU financial services legislation.

UBS implemented contingency plans through the combined UK business transfer and cross-border merger of UBS Limited into UBS Europe SE (UBS ESE) in March 2019.

The European Commission has confirmed an extension of the temporary equivalence for UK central counterparties (CCPs) until 31 January 2021. Should the UK exit the transition period without the necessary equivalence determination in place, UBS ESE’s exposures to UK CCPs would need to be migrated to an EU CCP ahead of the 31 January 2021 deadline. In the absence of an agreement on the future EU–UK relationship or equivalence determinations covering relevant financial services, however, the industry would face a number of market structure issues that await resolution between the UK and EU in 2020, such as the operation of the derivatives and share trading obligations under the EU’s Markets in Financial Instruments Directive II.

Final BEAT tax regulations issued

In December 2019, the US Treasury Department and the Internal Revenue Service issued final regulations regarding the base erosion and anti-abuse tax (BEAT). BEAT was introduced as part of the Tax Cuts and Jobs Act of 2017 with the intended purpose of preventing US corporations from unduly reducing their US taxable income through payments to related foreign parties. While generally retaining most features of the proposed regulations issued in December 2018, including those that were considered helpful to foreign banks operating through branches and subsidiaries in the US (such as UBS), the final regulations contain a number of meaningful clarifications and changes. We continue to expect to have nil to limited exposure to BEAT for the foreseeable future, primarily because payments that our US branches and subsidiaries make to related parties outside the US are expected to remain below the applicable BEAT thresholds.


US Securities and Exchange Commission adopts the US security-based swaps regulation

In December 2019, the Securities and Exchange Commission (the SEC) adopted a package of rule amendments guidance and a related order, to expand and improve the framework for regulating cross-border security-based swaps. The adoption of this package triggers the compliance date for security-based swap entities to register with the SEC and the implementation period for the SEC’s securities-based swaps regulations, including its margin, capital, segregation, recordkeeping and reporting, and business conduct requirements. Registration as a securities-based swap dealer will not be required before 1 September 2021. The package modifies certain of the thresholds requiring foreign securities-based swap dealers (SBSDs) to register with the SEC, allows foreign SBSDs to provisionally register without meeting certain requirements, including the requirement to furnish a legal opinion on access to information. The SEC also published guidance on the process for obtaining substituted compliance for non-US SBSDs. We expect that UBS AG will be required to register as an SBSD.

Other developments

Transition away from IBORs – Amendments to IAS 39, IFRS 9 and IFRS 7 (Interest Rate Benchmark Reform)

As part of the ongoing efforts by regulators and others to facilitate the transition from interbank offered rates (IBORs) to new alternative reference rates (ARR), the IASB published Interest Rate Benchmark Reform, Amendments to IFRS 9, IAS 39 and IFRS 7. The amendments permit hedge accounting to continue during the period of uncertainty before IBORs are replaced with ARRs, limiting the consequential impact on the financial statements. We early adopted the amendments in the fourth quarter of 2019 and will provide additional disclosure in our Annual Report 2019.

  

7 


Group performance  

Group performance

Income statement

 

 

 

 

 

 

 

 

 

 

 

 

For the quarter ended

 

% change from

 

For the year ended

USD million

 

31.12.19

30.9.19

31.12.18

 

3Q19

4Q18

 

31.12.19

31.12.18

Net interest income

 

1,262

1,090

1,226

 

16

3

 

4,501

5,048

Other net income from financial instruments measured at fair value through profit or loss

 

1,381

1,587

1,297

 

(13)

6

 

6,842

6,960

Credit loss (expense) / recovery

 

(8)

(38)

(53)

 

(80)

(86)

 

(78)

(118)

Fee and commission income

 

4,856

4,805

4,700

 

1

3

 

19,110

19,598

Fee and commission expense

 

(458)

(396)

(439)

 

16

4

 

(1,696)

(1,703)

Net fee and commission income

 

4,398

4,409

4,261

 

0

3

 

17,413

17,895

Other income

 

19

39

241

 

(52)

(92)

 

212

428

Total operating income

 

7,052

7,088

6,972

 

(1)

1

 

28,889

30,213

Personnel expenses

 

3,902

3,987

3,839

 

(2)

2

 

16,084

16,132

General and administrative expenses

 

1,618

1,308

2,293

 

24

(29)

 

5,288

6,797

Depreciation and impairment of property, equipment and software

 

480

432

343

 

11

40

 

1,765

1,228

Amortization and impairment of goodwill and intangible assets

 

125

16

17

 

659

635

 

175

65

Total operating expenses

 

6,124

5,743

6,492

 

7

(6)

 

23,312

24,222

Operating profit / (loss) before tax

 

928

1,345

481

 

(31)

93

 

5,577

5,991

Tax expense / (benefit)

 

200

294

165

 

(32)

21

 

1,267

1,468

Net profit / (loss)

 

727

1,051

315

 

(31)

131

 

4,310

4,522

Net profit / (loss) attributable to non-controlling interests

 

6

1

1

 

351

712

 

6

7

Net profit / (loss) attributable to shareholders

 

722

1,049

315

 

(31)

129

 

4,304

4,516

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

 (1,567) 

 3,146 

 1,208 

 

 

 

 

 5,091 

 4,231 

Total comprehensive income attributable to non-controlling interests

 

 10 

 (5) 

 2 

 

 

468

 

 2 

 5 

Total comprehensive income attributable to shareholders

 

 (1,577) 

 3,151 

 1,207 

 

 

 

 

 5,089 

 4,225 

 

8 


 

Performance of our business divisions and Corporate Center – reported and adjusted1,2

 

 

For the quarter ended 31.12.19

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

4,150

881

551

1,681

(211)

7,052

of which: net gains / (losses) from properties held for sale 

 

 

 

 

 

(29)

(29)

Operating income (adjusted)

 

4,150

881

551

1,681

(182)

7,080

 

 

 

 

 

 

 

 

Operating expenses as reported

 

3,384

571

371

1,703

95

6,124

of which: personnel-related restructuring expenses4

 

0

0

1

81

32

114

of which: non-personnel-related restructuring expenses4

 

0

0

1

2

28

32

of which: restructuring expenses allocated from Corporate Center4,5

 

21

3

5

28

(57)

0

of which: impairment of goodwill

 

 

 

 

110

 

110

Operating expenses (adjusted)

 

3,363

567

365

1,483

91

5,868

of which: net expenses for litigation, regulatory and similar matters6

 

47

0

0

55

3

104

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

766

310

180

(22)

(306)

928

Operating profit / (loss) before tax (adjusted)

 

787

314

187

198

(273)

1,212

 

 

 

 

 

 

 

 

 

 

For the quarter ended 30.9.19

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

4,142

919

465

1,752

(191)

7,088

of which: net foreign currency translations losses7

 

 

 

 

 

(46)

(46)

Operating income (adjusted)

 

4,142

919

465

1,752

(145)

7,133

 

 

 

 

 

 

 

 

Operating expenses as reported

 

3,248

565

341

1,580

9

5,743

of which: personnel-related restructuring expenses4

 

0

0

1

1

44

46

of which: non-personnel-related restructuring expenses4

 

0

0

2

1

20

23

of which: restructuring expenses allocated from Corporate Center4,5

 

25

8

8

28

(70)

0

Operating expenses (adjusted)

 

3,223

557

331

1,549

15

5,674

of which: net expenses for litigation, regulatory and similar matters6

 

69

0

0

0

(4)

65

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

894

354

124

172

(200)

1,345

Operating profit / (loss) before tax (adjusted)

 

919

362

135

203

(160)

1,459

 

9 


Group performance  

Performance of our business divisions and Corporate Center – reported and adjusted (continued)1,2

 

 

For the quarter ended 31.12.18

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

4,129

1,278

468

1,521

(423)

6,972

of which: gains related to investments in associates

 

101

359

 

 

 

460

of which: remeasurement loss related to UBS Securities China

 

 

 

 

 

(270)

(270)

Operating income (adjusted)

 

4,028

919

468

1,521

(154)

6,782

 

 

 

 

 

 

 

 

Operating expenses as reported

 

3,802

634

362

1,598

95

6,492

of which: personnel-related restructuring expenses4

 

17

1

5

1

70

95

of which: non-personnel-related restructuring expenses4

 

0

0

3

3

87

93

of which: restructuring expenses allocated from Corporate Center4,5

 

59

17

13

69

(157)

0

Operating expenses (adjusted)

 

3,726

616

342

1,526

95

6,304

of which: net expenses for litigation, regulatory and similar matters6

 

505

41

0

(6)

(8)

533

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

327

644

106

(78)

(518)

481

Operating profit / (loss) before tax (adjusted)

 

302

303

126

(5)

(248)

478

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations.    2 Prior-year comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity attribution framework effective 1 January 2019. Refer to “Note 1 Basis of accounting” in the “Consolidated financial statements” section of our first quarter 2019 report for more information about the changes to the Corporate Center cost and resource allocation to business divisions and to the “Recent developments” section of our first quarter 2019 report for more information about the changes in the equity attribution framework. Comparatives may additionally differ as a result of 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.    3 Corporate Center operating expenses presented in this table are after service allocations to business divisions.    4 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives.    5 Prior periods may include allocations (to) / from other business divisions.    6 Reflects the net increase in / (release of) provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to ”Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for more information. Also includes recoveries from third parties (fourth quarter of 2019: USD 1 million; third quarter of 2019: USD 2 million; fourth quarter of 2018: USD 1 million).    7 Related to the disposal or closure of foreign operations.

 

10 


 

Performance of our business divisions and Corporate Center – reported and adjusted1,2

 

 

For the year ended 31.12.19

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

16,353

3,715

1,938

7,269

(385)

28,889

of which: net foreign currency translations losses4

 

 

 

 

 

(35)

(35)

of which: net gains / (losses) from properties held for sale 

 

 

 

 

 

(29)

(29)

Operating income (adjusted)

 

16,353

3,715

1,938

7,269

(321)

28,953

 

 

 

 

 

 

 

 

Operating expenses as reported

 

12,955

2,274

1,406

6,485

192

23,312

of which: personnel-related restructuring expenses5

 

0

0

6

84

113

203

of which: non-personnel-related restructuring expenses5

 

0

0

7

7

68

81

of which: restructuring expenses allocated from Corporate Center5

 

69

17

20

77

(183)

0

of which: impairment of goodwill

 

 

 

 

110

 

110

Operating expenses (adjusted)

 

12,887

2,257

1,373

6,208

194

22,918

of which: net expenses for litigation, regulatory and similar matters6

 

135

0

0

53

(23)

165

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

3,397

1,441

532

784

(577)

5,577

Operating profit / (loss) before tax (adjusted)

 

3,466

1,458

565

1,061

(515)

6,035

 

 

 

 

 

 

 

 

 

 

For the year ended 31.12.18

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

16,785

4,161

1,852

8,041

(626)

30,213

of which: gains related to investments in associates

 

101

359

 

 

 

460

of which: gains on sale of real estate

 

 

 

 

 

31

31

of which: gains on sale of subsidiaries and businesses

 

 

 

 

 

25

25

of which: remeasurement loss related to UBS Securities China

 

 

 

 

 

(270)

(270)

Operating income (adjusted)

 

16,684

3,802

1,852

8,041

(413)

29,966

 

 

 

 

 

 

 

 

Operating expenses as reported

 

13,531

2,365

1,426

6,554

346

24,222

of which: personnel-related restructuring expenses5

 

34

4

23

16

208

286

of which: non-personnel-related restructuring expenses5

 

16

0

10

11

238

275

of which: restructuring expenses allocated from Corporate Center5

 

209

43

33

166

(450)

0

of which: gain related to changes to the Swiss pension plan7

 

(66)

(38)

(10)

(5)

(122)

(241)

Operating expenses (adjusted)

 

13,338

2,355

1,370

6,367

472

23,903

of which: net expenses for litigation, regulatory and similar matters6

 

619

41

0

(64)

62

657

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

3,254

1,796

426

1,486

(971)

5,991

Operating profit / (loss) before tax (adjusted)

 

3,346

1,447

482

1,674

(885)

6,063

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations.    2 Prior-year comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity attribution framework effective 1 January 2019. Refer to “Note 1 Basis of accounting” in the “Consolidated financial statements” section of our first quarter 2019 report for more information about the changes to the Corporate Center cost and resource allocation to business divisions and to the “Recent developments” section of our first quarter 2019 report for more information about the changes in the equity attribution framework. Comparatives may additionally differ as a result of 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.    3 Corporate Center operating expenses presented in this table are after service allocations to business divisions.    4 Related to the disposal of foreign branches and subsidiaries.    5 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives.    6 Reflects the net increase in / (release of) provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report for more information. Also includes recoveries from third parties of USD 11 million and USD 29 million for the years ended 31 December 2019 and 31 December 2018, respectively.    7 Changes to the Pension Fund of UBS in Switzerland in the first quarter of 2018 resulted in a reduction in the pension obligation recognized by UBS. As a consequence, a pre-tax gain of USD 241 million was recognized in the income statement in the first quarter of 2018, with no overall effect on total equity. Refer to “Note 29 Pension and other post-employment benefit plans” in the “Consolidated financial statements” section of our Annual Report 2018 for more information.

 

11 


Group performance  

Results: 2019

We recorded net profit attributable to shareholders of USD 4,304 million in 2019, which included a net tax expense of USD 1,267 million. In 2018, net profit attributable to shareholders was USD 4,516 million, which included a net tax expense of USD 1,468 million.

Profit before tax was USD 5,577 million in 2019, compared with USD 5,991 million in 2018, reflecting USD 1,324 million lower operating income and USD 910 million lower operating expenses. Adjusted profit before tax was USD 6,035 million, compared with USD 6,063 million, reflecting USD 1,013 million lower operating income and USD 985 million lower operating expenses on an adjusted basis.

Results: 4Q19 vs 4Q18

Profit before tax increased by USD 447 million, or 93%, to USD 928 million, mainly reflecting a decrease in operating expenses. Operating income increased by USD 80 million, or 1%, to USD 7,052 million. Operating expenses decreased by USD 368 million, or 6%, to USD 6,124 million, primarily due to USD 675 million lower general and administrative expenses, mainly driven by USD 429 million lower expenses related to litigation, regulatory and similar matters. This was partly offset by USD 137 million higher depreciation and impairment of property, equipment and software, as well as USD 108 million higher amortization and impairment of goodwill and intangible assets.

In addition to reporting our results in accordance with International Financial Reporting Standards (IFRS), we report adjusted results, which exclude items that management believes are not representative of the underlying performance of our businesses. Such adjusted results are non-GAAP financial measures as defined by US Securities and Exchange Commission (SEC) regulations. These adjustments include restructuring expenses related to our CHF 2.1 billion cost reduction program completed at the end of 2017 (referred to as our “legacy cost programs” in this report), as well as expenses relating to new restructuring initiatives. For the full year 2019, we incurred a runoff of restructuring expenses associated with our legacy cost programs of USD 205 million, which are now expected to be nil for 2020 and future years. In addition, in connection with the previously announced planned structural changes in the Investment Bank, we incurred USD 79 million of restructuring expenses in the fourth quarter of 2019. We expect to incur restructuring expenses of approximately USD 200 million in 2020 related to additional cost actions across the Group, with the majority of these expenses being incurred in the first half of the year.

For the purpose of determining adjusted results for the fourth quarter of 2019, we excluded net restructuring expenses of USD 146 million, a USD 110 million loss related to an impairment of goodwill, and a loss of USD 29 million related to the remeasurement of properties that were reclassified as properties held for sale. For the fourth quarter of 2018, we excluded a gain of USD 460 million related to investments in associates and a remeasurement loss of USD 270 million related to the increase of our shareholding in UBS Securities China, as well as net restructuring expenses of USD 188 million.

On this adjusted basis, profit before tax for the fourth quarter of 2019 increased by USD 734 million, or 153%, to USD 1,212 million, reflecting USD 436 million, or 7%, lower operating expenses and USD 298 million, or 4%, higher operating income.

Operating income: 4Q19 vs 4Q18

Operating income increased by USD 80 million, or 1%, to USD 7,052 million. On an adjusted basis, total operating income increased by USD 298 million, or 4%, to USD 7,080 million.

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 119 million to USD 2,642 million. A USD 156 million increase in the Investment Bank was mainly driven by our Equities and Foreign Exchange, Rates and Credit businesses, which benefited from a more constructive trading environment in the fourth quarter of 2019. This was partly offset by USD 21 million and USD 19 million lower income earned in Corporate Center and Global Wealth Management, respectively.

Net fee and commission income

Net fee and commission income was USD 4,398 million compared with USD 4,261 million, primarily reflecting increases in investment fund fees in Asset Management and fees for portfolio management and related services, as well as higher M&A and corporate finance fees.

In the fourth quarter of 2019, we realigned our client coverage between Global Wealth Management and Personal & Corporate Banking as a result of a detailed client segmentation review. This resulted in a reduction of USD 5 billion in invested assets in Global Wealth Management and the shifting of USD 1 billion in loans from Global Wealth Management to Personal & Corporate Banking. In line with the remuneration framework for net client shifts and referrals, Global Wealth Management received a fee of USD 75 million (CHF 73 million) from Personal & Corporate Banking related to this shift. This increased transaction-based income in Global Wealth Management, with an offsetting decrease in transaction-based income in Personal & Corporate Banking. The reduction of invested assets and the shift of loans did not affect net new money or net new business volume reported by Global Wealth Management and Personal & Corporate Banking, respectively.

 

12 


 

Other income

Other income was USD 19 million, compared with USD 241 million. The fourth quarter 2019 included a loss of USD 29 million related to the remeasurement of properties that were reclassified as properties held for sale. The fourth quarter of 2018 included a valuation gain of USD 460 million on our equity ownership in SIX related to the sale of SIX Payment Services to Worldline and a remeasurement loss of USD 270 million related to the increase of our shareholding in UBS Securities China. Excluding these items, adjusted other income decreased by USD 4 million.

Credit loss expense / recovery

Total net credit loss expenses were USD 8 million, compared with USD 53 million, reflecting net expenses of USD 7 million related to credit-impaired (stage 3) positions and net expenses of USD 1 million related to stage 1 and stage 2 positions.

Operating expenses: 4Q19 vs 4Q18

Total operating expenses decreased by USD 368 million, or 6%, to USD 6,124 million. On an adjusted basis, total operating expenses decreased by USD 436 million, or 7%, to USD 5,868 million.

Personnel expenses

Personnel expenses increased by USD 63 million to USD 3,902 million on a reported basis, and by USD 43 million to USD 3,787 million on an adjusted basis, primarily reflecting higher variable compensation, as well as an increase in expenses related to financial advisor compensation and social security. This was partly offset by a decline in medical insurance costs, as well as lower expenses related to contractors in Corporate Center, mainly reflecting our insourcing initiatives.

General and administrative expenses

General and administrative expenses decreased by USD 675 million to USD 1,618 million. This was mainly driven by USD 429 million lower expenses related to litigation, regulatory and similar matters, as the prior-year quarter included an increase in provisions that largely related to our cross-border wealth management businesses. There was also a USD 129 million decrease in rent expenses arising from the application of IFRS 16, Leases, which was adopted in the first quarter of 2019. This decrease was more than offset by an increase of USD 130 million in depreciation expense and an increase of USD 30 million in interest expense relating to lease liabilities, also as a direct result of the application of IFRS 16. The full year effect of the application of IFRS 16 was a net decrease in profit before tax of approximately USD 60 million, reflecting reductions of approximately USD 120 million and USD 60 million in operating income and expenses, respectively.

The fourth quarter of 2019 included an expense for the UK bank levy of USD 61 million compared with an expense of USD 85 million in the fourth quarter of 2018.


On an adjusted basis, general and administrative expenses decreased by USD 633 million to USD 1,588 million, largely due to the aforementioned decreases in expenses related to litigation, regulatory and similar matters, and rent expenses.

We believe that the industry continues to operate in an environment in which expenses associated with litigation, regulatory and similar matters will remain elevated for the foreseeable future and we continue to be exposed to a number of significant claims and regulatory matters. The outcome of many of these matters, the timing of a resolution, and the potential effects of resolutions on our future business, financial results or financial condition are extremely difficult to predict

®   Refer to “Provisions and contingent liabilities” in the “Consolidated financial information” section of this report and to the “Regulatory and legal developments” and “Risk factors” sections of our Annual Report 2018 for more information about litigation, regulatory and similar matters

Depreciation, amortization and impairment

Depreciation and impairment of property, equipment and software increased by USD 137 million to USD 480 million on a reported basis, and by USD 155 million to USD 477 million on an adjusted basis, mainly driven by USD 130 million higher depreciation expenses resulting from the application of IFRS 16.

Amortization and impairment of goodwill and intangible assets increased by USD 108 million to USD 125 million on a reported basis, as a result of a USD 110 million impairment of goodwill in the Investment Bank in the fourth quarter of 2019. Excluding this item, these expenses were broadly unchanged.

®   Refer to “Investment Bank” in the “UBS business divisions and Corporate Center” section of this report for more information about the impairment of goodwill

Tax: 4Q19 vs 4Q18

We recognized income tax expenses of USD 200 million for the fourth quarter of 2019, representing an effective tax rate of 21.6%.

Current tax expenses were USD 183 million and related to taxable profits of UBS Switzerland AG and other entities.

Deferred tax expenses were USD 17 million. These included expenses of USD 100 million that primarily reflect the amortization of deferred tax assets (DTAs) previously recognized in relation to tax losses carried forward and deductible temporary differences to reflect their offset against profits for the quarter, including the amortization of US tax loss DTAs at the level of UBS Americas Inc. Deferred tax expenses were decreased by a benefit of USD 65 million in respect of additional DTA recognition that resulted from the contribution of real estate assets by UBS AG to UBS Americas Inc. during the second quarter of 2019 in accordance with the requirements of IAS 34, Interim Financial Reporting, as described in our second quarter 2019 report. Deferred tax expenses for the quarter were also reduced by a net tax benefit of USD 18 million in relation to the revaluation of DTAs for certain entities, following the production of profit forecasts for them in the quarter.

 

13 


Group performance  

Income tax expenses for the fourth quarter of 2018 were USD 165 million, including current tax expenses of USD 395 million and a net deferred tax benefit of USD 230 million. These income tax expenses reflected a net tax benefit of USD 275 million, following the review of our approach to the remeasurement of our US DTAs in that quarter. This included current tax expenses of USD 160 million in relation to the taxable income that resulted from the capitalization of real estate costs for US tax purposes under elections made in that quarter for certain states where taxable profits could not be reduced by brought-forward tax losses. It also included a net deferred tax benefit of USD 435 million from revaluations of DTAs (refer to the “Group performance” section of our fourth quarter 2018 report).

For 2020, we expect a full-year tax rate of approximately 25%.

Total comprehensive income attributable to shareholders: 4Q19 vs 4Q18

Total comprehensive income attributable to shareholders was negative USD 1,577 million, compared with positive USD 1,207 million. Net profit attributable to shareholders was USD 722 million, compared with USD 315 million, and other comprehensive income (OCI) attributable to shareholders, net of tax, was negative USD 2,299 million, compared with positive USD 892 million.

Defined benefit plan OCI was negative USD 2,015 million, compared with negative USD 31 million. We recorded net pre-tax OCI losses of USD 2,626 million related to our Swiss pension plan, reflecting a reversal of the Swiss plan’s net defined benefit asset that was initially recognized in the third quarter of 2019. The plan’s surplus was derecognized in accordance with IFRS requirements, which stipulate how much of the surplus can be recognized as a pension asset by considering whether the future service benefits in the plan exceed the future contributions that UBS is required to make. The derecognition was primarily due to the annual update of membership data and certain actuarial assumptions in the fourth quarter of 2019, which decreased the value of the expected future service benefits. There was no significant effect on regulatory capital as the Swiss pension plan surplus was reversed as a CET1 capital deduction.

Net pre-tax OCI gains related to the non-Swiss pension plans amounted to USD 151 million, primarily driven by the UK and US defined benefit plans.

The total net pre-tax OCI losses on defined benefit plans of USD 2,475 million were partly offset by a net tax benefit of USD 461 million, largely related to the aforementioned pre-tax OCI losses in the Swiss pension plan.

In the fourth quarter of 2019, UBS established an enhanced methodology for measuring the estimated future economic benefits available under the Swiss pension plan, which limits the amount of any surplus recognized in accordance with IFRS, i.e., the asset ceiling calculation. Under the revised approach, which will come into effect in the first quarter of 2020, future service cost is measured individually for each future year, considering the individually applicable discount rate. In addition, an enhanced discount curve methodology will be adopted, utilizing the FINMA-published ultimate forward rate, which represents the average long-term historical real rate plus expected inflation over the long-dated periods where discount rates are unobservable. Application of this approach is expected to reduce the sensitivity in the quarterly asset ceiling calculation to short-term interest rates, resulting in less frequent recognition of the plan’s surplus, with the asset ceiling presently at zero. No changes have been made to the methodology for measuring the defined benefit obligation.

In the fourth quarter of 2019, OCI related to cash flow hedges was negative USD 506 million, mainly reflecting a decrease in unrealized gains on US dollar hedging derivatives resulting from increases in the relevant US dollar long-term interest rates. In the fourth quarter of 2018, OCI related to cash flow hedges was positive USD 616 million.

OCI related to own credit on financial liabilities designated at fair value was negative USD 147 million, compared with positive USD 368 million, mainly due to tightening credit spreads in the fourth quarter of 2019.

OCI associated with financial assets measured at fair value through OCI was negative 11 million, compared with positive USD 44 million, and mainly reflected net unrealized losses of USD 12 million following increases in the relevant US dollar long-term interest rates in the fourth quarter of 2019.

Foreign currency translation OCI was positive USD 380 million in the fourth quarter of 2019, mainly resulting from the strengthening of the Swiss franc, the euro and the pound sterling against the US dollar. OCI related to foreign currency translation in the fourth quarter of 2018 was negative USD 105 million.

®   Refer to “Statement of comprehensive income” in the “Consolidated financial information” section of this report for more information

®   Refer to “Note 29 Pension and other post-employment benefit plans” in the “Consolidated financial statements” section of our Annual Report 2018 for more information about other comprehensive income related to defined benefit plans

Sensitivity to interest rate movements

As of 31 December 2019, we estimate that a parallel shift in yield curves by +100 basis points could lead to a combined increase in annual net interest income of approximately USD 0.6 billion in Global Wealth Management and Personal & Corporate Banking. A parallel shift in yield curves by –100 basis points could lead to a combined reduction in annual net interest income of approximately USD 0.6 billion.

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 applied to our banking book. These estimates further assume no change to balance sheet size and structure, constant foreign exchange rates and no specific management action.

®   Refer  to the “Risk management and control” section of this report for information about interest rate risk in the banking book

 

14 


 

Key figures and personnel

Below we provide 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.

Adjusted cost / income ratio: 4Q19 vs 4Q18

The adjusted cost / income ratio was 82.8%, compared with 92.2%, driven mainly by a decrease in adjusted operating expenses.

Common equity tier 1 capital: 4Q19 vs 3Q19

Common equity tier 1 (CET1) capital increased by USD 0.9 billion to USD 35.6 billion.

Return on CET1 capital: 4Q19 vs 4Q18

The annualized return on CET1 capital (RoCET1) was 8.2%, compared with 3.7%, driven by a USD 1.6 billion increase in annualized quarterly net profit attributable to shareholders and a USD 0.7 billion increase in the average CET1 capital.

Risk-weighted assets: 4Q19 vs 3Q19

Risk-weighted assets (RWA) decreased by USD 5.4 billion to USD 259.2 billion, reflecting decreases from asset size and other movements of USD 6.2 billion and model updates of USD 2.9 billion, partly offset by currency effects of USD 3.2 billion and regulatory add-ons of USD 0.5 billion.


Common equity tier 1 capital ratio: 4Q19 vs 3Q19

Our CET1 capital ratio increased 0.6 percentage points to 13.7%, reflecting a USD 5.4 billion decrease in RWA and a USD 0.9 billion increase in CET1 capital.

Leverage ratio denominator: 4Q19 vs 3Q19

The leverage ratio denominator (LRD) increased by USD 9 billion to USD 911 billion. The increase was driven by currency effects of USD 16 billion, partly offset by a decrease in asset size and other movements of USD 7 billion.

Common equity tier 1 leverage ratio: 4Q19 vs 3Q19

Our CET1 leverage ratio increased from 3.84% to 3.90% in the fourth quarter of 2019, as the aforementioned USD 9 billion increase in the LRD was more than offset by the aforementioned USD 0.9 billion increase in CET1 capital.

Going concern leverage ratio: 4Q19 vs 3Q19

Our going concern leverage ratio increased from 5.6% to 5.7%, reflecting a USD 1.2 billion increase in our going concern capital as well as the increase in the LRD of USD 9 billion.

Personnel: 4Q19 vs 3Q19

We employed 68,662 personnel (full-time equivalents) as of 31 December 2019, a net increase of 1,028 compared with 30 September 2019, driven by the ongoing insourcing of certain activities from third-party vendors to our Business Solutions Centers, as well as staffing to address regulatory requirements.

 

 

Return on equity

 

 

 

 

 

 

 

 

 

As of or for the quarter ended

 

As of or for the year ended

USD million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

31.12.19

31.12.18

 

 

 

 

 

 

 

 

Net profit

 

 

 

 

 

 

 

Net profit / (loss) attributable to shareholders

 

722

1,049

315

 

4,304

4,516

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Equity attributable to shareholders

 

54,533

56,187

52,928

 

54,533

52,928

Less: goodwill and intangible assets

 

6,469

6,560

6,647

 

6,469

6,647

Tangible equity attributable to shareholders

 

48,064

49,627

46,281

 

48,064

46,281

Less: other CET1 deductions

 

12,482

14,954

12,162

 

12,482

12,162

Common equity tier 1 capital

 

35,582

34,673

34,119

 

35,582

34,119

 

 

 

 

 

 

 

 

Return on equity

 

 

 

 

 

 

 

Return on equity (%)1

 

5.2

7.7

2.4

 

7.9

8.6

Return on tangible equity (%)2

 

5.9

8.7

2.7

 

9.0

9.8

Return on common equity tier 1 capital (%)3

 

8.2

12.1

3.7

 

12.4

13.1

1 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average equity attributable to shareholders.    2 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average equity attributable to shareholders less average goodwill and intangible assets. Effective 1 January 2019, the definition of the numerator for return on tangible equity has been revised to align with numerators for return on equity and return on CET1 capital; i.e., we no longer adjust for amortization and impairment of goodwill and intangible assets. Prior periods have been restated.    3 Calculated as net profit attributable to shareholders (annualized as applicable) divided by average common equity tier 1 capital.

 

 

 

15 


Group performance  

Net new money and invested assets

Management’s discussion and analysis of net new money and invested assets is provided in the “UBS business divisions and Corporate Center” section of this report.

Outlook

Stimulus measures and easing of monetary policy by central banks contributed to a strong performance in financial markets in the fourth quarter and are likely to prevail. A favorable credit environment and a partial resolution of trade disputes should mitigate slowing global economic growth.

While the macroeconomic and geopolitical situation remains uncertain, for the first quarter we expect more typical seasonality, supporting earnings. Clients are more active, which should lead to an improvement in transaction-related revenues. Higher asset prices should have a positive effect on recurring fee income in our asset gathering businesses. Low and persistently negative interest rates and expectations of continuing easy monetary policy will continue to provide some headwinds to net interest income.

As we execute on our strategy, we are balancing investments to take advantage of opportunities for growth across our businesses and regions, while managing for efficiency. We remain committed to delivering on our financial targets, creating further value through even closer collaboration across all divisions to drive sustainable long-term value for our clients and shareholders.

 

  

16 


 

UBS business
divisions
and Corporate
Center

 Management report

  

 


Global Wealth Management 

Global Wealth Management

Global Wealth Management1

 

 

 

 

 

 

 

 

 

 

As of or for the quarter ended

 

% change from

 

As of or for the year ended

USD million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

3Q19

4Q18

 

31.12.19

31.12.18

 

 

 

 

 

 

 

 

 

 

 

Results

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 993 

 979 

 1,028 

 

 1 

 (3) 

 

 3,947 

 4,101 

Recurring net fee income2

 

 2,354 

 2,371 

 2,374 

 

 (1) 

 (1) 

 

 9,258 

 9,577 

Transaction-based income3

 

 789 

 741 

 627 

 

 7 

 26 

 

 3,059 

 2,971 

Other income

 

 23 

 58 

 112 

 

 (60) 

 (79) 

 

 110 

 151 

Income

 

 4,160 

 4,149 

 4,141 

 

 0 

 0 

 

 16,373 

 16,800 

Credit loss (expense) / recovery

 

 (10) 

 (7) 

 (12) 

 

 45 

 (17) 

 

 (20) 

 (15) 

Total operating income

 

 4,150 

 4,142 

 4,129 

 

 0 

 1 

 

 16,353 

 16,785 

Personnel expenses

 

 1,912 

 1,903 

 1,882 

 

 0 

 2 

 

 7,621 

 7,683 

Salaries and other personnel costs

 

 863 

 874 

 883 

 

 (1) 

 (2) 

 

 3,578 

 3,628 

Financial advisor variable compensation4,5

 

 913 

 894 

 857 

 

 2 

 7 

 

 3,501 

 3,470 

Compensation commitments with recruited financial advisors4,6

 

 137 

 135 

 142 

 

 1 

 (4) 

 

 542 

 584 

General and administrative expenses

 

 353 

 344 

 816 

 

 2 

 (57) 

 

 1,217 

 1,724 

Services (to) / from Corporate Center and other business divisions

 

 1,104 

 985 

 1,088 

 

 12 

 1 

 

 4,056 

 4,070 

of which: services from Corporate Center

 

 1,089 

 948 

 1,050 

 

 15 

 4 

 

 3,922 

 3,936 

Depreciation and impairment of property, equipment and software

 

 1 

 2 

 2 

 

 (34) 

 (40) 

 

 5 

 4 

Amortization and impairment of goodwill and intangible assets

 

 14 

 14 

 14 

 

 (2) 

 (3) 

 

 56 

 50 

Total operating expenses

 

 3,384 

 3,248 

 3,802 

 

 4 

 (11) 

 

 12,955 

 13,531 

Business division operating profit / (loss) before tax

 

 766 

 894 

 327 

 

 (14) 

 134 

 

 3,397 

 3,254 

 

 

 

 

 

 

 

 

 

 

 

Adjusted results7

 

 

 

 

 

 

 

 

 

 

Total operating income as reported

 

 4,150 

 4,142 

 4,129 

 

 0 

 1 

 

 16,353 

 16,785 

of which: gain related to investments in associates

 

 

 

 101 

 

 

 

 

 

 101 

Total operating income (adjusted)

 

 4,150 

 4,142 

 4,028 

 

 0 

 3 

 

 16,353 

 16,684 

Total operating expenses as reported

 

 3,384 

 3,248 

 3,802 

 

 4 

 (11) 

 

 12,955 

 13,531 

of which: personnel-related restructuring expenses8

 

 0 

 0 

 17 

 

 

 

 

 0 

 34 

of which: non-personnel-related restructuring expenses8

 

 0 

 0 

 0 

 

 

 

 

 0 

 16 

of which: restructuring expenses allocated from Corporate Center8,9

 

 21 

 25 

 59 

 

 

 

 

 69 

 209 

of which: gain related to changes to the Swiss pension plan

 

 

 

 

 

 

 

 

 

 (66) 

Total operating expenses (adjusted)

 

 3,363 

 3,223 

 3,726 

 

 4 

 (10) 

 

 12,887 

 13,338 

Business division operating profit / (loss) before tax as reported

 

 766 

 894 

 327 

 

 (14) 

 134 

 

 3,397 

 3,254 

Business division operating profit / (loss) before tax (adjusted)

 

 787 

 919 

 302 

 

 (14) 

 160 

 

 3,466 

 3,346 

 

 

 

 

 

 

 

 

 

 

 

Performance measures10

 

 

 

 

 

 

 

 

 

 

Pre-tax profit growth (%)

 

 134.3 

 3.5 

 (52.9) 

 

 

 

 

 4.4 

 1.1 

Cost / income ratio (%)

 

 81.4 

 78.3 

 91.8 

 

 

 

 

 79.1 

 80.5 

Net new money growth (%)

 

 (0.8) 

 2.5 

 (1.3) 

 

 

 

 

 1.4 

 1.0 

 

 

 

 

 

 

 

 

 

 

 

Adjusted performance measures7,10

 

 

 

 

 

 

 

 

 

 

Pre-tax profit growth (%)

 

 160.4 

 (1.8) 

 (66.1) 

 

 

 

 

 3.6 

 (12.1) 

Cost / income ratio (%)

 

 80.8 

 77.7 

 92.2 

 

 

 

 

 78.7 

 79.9 

 

18 


 

Global Wealth Management (continued)¹

 

 

 

 

 

 

 

As of or for the quarter ended

 

% change from

 

As of or for the year ended

USD million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

3Q19

4Q18

 

31.12.19

31.12.18

 

 

 

 

 

 

 

 

 

 

 

Additional information

 

 

 

 

 

 

 

 

 

 

Recurring income11

 

 3,348 

 3,350 

 3,402 

 

 0 

 (2) 

 

 13,205 

 13,678 

Recurring income as a percentage of income (%)

 

 80.5 

 80.7 

 82.2 

 

 

 

 

 80.6 

 81.4 

Average attributed equity (USD billion)12

 

 16.6 

 16.7 

 16.3 

 

 (1) 

 1 

 

 16.6 

 16.3 

Return on attributed equity (%)12

 

 18.5 

 21.4 

 8.0 

 

 

 

 

 20.5 

 20.0 

Risk-weighted assets (USD billion)12

 

 78.1 

 78.7 

 74.3 

 

 (1) 

 5 

 

 78.1 

 74.3 

Leverage ratio denominator (USD billion)12

 

 312.7 

 313.6 

 315.8 

 

 0 

 (1) 

 

 312.7 

 315.8 

Goodwill and intangible assets (USD billion)

 

 5.1 

 5.1 

 5.2 

 

 0 

 (1) 

 

 5.1 

 5.2 

Net new money (USD billion)

 

 (4.7) 

 15.7 

 (7.9) 

 

 

 

 

 31.6 

 24.7 

Invested assets (USD billion)

 

 2,635 

 2,502 

 2,260 

 

 5 

 17 

 

 2,635 

 2,260 

Net margin on invested assets (bps)13

 

 12 

 14 

 6 

 

 (17) 

 114 

 

 14 

 14 

Gross margin on invested assets (bps)

 

 65 

 67 

 71 

 

 (3) 

 (8) 

 

 66 

 70 

Client assets (USD billion)

 

 2,909 

 2,770 

 2,519 

 

 5 

 15 

 

 2,909 

 2,519 

Loans, gross (USD billion)14

 

 179.3 

 176.1 

 174.7 

 

 2 

 3 

 

 179.3 

 174.7 

Customer deposits (USD billion)14

 

 296.1 

 284.2 

 278.1 

 

 4 

 6 

 

 296.1 

 278.1 

Recruitment loans to financial advisors4

 

 2,053 

 2,153 

 2,296 

 

 (5) 

 (11) 

 

 2,053 

 2,296 

Other loans to financial advisors4

 

 824 

 851 

 994 

 

 (3) 

 (17) 

 

 824 

 994 

Personnel (full-time equivalents)

 

 22,681 

 22,748 

 23,618 

 

 0 

 (4) 

 

 22,681 

 23,618 

Advisors (full-time equivalents)

 

 10,077 

 10,217 

 10,677 

 

 (1) 

 (6) 

 

 10,077 

 10,677 

1 Prior-year comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity attribution framework effective 1 January 2019. Refer to “Note 1 Basis of accounting” in the “Consolidated financial statements” section of our first quarter 2019 report for more information about the changes to the Corporate Center cost and resource allocation to business divisions and to the “Recent developments” section of our first quarter 2019 report for more information about the changes in the equity attribution framework. Comparatives may additionally differ as a result of 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 Recurring net fee income consists of fees for services provided on an ongoing basis, such as portfolio management fees, asset-based investment fund fees, custody fees and account-keeping fees, which are generated on client assets.    3 Transaction-based income consists of the non-recurring portion of net fee and commission income, mainly composed of brokerage and transaction-based investment fund fees, as well as credit card fees and fees for payment transactions, together with Other net income from financial instruments measured at fair value through profit or loss.    4 Relates to licensed professionals with the ability to provide investment advice to clients in the Americas.    5 Financial advisor variable compensation consists of formulaic compensation based directly on compensable revenues generated by financial advisors and supplemental compensation calculated on the basis of financial advisor productivity, firm tenure, new assets and other variables.    6 Compensation commitments with recruited financial advisors represent expenses related to compensation commitments granted to financial advisors at the time of recruitment that are subject to vesting requirements.    7 Adjusted results are non-GAAP financial measures as defined by SEC regulations.    8 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives.    9 Prior periods may include allocations (to) / from other business divisions.    10 Refer to the “Performance targets and measurement” section of our Annual Report 2018 for the definitions of our performance measures.    11 Recurring income consists of net interest income and recurring net fee income.    12 Refer to the “Capital management” section of this report for more information.    13 Calculated as operating profit before tax (annualized as applicable) divided by average invested assets.    14 Loans and Customer deposits in this table include customer brokerage receivables and payables, respectively, which, with the adoption of IFRS 9, effective 1 January 2018, have been reclassified to a separate reporting line on the balance sheet.

 

 

Regional breakdown of performance measures1

 

 

 

 

 

 

As of or for the quarter ended 31.12.19

USD billion, except where indicated

Americas

EMEA

Asia Pacific

Switzerland

Total of regions2

of which: ultra high net worth (UHNW)

Net new money

 (9.0) 

 0.0 

 3.1 

 1.3 

 (4.6) 

 5.7 

Net new money growth (%)

 (2.7) 

 0.0 

 3.0 

 2.3 

 (0.7) 

 1.8 

Invested assets

 1,403 

 552 

 450 

 228 

 2,633 

 1,371 

Loans, gross

 62.53

 37.1 

 43.1 

 36.0 

 178.7 

 

Advisors (full-time equivalents)

 6,549 

 1,660 

 1,041 

 727 

 9,976 

 1,0424

1 Refer to the “Performance targets and measurement” section of our Annual Report 2018 for the definitions of our performance measures.    2 Excluding minor functions with 101 advisors, USD 3 billion of invested assets, USD 0.6 billion of loans and USD 0.1 billion of net new money outflows in the fourth quarter of 2019.    3 Loans include customer brokerage receivables, which with the adoption of IFRS 9, effective 1 January 2018, have been reclassified to a separate reporting line on the balance sheet.    4 Represents advisors who exclusively serve ultra high net worth clients in a globally managed unit.

 

19 


Global Wealth Management 

Results: 4Q19 vs 4Q18

Profit before tax increased by USD 439 million to USD 766 million. Excluding a USD 101 million valuation gain on our equity ownership in SIX related to the sale of SIX Payment Services to Worldline in the fourth quarter of 2018 and restructuring expenses, adjusted profit before tax increased by USD 485 million to USD 787 million, reflecting lower operating expenses and higher operating income. Operating income included a USD 75 million fee received from Personal & Corporate Banking for the shift of USD 6 billion of business volume from Global Wealth Management to Personal & Corporate Banking, as a result of a detailed client segmentation review.

Operating income

Total operating income increased by USD 21 million to USD 4,150 million. Excluding the aforementioned valuation gain on our equity ownership in SIX, adjusted total operating income increased by USD 122 million, or 3%, mainly driven by higher transaction-based income, partly offset by lower net interest and recurring net fee income.

Net interest income decreased by USD 35 million to USD 993 million, mainly reflecting lower deposit and loan margins, partly offset by higher investment-of-equity income.

Recurring net fee income decreased by USD 20 million to USD 2,354 million. The effects of positive market performance and increased mandate penetration were more than offset by margin compression and moves into lower-margin products.

Transaction-based income increased by USD 162 million to USD 789 million, driven by higher levels of client activity in all regions as well as the aforementioned fee received from Personal & Corporate Banking.

®   Refer to the “Group performance” section of our third quarter 2019 report for more information about the realignment of our client coverage between Global Wealth Management and Personal & Corporate Banking

 

Other income decreased by USD 89 million to USD 23 million. Excluding the aforementioned valuation gain on our equity ownership in SIX, adjusted other income increased by USD 13 million to USD 23 million, mainly reflecting a gain related to legacy securities positions.

®   Refer to the “Recent developments” section of our fourth quarter 2018 report for more information about the Worldline acquisition of SIX Payment Services

 


Operating expenses

Total operating expenses decreased by USD 418 million, or 11%, to USD 3,384 million, and adjusted operating expenses decreased by USD 363 million, or 10%, to USD 3,363 million.

Personnel expenses increased by USD 30 million to USD 1,912 million. Adjusted personnel expenses increased by USD 47 million to USD 1,912 million, mainly as a result of higher financial advisor variable compensation, partly offset by a decrease in staffing levels.

General and administrative expenses decreased by USD 463 million to USD 353 million, driven by lower expenses for provisions for litigation, regulatory and similar matters.

Net expenses for services to/from Corporate Center and other business divisions increased by USD 16 million to USD 1,104 million. Excluding restructuring expenses, adjusted net expenses for services increased by USD 55 million to USD 1,083 million, mainly due to higher expenses for regulatory projects and IT development.

Net new money: 4Q19 vs 4Q18

Net new money outflows were USD 4.7 billion, compared with net outflows of USD 7.9 billion, reflecting an annualized net new money growth rate of negative 0.8%, compared with negative 1.3%. Outflows mainly occurred in the Americas, which included two single large outflows that amounted to USD 5.4 billion. Net new money from ultra high net worth clients was USD 5.7 billion.

Invested assets: 4Q19 vs 3Q19

Invested assets increased by USD 133 billion to USD 2,635 billion, driven by positive market performance of USD 110 billion, positive currency effects of USD 24 billion and reclassifications of USD 5 billion, partly offset by net new money outflows of USD 5 billion. Mandate penetration decreased to 34.3% from 34.4%.

 

  

20 


 

Personal & Corporate Banking

Personal & Corporate Banking – in Swiss francs1

 

 

 

 

 

 

 

 

 

 

 

 

As of or for the quarter ended

 

% change from

 

As of or for the year ended

CHF million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

3Q19

4Q18

 

31.12.19

31.12.18

 

 

 

 

 

 

 

 

 

 

 

Results

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 494 

 495 

 515 

 

 0 

 (4) 

 

 1,980 

 2,003 

Recurring net fee income2

 

 164 

 155 

 157 

 

 6 

 5 

 

 634 

 625 

Transaction-based income3

 

 189 

 283 

 247 

 

 (33) 

 (23) 

 

 1,041 

 1,082 

Other income

 

 14 

 11 

 373 

 

 24 

 (96) 

 

 60 

 419 

Income

 

 861 

 944 

 1,292 

 

 (9) 

 (33) 

 

 3,714 

 4,128 

Credit loss (expense) / recovery

 

 7 

 (30) 

 (17) 

 

 

 

 

 (22) 

 (55) 

Total operating income

 

 868 

 914 

 1,275 

 

 (5) 

 (32) 

 

 3,692 

 4,074 

Personnel expenses

 

 203 

 204 

 185 

 

 0 

 10 

 

 850 

 786 

General and administrative expenses

 

 61 

 57 

 109 

 

 7 

 (44) 

 

 222 

 279 

Services (to) / from Corporate Center and other business divisions

 

 295 

 298 

 334 

 

 (1) 

 (12) 

 

 1,173 

 1,234 

of which: services from Corporate Center

 

 325 

 323 

 360 

 

 1 

 (10) 

 

 1,286 

 1,336 

Depreciation and impairment of property, equipment and software

 

 3 

 3 

 4 

 

 5 

 (24) 

 

 13 

 14 

Amortization and impairment of goodwill and intangible assets

 

 0 

 0 

 0 

 

 

 

 

 0 

 0 

Total operating expenses

 

 562 

 562 

 632 

 

 0 

 (11) 

 

 2,259 

 2,313 

Business division operating profit / (loss) before tax

 

 306 

 353 

 643 

 

 (13) 

 (52) 

 

 1,433 

 1,760 

 

 

 

 

 

 

 

 

 

 

 

Adjusted results4

 

 

 

 

 

 

 

 

 

 

Total operating income as reported

 

 868 

 914 

 1,275 

 

 (5) 

 (32) 

 

 3,692 

 4,074 

of which: gains related to investments in associates

 

 

 

 359 

 

 

 

 

 

 359 

Total operating income (adjusted)

 

 868 

 914 

 916 

 

 (5) 

 (5) 

 

 3,692 

 3,715 

Total operating expenses as reported

 

 562 

 562 

 632 

 

 0 

 (11) 

 

 2,259 

 2,313 

of which: personnel-related restructuring expenses5

 

 0 

 0 

 1 

 

 

 

 

 0 

 4 

of which: non-personnel-related restructuring expenses5

 

 0 

 0 

 0 

 

 

 

 

 0 

 0 

of which: restructuring expenses allocated from Corporate Center5,6

 

 3 

 8 

 17 

 

 

 

 

 17 

 42 

of which: gain related to changes to the Swiss pension plan

 

 

 

 

 

 

 

 

 

 (35) 

Total operating expenses (adjusted)

 

 559 

 554 

 614 

 

 1 

 (9) 

 

 2,242 

 2,302 

Business division operating profit / (loss) before tax as reported

 

 306 

 353 

 643 

 

 (13) 

 (52) 

 

 1,433 

 1,760 

Business division operating profit / (loss) before tax (adjusted)

 

 309 

 360 

 303 

 

 (14) 

 2 

 

 1,450 

 1,413 

 

 

 

 

 

 

 

 

 

 

 

Performance measures7

 

 

 

 

 

 

 

 

 

 

Pre-tax profit growth (%)

 

 (52.4) 

 (9.6) 

 79.9 

 

 

 

 

 (18.6) 

 21.6 

Cost / income ratio (%)

 

 65.3 

 59.5 

 48.9 

 

 

 

 

 60.8 

 56.0 

Net interest margin (bps)

 

 149 

 150 

 157 

 

 

 

 

 150 

 153 

 

 

 

 

 

 

 

 

 

 

 

Adjusted performance measures4,7

 

 

 

 

 

 

 

 

 

 

Pre-tax profit growth (%)

 

 2.2 

 (9.8) 

 (23.1) 

 

 

 

 

 2.6 

 (8.8) 

Cost / income ratio (%)

 

 64.9 

 58.7 

 65.8 

 

 

 

 

 60.4 

 61.1 

 

21 


Personal & Corporate Banking 

Personal & Corporate Banking – in Swiss francs (continued)1

 

 

 

 

 

 

 

 

 

 

As of or for the quarter ended

 

% change from

 

As of or for the year ended

CHF million, except where indicated

 

31.12.19

30.9.19

31.12.18

 

3Q19

4Q18

 

31.12.19

31.12.18

 

 

 

 

 

 

 

 

 

 

 

Additional information

 

 

 

 

 

 

 

 

 

 

Average attributed equity (CHF billion)8

 

 8.4 

 8.4 

 8.1 

 

 1 

 5 

 

 8.4 

 7.8 

Return on attributed equity (%)8

 

 14.5 

 16.8 

 31.8 

 

 

 

 

 17.1 

 22.5 

Risk-weighted assets (CHF billion)8

 

 65.0 

 64.4 

 62.8 

 

 1 

 3 

 

 65.0 

 62.8 

Leverage ratio denominator (CHF billion)8

 

 217.1 

 214.3 

 210.2 

 

 1 

 3 

 

 217.1 

 210.2 

Business volume for personal banking (CHF billion)