UBS(UBS)2025-03-17 11:41Financial Performance - Net interest income from financial instruments measured at fair value through profit or loss increased by 87% to USD 7,061 million in 2024, compared to USD 3,770 million in 2023[597]. - Net fee and commission income rose by USD 4,568 million to USD 26,138 million, primarily due to the consolidation of Credit Suisse revenues for the full period[598]. - Fees for portfolio management and related services increased by USD 1,650 million to USD 12,323 million, largely driven by the consolidation of Credit Suisse revenues and positive market performance[599]. - Total revenues increased by USD 2,960m, or 14%, to USD 24,516m, driven by the consolidation of Credit Suisse revenues and higher recurring net fee income[640]. - Total comprehensive income attributable to shareholders was USD 3,388 million, reflecting a net profit of USD 5,085 million and negative other comprehensive income of USD 1,698 million[617]. - Total revenues increased by USD 2,245 million, or 26%, to USD 10,948 million, with underlying total revenues rising by 23% to USD 9,958 million[687]. Expenses and Cost Management - Personnel expenses increased by USD 2,419 million to USD 27,318 million, largely due to the consolidation of Credit Suisse expenses for the full period[607]. - General and administrative expenses decreased by USD 32 million to USD 10,124 million, primarily due to a reduction in litigation-related expenses[608]. - Operating expenses rose by USD 2,663m, or 15%, to USD 20,608m, including a USD 785m increase in integration-related expenses[646]. - The cost/income ratio improved to 84.8%, down from 95.0%, reflecting higher total revenues despite increased operating expenses[626]. - The cost/income ratio increased to 84.1% from 83.2%, while the underlying cost/income ratio improved to 79.5% from 81.3%[647]. Taxation - The effective tax rate for 2024 was 24.6%, compared to 3.1% in 2023, with total income tax expenses recognized at USD 1,675 million[613]. - The Group expects the 2025 full year effective tax rate to be materially less than the structural rate of 23% due to projected reorganization-related tax benefits[616]. Credit and Risk Management - Total net credit loss expenses in 2024 were USD 551 million, a decrease from USD 1,037 million in 2023, reflecting net releases of USD 99 million related to performing positions[605]. - Net credit loss releases were USD 16m, a significant improvement from net credit loss expenses of USD 166m in 2023[645]. - Credit loss expenses decreased to USD 97 million from USD 190 million in 2023, reflecting improved credit conditions[694]. - The total credit-impaired exposure, gross, was USD 6.637 billion as of December 31, 2024, with stage 3 impairments at USD 5.300 billion[788]. - Total allowances and provisions for expected credit losses amounted to USD 2.507 billion, with stage 1 allowances at USD 487 million[788]. Asset Management - Total revenues for the Asset Management division increased by USD 496m, or 18%, to USD 3,182m, reflecting the consolidation of Credit Suisse revenues[674]. - Net management fees in Asset Management rose by USD 367m, or 14%, to USD 2,921m, attributed to the consolidation of Credit Suisse net management fees and positive market performance[675]. - Total net new money in Asset Management reached USD 44.6 billion, a significant increase from USD 15.7 billion in the previous year[672]. Market and Geopolitical Risks - Geopolitical and macroeconomic risks remain significant, impacting business activities and financial results[718]. - Cyber risks have increased due to geopolitical trends, necessitating enhanced operational resilience measures[718]. - Sustainability and climate risks are a focus for UBS, with enhanced methodologies and updated guidelines on sustainable finance to address emerging risks[720]. Integration and Future Outlook - Integration of Credit Suisse is progressing, with client account migrations completed in Hong Kong, Singapore, Japan, and parts of Europe[716]. - The company aims for a fully integrated risk framework by the end of 2025, incorporating legacy Credit Suisse models into UBS's risk management[716]. Risk Governance and Compliance - The Group Chief Risk Officer is responsible for developing the risk management framework for various risk categories, including credit and market risks[730]. - The Group Chief Compliance and Governance Officer oversees the framework for non-financial risks, including financial crime and operational risks[731]. - The risk governance framework operates along three lines of defense, ensuring accountability and effective risk management processes[721]. Loans and Advances - Total loans and advances to customers, gross, decreased from USD 317,137 million in 31.12.23 to USD 295,856 million in 31.12.24, a decline of approximately 6.5%[795]. - Residential real estate loans decreased from USD 111,755 million in 31.12.23 to USD 106,124 million in 31.12.24, a decline of about 5.9%[795]. - Total allowances for loans and advances increased from USD 181 million in 31.12.23 to USD 221 million in 31.12.24, an increase of about 22.1%[795].