UBS(UBS)2024-03-28 11:23Revenue and Financial Performance - UBS AG's total revenues for 2023 were 13.3 billion, Asia Pacific 6.1 billion, Switzerland (0.1) billion[20] - Credit Suisse AG's net revenues for 2023 were CHF 19,890 million, with Wealth Management contributing CHF 3,058 million, Swiss Bank CHF 3,515 million, Asset Management CHF 659 million, and Non-core and Legacy (including Investment Bank) CHF (1,185) million[22][23] - Credit Suisse AG's net revenues by geographic location for 2023 were Switzerland CHF 17,210 million, EMEA CHF (1,488) million, Americas CHF 4,270 million, and Asia Pacific CHF (102) million[24] - UBS AG's Americas revenues decreased from 10.2 billion in 2023, while Switzerland revenues increased from 9.2 billion in 2023[20] - Credit Suisse AG's Wealth Management revenues declined from CHF 5,549 million in 2021 to CHF 3,058 million in 2023[22] - UBS AG's Asia Pacific revenues decreased from 2.5 billion in 2023[20] - Credit Suisse AG's Asset Management revenues dropped from CHF 1,352 million in 2021 to CHF 659 million in 2023[22] - UBS AG's EMEA revenues decreased from 3.6 billion in 2023[20] - Credit Suisse AG's Swiss Bank revenues declined from CHF 4,457 million in 2021 to CHF 3,515 million in 2023[22] - UBS AG's Global revenues were 0.8 billion in 2022[20] - UBS's total revenues for 2023 were USD 40,834 million, compared to USD 34,563 million in 2022[106] - UBS's net profit attributable to shareholders for 2023 was USD 27,849 million, a 265.0% increase from 2022[106] - UBS's total assets for 2023 were USD 1,717,246 million, compared to USD 1,104,364 million in 2022[106] - UBS's common equity tier 1 capital ratio for 2023 was 14.4%, compared to 14.2% in 2022[106] - UBS's negative goodwill from the Credit Suisse acquisition was adjusted to USD 27.7 billion, decreasing from USD 28.9 billion[107] - UBS's full-year profit before tax in 2023 stood at USD 28.7 billion, including USD 27.7 billion of negative goodwill[91] - UBS's common equity tier 1 (CET1) capital ratio increased to 14.4% at year-end 2023, comfortably above the guidance of around 14%[91] Corporate Governance and Shareholder Rights - Shareholders' meetings require approval of at least two-thirds of the votes for significant corporate changes such as delisting, share capital increase, and change of domicile[36] - The company must retain at least 5% of annual net profits as statutory retained earnings until they reach 50% of the registered share capital[38] - Dividends can only be paid if the company has sufficient distributable profits or reserves, and must be approved by shareholders[39] - Existing shareholders have preemptive rights in share issues, which can be limited or excluded by a two-thirds majority vote[40] - A mandatory takeover bid is required if an entity acquires more than 33 1/3% of the voting rights of the company[42] - The company can repurchase shares only if freely distributable reserves cover the purchase price and the total nominal value of repurchased shares does not exceed 10% of nominal share capital[47] Taxation and Dividends - Dividends paid by the company are subject to a 35% Swiss federal withholding tax, with potential refunds for US holders under the Treaty[58] - The company distributes dividends equally from capital contribution reserves and taxable dividends, with the latter subject to 35% withholding tax[59] - Swiss securities transfer stamp duty of up to 0.15% applies to UBS ordinary shares transactions through banks or securities dealers in Switzerland or Liechtenstein[62] - Dividends paid by UBS Group AG to US holders are generally treated as qualified dividend income if shares are held for more than 60 days during a 121-day period around the ex-dividend date[66] - UBS Group AG expects dividends to be qualified dividend income as its ordinary shares are listed on the New York Stock Exchange[66] - US holders may recognize capital gain or loss on the sale of UBS ordinary shares, with preferential tax rates for non-corporate holders if shares are held for more than one year[71] - UBS Group AG believes it should not currently be classified as a Passive Foreign Investment Company (PFIC) for US federal income tax purposes[72] - If classified as a PFIC, US holders may face ordinary income tax rates on gains or excess distributions from UBS ordinary shares, with interest charges on deferred taxes[72] - Dividends paid by UBS Group AG are generally considered foreign-source income for US foreign tax credit purposes, unless specific ownership and earnings conditions are met[68] - US holders must include dividends in gross income at the US dollar value of Swiss franc payments, based on the spot exchange rate on the dividend inclusion date[69] - Swiss withholding tax on dividends may be creditable or deductible against US federal income tax liability, subject to US foreign tax credit limitations[70] - UBS Group AG’s PFIC status depends on whether at least 75% of its gross income is passive or 50% of its assets produce passive income[72] Debt Issuance - UBS Group AG issued USD 1.75 billion 9.250% Tier 1 Subordinated Notes on 13 November 2023 with a first call date of 13 November 2028[75] - UBS Group AG issued USD 1.75 billion 9.250% Tier 1 Subordinated Notes on 13 November 2023 with a first call date of 13 November 2033[75] - UBS Group AG issued USD 1 billion 7.750% Tier 1 Subordinated Notes on 12 February 2024 with a first call date of 12 April 2031[75] - UBS Group AG issued SGD 650 million 5.750% Tier 1 Subordinated Notes on 21 February 2024 with a first call date of 21 August 2029[75] - UBS Group AG issued USD 1.5 billion 4.875% Tier 1 Subordinated Notes on 12 January 2022[76] - UBS Group AG issued CHF 265 million 3.375% Tier 1 Subordinated Notes on 16 February 2022[76] - UBS Group AG issued USD 750 million 3.875% Tier 1 Subordinated Notes on 02 June 2021[73] - UBS Group AG issued USD 1.5 billion 4.375% Tier 1 Subordinated Notes on 10 February 2021[73] - UBS Group AG issued USD 750 million 5.125% Tier 1 Subordinated Notes on 29 July 2020[73] - UBS Group AG issued AUD 700 million 4.375% Tier 1 Subordinated Notes on 27 August 2019[73] Wealth Management and Asset Growth - UBS achieved net new assets of USD 77 billion in Global Wealth Management and USD 77 billion of net new deposits across Global Wealth Management and Personal & Corporate Banking since the acquisition of Credit Suisse[90] - UBS's Global Wealth Management business generated 60% of the company's revenues in 2023, with over a third of risk-weighted assets dedicated to this segment[92] - UBS expects Global Wealth Management margins in Asia Pacific to eventually exceed 40% as the company captures the benefits of its leadership positions and integration-related synergies[92] - UBS aims to capture around USD 100 billion of net new assets per annum through 2025, building to around USD 200 billion per annum by 2028[95] - UBS's total invested assets reached USD 1.6 trillion following the acquisition of Credit Suisse Group[146] - UBS's combined market share in the Swiss franc-denominated market is nearly 50%[153] - UBS's Investment Bank Research covers more than 3,400 stocks in 49 different countries[153] - UBS's ESG Company Radar reports assess the impact of ESG factors at the company level and received a positive client response[153] - UBS's Global Markets business aims to capture market share in global equity derivatives, focusing on flow derivatives and quantitative investment strategies[152] - UBS's total invested assets (UBS Group) reached USD 5,714.1bn as of 31 December 2023[210] Cost Savings and Efficiency - UBS expects to realize around USD 13 billion in gross cost savings by the end of 2026, with around 45% of the cumulative gross cost reductions expected by the end of 2024[95] - UBS achieved around USD 4bn in exit rate gross cost savings as of the end of 2023 compared with the full year 2022 for UBS and Credit Suisse combined[120] - UBS reduced funding costs by around USD 550m per quarter by terminating the loss protection agreement guaranteed by the Swiss government[120] - UBS reduced risk-weighted assets by USD 12bn, nearly 80% of which came from unwinds[120] - The company aims to deliver exit rate gross cost savings of approximately USD 13bn by the end of 2026 compared to 2022[133] - The company expects up to USD 1bn of funding cost savings by 2026 compared to 2023 levels[133] Sustainability and ESG - UBS aims to reduce its absolute financed emissions in the fossil fuel sector by 70% from the 2021 baseline to 2030[96] - UBS facilitated USD 53.7bn in green, social, sustainability, and sustainability-linked bond deals in 2023[209] - UBS AG's sustainable investments rose to USD 292.3bn as of 31 December 2023, a 10% year-on-year increase[210] - Sustainable investments accounted for 6.5% of UBS's total invested assets at year-end 2023[210] - UBS reduced its own energy consumption by 15% from 2019 levels by 2025[204] - UBS aims for 100% renewable electricity coverage[204] - UBS plans to neutralize residual emissions down to zero by 2025 through credible carbon removal credits[204] - UBS engaged with GHG key vendors, targeting 100% to declare emissions and set net-zero-aligned goals by 2026[204] - UBS's sustainability and impact strategy focuses on three key areas: planet, people, and partnerships[203] - UBS aims to align 20% of UBS AG Asset Management's total assets under management with net zero by 2030[204] - UBS targets USD 400bn in sustainable investments by 2025[204] - UBS's Corporate Culture and Responsibility Committee oversees the Group-wide sustainability and impact strategy, including climate, nature, and human rights[201] - UBS is committed to the 17 United Nations Sustainable Development Goals and the transition to a low-carbon economy[199] - UBS's direct cash contributions and affiliated foundations amounted to USD 63m in 2023[198] - 38% of UBS's global workforce engaged in volunteering in 2023, contributing 199,633 volunteer hours, with 45% being skills-based[198] - UBS launched donor-advised funds in Hong Kong SAR in 2023, raising USD 318m in donations[194] - The UBS Optimus network of foundations raised USD 328m in donations and committed USD 306m in grants in 2023[195] - UBS secured major investor commitments for a USD 100m SDG Outcomes blended finance initiative in 2023[196] - The UBS Optimus network of foundations raised and distributed over USD 25m for emergency relief in 2023, including for the Turkey and Syria earthquake and Hawaiian wildfires[197] - UBS aims to mobilize USD 1bn in philanthropic capital and positively impact more than 26.5 million people by 2025 (cumulative total since 2021)[194] - UBS's DE&I strategy aims for 30% of Director level and above roles globally to be held by women by 2025[191] - Women accounted for 40.9% of UBS's workforce and 29.5% of Director level and above roles at the end of 2023, up from 27.8% in 2022[191] - UBS's internal pay equity audits show a gender pay differential of less than 1% across major locations[191] - UBS's employee engagement survey in November 2023 found 87% of respondents experienced a professional and respectful work environment[192] - UBS's workforce as of 31 December 2023 includes 115,038 internal employees and 25,619 external staff[187] - UBS hired 11,435 external candidates and developed over 3,700 graduates, trainees, apprentices, and interns globally in 2023[189] - UBS's full-time equivalents in the Americas increased by 27% to 27,638, with the USA seeing a 24% increase to 26,024[190] - UBS employees completed over 2.3 million learning activities in 2023, averaging 1.91 training days per employee, with a total investment of over USD 100m in training[191] - Increased worldwide roles at Director level and above held by women to 29.5% in 2023, up from 27.8% in 2022[214] - Increased US roles at Director level and above held by employees from ethnic minority backgrounds to 25.1% in 2023, up from 20.5% in 2022[214] - Achieved a UBS Optimus network of foundations donation volume of USD 328.0m in 2023, totaling USD 763.9m since 2021[215] - Reached 7 million beneficiaries in 2023 and 18.5 million beneficiaries across social impact activities since 2021[215] - UBS Group will publish sustainability and climate risk metrics for UBS Group and Credit Suisse AG in a supplement to the UBS Group Annual Report and Sustainability Report in Q3 2024[216] - UBS Group Sustainability Report 2023 follows GRI standards, EU Directive 2014/95/EU, and Swiss Code of Obligations (Art. 964a et. seq.)[216] - UBS Group Climate and Nature Report 2023 aligns with TCFD and TNFD frameworks[216] - UBS Group's sustainability reporting has been reviewed on a limited assurance basis by Ernst & Young Ltd against GRI Standards[216] - UBS Group is subject to consolidated supervision by FINMA as a financial services provider based in Switzerland[217] - UBS Group entities are regulated and supervised by authorities in each country where they conduct business[217] - UBS Group is designated as a global systemically important bank (G-SIB) by the Financial Stability Board[217] - UBS Group is classified as a systemically relevant bank (SRB) in Switzerland, subject to stricter regulatory requirements[217] Acquisition and Integration of Credit Suisse - UBS Group AG acquired Credit Suisse Group AG for a purchase price of USD 3.7bn, with Credit Suisse shareholders receiving 5.1% of UBS Group AG shares[119] - The acquisition of Credit Suisse strengthened UBS's position as a leading global wealth manager and the leading bank in Switzerland[116] - The acquisition of Credit Suisse was supported by government guarantees and measures to restore confidence in the Swiss economy and banking system[119] - The acquisition of Credit Suisse was accounted for as a business combination under IFRS 3, applying the acquisition method of accounting[119] - The acquisition of Credit Suisse followed a request from Swiss authorities to restore stability in the Swiss banking system[119] - UBS has been entrusted with USD 77bn of net new assets since the acquisition of Credit Suisse[120] - UBS expects to complete the merger of UBS AG and Credit Suisse AG by the end of the second quarter of 2024[120] - UBS aims to substantially complete the integration of Credit Suisse by the end of 2026[120] - The legal merger of Credit Suisse (Schweiz) AG with UBS Switzerland AG is expected to be completed in the third quarter of 2024[141] - UBS has excluded Credit Suisse entities from its assessment of internal control over financial reporting as of 31 December 2023[123] - UBS plans to complete remediation of internal control risk identification and severity assessment weaknesses by integrating Credit Suisse into the UBS internal control framework in 2024[122] - The acquisition of Credit Suisse contributed approximately USD 680bn in invested assets and more than 1,500 client advisors globally[135] Market and Economic Outlook - Global economic growth slowed to 3.2% in 2023, down from 3.4% in 2022, with US GDP growth increasing to 2.5% from 1.9% in 2022[163] - US consumer price inflation slowed to 3.4% in December 2023 from 6.4% in January 2023, while Eurozone inflation decelerated to 2.9% year over year in December 2023 from 8.5% in January 2023[163] - The MSCI All Country World Index returned a 22.2% gain in 2023, with the S&P 500 rising by 26.3% and the FANG+ index increasing 96% over the year[163] - UBS expects US GDP growth to remain positive at around 1.1% in 2024, with Eurozone growth at 0.6% and UK GDP growth at 0.6%[164]