Annual report, Group and Parent Bank accounts for financial year 2012
1.1. Approval of annual report and Group and Parent Bank accounts
The Board of Directors proposes that the report on the financial year 2012 and the Group and Parent Bank accounts for 2012 be approved.
The “Financial information” section of UBS’s annual report 2012 contains the consolidated financial statements of the UBS Group and the financial statements of UBS AG, the Parent Bank. Additional information on the strategy, organization and activities of the Group, the business divisions and the Corporate Center, as well as on risk management and control, may be found in the sections “Operating environment and strategy,” “Financial and operating performance” and “Risk, treasury and capital management” of the annual report 2012. Information relating to corporate governance as required by the applicable Swiss laws and regulations, in particular the SIX Swiss Exchange’s Directive on Information Relating to Corporate Governance and the Swiss Code of Obligations, can be found in the section “Corporate governance, responsibility and compensation” of the annual report 2012. The annual report 2012is also available on the internet at www.ubs.com/investors. Shareholders registered in the share register in Switzerland and shareholders in the US who are registered with Computershare will receive the abovementioned reporting as per their individual orders.
UBS Group net loss attributable to UBS shareholders in 2012 was CHF 2,511 million compared with a profit of CHF 4,138 million in 2011. The pre-tax loss was CHF 1,774 million compared with a profit of CHF 5,307 million in the prior year. The 2012 loss was primarily due to impairment losses of CHF 3,064 million on goodwill and other non-financial assets in the Investment Bank, net charges for provisions for litigation, regulatory and similar matters of CHF 2,549 million, an own credit loss on financial liabilities designated at fair value of CHF 2,202 million and net restructuring charges of CHF 371 million. In 2012, we recorded a tax expense of CHF 461 million compared with CHF 901 million in 2011. Net profit attributable to non-controlling interests was CHF 276 million in 2012 compared with CHF 268 million in 2011. Total consolidated assets stood at CHF 1,259.2 billion on 31 December 2012. Equity attributable to UBS shareholders decreased by CHF 2.6 billion to CHF 45.9 billion in 2012.
The loss for UBS AG (Parent Bank) for the period was CHF 6,645 million. Total operating income of CHF 17,374 million and total operating expenses of CHF 13,904 million resulted in an operating profit of CHF 3,470 million. Impairment, depreciation, allowances, provisions and losses amounted to CHF 6,486 million. Extraordinary income was CHF 429 million, extraordinary expenses totaled CHF 4,117 million and the net income tax benefit amounted to CHF 59 million.
The BIS Basel 2.5 total capital ratio and the FINMA Basel 2.5 total capital ratio for UBS AG (Parent Bank) were 16.8% and 15.5%, respectively, as of 31 December 2012. BIS Basel 2.5 total capital and FINMA Basel 2.5 total capital both stood at CHF 38,173 million. Risk-weighted assets wereCHF 227,287 million (BIS) and CHF 246,574 million (FINMA).
In their reports to the Annual General Meeting, Ernst & Young Ltd., Basel, as auditors, recommended without qualification that the Group and Parent Bank accounts be approved. The auditors confirm that, in their opinion, the Group financial statements accurately reflect the consolidated financial position of UBS AG and its consolidated subsidiaries and their consolidated results of operations and cash flows, in conformity with the International Financial Reporting Standards (IFRS), and that they comply with Swiss law. With respect to the Parent Bank, the auditors confirm that the financial statements and the proposal of the Board of Directors relating to the proposed appropriation of results comply with Swiss law and with the Articles of Association of UBS AG.
1.2. Advisory vote on the compensation report 2012
The Board of Directors proposes that the compensation report 2012 be ratified in a non-binding advisory vote.
The compensation report 2012 is a chapter in the annual report 2012. It explains the governance and principles behind the compensation structure at UBS AG, including the link between pay and performance. It contains information on the Total Reward Principles for all employees, which were re-affirmed on 24 October 2012 by the Board of Directors’ Human Resources and Compensation Committee. The compensation report also sets out the compensation of the management and Board of Directors in accordance with all applicable laws and regulations.
The vote on the compensation report 2012 of UBS AG is advisory in nature.