Quarterly reporting

UBS financial information

Second quarter 2022

Group highlights

We are helping our clients navigate challenging markets: Amidst an acceleration in market declines across equity and fixed income, we focused on being close to our clients and supporting them with advice, liquidity and execution across our USD 3.9trn ecosystem. Against this backdrop, Global Wealth Management net new fee-generating assets flows were muted at USD 0.4bn globally, but they were over USD 3bn positive in APAC. We saw USD 12bn of outflows in Asset Management, primarily from equities. With loans of close to USD 400bn and deposits over USD 500bn we saw combined net interest income up 15% year-on-year for GWM and P&C. Client activity was robust but differentiated across segments as institutional clients remained very active, with 10% growth in Global Markets revenues, on the back of high volatility, whereas private investors remained generally on the sidelines. Nonetheless, our clients committed USD 3.9bn in private markets and invested USD 4.0bn in separately managed accounts. Momentum also stayed positive in our modular digital mandate offering, My Way, as well as in investment products in Switzerland, each contributing USD 0.5bn of inflows. Finally, with USD 239bn Sustainable Finance invested assets we are more than halfway towards our USD 400bn aspiration by 2025.

We are executing our strategy to drive sustainable growth and efficiency: We are using technology to improve how clients interact with us and how we work. Our mobile-only retail clients in Switzerland now represent around a third of our client base, a 30% growth versus last year. To support them, we expanded our offering and capabilities with UBS key4. In APAC, we launched Circle One, a platform that will bring the best of UBS's global ecosystem directly to our clients. We are improving how we manage, change and develop technology, and we are fostering our engineering culture. For instance, 60% of our applications are currently on the cloud – half in the public and half in the private cloud. Engineers make up 65% of the technology teams that have transitioned to agile, 10 percentage points more than pre-agile. We deployed new AI technology in over 500 applications, and we decommissioned around 300 applications year to date to simplify our tech estate. We achieved this while remaining disciplined on costs, progressing our cost-saving program as planned and investing in our growth initiatives.

We delivered strong reported results and good underlying performance: 2Q22 PBT was USD 2,615m (up 1% YoY). This included the sale of our stake in a joint venture as announced in 1Q22. Our capital-light business model, proactive risk management and exposure to rising interest rates contributed to the quarter’s good performance. The cost/income ratio was 70.6%, an improvement of 1.2 percentage points YoY. Total revenues were broadly flat YoY, while operating expenses decreased by 1%. Net profit attributable to shareholders was USD 2,108m (up 5% YoY), with diluted earnings per share of USD 0.61. Return on CET1 capital was 18.9%. The quarter-end CET1 capital ratio was 14.2% (guidance: ~13%) and the CET1 leverage ratio was 4.37% (guidance: >3.7%). We repurchased USD 1.6bn of shares in 2Q22 and USD 3.3bn in the first half of the year, and we expect to repurchase a total of around USD 5bn of shares during 2022, as planned.

First quarter 2022

Group highlights

We are executing our strategy to drive growth and efficiency: During 1Q22, we remained focused on executing our strategy. Sustainability remains an important topic for our clients and for us, and this quarter, we launched a new climate transition fund in collaboration with Aon. We saw USD 8bn commitments into private markets from our wealth management clients, who benefit from our scale to receive institutional-like access and pricing. We also continued to improve our mobile applications, helping our clients connect with us easily. In the quarter, more than half of our personal banking clients in Switzerland were active on mobile banking.

We are helping our clients navigate challenging markets: Macroeconomic, geopolitical and market factors created a high level of uncertainty in the first quarter, with Russia’s invasion of Ukraine, COVID-related restrictions and lockdowns, higher volatility, the lower economic growth outlook, and concerns about higher inflation and the monetary policy response. Our clients continued to put their trust in us to navigate this environment. This led to USD 19bn in net new fee-generating asset flows1 in GWM, USD 14bn net new money excluding money market flows in AM, and CHF 1bn net new investment products for Personal Banking.

We delivered strong firm-wide results while managing risk: 1Q22 PBT was USD 2,729m (up 19% YoY), including net credit loss expenses of USD 18m. The cost/income ratio was 70.7%, 3.1 percentage points lower YoY. Operating income increased by 8% YoY, while operating expenses increased by 4%. Net profit attributable to shareholders was USD 2,136m (up 17% YoY), with diluted earnings per share of USD 0.61. Return on CET1 capital was 19.0%. The quarter-end CET1 capital ratio was 14.3% (guidance: ~13%) and the CET1 leverage ratio was 4.16% (guidance: >3.7%). We repurchased USD 1.7bn of shares in 1Q22, and we intend to repurchase a total of around USD 5bn of shares during 2022.