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| Statement |
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| In Switzerland, EMEA and APAC, we expect PBT margins to eventually exceed 40% in each of these regions as we capture the benefits of our fortified leadership positions and integration-related synergies |
| With enhanced scale and capabilities across our leading client franchises and improved resource discipline, we will drive sustainable long-term growth and higher returns |
| The strength and stability of UBS provides is a direct result of our decade-long sustainable strategy, an unwavering commitment to maintaining a balance sheet for all seasons and a focus on risk and capital efficiency |
| And globally, we expect our broader and deeper solutions across M&A, equity capital markets and leverage capital markets to drive profitable market share |
| We will do this while building on our strong partnership with Global Wealth Management to drive growth |
| This gives us great confidence in our ability to meet our ambitions and deliver long-term growth and consistently higher returns |
| We are already seeing the benefits with notable mandate successes across the globe |
| Over the second half of the plan horizon, we expect NII to recover, resulting from funding cost efficiencies, stable implied forward rates and improved loan revenues |
| Our award-winning equities and FX franchises will now serve an even larger and broader client base, also supported by our strengthened global research coverage of the most relevant and fastest growing sectors |
| By deploying its products and services across a more diversified institutional, corporate and financial sponsor client base, in addition to the improved connectivity with our clients in GWM and P&C, the Investment Bank is poised to achieve around 15% return on attributed equity over the cycle, and it will do this while consuming no more than 25% of the Group’s risk-weighted assets |
| In recent years, P&C’s consistent investments to improve the client experience and boost efficiency have supported steady growth and higher returns |
| We maintained momentum with our clients with $22 billion in net new assets in GWM, bringing our total to $77 billion since the closing of the acquisition |
| business that we’re going to do over the next three years will set us up for success and being able to then at that stage drive greater returns and narrow the gap further beyond 2026 |
| and building on our market-leading strengths in Switzerland, EMEA and APAC |
| Our CET1 capital ratio increased to 14.5%, helping us to build capacity for higher capital returns, while at the same time, preparing to absorb integration charges and tax inefficiencies |
| It gives us the ability to withstand financial shocks and the flexibility to support our clients in all climates |
| Lastly, let me highlight some things I’m especially proud of and which I believe is the essential driver of what will make this successful journey a great story |
| Second, in our Investment Bank, we’re well positioned to achieve revenue accretion relatively quickly, especially as we’re selectively adding key Credit Suisse IB resources directly to the UBS platform |
| On top of revenue improvement, we also believe we can enhance GWM’s net margins and drive greater returns overall by leveraging the benefits of increased scale, realizing cost synergies from the Credit Suisse integration and emphasizing data and AI capabilities to improve advisor productivity |
| As we continue to execute on our integration plans at pace and benefit from seasonally higher client activity, we expect substantial improvement in our first quarter reported net profit as compared to 4Q 2023 |
| Another is Australia, where we exited, again, more of an affluent practice that we had many years ago, and we have an opportunity now to inherit a business in Australia, aligned by the way, with the IB in Australia, which is quite exciting and that business is more the high net worth and the ultra, that is our bread and butter |
| Greater scale alongside our cost and capital efficiency measures will support GWM’s ability to achieve improved profitability with an expected underlying cost income ratio of less than 70% |
| We saw continued momentum and flows with $22 billion in net new assets, with particularly strong performance in APAC and the Americas |
| Since 2012, our ambition to be the world’s leading global wealth manager has served us well, allowing us to generate over $50 billion in capital for shareholders through the end of 2022, while also investing in sustainable long-term growth |
| In addition to growing our asset base, we believe we’re in a strong position to offset some of the structural fee margin pressure visible in the industry by leveraging a unified shelf of CIO-led products and solutions, as well as increasing discretionary mandate penetration across our expanded client base |
| Overall, as a result of lower funding needs, diversified and more stable funding sources, tighter issue and spreads relative to 2023 levels, and disciplined deposit pricing, we believe we can realize funding cost saves of up to $1 billion by 2026 on top of the saves achieved last year |
| By staying close to our clients, continuing to win back assets and offering differentiated products and services to help navigate challenging market conditions, we expect to attract around $200 billion in net new assets over the next two years |
| As we expand our GWM invested asset base and enhance our solution offerings and capabilities, we expect to increase both recurring fee and transaction-based income with stronger net margins |
| As I highlighted last quarter in connection with September trends, the focus on win-back and coverage alignment across both Swiss platforms continues to contribute to strong financial performance for P&C, including over CHF7 billion of net new deposit inflows in the fourth quarter and revenue resiliency |
| We have made good progress to-date |
| Statement |
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| Moving on to GWM’s P&L, profit before tax was $778 million, down 31% sequentially, driven by lower revenues and higher operating expenses |
| Credit Suisse didn’t fail because of lack of capital or lack of liquidity per se, but it failed because partially, I would say, the loss of trust and confidence, the lack of underlying profitability and that created a self-fulfilling problem |
| Group revenues decreased by 3% sequentially to $10.4 billion, driven by lower recurring and net management fees on a reduced average invested asset base, lower fair value and exit gains in non-core and legacy, as well as decreased transaction-based revenues across the divisions |
| Non-NII revenues in P&C declined by 11%, mostly driven by transaction-based income, including lower client activity, particularly in corporate and institutional clients |
| Recurring fees were down 2%, reflecting a lower average billing base |
| And you’re on the tape as saying, we are sacrificing some topline growth in order to enhance returns |
| The operating loss of $280 million primarily reflects 34% higher costs, mainly personnel and technology related, while revenues from onboarded Credit Suisse staff are only beginning to build |
| Because if we have a delay, our ability to start to deliver on the cost synergies will come just later, and therefore, we would lose capital buffers that we believe is necessary |
| The non-core and legacy portfolio will continue to be a meaningful drag on our results as it is actively unwound |
| Todd Tuckner Anke, on the net new fee generating assets in the quarter, as you mentioned, they were negative |
| Underlying PBT was negative $977 million |
| Given the evident structural issues with Credit Suisse’s business model and lack of profitability, there is a significant amount of restructuring and optimization that must take place over the next three years before we can harvest the full benefits of the combination |
| Net interest income was down 2%, reflecting tapering deposit mix effects in the U.S |
| Net interest income was down 1% as the benefits from deposit inflows and higher rates were slightly more than offset by the effects of lower loan volumes and clients shifting deposits into higher yielding products |
| Net management fees were down slightly on lower average invested assets in the quarter |
| We have acquired an enterprise that has suffered from many years of unsustainable capital allocation and underinvestment in its businesses and control framework |
| This resulted in cost and capital inefficiencies, significant losses, and ultimately, substantial franchise erosion |
| Starting with the P&L on slide six, PBT in the fourth quarter was $592 million, a decrease of $322 million from the third quarter, mainly driven by lower client activity and billable invested assets, as well as the U.K |
| Notably, underlying OpEx was down 9% as we continue to reduce headcount |
| While in the short-term it will be difficult to produce the best-in-class returns that UBS had previously, our aim is to narrow the gap in a reasonable timeframe |
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