2Q19 net profit USD 1.4bn, highest 2Q since 2010

1H19 net profit2 of USD 2.5bn; 1H19 reported RoCET13 14.6%

2Q19 reported and adjusted1 PBT USD 1.8bn

2Q19 reported RoCET13 16.0%; diluted EPS USD 0.37, +2% YoY

CET1 capital ratio 13.3% and CET1 leverage ratio 3.8%; tier 1 leverage ratio4 5.5%

Record invested assets of USD 3.3trn in GWM and AM combined

Record GWM Americas PBT; very strong IB CCS performance

UBS and BOTTLETOP launch #TOGETHERBAND in support of the UN Sustainable Development Goals

ZURICH--()-- 

UBS (NYSE:UBS) (SWX:UBSN) delivered strong second quarter 2019 results. Reported profit before tax (PBT) increased by 3% year over year (YoY) to USD 1,759m and adjusted PBT decreased by 2% to USD 1,787m. The Group's adjusted cost/income ratio was 76.1%. Net profit attributable to shareholders was USD 1,392m, up 1% YoY. Reported return on CET1 capital3 (RoCET1) was 16.0%.

Global Wealth Management (GWM) adjusted PBT was USD 886m; invested assets reached a new high of USD 2,486bn; recurring net fee income increased from the prior quarter; and profits in the Americas region were a record. Personal & Corporate Banking adjusted PBT rose 10% to USD 392m (+11% YoY in CHF) on higher transaction-based income and lower credit loss expenses; net new business volume growth in personal banking was strong at 4.4%. Asset Management (AM) adjusted PBT increased by 10% to USD 135m, on higher operating income; invested assets reached a record of USD 831bn. The Investment Bank (IB) delivered adjusted PBT of USD 440m, with very strong Advisory revenue growth against a lower global fee pool YoY, the highest M&A revenues since 2012, and an adjusted return on attributed equity of 14.2%. Corporate Center adjusted loss before tax was USD 65m.

UBS’s capital position remains strong, with a CET1 capital ratio of 13.3%, a CET1 leverage ratio of 3.8%, a fully applied tier 1 leverage ratio4 of 5.5%, and total loss-absorbing capacity of USD 87bn. During the second quarter of 2019, UBS repurchased USD 297m of its shares.

"In the second quarter we achieved the highest 2Q net profit since 2010 and an improvement on an already strong 2Q18. Once again we showed the strength of our business model and its ability to generate competitive returns even with market conditions far from last year’s. Overall, our goals remain unchanged: to deliver sustainable and profitable long-term growth while investing in our businesses and providing attractive shareholder returns."
Sergio P. Ermotti, Group Chief Executive Officer

1 Adjusted results are non-GAAP financial measures defined by SEC regulations. Refer to the “Performance of our business divisions and Corporate Center – reported and adjusted“ table in this news release.

Outlook

The overall pace of global growth has stabilized at a lower level after a synchronized global slowdown in prior quarters. Downside risks remain due to political uncertainties and geopolitical tensions. Central banks are indicating a reversal of monetary policy normalization and embarking on new stimulus measures.

A sharp drop in interest rates and expected rate cuts will continue to adversely affect net interest income compared with last year. Our regional and business diversification, along with higher invested assets benefitting recurring revenues, will help to mitigate this. An improvement in investor sentiment and higher market volatility could help to offset the typical third quarter seasonality.

We are executing our strategy with discipline, focusing on balancing efficiency and investments for growth, to deliver on our capital return objectives and to create sustainable long-term value for our shareholders.

Second quarter 2019 performance overview

UBS’s second quarter adjusted1 PBT was USD 1,787m (down 2% YoY), and reported PBT was USD 1,759m (up 3% YoY). Adjusted figures this quarter exclude USD 39m of restructuring expenses, as well as USD 10m of net foreign currency translation gains. The adjusted cost/income ratio was 76.1%. Net profit attributable to shareholders was USD 1,392m (up 1% YoY), with diluted earnings per share of USD 0.37 (up 2% YoY). Reported return on CET1 capital3 was 16.0%.

Global Wealth Management (GWM) adjusted PBT USD 886m, (12%) YoY

Recurring net fee income recovered quarter-on-quarter, although down YoY, as invested assets rose to a record by the end of June 2019. Transaction-based income rose 3%, while net interest income decreased. Regionally, the Americas posted record profits. Mandate penetration increased to 34.4% of invested assets. Loans increased by USD 2bn sequentially. The adjusted cost/income ratio was 78.1%. Net new money was negative USD 2bn, driven by the US, primarily reflecting seasonal tax-related outflows of approximately USD 5.1bn, while other regions had net new money inflows. Invested assets increased by USD 54bn (+2%) during the quarter. Adjusted net margin was 14bps.

Personal & Corporate Banking (P&C) adjusted PBT CHF 391m, +11% YoY

Transaction-based income increased and credit loss expenses reduced, while the other revenue lines were broadly unchanged. Despite continued investments in technology, adjusted operating expenses decreased slightly. The adjusted cost/income ratio was 59.0%. Business momentum remained strong, with Personal Banking net new business volume growth of 4.4%; loans also grew. Net interest margin was 152bps.

Asset Management (AM) adjusted PBT USD 135m, +10% YoY

Net management fees increased, reflecting slightly higher average invested assets. Performance fees rose by USD 4m. The adjusted cost/income ratio improved to 71.7%. Invested assets rose to a record USD 831bn, and net new money outflows excluding money markets were USD 13.9bn.

Investment Bank (IB) adjusted PBT USD 440m, (23%) YoY

Corporate Client Solutions (+18% YoY) had a very strong quarter, mainly driven by Advisory and Equity Capital Markets revenues. Equities revenues decreased by 9% as a result of lower volumes, market volatility, and client activity. FX, Rates & Credit was down approximately 7% YoY excluding net income of around USD 100m mainly related to the recognition of previously deferred day-1 profits in the prior-year quarter and gains related to Tradeweb in both quarters. The adjusted cost/income ratio was 78.7%. Adjusted return on attributed equity was 14.2%.

Corporate Center adjusted loss before tax was USD 65m, driven by lower litigation expenses, gains from accounting asymmetries and hedge accounting ineffectiveness, as well as other gains.

1 Adjusted results are non-GAAP financial measures defined by SEC regulations. Refer to the “Performance of our business divisions and Corporate Center – reported and adjusted“ table in this news release.

First half of 2019 performance overview

UBS’s first half adjusted1 PBT was USD 3,364m (down 12% YoY), and reported PBT was USD 3,305m (down 13% YoY). Adjusted figures exclude USD 70m of restructuring expenses, as well as USD 10m of net foreign currency translation gains. The adjusted cost/income ratio was 77.0%, with a 5% reduction in operating expenses partially offsetting a 7% reduction in operating income. Net profit attributable to shareholders was USD 2,533m, with diluted earnings per share of USD 0.67. Reported return on CET1 capital3 was 14.6%.

Global Wealth Management (GWM) adjusted PBT USD 1,759m, (17%) YoY

Recurring net fee income decreased on lower average invested assets, while transaction-based income declined on lower client activity, particularly in APAC and, to a lesser extent, in the Americas, and net interest income decreased. Mandate penetration increased to a record 34.4% of invested assets. Loans decreased by USD 1bn YoY, due to deleveraging in APAC. Adjusted operating expenses decreased mainly due to lower personnel expenses. The adjusted cost/income ratio was 78.1%. Net new money was USD 20.6bn (2% annualized growth rate) with record inflows in APAC, while invested assets increased by USD 226bn (+10%) year-to-date. Adjusted net margin was 15bps.

Personal & Corporate Banking (P&C) adjusted PBT CHF 781m, +10% YoY

All revenue lines increased. Despite continued investments in technology, adjusted operating expenses were stable. The adjusted cost/income ratio was 59.2%. Business momentum remained strong and in Personal Banking, net new business volume growth was strong at 6.3%. Net interest margin was 151bps.

Asset Management (AM) adjusted PBT USD 244m, +6% YoY

Lower adjusted operating expenses, down 3%, more than offset a decrease in operating income. Net management fees decreased, mainly reflecting lower average invested assets, largely due to lower market levels in the fourth quarter of 2018. Performance fees rose by USD 16m. The adjusted cost/income ratio improved to 73.5%. Invested assets were USD 831bn, and net new money outflows excluding money markets were USD 16.1bn.

Investment Bank (IB) adjusted PBT USD 661m, (44%) YoY

Challenging market conditions, which were most pronounced in the first quarter of 2019, affected both Corporate Client Solutions and Equities revenues. Partly offsetting this, FX, Rates & Credit had a good first half, down 2% YoY when excluding net income of around USD 100m mainly related to the recognition of previously deferred day-1 profits in the second quarter of 2018 and gains related to Tradeweb in both periods. The adjusted cost/income ratio was 82.3%. Adjusted return on attributed equity was 10.7%.

Corporate Center adjusted loss before tax was USD 82m, driven by lower litigation expenses, gains from accounting asymmetries and hedge accounting ineffectiveness, as well as other gains.

1 Adjusted results are non-GAAP financial measures defined by SEC regulations. Refer to the “Performance of our business divisions and Corporate Center – reported and adjusted“ table in this news release.

Commitment to sustainable performance

UBS is committed to creating long-term positive value for its clients, employees, investors and society. This is illustrated by the ongoing recognition UBS receives for its activities and capabilities related to sustainable investing, philanthropy, environmental and human rights policies governing client and supplier relationships, the firm's environmental footprint and community investment.

Confirmed leader in sustainability

ISS-oekom recently confirmed UBS's corporate responsibility prime status, which was reviewed during the second quarter. Prime status is awarded to companies that meet specific minimum requirements in Corporate Ratings and achieve the best ESG scores among their sector peers. A company's management of ESG issues is analyzed on the basis of up to 100 rating criteria, most of which are sector-specific.

Promoting the UN Sustainable Development Goals

BOTTLETOP and UBS jointly launched the #TOGETHERBAND campaign (www.togetherband.org) on April 22, World Earth Day, setting out to engage the world with the 17 United Nations (UN) Sustainable Development Goals (SDGs). The campaign is designed to raise public awareness and inspire action to achieve the Goals. It is supported by a group of high-profile ambassadors and experts with a strong commitment to sustainability.

At the heart of the #TOGETHERBAND campaign are 17 sustainably and ethically produced friendship bands in the colors of the SDGs. The production of the bands is generating skills and livelihoods for women working as artisans in Nepal. Each purchase comes with two bands, one to wear and one to share, including on social media, helping spread the critical message of the SDGs and fund projects that support their achievement.

Extending UBS's leading position in sustainable and impact investing

In May, UBS announced it had raised more than USD 93 million as an exclusive wealth management partner for Sustainable Solutions Fund III, a growth equity fund from the sustainable investment firm Generation Investment Management. The fund aims to generate long-term returns through USD 50-150 million investments in high growth, sustainable companies, defined as providing goods and services consistent with a low-carbon, prosperous, equitable, healthy and safe society.

The partnership extends UBS's leading position in sustainable and impact investing solutions, which include: launching the first 100% sustainable cross-asset portfolio for private clients, which now has USD 5 billion under management; pledging to raise at least USD 5 billion in SDG-related impact investments over five years; creating the UBS Oncology Impact Fund, the largest healthcare impact investment to date; and partnering with the World Bank Group to offer development bank bond investments to wealth management clients, as well as serving on the steering committee, and being a founding signatory, of the World Bank IFC's new Operating Principles for Impact Management.

Information in this news release is presented for UBS Group AG on a consolidated basis unless otherwise specified. Financial information for UBS AG (consolidated) does not differ materially from UBS Group AG (consolidated) and a comparison between UBS Group AG (consolidated) and UBS AG (consolidated) is provided at the end of this news release.

1 Adjusted results are non-GAAP financial measures defined by SEC regulations. Refer to the “Performance of our business divisions and Corporate Center – reported and adjusted“ table in this news release.
2 Net profit attributable to shareholders
3 Return on CET1 capital. Net profit attributable to shareholders (annualized as applicable) divided by average common equity tier 1 capital.
4 Going concern ratio under Swiss SRB rules applicable as of 1 January 2020.

Performance of our business divisions and Corporate Center – reported and adjusted1,2

 

 

For the quarter ended 30.6.19

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Management

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

4,057

958

475

2,071

(30)

7,532

of which: net foreign currency translations gains4

 

 

 

 

 

10

10

Operating income (adjusted)

 

4,057

958

475

2,071

(40)

7,522

 

 

 

 

 

 

 

 

Operating expenses as reported

 

3,183

568

351

1,644

26

5,773

of which: personnel-related restructuring expenses5

 

0

0

3

1

22

25

of which: non-personnel-related restructuring expenses5

 

0

0

2

2

10

13

of which: restructuring expenses allocated from Corporate Center5

 

12

2

5

10

(30)

0

Operating expenses (adjusted)

 

3,171

566

340

1,631

25

5,735

of which: net expenses for litigation, regulatory and similar matters6

 

19

0

0

(1)

(14)

4

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

874

390

124

427

(56)

1,759

Operating profit / (loss) before tax (adjusted)

 

886

392

135

440

(65)

1,787

 

 

 

 

 

 

 

 

 

 

For the quarter ended 30.6.18

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Management

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

4,164

930

461

2,162

(73)

7,644

Operating income (adjusted)

 

4,164

930

461

2,162

(73)

7,644

 

 

 

 

 

 

 

 

Operating expenses as reported

 

3,202

584

365

1,627

160

5,938

of which: personnel-related restructuring expenses5

 

3

1

15

2

43

64

of which: non-personnel-related restructuring expenses5

 

5

0

3

3

40

51

of which: restructuring expenses allocated from Corporate Center5

 

39

9

8

32

(88)

0

Operating expenses (adjusted)

 

3,155

574

339

1,591

165

5,823

of which: net expenses for litigation, regulatory and similar matters6

 

53

0

0

2

78

132

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

961

347

97

535

(233)

1,706

Operating profit / (loss) before tax (adjusted)

 

1,009

357

122

571

(238)

1,821

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity attribution framework. Refer to “Note 2 Segment reporting” in the “Consolidated financial statements” section of the UBS Group second quarter 2019 report for more information. Comparatives may additionally differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 3 Corporate Center operating expenses presented in this table are after service allocations to business divisions. 4 Related to the disposal of foreign branches and subsidiaries. 5 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives. 6 Reflects the net increase in / (release of) provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to ”Note 16 Provisions and contingent liabilities” in the “Consolidated financial statements” section of the UBS Group second quarter 2019 report for more information. Also includes recoveries from third parties (second quarter of 2019: USD 1 million; first quarter of 2019: USD 7 million; second quarter of 2018: USD 10 million).

Performance of our business divisions and Corporate Center – reported and adjusted1,2

 

 

Year-to-date 30.6.19

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Management

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

8,061

1,915

921

3,836

17

14,750

of which: net foreign currency translations gains4

 

 

 

 

 

10

10

Operating income (adjusted)

 

8,061

1,915

921

3,836

6

14,740

 

 

 

 

 

 

 

 

Operating expenses as reported

 

6,323

1,139

693

3,202

88

11,445

of which: personnel-related restructuring expenses5

 

0

0

5

2

36

43

of which: non-personnel-related restructuring expenses5

 

0

0

4

3

20

27

of which: restructuring expenses allocated from Corporate Center5

 

22

6

7

21

(57)

0

Operating expenses (adjusted)

 

6,301

1,133

677

3,175

89

11,375

of which: net expenses for litigation, regulatory and similar matters6

 

20

0

0

(2)

(22)

(4)

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

1,737

777

228

634

(71)

3,305

Operating profit / (loss) before tax (adjusted)

 

1,759

783

244

661

(82)

3,364

 

 

 

 

 

 

 

 

 

 

Year-to-date 30.6.18

USD million

 

Global Wealth Management

Personal &

Corporate

Banking

Asset

Management

Investment Bank

Corporate Center3

UBS

Operating income as reported

 

8,572

1,911

927

4,577

(174)

15,812

Operating income (adjusted)

 

8,572

1,911

927

4,577

(174)

15,812

 

 

 

 

 

 

 

 

Operating expenses as reported

 

6,509

1,156

725

3,465

151

12,007

of which: personnel-related restructuring expenses5

 

6

2

16

14

93

131

of which: non-personnel-related restructuring expenses5

 

15

0

6

5

93

119

of which: restructuring expenses allocated from Corporate Center5

 

89

18

15

66

(187)

0

of which: gain related to changes to the Swiss pension plan7

 

(66)

(38)

(10)

(5)

(122)

(241)

Operating expenses (adjusted)

 

6,465

1,174

698

3,387

274

11,997

of which: net expenses for litigation, regulatory and similar matters6

 

85

0

0

0

36

121

 

 

 

 

 

 

 

 

Operating profit / (loss) before tax as reported

 

2,064

754

202

1,111

(325)

3,806

Operating profit / (loss) before tax (adjusted)

 

2,108

737

229

1,190

(448)

3,815

1 Adjusted results are non-GAAP financial measures as defined by SEC regulations. 2 Comparative figures in this table have been restated for the changes in Corporate Center cost and resource allocation to the business divisions and the changes in the equity attribution framework. Refer to “Note 2 Segment reporting" in the “Consolidated financial statements” section of the UBS Group second quarter 2019 report for more information. Comparatives may additionally differ as a result of adjustments following organizational changes, restatements due to the retrospective adoption of new accounting standards or changes in accounting policies, and events after the reporting period. 3 Corporate Center operating expenses presented in this table are after service allocations to business divisions. 4 Related to the disposal of foreign branches and subsidiaries. 5 Reflects restructuring expenses related to legacy cost programs as well as expenses for new restructuring initiatives. 6 Reflects the net increase in / (release of) provisions for litigation, regulatory and similar matters recognized in the income statement. Refer to ”Note 16 Provisions and contingent liabilities” in the “Consolidated financial statements” section of the UBS Group second quarter 2019 report for more information. Also includes recoveries from third parties of USD 8 million and USD 28 million for the first six months of 2019 and 2018, respectively. 7 Changes to the Pension Fund of UBS in Switzerland in the first quarter of 2018 resulted in a reduction in the pension obligation recognized by UBS. As a consequence, a pre-tax gain of USD 241 million was recognized in the income statement in the first quarter of 2018, with no overall effect on total equity. Refer to “Note 29 Pension and other post-employment benefit plans” in the “Consolidated financial statements” section of our Annual Report 2018 for more information.

 

Our key figures

 

 

 

 

 

 

 

 

 

 

As of or for the quarter ended

 

As of or year-to-date

USD million, except where indicated

 

30.6.19

31.3.19

31.12.18

30.6.18

 

30.6.19

30.6.18

Group results

 

 

 

 

 

 

 

 

Operating income

 

7,532

7,218

6,972

7,644

 

14,750

15,812

Operating expenses

 

5,773

5,672

6,492

5,938

 

11,445

12,007

Operating profit / (loss) before tax

 

1,759

1,546

481

1,706

 

3,305

3,806

Net profit / (loss) attributable to shareholders

 

1,392

1,141

315

1,382

 

2,533

2,948

Diluted earnings per share (USD)1

 

0.37

0.30

0.08

0.36

 

0.67

0.76

Profitability and growth2

 

 

 

 

 

 

 

 

Return on equity (%)3

 

10.4

8.6

2.4

10.5

 

9.5

11.2

Return on tangible equity (%)4

 

11.9

9.8

2.7

12.0

 

10.8

12.8

Return on common equity tier 1 capital (%)5

 

16.0

13.3

3.7

16.1

 

14.6

17.2

Return on risk-weighted assets, gross (%)6

 

11.4

10.9

10.8

11.8

 

11.1

12.3

Return on leverage ratio denominator, gross (%)6

 

3.3

3.2

3.1

3.3

 

3.3

3.5

Cost / income ratio (%)7

 

76.5

78.4

92.4

77.4

 

77.4

75.7

Adjusted cost / income ratio (%)8

 

76.1

77.9

92.2

75.9

 

77.0

75.6

Net profit growth (%)9

 

0.7

(27.1)

 

19.9

 

(14.1)

22.6

Resources

 

 

 

 

 

 

 

 

Total assets

 

968,728

956,579

958,489

952,817

 

968,728

952,817

Equity attributable to shareholders

 

53,180

53,667

52,928

51,210

 

53,180

51,210

Common equity tier 1 capital10

 

34,948

34,658

34,119

34,116

 

34,948

34,116

Risk-weighted assets10

 

262,135

267,556

263,747

254,603

 

262,135

254,603

Common equity tier 1 capital ratio (%)10

 

13.3

13.0

12.9

13.4

 

13.3

13.4

Going concern capital ratio (%)10

 

19.1

18.5

17.5

17.8

 

19.1

17.8

Total loss-absorbing capacity ratio (%)10

 

33.3

32.7

31.7

32.3

 

33.3

32.3

Leverage ratio denominator10

 

911,379

910,993

904,598

910,383

 

911,379

910,383

Common equity tier 1 leverage ratio (%)10

 

3.83

3.80

3.77

3.75

 

3.83

3.75

Going concern leverage ratio (%)10

 

5.5

5.4

5.1

5.0

 

5.5

5.0

Total loss-absorbing capacity leverage ratio (%)10

 

9.6

9.6

9.3

9.0

 

9.6

9.0

Liquidity coverage ratio (%)11

 

145

153

136

144

 

145

144

Other

 

 

 

 

 

 

 

 

Invested assets (USD billion)12

 

3,381

3,318

3,101

3,271

 

3,381

3,271

Personnel (full-time equivalents)

 

66,922

67,481

66,888

63,684

 

66,922

63,684

Market capitalization13,14

 

43,491

45,009

45,907

57,654

 

43,491

57,654

Total book value per share (USD)13

 

14.53

14.45

14.35

13.73

 

14.53

13.73

Total book value per share (CHF)13,15

 

14.18

14.39

14.11

13.61

 

14.18

13.61

Tangible book value per share (USD)13

 

12.72

12.67

12.55

12.00

 

12.72

12.00

Tangible book value per share (CHF)13,15

 

12.42

12.62

12.33

11.90

 

12.42

11.90

1 Refer to “Note 9 Earnings per share (EPS) and shares outstanding” in the “Consolidated financial statements” section of the UBS Group second quarter 2019 report for more information. 2 Refer to the “Performance targets and measurement” section of our Annual Report 2018 for more information on our performance targets. 3 Calculated as net profit attributable to shareholders (annualized as applicable) / average equity attributable to shareholders. 4 Calculated as net profit attributable to shareholders (annualized as applicable) / average equity attributable to shareholders less average goodwill and intangible assets. Effective 1 January 2019, the definition of the numerator for return on tangible equity has been revised to align with numerators for return on equity and return on CET1 capital; i.e., we no longer adjust for amortization and impairment of goodwill and intangible assets. Prior periods have been restated. 5 Calculated as net profit attributable to shareholders (annualized as applicable) / average common equity tier 1 capital. 6 Calculated as operating income before credit loss expense or recovery (annualized as applicable) / average risk-weighted assets and average leverage ratio denominator, respectively. 7 Calculated as operating expenses / operating income before credit loss expense or recovery. 8 Calculated as adjusted operating expenses / adjusted operating income before credit loss expense or recovery. 9 Calculated as change in net profit attributable to shareholders from continuing operations between current and comparison periods / net profit attributable to shareholders from continuing operations of comparison period. 10 Based on the Swiss systemically relevant bank framework as of 1 January 2020. Refer to the “Capital management” section of the UBS Group second quarter 2019 report for more information. 11 Refer to the “Balance sheet, liquidity and funding management” section of the UBS Group second quarter 2019 report for more information. 12 Includes invested assets for Global Wealth Management, Asset Management and Personal & Corporate Banking. 13 Refer to “UBS shares” in the “Capital management” section of the UBS Group second quarter 2019 report for more information. 14 Beginning with our Annual Report 2018, the calculation of market capitalization has been amended to reflect total shares outstanding multiplied by the share price at the end of the period. The calculation was previously based on total shares issued multiplied by the share price at the end of the period. Market capitalization has been reduced by USD 2.1 billion as of 31 December 2018 and by USD 1.9 billion as of 30 June 2018 as a result. 15 Total book value per share and tangible book value per share in Swiss francs are calculated based on a translation of equity under our US dollar presentation currency. As a consequence of the restatement to a US dollar presentation currency, amounts may differ from those originally published in our quarterly and annual reports.

 

Income statement

 

 

 

 

 

 

 

 

 

 

 

 

For the quarter ended

 

% change from

 

Year-to-date

USD million

 

30.6.19

31.3.19

30.6.18

 

1Q19

2Q18

 

30.6.19

30.6.18

Net interest income

 

1,026

1,123

1,205

 

(9)

(15)

 

2,149

2,639

Other net income from financial instruments measured at fair value through profit or loss

 

1,939

1,935

2,001

 

0

(3)

 

3,874

3,974

Credit loss (expense) / recovery

 

(12)

(20)

(29)

 

(40)

(57)

 

(33)

(55)

Fee and commission income

 

4,907

4,541

4,845

 

8

1

 

9,448

10,022

Fee and commission expense

 

(434)

(409)

(421)

 

6

3

 

(842)

(855)

Net fee and commission income

 

4,474

4,132

4,423

 

8

1

 

8,606

9,168

Other income

 

105

49

44

 

116

141

 

154

86

Total operating income

 

7,532

7,218

7,644

 

4

(1)

 

14,750

15,812

Personnel expenses

 

4,153

4,043

4,102

 

3

1

 

8,196

8,357

General and administrative expenses

 

1,175

1,187

1,533

 

(1)

(23)

 

2,362

3,042

Depreciation and impairment of property, equipment and software

 

427

427

287

 

0

49

 

854

575

Amortization and impairment of intangible assets

 

18

16

16

 

13

9

 

33

33

Total operating expenses

 

5,773

5,672

5,938

 

2

(3)

 

11,445

12,007

Operating profit / (loss) before tax

 

1,759

1,546

1,706

 

14

3

 

3,305

3,806

Tax expense / (benefit)

 

366

407

322

 

(10)

14

 

773

855

Net profit / (loss)

 

1,393

1,139

1,384

 

22

1

 

2,532

2,951

Net profit / (loss) attributable to non-controlling interests

 

1

(2)

1

 

 

(31)

 

(1)

3

Net profit / (loss) attributable to shareholders

 

1,392

1,141

1,382

 

22

1

 

2,533

2,948

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

2,473

1,039

359

 

138

589

 

3,512

2,213

Total comprehensive income attributable to non-controlling interests

 

(5)

2

(3)

 

 

51

 

(3)

0

Total comprehensive income attributable to shareholders

 

2,478

1,037

362

 

139

584

 

3,515

2,213

Comparison between UBS Group AG consolidated and UBS AG consolidated

 

 

As of or for the quarter ended 30.6.19

 

As of or for the quarter ended 31.3.19

 

As of or for the quarter ended 31.12.18

USD million, except where indicated

 

UBS Group AG

(consolidated)

UBS AG

(consolidated)

Difference

(absolute)

 

UBS Group AG

(consolidated)

UBS AG

(consolidated)

Difference

(absolute)

 

UBS Group AG

(consolidated)

UBS AG

(consolidated)

Difference

(absolute)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income statement

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

7,532

7,632

(100)

 

7,218

7,343

(125)

 

6,972

7,083

(111)

Operating expenses

 

5,773

5,975

(202)

 

5,672

5,890

(217)

 

6,492

6,667

(176)

Operating profit / (loss) before tax

 

1,759

1,657

102

 

1,546

1,454

92

 

481

416

65

of which: Global Wealth Management

 

874

857

17

 

863

848

16

 

327

316

11

of which: Personal & Corporate Banking

 

390

392

(2)

 

387

386

1

 

644

645

(1)

of which: Asset Management

 

124

124

0

 

103

103

0

 

106

105

1

of which: Investment Bank

 

427

419

8

 

207

187

20

 

(78)

(79)

1

of which: Corporate Center

 

(56)

(135)

79

 

(15)

(71)

56

 

(518)

(571)

53

Net profit / (loss)

 

1,393

1,308

85

 

1,139

1,067

72

 

315

273

42

of which: net profit / (loss) attributable to shareholders

 

1,392

1,307

85

 

1,141

1,069

72

 

315

272

42

of which: net profit / (loss) attributable to non-controlling interests

 

1

1

0

 

(2)

(2)

0

 

1

1

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

1,080

1,076

4

 

(100)

(90)

(10)

 

893

895

(2)

of which: attributable to shareholders

 

1,086

1,082

4

 

(104)

(94)

(10)

 

892

894

(2)

of which: attributable to non-controlling interests

 

(6)

(6)

0

 

4

4

0

 

1

1

0

Total comprehensive income

 

2,473

2,384

89

 

1,039

977

62

 

1,208

1,168

41

of which: attributable to shareholders

 

2,478

2,389

89

 

1,037

974

62

 

1,207

1,166

41

of which: attributable to non-controlling interests

 

(5)

(5)

0

 

2

2

0

 

2

2

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

968,728

968,645

83

 

956,579

956,737

(158)

 

958,489

958,055

434

Total liabilities

 

915,378

916,116

(738)

 

902,739

903,348

(609)

 

905,386

905,624

(238)

Total equity

 

53,350

52,529

821

 

53,840

53,389

451

 

53,103

52,432

671

of which: equity attributable to shareholders

 

53,180

52,359

821

 

53,667

53,216

451

 

52,928

52,256

671

of which: equity attributable to non-controlling interests

 

170

170

0

 

173

173

0

 

176

176

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital information

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital

 

34,948

35,881

(933)

 

34,658

34,933

(275)

 

34,119

34,608

(489)

Going concern capital

 

49,993

46,500

3,493

 

49,436

45,368

4,068

 

46,279

42,413

3,865

Risk-weighted assets

 

262,135

261,364

772

 

267,556

266,581

976

 

263,747

262,840

907

Common equity tier 1 capital ratio (%)

 

13.3

13.7

(0.4)

 

13.0

13.1

(0.2)

 

12.9

13.2

(0.2)

Going concern capital ratio (%)

 

19.1

17.8

1.3

 

18.5

17.0

1.5

 

17.5

16.1

1.4

Total loss-absorbing capacity ratio (%)

 

33.3

33.0

0.3

 

32.7

32.2

0.5

 

31.7

31.3

0.5

Leverage ratio denominator

 

911,379

911,601

(221)

 

910,993

911,410

(417)

 

904,598

904,458

140

Common equity tier 1 leverage ratio (%)

 

3.83

3.94

(0.10)

 

3.80

3.83

(0.03)

 

3.77

3.83

(0.05)

Going concern leverage ratio (%)

 

5.5

5.1

0.4

 

5.4

5.0

0.4

 

5.1

4.7

0.4

Total loss-absorbing capacity leverage ratio (%)

 

9.6

9.5

0.1

 

9.6

9.4

0.2

 

9.3

9.1

0.2

UBS’s second quarter 2019 report, news release and slide presentation will be available from 06:45 CEST on Tuesday, 23 July 2019, at www.ubs.com/quarterlyreporting.

UBS will hold a presentation of its second quarter 2019 results on Tuesday, 23 July 2019. The results will be presented by Sergio P. Ermotti, Group Chief Executive Officer, Kirt Gardner, Group Chief Financial Officer, Martin Osinga, Head Investor Relations ad interim, and Hubertus Kuelps, Group Head Communications & Branding.

Time

• 09:00–11:00 CEST

• 08:00–10:00 BST

• 03:00–05:00 US EDT

Audio webcast

The presentation for analysts can be followed live on www.ubs.com/quarterlyreporting with a simultaneous slide show.

Webcast playback

An audio playback of the results presentation will be made available at www.ubs.com/investors later in the day.

UBS Group AG and UBS AG

Investor contact
Switzerland: +41-44-234 41 00

Media contact
Switzerland: +41-44-234 85 00
UK: +44-207-567 47 14
Americas: +1-212-882 58 58
APAC: +852-297-1 82 00

www.ubs.com

Cautionary Statement Regarding Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements,” including but not limited to management’s outlook for UBS’s financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBS’s business and future development. While these forward-looking statements represent UBS’s judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBS’s expectations. These factors include, but are not limited to: (i) the degree to which UBS is successful in the ongoing execution of its strategic plans, including its cost reduction and efficiency initiatives and its ability to manage its levels of risk-weighted assets (RWA) and leverage ratio denominator (LRD), including to counteract regulatory-driven increases, liquidity coverage ratio and other financial resources, and the degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory and other conditions; (ii) the continuing low or negative interest rate environment in Switzerland and other jurisdictions, developments in the macroeconomic climate and in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, and currency exchange rates, and the effects of economic conditions, market developments, and geopolitical tensions on the financial position or creditworthiness of UBS’s clients and counterparties as well as on client sentiment and levels of activity; (iii) changes in the availability of capital and funding, including any changes in UBS’s credit spreads and ratings, as well as availability and cost of funding to meet requirements for debt eligible for total loss-absorbing capacity (TLAC); (iv) changes in or the implementation of financial legislation and regulation in Switzerland, the US, the UK, the European Union and other financial centers that have imposed, or resulted in, or may do so in the future, more stringent or entity-specific capital, TLAC, leverage ratio, liquidity and funding requirements, incremental tax requirements, additional levies, limitations on permitted activities, constraints on remuneration, constraints on transfers of capital and liquidity and sharing of operational costs across the Group or other measures, and the effect these will or would have on UBS’s business activities; (v) the degree to which UBS is successful in implementing further changes to its legal structure to improve its resolvability and meet related regulatory requirements and the potential need to make further changes to the legal structure or booking model of UBS Group in response to legal and regulatory requirements, proposals in Switzerland and other jurisdictions for mandatory structural reform of banks or systemically important institutions or to other external developments, and the extent to which such changes will have the intended effects; (vi) UBS’s ability to maintain and improve its systems and controls for the detection and prevention of money laundering and compliance with sanctions to meet evolving regulatory requirements and expectations, in particular in the US; (vii) the uncertainty arising from the timing and nature of the UK’s exit from the EU; (viii) changes in UBS’s competitive position, including whether differences in regulatory capital and other requirements among the major financial centers will adversely affect UBS’s ability to compete in certain lines of business; (ix) changes in the standards of conduct applicable to our businesses that may result from new regulation or new enforcement of existing standards, including recently enacted and proposed measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (x) the liability to which UBS may be exposed, or possible constraints or sanctions that regulatory authorities might impose on UBS, due to litigation, contractual claims and regulatory investigations, including the potential for disqualification from certain businesses, potentially large fines or monetary penalties, or the loss of licenses or privileges as a result of regulatory or other governmental sanctions, as well as the effect that litigation, regulatory and similar matters have on the operational risk component of our RWA as well as the amount of capital available for return to shareholders; (xi) the effects on UBS’s cross-border banking business of tax or regulatory developments and of possible changes in UBS’s policies and practices relating to this business; (xii) UBS’s ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses, which may be affected by competitive factors; (xiii) changes in accounting or tax standards or policies, and determinations or interpretations affecting the recognition of gain or loss, the valuation of goodwill, the recognition of deferred tax assets and other matters; (xiv) UBS’s ability to implement new technologies and business methods, including digital services and technologies and ability to successfully compete with both existing and new financial service providers, some of which may not be regulated to the same extent; (xv) limitations on the effectiveness of UBS’s internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (xvi) the occurrence of operational failures, such as fraud, misconduct, unauthorized trading, financial crime, cyberattacks, and systems failures; (xvii) restrictions on the ability of UBS Group AG to make payments or distributions, including due to restrictions on the ability of its subsidiaries to make loans or distributions, directly or indirectly, or, in the case of financial difficulties, due to the exercise by FINMA or the regulators of UBS’s operations in other countries of their broad statutory powers in relation to protective measures, restructuring and liquidation proceedings; (xviii) the degree to which changes in regulation, capital or legal structure, financial results or other factors may affect UBS’s ability to maintain its stated capital return objective; and (xix) the effect that these or other factors or unanticipated events may have on our reputation and the additional consequences that this may have on our business and performance. The sequence in which the factors above are presented is not indicative of their likelihood of occurrence or the potential magnitude of their consequences. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBS’s Annual Report on Form 20-F for the year ended 31 December 2018. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

Rounding

Numbers presented throughout this news release may not add up precisely to the totals provided in the tables and text. Percentages, percent changes, and adjusted results are calculated on the basis of unrounded figures. Information on absolute changes between reporting periods, which is provided in text and that can be derived from figures displayed in the tables, is calculated on a rounded basis.

Tables

Within tables, blank fields generally indicate that the field is not applicable or not meaningful, or that information is not available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Percentage changes are presented as a mathematical calculation of the change between periods.

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