Annual Report 2023 |
Cautionary statement
regarding forward-looking statements
|
This report contains
statements that
constitute “forward-looking
statements,” including
but
not limited to management’s
outlook for UBS’s financial performance,
statements relating to the
anticipated effect of transactions
and strategic initiatives on
UBS’s
business and
future
development and
goals
or
intentions to
achieve climate,
sustainability and
other social
objectives. While
these
forward-looking
statements represent
UBS’s judgments,
expectations and
objectives 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. In particular,
terrorist activity and conflicts
in the Middle East,
as well as the continuing Russia–Ukraine
war, may have significant impacts on global markets,
exacerbate global inflationary pressures, and slow
global growth.
In addition,
the ongoing
conflicts may
continue to
cause significant
population displacement,
and lead
to shortages
of vital
commodities, including
energy
shortages and food insecurity outside the areas immediately involved in armed conflict. Governmental responses to the armed conflicts, including, with
respect
to the Russia–Ukraine war, coordinated successive
sets of sanctions on
Russia and Belarus,
and Russian and Belarusian
entities and nationals, and
the uncertainty
as to whether
the ongoing conflicts will
widen and intensify,
may continue to
have significant adverse effects
on the market and
macroeconomic conditions,
including in
ways that
cannot be
anticipated. UBS’s
acquisition of
the Credit
Suisse Group
has materially
changed our
outlook and
strategic direction
and
introduced new operational challenges. The integration
of the Credit Suisse entities into the UBS structure is expected
to take between three and five years and
presents significant
risks, including
the risks that
UBS Group AG
may be unable
to achieve
the cost reductions
and other benefits
contemplated by
the transaction.
This creates significantly greater uncertainty about forward-looking statements. Other factors that may affect our performance and ability to achieve our plans,
outlook and other objectives also
include, but are not limited to:
(i) the degree to which UBS is successful
in the 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), liquidity
coverage ratio
and other financial resources,
including changes in RWA assets
and liabilities arising from higher
market volatility and the size
of the combined Group; (ii) the
degree to which UBS is successful in implementing changes to its businesses to meet changing market, regulatory
and other conditions, including as a result of
the acquisition of the Credit Suisse
Group; (iii) increased inflation and interest rate
volatility in major markets; (iv) 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, currency
exchange rates,
deterioration or slow recovery in residential and commercial real estate markets, the effects of economic conditions, including increasing inflationary pressures,
market developments, increasing geopolitical tensions, and changes to national trade policies on the financial position or creditworthiness of
UBS’s clients and
counterparties, as well as on client sentiment and levels of activity; (v) changes in the availability of capital and funding, including
any adverse changes in UBS’s
credit spreads and credit ratings of UBS, Credit Suisse, sovereign issuers, structured credit products or
credit-related exposures, as well as availability and cost of
funding to
meet requirements
for debt
eligible for
total loss-absorbing
capacity (TLAC),
in particular
in light
of the
acquisition of
the Credit
Suisse Group;
(vi) changes in central
bank policies or
the implementation
of financial legislation
and regulation in
Switzerland, the
US, the UK,
the EU 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, net
stable funding ratio, liquidity
and
funding
requirements,
heightened
operational
resilience
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; (vii) UBS’s
ability to
successfully implement
resolvability and
related regulatory requirements
and the
potential
need to make further changes to the
legal structure or booking model of
UBS in response to legal and regulatory requirements
and any additional requirements
due to its acquisition of the Credit Suisse Group, or other developments; (viii) UBS’s ability to maintain and improve its systems and controls for complying
with
sanctions in a timely
manner and for the detection
and prevention of money
laundering to meet evolving
regulatory requirements and expectations,
in particular
in current geopolitical turmoil; (ix)
the uncertainty arising from domestic
stresses in certain major economies;
(x) changes in UBS’s competitive
position, including
whether differences in regulatory capital and other requirements among the major financial centers adversely affect UBS’s ability to
compete in certain lines of
business; (xi) changes in the standards of conduct applicable to our businesses that may result from new regulations or new enforcement of existing standards,
including measures to impose new and enhanced duties when interacting with customers and in the execution and handling of customer transactions; (xii) 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, including as a result of
its acquisition of the Credit Suisse Group, as well as
the amount of capital available for return
to shareholders; (xiii) the effects on UBS’s business, in particular cross-border
banking, of sanctions, tax or regulatory developments and of possible changes in
UBS’s policies
and practices;
(xiv) 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;
(xv) 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;
(xvi) 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; (xvii) limitations on the
effectiveness of UBS’s internal processes for risk management, risk
control, measurement and modeling,
and of financial models
generally; (xviii) the occurrence of
operational failures, such as
fraud, misconduct, unauthorized
trading, financial crime, cyberattacks,
data leakage and systems failures,
the risk of which is increased
with cyberattack threats from both
nation states and non-
nation-state actors targeting
financial institutions; (xix) restrictions
on the ability of UBS
Group AG and UBS 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; (xx) 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;
(xxi) uncertainty over the scope
of actions that may
be required by UBS, governments
and others for UBS to
achieve goals relating
to climate, environmental and social matters, as well as the evolving
nature of underlying science and industry and the possibility of conflict
between different
governmental standards and regulatory regimes; (xxii) the ability of UBS to
access capital markets; (xxiii) the ability of UBS to successfully
recover from a disaster
or other
business continuity
problem due
to a
hurricane, flood,
earthquake, terrorist
attack, war,
conflict (e.g.,
the Russia–Ukraine
war), pandemic,
security
breach, cyberattack, power
loss, telecommunications failure or
other natural or
man-made event, including
the ability to
function remotely during
long-term
disruptions such as the COVID-19 (coronavirus) pandemic; (xxiv) the level
of success in the absorption of Credit Suisse, in the integration of the two groups
and
their businesses, and in the execution of the planned strategy regarding cost reduction and divestment of any non-core assets, the existing assets and liabilities
of Credit Suisse, the level
of resulting impairments and write-downs, the effect of
the consummation of the integration on the operational results,
share price
and credit
rating of UBS
– delays,
difficulties, or
failure in
closing the transaction
may cause market
disruption and challenges
for UBS
to maintain
business,
contractual and operational relationships;
and (xxv) the effect that these or other
factors or unanticipated events,
including media reports and speculations,
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
US Securities and Exchange Commission (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 the UBS Group AG
and UBS AG Annual Reports
on Form 20- F for the year
ended 31 December 2023. 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 report may not add up
precisely to the totals provided in the tables and text.
Percentages and percent changes
disclosed in text and tables are
calculated on the basis of unrounded
figures. Absolute changes between reporting periods disclosed in
the text, which can be
derived from numbers presented in related tables, are calculated on
a rounded basis.
Tables |
Within tables, blank fields generally indicate non-applicability or that presentation of any content would not be 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.
Values
that are zero on a rounded basis can be either negative
or positive on an actual basis.
Websites |
In this report, any
website addresses are provided
solely for information
and are not intended
to be active links.
UBS is not incorporating
the contents
of any such websites into this report.
