31
Cautionary statement regarding forward-looking
statements
This transcript 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 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 Risk Factors filed on Form
6-K with the 2Q23
UBS Group AG report
on 31 August 2023
and the Annual Report
on Form 20-F for
the year ended
31 December 2022.
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.
