UBS Switzerland AG: 2024 Standalone Financial Summary
Business Context and Reporting Period
This Form 6-K filing presents the audited standalone financial statements for UBS Switzerland AG for the year ended December 31, 2024. The entity is a wholly-owned subsidiary of UBS AG and operates under Swiss GAAP. A material event during the period was the merger with Credit Suisse (Schweiz) AG, which was legally completed on July 1, 2024, and accounted for retroactively as of April 1, 2024. The filing includes standalone regulatory information for the fourth quarter of 2024.
Key Financial Metrics
| Metric (CHF m) | 2024 | 2023 |
|---|---|---|
| Total Operating Income | 11,906 | 9,655 |
| Net Interest Income | 4,799 | 4,404 |
| Net Fee and Commission Income | 5,094 | 4,139 |
| Net Trading Income | 1,268 | 900 |
| Total Operating Expenses | 8,931 | 5,816 |
| Operating Profit | 2,975 | 3,839 |
| Net Profit for the Period | 2,371 | 3,133 |
| Total Assets | 516,228 | 314,231 |
| Total Equity | 25,596 | 15,926 |
Regulatory Capital (Q4 2024): Common Equity Tier 1 (CET1) capital stood at CHF 21.7 billion. The CET1 ratio was 11.63%, and the Leverage Ratio was 5.33%. The Liquidity Coverage Ratio (LCR) averaged 143.5% for the quarter, and the Net Stable Funding Ratio (NSFR) was 132.2%.
Material Changes vs. Prior Period
- Balance Sheet Expansion: Total assets increased by 64% to CHF 516.2 billion, primarily driven by the merger with Credit Suisse (Schweiz) AG. Mortgage loans grew significantly to CHF 282.4 billion (from CHF 168.7 billion), and customer deposits rose to CHF 359.0 billion.
- Profitability Decline: Despite a 23% increase in Total Operating Income, Net Profit decreased by 24% to CHF 2.4 billion. This was due to a 54% increase in Operating Expenses (CHF 8.9 billion vs. CHF 5.8 billion) and CHF 91 million in extraordinary expenses related to the merger accounting adjustments.
- Expense Drivers: Personnel expenses rose to CHF 3.0 billion (from CHF 2.0 billion) due to the integration of Credit Suisse staff. General and administrative expenses increased to CHF 5.5 billion, largely due to shared service costs charged by the Group.
- Trading Income: Net trading income improved by 41% to CHF 1.3 billion, driven by foreign exchange instruments (CHF 1.2 billion).
Guidance, Outlook, and Risks
Dividend Proposal: The Board proposes a total dividend distribution of CHF 4.2 billion, funded by the current year's net profit (CHF 2.4 billion), the voluntary earnings reserve (CHF 1.4 billion), and other statutory capital reserves (CHF 0.45 billion).
Liquidity and Capital: The bank remains well-capitalized and liquid, exceeding all FINMA prudential requirements. The LCR decrease in Q4 was attributed to higher net cash outflows from customer deposits and a reduction in high-quality liquid assets (HQLA).
Risks and Contingencies:
- Joint and Several Liability: UBS Switzerland AG holds joint and several liability for UBS AG contractual obligations of CHF 2 billion and CHF 538 million under the international covered bond program (formerly Credit Suisse).
- Deposit Insurance: The bank's share of the Swiss deposit insurance payment obligation increased to CHF 1.5 billion following the merger.
- Climate Risk: Climate risk management is conducted at the Group level; specific metrics for the standalone entity are referenced in the Group Annual Report.
Investor Verification Checklist
- Merger Integration: Verify the full impact of the Credit Suisse (Schweiz) AG merger on future cost synergies and revenue growth, given the significant expense increase in 2024.
- Dividend Sustainability: Confirm the ability to sustain the proposed CHF 4.2 billion dividend payout relative to the reduced net profit of CHF 2.4 billion.
- Regulatory Compliance: Monitor the CET1 ratio (11.63%) against the Swiss SRB going concern requirement of 15.26% (including buffers) to ensure continued compliance.
- Contingent Liabilities: Assess the potential exposure from the CHF 2 billion joint and several liability to UBS AG and the covered bond program obligations.
- Asset Quality: Review the development of allowances for expected credit losses (ECL), which totaled CHF 1.7 billion, particularly regarding the expanded mortgage loan portfolio.