Business Context and Reporting Period
This Form 6-K filing by UBS Group AG and UBS AG, dated August 23, 2024, provides supplementary regulatory information for significant regulated subsidiaries and sub-groups for the first and second quarters of 2024. The data covers the period ended June 30, 2024, and includes entities operating under Swiss, EU, US, and UK regulatory frameworks. Notably, the US figures for the second quarter include Credit Suisse Holdings (USA), Inc., following its reparenting under UBS Americas Holding LLC on June 7, 2024.
Key Financial Metrics
The filing focuses on regulatory capital, liquidity, and leverage ratios rather than standard GAAP revenue or profit metrics. Key figures for the quarter ended June 30, 2024, include:
- Capital Adequacy (Consolidated UBS AG): Common Equity Tier 1 (CET1) capital totaled $83,001 million with a CET1 ratio of 16.3%. Total loss-absorbing capacity was $196,966 million.
- Liquidity (Consolidated UBS AG): High-quality liquid assets were $280.3 billion, resulting in a Liquidity Coverage Ratio (LCR) of 194.1%. The Net Stable Funding Ratio (NSFR) was 127.7%.
- US Subsidiary (UBS Americas Holding LLC): CET1 capital was $23,036 million with a CET1 ratio of 27.3%. The LCR was 147.7% and NSFR was 135.4%.
- Swiss Subsidiary (UBS Switzerland AG): CET1 capital was CHF 12,601 million with a CET1 ratio of 11.4%. The LCR was 145.9% and NSFR was 136.1%.
- Credit Suisse Entities: Credit Suisse (Schweiz) AG (consolidated) reported a CET1 ratio of 14.4% and an LCR of 150.8%.
Material Changes Versus Prior Period
Comparing the quarter ended June 30, 2024, to March 31, 2024:
- Capital Growth: Consolidated UBS AG CET1 capital increased from $43,863 million to $83,001 million. The CET1 ratio improved from 13.3% to 16.3%.
- US Entity Integration: UBS Americas Holding LLC CET1 capital rose from $14,136 million to $23,036 million, reflecting the inclusion of Credit Suisse Holdings (USA), Inc. The CET1 ratio increased from 18.6% to 27.3%.
- Risk-Weighted Assets: Consolidated UBS AG risk-weighted assets increased from $328,732 million to $509,953 million.
- Liquidity: High-quality liquid assets for Consolidated UBS AG grew from $251.0 billion to $280.3 billion.
Guidance, Outlook, and Risks
The filing does not provide forward-looking financial guidance or management commentary on future earnings. However, it highlights the following regulatory outcomes and risks:
- Stress Test Results: UBS Americas Holding LLC exceeded minimum capital requirements under the severely adverse scenario of the 2024 Dodd–Frank Act Stress Test (DFAST).
- Regulatory Compliance: All reported entities maintained LCR and NSFR levels above their respective prudential requirements set by FINMA, the ECB, and the Federal Reserve.
- Capital Phase-in: UBS AG's standalone CET1 ratio is subject to a phase-in of risk-weights for participations, which will increase until January 1, 2028, potentially impacting the fully applied CET1 ratio.
- Contingencies: Joint and several liability exists between UBS AG and UBS Switzerland AG (CHF 3 billion) and between UBS AG and Credit Suisse (Schweiz) AG (CHF 0.6 billion), with the latter fully collateralized by cash deposits.
Investor Verification Checklist
- Verify the impact of the Credit Suisse reparenting on the US subsidiary's capital ratios and leverage exposure.
- Review the 30 June 2024 Pillar 3 Report for detailed breakdowns of risk-weighted assets and capital components.
- Monitor the phased increase in risk-weights for UBS AG's participations and its effect on the fully applied CET1 ratio by 2028.
- Confirm the status of joint and several liability arrangements and collateralization levels.
- Assess the sustainability of high liquidity coverage ratios in the context of potential market stress scenarios.