Business Context and Reporting Period
This Form 6-K filing by UBS Group AG, dated April 16, 2024, announces the publication of restated historical segment-level financial data. The restatement reflects changes to the Group's segment financial reporting previously announced on February 6, 2024, aimed at improving reporting consistency and clarifying funding and cost allocation methodologies. These changes will be reflected in the first-quarter results scheduled for publication on May 7, 2024.
Key Financial Metrics and Segment Adjustments
The filing details specific realignments with no impact on overall Group financial performance:
- Client Segment Shifts: Transfer of the Credit Suisse Swiss Bank high net worth client segment (USD 72 billion in invested assets; approx. USD 600 million annualized underlying revenues) from Personal & Corporate Banking to Global Wealth Management.
- Group Treasury Allocations: Transfer of effectively all Group Treasury costs to business divisions. Only costs not controlled by divisions (Group hedging, own debt, DTA funding) remain in Group Items.
- Non-core and Legacy Costs: Reallocation of approximately USD 300 million annually in select costs from Non-core and Legacy into core business divisions.
Material Changes and Outlook
Management provided the following expectations regarding the impact of these reporting changes:
- Global Wealth Management PBT: The transferred high net worth segment is expected to contribute more than USD 200 million annually to Global Wealth Management Pre-Tax Profit (PBT) by 2026.
- Net Interest Income (NII): Changes result in lower NII in business divisions with an offset in Group Items. For the first quarter, UBS expects a low single-digit quarter-on-quarter increase in combined NII for Global Wealth Management and Personal & Corporate Banking.
- Group Items PBT: Going forward, PBT reported in Group Items (excluding P&L from Group hedging and own debt) is expected to average around minus USD 100 million per quarter.
Investor Verification Checklist
- Verify the restated time series of financial information available at the UBS investor relations website for 2023 comparability.
- Confirm the impact of the USD 300 million annual cost reallocation on core division margins in the upcoming Q1 2024 results.
- Monitor the actual Q1 2024 NII performance against the "low single-digit" quarter-on-quarter increase guidance.
- Note that the updated time series numbers are unaudited.