Business Context and Reporting Period
This Form 6-K is a report of foreign private issuer filed by UBS Group AG and UBS AG on July 27, 2018. The filing provides supplementary financial data for the quarter ended June 30, 2018, and the year ended December 31, 2017. The reports are prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in Swiss francs (CHF) with US dollar (USD) translations.
Key Financial Metrics
Capitalization (as of June 30, 2018)
| Item | CHF (Million) | USD (Million) |
|---|---|---|
| Short-term debt issued | 69,906 | 70,524 |
| Long-term debt issued | 85,873 | 86,631 |
| Total debt issued | 155,779 | 157,155 |
| Equity attributable to UBS AG shareholders | 49,961 | 50,403 |
| Equity attributable to non-controlling interests | 60 | 61 |
| Total capitalization | 205,800 | 207,618 |
Earnings to Fixed Charges
For the quarter ended June 30, 2018, pre-tax earnings from continuing operations were CHF 1,561 million. Total fixed charges for the quarter were CHF 3,254 million, resulting in a ratio of earnings to fixed charges of 1.48.
Material Changes Versus Prior Period
- Debt Levels: Total debt issued increased from CHF 154,272 million as of March 31, 2018, to CHF 155,779 million as of June 30, 2018. This increase was driven by a rise in long-term debt (CHF 80,319 million to CHF 85,873 million) which offset a decrease in short-term debt (CHF 73,952 million to CHF 69,906 million).
- Equity: Equity attributable to shareholders decreased slightly from CHF 50,788 million (March 31, 2018) to CHF 49,961 million (June 30, 2018).
- Currency Impact: The USD translation of total capitalization decreased from $215,159 million (March 31, 2018) to $207,618 million (June 30, 2018), primarily due to the strengthening of the Swiss franc against the US dollar (exchange rate moved from 1.04893 to 1.00884).
Guidance, Outlook, and Risks
The filing text does not provide specific forward-looking guidance, management commentary on future outlook, or detailed risk factors beyond standard regulatory disclosures. The document notes that UBS AG redeemed its last outstanding preferred notes in December 2017, meaning no mandatory preferred share dividends were applicable for the periods presented. Additionally, the filing references a change in presentation for interest income and expense upon the adoption of amendments to IAS 1 on January 1, 2018, which affected the calculation of fixed charges for prior periods.
Investor Verification Checklist
- Verify the full Q2 2018 earnings report (filed separately on Form 6-K on July 27, 2018) for detailed revenue, profit, and cash flow metrics not included in this summary.
- Review the Annual Report on Form 20-F for the year ended December 31, 2017, for comprehensive risk factors and management discussion.
- Confirm the impact of the IAS 1 presentation change on historical interest expense comparisons.
- Monitor the exchange rate volatility between CHF and USD, as it significantly impacts the USD presentation of capitalization figures.