# UBS Group AG (UBS): Narrative, third quarter 2026 UBS Group AG reports under IFRS Accounting Standards, and its presentation currency is the US dollar, so almost every amount below appears as the company printed it. The few amounts the filings give in euros or Swiss francs have been converted to US dollars. The one exception is a division's own Swiss-franc results, labelled where used. UBS's ordinary shares are listed directly on the New York Stock Exchange. Sources: the Business, Risk factors and annual results sections come from the Annual Report 2025 filed as UBS's Form 20-F for the year ended 31 December 2025 (accession 0001610520-26-000023, filed 9 March 2026). The current-quarter and subsequent-events sections come from the Third Quarter 2026 Report of UBS Group AG, furnished on Form 6-K (accession 0001610520-26-000106, filed 28 October 2026). ## Business UBS is a Swiss-headquartered global bank whose core business is managing money for wealthy individuals worldwide. It calls itself "the world's only truly global wealth manager and the leading bank in Switzerland", and it adds asset management and a focused investment bank to those two pillars. It earns money in three main ways: recurring fees charged on the assets clients entrust to it, net interest income on client loans and deposits, and transaction and trading revenue from client activity. At the end of 2025 its invested assets exceeded $7 trillion ($7,005 billion), and 2025 total revenues were $49.57 billion. The asset-gathering businesses produce close to 60% of revenues, excluding Non-core and Legacy, while using about 39% of risk-weighted assets (RWA). Roughly another third of RWA sits in Swiss personal and corporate banking. The Investment Bank is capped at 25% of Group RWA. The Group reports five business divisions. Support and control functions charge almost all of their costs out to the divisions; what remains is reported as Group Items. - **Global Wealth Management (GWM)** serves high and ultra high net worth individuals and some institutional clients, organized in five regions: the US, Latin America, Asia Pacific, EMEA and Switzerland. Of $4.8 trillion in invested assets at end-2025, $2.1 trillion were fee-generating discretionary and advisory mandates, which earn recurring portfolio-management, fund, custody and administration fees. GWM also earns transaction income from brokerage, trading and foreign exchange, and net interest income on a $327 billion loan book (mostly securities-based lending and mortgages) and $479 billion of deposits. Around half of the invested assets of UBS's wealth management clients are booked in the Americas. UBS describes itself as by far the largest wealth manager in Asia Pacific, where invested assets passed $1 trillion in 2025. Its main competitors are Morgan Stanley, JPMorgan Chase, Bank of America and Wells Fargo in the US, and Julius Baer, BNP Paribas, Deutsche Bank and HSBC internationally. GWM was the largest 2025 profit contributor, with $5.21 billion of reported pre-tax profit on $25.96 billion of revenue. - **Personal & Corporate Banking (P&C)** is UBS's Swiss universal bank. It has around 190 branches, serves more than one-third of Swiss households and more than 90% of large Swiss companies, and has pledged a lending volume commitment of about CHF 350 billion ($441.03 billion) to the Swiss economy. Net interest income on mortgages, corporate loans and deposits makes up more than half of its revenue. Transaction income from payments, cards, trade finance and foreign exchange makes up about a quarter. Its competitors are the Swiss cantonal banks, Raiffeisen, PostFinance and digital entrants. 2025 reported pre-tax profit was $2.50 billion on $9.15 billion of revenue. - **Asset Management** is a global, multi-asset manager with over $2 trillion of invested assets. Its capabilities include active equities and fixed income, multi-asset, passive and ETFs (it is the largest Europe-based manager of indexed investments), real assets, and Unified Global Alternatives, a $330 billion manager-selection platform it shares with GWM. Revenue depends mainly on management fees as a percentage of invested assets, plus some performance fees. 2025 reported pre-tax profit was $719 million on $3.16 billion of revenue. - **Investment Bank** has two parts. Global Banking covers M&A advisory and capital markets. Global Markets is organized as Execution Services, Derivatives & Solutions, and Financing, which includes prime brokerage. Both are supported by Global Research. Its traditional strengths are equities, foreign exchange, precious metals, research, advisory and capital markets. It competes with Morgan Stanley, Goldman Sachs, Bank of America, Barclays, Citigroup, BNP Paribas, Deutsche Bank, Wells Fargo and JPMorgan Chase. 2025 reported pre-tax profit was $2.82 billion on $12.34 billion of revenue. - **Non-core and Legacy** holds the former Credit Suisse assets and businesses that UBS is running down. It reported a 2025 pre-tax loss of $1.20 billion. The present shape of the Group follows UBS's acquisition of Credit Suisse Group on 12 June 2023. The deal was made at the request of the Swiss Federal Department of Finance, the Swiss National Bank and FINMA to stabilize the Swiss banking system. Since then UBS has merged the main legal entities: UBS AG with Credit Suisse AG in May 2024, the two Swiss banks in July 2024, and the US holding companies in 2025. It has also sold Credit Suisse's US mortgage servicer, Select Portfolio Servicing, for a $97 million gain in March 2025, and sold its 50% stake in Swisscard to American Express in January 2026. The bank expects to complete the integration substantially by the end of 2026. **Targets.** UBS's exit-rate targets for end-2026 are an underlying return on CET1 capital of about 15% and an underlying cost/income ratio below 70%. For 2028 it aims for a reported return on CET1 capital of about 18% and a reported cost/income ratio of about 67%. Its capital guidance is a CET1 capital ratio of about 14% and a CET1 leverage ratio above 4.0%. Division ambitions include more than $5.5 trillion of GWM invested assets by end-2028 and more than $200 billion a year of GWM net new assets from 2028. ## Risk factors UBS's filed risk factors come in four groups: strategy, management and operational; market, credit and macroeconomic; regulatory and legal; and liquidity and funding. These are the ones that matter most for the investment case: - **Swiss capital regulation.** Switzerland's rules for its big banks are among the strictest of any major financial center, and they are being tightened after Credit Suisse failed. The Federal Council's proposed capital measures, if adopted as proposed, would require significant additional capital at UBS AG and a higher capital ratio at Group level. That would weigh on returns and on capital distributed to shareholders, and would leave UBS at a disadvantage to peers held to lower requirements. FINMA has also said UBS's Swiss emergency plan needs further development, and resolution rules give FINMA broad powers, including writing down equity and debt, if the bank gets into severe difficulty. - **The Credit Suisse acquisition.** UBS took on all of Credit Suisse's liabilities, including its litigation and regulatory matters. Former Credit Suisse shareholders are challenging the merger consideration. Holders of the written-down Credit Suisse AT1 bonds won a partial ruling from the Swiss Federal Administrative Court that FINMA's write-down order was unlawful, which FINMA and UBS have appealed to the Swiss Federal Supreme Court. UBS says a final adverse decision could be material. The integration itself depends on migrating clients, decommissioning IT, cutting costs on schedule, retaining deposits and invested assets, and running down Non-core and Legacy. UBS may also face material future Swiss tax liabilities if prior Credit Suisse impairments of its subsidiaries reverse. - **Litigation and conduct.** Exposure is material and could substantially exceed provisions. The filing cites the French cross-border case, resolved in September 2025 with UBS AG paying a fine of EUR 730 million ($856.65 million) and EUR 105 million ($123.22 million) in civil damages. A guilty plea or conviction, for example if Credit Suisse's 2021 Mozambique deferred prosecution agreement were terminated, could put licenses and US regulatory waivers at risk. - **Reputation and operations.** Reputation drives client and asset flows. The integration, the push into AI and automation, cyberattacks (including state-backed attacks linked to the Russia–Ukraine war and AI-enabled phishing), data-protection rules, and anti-money-laundering and sanctions compliance all carry operational and legal risk. - **Markets and macro.** Market downturns reduce fee income tied to invested assets and transaction revenue in GWM and the Investment Bank. UBS is more concentrated in Asia than many peers, and its Investment Bank leans toward Europe, Asia and structured products for wealth clients. Geopolitical risks named include US–China tensions, the Middle East conflict and the Russia–Ukraine war. - **Credit risk.** Swiss mortgages and corporate loans make up a large part of the loan book, which exposes UBS to Swiss property prices, the strength of the franc and Switzerland–EU relations. Its prime brokerage, securities finance and Lombard lending extend substantial credit against collateral whose value can fall quickly. - **Interest rates and currency.** The Swiss National Bank's return to a zero policy rate in 2025 has hurt, and UBS expects it to keep hurting, net interest income. Higher rates can push deposits into higher-yielding products. Because UBS hedges its CET1 ratio, CET1 capital stays exposed to currency moves. The dollar's fall in 2025 inflated the leverage ratio denominator. - **Capital, tax and funding.** Losses, RWA inflation or methodology changes could limit the planned progressive dividend and share buybacks. The effective tax rate is sensitive to how deferred tax assets are valued, especially in the US. Funding depends on credit ratings: Fitch cut UBS Group AG to "A" from "A+" when the acquisition closed. - **Holding-company structure.** UBS Group AG's dividends, buybacks and debt service depend on distributions from subsidiaries, which local capital and liquidity rules can restrict. ## Management's discussion: full year 2025 **Results.** Reported net profit attributable to shareholders rose 53% to $7.77 billion (diluted EPS $2.36, against $1.52), and pre-tax profit rose 30% to $8.85 billion. Total revenues grew 2% to $49.57 billion. Net fee and commission income rose $1.77 billion to $27.91 billion: portfolio-management and fund fees climbed $1.47 billion to $19.56 billion on higher fee-generating assets in GWM, and brokerage fees rose $870 million on Investment Bank cash-equities volumes and GWM client activity. Other income turned negative ($96 million loss) because of a $457 million net loss on repurchasing legacy Credit Suisse debt and a $230 million loss on an associate. Operating expenses fell 3% to $40.20 billion. The main reason was an $821 million increase in net releases of litigation provisions and contingent liabilities, as Credit Suisse's US residential mortgage-backed securities settlement obligations were completed and the French cross-border matter was resolved. Credit loss expense was $524 million. **Divisional drivers.** Investment Bank revenues from net interest and trading rose $1.37 billion, driven by volatility and client activity in Derivatives & Solutions and higher prime brokerage balances. P&C's net interest income fell $328 million on lower central bank rates. GWM's net interest income fell $340 million, mainly on reduced accretion of purchase-price-allocation (PPA) adjustments. Non-core and Legacy revenues swung from $1.16 billion in 2024 to a $24 million loss as position-exit gains dried up. **Underlying view.** Excluding PPA effects, integration costs and the Swisscard items, underlying pre-tax profit was $11.73 billion (2024: $8.83 billion). The underlying cost/income ratio was 74.4% (reported: 81.1%), and the underlying return on CET1 capital was 13.7% (reported: 10.8%). Net integration-related expenses were $5.01 billion. Cumulative gross cost savings reached $10.7 billion by end-2025, and UBS raised its end-2026 exit-rate savings ambition to about $13.5 billion. **Tax, capital and returns.** The effective tax rate was 11.9%, helped by a $747 million net upward revaluation of deferred tax assets; UBS guided to about 23% for 2026. The CET1 ratio was 14.4% and the CET1 leverage ratio 4.4%. RWA fell $5.1 billion to $493.4 billion, while the leverage ratio denominator rose $103 billion, mostly on currency effects. Capital returns in 2025 totalled $6.4 billion, of which $3.4 billion was dividends. For 2025 the Board proposed a dividend of $1.10 per share, up 22%. For 2026 UBS said it would accrue for a mid-teens percentage dividend increase and buy back $3 billion of shares, with the aim of doing more depending on Swiss regulation. Internal headcount fell by 5,471 to 103,177 full-time equivalents. **Rate sensitivity.** A +100 basis-point parallel shift would add about $1.4 billion to annual banking-book net interest income, about $1.1 billion of it from Swiss franc rates. ## Current quarter: third quarter 2026 From the first quarter of 2026, UBS's first- and third-quarter reports no longer contain IAS 34 interim financial statements; full IAS 34 statements are published at the half year. The third-quarter consolidated financial information is presented for the nine months to 30 September 2026. **Headline results.** Reported net profit attributable to shareholders was $2.69 billion, up 8% from $2.48 billion a year earlier, with diluted EPS of $0.85 (third quarter 2025: $0.76). Pre-tax profit rose 27% to $3.59 billion. Total revenues rose 5% to $13.35 billion, and operating expenses fell 2% to $9.65 billion. Underlying pre-tax profit rose $487 million to $4.08 billion, from $3.59 billion in the third quarter of 2025. The reported cost/income ratio was 72.3% (underlying: 68.7%), and the annualized return on CET1 capital was 14.8% (underlying: 16.7%). The tax rate rose to 24.7% from 12.0%. For the nine months, net profit attributable to shareholders was $8.53 billion and diluted EPS $2.66 (nine months 2025: $6.57 billion and $1.99). **Two one-off items shaped the quarter, partly offsetting each other:** - **Legal settlements.** UBS resolved certain legacy legal matters in Non-core and Legacy for a net gain of $697 million, booked in other income and included in underlying results. The same division also took $275 million of net litigation expense. - **Debt buyback.** In September 2026 UBS repurchased $9.8 billion principal of legacy Credit Suisse senior debt for about $9.9 billion. It recorded a $346 million net loss in Group Items, which includes a $241 million release of PPA adjustments and is excluded from underlying results. UBS expects lower interest expense in future periods to offset the loss. Group-wide litigation, regulatory and similar matters cost a net $336 million in expenses, against net releases of $668 million a year earlier. That swing is why general and administrative expenses rose 22% even as personnel costs fell 7% with a smaller workforce. **Divisions (reported, third quarter 2026 against third quarter 2025):** - **GWM:** pre-tax profit up 42% to $1.92 billion on revenue up 7% to $7.00 billion. Recurring fees rose 9% on higher fee-generating assets, and net interest income rose 5% on deposit pricing and loan growth. Net new assets were $55.1 billion, a 4.5% annualized growth rate, with $17.9 billion from Asia Pacific, $16.7 billion from the Americas, $12.1 billion from Switzerland and $8.7 billion from EMEA. Invested assets were $4.98 trillion. - **P&C:** pre-tax profit up 77% to $1.12 billion on revenue of $2.36 billion; in Swiss francs, profit was up 80% to CHF 915 million. Costs fell 25% as integration expenses dropped and synergies came through. Underlying net interest income rose 2% in francs despite lower central bank rates. - **Asset Management:** pre-tax profit up 24% to $271 million, although revenue fell 7% to $780 million. Performance fees fell 82% after the exit from the O'Connor hedge-fund business, which was sold to Cantor Fitzgerald. The division had net new money outflows of $5 billion in the quarter, and invested assets were $2.20 trillion. - **Investment Bank:** pre-tax profit down 7% to $838 million. The year-ago quarter included a $128 million gain on selling a stake in Credit Suisse Securities (China), so underlying profit rose 9%. Global Markets revenue rose 16% to $2.55 billion, led by Financing (prime brokerage, up 32%) and Asia-Pacific cash equities. Global Banking fell 34% to $692 million as Advisory dropped 44% on lower M&A revenue. - **Non-core and Legacy:** pre-tax profit of $183 million, against a $102 million loss, driven by the legal-settlement gain. RWA were $27.3 billion. - **Group Items:** pre-tax loss of $740 million, due to the debt-repurchase loss and mark-to-market losses on hedges and callable own debt as US dollar rates rose sharply. **Integration progress.** About 98% of in-scope legacy Credit Suisse applications were no longer in use and about 90% had been fully decommissioned. Gross cost savings reached $13.2 billion cumulatively, after $0.6 billion more in the quarter. UBS now expects about $13.7 billion by end-2026, above its $13.5 billion ambition. Cumulative integration expenses were $14.6 billion, heading to about $15.1 billion. Non-core and Legacy has cut underlying operating expenses (excluding litigation) by 91% against the 2022 baseline, and its credit and market risk RWA, at $3 billion, are already below the year-end target of about $4 billion. **Capital.** The CET1 ratio rose to 14.7% from 14.4% at the end of June, as RWA fell $7.8 billion to $496.1 billion and CET1 capital rose $0.7 billion to $73.1 billion. The CET1 leverage ratio was 4.6%. UBS bought back $1.81 billion of shares in the quarter. That did not reduce CET1 capital, because the capital reserve already set aside for buybacks was reduced by the same amount. UBS expects to complete its current $3 billion program by the time it publishes fourth-quarter 2026 results. **Swiss regulation, the main open question.** In September 2026 the Council of States, the upper house of the Swiss Parliament, backed a proposal requiring systemically important banks to deduct 90% of the carrying value of foreign subsidiaries from CET1 capital. The National Council must still deliberate. If enacted in that form, with phase-in from 2028 at the earliest, UBS AG would need about $16 billion of additional CET1 capital. That comes on top of about $2 billion from this year's ordinance-level measures and about $15 billion already required since the acquisition, for a total of about $33 billion of incremental CET1 capital. UBS puts the total annual capital-related cost of the acquisition at about $2.5 billion. In August 2026 the Federal Council also opened consultations on recovery and resolution, emergency liquidity borrowing capacity, a Senior Managers Regime and broader FINMA powers. The consultations run until November 2026, and a final legislative proposal to Parliament is expected in the first half of 2027. These measures are expected to take effect no earlier than 2029. **Outlook (management, for the fourth quarter of 2026).** Management expects: - a more typical seasonal slowdown in transaction volumes; - a tougher year-on-year comparison in Global Markets, because the prior-year quarter included a gain on disposal; - Global Banking revenue to rise from the third quarter if markets are constructive; - GWM net interest income to rise by a low-single-digit percentage sequentially, and P&C's to rise slightly in Swiss francs; - a 2026 tax rate of about 23%; - a year-end CET1 ratio at or very close to about 14%, possibly including an accrual for the first part of intended 2027 buybacks. The pace of buybacks remains tied to the outcome of the Swiss parliamentary debate. ## Subsequent events UBS disclosed the following events after 30 September 2026: - **Fund administration transfer to Northern Trust (agreed October 2026).** UBS agreed to extend its fund administration relationship with Northern Trust and to transfer to it the former Credit Suisse traditional and alternatives fund administration businesses in Luxembourg and Switzerland. UBS's Swiss and Luxembourg management companies will also add funds that UBS currently services to the existing agreement. The deal needs regulatory approval and is expected to close in the second quarter of 2027. No price was disclosed, and UBS does not expect a material profit or loss. - **360 ONE WAM stake (22 October 2026).** UBS exercised all of the warrants it subscribed for in 2025 under its agreement with 360 ONE WAM Ltd, one of India's largest independent wealth and asset managers. It now holds 20.5 million shares, about 4.8% of the company. The exercise price was not disclosed, and the transaction produced no material profit or loss. - **Credit Suisse mortgage-securities litigation (October 2026).** The parties agreed to resolve all remaining repurchase actions brought by trusts holding Credit Suisse residential mortgage-backed securities. These include Asset Backed Securities Corporation Home Equity Loan Trust Series 2006-HE7, Home Equity Asset Trust 2006-8, Home Equity Asset Trust 2007-2 and CSMC Asset-Backed Trust 2007-NC1. The resolutions still require conditions to be met, including court approval, and no amount was disclosed. The quarterly report discloses no other acquisition or divestiture after the quarter end. At 30 September 2026, UBS estimated possible litigation losses not covered by provisions at $0 to $1.1 billion. Provisions for litigation, regulatory and similar matters stood at $2.11 billion.