UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: March 28, 2024
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form
40-F.
Form 20-F
☒
☐
This Form 6-K consists of the UBS AG audited standalone financial statements for the year ended 31 December
2023, as well as the consent of Ernst & Young Ltd. with respect thereto, which appear immediately following this
page.
31 December 2023
Table of contents
1
42
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements
(audited)
Income statement
USD m
CHF m
For the year ended
For the year ended
Note
31.12.23
31.12.22
31.12.23
31.12.22
Interest and discount income
1
18,473
7,133
16,540
6,821
Interest and dividend income from trading portfolio
1
2,664
2,199
2,389
2,097
Interest and dividend income from financial investments
1,216
359
1,089
344
Interest expense
2
(24,683)
(9,197)
(22,104)
(8,799)
Gross interest income
(2,330)
495
(2,086)
463
Credit loss (expense) / release
12
(13)
18
(13)
17
Net interest income
(2,343)
513
(2,099)
480
Fee and commission income from securities and investment business and other fee and
commission income
2,435
2,756
2,193
2,618
Credit-related fees and commissions
125
99
111
95
Fee and commission expense
(705)
(684)
(632)
(651)
Net fee and commission income
1,855
2,171
1,672
2,062
Net trading income
7,253
5,796
6,527
5,512
Net income from disposal of financial investments
43
(110)
38
(106)
Dividend income from investments in subsidiaries and other participations
4
5,430
6,465
4,862
6,183
Income from real estate holdings
405
394
363
375
Sundry ordinary income
5
1,596
1,467
1,426
1,397
Sundry ordinary expenses
5
(407)
(937)
(366)
(888)
Other income from ordinary activities
7,068
7,279
6,323
6,962
Total operating income
13,832
15,759
12,422
15,015
Personnel expenses
6
3,408
3,109
3,063
2,960
General and administrative expenses
7
4,118
3,543
3,684
3,375
Subtotal operating expenses
7,526
6,653
6,747
6,334
Impairment of investments in subsidiaries and other participations
4
3,715
1,056
3,343
1,014
Depreciation, amortization and impairment of property, equipment, software and intangible
assets
765
743
687
708
Changes in provisions for litigation, regulatory and similar matters, and other provisions
33
54
29
50
Total operating expenses
12,040
8,505
10,805
8,106
Operating profit
1,792
7,253
1,617
6,909
Extraordinary income
8
34
201
32
191
Extraordinary expenses
8
2
2
2
2
Tax expense / (benefit)
9
310
295
283
281
Net profit / (loss)
1,515
7,157
1,364
6,817
1 Interest income includes negative interest income, which was not material for the year ended 31 December 2023 (approximately USD 0.4bn (CHF 0.4bn) for the year ended 31 December 2022). 2 Includes negative
interest expense on financial liabilities, which was not material for the year ended 31 December 2023 (approximately USD 0.4bn (CHF 0.4bn) for the year ended 31 December 2022).
UBS AG standalone financial statements (audited)
Balance sheet
USD m
CHF m
Note
31.12.23
31.12.22
31.12.23
31.12.22
Assets
Cash and balances at central banks
12
49,449
48,344
41,620
44,684
Due from banks
12, 23
56,082
31,450
47,204
29,069
Receivables from securities financing transactions
10, 12, 23
69,381
58,141
58,398
53,739
Due from customers
11, 12, 23
107,463
105,552
90,451
97,561
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing capacity
1
11, 12, 23
29,380
27,678
24,729
25,582
Mortgage loans
11, 12
5,116
5,039
4,306
4,657
Trading portfolio assets
13
124,682
98,566
104,943
91,104
Derivative financial instruments
14
10,056
14,701
8,464
13,588
Financial investments
15
40,874
43,746
34,403
40,434
Accrued income and prepaid expenses
12
3,000
1,872
2,525
1,730
Investments in subsidiaries and other participations
4
48,090
51,029
40,477
47,165
Property, equipment and software
5,049
5,134
4,250
4,745
Other assets
11, 12, 16
9,905
13,516
8,336
12,491
Total assets
558,527
504,767
470,106
466,550
of which: subordinated assets
20,183
18,748
16,988
17,329
of which: subject to mandatory conversion and / or debt waiver
19,250
18,042
16,202
16,676
Liabilities
Due to banks
23
62,428
47,329
52,545
43,745
Payables from securities financing transactions
10, 23
23,774
23,497
20,011
21,718
Due to customers
23
147,388
138,941
124,055
128,421
Funding received from UBS Group AG measured at amortized cost
20, 23
70,620
61,202
59,440
56,568
Trading portfolio liabilities
13
27,280
25,058
22,961
23,160
Derivative financial instruments
14
16,921
17,429
14,242
16,109
Financial liabilities designated at fair value
13, 19
80,859
70,603
68,058
65,258
of which: funding received from UBS Group AG
19, 20, 23
2,711
1,959
2,282
1,811
Bonds issued
20
67,144
56,148
56,514
51,897
Accrued expenses and deferred income
5,474
3,592
4,608
3,320
Other liabilities
16
1,755
1,582
1,475
1,462
Provisions
12
2,008
2,026
1,690
1,872
Total liabilities
505,650
447,406
425,600
413,532
Equity
Share capital
21
386
393
380
386
Statutory capital reserve
36,334
36,326
35,655
35,649
of which: capital contribution reserve
22,190
36,326
23,936
35,649
14,144
11,719
Voluntary earnings reserve
14,642
13,485
7,107
10,167
Net profit / (loss) for the period
1,515
7,157
1,364
6,817
Total equity
52,877
57,361
44,506
53,018
Total liabilities and equity
558,527
504,767
470,106
466,550
of which: subordinated liabilities
77,573
66,872
65,293
61,809
of which: subject to mandatory conversion and / or debt waiver
77,012
66,314
64,820
61,293
1 Represents the Swiss GAAP carrying amount of instruments qualifying as total loss-absorbing capital at the level of the respective subsidiaries. 2 The capital contribution reserve balance of USD 22,190m as of
31 December 2023 can be distributed free of withholding tax to the shareholder. Refer to the Statement of changes in equity for more information.
UBS AG standalone financial statements (audited)
Balance sheet (continued)
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Off-balance sheet items
Contingent liabilities, gross
31,360
20,359
26,395
18,818
Sub-participations
(990)
(1,069)
(834)
(988)
Contingent liabilities, net
30,369
19,290
25,562
17,830
of which: guarantees to third parties related to subsidiaries
6,362
6,156
5,355
5,690
Irrevocable loan commitments, gross
19,900
16,272
16,749
15,041
Sub-participations
8
0
7
0
Irrevocable loan commitments, net
19,892
16,272
16,743
15,041
Forward starting transactions
1
102,122
54,321
85,955
50,208
of which: forward starting reverse repurchase agreements
63,527
27,343
53,470
25,273
of which: repurchase agreements
38,595
26,978
32,485
24,936
Liabilities for calls on shares and other equity instruments
5
5
4
4
1 Cash to be paid in the future by either UBS AG or the counterparty.
Off-balance sheet items
Contingent liabilities include indemnities and guarantees issued by UBS AG for the benefit of subsidiaries and creditors
of subsidiaries.
Where the indemnity amount issued by UBS AG is not specifically defined, the indemnity relates to the solvency or
minimum capitalization of a subsidiary, and therefore no amount is included in the table above.
Joint and several liability – value-added tax
UBS AG is jointly and severally liable for the combined value-added tax (
VAT
) liability of UBS entities that belong to the
VAT group of UBS in Switzerland. This contingent liability is not included in the table above.
Guarantees – UBS Europe SE
Following the combined UK business transfer and cross-border merger of UBS Limited into UBS Europe SE in March 2019,
UBS AG issued a guarantee for the benefit of counterparties of UBS Europe SE’s investment banking business, covering
transactions subject to master netting agreements.
A similar guarantee that UBS AG issued in 2003 for the benefit of each counterparty of UBS Limited also continues to be
effective. This guarantee covers transactions in accordance with and contemplated under any agreement entered into by
UBS Limited prior to the merger into UBS Europe SE, to the extent that such an agreement has not been amended by
UBS Europe SE thereafter.
Under both guarantees, UBS AG promises to pay to the beneficiary counterparties any unpaid liabilities covered under
the terms of the guarantees on demand. These guarantees are included as contingent liabilities in the off-balance sheet
items table above.
Indemnities – UBS Europe SE
In connection with the establishing of UBS Europe SE in 2016, UBS AG entered into agreement s with UBS Europe SE
under which UBS AG would provide UBS Europe SE with limited indemnification of payment obligations that may arise
from certain litigation, regulatory and similar matters.
As of 31 December 2023, the amount of such potential payment obligations could not be reliably estimated and the
likelihood of an outflow is not considered to be probable or the probability of an outflow was assessed to be remote;
therefore, the table above does not include any amount related to this limited indemnification.
In addition, in accordance with the bylaws of the Deposit Protection Fund of the Association of German Banks, UBS AG
issued an indemnity in favor of this fund on behalf of UBS Europe SE. The probability of an outflow was assessed to be
remote, and as a result, the table above does not include any exposure arising under this indemnity.
UBS AG standalone financial statements (audited)
Statement of changes in equity
USD m
Share capital
Statutory
capital reserve
of which:
capital
contribution
reserve
of which:
other statutory
capital reserve
Voluntary
earnings
reserve and
profit / (loss)
carried forward
Net profit /
(loss)
for the period
Total equity
Balance as of 1 January 2023
393
36,326
36,326
13,485
7,157
57,361
Net profit / (loss) appropriation
7,157
(7,157)
0
Dividend distribution
(6,000)
(6,000)
Share capital currency conversion
1
(7)
7
2,236
(2,228)
0
Reclassification
2
(16,372)
16,372
0
Net profit / (loss) for the period
1,515
1,515
Balance as of 31 December 2023
386
36,334
22,190
14,144
14,642
1,515
52,877
1 Refer to Note 21a for more information. 2 In 2023, the Swiss Federal Court confirmed the practice of the Swiss Federal Tax Administration (SFTA) which limits the capital contribution reserve distributable to the
shareholders free of withholding tax to an amount confirmed by the SFTA. In order to align the capital contribution reserve to the amount confirmed by the SFTA, USD 16,372m was reclassified from the capital
contribution reserve to the other statutory capital reserve. This resulted in a capital contribution reserve balance of USD 22,190m as of 31 December 2023 which can be distributed free of withholding tax to the
shareholder. The reclassification did not change total Statutory capital reserve and equity reported for UBS AG.
CHF m
Share capital
Statutory
capital reserve
of which:
capital
contribution
reserve
of which:
other statutory
capital reserve
Voluntary
earnings
reserve and
profit / (loss)
carried forward
Net profit /
(loss)
for the period
Total equity
Balance as of 1 January 2023
386
35,649
35,649
10,167
6,817
53,018
Net profit / (loss) appropriation
6,817
(6,817)
0
Dividend distribution
(5,361)
(5,361)
Share capital currency conversion
1
(6)
6
2,068
(2,062)
0
Reclassification
2
(13,780)
13,780
0
Currency translation difference
(4,516)
(4,516)
Net profit / (loss) for the period
1,364
1,364
Balance as of 31 December 2023
380
35,655
23,936
11,719
7,107
1,364
44,506
1 Refer to Note 21a for more information. 2 In 2023, the Swiss Federal Court confirmed the practice of the Swiss Federal Tax Administration (SFTA) which limits the capital contribution reserve distributable to the
shareholders free of withholding tax to an amount confirmed by the SFTA. In order to align the capital contribution reserve to the amount confirmed by the SFTA, CHF 13,780m was reclassified from the capital
contribution reserve to the other statutory capital reserve. The reclassification did not change total Statutory capital reserve and equity reported for UBS AG.
Statement of proposed appropriation of total profit and dividend distribution
The Board of Directors (the BoD) proposes that the Annual General Meeting of Shareholders (the AGM) on 23 April 2024
approve the appropriation of total profit and an ordinary dividend distribution of USD 3,000m out of the total profit
(USD 1,515m) and out of the
Voluntary earnings reserve
Appropriation of and distribution out of total profit
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.23
1
Net profit for the period
1,515
1,364
Profit / (loss) carried forward
0
0
Total profit available for appropriation
1,515
1,364
Appropriation of total profit
Dividend distribution
(1,515)
(1,364)
Profit / (loss) carried forward
0
0
Proposed dividend out of voluntary earnings reserve
Total voluntary earnings reserve before distribution
14,642
7,107
Dividend distribution
(1,485)
(1,161)
Total voluntary earnings reserve after distribution
13,157
5,946
1 For illustrative purposes, the proposed dividend of USD 3,000m is converted to Swiss francs at the closing exchange rate as of 31 December 2023 (CHF / USD 1.19), which equals a Swiss franc dividend of CHF
2,525m
and would result in a distribution of CHF 1,364m out of total profit and the remainder of CHF 1,161m out of the voluntary earnings reserve.
UBS AG standalone financial statements (audited)
Note 1 Name, legal form and registered office
UBS AG is incorporated and domiciled in Switzerland. Its registered offices are at Bahnhofstrasse 45, CH-8001 Zurich
and Aeschenvorstadt 1, CH-4051 Basel, Switzerland. UBS AG operates under Art. 620 et seq. of the Swiss Code of
Obligations and Swiss banking law as an
Aktiengesellschaft
, a corporation limited by shares.
UBS AG is a regulated bank in Switzerland and is 100% owned by UBS Group AG, the ultimate parent of the UBS Group.
UBS AG holds investments in and provides funding to subsidiaries, including the other banking subsidiaries of the UBS
Group. In addition, UBS AG operates globally, including business activities from all five UBS business divisions and Group
Items. In the ordinary course of business, the main contributors to the net profit / (loss) of UBS AG are Global Wealth
Management, the Investment Bank, Group Treasury and Group Services. The balance sheet is mainly composed of
financial assets and liabilities from the Investment Bank, Global Wealth Management businesses booked outside of
Switzerland and Group Treasury, as well as investments in subsidiaries and other participations in Group Treasury and
fixed assets of Group Services.
UBS AG employed 10,398 personnel on a full-time equivalent basis as of 31 December 2023, compared with 10,333
personnel as of 31 December 2022.
Note 2 Accounting policies
a) Significant accounting policies
UBS AG standalone financial statements are prepared in accordance with Swiss GAAP (the FINMA Accounting Ordinance,
FINMA Circular 2020/1 “Accounting – banks” and the Banking Ordinance) and represent “reliable assessment statutory
single-entity financial statements.” The accounting policies are principally the same as those outlined in Note 1 to the
consolidated financial statements of UBS AG included in the UBS AG Annual Report 2023. Major differences between
the Swiss GAAP requirements and IFRS Accounting Standards are described in Note 33 to the consolidated financial
statements of UBS AG. The significant accounting policies applied for the standalone financial statements of UBS AG are
discussed below.
›
Refer to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
Compensation policy
The compensation structure and processes of UBS AG conform to the compensation principles and framework of UBS
Group AG. For detailed information, refer to the Compensation Report of UBS Group AG.
Deferred compensation
Expenses for deferred compensation awards granted by UBS Group AG to employees of UBS AG in the form of UBS
shares, notional investment funds and notional additional tier 1 (AT1) capital instruments are charged by UBS Group AG
to UBS AG.
›
Refer to Note 27 to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
Foreign currency translation
Non-US dollar-denominated transactions are translated into US dollars at the spot exchange rate on the date of the
transaction. At the balance sheet date, all non-US dollar-denominated monetary assets and liabilities, as well as non-US
dollar-denominated equity instruments recorded in
Trading portfolio assets
Financial investments
, are translated into
US dollars using the closing exchange rate. Non-monetary items measured at historic cost are translated at the spot
exchange rate on the date of the transaction. Assets and liabilities of branches with functional currencies other than the
US dollar are translated into US dollars at the closing exchange rate. Income and expense items of such branches are
translated at weighted-average exchange rates for the period. All currency translation effects are recognized in the
income statement.
The main currency translation rates used by UBS AG are provided in Note 32 to the UBS AG consolidated financial
statements in the UBS AG Annual Report 2023.
›
Refer to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
UBS AG standalone financial statements (audited)
Note 2 Accounting policies (continued)
Presentation currencies
As the primary presentation currency of the financial statements of UBS AG is the US dollar, amounts in Swiss francs are
additionally presented for each component of the financial statements. UBS AG applies the modified closing rate method
for converting the US dollar presentation currency amounts into Swiss francs: assets and liabilities are converted at the
closing rate, equity positions at historic rates, and income and expense items at the weighted-average rate for the period.
The resulting currency translation effects are recognized separately in the
Voluntary earnings reserve
.
Structured debt instruments
Structured debt instruments consist of debt instruments issued and transacted over the counter and include a host
contract and one or more embedded derivatives that do not relate to UBS AG’s own equity. By applying the fair value
option, the vast majority of structured debt instruments are measured at fair value as a whole and recognized in
liabilities designated at fair value.
criteria are cumulatively met:
–
the structured debt instrument is measured on a fair value basis and is subject to risk management that is equivalent
to risk management for trading activities;
–
the application of the fair value option eliminates or significantly reduces an accounting mismatch that would
otherwise arise; and
–
changes in fair value attributable to changes in unrealized own credit are not recognized.
Fair value changes related to
Financial liabilities designated at fair value,
recognized in
Net trading income.
Financial liabilities designated at fair value
is recognized in
Interest
expense.
Where the designation criteria for the fair value option are not met, the embedded derivatives are assessed for bifurcation
for measurement purposes. Bifurcated embedded derivatives are measured at fair value through profit or loss and
presented in the same balance sheet line as the host contract.
›
Refer to Note 19 for more information
Group-internal funding
UBS AG obtains funding from UBS Group AG in the form of loans that are subject to mandatory conversion and / or debt
waiver, as explained below, and generally either qualify as loss-absorbing tier 1 capital or as gone concern loss-absorbing
capacity, i.e., total funding eligible as total loss-absorbing capacity (TLAC), at the UBS AG consolidated and standalone
levels. A portion of Group-internal funding obtained is further on lent by UBS AG to certain subsidiaries in the form of
loans.
›
Refer to Note 20 for information about funding eligible as total loss-absorbing capacity at the UBS AG level
UBS AG obligations arising from Group-internal funding it has received are presented as
Funding received from UBS
Group AG measured at amortized cost
Funding received from UBS Group AG
within
Financial liabilities designated
at fair value.
Funding provided to
significant regulated subsidiaries eligible as total loss-absorbing capacity
allowance for expected credit losses.
Subordinated assets and liabilities
Subordinated assets
bankruptcy or composition concerning the debtor, rank after the claims of all other creditors and may not be offset
against amounts payable to the debtor nor be secured by its assets.
Subordinated liabilities
corresponding obligations.
Subordinated assets and liabilities that contain a point-of-non-viability clause in accordance with Swiss capital
requirements pursuant to Art. 29 and 30 of the Capital Adequacy Ordinance are disclosed as being
Subject to mandatory
conversion and / or debt waiver
the event that the issuing bank reaches a point of non-viability.
UBS AG standalone financial statements (audited)
Note 2 Accounting policies (continued)
Investments in subsidiaries and other participations
Investments in subsidiaries and other participations
or for other strategic purposes. They include all subsidiaries directly held by UBS AG through which UBS AG conducts its
business on a global basis. The investments are measured individually and carried at cost less impairment. The carrying
amount is tested for impairment annually and when indicators of a potential decrease in value exist, which include
significant operating losses incurred or a severe depreciation of the currency in which the investment is denominated. If
an investment in a subsidiary is impaired, its value is generally written down to the net asset value. Subsequent recoveries
in value are recognized up to the original cost value based on either the increased net asset value or a value above the
net asset value if, in the opinion of management, forecasts of future profitability provide sufficient evidence that a
carrying amount above net asset value is supported. Management may exercise its discretion as to what extent and in
which period a recovery in value is recognized.
Impairments of investments are presented
as Impairment of investments in subsidiaries and other participations
and
reversals of impairments
are presented as
Extraordinary income
reversals of impairments for a subsidiary during the same annual period are determined on a net basis.
›
Refer to Note 4 for more information
Hedge accounting for Investments in subsidiaries and other participations
UBS AG applies hedge accounting for certain investments in subsidiaries and other participations denominated in
currencies other than the US dollar, which are designated as hedged items. For this purpose, foreign exchange (FX)
derivatives, mainly FX forwards and FX swaps, are used and designated as hedging instruments.
The hedged risk is determined as the change in the carrying amount of the hedged item arising solely from changes in
spot FX rates. Consequently, UBS AG only designates the spot element of the FX derivatives as hedging instruments.
Changes in the fair value of the hedging instruments attributable to changes in forward points are not part of a hedge
accounting designation. These amounts, therefore, do not form part of the effectiveness assessment and are recognized
in
Net trading income
.
The effective portion of gains and losses of these FX derivatives is deferred on the balance sheet as
Other assets
Other
liabilities
FX rates. Otherwise, the effective portion of gains and losses of these FX derivatives is matched with the corresponding
valuation adjustments of the hedged item recorded in the income statement and recorded either as a reduction of
Impairment of investments in subsidiaries and other participations
Extraordinary income.
Revenue and expense transfers with other Group entities
UBS AG pays to and receives amounts from other Group entities in connection with revenue sharing arrangements,
primarily related to the Investment Bank. Revenues transferred to and received from Group entities are settled in cash as
entity revenue transfers paid or received. When the nature of the underlying transaction between UBS AG and the Group
entity contains a single, clearly identifiable service component, related income and expenses are presented in the
respective income statement line item, e.g.,
Fee and commission income from securities and investment business and
other fee and commission income
,
Fee and commission expense
Net trading income
. To the extent the nature of the
underlying transaction contains various service components and is not clearly attributable to a particular income
statement line item, related income and expenses are presented in
Sundry ordinary income
and
Sundry ordinary expenses
.
UBS AG receives services from UBS Business Solutions AG, mainly relating to the Group Operations and Technology Office,
as well as certain other services from other Group entities.
UBS AG provides services to Group entities, mainly relating to real estate and selected other Group Services functions.
Services received from and provided to Group entities are settled in cash as entity cost transfers paid or received. Entity
cost transfers paid are presented within
General and administrative expenses
presented within
Sundry ordinary income
or
Income from real estate holdings
.
›
Refer to Notes 5 and 7 for more information
UBS AG standalone financial statements (audited)
Note 2 Accounting policies (continued)
Post-employment benefit plans
Swiss GAAP permit the use of IFRS Accounting Standards or Swiss accounting standards for post-employment benefit
plans, with the election made on a plan-by-plan basis.
UBS AG has elected to apply Swiss GAAP (FER 16) for the Swiss pension plan in its standalone financial statements. The
requirements of Swiss GAAP (FER 16) are better aligned with the specific nature of Swiss pension plans, which are hybrid
in that they combine elements of defined contribution and defined benefit plans but are treated as defined benefit plans
under IFRS Accounting Standards. Swiss GAAP (FER 16) require that the employer contributions to the pension fund are
recognized as
Personnel expenses
determined as a percentage of contributory compensation. Furthermore, Swiss GAAP (FER16) require an assessment as
to whether, based on the financial statements of the pension fund prepared in accordance with Swiss accounting
standards (FER 26), an economic benefit to, or obligation of, UBS AG arises from the pension fund that is recognized in
the balance sheet when conditions are met. Conditions for recording a pension asset or liability would be met if, for
example, an employer contribution reserve is available or UBS AG is required to contribute to the reduction of a pension
deficit (on a FER 26 basis).
Key differences between Swiss GAAP (FER 16) and IFRS Accounting Standards include the treatment of dynamic elements,
such as future salary increases and future interest credits on retirement savings, which are not considered under the static
method used in accordance with Swiss GAAP (FER 16). Also, the discount rate used to determine the defined benefit
obligation in accordance with IFRS Accounting Standards is based on the yield of high-quality corporate bonds of the
market in the respective pension plan country. The discount rate used in accordance with Swiss GAAP (FER 16), i.e., the
technical interest rate, is determined by the Pension Foundation Board, based on the expected returns of the Board’s
investment strategy.
›
Refer to Note 22 for more information
UBS AG has elected to apply IFRS Accounting Standards (IAS 19) for its non-Swiss defined benefit plans. However,
remeasurements of the defined benefit obligation and the plan assets are recognized in the income statement rather
than directly in equity. For corresponding disclosures in accordance with IAS 19 requirements, refer to Note 26 to the
consolidated financial statements of UBS AG.
›
Refer to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
Deferred taxes
Deferred tax assets are not recognized in UBS AG’s standalone financial statements. However, deferred tax liabilities may
be recognized for taxable temporary differences. Changes in the deferred tax liability balance are recognized in the
income statement.
Allowances and provisions for expected credit losses
UBS AG is required to apply expected credit loss (ECL) approaches for credit-impaired and non-credit-impaired financial
instruments in its standalone financial statements.
For the substantial majority of non-credit-impaired exposures within the scope of the Swiss GAAP ECL requirements,
UBS AG has chosen to apply the IFRS Accounting Standards ECL approach that is also applied in its consolidated financial
statements. These exposures include all financial assets that are measured at amortized cost under both frameworks,
Swiss GAAP and IFRS Accounting Standards, fee and lease receivables, claims arising from Group-internal funding
presented as
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing capacity
, guarantees,
irrevocable loan commitments, revolving revocable credit lines and forward starting reverse repurchase and securities
borrowing agreements. Further information about the ECL approach under IFRS Accounting Standards is provided in
Note 1 to the consolidated financial statements of UBS AG.
›
Refer to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
For the small residual population of exposures within the scope of the Swiss GAAP ECL requirements, which are not
subject to ECL under IFRS Accounting Standards due to classification differences, alternative approaches are applied.
–
For exposures for which Pillar 1 internal ratings-based models are applied for measurement of credit risk RWA, ECL for
such exposures is calculated as the regulatory expected loss (EL), with an add-on to scale up to the residual maturity
of exposures maturing beyond the next 12 months. This approach is mainly applied for brokerage receivables presented
within
Due from customers,
which
generally mature within 12 months. For detailed information about regulatory EL,
refer to the “Risk management and control” section of the UBS AG Annual Report 2023.
–
For exposures for which the standardized approach is applied for the measurement of credit risk RWA, ECL is
determined using a portfolio approach that derives a conservative probability of default (PD) and a conservative loss
given default (LGD) for the entire portfolio. This approach is mainly applied for a small number of loans to large
corporate clients presented within
Due from customers.
UBS AG standalone financial statements (audited)
Note 2 Accounting policies (continued)
UBS applies a single definition of default for credit risk management purposes, regulatory reporting and ECL, with a
counterparty classified as defaulted based on quantitative and qualitative criteria.
›
Refer to “Credit policies for distressed assets” in the “Risk management and control” section of the UBS AG consolidated financial
statements in the UBS AG Annual Report 2023 for more information
An allowance for credit losses is reported as a decrease in the carrying amount of a financial asset. For an off-balance
sheet item, such as a commitment, a provision for credit losses is reported in
Provisions
. Changes to allowances and
provisions for credit losses are recognized in
Credit loss (expense) / release
.
›
Refer to Note 12 for more information
Dispensations in the standalone financial statements
As UBS AG prepares consolidated financial statements in accordance with IFRS Accounting Standards, UBS AG is exempt
from various disclosures in the standalone financial statements. The dispensations include the management report, the
statement of cash flows and various note disclosures, as well as the publication of full interim financial statements.
b) Changes in accounting policies
There were no significant changes in accounting policies during 2023.
c) Change in organization
In December 2023, the Board of Directors of UBS Group AG approved the merger of UBS AG and Credit Suisse AG, and
both entities entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals
and is expected to occur by the end of the second quarter of 2024.
d) Risk management
UBS AG is fully integrated into the Group-wide risk management process described in the audited part of the “Risk
management and control” section of the UBS AG Annual Report 2023.
Further information about the use of derivative instruments and hedge accounting is provided on the following pages
and in Notes 1, 10 and 25 to the consolidated financial statements of UBS AG.
›
Refer to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
Note 3a Net trading income by business
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Investment Bank
6,575
5,271
5,922
5,016
of which: Global Markets
6,616
5,423
5,960
5,165
of which: Global Banking
(42)
(152)
(38)
(148)
Other business divisions and Group Items
678
525
605
496
Total net trading income
7,253
5,796
6,527
5,512
Note 3b Net trading income by underlying risk category
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Equity instruments (including funds)
5,479
3,528
4,930
3,361
Foreign exchange instruments
1,128
1,404
1,017
1,341
Interest rate and credit instruments (including funds)
524
763
471
714
Other
122
100
110
97
Total net trading income
7,253
5,796
6,527
5,512
of which: net gains / (losses) from financial liabilities designated at fair value
(1,839)
12,687
(1,471)
12,184
1 Excludes fair value changes of hedges related to financial liabilities designated at fair value and foreign currency effects arising from translating foreign currency transactions into the respective functional currency,
both of which are reported within Net trading income.
UBS AG standalone financial statements (audited)
Note 4 Investments in subsidiaries and other participations
The table below provides the carrying amount, the equity interest and the registered office information regarding the
investments in subsidiaries and other participations.
Registered office
Equity interest
accumulated in %
Carrying amount in USD m
Carrying amount in CHF m
31.12.23
31.12.22
31.12.23
31.12.22
UBS Americas Holding LLC
Wilmington, Delaware, USA
31,484
34,233
26,500
31,642
UBS Switzerland AG
Zurich, Switzerland
7,985
7,984
6,721
7,380
UBS Europe SE
Frankfurt, Germany
3,914
3,572
3,294
3,301
UBS Asset Management AG
Zurich, Switzerland
1,732
1,728
1,457
1,597
Other
2,976
3,511
2,505
3,246
Total investments in subsidiaries and other participations
48,090
51,029
40,477
47,165
Dividend income from investments in subsidiaries and other participations
USD 6,465m (CHF 6,183m) in 2022 was mainly attributable to UBS Switzerland AG, UBS Asset Management AG,
UBS Americas Holding LLC and UBS Europe SE.
In 2023, UBS AG recognized
Impairments of investments in subsidiaries and other participations
(CHF 3,343m), mainly due to an impairment related to UBS Americas Holding LLC of USD 3,500m (CHF 3,135m), as the
recoverable amount of this participation declined, mostly due to lower forecasted profits and dividend payouts. In 2022,
UBS AG recognized
Impairments of investments in subsidiaries and other participations
mainly due to impairments related to UBS Europe SE of USD 628m (CHF 609m), which partly offset the dividends received
from this subsidiary.
Note 5 Sundry ordinary income and expenses
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Income from services provided to UBS Group AG or its subsidiaries
1
1,511
1,398
1,354
1,332
Net unrealized gains on financial investments
2
70
0
59
0
Other
14
69
14
65
Total sundry ordinary income
1,596
1,467
1,426
1,397
Expenses from revenue transfers to UBS Group AG or its subsidiaries
(394)
(629)
(355)
(596)
Net unrealized losses on financial investments
2
0
(288)
0
(274)
Other
(13)
(20)
(11)
(19)
Total sundry ordinary expenses
(407)
(937)
(366)
(888)
1 Services provided by UBS AG primarily related to Group Items. 2 Mainly relates to debt instruments available for sale. Refer to Note 15a for more information.
Note 6 Personnel expenses
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Salaries
1,710
1,602
1,536
1,527
Variable compensation – performance awards
1,115
1,141
1,003
1,084
Variable compensation – other
83
76
74
72
Contractors
27
35
25
33
Social security
242
205
217
194
Post-employment benefit plans
124
(55)
115
(51)
of which: value adjustments for economic benefits or obligations from non-Swiss pension funds
31
(167)
31
(157)
Other personnel expenses
106
106
95
101
Total personnel expenses
3,408
3,109
3,063
2,960
1 Reflects the remeasurement of the defined benefit obligation and return on plan assets excluding amounts included in interest income for the non-Swiss defined benefit plans, for which IAS 19 is applied.
UBS AG standalone financial statements (audited)
Note 7 General and administrative expenses
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Real estate
451
415
404
395
Market data services
129
108
115
103
Technology costs
98
92
88
87
Outsourcing costs
75
77
67
74
Marketing and communication
35
27
31
26
Travel and entertainment
65
41
58
39
Fees to audit firms
12
14
11
13
of which: financial and regulatory audits
9
11
8
10
of which: audit-related services
2
3
2
3
of which: tax and other services
0
0
0
0
Other professional fees
173
96
153
92
Other
3,081
2,674
2,757
2,546
of which: shared services costs charged by UBS Group AG or its subsidiaries
2,806
2,465
2,514
2,349
Total general and administrative expenses
4,118
3,543
3,684
3,375
Note 8 Extraordinary income and expenses
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Reversal of impairments of and provisions for subsidiaries and other participations
1
9
5
10
4
Net gains from disposals of properties
10
80
9
74
Gains from disposals of subsidiaries and other participations
9
116
8
113
Other extraordinary income
5
1
5
0
Total extraordinary income
34
201
32
191
Total extraordinary expenses
2
2
2
2
1 Refer to Note 4 for more information.
Net gains from disposals of properties
Basel.
Gains from disposals of subsidiaries and other participations
of USD 116m (CHF 113m) in 2022 mainly included a gain
from the sale of UBS AG’s wholly owned subsidiary UBS Swiss Financial Advisers AG to Vontobel.
UBS AG standalone financial statements (audited)
Note 9 Taxes
USD m
CHF m
For the year ended
For the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Income tax expense / (benefit)
279
271
255
258
of which: current
277
250
254
237
of which: deferred
2
21
2
21
Capital tax
31
24
28
23
Total tax expense / (benefit)
310
295
283
281
Income tax expense of USD 279m (CHF 255m) was recognized for UBS AG in 2023, compared with USD 271m
(CHF 258m) for 2022. The income tax expense for 2023 was reduced by a benefit of USD 397m (CHF 356m) in respect
of the utilization of tax losses carried forward, primarily in the US and in Jersey. The income tax expense for 2023 related
to UBS AG’s taxable profits that were primarily earned in other locations.
The income tax expense for 2022 was reduced by a benefit of USD 204m (CHF 195m) in respect of the utilization of tax
losses carried forward, primarily in the US and the UK. The income tax expense for 2022 related to UBS AG’s taxable
profits that were primarily earned in other locations.
For 2023, the average tax rate, defined as income tax expense divided by the sum of operating profit and extraordinary
income minus extraordinary expenses and capital tax, was 15.5% (2022: 3.6%).
Note 10 Securities financing transactions
USD bn
CHF bn
31.12.23
31.12.22
31.12.23
31.12.22
On-balance sheet
Receivables from securities financing transactions, gross
157.0
131.3
132.1
121.4
Netting of securities financing transactions
(87.6)
(73.2)
(73.7)
(67.7)
Receivables from securities financing transactions, net
69.4
58.1
58.4
53.7
Payables from securities financing transactions, gross
111.4
96.7
93.7
89.4
Netting of securities financing transactions
(87.6)
(73.2)
(73.7)
(67.7)
Payables from securities financing transactions, net
23.8
23.5
20.0
21.7
Assets pledged as collateral in connection with securities financing transactions
75.7
54.0
63.7
49.9
of which: trading portfolio assets
68.2
50.9
57.4
47.1
of which: assets that may be sold or repledged by counterparties
49.9
39.3
42.0
36.4
of which: financial investments
7.5
3.1
6.3
2.8
of which: assets that may be sold or repledged by counterparties
7.4
2.8
6.2
2.6
Off-balance sheet
Fair value of assets received as collateral in connection with securities financing transactions
372.6
312.8
313.6
289.1
of which: repledged
246.5
225.6
207.5
208.5
of which: sold in connection with short sale transactions
27.3
25.1
23.0
23.2
UBS AG standalone financial statements (audited)
Note 11a Collateral for loans and off-balance sheet transactions
31.12.23
31.12.22
Secured
Unsecured
Total
Secured
Unsecured
Total
Secured by collateral
Secured by
other credit
enhancements
2
Secured by collateral
Secured by
other credit
enhancements
2
USD m
Real estate
Other
collateral
1
Real estate
Other
collateral
1
On-balance sheet
Due from customers, gross
3
65,884
48
41,733
4
107,665
7
64,475
176
41,069
4
105,726
Mortgage loans, gross
5,116
5,116
5,039
5,039
of which: residential mortgages
2,854
2,854
3,205
3,205
of which: other mortgages
5
2,263
2,263
1,834
1,834
Funding provided to significant
regulated subsidiaries eligible as
total loss-absorbing capacity
29,403
29,403
27,704
27,704
Total on-balance sheet, gross
5,116
65,884
48
71,136
142,184
5,045
64,475
176
68,772
138,469
Allowances
(0)
(63)
0
(161)
(225)
(0)
(54)
0
(145)
(200)
Total on-balance sheet, net
5,116
65,821
48
70,974
141,959
5,045
64,421
176
68,627
138,269
Off-balance sheet
Contingent liabilities, gross
21,245
990
9,125
31,360
10,437
1,069
8,853
20,359
Irrevocable commitments, gross
550
9,365
154
9,831
19,900
237
7,467
129
8,440
16,272
Forward starting reverse repurchase
and securities borrowing
transactions
63,527
63,527
27,343
27,343
Liabilities for calls on shares and
other equities
5
5
5
5
Total off-balance sheet
550
94,136
1,144
18,961
114,791
237
45,246
1,198
17,298
63,979
1 Mainly includes cash and securities. 2 Includes guarantees. 3 Includes prime brokerage margin lending receivables and prime brokerage receivables relating to securities financing transactions. 4 Primarily
consists of amounts due from subsidiaries and other Group entities. 5 Consists of office and business premises, industrial premises and other mortgages.
31.12.23
31.12.22
Secured
Unsecured
Total
Secured
Unsecured
Total
Secured by collateral
Secured by
other credit
enhancements
2
Secured by collateral
Secured by
other credit
enhancements
2
CHF m
Real estate
Other
collateral
1
Real estate
Other
collateral
1
On-balance sheet
Due from customers, gross
3
55,454
40
35,126
4
90,621
6
59,594
163
37,959
4
97,722
Mortgage loans, gross
4,306
4,306
4,657
4,657
of which: residential mortgages
2,402
2,402
2,962
2,962
of which: other mortgages
5
1,904
1,904
1,695
1,695
Funding provided to significant
regulated subsidiaries eligible as
total loss-absorbing capacity
24,748
24,748
25,606
25,606
Total on-balance sheet, gross
4,306
55,454
40
59,874
119,675
4,663
59,594
163
63,565
127,985
Allowances
(0)
(56)
0
(133)
(189)
(0)
(50)
0
(135)
(185)
Total on-balance sheet, net
4,306
55,397
40
59,742
119,486
4,663
59,544
163
63,430
127,801
Off-balance sheet
Contingent liabilities, gross
17,881
833
7,680
26,395
9,646
988
8,183
18,818
Irrevocable commitments, gross
463
7,882
129
8,275
16,749
219
6,902
119
7,801
15,041
Forward starting reverse repurchase
and securities borrowing
transactions
53,470
0
53,470
25,273
25,273
Liabilities for calls on shares and
other equities
4
4
4
4
Total off-balance sheet
463
79,233
963
15,959
96,619
219
41,821
1,107
15,988
59,135
1 Mainly includes cash and securities. 2 Includes guarantees. 3 Includes prime brokerage margin lending receivables and prime brokerage receivables relating to securities financing transactions. 4 Primarily
consists of amounts due from subsidiaries and other Group entities. 5 Consists of office and business premises, industrial premises and other mortgages.
UBS AG standalone financial statements (audited)
Note 11b Credit-impaired financial instruments
31.12.23
31.12.22
USD m
Gross credit-
impaired financial
instruments
Allowances
and
provisions
Estimated
liquidation
proceeds of
collateral
Net credit-
impaired
financial
instruments
Gross credit-
impaired
financial
instruments
Allowances
and
provisions
Estimated
liquidation
proceeds of
collateral
Net credit-
impaired
financial
instruments
Amounts due from customers
384
114
270
0
318
105
213
0
Mortgage loans
113
0
113
0
185
0
184
0
Other assets
2
2
0
0
2
2
0
0
Guarantees and loan commitments
18
4
8
7
73
0
40
33
Total credit-impaired financial instruments
1
517
120
390
7
577
107
437
33
1 Credit-impaired financial instruments are financial assets and off-balance sheet positions subject to incurred credit losses, also referred to as stage 3 positions.
31.12.23
31.12.22
CHF m
Gross credit-
impaired financial
instruments
Allowances
and
provisions
Estimated
liquidation
proceeds of
collateral
Net credit-
impaired
financial
instruments
Gross credit-
impaired
financial
instruments
Allowances
and
provisions
Estimated
liquidation
proceeds of
collateral
Net credit-
impaired
financial
instruments
Amounts due from customers
323
96
227
0
294
97
197
0
Mortgage loans
95
0
95
0
171
0
170
0
Other assets
1
1
0
0
2
2
0
0
Guarantees and loan commitments
15
3
6
6
67
0
37
31
Total credit-impaired financial instruments
1
435
101
329
6
534
99
404
31
1 Credit-impaired financial instruments are financial assets and off-balance sheet positions subject to incurred credit losses, also referred to as stage 3 positions.
Note 12 Allowances and provisions
Allowances and provisions of USD 2,249m (CHF 1,893m) as of 31 December 2023 included allowances and provisions
for credit losses of USD 294m (CHF 247m). Allowances and provisions of USD 2,237m (CHF 2,068m) as of 31 December
2022 included allowances and provisions for credit losses of USD 287m (CHF 266m).
The 2023 increase in allowances and provisions for credit losses of USD 7m (a decrease of CHF 19m) included net credit
loss expenses of USD 13m (CHF 13m), primarily related to credit-impaired positions, as well as USD 7m (CHF 33m) for
write-offs and other movements that did not impact the income statement.
Net credit loss expenses in 2023 included a net expense of USD 54m (CHF 48m) on credit-impaired positions, in the
Investment Bank, and a net release of USD 34m (CHF 29m) in Group Items on a single position.
Note 12a Allowances for credit losses
USD m
Balance
as of
31.12.22
Increase
recognized
in the
income
statement
Release
recognized
in the
income
statement
Write-offs
Recoveries
and past
due interest
Reclassifications /
other
Foreign
currency
translation
Balance
as of
31.12.23
Default risk relating to on-balance sheet exposures
211
29
0
(9)
0
0
3
233
of which: incurred credit losses
107
15
0
(9)
0
0
3
116
of which: expected credit losses
104
14
0
0
0
0
0
117
Other
0
7
0
0
0
0
0
7
Total allowances
211
36
0
(9)
0
0
3
241
CHF m
Balance
as of
31.12.22
Increase
recognized
in the
income
statement
Release
recognized
in the
income
statement
Write-offs
Recoveries
and past
due interest
Reclassifications /
other
Foreign
currency
translation
Balance
as of
31.12.23
Default risk relating to on-balance sheet exposures
196
27
0
(7)
0
0
(19)
197
of which: incurred credit losses
99
14
0
(7)
0
0
(9)
98
of which: expected credit losses
97
12
0
0
0
0
(10)
99
Other
0
6
0
0
0
0
0
6
Total allowances
196
33
0
(7)
0
0
(19)
203
UBS AG standalone financial statements (audited)
Note 12b Provisions
USD m
Balance
as of
31.12.22
Increase
recognized
in the
income
statement
Release
recognized
in the
income
statement
Provisions
used in
conformity
with
designated
purpose
Recoveries
Reclassifications
Foreign
currency
translation /
other
2
as of
31.12.23
Default risk related to off-balance sheet items and
credit lines
76
4
(19)
0
0
0
0
60
of which: incurred credit losses
0
4
0
0
0
0
0
4
of which: expected credit losses
76
0
(19)
0
0
0
0
57
Litigation, regulatory and similar matters
1,643
58
(30)
(53)
0
1
45
1,665
Restructuring
51
31
(5)
(54)
0
0
2
25
Real estate
1
109
17
0
(27)
0
0
13
113
Employee benefits
27
4
(4)
0
0
0
1
27
Deferred taxes
92
2
0
0
0
0
0
94
Other
28
4
(5)
(3)
0
0
1
25
Total provisions
2,026
119
(64)
(136)
0
1
62
2,008
1 Includes provisions for onerous contracts of USD 47m as of 31 December 2023 (31 December 2022: USD 51m) and reinstatement cost provisions for leasehold improvements of USD 66m as of 31 December 2023
(31 December 2022: USD 58m). 2 Other mainly includes reinstatement costs.
CHF m
Balance
as of
31.12.22
Increase
recognized
in the
income
statement
Release
recognized
in the
income
statement
Provisions
used in
conformity
with
designated
purpose
Recoveries
Reclassifications
Foreign
currency
translation /
other
2
as of
31.12.23
Default risk related to off-balance sheet items and
credit lines
70
3
(17)
0
0
0
(6)
51
of which: incurred credit losses
0
3
0
0
0
0
0
3
of which: expected credit losses
70
0
(17)
0
0
0
(6)
48
Litigation, regulatory and similar matters
1,518
51
(26)
(47)
0
1
(96)
1,401
Restructuring
47
27
(5)
(48)
0
0
(1)
21
Real estate
1
101
16
0
(24)
0
0
2
95
Employee benefits
25
3
(4)
0
0
0
(2)
23
Deferred taxes
85
1
0
0
0
0
(7)
79
Other
26
3
(4)
(3)
0
0
(1)
21
Total provisions
1,872
105
(57)
(122)
0
1
(110)
1,690
1 Includes provisions for onerous contracts of CHF 39m as of 31 December 2023 (31 December 2022: CHF 47m) and reinstatement cost provisions for leasehold improvements of CHF 55m as of 31 December 2023
(31 December 2022: CHF 54m). 2 Other mainly includes reinstatement costs.
UBS AG standalone financial statements (audited)
Note 12c Development of allowances and provisions for credit losses
USD m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2022
Net movement from new and derecognized transactions
1
of which: Large corporate clients
Remeasurements with stage transfers
2
of which: Large corporate clients
Remeasurements without stage transfers
3
of which: Large corporate clients
Model changes
4
Total ECL allowance movements with profit or loss impact
Movements without profit or loss impact (write-off, FX and other)
5
Balance as of 31 December 2023
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and
provisions related to changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance
against the gross carrying amount when all or part of a financial asset is deemed uncollectible or forgiven and movements in foreign exchange rates.
CHF m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2022
Net movement from new and derecognized transactions
1
of which: Large corporate clients
Remeasurements with stage transfers
2
of which: Large corporate clients
Remeasurements without stage transfers
3
of which: Large corporate clients
Model changes
4
Total ECL allowance movements with profit or loss impact
Movements without profit or loss impact (write-off, FX and other)
5
Balance as of 31 December 2023
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and
provisions related to changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance
against the gross carrying amount when all or part of a financial asset is deemed uncollectible or forgiven and movements in foreign exchange rates.
UBS AG standalone financial statements (audited)
Note 12c Development of allowances and provisions for credit losses (continued)
USD m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2021
Net movement from new and derecognized transactions
1
of which: Large corporate clients
Remeasurements with stage transfers
2
of which: Large corporate clients
Remeasurements without stage transfers
3
of which: Large corporate clients
Model changes
4
Total ECL allowance movements with profit or loss impact
Movements without profit or loss impact (write-off, FX and other)
5
Balance as of 31 December 2022
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and
provisions related to changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance
against the gross carrying amount when all or part of a financial asset is deemed uncollectible or forgiven and movements in foreign exchange rates.
CHF m
Total
Stage 1
Stage 2
Stage 3
Balance as of 31 December 2021
Net movement from new and derecognized transactions
1
of which: Large corporate clients
Remeasurements with stage transfers
2
of which: Large corporate clients
Remeasurements without stage transfers
3
of which: Large corporate clients
Model changes
4
Total ECL allowance movements with profit or loss impact
Movements without profit or loss impact (write-off, FX and other)
5
Balance as of 31 December 2022
1 Represents the increase and decrease in allowances and provisions resulting from financial instruments (including guarantees and facilities) that were newly originated, purchased or renewed and from the final
derecognition of loans or facilities on their maturity date or earlier. 2 Represents the remeasurement between 12-month and lifetime ECL due to stage transfers. 3 Represents the change in allowances and
provisions related to changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions, changes in the exposure profile, PD and LGD changes, and unwinding of the time value.
4 Represents the change in the allowances and provisions related to changes in models and methodologies. 5 Represents the decrease in allowances and provisions resulting from write-offs of the ECL allowance
against the gross carrying amount when all or part of a financial asset is deemed uncollectible or forgiven and movements in foreign exchange rates.
UBS AG standalone financial statements (audited)
Note 12d Balance sheet and off-balance sheet positions subject to ECL
The tables below provide ECL exposure and allowance and provision information about financial instruments and certain
non-financial instruments that are subject to ECL.
USD m
31.12.23
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
49,449
49,449
0
0
0
0
0
0
Due from banks
56,082
56,082
0
0
(5)
(5)
0
0
Receivables from securities financing transactions
69,381
69,381
0
0
(2)
(2)
0
0
Due from customers
107,463
105,919
1,275
270
(202)
(69)
(19)
(114)
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing
capacity
29,380
29,380
0
0
(22)
(22)
0
0
Mortgage loans
5,116
4,997
6
113
0
(0)
0
0
Accrued income and prepaid expenses
3,000
2,991
8
(0)
(0)
0
0
(0)
Other assets
2
918
918
0
0
(2)
(0)
0
(2)
Total on-balance sheet financial assets within the scope of ECL
320,789
319,117
1,289
383
(233)
(99)
(19)
(116)
Total exposure
ECL provisions
Off-balance sheet (within the scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Contingent liabilities, gross
31,360
31,226
129
4
(3)
(2)
(1)
(1)
Irrevocable commitments, gross
19,900
18,427
1,458
14
(56)
(33)
(21)
(2)
Forward starting transactions (securities financing transactions)
3
9,500
9,500
0
0
0
0
0
0
Credit lines
9,777
9,446
331
0
(1)
(1)
(0)
0
Irrevocable committed prolongation of existing loans
1,907
1,907
0
0
0
0
0
0
Total off-balance sheet financial instruments and credit lines within the scope of
ECL
72,444
70,507
1,918
18
(60)
(35)
(22)
(4)
Total allowances and provisions
(294)
(133)
(41)
(120)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes components of other receivables due from UBS Group AG
and subsidiaries in the UBS Group and other assets within the scope of ECL. Refer to Note 16a for more information. 3 Includes forward starting reverse repurchase agreements within the scope of ECL.
CHF m
31.12.23
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
41,620
41,620
0
0
0
0
0
0
Due from banks
47,204
47,204
0
0
(4)
(4)
0
0
Receivables from securities financing transactions
58,398
58,398
0
0
(1)
(1)
0
0
Due from customers
90,451
89,151
1,073
227
(170)
(58)
(16)
(96)
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing
capacity
24,729
24,729
0
0
(19)
(19)
0
0
Mortgage loans
4,306
4,206
5
95
0
(0)
0
0
Accrued income and prepaid expenses
2,525
2,518
7
(0)
0
0
0
(0)
Other assets
2
772
772
0
0
(2)
(0)
0
(1)
Total on-balance sheet financial assets within the scope of ECL
270,005
268,598
1,085
322
(197)
(83)
(16)
(98)
Total exposure
ECL provisions
Off-balance sheet (within the scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Contingent liabilities, gross
26,395
26,283
109
3
(3)
(1)
(0)
(1)
Irrevocable commitments, gross
16,749
15,510
1,227
12
(49)
(29)
(19)
(2)
Forward starting transactions (securities financing transactions)
3
7,996
7,996
0
0
0
0
0
0
Credit lines
8,229
7,951
278
0
0
0
0
0
Irrevocable committed prolongation of existing loans
1,605
1,605
0
0
0
0
0
0
Total off-balance sheet financial instruments and credit lines within the scope of
ECL
60,975
59,345
1,615
15
(51)
(30)
(18)
(3)
Total allowances and provisions
(247)
(112)
(34)
(101)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes components of other receivables due from UBS Group AG
and subsidiaries in the UBS Group and other assets within the scope of ECL. Refer to Note 16a for more information. 3 Includes forward starting reverse repurchase agreements within the scope of ECL.
UBS AG standalone financial statements (audited)
Note 12d Balance sheet and off-balance sheet positions subject to ECL (continued)
USD m
31.12.22
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
48,344
48,344
0
0
0
0
0
0
Due from banks
31,450
31,450
0
0
(5)
(5)
0
0
Receivables from securities financing transactions
58,141
58,141
0
0
(2)
(2)
0
0
Due from customers
105,552
103,876
1,463
213
(174)
(59)
(9)
(105)
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing
capacity
27,678
27,678
0
0
(26)
(26)
0
0
Mortgage loans
5,039
4,837
17
184
(0)
0
0
(0)
Accrued income and prepaid expenses
1,872
1,863
9
0
0
0
0
0
Other assets
2
939
939
(0)
0
(3)
(1)
0
(2)
Total on-balance sheet financial assets within the scope of ECL
279,015
277,128
1,490
397
(211)
(94)
(9)
(107)
Total exposure
ECL provisions
Off-balance sheet (within the scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Contingent liabilities, gross
20,359
19,260
1,091
8
(3)
(2)
(1)
0
Irrevocable commitments, gross
16,272
14,474
1,734
64
(72)
(35)
(37)
0
Forward starting transactions (securities financing transactions)
3
2,810
2,810
0
0
(0)
(0)
0
0
Credit lines
11,592
11,256
335
0
(1)
(0)
(0)
0
Irrevocable committed prolongation of existing loans
147
147
0
0
0
0
0
0
Total off-balance sheet financial instruments and credit lines within the scope of
ECL
51,180
47,947
3,160
73
(76)
(38)
(38)
0
Total allowances and provisions
(287)
(132)
(47)
(107)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes components of other receivables due from UBS Group AG
and subsidiaries in the UBS Group and other assets within the scope of ECL. Refer to Note 16a for more information. 3 Includes forward starting reverse repurchase agreements within the scope of ECL.
CHF m
31.12.22
Carrying amount
1
ECL allowances
Financial instruments measured at amortized cost
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Cash and balances at central banks
44,684
44,684
0
0
0
0
0
0
Due from banks
29,069
29,069
0
0
(5)
(5)
0
0
Receivables from securities financing transactions
53,739
53,739
0
0
(2)
(2)
0
0
Due from customers
97,561
96,011
1,353
197
(161)
(55)
(9)
(97)
Funding provided to significant regulated subsidiaries eligible as total loss-absorbing
capacity
25,582
25,582
0
0
(24)
(24)
0
0
Mortgage loans
4,657
4,471
16
170
(0)
0
0
0
Accrued income and prepaid expenses
1,730
1,722
8
0
0
0
0
0
Other assets
2
867
867
(0)
(0)
(3)
(1)
0
(2)
Total on-balance sheet financial assets within the scope of ECL
257,890
256,146
1,377
367
(196)
(88)
(9)
(99)
Total exposure
ECL provisions
Off-balance sheet (within the scope of ECL)
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Contingent liabilities, gross
18,818
17,802
1,008
8
(3)
(2)
(1)
0
Irrevocable commitments, gross
15,041
13,378
1,603
60
(66)
(32)
(34)
0
Forward starting transactions (securities financing transactions)
3
2,597
2,597
0
0
(0)
(0)
0
0
Credit lines
10,714
10,404
310
0
(1)
(1)
(0)
0
Irrevocable committed prolongation of existing loans
135
135
0
0
0
0
0
0
Total off-balance sheet financial instruments and credit lines within the scope of
ECL
47,305
44,317
2,921
67
(70)
(35)
(35)
0
Total allowances and provisions
(266)
(123)
(44)
(99)
1 The carrying amount of financial assets measured at amortized cost represents the total gross exposure net of the respective ECL allowances. 2 Includes components of other receivables due from UBS Group AG
and subsidiaries in the UBS Group and other assets within the scope of ECL. Refer to Note 16a for more information. 3 Includes forward starting reverse repurchase agreements within the scope of ECL.
UBS AG standalone financial statements (audited)
Note 12e Financial assets subject to credit risk by rating category
The table below shows the credit quality and the maximum exposure to credit risk based on the Group’s internal credit
rating system and year-end stage classification.
Financial assets subject to credit risk by rating category
USD m
31.12.23
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial instruments measured at amortized cost
Cash and balances at central banks
of which: stage 1
Due from banks
of which: stage 1
Receivables from securities financing transactions
of which: stage 1
Due from customers
of which: stage 1
of which: stage 2
of which: stage 3
Funding provided to significant regulated subsidiaries eligible
as total loss-absorbing capacity
of which: stage 1
Mortgage loans
of which: stage 1
of which: stage 2
of which: stage 3
Accrued income and prepaid expenses
of which: stage 1
of which: stage 2
Other assets
of which: stage 1
of which: stage 3
Total in scope of ECL assets / ECL amounts by stages
Off-balance sheet positions and credit lines subject to expected credit loss by rating category
USD m
31.12.23
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total off-
balance sheet
exposure
(maximum
exposure to
credit risk)
ECL provisions
Off-balance sheet (within the scope of ECL)
Contingent liabilities, gross
of which: stage 1
of which: stage 2
of which: stage 3
Irrevocable commitments, gross
of which: stage 1
of which: stage 2
of which: stage 3
Forward starting transactions (securities financing transactions)
of which: stage 1
Credit lines
of which: stage 1
of which: stage 2
Irrevocable committed prolongation of existing loans
of which: stage 1
Total off-balance sheet financial instruments and credit lines
UBS AG standalone financial statements (audited)
Note 12e Financial assets subject to credit risk by rating category (continued)
Financial assets subject to credit risk by rating category
CHF m
31.12.23
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial instruments measured at amortized cost
Cash and balances at central banks
of which: stage 1
Due from banks
of which: stage 1
Receivables from securities financing transactions
of which: stage 1
Due from customers
of which: stage 1
of which: stage 2
of which: stage 3
Funding provided to significant regulated subsidiaries eligible
as total loss-absorbing capacity
of which: stage 1
Mortgage loans
of which: stage 1
of which: stage 2
of which: stage 3
Accrued income and prepaid expenses
of which: stage 1
of which: stage 2
Other assets
of which: stage 1
of which: stage 3
Total in scope of ECL assets / ECL amounts by stages
Off-balance sheet positions and credit lines subject to expected credit loss by rating category
CHF m
31.12.23
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total off-
balance sheet
exposure
(maximum
exposure to
credit risk)
ECL provisions
Off-balance sheet (within the scope of ECL)
Contingent liabilities, gross
of which: stage 1
of which: stage 2
of which: stage 3
Irrevocable commitments, gross
of which: stage 1
of which: stage 2
of which: stage 3
Forward starting transactions (securities financing transactions)
of which: stage 1
Credit lines
of which: stage 1
of which: stage 2
Irrevocable committed prolongation of existing loans
of which: stage 1
Total off-balance sheet financial instruments and credit lines
›
Refer to Note 9 and Note 19 to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more
information about ECL in accordance with IFRS Accounting Standards
UBS AG standalone financial statements (audited)
Note 12e Financial assets subject to credit risk by rating category (continued)
Financial assets subject to credit risk by rating category
USD m
31.12.22
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial instruments measured at amortized cost
Cash and balances at central banks
of which: stage 1
Due from banks
of which: stage 1
Receivables from securities financing transactions
of which: stage 1
Due from customers
of which: stage 1
of which: stage 2
of which: stage 3
Funding provided to significant regulated subsidiaries eligible
as total loss-absorbing capacity
of which: stage 1
Mortgage loans
of which: stage 1
of which: stage 2
of which: stage 3
Accrued income and prepaid expenses
of which: stage 1
of which: stage 2
Other assets
of which: stage 1
of which: stage 3
Total in scope of ECL assets / ECL amounts by stages
Off-balance sheet positions and credit lines subject to expected credit loss by rating category
USD m
31.12.22
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total off-
balance sheet
exposure
(maximum
exposure to
credit risk)
ECL provisions
Off-balance sheet (in scope of ECL)
Contingent liabilities, gross
of which: stage 1
of which: stage 2
of which: stage 3
Irrevocable commitments, gross
of which: stage 1
of which: stage 2
of which: stage 3
Forward starting transactions (securities financing transactions)
of which: stage 1
Credit lines
of which: stage 1
of which: stage 2
Irrevocable committed prolongation of existing loans
of which: stage 1
Total off-balance sheet financial instruments and credit lines
UBS AG standalone financial statements (audited)
Note 12e Financial assets subject to credit risk by rating category (continued)
Financial assets subject to credit risk by rating category
CHF m
31.12.22
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total gross
carrying
amount
ECL
allowances
Net carrying
amount
(maximum
exposure to
credit risk)
Financial instruments measured at amortized cost
Cash and balances at central banks
of which: stage 1
Due from banks
of which: stage 1
Receivables from securities financing transactions
of which: stage 1
Due from customers
of which: stage 1
of which: stage 2
of which: stage 3
Funding provided to significant regulated subsidiaries eligible
as total loss-absorbing capacity
of which: stage 1
Mortgage loans
of which: stage 1
of which: stage 2
of which: stage 3
Accrued income and prepaid expenses
of which: stage 1
of which: stage 2
Other assets
of which: stage 1
of which: stage 3
Total in scope of ECL assets / ECL amounts by stages
Off-balance sheet positions and credit lines subject to expected credit loss by rating category
CHF m
31.12.22
Rating category
0–1
2–3
4–5
6–8
9–13
Credit-
impaired
(defaulted)
Total off-
balance sheet
exposure
(maximum
exposure to
credit risk)
ECL provisions
Off-balance sheet (in scope of ECL)
Contingent liabilities, gross
of which: stage 1
of which: stage 2
of which: stage 3
Irrevocable commitments, gross
of which: stage 1
of which: stage 2
of which: stage 3
Forward starting transactions (securities financing transactions)
of which: stage 1
Credit lines
of which: stage 1
of which: stage 2
Irrevocable committed prolongation of existing loans
of which: stage 1
Total off-balance sheet financial instruments and credit lines
UBS AG standalone financial statements (audited)
Note 13 Trading portfolio and other financial instruments measured at fair value
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Assets
Trading portfolio assets
124,682
98,566
104,943
91,104
of which: debt instruments
1
21,300
12,088
17,928
11,173
of which: listed
17,653
9,618
14,858
8,890
of which: equity instruments
100,646
83,720
84,713
77,382
of which: precious metals and other physical commodities
2,735
2,757
2,302
2,549
Total assets measured at fair value
124,682
98,566
104,943
91,104
of which: fair value derived using a valuation model
17,340
9,635
14,595
8,906
of which: securities eligible for repurchase transactions in accordance with liquidity regulations
12,167
5,635
10,241
5,208
Liabilities
Trading portfolio liabilities
27,280
25,058
22,961
23,160
of which: debt instruments
1
11,191
8,234
9,419
7,610
of which: listed
10,908
7,738
9,181
7,153
of which: equity instruments
16,089
16,824
13,542
15,550
Financial liabilities designated at fair value
3
80,859
70,603
68,058
65,258
Total liabilities measured at fair value
108,139
95,661
91,019
88,418
of which: fair value derived using a valuation model
85,898
75,024
72,300
69,344
1 Includes money market paper. 2 Consists of high-quality liquid debt securities that are eligible for repurchase transactions at the Swiss National Bank or other central banks. 3 Refer to Note 19 for more
information.
UBS AG standalone financial statements (audited)
Note 14 Derivative instruments
1
31.12.23
31.12.22
USD bn
Derivative
financial
assets
Derivative
financial
liabilities
Total notional
values
2
Derivative
financial
assets
Derivative
financial
liabilities
Total notional
values
2
Interest rate contracts
Forwards
3
0.1
0.2
1,076
0.3
0.2
821
Swaps
25.7
21.0
12,667
28.8
22.9
10,336
of which: designated in hedge accounting relationships
0.0
0.0
123
0.0
0.0
112
Futures
0.0
0.0
704
0.0
0.0
603
Over-the-counter (OTC) options
12.1
14.4
1,571
14.2
17.5
1,393
Exchange-traded options
0.1
0.1
96
0.2
0.2
136
Total
38.1
35.7
4
43.6
40.8
13,289
Foreign exchange contracts
Forwards
15.6
18.9
1,892
26.5
28.6
1,765
of which: designated in hedge accounting relationships
0.0
0.0
0
0.0
0.0
0
Swaps
44.5
47.1
3,823
50.2
51.0
3,351
of which: designated in hedge accounting relationships
0.5
0.7
46
0.8
0.5
33
Futures
0.0
0.0
1
0.0
0.0
2
Over-the-counter (OTC) options
6.3
6.1
894
9.3
9.3
1,074
Exchange-traded options
0.1
0.1
5
0.1
0.2
10
Total
66.4
72.2
6,615
86.1
89.1
6,201
Equity contracts
Forwards
0.2
0.4
33
0.2
0.3
33
Swaps
6.5
9.3
269
5.7
6.9
223
Futures
0.0
73
0.0
50
Over-the-counter (OTC) options
2.9
6.0
199
2.8
4.6
144
Exchange-traded options
9.5
9.0
726
8.7
9.6
525
Total
19.1
24.6
1,299
17.4
21.4
975
Credit derivative contracts
Credit default swaps
1.5
1.3
95
0.9
1.0
76
Total return swaps
0.0
0.1
1
0.1
0.2
1
Other
0.1
0.0
1
0.0
0.0
2
Total
1.7
1.5
97
1.0
1.2
79
Commodity, precious metals and other contracts
Forwards
5
0.1
0.2
49
0.1
0.1
64
Swaps
0.7
0.5
45
0.5
0.7
39
Futures
0.0
13
0.0
16
Over-the-counter (OTC) options
0.6
0.3
38
0.4
0.3
29
Exchange-traded options
0.3
0.3
4
0.3
0.3
6
Total
1.6
1.3
150
1.3
1.4
154
Total before netting
126.9
135.3
24,275
149.5
153.8
20,698
of which: trading derivatives
126.4
134.5
148.6
153.3
of which: fair value derived using a valuation model
125.8
133.8
147.8
152.4
of which: derivatives designated in hedge accounting relationships
0.5
0.7
0.8
0.5
of which: fair value derived using a valuation model
0.5
0.7
0.8
0.5
Netting with cash collateral payables / receivables
(17.9)
(19.4)
(20.9)
(22.5)
Replacement value netting
(98.9)
(98.9)
(113.8)
(113.8)
Total after netting
10.1
16.9
14.7
17.4
of which: with central clearing counterparties
0.5
0.2
0.9
0.2
of which: with bank and broker-dealer counterparties
2.1
2.1
4.3
2.8
of which: other client counterparties
7.5
14.6
9.6
14.5
1 Bifurcated embedded derivatives are presented on the same balance sheet lines as their host contracts and are excluded from this table. The replacement values and related notional values of these derivatives were
not material for the periods presented. 2 Total notional values include USD 13.8trn (31 December 2022: USD 11.2trn) relating to derivatives that are cleared through either a central counterparty or an exchange.
The fair value of these derivatives net of the corresponding cash margin was not material for any of the periods presented. 3 Includes forward rate agreements. 4 Notional amounts related to interest rate contracts
increased by USD 2.8trn compared with 31 December 2022, mainly reflecting lower compression activity and higher business volumes driven by elevated interest rate volatility and inflation. 5 Includes derivative
loan commitments with notional values of USD 6bn as of 31 December 2023 (31 December 2022: USD 5bn) and negative replacement values of USD 21m (31 December 2022: USD 43m).
UBS AG standalone financial statements (audited)
Note 14 Derivative instruments (continued)
1
31.12.23
31.12.22
CHF bn
Derivative
financial
assets
Derivative
financial
liabilities
Total notional
values
2
Derivative
financial
assets
Derivative
financial
liabilities
Total notional
values
2
Interest rate contracts
Forwards
3
0.1
0.1
905
0.3
0.1
759
Swaps
21.7
17.6
10,662
26.7
21.1
9,553
of which: designated in hedge accounting relationships
0.0
0.0
104
0.0
0.0
104
Futures
0.0
0.0
593
0.0
0.0
558
Over-the-counter (OTC) options
10.2
12.1
1,322
13.1
16.2
1,288
Exchange-traded options
0.1
0.1
81
0.2
0.2
126
Total
32.0
30.0
13,563
4
40.3
37.7
12,283
Foreign exchange contracts
Forwards
13.1
15.9
1,593
24.5
26.5
1,631
of which: designated in hedge accounting relationships
0.0
0.0
0
0.0
0.0
0
Swaps
37.5
39.6
3,218
46.4
47.1
3,097
of which: designated in hedge accounting relationships
0.4
0.6
39
0.8
0.5
31
Futures
0.0
0.0
1
0.0
0.0
2
Over-the-counter (OTC) options
5.3
5.2
752
8.6
8.6
993
Exchange-traded options
0.0
0.0
5
0.1
0.2
9
Total
55.9
60.7
5,568
79.6
82.3
5,732
Equity contracts
Forwards
0.2
0.3
27
0.2
0.3
31
Swaps
5.4
7.8
226
5.2
6.3
206
Futures
0.0
61
0.0
46
Over-the-counter (OTC) options
2.5
5.0
168
2.6
4.2
133
Exchange-traded options
8.0
7.6
611
8.1
8.9
486
Total
16.1
20.7
1,094
16.1
19.8
901
Credit derivative contracts
Credit default swaps
1.2
1.1
80
0.8
0.9
70
Total return swaps
0.0
0.1
1
0.1
0.2
1
Other
0.1
0.0
1
0.0
0.0
2
Total
1.4
1.2
81
1.0
1.1
73
Commodity, precious metals and other contracts
Forwards
5
0.1
0.1
41
0.1
0.1
59
Swaps
0.6
0.5
38
0.5
0.6
36
Futures
0.0
11
0.0
15
Over-the-counter (OTC) options
0.5
0.2
32
0.4
0.3
27
Exchange-traded options
0.2
0.3
4
0.3
0.3
5
Total
1.4
1.1
126
1.2
1.3
142
Total before netting
106.8
113.9
20,432
138.1
142.1
19,131
of which: trading derivatives
106.4
113.2
137.4
141.7
of which: fair value derived using a valuation model
105.9
112.6
136.6
140.8
of which: derivatives designated in hedge accounting relationships
0.4
0.6
0.8
0.5
of which: fair value derived using a valuation model
0.4
0.6
0.8
0.5
Netting with cash collateral payables / receivables
(15.1)
(16.4)
(19.3)
(20.8)
Replacement value netting
(83.2)
(83.2)
(105.2)
(105.2)
Total after netting
8.5
14.2
13.6
16.1
of which: with central clearing counterparties
0.4
0.2
0.8
0.2
of which: with bank and broker-dealer counterparties
1.7
1.7
4.0
2.6
of which: other client counterparties
6.3
12.3
8.8
13.4
1 Bifurcated embedded derivatives are presented on the same balance sheet lines as their host contracts and are excluded from this table. The replacement values and related notional values of these derivatives were
not material for the periods presented. 2 Total notional values include CHF 11.6trn (31 December 2022: CHF 10.4trn) relating to derivatives that are cleared through either a central counterparty or an exchange.
The fair value of these derivatives net of the corresponding cash margin was not material for any of the periods presented. 3 Includes forward rate agreements. 4 Notional amounts related to interest rate contracts
increased by CHF 1.3trn compared with 31 December 2022, mainly reflecting lower compression activity and higher business volumes driven by elevated interest rate volatility and inflation. 5 Includes derivative
loan commitments with notional values of CHF 5bn as of 31 December 2023 (31 December 2022: CHF 4bn) and negative replacement values of CHF 17m (31 December 2022: CHF 40m).
UBS AG standalone financial statements (audited)
Note 15a Financial investments by instrument type
31.12.23
31.12.22
USD m
Carrying amount
Fair value
Carrying amount
Fair value
Debt instruments
40,857
40,864
43,725
43,496
20,760
20,474
21,657
21,202
of which: available for sale
20,097
20,390
22,068
22,293
Equity instruments
16
19
20
22
of which: qualified participations
2
2
4
4
Other
1
1
1
1
Total financial investments
40,874
40,884
43,746
43,518
of which: securities eligible for repurchase transactions in accordance with liquidity regulations
36,255
36,065
38,452
38,020
1 Qualified participations are investments in which UBS AG holds 10% or more of the total capital or has at least 10% of total voting rights. 2 Consists of high-quality liquid debt securities that are eligible for
repurchase transactions at the Swiss National Bank or other central banks.
31.12.23
31.12.22
CHF m
Carrying amount
Fair value
Carrying amount
Fair value
Debt instruments
34,388
34,395
40,414
40,203
17,473
17,233
20,018
19,597
of which: available for sale
16,915
17,162
20,397
20,606
Equity instruments
14
16
18
20
of which: qualified participations
1
1
4
4
Other
1
1
1
1
Total financial investments
34,403
34,412
40,434
40,224
of which: securities eligible for repurchase transactions in accordance with liquidity regulations
30,515
30,355
35,541
35,142
1 Qualified participations are investments in which UBS AG holds 10% or more of the total capital or has at least 10% of total voting rights. 2 Consists of high-quality liquid debt securities that are eligible for
repurchase transactions at the Swiss National Bank or other central banks.
Note 15b Financial investments by counterparty rating – debt instruments
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Internal UBS rating
1
0–1
31,902
36,214
26,852
33,472
2–3
8,929
7,193
7,515
6,649
4–5
24
237
20
219
6–8
0
0
0
0
9–13
0
0
0
0
Non-rated
1
81
1
75
Total financial investments
40,857
43,725
34,388
40,414
1 Refer to Note 18 for more information.
Note 16a Other assets
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Deferral position for hedging instruments
6,824
9,029
5,743
8,346
Deposits and collateral provided in connection with litigation, regulatory and similar matters
1
1,372
2,197
1,155
2,030
Fee- and commission-related receivables
242
121
203
112
Net assets for defined benefit plans
344
322
290
298
VAT, withholding tax and other tax receivables
425
1,038
357
959
Other
699
809
587
746
of which: other receivables due from UBS Group AG and subsidiaries in the UBS Group
483
519
407
480
Total other assets
2
9,905
13,516
8,336
12,491
1 Refer to item 1 in Note 17b to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information. 2 Includes components of other receivables due from UBS Group AG and
subsidiaries in the UBS Group and other assets totaling USD 918m (CHF 772m) as of 31 December 2023 (USD 939m (CHF 867m) as of 31 December 2022), which are within the scope of expected credit loss
accounting. Refer to Note 12d for more information.
UBS AG standalone financial statements (audited)
Note 16b Other liabilities
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Settlement and clearing accounts
115
102
97
95
Net defined benefit liabilities
66
65
56
60
VAT, withholding tax and other tax payables
1
82
70
69
65
Other
1,491
1,345
1,254
1,243
of which: other payables due to UBS Group AG and subsidiaries in the UBS Group
900
814
758
753
Total other liabilities
1,755
1,582
1,475
1,462
1 Excludes capital tax payables.
Note 17 Pledged assets
The table below provides information about pledged assets, other than assets placed with central banks related to
undrawn credit lines and for payment, clearing and settlement purposes (31 December 2023: USD 3.5bn (CHF 2.9bn),
31 December 2022: USD 5.2bn (CHF 4.8bn)) and those pledged in connection with securities financing transactions (refer
to Note 10 for more information).
31.12.23
31.12.22
USD m
Carrying amount of
pledged assets
Carrying amount of
pledged assets
Securities
1
Property
2
Total pledged assets
1 Includes securities pledged for derivative transactions, where the replacement values are managed on a portfolio basis across counterparties and product types, and therefore there is no direct relationship between
the specific collateral pledged and the associated liability. 2 These pledged properties serve as collateral for an existing mortgage loan from UBS Switzerland AG, the carrying amount of which was USD 2,804m
as of 31 December 2023 (USD 2,651m as of 31 December 2022).
31.12.23
31.12.22
CHF m
Carrying amount of
pledged assets
Carrying amount of
pledged assets
Securities
1
Property
2
Total pledged assets
1 Includes securities pledged for derivative transactions, where the replacement values are managed on a portfolio basis across counterparties and product types, and therefore there is no direct relationship between
the specific collateral pledged and the associated liability. 2 These pledged properties serve as collateral for an existing mortgage loan from UBS Switzerland AG, the carrying amount of which was CHF 2,360m
as of 31 December 2023 (CHF 2,450m as of 31 December 2022).
UBS AG standalone financial statements (audited)
Note 18 Country risk of total assets
The table below provides a breakdown of total non-Swiss assets by credit rating, after netting of assets and liabilities as
recognized on the balance sheet, but before other risk mitigants. The credit ratings reflect the sovereign credit rating of
the country to which the ultimate risk of the underlying asset is related. The ultimate country of risk for unsecured loan
positions is the domicile of the immediate borrower or, in the case of a legal entity, the domicile of the ultimate parent
entity. For collateralized or guaranteed positions, the ultimate country of risk is the domicile of the provider of the
collateral or guarantor or, if applicable, the domicile of the ultimate parent entity of the provider of the collateral or
guarantor. For mortgage loans, the ultimate country of risk is the country where the real estate is located. Similarly, the
ultimate country of risk for property and equipment is the country where the property and equipment are located. Assets
for which Switzerland is the ultimate country of risk are provided separately at the bottom of the table in order to provide
a reconciliation to total balance sheet assets.
›
Refer to the “Risk management and control” section of the UBS AG Annual Report 2023 for more information
31.12.23
31.12.22
Classification
Internal UBS rating
1
Description
Moody’s Investors
Service
S&P
Fitch
USD m
%
USD m
%
Low risk
0 and 1
Investment grade
Aaa
AAA
AAA
251,204
45
230,979
46
2
Aa1 to Aa3
AA+ to AA–
AA+ to AA–
90,612
16
96,069
19
Medium risk
3
A1 to A3
A+ to A–
A+ to A–
71,893
13
71,856
14
4
Baa1 to Baa2
BBB+ to BBB
BBB+ to BBB
10,340
2
8,013
2
5
Baa3
BBB–
BBB–
5,328
1
6,156
1
High risk
6
Sub-investment grade
Ba1
BB+
BB+
127
0
287
0
7
Ba2
BB
BB
774
0
566
0
8
Ba3
BB–
BB–
1,940
0
1,958
0
9
B1
B+
B+
750
0
868
0
Very high risk
10
B2
B
B
503
0
524
0
11
B3
B–
B–
121
0
20
0
12
Caa1 to Caa2
CCC+ to CCC
CCC+ to CCC
261
0
203
0
13
Caa3 to C
CCC– to C
CCC– to C
134
0
140
0
Distressed
Default
Defaulted
D
D
29
0
9
0
Subtotal
434,016
78
417,648
83
Switzerland
124,511
22
87,119
17
Total assets
558,527
100
504,767
100
1 Internal ratings are mapped to the external ratings in line with the table published in the “Risk management and control” section of the UBS AG Annual Report 2023.
31.12.23
31.12.22
Classification
Internal UBS rating
1
Description
Moody’s Investors
Service
S&P
Fitch
CHF m
%
CHF m
%
Low risk
0 and 1
Investment grade
Aaa
AAA
AAA
211,428
45
213,488
46
2
Aa1 to Aa3
AA+ to AA–
AA+ to AA–
76,271
16
88,797
19
Medium risk
3
A1 to A3
A+ to A–
A+ to A–
60,511
13
66,416
14
4
Baa1 to Baa2
BBB+ to BBB
BBB+ to BBB
8,703
2
7,407
2
5
Baa3
BBB–
BBB–
4,485
1
5,690
1
High risk
6
Sub-investment grade
Ba1
BB+
BB+
107
0
265
0
7
Ba2
BB
BB
651
0
523
0
8
Ba3
BB–
BB–
1,633
0
1,810
0
9
B1
B+
B+
631
0
802
0
Very high risk
10
B2
B
B
423
0
485
0
11
B3
B–
B–
102
0
19
0
12
Caa1 to Caa2
CCC+ to CCC
CCC+ to CCC
220
0
187
0
13
Caa3 to C
CCC– to C
CCC– to C
113
0
129
0
Distressed
Default
Defaulted
D
D
24
0
8
0
Subtotal
365,302
78
386,026
83
Switzerland
104,803
22
80,524
17
Total assets
470,106
100
466,550
100
1 Internal ratings are mapped to the external ratings in line with the table published in the “Risk management and control” section of the UBS AG Annual Report 2023.
UBS AG standalone financial statements (audited)
Note 19 Structured debt instruments
The table below provides a breakdown of financial liabilities designated at fair value that are considered structured debt
instruments.
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Fixed-rate bonds with structured features
5,679
2,293
4,780
2,120
Structured debt instruments issued:
Equity-linked
46,220
41,926
38,903
38,752
Rates-linked
16,681
15,925
14,040
14,719
Credit-linked
4,287
2,281
3,608
2,108
Commodity-linked
1
3,704
4,304
3,118
3,978
FX-linked
699
578
589
535
Funding received from UBS Group AG designated at fair value
2
2,711
1,959
2,282
1,811
Structured over-the-counter (OTC) debt instruments
877
1,336
738
1,235
Total financial liabilities designated at fair value
80,859
70,603
68,058
65,258
1 Includes precious metals-linked debt instruments issued. 2 Refer to Note 20 for more information.
In addition to
Financial liabilities designated at fair value
, certain structured debt instruments were reported within the
balance sheet lines
Due to banks
,
Due to customers
Bonds issued
. These instruments were bifurcated for
measurement purposes. As of 31 December 2023, the total carrying amount of the host instruments was USD 7,555m
(CHF 6,359m) (31 December 2022: USD 5,379m (CHF 4,972m)) and the total carrying amount of the bifurcated
embedded derivatives was positive USD 58m (CHF 49m) (31 December 2022: positive USD 59m (CHF 54m)).
Note 20 Funding eligible as total loss-absorbing capacity at the UBS AG level
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Funding eligible as total loss-absorbing capacity at the UBS AG level included in:
Funding received from UBS Group AG measured at amortized cost
67,292
59,202
56,639
54,720
Funding received from UBS Group AG designated at fair value
2,711
1,959
2,282
1,811
Bonds issued
546
3,041
460
2,811
Total funding eligible as total loss-absorbing capacity at the UBS AG level
1
70,549
64,202
59,381
59,342
1 Represents the Swiss GAAP carrying amount of instruments qualifying as total loss-absorbing capital. In accordance with the Basel III framework, as applicable to Swiss systemically relevant banks (SRB), total
funding eligible as total loss-absorbing capacity at the UBS AG level was USD 66,951m (CHF 56,352m) as of 31 December 2023 (31 December 2022: USD 58,823m (CHF 54,370m)). Refer to the “UBS AG standalone
regulatory information” section of this report for more information about Swiss SRB going and gone concern capital.
UBS AG standalone financial statements (audited)
Note 21a Share capital
UBS AG shares
The 2023 Annual General Meeting of UBS AG approved a change of the share capital currency from the Swiss franc to
the US dollar, resulting in a slight reduction to the nominal value per share to USD 0.10 (from CHF 0.10 previously), with
the amount of the reduction allocated to the
Capital contribution reserve
. As a consequence of the change in the share
capital currency, the capital contribution reserve was also converted from Swiss francs to US dollars, resulting in an
increase, with the offset recorded in the
Other statutory capital reserve
. Total equity reported for UBS AG standalone
was not affected by these changes.
As of 31 December 2023, UBS AG’s share capital of USD 386m (CHF 386m as of 31 December 2022) consisted of fully
paid-up registered issued shares with a nominal value each of USD 0.10 (CHF 0.10 as of 31 December 2022), which each
entitle the holder to one vote at the meeting of the shareholders of UBS AG, if entered into the share register as having
the right to vote, as well as a proportionate share of distributed dividends. UBS AG’s shares are not subject to any
restrictions or limitations on their transferability.
As of 31 December 2023, shares issued by UBS AG totaled 3,858,408,466 shares (unchanged from 31 December 2022).
The shares were all dividend bearing and held by UBS Group AG.
Additionally, as of 31 December 2023, 380,000,000 registered shares with a nominal value of USD 0.10 each (CHF 0.10
as of 31 December 2022) were available to be issued out of conditional capital through the voluntary or mandatory
exercise of conversion rights and / or warrants granted in connection with the issuance of bonds or similar financial
instruments on national or international capital markets.
Non-distributable reserves
Non-distributable reserves consist of 50% of the share capital of UBS AG, amounting to USD 193m (CHF 190m) as of
31 December 2023 (USD 197m (CHF 193m) as of 31 December 2022).
Note 21b Significant shareholders
The sole direct shareholder of UBS AG is UBS Group AG, which holds 100% of UBS AG shares. These shares are entitled
to voting rights. Indirect shareholders of UBS AG included in the table below are the direct shareholders of UBS Group AG
(acting in their own name or in their capacity as nominees for other investors or beneficial owners) that were registered
in the UBS Group AG share register with 3% or more of the share capital of UBS Group AG as of 31 December 2023 or
as of 31 December 2022. The shares and share capital of UBS AG held by indirect shareholders, as shown in the table
below, represent their relative holding of UBS Group AG shares. They do not have voting rights in UBS AG.
31.12.23
31.12.22
USD m, except where indicated
Share capital held
Shares held (%)
Share capital held
Shares held (%)
Significant direct shareholder of UBS AG
UBS Group AG
386
100
393
100
Significant indirect shareholders of UBS AG
DTC (Cede & Co.), New York
1
29
7
28
7
Nortrust Nominees Ltd., London
15
4
17
4
Chase Nominees Ltd., London
34
9
1 DTC (Cede & Co.), New York, “The Depository Trust Company,” is a US securities clearing organization.
31.12.23
31.12.22
CHF m, except where indicated
Share capital held
Shares held (%)
Share capital held
Shares held (%)
Significant direct shareholder of UBS AG
UBS Group AG
380
100
386
100
Significant indirect shareholders of UBS AG
DTC (Cede & Co.), New York
1
28
7
27
7
Nortrust Nominees Ltd., London
15
4
17
4
Chase Nominees Ltd., London
33
9
1 DTC (Cede & Co.), New York, “The Depository Trust Company,” is a US securities clearing organization.
UBS AG standalone financial statements (audited)
Note 22 Swiss and non-Swiss post-employment benefit plans
a) Assets related to non-Swiss defined benefit plans
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Net assets for non-Swiss defined benefit plans
1
Total assets for non-Swiss defined benefit plans
1 As of 31 December 2023, USD 341m (CHF 287m) related to the UK defined benefit pension plan and USD 3m (CHF 2m) related to the US defined benefit pension plan. As of 31 December 2022, USD 321m
(CHF 297m) related to the UK defined benefit pension plan and USD 1m (CHF 1m) related to the US defined benefit pension plan.
b) Liabilities related to Swiss pension plan and non-Swiss defined benefit plans
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Provision for Swiss pension plan
Net defined benefit liabilities for non-Swiss defined benefit plans
1
Total provision for Swiss pension plan and net defined benefit liabilities for non-Swiss defined benefit plans
Bank accounts at UBS and UBS debt instruments held by Swiss pension fund
UBS derivative financial instruments held by Swiss pension fund
Total liabilities related to Swiss pension plan and non-Swiss defined benefit plans
1 As of 31 December 2023, USD 37m (CHF 31m) related to the US plans and USD 14m (CHF 12m) related to the UK plan. As of 31 December 2022, USD 37m (CHF 34m) related to the US plans and USD 14m
(CHF 13m) related to the UK plan.
c) Swiss pension plan
USD m
CHF m
As of or for the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Pension plan surplus
1
Economic benefit / (obligation) of UBS AG
Change in economic benefit / (obligation) recognized in the income statement
Employer contributions in the period recognized in the income statement
Performance awards-related employer contributions accrued
Total pension expense recognized in the income statement within Personnel expenses
1 The pension plan surplus is determined in accordance with FER 26 and consists of the reserve for the fluctuation in asset value. The surplus did not represent an economic benefit for UBS AG in accordance with
FER 16 both as of 31 December 2023 and 31 December 2022.
UBS AG has elected to apply FER 16 for its Swiss pension plan and IFRS Accounting Standards (IAS 19) for its non-Swiss
defined benefit plans. However, remeasurements of the defined benefit obligations for non-Swiss defined benefit plans
are recognized in the income statement rather than directly in equity.
In 2023, an expense of USD 124m (CHF 115m) was recognized in the income statement, driven by expenses of USD 76m
(CHF 68m) related to defined contribution plans and USD 49m (CHF 47m) related to defined benefit plans.
In 2022, a gain of USD 55m (CHF 51m) was recognized in the income statement, driven by a net gain related to the UK
defined benefit plan that reflected an increase in the applicable discount rate, partly offset by a loss due to a negative
return on plan assets and an increase in the applicable inflation rate. This net gain was partly offset by expenses related
to the Swiss plan and other non-Swiss defined benefit plans .
The Swiss pension plan had no employer contribution reserve as of both 31 December 2023 and 31 December 2022.
›
Refer to Note 2 for more information
›
Refer to Note 26 to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information about
non-Swiss defined benefit plans in accordance with IFRS Accounting Standards
UBS AG standalone financial statements (audited)
Note 23 Related parties
Transactions with related parties are conducted at internally agreed transfer prices or at arm’s-length terms and neither
involve more than the normal risk of collectability nor contain any other unfavorable features for the firm. Loans, fixed
advances and mortgages granted to non-independent members of the governing bodies in the ordinary course of
business are also on substantially the same terms and conditions that are available to other employees, including interest
rates and collateral. Independent members of the governing bodies are granted loans and mortgages in the ordinary
course of business at general market conditions.
31.12.23
31.12.22
USD m
Amounts due from
Amounts due to
Amounts due from
Amounts due to
Qualified shareholders
1
4,344
77,258
2,609
65,310
of which: due from / to customers
3,804
2,535
2,526
1,061
of which: funding received from UBS Group AG measured at amortized cost
70,620
61,202
of which: funding received from UBS Group AG designated at fair value
2,711
1,959
Subsidiaries
116,967
68,654
100,990
51,093
of which: due from / to banks
35,235
51,206
26,500
39,168
of which: due from / to customers
35,319
1,267
32,075
2,801
of which: receivables / payables from securities financing transactions
15,979
15,121
13,003
7,775
of which: funding provided to significant regulated subsidiaries eligible as total loss-
absorbing capacity
29,380
27,678
Affiliated entities
2
16,644
2,004
332
420
of which: due from / to banks
14,821
1,194
of which: due from / to customers
904
232
219
208
External auditors
4
4
Other related parties
3
2
6
2
1 The qualified shareholder of UBS AG is UBS Group AG. 2 Affiliated entities of UBS AG are all direct subsidiaries of UBS Group AG, including Credit Suisse AG. 3 Includes amounts due to / from other participations.
31.12.23
31.12.22
CHF m
Amounts due from
Amounts due to
Amounts due from
Amounts due to
Qualified shareholders
1
3,656
65,027
2,412
60,366
of which: due from / to customers
3,201
2,134
2,335
981
of which: funding received from UBS Group AG measured at amortized cost
59,440
56,568
of which: funding received from UBS Group AG designated at fair value
2,282
1,811
Subsidiaries
98,450
57,785
93,344
47,225
of which: due from / to banks
29,657
43,099
24,494
36,202
of which: due from / to customers
29,728
1,067
29,647
2,589
of which: receivables / payables from securities financing transactions
13,450
12,727
12,018
7,187
of which: funding provided to significant regulated subsidiaries eligible as total loss-
absorbing capacity
24,729
25,582
Affiliated entities
2
14,009
1,687
307
388
of which: due from / to banks
12,475
1,005
of which: due from / to customers
761
195
202
193
External auditors
3
4
Other related parties
3
2
5
2
1 The qualified shareholder of UBS AG is UBS Group AG. 2 Affiliated entities of UBS AG are all direct subsidiaries of UBS Group AG, including Credit Suisse AG. 3 Includes amounts due to / from other participations.
As of 31 December 2023, off-balance sheet positions related to subsidiaries amounted to USD 8.6bn (CHF 7.2bn)
(31 December 2022: USD 8.0bn (CHF 7.4bn)), of which USD 6.4bn (CHF 5.4bn) was guarantees to third parties
(31 December 2022: USD 6.2bn (CHF 5.7bn)) and USD 0.5bn (CHF 0.4bn) was loan commitments (31 December 2022:
USD 0.5bn (CHF 0.5bn)).
As of 31 December 2023, off-balance sheet positions related to affiliates amounted to USD 1.0bn (CHF 0.8bn)
(31 December 2022: USD 0.0bn (CHF 0.0bn)).
Loans to and deposits from members of governing bodies were immaterial for all periods presented.
UBS AG standalone financial statements (audited)
Note 24 Fiduciary transactions
USD m
CHF m
31.12.23
31.12.22
31.12.23
31.12.22
Fiduciary deposits
39
84
33
78
of which: placed with third-party banks
39
84
33
78
of which: placed with subsidiaries and affiliated entities
0
0
0
0
Total fiduciary transactions
39
84
33
78
Fiduciary transactions encompass transactions entered into by UBS AG that result in holding or placing assets on behalf
of individuals, trusts, defined benefit plans and other institutions. Unless the recognition criteria for the assets are
satisfied, these assets and the related income are excluded from UBS AG’s balance sheet and income statement but are
disclosed in this Note as off-balance sheet fiduciary transactions. Client deposits that are initially placed as fiduciary
transactions with UBS AG may be recognized on UBS AG’s balance sheet in situations in which the deposit is subsequently
placed within UBS AG. In such cases, these deposits are not reported in the table above.
Note 25a Invested assets and net new money
USD bn
CHF bn
As of or for the year ended
As of or for the year ended
31.12.23
31.12.22
31.12.23
31.12.22
Discretionary assets
60
53
51
48
Other invested assets
434
415
365
384
Total invested assets
1
494
468
416
432
Net new money
23
(1)
21
(2)
1 Includes no double counts.
Note 25b Development of invested assets
USD bn
CHF bn
31.12.23
31.12.22
31.12.23
31.12.22
Total invested assets at the beginning of the year
1
468
560
432
510
Net new money
23
(1)
21
(2)
Market movements
2
3
(81)
1
(75)
Foreign currency translation
2
(10)
(37)
(2)
Other effects
(1)
1
(1)
1
Total invested assets at the end of the year
1
494
468
416
432
1 Includes no double counts. 2 Includes interest and dividend income.
›
Refer to Note 31 to the UBS AG consolidated financial statements in the UBS AG Annual Report 2023 for more information
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone financial statements (audited)
UBS AG standalone regulatory information
UBS AG standalone regulatory information
UBS AG standalone regulatory information
Key metrics of the fourth quarter of 2023
Quarterly |
The table below is based on Basel Committee on Banking Supervision (BCBS) Basel III rules and IFRS Accounting
Standards.
During the fourth quarter of 2023, tier 1 capital increased by USD 0.3bn to USD 65.1bn. Common equity tier 1 (CET1)
capital decreased by USD 0.6bn to USD 52.6bn, mainly reflecting additional accruals for capital returns to UBS Group AG.
Additional tier 1 (AT1) capital issued by the Group and on-lent to UBS AG increased by USD 0.8bn to USD 12.5bn, mainly
reflecting two issuances of AT1 capital instruments of USD 3.5bn and positive impacts from interest rate risk hedge,
foreign currency translation and other effects. These increases were partly offset by a USD 2.5bn AT1 capital instrument
that ceased to be eligible as going concern capital when we issued a notice of redemption of this instrument in the fourth
quarter of 2023. In addition, two high-trigger loss-absorbing AT1 capital instruments of an equivalent of USD 0.6bn
previously on-lent from the Group to UBS AG were transferred to Credit Suisse AG on 20 October 2023.
Phase-in risk-weighted assets (RWA) increased by USD 6.6bn to USD 354.1bn during the fourth quarter of 2023, primarily
driven by increases in credit and counterparty credit risk RWA and participation RWA, partly offset by decreases in
operational risk RWA and market risk RWA.
The leverage ratio denominator (the LRD) increased by USD 35.0bn to USD 643.9bn, driven by a USD 19.2bn increase in
asset size and other movements and a USD 15.9bn increase in currency effects. The increase in asset size and other
movements was mainly driven by higher on-balance sheet assets, mainly due to higher trading portfolio assets and
lending balances, and securities financing transactions, partly offset by lower derivative exposures.
Correspondingly, the CET1 capital ratio of UBS AG standalone decreased to 14.8% from 15.3%, reflecting the increase
in RWA and the decrease in CET1 capital. The firm’s Basel III leverage ratio decreased to 10.1% from 10.6%, reflecting
the increase in the LRD, partly offset by the aforementioned increase in tier 1 capital.
The quarterly average liquidity coverage ratio (LCR) of UBS AG standalone increased 34.2 percentage points to 260.2%,
remaining above the prudential requirement communicated by the Swiss Financial Market Supervisory Authority (FINMA).
The movement in the quarterly average LCR was driven by an increase in average high-quality liquid assets (HQLA) of
USD 20.7bn to USD 130.0bn, mainly driven by an increase in customer deposits. The effect of the increase in average
HQLA was slightly offset by an increase in average net cash outflows of USD 1.6bn to USD 50.4bn, mainly driven by
lower net inflows from securities financing transactions.
As of 31 December 2023, the net stable funding ratio decreased 2.7 percentage points to 91.7%, remaining above the
prudential requirement communicated by FINMA. Available stable funding increased by USD 16.0bn to USD 279.8bn,
mainly driven by higher customer deposits, debt issued and regulatory capital. Required stable funding increased by
USD 25.8bn to USD 304.9bn, mainly driven by higher trading and lending assets.
UBS AG standalone regulatory information
KM1: Key metrics
USD m, except where indicated
31.12.23
30.9.23
30.6.23
31.3.23
31.12.22
Available capital (amounts)
1
Common Equity Tier 1 (CET1)
1
2
Tier 1
1
3
Total capital
1
Risk-weighted assets (amounts)
2
4
Total risk-weighted assets (RWA)
4a
Minimum capital requirement
3
Risk-based capital ratios as a percentage of RWA
2
5
CET1 ratio (%)
1
6
Tier 1 ratio (%)
1
7
Total capital ratio (%)
1
Additional CET1 buffer requirements as a percentage of RWA
8
Capital conservation buffer requirement (%)
9
Countercyclical buffer requirement (%)
9a
Additional countercyclical buffer for Swiss mortgage loans (%)
10
Bank G-SIB and / or D-SIB additional requirements (%)
4
11
Total of bank CET1 specific buffer requirements (%)
5
12
CET1 available after meeting the bank’s minimum capital requirements (%)
6
Basel III leverage ratio
13
Total Basel III leverage ratio exposure measure
14
Basel III leverage ratio (%)
1
Liquidity coverage ratio (LCR)
7
15
Total high-quality liquid assets (HQLA)
16
Total net cash outflow
16a
of which: cash outflows
16b
of which: cash inflows
17
LCR (%)
260.16
Net stable funding ratio (NSFR)
8
18
Total available stable funding
279,758
19
Total required stable funding
304,938
20
NSFR (%)
91.74
1 As of 1 July 2022, capital amounts exclude the transitional relief of recognizing ECL allowances and provisions in CET1 capital in accordance with FINMA Circular 2013/1 “Eligible capital – banks”. 2 Based on
phase-in rules for RWA. Refer to “Swiss SRB going and gone concern requirements and information” below for more information. 3 Calculated as 8% of total RWA, based on total capital minimum requirements,
excluding CET1 buffer requirements. 4 Swiss SRB going and gone concern requirements and information for UBS AG standalone are provided below in this section. 5 Excludes non-BCBS capital buffer requirements
for risk-weighted positions that are directly or indirectly backed by residential properties in Switzerland. 6 Represents the CET1 ratio that is available to meet buffer requirements. Calculated as the CET1 ratio minus
the BCBS CET1 capital requirement and, where applicable, minus the BCBS tier 2 capital requirement met with CET1 capital. 7 Calculated after the application of haircuts and inflow and outflow rates, as well as,
where applicable, caps on Level 2 assets and cash inflows. Calculated based on an average of 63 data points in the fourth quarter of 2023 and 63 data points in the third quarter of 2023. Fo r the prior-quarter data
points, refer to the respective Pillar 3 Report, available under “Pillar 3 disclosures” at ubs.com/investors, for more information. 8 In accordance with Art. 17h para. 3 and 4 of the Liquidity Ordinance, UBS AG
standalone is required to maintain a minimum NSFR of at least 80% without taking into account excess funding of UBS Switzerland AG and 100% after taking into account such excess funding.
p
UBS AG standalone regulatory information
Swiss systemically relevant bank going and gone concern requirements and information
UBS AG standalone is considered a systemically relevant bank (an SRB) under Swiss banking law and is subject to capital
regulations on a standalone basis.
The capital requirements based on RWA include a minimum CET1 capital requirement of 10.12%, including a
countercyclical buffer of 0.12%, and a total going concern capital requirement of 14.42%, including a countercyclical
buffer of 0.12%. The capital requirements based on the LRD include a minimum CET1 capital requirement of 3.5% and
a total going concern leverage ratio requirement of 5.0%.
CET1 capital and high -trigger AT1 capital instruments are eligible as going concern capital. As of 31 December 2023,
one remaining outstanding low-trigger AT1 capital instrument, amounting to USD 1.2bn, that was on-lent from
UBS Group AG to UBS AG qualified as going concern capital, as agreed with FINMA.
Following the amendments to the Banking Act and the Banking Ordinance that entered into force as of 1 January 2023,
UBS AG standalone is subject to a gone concern capital requirement based on the sum of: (i) the nominal value of the
gone concern instruments issued by UBS entities and held by the parent firm; (ii) 75% of the capital requirements resulting
from third-party exposure on a standalone basis; and (iii) a buffer requirement equal to 30% of the Group’s gone concern
capital requirement on UBS AG’s consolidated exposure. A transitional period until 2024 has been granted for the buffer
requirement. The gone concern capital coverage ratio reflects how much gone concern capital is available to meet the
gone concern requirement. Outstanding high- and low-trigger loss-absorbing tier 2 capital instruments, non-Basel III-
compliant tier 2 capital instruments and total loss-absorbing capacity-eligible unsecured debt instruments are eligible to
meet gone concern requirements until one year before maturity.
For direct and indirect investments, including the holding of regulatory capital instruments of UBS AG by subsidiaries that
are active in banking and finance, a FINMA decree introduced a risk-weighting approach, with a phase-in period until
1 January 2028. Starting from 1 July 2017, these investments were risk-weighted at 200%. From 1 January 2019 onward,
the risk weights are being gradually raised by 5 percentage points per year for Switzerland-domiciled investments and by
20 percentage points per year for foreign-domiciled investments until the fully applied risk weights are 250% and 400%,
respectively. As of 31 December 2023, the applicable phase-in risk weights were 225% for Switzerland-domiciled
investments and 300% for foreign-domiciled investments.
›
Refer to “Capital and capital ratios of our significant regulated subsidiaries” in the “Capital, liquidity and funding, and balance
sheet” section of the UBS Group Annual Report 2023, available under “Annual reporting” at
ubs.com/investors
, for more
information about the joint liability of UBS AG and UBS Switzerland AG
UBS AG standalone regulatory information
Quarterly |
The tables below provide details of the Swiss SRB RWA- and LRD-based going and gone concern requirements
and information as required by FINMA; details regarding eligible gone concern instruments are provided below.
Swiss SRB going and gone concern requirements and information
As of 31.12.23
RWA, phase-in
RWA, fully applied as of 1.1.28
LRD
USD m, except where indicated
in %
in %
in %
Required going concern capital
Total going concern capital
1
1
1
Common equity tier 1 capital
of which: minimum capital
of which: buffer capital
of which: countercyclical buffer
Maximum additional tier 1 capital
of which: additional tier 1 capital
of which: additional tier 1 buffer capital
Eligible going concern capital
Total going concern capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Risk-weighted assets / leverage ratio denominator
Risk-weighted assets
Leverage ratio denominator
Required gone concern capital
2
Higher of RWA- or LRD-based
Total gone concern loss-absorbing capacity
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Gone concern capital coverage ratio
1 Includes applicable add-ons of 1.44% for risk-weighted assets (RWA) and 0.50% for leverage ratio denominator (LRD). 2 A maximum of 25% of the gone concern requirements can be met with instruments that
have a remaining maturity of between one and two years. Once at least 75% of the minimum gone concern requirement has been met with instruments that have a remaining maturity of greater than two years, all
instruments that have a remaining maturity of between one and two years remain eligible to be included in the total gone concern capital.
UBS AG standalone regulatory information
Swiss SRB going and gone concern information
USD m, except where indicated
31.12.23
30.9.23
31.12.22
Eligible going concern capital
Total going concern capital
Total tier 1 capital
Common equity tier 1 capital
Total loss-absorbing additional tier 1 capital
of which: high-trigger loss-absorbing additional tier 1 capital
of which: low-trigger loss-absorbing additional tier 1 capital
Eligible gone concern capital
Total gone concern loss-absorbing capacity
Total tier 2 capital
of which: low-trigger loss-absorbing tier 2 capital
of which: non-Basel III-compliant tier 2 capital
TLAC-eligible unsecured debt
Total loss-absorbing capacity
Total loss-absorbing capacity
Denominators for going and gone concern ratios
Risk-weighted assets, phase-in
of which: investments in Switzerland-domiciled subsidiaries
1
of which: investments in foreign-domiciled subsidiaries
1
Risk-weighted assets, fully applied as of 1.1.28
of which: investments in Switzerland-domiciled subsidiaries
1
of which: investments in foreign-domiciled subsidiaries
1
Leverage ratio denominator
Capital and loss-absorbing capacity ratios (%)
Going concern capital ratio, phase-in
of which: common equity tier 1 capital ratio, phase-in
Going concern capital ratio, fully applied as of 1.1.28
of which: common equity tier 1 capital ratio, fully applied as of 1.1.28
Leverage ratios (%)
Going concern leverage ratio
of which: common equity tier 1 leverage ratio
Capital coverage ratio (%)
Gone concern capital coverage ratio
1 Net exposures for direct and indirect investments including holding of regulatory capital instruments in Switzerland-domiciled subsidiaries and for direct and indirect investments including holding of regulatory capital
instruments in foreign-domiciled subsidiaries are risk-weighted at 225% and 300%, respectively, for the current year. Risk weights will gradually increase by 5 percentage points per year for Switzerland-domiciled
investments and 20 percentage points per year for foreign-domiciled investments until the fully applied risk weights of 250% and 400%, respectively, are applied.
p
UBS AG standalone regulatory information
Climate risk
Annual |
Our climate strategy and governance are determined and overseen at the UBS Group level. Similarly, we identify
and manage climate risks, including climate-related financial risks, in our own operations, balance sheet, client assets and
supply chain at the UBS Group level.
Climate-related metrics for the UBS AG legal entity are presented in the UBS Group AG Annual Report 2023.
›
Refer to “Our focus on sustainability and climate” in the “How we create value for our stakeholders” section and to
“Sustainability and climate risk” in the “Risk management and control” section of the UBS Group AG Annual Report 2023 for more
information
›
Refer to “Our sustainability and impact strategy” in the “Strategy” section of the UBS Group AG Sustainability Report 2023,
available from 28 March 2024 under “Annual reporting” at
ubs.com/investors
, for more information
Non-financial report
UBS Group AG and UBS AG have issued a separate non-financial group report. This report provides disclosures on
environmental, social and governance (ESG) matters for UBS as a group. For UBS AG and its consolidated subsidiaries,
this report also provides the disclosures on non-financial information required by the German law implementing EU
Directive 2014/95 (
CSR-Richtlinie-Umsetzungsgesetz
CSR-RUG
), in accordance with Art. 114 of the Securities Trading
Act (
Wertpapierhandelsgesetz
WpHG
), and for UBS AG on a standalone basis, it provides disclosure under Art. 8 of the
EU Taxonomy Regulation. The report is available under “Annual reporting” at
ubs.com/investors.
›
Refer to the
UBS Group Sustainability Report 2023 available at
ubs.com/investors
, for more information
Cautionary Statement |
of an offer to buy or sell any securities or other financial instruments in Switzerland, the United States or any other jurisdiction. No investment decision relating
to securities of or relating to UBS Group AG, UBS AG or their affiliates should be made on the basis of this report. Refer to UBS’s most recent Annual Report on
Form 20-
F,
quarterly reports and other information furnished to or filed with the US Securities and Exchange Commission (the SEC) on Form 6-K, available at
ubs.com/investors
, for additional information.
Rounding |
disclosed in text and tables are calculated on the basis of unrounded figures. Absolute changes between reporting periods disclosed in the text, which can be
derived from numbers presented in related tables, are calculated on a rounded basis.
Tables |
available as of the relevant date or for the relevant period. Zero values generally indicate that the respective figure is zero on an actual or rounded basis. Values
that are zero on a rounded basis can be either negative or positive on an actual basis.
Websites |
of any such websites into this report.
UBS Group AG
P.O. Box
CH-8098 Zurich
ubs.com
Zurich, 28 March 2024
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in each of the following registration statements of UBS AG:
(1)
on Form F-3 (Registration Number 333-263376), and each related prospectus currently outstanding under
such registration statement,
(2)
the base prospectus of Corporate Asset Backed Corporation (CABCO) dated 23 June 2004 (Registration
Number 333-111572),
(3)
the Form 8-K of CABCO dated 23 June 2004 (SEC File Number 001-13444), and
(4)
the Prospectus Supplements relating to the CABCO Series 2004-101 Trust dated 10 May 2004
(Registration Number 033-91744) and 17 May 2004 (Registration Number 033-91744-05),
of our report dated 27 March 2024, with respect to the standalone financial statements of UBS AG for the year
ended 31 December 2023 included in this Report of Foreign Private Issuer (Form 6-K) dated 28 March 2024, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young Ltd
This Form 6-K is hereby incorporated by reference into (1) the registration statement of UBS AG on Form F-3
(Registration Number 333-263376), and into each prospectus outstanding under the foregoing registration
statement, (2) any outstanding offering circular or similar document issued or authorized by UBS AG that
incorporates by reference any Forms 6-K of UBS AG that are incorporated into its registration statements filed with
the SEC, and (3) the base prospectus of Corporate Asset Backed Corporation (“CABCO”) dated June 23, 2004
(Registration Number 333-111572), the Form 8-K of CABCO filed and dated June 23, 2004 (SEC File Number
001-13444), and the Prospectus Supplements relating to the CABCO Series 2004-101 Trust dated May 10, 2004
and May 17, 2004 (Registration Number 033-91744 and 033-91744-05).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
UBS AG
By: _/s/ Steffen Henrich__________
Name: Steffen Henrich
Title: Controller
By: _/s/ David Kelly _____________
Name: David Kelly
Title: Managing Director
Date: March 28, 2024