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: February 28, 2020

 

UBS Group AG

Commission File Number: 1-36764

 

UBS AG

Commission File Number: 1-15060

 

 

(Registrants' Name)

 

Bahnhofstrasse 45, Zurich, Switzerland and
Aeschenvorstadt 1, Basel, Switzerland

(Address of principal executive offices)

 

Indicate by check mark whether the registrants file or will file annual reports under cover of Form 20‑F or Form 40-F.

 

Form 20-F  x                        Form 40-F  o 

 

 

This Form 6-K consists of the UBS Switzerland AG audited standalone financial statements for the year ended 31 December 2019, which appear immediately following this page.

 

 

 

 

UBS Switzerland AG

Standalone financial statements and regulatory information
for the year ended 31 December 2019

 

 

  

 

UBS Switzerland AG standalone financial statements (audited) 

UBS Switzerland AG standalone financial statements (audited)

Income statement

 

 

 

 

 

 

 

 

 

 

For the year ended

CHF million

 

Note

 

31.12.19

 

31.12.18

Interest and discount income1

 

 

 

 3,301 

 

 3,450 

Interest and dividend income from financial investments

 

 

 

 159 

 

 133 

Interest expense2

 

 

 

 (405) 

 

 (307) 

Gross interest income

 

 

 

 3,055 

 

 3,276 

Credit loss (expense) / recovery

 

 

 

 (18) 

 

 (56) 

Net interest income

 

 

 

 3,038 

 

 3,221 

Fee and commission income from securities and investment business

 

 

 

 3,347 

 

 3,444 

Credit-related fees and commissions

 

 

 

 164 

 

 169 

Other fee and commission income

 

 

 

 804 

 

 757 

Fee and commission expense

 

 

 

 (817) 

 

 (382) 

Net fee and commission income

 

 

 

 3,498 

 

 3,989 

Net trading income

 

 3 

 

 864 

 

 869 

Net income from disposal of financial investments

 

 

 

 25 

 

 1 

Dividend income from investments in subsidiaries and other participations

 

 

 

 15 

 

 20 

Income from real estate holdings

 

 

 

 (1) 

 

 (1) 

Sundry ordinary income

 

 

 

 264 

 

 191 

Sundry ordinary expenses

 

 

 

 (15) 

 

 (33) 

Other income from ordinary activities

 

 

 

 289 

 

 179 

Total operating income

 

 

 

 7,688 

 

 8,257 

Personnel expenses

 

 4 

 

 1,940 

 

 2,000 

General and administrative expenses

 

 5 

 

 3,257 

 

 3,360 

Subtotal operating expenses

 

 

 

 5,197 

 

 5,361 

Depreciation and impairment of property, equipment and software

 

 

 

 38 

 

 20 

Amortization and impairment of goodwill and other intangible assets

 

 

 

 1,050 

 

 1,050 

Changes in provisions and other allowances and losses

 

 

 

 66 

 

 9 

Total operating expenses

 

 

 

 6,351 

 

 6,439 

Operating profit

 

 

 

 1,337 

 

 1,818 

Tax expense / (benefit)

 

 6 

 

 299 

 

 417 

Net profit / (loss) for the period

 

 

 

 1,0393

 

 1,401 

1 Interest and discount income includes negative interest income on financial assets of CHF 140 million and CHF 102 million for the years ended 31 December 2019 and 31 December 2018, respectively.    2 Interest expense includes negative interest expense on financial liabilities of CHF 209 million and CHF 198 million for the years ended 31 December 2019 and 31 December 2018, respectively.    3 Net profit 2019 does not include the share of profit of a portion of Global Wealth Management international business, see Note 2b.

 

2 

 

Balance sheet

 

 

 

 

 

 

CHF million

 

Note

 

31.12.19

 

31.12.18

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Cash and balances at central banks

 

 

 

 58,984 

 

 52,593 

Due from banks

 

 9 

 

 4,466 

 

 3,949 

Receivables from securities financing transactions

 

 7 

 

 12,136 

 

 28,157 

Due from customers

 

8, 9

 

 39,575 

 

 39,152 

Mortgage loans

 

8, 9

 

 152,591 

 

 150,208 

Trading portfolio assets

 

 10 

 

 1,679 

 

 1,601 

Derivative financial instruments

 

 11 

 

 2,085 

 

 1,662 

Financial investments

 

 12 

 

 11,928 

 

 13,057 

Accrued income and prepaid expenses

 

 

 

 189 

 

 259 

Investments in subsidiaries and other participations

 

13, 14

 

 68 

 

 60 

Property, equipment and software

 

 15 

 

 372 

 

 238 

Goodwill and other intangible assets

 

 16 

 

 263 

 

 1,313 

Other assets

 

 17 

 

 678 

 

 786 

Total assets

 

 

 

 285,014 

 

 293,034 

of which: subordinated assets

 

 

 

 1 

 

 0 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Due to banks

 

 

 

 27,344 

 

 24,382 

of which: total loss-absorbing capacity eligible

 

 

 

 15,626 

 

 15,174 

Payables from securities financing transactions

 

 7 

 

 547 

 

 1,147 

Due to customers

 

 

 

 231,693 

 

 241,347 

Trading portfolio liabilities

 

 10 

 

 371 

 

 485 

Derivative financial instruments

 

 11 

 

 1,092 

 

 915 

Loans from central mortgage institutions

 

 24 

 

 8,308 

 

 8,434 

Accrued expenses and deferred income

 

 

 

 748 

 

 885 

Other liabilities

 

 17 

 

 2,099 

 

 1,444 

Provisions

 

 9 

 

 139 

 

 161 

Total liabilities

 

 

 

 272,341 

 

 279,200 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

 25 

 

 10 

 

 10 

General reserve

 

 

 

 11,624 

 

 12,139 

of which: statutory capital reserve

 

 

 

 11,624 

 

 12,139 

of which: capital contribution reserve

 

 

 

 11,624 

 

 12,139 

Voluntary earnings reserve

 

 

 

 0 

 

 284 

Net profit / (loss) for the period

 

 

 

 1,039 

 

 1,401 

Total equity

 

 

 

 12,673 

 

 13,834 

Total liabilities and equity

 

 

 

 285,014 

 

 293,034 

of which: subordinated liabilities

 

 

 

 4,729 

 

 4,260 

of which: subject to mandatory conversion and/or debt waiver

 

 

 

 4,729 

 

 4,260 

 

 

3 

UBS Switzerland AG standalone financial statements (audited) 

 

Balance sheet (continued)

 

 

 

 

CHF million

 

31.12.19

 

31.12.18

 

 

 

 

 

Off-balance sheet items

 

 

 

 

Contingent liabilities, gross

 

 12,338 

 

 11,900 

Sub-participations

 

 (1,120) 

 

 (1,110) 

Contingent liabilities, net

 

 11,218 

 

 10,791 

of which: guarantees to third parties related to subsidiaries

 

 10 

 

 6 

of which: credit guarantees and similar instruments

 

 5,023 

 

 4,805 

of which: performance guarantees and similar instruments

 

 2,302 

 

 2,385 

of which: documentary credits

 

 3,882 

 

 3,595 

Irrevocable commitments, gross

 

 10,580 

 

 10,047 

Sub-participations

 

 (4) 

 

 (4) 

Irrevocable commitments, net

 

 10,576 

 

 10,043 

of which: loan commitments

 

 9,700 

 

 9,173 

of which: payment commitment related to deposit insurance

 

 876 

 

 870 

Forward starting transactions1

 

 0 

 

 12 

of which: reverse repurchase agreements

 

 0 

 

 12 

Liabilities for calls on shares and other equity instruments

 

 43 

 

 43 

1 Cash to be paid in the future by either UBS or the counterparty.

 

 

 

Off-balance sheet items

UBS Switzerland 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.

Swiss deposit insurance

Swiss banking law and the deposit insurance system require Swiss banks and securities dealers to jointly guarantee an amount of up to CHF 6 billion for privileged client deposits in the event that a Swiss bank or securities dealer becomes insolvent. The Swiss Financial Market Supervisory Authority (FINMA) estimates the share of UBS Switzerland AG from 1 July 2019 to 30 June 2020 to be CHF 876 million, which is reflected in the table above.

Joint and several liability

In June 2015, the Personal & Corporate Banking and Wealth Management businesses booked in Switzerland were transferred from UBS AG to UBS Switzerland AG through an asset transfer in accordance with the Swiss Merger Act. Under the Swiss Merger Act, UBS AG assumed joint liability for obligations existing on the asset transfer date, 14 June 2015, that were transferred to UBS Switzerland AG.

Similarly, under the terms of the asset transfer agreement, UBS Switzerland AG assumed joint liability for approximately CHF 325 billion of contractual obligations of UBS AG existing on the asset transfer date, excluding the collateralized portion of secured contractual obligations and covered bonds. UBS Switzerland AG has no liability for new obligations incurred by UBS AG after the asset transfer date. The joint liability amount declines as obligations mature, terminate or are novated following the asset transfer date.

As of 31 December 2019, the joint liability of UBS Switzerland AG for contractual obligations of UBS AG amounted to CHF 17 billion compared with CHF 26 billion as of 31 December 2018. Under certain circumstances, the Swiss Banking Act and the Bank Insolvency Ordinance of FINMA authorize FINMA to modify, extinguish or convert to common equity liabilities of a bank in connection with a resolution or insolvency of such bank. As of 31 December 2019, the probability of an outflow under this joint and several liability was assessed to be remote, and as a result, the table above does not include any exposures arising under this joint and several liability.

®     Refer to “Establishment of UBS Switzerland AG” in the “Legal entity financial and regulatory information” section of the UBS Group AG Annual Report 2015 for more information

 

4 

 

 

Statement of changes in equity

 

 

 

 

 

 

 

 

 

 

CHF million

 

Share capital

 

Statutory capital reserve

 

Voluntary earnings reserve

 

Net profit / (loss) for the period

 

Total equity

Balance as of 1 January 2018

 

 10 

 

 12,139 

 

 1,122 

 

 1,513 

 

 14,785 

Dividends and other distributions

 

 

 

 

 

 (838) 

 

 (1,513) 

 

 (2,351) 

Net profit / (loss) for the period

 

 

 

 

 

 

 

 1,401 

 

 1,401 

Balance as of 31 December 2018

 

 10 

 

 12,139 

 

 284 

 

 1,401 

 

 13,834 

 

 

 

 

 

 

 

 

 

 

 

Balance as of 1 January 2019

 

 10 

 

 12,139 

 

 284 

 

 1,401 

 

 13,834 

Dividends and other distributions

 

 

 

 (515) 

 

 (284) 

 

 (1,401) 

 

 (2,200)1

Net profit / (loss) for the period

 

 

 

 

 

 

 

 1,039 

 

 1,039 

Balance as of 31 December 2019

 

 10 

 

 11,624 

 

 0 

 

 1,039 

 

 12,673 

1 Includes CHF 2,100 million of dividend in kind. Refer to Note 2 for more information.

Statement of proposed appropriation of total profit and dividend distribution out of total profit and capital contribution reserve

The Board of Directors proposes that the Annual General Meeting of Shareholders (AGM) on 24 April 2020 approve the appropriation of total profit and an ordinary dividend distribution of CHF 1,250 million (gross) out of the total profit and capital contribution reserve as follows:

Proposed appropriation of total profit and dividend distribution out of total profit

 

 

For the year ended

CHF million

 

31.12.19

Net profit for the period

 

 1,039 

Profit / (loss) carried forward

 

 0 

Total profit available for appropriation

 

 1,039 

 

 

 

Appropriation of total profit

 

 

Dividend distribution

 

 (1,039) 

Profit / (loss) carried forward

 

 0 

 

 

 

Proposed dividend distribution out of capital contribution reserve

 

 

For the year ended

CHF million

 

31.12.19

Total capital contribution reserve before distribution

 

 11,624 

Dividend distribution

 

 (211) 

Total capital contribution reserve after distribution

 

 11,413 

  

5 

UBS Switzerland AG standalone financial statements (audited) 

Note 1  Name, legal form and registered office

UBS Switzerland AG is incorporated and domiciled in Switzerland and operates under art. 620ff. of the Swiss Code of Obligations as an Aktiengesellschaft, a corporation limited by shares. Its registered office is at Bahnhofstrasse 45, CH-8001 Zurich, Switzerland. UBS Switzerland AG is 100% owned by UBS AG.

  

Note 2  Accounting policies

a) Significant accounting policies

UBS Switzerland AG standalone financial statements are prepared in accordance with Swiss GAAP (FINMA Circular 2015/1 and the Banking Ordinance) and represent “reliable assessment statutory single-entity financial statements.” The accounting policies are principally the same as for the consolidated financial statements of UBS Group AG outlined in Note 1 to the consolidated financial statements of UBS Group AG included in the UBS Group AG Annual Report 2019. Major differences between the Swiss GAAP requirements and International Financial Reporting Standards are described in Note 38 of the consolidated financial statements of UBS Group AG. The functional currency of UBS Switzerland AG is the Swiss franc. The significant accounting policies applied for the standalone financial statements of UBS Switzerland AG are discussed below.

®     Refer to the UBS Group AG Annual Report 2019 for more information

Risk management

UBS Switzerland 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 Group AG Annual Report 2019.

Further information on the use of derivative instruments and hedge accounting is provided in Notes 1 and 11 to the consolidated financial statements of UBS Group AG.

®     Refer to the UBS Group AG Annual Report 2019 for more information


Compensation policy

The compensation structure and processes of UBS Switzerland AG conform to the compensation principles and framework of UBS Group AG. For detailed information refer to the Compensation Report of UBS Group AG.

®     Refer to the UBS Group AG Annual Report 2019 for more information

Deferred compensation

UBS Group AG is the grantor of the majority of UBS’s deferred compensation plans. Expenses for awards granted under such plans to UBS Switzerland AG employees are charged by UBS Group AG to UBS Switzerland AG.

®     Refer to Note 30 of the UBS Group AG consolidated financial statements in the UBS Group AG Annual Report 2019 for more information

Foreign currency translation

Transactions denominated in foreign currency are translated into Swiss francs at the spot exchange rate on the date of the transaction. At the balance sheet date, all monetary assets and liabilities, as well as equity instruments recorded in Trading portfolio assets and Financial investments denominated in foreign currency, are translated into Swiss francs 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. All currency translation effects are recognized in the income statement.

The main currency translation rates used by UBS Switzerland AG are provided in Note 37 of the consolidated financial statements of UBS Group AG.

®     Refer to the UBS Group AG Annual Report 2019 for more information

 

6 

 

 

Note 2  Accounting policies (continued) 

Group-internal funding

UBS Switzerland AG obtains funding from UBS AG in the form of loans that qualify as going concern additional tier 1 capital and as gone concern loss-absorbing capacity at the UBS Switzerland AG standalone level.

Where such Group-internal funding is eligible to meet the requirements for total loss-absorbing capacity (TLAC) at the level of UBS Switzerland AG, the aggregate amount of the respective obligations is separately disclosed on the balance sheet. For those TLAC instruments that are eligible to meet the going concern capital requirements (i.e., are subordinated and subject to mandatory conversion and / or debt waiver, as explained below), the aggregate corresponding amounts are disclosed on the balance sheet.

Obligations of UBS Switzerland AG arising from Group-internal funding it has received are presented as Due to banks and measured at amortized cost.

Subordinated assets and liabilities

Subordinated assets are comprised of claims that, based on an irrevocable written declaration, in the event of liquidation, 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 are comprised of corresponding obligations.

Subordinated assets and liabilities that contain a point-of-non-viability clause in accordance with Swiss capital requirements per articles 29 and 30 of the Capital Adequacy Ordinance are disclosed as being Subject to mandatory conversion and / or debt waiver and provide for the claim or the obligation to be written off or converted into equity in the event that the issuing bank reaches a point of non-viability.

Services received from and provided to Group entities

UBS Switzerland AG receives services from UBS Business Solutions AG, the main Group service company, mainly relating to Group Technology, Group Operations and Group Corporate Services, as well as certain other services from other Group entities. UBS Switzerland AG provides services to Group entities mainly relating to the distribution of security and investment products. Services received from and provided to Group entities are settled in cash as hard cost transfers or hard revenue transfers paid or received.

When the nature of the underlying transaction between UBS Switzerland AG and the Group entity contains a single, clearly identifiable service element, related income and expenses are presented in the respective income statement line item, e.g., Fee and commission income from securities and investment business, Other fee and commission income, Fee and commission expense, Net trading income or  General and administrative expenses. To the extent the nature of the underlying transaction contains various service elements 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.

®     Refer to Note 5 for more information

Pension and other post-employment benefit plans

Swiss GAAP permits the use of IFRS or Swiss accounting standards for pension and other post-employment benefit plans, with the election made on a plan-by-plan basis.

UBS Switzerland AG has elected to apply Swiss GAAP (FER 16) for its pension plan. The requirements of Swiss GAAP 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. Swiss GAAP requires that the employer contributions to the pension fund are recognized as Personnel expenses in the income statement. The employer contributions to the Swiss pension fund are determined as a percentage of contributory compensation. Furthermore, Swiss GAAP requires 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 Switzerland AG arises from the pension fund and 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 Switzerland AG is required to contribute to the reduction of a pension deficit (on a FER 26 basis).

®     Refer to Note 26 for more information

Goodwill

As part of the business transfer to UBS Switzerland AG, mainly of the Personal & Corporate Banking and Wealth Management businesses booked in Switzerland, from UBS AG effective 1 April 2015, UBS Switzerland AG recognized goodwill of CHF 5,250 million. This goodwill is amortized on a straight-line basis over five years and assessed for impairment annually.

Deferred taxes

Deferred tax assets are not recognized in UBS Switzerland 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.

7 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 2  Accounting policies (continued) 

Refinement of the credit loss calculation

As of 1 January 2018, UBS Switzerland AG made enhancements to its valuation methodology to calculate incurred losses for Swiss mortgage loans measured at amortized cost under Swiss GAAP resulting in approximately CHF 20 million additional credit loss expense for UBS Switzerland AG.

From the first quarter of 2018 onwards, the incurred loss calculation takes into account forward-looking macroeconomic information. In addition, an appropriate selection of a range of scenarios was developed to capture material non-linearity and asymmetries between different possible forward-looking scenarios and associated credit losses and adequate weights to reflect a likelihood of their occurrence were determined. Dispensations in the standalone financial statements

As UBS Switzerland AG has no listed shares outstanding and is within the scope of the UBS Group AG consolidated financial statements prepared in accordance with IFRS, UBS Switzerland AG is exempt from various disclosures in the standalone financial statements. The dispensations include the management report and the statement of cash flows. As the UBS Group AG consolidated financial statements are presented in USD, UBS Switzerland AG provides certain notes disclosures starting from the end of 2018 that would otherwise be covered by the disclosure dispensation; i.e., notes 13, 14, 15, 16, 19, 20, 21, 23 and 24.

 

b) Other events affecting comparability

Transfer of Global Wealth Management international business from UBS Switzerland AG to UBS AG

In the second quarter of 2019, the beneficial ownership of a portion of Global Wealth Management international business booked in Switzerland was transferred from UBS Switzerland AG to UBS AG to further optimize Group legal and operational structures. The transfer was made in the form of a dividend in kind in the amount of CHF 2.1 billion. UBS Switzerland AG expects full legal transfer to take place before the end of 2022. The compensation of UBS AG for its share of the profits for the full year of CHF 442 million is reflected in Fee and commission expense. Invested assets are reported in UBS Switzerland AG until the full legal transfer is completed; no double counting is applied.

c) Accounting policies to be adopted in the future

Amendment of accounting standards applicable to banks and security dealers

On 14 November 2019, FINMA published amended accounting standards applicable to banks and security dealers in Switzerland. UBS Switzerland AG will be required to apply an expected credit loss (ECL) approach in its standalone financial statements under Swiss GAAP and may substantially apply the ECL approach which is applied in UBS Group’s consolidated financial statements under IFRS.


UBS Switzerland AG will adopt the new ECL requirements on 1 January 2021. A transition period is granted until 31 December 2025, during which allowances and provisions for ECL can be phased-in on a straight-line basis.

Apart from these amendments, the existing guidance in FINMA Circular 2015/1 Accounting – banks remains materially unchanged and was incorporated into the new FINMA Accounting Ordinance and the new FINMA Circular 2020/1 Accounting – banks.

  

8 

 

Note 3a  Net trading income by business

 

 

For the year ended

CHF million

 

31.12.19

31.12.18

Global Wealth Management

 

 413 

 431 

Personal & Corporate Banking

 

 427 

 396 

Other business divisions and Corporate Center

 

 24 

 42 

Total net trading income

 

 864 

 869 

 

 

 

Note 3b  Net trading income by underlying risk category

 

 

For the year ended

CHF million

 

31.12.19

31.12.18

Interest rate instruments (including funds)

 

 23 

 33 

Foreign exchange instruments

 

 810 

 818 

Equity instruments (including funds)

 

 (2) 

 (4) 

Credit instruments

 

 4 

 0 

Precious metals / commodities

 

 29 

 23 

Total net trading income

 

 864 

 869 

 

 

 

Note 4  Personnel expenses

 

 

For the year ended

CHF million

 

31.12.19

31.12.18

Salaries

 

 1,199 

 1,230 

Variable compensation – performance awards

 

 377 

 372 

Variable compensation – other

 

 8 

 19 

Contractors

 

 2 

 2 

Social security

 

 100 

 96 

Pension and other post-employment benefit plans

 

 208 

 232 

Other personnel expenses

 

 45 

 49 

Total personnel expenses

 

 1,940 

 2,000 

 

As of 31 December 2019, UBS Switzerland AG employed 9,226 personnel (31 December 2018: 9,503) on a full-time equivalent basis.

 

9 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 5  General and administrative expenses

 

 

For the year ended

CHF million

 

31.12.19

31.12.18

Occupancy

 

 1 

 3 

Rent and maintenance of IT equipment

 

 2 

 2 

Communication and market data services

 

 48 

 52 

Administration

 

 2,793 

 2,849 

of which: hard cost transfers paid1

 

 2,712 

 2,765 

Marketing and public relations

 

 105 

 122 

Travel and entertainment

 

 84 

 93 

Fees to audit firms

 

 9 

 7 

of which: financial and regulatory audits

 

 8 

 7 

of which: audit-related services

 

 0 

 0 

Other professional fees

 

 70 

 84 

Outsourcing of IT and other services

 

 145 

 148 

Total general and administrative expenses

 

 3,257 

 3,360 

1 Represents expenses for services provided by UBS Group AG and subsidiaries in the UBS Group to UBS Switzerland AG.

 

Note 6  Taxes

 

 

For the year ended

CHF million

 

31.12.19

31.12.18

Income tax expense / (benefit)

 

 278 

 393 

of which: current

 

 278 

 393 

of which: deferred

 

 0 

 0 

Capital tax

 

 20 

 24 

Total tax expense / (benefit)

 

 299 

 417 

 

For the year ended 31 December 2019 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 21.1% (2018: 21.9%).

 

 

Note 7  Securities financing transactions

CHF billion

 

31.12.19

31.12.18

 

 

 

 

On-balance sheet

 

 

 

Receivables from securities financing transactions, gross

 

 14.1 

 30.6 

Netting of securities financing transactions

 

 (1.9) 

 (2.5) 

Receivables from securities financing transactions, net

 

 12.1 

 28.2 

Payables from securities financing transactions, gross

 

 2.5 

 3.6 

Netting of securities financing transactions

 

 (1.9) 

 (2.5) 

Payables from securities financing transactions, net

 

 0.5 

 1.1 

Assets pledged as collateral in connection with securities financing transactions

 

 6.6 

 0.0 

of which: financial investments

 

 6.6 

 0.0 

of which: assets that may be sold or repledged by counterparties

 

 2.9 

 0.0 

 

 

 

 

Off-balance sheet

 

 

 

Fair value of assets received as collateral in connection with securities financing transactions

 

 107.7 

 139.6 

of which: repledged

 

 87.9 

 108.4 

of which: sold in connection with short sale transactions

 

 0.4 

 0.5 

 

10 

 

 

Note 8a  Collateral for loans and off-balance sheet transactions

 

 

31.12.19

 

31.12.18

 

 

Secured

 

Unsecured

 

Total

 

Secured

 

Unsecured

 

Total

 

 

Secured by collateral

 

Secured by

other credit

enhancements2

 

 

 

 

 

Secured by collateral

 

Secured by

other credit

enhancements2

 

 

 

 

CHF million

 

Real estate

 

Other

collateral1

 

 

 

 

 

 

Real estate

 

Other

collateral1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On-balance sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due from customers, gross

 

 1,294 

 

 26,604 

 

 987 

 

 11,145 

 

 40,030 

 

 1,267 

 

 25,560 

 

 1,075 

 

 11,707 

 

 39,609 

Mortgage loans, gross

 

 152,591 

 

 

 

 

 

 

 

 152,591 

 

 150,208 

 

 

 

 

 

 

 

 150,208 

of which: residential mortgages

 

 130,502 

 

 

 

 

 

 

 

 130,502 

 

 128,053 

 

 

 

 

 

 

 

 128,053 

of which: office and business premises mortgages

 

 9,804 

 

 

 

 

 

 

 

 9,804 

 

 9,659 

 

 

 

 

 

 

 

 9,659 

of which: industrial premises mortgages

 

 2,722 

 

 

 

 

 

 

 

 2,722 

 

 2,876 

 

 

 

 

 

 

 

 2,876 

of which: other mortgages

 

 9,563 

 

 

 

 

 

 

 

 9,563 

 

 9,620 

 

 

 

 

 

 

 

 9,620 

Total on-balance sheet, gross

 

 153,885 

 

 26,604 

 

 987 

 

 11,145 

 

 192,621 

 

 151,475 

 

 25,560 

 

 1,075 

 

 11,707 

 

 189,817 

Allowances

 

 0 

 

 0 

 

 0 

 

 (454) 

 

 (454) 

 

 0 

 

 (8) 

 

 0 

 

 (449) 

 

 (458) 

Total on-balance sheet, net

 

 153,885 

 

 26,604 

 

 987 

 

 10,690 

 

 192,166 

 

 151,475 

 

 25,552 

 

 1,075 

 

 11,258 

 

 189,360 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Off-balance sheet

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Contingent liabilities, gross

 

 169 

 

 2,533 

 

 1,259 

 

 8,377 

 

 12,338 

 

 158 

 

 2,140 

 

 1,232 

 

 8,370 

 

 11,900 

Irrevocable commitments, gross

 

 833 

 

 525 

 

 223 

 

 9,000 

 

 10,580 

 

 793 

 

 592 

 

 24 

 

 8,638 

 

 10,047 

Forward starting reverse repurchase and securities borrowing transactions

 

  

 

  

 

  

 

  

 

  

 

 0 

 

 10 

 

 0 

 

 2 

 

 12 

Liabilities for calls on shares and other equities

 

 

 

 

 

 

 

 43 

 

 43 

 

 

 

 

 

 

 

 43 

 

 43 

Total off-balance sheet

 

 1,002 

 

 3,057 

 

 1,482 

 

 17,420 

 

 22,961 

 

 951 

 

 2,742 

 

 1,256 

 

 17,053 

 

 22,002 

1 Includes but is not limited to deposits, securities, life insurance contracts, inventory, accounts receivable, patents and copyrights.    2 Includes credit default swaps and guarantees.

 

Note 8b  Impaired financial instruments

 

 

31.12.19

 

31.12.18

CHF million

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

 

Gross impaired financial instruments

Allowances and

provisions

Estimated liquidation

proceeds of collateral

Net impaired financial instruments

Amounts due from banks

 

 1 

 1 

 0 

 0 

 

 3 

 3 

 0 

 0 

Amounts due from customers

 

 851 

 454 

 355 

 41 

 

 1,016 

 458 

 490 

 69 

Mortgage loans

 

 769 

 0 

 769 

 0 

 

 806 

 0 

 806 

 0 

Guarantees and loan commitments

 

 161 

 31 

 15 

 115 

 

 363 

 32 

 86 

 244 

Total impaired financial instruments1

 

 1,782 

 487 

 1,139 

 156 

 

 2,188 

 493 

 1,382 

 314 

1 Under Swiss GAAP, in line with the adoption of IFRS 9 as of 1 January 2018, an instrument is classified as credit-impaired if the counterparty is defaulted. Total impaired financial instruments include credit-impaired exposures for which no loss has occurred or no allowance has been recognized (e.g., because they are expected to be fully recoverable through the collateral held). Refer to Note 2 for more information on refinement of the credit loss calculation.

 

11 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 9a  Allowances

CHF million

Balance as of 31 December 2018

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 December 2019

Specific allowances for amounts due from customers and mortgage loans

 458 

 159 

 (137) 

 (51) 

 33 

 (3) 

 (4) 

 454 

Specific allowances for amounts due from banks

 3 

 0 

 0 

 (1) 

 0 

 0 

 0 

 1 

Total allowances

 460 

 159 

 (137) 

 (53) 

 33 

 (3) 

 (4) 

 456 

 

 

Note 9b  Provisions

CHF million

Balance as of 31 December 2018

Increase recognized in the income statement

Release recognized in the income statement

Provisions used in conformity with designated purpose

Recoveries

Reclassifications / other

Foreign currency translation

Balance as of 31 December 2019

Default risk related to loan commitments and guarantees

 32 

 4 

 (8) 

 0 

 0 

 3 

 0 

 31 

Operational risks

 4 

 0 

 0 

 (2) 

 0 

 0 

 0 

 2 

Litigation, regulatory and similar matters1

 74 

 64 

 (2) 

 (68) 

 1 

 0 

 0 

 68 

Restructuring

 17 

 3 

 (3) 

 (17) 

 0 

 0 

 0 

 0 

Employee benefits

 18 

 1 

 0 

 0 

 0 

 0 

 0 

 18 

Other

 15 

 5 

 0 

 (1) 

 0 

 0 

 0 

 19 

Total provisions

 161 

 76 

 (13) 

 (88) 

 1 

 3 

 0 

 139 

1 Includes provisions for litigation resulting from security risks.

 

Note 10  Trading portfolio and other financial instruments measured at fair value

CHF million

 

31.12.19

 

31.12.18

 

 

 

 

 

Assets

 

 

 

 

Trading portfolio assets

 

 1,679 

 

 1,601 

of which: debt instruments1

 

 14 

 

 32 

of which: listed

 

 8 

 

 4 

of which: equity instruments

 

 37 

 

 29 

of which: precious metals and other physical commodities

 

 1,628 

 

 1,540 

Total assets measured at fair value

 

 1,679 

 

 1,601 

of which: fair value derived using a valuation model

 

 39 

 

 47 

of which: securities eligible for repurchase transactions in accordance with liquidity regulations2

 

 2 

 

 13 

 

 

 

 

 

Liabilities

 

 

 

 

Trading portfolio liabilities

 

 371 

 

 485 

of which: debt instruments1

 

 125 

 

 108 

of which: listed

 

 102 

 

 101 

of which: equity instruments

 

 246 

 

 377 

Total liabilities measured at fair value

 

 371 

 

 485 

of which: fair value derived using a valuation model

 

 325 

 

 214 

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.

 

12 

 

 

Note 11  Derivative instruments

 

 

31.12.19

 

31.12.18

CHF million, except where indicated

 

Derivative financial assets

 

Derivative financial liabilities

 

Total notional values

(CHF billion)

 

Derivative financial assets

 

Derivative financial liabilities

 

Total notional values

(CHF billion)

Interest rate contracts

 

 

 

 

 

 

 

 

 

 

 

 

Forwards1

 

 34 

 

 27 

 

 17 

 

 33 

 

 37 

 

 8 

Swaps

 

 1,910 

 

 1,579 

 

 139 

 

 1,959 

 

 1,648 

 

 149 

of which: designated in hedge accounting relationships

 

 422 

 

 193 

 

 23 

 

 440 

 

 328 

 

 34 

Over-the-counter (OTC) options

 

 64 

 

 74 

 

 8 

 

 51 

 

 51 

 

 5 

Total

 

 2,009 

 

 1,679 

 

 164 

 

 2,044 

 

 1,737 

 

 162 

Foreign exchange contracts

 

 

 

 

 

 

 

 

 

 

 

 

Forwards

 

 324 

 

 312 

 

 34 

 

 311 

 

 296 

 

 29 

Interest and currency swaps

 

 599 

 

 745 

 

 100 

 

 408 

 

 406 

 

 72 

Over-the-counter (OTC) options

 

 110 

 

 109 

 

 27 

 

 180 

 

 179 

 

 30 

Total

 

 1,033 

 

 1,166 

 

 160 

 

 898 

 

 881 

 

 132 

Equity / index contracts

 

 

 

 

 

 

 

 

 

 

 

 

Forwards

 

 31 

 

 22 

 

 3 

 

 32 

 

 38 

 

 4 

Swaps

 

 29 

 

 29 

 

 1 

 

 28 

 

 28 

 

 1 

Over-the-counter (OTC) options

 

 91 

 

 91 

 

 3 

 

 97 

 

 97 

 

 1 

Exchange-traded options

 

 332 

 

 332 

 

 0 

 

 382 

 

 382 

 

 0 

Total

 

 483 

 

 474 

 

 8 

 

 539 

 

 545 

 

 6 

Credit derivative contracts

 

 

 

 

 

 

 

 

 

 

 

 

Credit default swaps

 

 1 

 

 8 

 

 0 

 

 2 

 

 3 

 

 0 

Total

 

 1 

 

 8 

 

 0 

 

 2 

 

 3 

 

 0 

Commodity, precious metals and other contracts

 

 

 

 

 

 

 

 

 

 

 

 

Forwards

 

 7 

 

 7 

 

 1 

 

 18 

 

 18 

 

 1 

Swaps

 

 25 

 

 24 

 

 1 

 

 18 

 

 18 

 

 1 

Over-the-counter (OTC) options

 

 558 

 

 558 

 

 22 

 

 251 

 

 250 

 

 17 

Total

 

 590 

 

 589 

 

 24 

 

 287 

 

 286 

 

 19 

Total before netting

 

 4,115 

 

 3,917 

 

 357 

 

 3,770 

 

 3,451 

 

 319 

of which: trading derivatives

 

 3,694 

 

 3,724 

 

 

 

 3,330 

 

 3,123 

 

 

of which: fair value derived using a valuation model

 

 3,643 

 

 3,684 

 

 

 

 3,275 

 

 3,066 

 

 

of which: derivatives designated in hedge accounting relationships

 

 422 

 

 193 

 

 

 

 440 

 

 328 

 

 

of which: fair value derived using a valuation model

 

 422 

 

 193 

 

 

 

 440 

 

 328 

 

 

Netting with cash collateral payables / receivables

 

 0 

 

 (795) 

 

 

 

 0 

 

 (428) 

 

 

Replacement value netting

 

 (2,030) 

 

 (2,030) 

 

 

 

 (2,108) 

 

 (2,108) 

 

 

Total after netting

 

 2,085 

 

 1,092 

 

 

 

 1,662 

 

 915 

 

 

of which: with bank and broker-dealer counterparties

 

 120 

 

 444 

 

 

 

 113 

 

 388 

 

 

of which: other client counterparties

 

 1,965 

 

 648 

 

 

 

 1,549 

 

 526 

 

 

1 Includes forward rate agreements.

 

13 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 12a  Financial investments by instrument type

 

 

31.12.19

 

31.12.18

CHF million

 

Carrying amount

Fair value

 

Carrying amount

Fair value

Debt instruments

 

 11,874 

 11,911 

 

 12,988 

 12,829 

of which: held to maturity

 

 5,620 

 5,634 

 

 6,144 

 5,970 

of which: available for sale

 

 6,255 

 6,277 

 

 6,845 

 6,859 

Equity instruments

 

 21 

 47 

 

 21 

 33 

Property

 

 33 

 33 

 

 47 

 47 

Total financial investments

 

 11,928 

 11,991 

 

 13,057 

 12,909 

of which: securities eligible for repurchase transactions in accordance with liquidity regulations1

 

 10,458 

 10,493 

 

 12,656 

 12,496 

1 Consists of high-quality liquid debt securities that are eligible for repurchase transactions at the Swiss National Bank (SNB) or other central banks.

 

Note 12b  Financial investments by counterparty rating – debt instruments

CHF million

 

31.12.19

 

31.12.18

Internal UBS rating1

 

 

 

 

0–1

 

 10,270 

 

 11,340 

2–3

 

 1,604 

 

 1,649 

4–5

 

 0 

 

 0 

6–8

 

 0 

 

 0 

9–13

 

 0 

 

 0 

Non-rated

 

 0 

 

 0 

Total financial investments

 

 11,874 

 

 12,988 

1  Refer to Note 22 for more information.

 

Note 13  Investments in subsidiaries and other participations

CHF million

31.12.19

31.12.18

Historical cost

 

 

Balance at the beginning of the year

 69 

 65 

Additions

 8 

 4 

Balance at the end of the year

 77 

 69 

Accumulated value adjustments and changes in book value

 

 

Balance at the beginning of the year

 (9) 

 (9) 

Value adjustments

 0 

 0 

Balance at the end of the year

 (9) 

 (9) 

Net book value

 

 

Book value at the beginning of the year

 60 

 56 

Book value at the end of the year

 68 

 60 

of which: without market value

 68 

 60 

of which: other participations

 53 

 53 

of which: Pfandbriefbank

 47 

 47 

of which: Twint AG

 6 

 6 

of which: subsidiaries

 15 

 7 

 

 

14 

 

 

Note 14  Companies in which the bank holds a permanent direct or indirect significant participation

 

 

 

 

31.12.19

 

Company name

Domicile

Primary business division

 

Share capital in thousand

Share of capital

(in %)

Share of votes 

(in %)

Held directly

in thousand

Held

indirectly

UBS Card Center AG

Switzerland

Personal & Corporate Banking

 

CHF

 100 

 100 

 100 

 100 

–

UBS Hypotheken AG

Switzerland

Personal & Corporate Banking

 

CHF

 100 

 98 

 98 

 98 

–

TopCard Service AG

Switzerland

Personal & Corporate Banking

 

CHF

 150 

 100 

 100 

 150 

–

TWINT AG

Switzerland

Personal & Corporate Banking

 

CHF

 12,750 

 11 

 11 

 1,462 

–

Pfandbriefbank schweizerischer Hypothekarinstitute AG

Switzerland

Personal & Corporate Banking

 

CHF

 900,000 

 9 

 9 

 76,801 

–

SwissSign Group AG

Switzerland

Personal & Corporate Banking

 

CHF

 12,500 

 6 

 6 

 766 

–

 

 

 

Note 15  Property, equipment and software

At historical cost less accumulated depreciation

 

 

 

 

CHF million

 

IT hardware and communication

 

Internally generated software

 

Other machines and equipment

 

Projects in progress1

 

31.12.19

 

31.12.18

Historical cost

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 9 

 

 113 

 

 94 

 

 117 

 

 333 

 

 169 

Additions

 

 4 

 

 0 

 

 2 

 

 166 

 

 172 

 

 167 

Disposals / write-offs2

 

 (2) 

 

 0 

 

 (1) 

 

 0 

 

 (3) 

 

 (4) 

Reclassifications

 

 (2) 

 

 184 

 

 2 

 

 (184) 

 

 0 

 

 0 

Balance at the end of the year

 

 8 

 

 297 

 

 97 

 

 99 

 

 501 

 

 333 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 4 

 

 11 

 

 79 

 

 

 

 94 

 

 78 

Depreciation

 

 2 

 

 28 

 

 7 

 

 

 

 38 

 

 20 

Disposals / write-offs2

 

 (2) 

 

 0 

 

 (1) 

 

 

 

 (3) 

 

 (4) 

Balance at the end of the year

 

 4 

 

 39 

 

 85 

 

 

 

 129 

 

 94 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

 

Net book value at the beginning of the year

 

 5 

 

 101 

 

 15 

 

 117 

 

 238 

 

 92 

Net book value at the end of the year

 

 4 

 

 257 

 

 12 

 

 99 

 

 372 

 

 238 

1 Entirely related to Internally generated software.    2 Includes write-offs of fully depreciated assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease commitments

 

 

 

 

 

 

 

 

 

 

 

 

CHF million

 

 

 

 

 

 

 

 

 

 

 

31.12.19

Expenses for operating leases to be recognized in:

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

183

2021

 

 

 

 

 

 

 

 

 

 

 

176

2022

 

 

 

 

 

 

 

 

 

 

 

160

2023

 

 

 

 

 

 

 

 

 

 

 

69

2024

 

 

 

 

 

 

 

 

 

 

 

35

2025 and thereafter

 

 

 

 

 

 

 

 

 

 

 

138

Total commitments for minimum payments under operating leases

 

 

 

 

 

 

 

 

 

 

 

760

 

 

Property, equipment and software are depreciated on a straight-line basis over their useful life, which is between 3 and 10 years.

 

15 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 16  Goodwill

At historical cost less accumulated amortization

 

 

 

CHF million

 

31.12.19

31.12.18

Historical cost

 

 

 

Balance at the beginning of the year

 

 5,250 

 5,250 

Balance at the end of the year

 

 5,250 

 5,250 

Accumulated amortization

 

 

 

Balance at the beginning of the year

 

 3,938 

 2,888 

Amortization

 

 1,050 

 1,050 

Balance at the end of the year

 

 4,988 

 3,938 

 

 

 

 

Net book value

 

 

 

Net book value at the beginning of the year

 

 1,313 

 2,363 

Net book value at the end of the year

 

 263 

 1,313 

Refer to Note 2 for more information regarding goodwill.

 

Note 17a  Other assets

CHF million

 

31.12.19

 

31.12.18

Deferral position for hedging instruments

 

 0 

 

 42 

Settlement and clearing accounts

 

 466 

 

 496 

VAT and other indirect tax receivables

 

 16 

 

 13 

Other

 

 195 

 

 235 

of which: other receivables due from UBS Group AG and subsidiaries in the UBS Group

 

 179 

 

 206 

Total other assets

 

 678 

 

 786 

 

Note 17b  Other liabilities

CHF million

 

31.12.19

 

31.12.18

Deferral position for hedging instruments

 

 133 

 

 0 

Settlement and clearing accounts

 

 1,054 

 

 588 

VAT and other indirect tax payables

 

 130 

 

 147 

Other

 

 782 

 

 710 

of which: other payables due to UBS Group AG and subsidiaries in the UBS Group

 

 519 

 

 380 

Total other liabilities

 

 2,099 

 

 1,444 

 

Note 18  Pledged assets1

 

 

31.12.19

 

31.12.18

CHF million

 

Carrying amount of pledged assets

 

Effective

commitment

 

Carrying amount of pledged assets

 

Effective

commitment

Mortgage loans2

 

 17,193 

 

 10,737 

 

 17,219 

 

 12,294 

Securities

 

 0 

 

 0 

 

 21 

 

 0 

Total pledged assets

 

 17,193 

 

 10,737 

 

 17,240 

 

 12,294 

1 Excluding securities financing transactions. Refer to Note 7 for more information on securities financing transactions.    2 These pledged mortgage loans serve as collateral for existing liabilities against Swiss central mortgage institutions and for existing covered bond issuances. Of these pledged mortgage loans, approximately CHF 5.4 billion as of 31 December 2019 (approximately CHF 1.9 billion as of 31 December 2018) could be withdrawn or used for future liabilities or covered bond issuances without breaching existing collateral requirements.

 

16 

 

 

Note 19  Maturity structure of financial instruments

CHF million

 

At sight

Cancellable

Due within

1 month

Due between

1 and 3

months

Due between

3 and 12 months

Due between

1 and 5

years

Due after

5 years

Perpetual / Not applicable

Total

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Cash and balances at central banks

 

 58,984 

 0 

0

 0 

 0 

 0 

 0 

 0 

 58,984 

Due from banks

 

 3,323 

 0 

 256 

 423 

 437 

 12 

 15 

 0 

 4,466 

Receivables from securities financing transactions

 

 0 

 3,744 

 7,901 

 432 

 59 

 0 

 0 

 0 

 12,136 

Due from customers

 

 160 

 8,383 

 11,836 

 4,359 

 5,904 

 7,130 

 1,803 

 0 

 39,575 

Mortgage loans

 

 0 

 29,138 

 5,521 

 6,569 

 13,675 

 66,332 

 31,357 

 0 

 152,591 

Trading portfolio assets

 

 1,679 

 0 

0

 0 

 0 

 0 

 0 

 0 

 1,679 

Derivative financial instruments

 

 2,085 

 0 

0

 0 

 0 

 0 

 0 

 0 

 2,085 

Financial investments

 

0

 0 

 1,304 

 1,420 

 2,040 

 5,344 

 1,765 

 54 

 11,928 

Total assets / financial instruments

as of 31 December 2019

 

 66,230 

 41,266 

 26,818 

 13,203 

 22,114 

 78,818 

 34,941 

 54 

 283,444 

Total assets / financial instruments

as of 31 December 20181

 

 58,351 

 46,471 

 23,145 

 20,022 

 28,928 

 78,740 

 34,653 

 68 

 290,377 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Due to banks2

 

 5,443 

 62 

 6,091 

 111 

 11 

 4,265 

 6,650 

 4,711 

 27,344 

Payables from securities financing transactions

 

 0 

 545 

 1 

 2 

 0 

 0 

 0 

 0 

 547 

Due to customers

 

 123,161 

 106,789 

 1,030 

 468 

 178 

 50 

 17 

 0 

 231,693 

Trading portfolio liabilities

 

 371 

 0 

0

 0 

 0 

 0 

 0 

 0 

 371 

Derivative financial instruments

 

 1,092 

 0 

0

 0 

 0 

 0 

 0 

 0 

 1,092 

Loans from central mortgage institutions

 

0

 0 

 9 

 67 

 656 

 3,718 

 3,858 

 0 

 8,308 

Total liabilities / financial instruments

as of 31 December 2019

 

 130,067 

 107,395 

 7,131 

 647 

 845 

 8,034 

 10,525 

 4,711 

 269,356 

Total liabilities / financial instruments

as of 31 December 20181

 

 145,441 

 103,462 

 3,349 

 604 

 901 

 6,318 

 12,393 

 4,243 

 276,710 

1 Comparative data for “At sight” has been adjusted to align with the presentation of the new column “Due within 1 month”.    2 Due to banks with maturity above one year and Perpetual mainly relates to loss-absorbing capacity-eligible positions.

 

17 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 20  Assets and liabilities by domestic and foreign origin in accordance with the domicile principle

 

 

31.12.19

 

31.12.18

CHF million

 

Domestic

Foreign

 

Domestic

Foreign

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Cash and balances at central banks

 

 58,984 

 0 

 

 52,593 

 0 

Due from banks

 

 1,563 

 2,902 

 

 887 

 3,062 

Receivables from securities financing transactions

 

 1,099 

 11,037 

 

 4,957 

 23,200 

Due from customers

 

 19,352 

 20,223 

 

 19,177 

 19,974 

Mortgage loans

 

 152,572 

 19 

 

 150,184 

 24 

Trading portfolio assets

 

 1,639 

 39 

 

 1,582 

 19 

Derivative financial instruments

 

 1,144 

 941 

 

 1,035 

 627 

Financial investments

 

 1,202 

 10,727 

 

 1,582 

 11,475 

Accrued income and prepaid expenses

 

 89 

 100 

 

 102 

 157 

Investments in subsidiaries and other participations

 

 68 

 0 

 

 60 

 0 

Property, equipment and software

 

 372 

 0 

 

 238 

 0 

Goodwill and other intangible assets

 

 263 

 0 

 

 1,313 

 0 

Other assets

 

 604 

 73 

 

 721 

 65 

Total assets

 

 238,952 

 46,062 

 

 234,432 

 58,602 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Due to banks

 

 24,160 

 3,185 

 

 19,275 

 5,107 

Payables from securities financing transactions

 

 139 

 408 

 

 220 

 927 

Due to customers

 

 182,880 

 48,812 

 

 186,676 

 54,671 

Trading portfolio liabilities

 

 43 

 327 

 

 48 

 437 

Derivative financial instruments

 

 505 

 587 

 

 348 

 566 

Loans from central mortgage institutions

 

 8,308 

 0 

 

 8,434 

 0 

Accrued expenses and deferred income

 

 728 

 19 

 

 861 

 24 

Other liabilities

 

 1,899 

 200 

 

 1,370 

 74 

Provisions

 

 138 

 1 

 

 159 

 1 

Total liabilities

 

 218,802 

 53,540 

 

 217,391 

 61,808 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

 10 

 0 

 

 10 

 0 

General reserve

 

 11,624 

 0 

 

 12,139 

 0 

Voluntary earnings reserve

 

 0 

 0 

 

 284 

 0 

Net profit / (loss) for the period

 

 1,039 

 0 

 

 1,401 

 0 

Total equity

 

 12,673 

 0 

 

 13,834 

 0 

Total liabilities and equity

 

 231,475 

 53,540 

 

 231,226 

 61,808 

 

 

18 

 

 

Note 21  Total assets by geographic location

 

 

31.12.19

 

31.12.18

CHF million

 

CHF million

%

 

CHF million

%

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Switzerland

 

 238,952 

 84 

 

 234,432 

 80 

Europe, Middle East and Africa

 

 30,264 

 11 

 

 40,801 

 14 

of which: United Kingdom

 

 11,649 

 4 

 

 22,723 

 8 

of which: Germany

 

 3,804 

 1 

 

 4,857 

 2 

Americas

 

 13,237 

 5 

 

 14,500 

 5 

of which: United States

 

 5,236 

 2 

 

 6,527 

 2 

of which: British Virgin Islands

 

 2,834 

 1 

 

 3,067 

 1 

Asia Pacific

 

 2,561 

 1 

 

 3,302 

 1 

Total assets

 

285,014

 100 

 

 293,034 

 100 

 

Note 22  Country risk of total assets

The table below provides a breakdown of total non-Swiss assets by credit rating. These 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 is located. Assets for which Switzerland is the ultimate country of risk are provided separately in order to reconcile them to total balance sheet assets.

®     Refer to the “Risk management and control” section of the UBS Group AG Annual Report 2019 for more information

 

  

  

  

  

  

  

 

31.12.19

 

31.12.18

Classification

Internal UBS rating

Description

Moody’s Investors

Service

Standard & Poor’s

Fitch

 

CHF million

%

 

CHF million

%

  

0 and 1

Investment grade

Aaa

AAA

AAA

 

 23,331 

 8 

 

 27,988 

 10 

Low risk

2

 

Aa1 to Aa3

AA+ to AA–

AA+ to AA–

 

 11,960 

 4 

 

 18,523 

 6 

3

 

A1 to A3

A+ to A–

A+ to AA–

 

 2,027 

 1 

 

 2,452 

 1 

Medium risk

4

 

Baa1 to Baa2

BBB+ to BBB

BBB+ to BBB

 

 3,479 

 1 

 

 3,661 

 1 

5

 

Baa3

BBB–

BBB–

 

 928 

 0 

 

 1,674 

 1 

High risk

6

Sub-investment grade

Ba1

BB+

BB+

 

 544 

 0 

 

 416 

 0 

7

 

Ba2

BB

BB

 

 372 

 0 

 

 1,043 

 0 

8

 

Ba3

BB–

BB–

 

 37 

 0 

 

 52 

 0 

9

 

B1

B+

B+

 

 578 

 0 

 

 1,208 

 0 

Very high risk

10

 

B2

B

B

 

 97 

 0 

 

 271 

 0 

11

 

B3

B–

B–

 

 23 

 0 

 

 451 

 0 

12

 

Caa

CCC

CCC

 

 102 

 0 

 

 12 

 0 

13

 

Ca to C

CC to C

CC to C

 

 46 

 0 

 

 7 

 0 

Distressed

Default

Defaulted

D

D

D

 

 6 

 0 

 

 12 

 0 

Subtotal

 

 

 

 

 

 

 43,530 

 15 

 

 57,771 

 20 

Switzerland

  

  

  

  

  

 

 241,483 

 85 

 

 235,263 

 80 

Total assets

 

 

 

 

 

 

 285,014 

 100 

 

 293,034 

 100 

 

19 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 23  Assets and liabilities by the most significant currencies for the bank

 

 

31.12.19

CHF million

 

CHF

USD

EUR

GBP

other

Total

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and balances at central banks

 

 58,752 

 16 

 203 

 6 

 8 

 58,984 

Due from banks

 

 534 

 2,232 

 914 

 308 

 478 

 4,466 

Receivables from securities financing transactions

 

 1,494 

 356 

 9,019 

 1,267 

 0 

 12,136 

Due from customers

 

 14,136 

 15,068 

 8,501 

 1,111 

 759 

 39,575 

Mortgage loans

 

 150,927 

 1,604 

 58 

 0 

 1 

 152,591 

Trading portfolio assets

 

 10 

 21 

 20 

 0 

 1,628 

 1,679 

Derivative financial instruments

 

 2,085 

 0 

 0 

 0 

 0 

 2,085 

Financial investments

 

 1,202 

 9,044 

 1,372 

 218 

 93 

 11,928 

Accrued income and prepaid expenses

 

 83 

 82 

 20 

 3 

 2 

 189 

Investments in subsidiaries and other participations

 

 68 

 0 

 0 

 0 

 0 

 68 

Property, equipment and software

 

 372 

 0 

 0 

 0 

 0 

 372 

Goodwill and other intangible assets

 

 263 

 0 

 0 

 0 

 0 

 263 

Other assets

 

 409 

 233 

 22 

 6 

 7 

 678 

Total assets shown on the balance sheet

 

 230,335 

 28,655 

 20,128 

 2,919 

 2,976 

 285,014 

Delivery entitlements from spot exchange, forward forex and forex options transactions

 

 11,274 

 22,215 

 15,447 

 4,642 

 6,967 

 60,545 

Total assets

 

 241,609 

 50,871 

 35,576 

 7,561 

 9,943 

 345,559 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Due to banks

 

 22,833 

 2,955 

 515 

 133 

 908 

 27,344 

Payables from securities financing transactions

 

 29 

 499 

 18 

 1 

 0 

 547 

Due to customers

 

 172,679 

 23,506 

 25,963 

 3,742 

 5,803 

 231,693 

Trading portfolio liabilities

 

 50 

 128 

 65 

 115 

 13 

 371 

Derivative financial instruments

 

 1,092 

 0 

 0 

 0 

 0 

 1,092 

Loans from central mortgage institutions

 

 8,304 

 3 

 1 

 0 

 0 

 8,308 

Accrued expenses and deferred income

 

 706 

 32 

 9 

 0 

 0 

 748 

Other liabilities

 

 1,411 

 533 

 131 

 14 

 9 

 2,099 

Provisions

 

 124 

 9 

 7 

 0 

 0 

 139 

Total liabilities shown on the balance sheet

 

 207,229 

 27,665 

 26,710 

 4,005 

 6,733 

 272,341 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

 10 

 0 

 0 

 0 

 0 

 10 

General reserve

 

 11,624 

 0 

 0 

 0 

 0 

 11,624 

Net profit / (loss) for the period

 

 1,039 

 0 

 0 

 0 

 0 

 1,039 

Total equity shown in balance sheet

 

 12,673 

 0 

 0 

 0 

 0 

 12,673 

Total liabilities and equity shown on the balance sheet

 

 219,902 

 27,665 

 26,710 

 4,005 

 6,733 

 285,014 

Delivery obligations from spot exchange, forward forex and forex options transactions

 

 11,217 

 22,903 

 15,070 

 4,541 

 6,798 

 60,529 

Total equity and liabilities

 

 231,119 

 50,568 

 41,779 

 8,546 

 13,531 

 345,543 

Net position per currency as of 31 December 2019

 

 10,490 

 303 

 (6,204) 

 (984) 

 (3,588) 

 16 

Net position per currency as of 31 December 2018

 

 6,080 

 11,098 

 (13,833) 

 (1,005) 

 (2,327) 

 13 

 

 

 

20 

 

 

Note 24  Loans from central mortgage institutions

Contractual maturity of carrying amount

 

 

 

CHF million

 

2020

2021

2022

2023

2024

Thereafter

Total 31.12.19

Total 31.12.18

Non-subordinated debt

 

 

 

 

 

 

 

 

 

Fixed-rate

 

 732 

 995 

 823 

 920 

 981 

 3,858 

 8,308 

 8,434 

Interest rates (range in %)

 

0.0–2.8

0.1–2.4

0.1–3.4

0.1–2.2

0.1–2.4

0.1–2.8

 

 

Total

 

 732 

 995 

 823 

 920 

 981 

 3,858 

 8,308 

 8,434 

 

 

Note 25a  Share capital

 

 

31.12.19

 

31.12.18

 

 

Par value in CHF

Number of shares

of which: dividend bearing

 

Par value in CHF

Number of shares

of which: dividend bearing

Share capital1

 

 10,000,000 

 100,000,000 

 100,000,000 

 

 10,000,000 

 100,000,000 

 100,000,000 

of which: shares outstanding

 

 10,000,000 

 100,000,000 

 100,000,000 

 

 10,000,000 

 100,000,000 

 100,000,000 

1 Registered shares issued.

 

UBS Switzerland AG’s share capital is fully paid up. Each share has a par value of CHF 0.10 and entitles the holder to one vote at the UBS Switzerland AG shareholders’ meeting, if entered into the share register as having the right to vote, as well as a proportionate share of distributed dividends. UBS Switzerland AG does not apply any restrictions or limitations on the transferability of shares.


Non-distributable reserves

Non-distributable reserves consist of 50% of the share capital of UBS Switzerland AG, amounting to CHF 5 million as of 31 December 2019.

 

Note 25b  Significant shareholders

The sole direct shareholder of UBS Switzerland AG is UBS AG, which holds 100% of UBS Switzerland AG shares. These shares are entitled to voting rights. Indirect shareholders of UBS Switzerland AG, who do not have voting rights, include UBS Group AG, which holds 100% of UBS AG shares. Included in the table below are also 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 2019 or as of 31 December 2018.

The shares and share capital of UBS Switzerland AG held by indirect shareholders shown in the table below represent their relative holding of UBS Group AG shares.

®     Refer to Note 23 of the UBS Group AG standalone financial statements in the UBS Group AG Annual Report 2019 for more information on significant shareholders of UBS Group AG

 

 

 

 

31.12.19

 

31.12.18

CHF million, except where indicated

 

Share capital held

Shares held (%)

 

Share capital held

Shares held (%)

Significant direct shareholder of UBS Switzerland AG

 

 

 

 

 

 

UBS AG

 

 10 

 100 

 

 10 

 100 

Significant indirect shareholders of UBS Switzerland AG

 

 

 

 

 

 

UBS Group AG

 

 10 

 100 

 

 10 

 100 

Chase Nominees Ltd., London

 

 1 

 11 

 

 1 

 12 

DTC (Cede & Co.), New York1

 

 1 

 8 

 

 1 

 7 

Nortrust Nominees Ltd., London

 

 1 

 5 

 

 0 

 4 

1 DTC (Cede & Co.), New York, “The Depository Trust Company,” is a US securities clearing organization.

 

21 

UBS Switzerland AG standalone financial statements (audited) 

 

Note 26  Swiss pension plan

a) Liabilities related to Swiss pension plan

 

 

 

CHF million

 

31.12.19

31.12.18

Provision for Swiss pension plan

 

0

0

Bank accounts at UBS and UBS debt instruments held by Swiss pension fund

 

74

68

UBS derivative financial instruments held by Swiss pension fund

 

13

18

Total liabilities related to Swiss pension plan

 

87

86

 

 

 

 

b) Swiss pension plan

 

 

 

 

 

As of or for the year ended

CHF million

 

31.12.19

31.12.18

Pension plan surplus1

 

2,675

2,385

Economic benefit / (obligation) of UBS Switzerland AG

 

0

0

Change in economic benefit / (obligation) recognized in the income statement

 

0

0

Employer contributions in the period recognized in the income statement

 

183

204

Performance awards-related employer contributions accrued

 

25

28

Total pension expense recognized in the income statement within Personnel expenses

 

208

232

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 Switzerland AG in accordance with FER 16 both as of 31 December 2019 and 31 December 2018. Refer to Note 2 for more information.

 

The Swiss pension plan had no employer contribution reserve both as of 31 December 2019 and 31 December 2018.

Note 27  Related parties

Transactions with related parties are conducted at internally agreed transfer prices, at arm’s length or, with respect to loans, fixed advances and mortgages to non-independent members of the governing bodies in the ordinary course of business, on substantially the same terms and conditions that are available to other employees, including interest rates and collateral, and neither involve more than the normal risk of collectability nor contain any other unfavorable features for the firm. Independent members of the governing bodies are granted loans and mortgages in the ordinary course of business at general market conditions.

 

 

 

31.12.19

 

31.12.18

CHF million

 

Amounts due from

 

Amounts due to

 

Amounts due from

 

Amounts due to

Qualified shareholders1

 

 16,042 

 

 24,101 

 

 26,578 

 

 19,753 

of which: due from/to banks

 

 5,574 

 

 23,148 

 

 4,718 

 

 19,074 

of which: receivables / payables from securities financing transactions

 

 10,256 

 

 0 

 

 21,528 

 

 0 

of which: due from/to customers

 

 51 

 

 138 

 

 59 

 

 102 

Subsidiaries2

 

 142 

 

 52 

 

 36 

 

 4 

of which: due from/to customers

 

 141 

 

 52 

 

 34 

 

 4 

Affiliated entities3

 

 385 

 

 978 

 

 407 

 

 1,449 

of which: due from/to banks

 

 222 

 

 481 

 

 348 

 

 908 

of which: due from/to customers

 

 1 

 

 278 

 

 4 

 

 319 

Members of governing bodies4

 

 49 

 

 

 

 52 

 

 

Other related parties5

 

 950 

 

 96 

 

 533 

 

 

1 Qualified shareholders of UBS Switzerland AG are UBS Group AG and UBS AG.    2 Subsidiaries of UBS Switzerland AG are UBS Card Center AG, TopCard Service AG and UBS Hypotheken AG.    3 Affiliated entities of UBS Switzerland AG are all direct and indirect subsidiaries of UBS Group AG including subsidiaries of UBS AG.    4 Members of governing bodies consist of members of the Board of Directors and Group Executive Board of UBS Group AG and members of the Board of Directors and Executive Board of UBS Switzerland AG and UBS AG.    5 As of 31 December 2019, a guarantee of CHF 1,547 million is reported Off-balance sheet as a Contingent liability under credit guarantees and similar instruments.

 

22 

 

 

Note 28  Fiduciary transactions

CHF million

 

31.12.19

 

31.12.18

Fiduciary deposits

 

 55,520 

 

 31,280 

of which: placed with third-party banks

 

 15,461 

 

 13,035 

of which: placed with subsidiaries and affiliated entities

 

 40,059 

 

 18,245 

Total fiduciary transactions

 

 55,520 

 

 31,280 

 

Fiduciary transactions encompass transactions entered into or granted by UBS Switzerland 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 Switzerland AG’s balance sheet and income statement, but disclosed in this Note as off-balance sheet fiduciary transactions. Client deposits that are initially placed as fiduciary transactions with UBS Switzerland AG may be recognized on UBS Switzerland AG’s balance sheet in situations in which the deposit is subsequently placed within UBS Switzerland AG. In such cases, these deposits are not reported in the table above.

 

 

 

Note 29a  Invested assets and net new money

 

 

As of or for the year ended

CHF billion

 

31.12.19

 

31.12.18

Fund assets managed

 

 0 

 

 0 

Discretionary assets

 

 103 

 

 96 

Other invested assets

 

 513 

 

 458 

Total invested assets (double counts included)

 

 616 

 

 554 

of which: double counts

 

 0 

 

 0 

Net new money (double counts included)

 

 18 

 

 8 

 

Note 29b  Development of invested assets

CHF billion

 

31.12.19

 

31.12.18

Total invested assets (including double counts) at the beginning of the year

 

 554 

 

 586 

Net new money inflows / (outflows)

 

 18 

 

 8 

Market movements (including dividends and interests)

 

 56 

 

 (34) 

Currency effects

 

 (7) 

 

 (5) 

Other effects

 

 (5) 

 

 0 

of which: acquisitions / (divestments)

 

 0 

 

 0 

Total invested assets (including double counts) at the end of the year1

 

 616 

 

 554 

1 As of 31 December 2019 and 31 December 2018 there were no invested assets double counts.

 

®     Refer to Note 36 of the UBS Group AG consolidated financial statements in the UBS Group AG Annual Report 2019 for more information

23 

UBS Switzerland AG standalone financial statements (audited) 

24 

 

25 

 

26 

 

UBS Switzerland AG standalone
regulatory information

27 

UBS Switzerland AG standalone regulatory information 

UBS Switzerland AG standalone regulatory information

Key metrics

The table below is based on the Basel Committee on Banking Supervision (the BCBS) Basel III rules.

During the fourth quarter of 2019, common equity tier 1 (CET1) capital remained stable. Risk-weighted assets (RWA) increased by CHF 1.7 billion to CHF 99.7 billion, primarily due to an increase in the Basel I RWA floor. Leverage ratio exposure decreased by CHF 7 billion, mainly due to a decrease of on-balance sheet exposures from securities financing transactions.


Average high-quality liquid assets increased by CHF 2.3 billion as a result of greater average cash balances, reflecting a reduction in secured financing transactions, partly offset by decreased customer deposits. Average total net cash outflows increased by CHF 2.3 billion, reflecting greater average outflows from intercompany transactions.

 

KM1: Key metrics

 

 

 

 

 

 

 

 

 

 

CHF million, except where indicated

 

 

 

31.12.19

 

30.9.19

 

30.6.19

 

31.3.19

 

31.12.18

Available capital (amounts)

 

 

 

 

 

 

 

 

 

 

1

Common equity tier 1 (CET1)

 

 10,895 

 

 10,875 

 

 10,654 

 

 10,463 

 

 10,225 

1a

Fully loaded ECL accounting model CET11

 

 10,890 

 

 10,871 

 

 10,649 

 

 10,457 

 

 10,225 

2

Tier 1

 

 15,606 

 

 15,124 

 

 14,894 

 

 14,712 

 

 14,468 

2a

Fully loaded ECL accounting model tier 11

 

 15,601 

 

 15,120 

 

 14,889 

 

 14,706 

 

 14,468 

3

Total capital

 

 15,606 

 

 15,124 

 

 14,894 

 

 14,712 

 

 14,468 

3a

Fully loaded ECL accounting model total capital1

 

 15,601 

 

 15,120 

 

 14,889 

 

 14,706 

 

 14,468 

Risk-weighted assets (amounts)

 

 

 

 

 

 

 

 

 

 

4

Total risk-weighted assets (RWA)

 

 99,667 

 

 97,927 

 

 96,640 

 

 96,067 

 

 95,646 

4a

Minimum capital requirement2

 

 7,973 

 

 7,834 

 

 7,731 

 

 7,685 

 

 7,652 

4b

Total risk-weighted assets (pre-floor)

 

 89,234 

 

 90,338 

 

 91,013 

 

 90,068 

 

 91,457 

Risk-based capital ratios as a percentage of RWA

 

 

 

 

 

 

 

 

 

 

5

Common equity tier 1 ratio (%)

 

 10.93 

 

 11.10 

 

 11.02 

 

 10.89 

 

 10.69 

5a

Fully loaded ECL accounting model CET1 ratio (%)1

 

 10.93 

 

 11.10 

 

 11.02 

 

 10.89 

 

 10.69 

6

Tier 1 ratio (%)

 

 15.66 

 

 15.44 

 

 15.41 

 

 15.31 

 

 15.13 

6a

Fully loaded ECL accounting model tier 1 ratio (%)1

 

 15.65 

 

 15.44 

 

 15.41 

 

 15.31 

 

 15.13 

7

Total capital ratio (%)

 

 15.66 

 

 15.44 

 

 15.41 

 

 15.31 

 

 15.13 

7a

Fully loaded ECL accounting model total capital ratio (%)1

 

 15.65 

 

 15.44 

 

 15.41 

 

 15.31 

 

 15.13 

Additional CET1 buffer requirements as a percentage of RWA3

 

 

 

 

 

 

 

 

 

 

8

Capital conservation buffer requirement (2.5% from 2019) (%)

 

 2.50 

 

 2.50 

 

 2.50 

 

 2.50 

 

 1.88 

9

Countercyclical buffer requirement (%)

 

 0.01 

 

 0.01 

 

 0.01 

 

 0.01 

 

 0.01 

9a

Additional countercyclical buffer for Swiss mortgage loans (%)

 

 0.57 

 

 0.57 

 

 0.57 

 

 0.58 

 

 0.56 

10

Bank G-SIB and/or D-SIB additional requirements (%)4

 

 

 

 

 

 

 

 

 

 

11

Total of bank CET1-specific buffer requirements (%)

 

 2.51 

 

 2.51 

 

 2.51 

 

 2.51 

 

 1.88 

12

CET1 available after meeting the bank’s minimum capital requirements (%)

 

 6.43 

 

 6.60 

 

 6.52 

 

 6.39 

 

 6.19 

Basel III leverage ratio

 

 

 

 

 

 

 

 

 

 

13

Total Basel III leverage ratio exposure measure

 

 302,304 

 

 309,750 

 

 311,212 

 

 310,545 

 

 306,487 

14

Basel III leverage ratio (%)

 

 5.16 

 

 4.88 

 

 4.79 

 

 4.74 

 

 4.72 

14a

Fully loaded ECL accounting model Basel III leverage ratio (%)1

 

 5.16 

 

 4.88 

 

 4.78 

 

 4.74 

 

 4.72 

Liquidity coverage ratio5

 

 

 

 

 

 

 

 

 

 

15

Total HQLA

 

 67,105 

 

 64,835 

 

 67,160 

 

 71,392 

 

 67,427 

16

Total net cash outflow

 

 51,561 

 

 49,242 

 

 48,761 

 

 51,945 

 

 52,846 

17

LCR (%)

 

 130 

 

 132 

 

 138 

 

 137 

 

 128 

1 The fully loaded ECL accounting model excludes the transitional relief of recognizing ECL allowances and provisions in CET1 capital in accordance with FINMA Circular 2013/1 “Eligible capital – banks.”    2 Calculated as 8% of total RWA, based on total capital minimum requirements, excluding CET1 buffer requirements.    3 As Annex 8 of the Swiss Capital Adequacy Ordinance (the CAO) does not apply to the systemically relevant banks, we can abstain from disclosing the information required in lines 12a–12e. We nevertheless provides information about the Swiss sector-specific countercyclical buffer in row 9a pursuant to Art. 44 CAO.    4 Swiss SRB going concern requirements and information for UBS Switzerland AG are provided on the next page.    5 Calculated based on quarterly average. Refer to “Liquidity coverage ratio” in this section for more information.

 

 

28 

 

Swiss SRB going and gone concern requirements and information

UBS Switzerland AG is considered a systemically relevant bank (SRB) under Swiss banking law and is subject to capital regulations on a standalone basis. As of 31 December 2019, the transitional going concern capital and leverage ratio requirements for UBS Switzerland AG standalone were 13.98%, including a countercyclical buffer of 0.58%, and 4.5%, respectively. The gone concern requirements under transitional arrangements were 9.51% for the RWA-based requirement and 3.27% for the LRD-based requirement.


The Swiss SRB framework and requirements applicable to UBS Switzerland AG standalone are consistent with those applicable to UBS Group AG consolidated and are described
in the “Capital management” section of our Annual Report 2019, available under “Annual reporting” at www.ubs.com/investors.  

®     Refer to “Regulatory framework” in the “Capital Management” section of the UBS Group AG Annual Report 2019 for more information about loss-absorbing capacity, leverage ratio requirements and gone concern rebate

®     Refer to “Additional information” in the “Capital Management” section of the UBS Group AG Annual Report 2019 for more information about the joint liability of UBS AG and UBS Switzerland AG

 

 

Swiss SRB going and gone concern requirements and information

 

 

Swiss SRB, including transitional arrangements

 

Swiss SRB as of 1.1.20

As of 31.12.19

 

RWA

LRD

 

RWA

LRD

CHF million, except where indicated

 

in %1

 

in %

 

 

in %

 

in %

 

Required going concern capital

 

 

 

 

 

 

 

 

 

 

Total going concern capital

 

 13.98 

 13,937 

 4.50 

 13,604 

 

 14.522

 14,475 

 4.882

 14,737 

Common equity tier 1 capital

 

 10.08 

 10,050 

 3.20 

 9,674 

 

 10.22 

 10,189 

 3.38 

 10,203 

of which: minimum capital

 

 4.90 

 4,884 

 1.70 

 5,139 

 

 4.50 

 4,485 

 1.50 

 4,535 

of which: buffer capital

 

 4.60 

 4,585 

 1.50 

 4,535 

 

 5.14 

 5,123 

 1.88 

 5,668 

of which: countercyclical buffer

 

 0.58 

 582 

 

 

 

 0.58 

 582 

 

 

Maximum additional tier 1 capital

 

 3.90 

 3,887 

 1.30 

 3,930 

 

 4.30 

 4,286 

 1.50 

 4,535 

of which: additional tier 1 capital

 

 3.10 

 3,090 

 1.30 

 3,930 

 

 3.50 

 3,488 

 1.50 

 4,535 

of which: additional tier 1 buffer capital

 

 0.80 

 797 

 

 

 

 0.80 

 797 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eligible going concern capital

 

 

 

 

 

 

 

 

 

 

Total going concern capital

 

 15.66 

 15,606 

 5.16 

 15,606 

 

 15.66 

 15,606 

 5.16 

 15,606 

Common equity tier 1 capital

 

 10.93 

 10,895 

 3.60 

 10,895 

 

 10.93 

 10,895 

 3.60 

 10,895 

Total loss-absorbing additional tier 1 capital

 

 4.73 

 4,711 

 1.56 

 4,711 

 

 4.73 

 4,711 

 1.56 

 4,711 

of which: high-trigger loss-absorbing additional tier 1 capital

 

 4.73 

 4,711 

 1.56 

 4,711 

 

 4.73 

 4,711 

 1.56 

 4,711 

 

 

 

 

 

 

 

 

 

 

 

Required gone concern capital

 

 

 

 

 

 

 

 

 

 

Total gone concern loss-absorbing capacity

 

 9.51 

 9,483 

 3.27 

 9,882 

 

 8.64 

 8,614 

 3.02 

 9,137 

of which: base requirement

 

 10.52 

 10,485 

 3.63 

 10,959 

 

 12.86 

 12,817 

 4.50 

 13,604 

of which: additional requirement for market share and LRD

 

 0.81 

 807 

 0.28 

 850 

 

 1.08 

 1,076 

 0.38 

 1,134 

of which: applicable reduction on requirements3

 

 (1.82) 

 (1,810) 

 (0.64) 

 (1,927) 

 

 (5.30) 

 (5,280) 

 (1.85) 

 (5,600) 

 

 

 

 

 

 

 

 

 

 

 

Eligible gone concern capital

 

 

 

 

 

 

 

 

 

 

Total gone concern loss-absorbing capacity

 

 10.95 

 10,915 

 3.61 

 10,915 

 

 10.95 

 10,915 

 3.61 

 10,915 

TLAC-eligible debt

 

 10.95 

 10,915 

 3.61 

 10,915 

 

 10.95 

 10,915 

 3.61 

 10,915 

 

 

 

 

 

 

 

 

 

 

 

Total loss-absorbing capacity

 

 

 

 

 

 

 

 

 

 

Required total loss-absorbing capacity

 

 23.50 

 23,420 

 7.77 

 23,485 

 

 23.17 

 23,089 

 7.90 

 23,874 

Eligible total loss-absorbing capacity

 

 26.61 

 26,521 

 8.77 

 26,521 

 

 26.61 

 26,521 

 8.77 

 26,521 

1 The total loss-absorbing capacity ratio requirement of 23.50% is the current requirement based on the transitional rules of the Swiss Capital Adequacy Ordinance including the rebate on the gone concern requirements. In addition, FINMA has defined a total capital ratio requirement, which is the sum of 14.4% and the effect of countercyclical buffer (CCyB) requirements of 0.58%, of which 10% plus the effect of CCyB requirements must be satisfied with CET1 capital.    2 Includes applicable add-ons of 1.08% for RWA and 0.375% for LRD.    3 The rebate granted for Swiss SRBs including transitional arrangements was 42.5% of the maximum rebate, whereas the rebate granted for Swiss SRBs as of 1 January 2020 is 38% of UBS Group AG’s gone concern requirement before applicable reductions.

 

29 

UBS Switzerland AG standalone regulatory information 

Swiss SRB loss-absorbing capacity

 

Swiss SRB going and gone concern information1

CHF million, except where indicated

 

31.12.19

 

30.9.19

31.12.18

 

 

 

 

 

 

Eligible going concern capital

 

 

 

 

 

Total going concern capital

 

 15,606 

 

 15,124 

 14,468 

Total tier 1 capital

 

 15,606 

 

 15,124 

 14,468 

Common equity tier 1 capital

 

 10,895 

 

 10,875 

 10,225 

of which: high-trigger loss-absorbing additional tier 1 capital

 

 4,711 

 

 4,249 

 4,243 

 

 

 

 

 

 

Eligible gone concern capital

 

 

 

 

 

Total gone concern loss-absorbing capacity

 

 10,915 

 

 10,948 

 10,932 

TLAC-eligible debt

 

 10,915 

 

 10,948 

 10,932 

 

 

 

 

 

 

Total loss-absorbing capacity

 

 

 

 

 

Total loss-absorbing capacity

 

 26,521 

 

 26,072 

 25,400 

 

 

 

 

 

 

Risk-weighted assets / leverage ratio denominator

 

 

 

 

 

Risk-weighted assets

 

 99,667 

 

 97,927 

 95,646 

Leverage ratio denominator

 

 302,304 

 

 309,750 

 306,487 

 

 

 

 

 

 

Capital and loss-absorbing capacity ratios (%)

 

 

 

 

 

Going concern capital ratio

 

 15.7 

 

 15.4 

 15.1 

of which: common equity tier 1 capital ratio

 

 10.9 

 

 11.1 

 10.7 

Gone concern loss-absorbing capacity ratio

 

 11.0 

 

 11.2 

 11.4 

Total loss-absorbing capacity ratio

 

 26.6 

 

 26.6 

 26.6 

 

 

 

 

 

 

Leverage ratios (%)

 

 

 

 

 

Going concern leverage ratio

 

 5.2 

 

 4.9 

 4.7 

of which: common equity tier 1 leverage ratio

 

 3.6 

 

 3.5 

 3.3 

Gone concern leverage ratio

 

 3.6 

 

 3.5 

 3.6 

Total loss-absorbing capacity leverage ratio

 

 8.8 

 

 8.4 

 8.3 

1 The numbers disclosed in the table are identical for Swiss SRB (including transitional arrangement) requirements and Swiss SRB requirements applicable as of 1 January 2020.

 

 

Reconciliation of Swiss banking law equity to Swiss SRB common equity tier 1 capital

CHF billion

31.12.19

31.12.18

Equity – Swiss banking law1

 12.7 

 13.8 

Deferred tax assets

 0.1 

 0.2 

Goodwill and intangible assets

 (0.3) 

 (1.3) 

Accruals for proposed dividends to shareholders

 (1.3) 

 (2.2) 

Other

 (0.3) 

 (0.3) 

Common equity tier 1 capital

 10.9 

 10.2 

1 Equity under Swiss banking law is adjusted to derive equity in accordance with IFRS and then further adjusted to derive common equity tier 1 (CET1) capital in accordance with Swiss SRB requirements.   

 

30 

 

Leverage ratio information

 

Swiss SRB leverage ratio denominator

CHF billion

 

31.12.19

31.12.18

Leverage ratio denominator

 

 

 

Swiss GAAP total assets

 

 285.0 

 293.0 

Difference between Swiss GAAP and IFRS total assets

 

 3.6 

 1.8 

Less: derivative exposures and SFTs1

 

 (17.3) 

 (32.5) 

On-balance sheet exposures (excluding derivative exposures and SFTs)

 

 271.3 

 262.3 

Derivative exposures

 

 4.4 

 3.7 

Securities financing transactions

 

 12.7 

 28.5 

Off-balance sheet items

 

 14.2 

 12.4 

Items deducted from Swiss SRB tier 1 capital

 

 (0.3) 

 (0.5) 

Total exposures (leverage ratio denominator)

 

 302.3 

 306.5 

1 Consists of derivative financial instruments, cash collateral receivables on derivative instruments, receivables from securities financing transactions, and margin loans as well as prime brokerage receivables and financial assets at fair value not held for trading, both related to securities financing transactions, in accordance with the regulatory scope of consolidation, which are presented separately under Derivative exposures and Securities financing transactions in this table.

 

 

 

BCBS Basel III leverage ratio

CHF million, except where indicated

 

31.12.19

30.9.19

30.6.19

31.3.19

31.12.18

Total tier 1 capital

 

 15,606 

 15,124 

 14,894 

 14,712 

 14,468 

Total exposures (leverage ratio denominator)

 

 302,304 

 309,750 

 311,212 

 310,545 

 306,487 

BCBS Basel III leverage ratio (%)

 

 5.2 

 4.9 

 4.8 

 4.7 

 4.7 

 

 

Liquidity coverage ratio

UBS Switzerland AG, as a Swiss SRB, is required to maintain a minimum liquidity coverage ratio of 100%.

 

 

Liquidity coverage ratio

 

 

 

 

 

Weighted value1

CHF billion, except where indicated

 

Average 4Q192

Average 4Q182

High-quality liquid assets

 

 67 

 67 

Total net cash outflows

 

 52 

 53 

of which: cash outflows

 

 84 

 86 

of which: cash inflows

 

 33 

 34 

Liquidity coverage ratio (%)

 

 130 

 128 

1 Calculated after the application of haircuts and inflow and outflow rates.    2 Calculated based on an average of 64 data points in the fourth quarter of 2019 and 64 data points in the fourth quarter of 2018.

 

 

 

31 

UBS Switzerland AG standalone regulatory information 

Capital instruments

 

Capital instruments of UBS Switzerland AG – key features

 

 

 

Presented according to issuance date.

 

 

 

 

Share capital

 

Additional tier 1 capital

 

1

Issuer

 

UBS Switzerland AG, Switzerland

 

UBS Switzerland AG, Switzerland

UBS Switzerland AG, Switzerland

UBS Switzerland AG, Switzerland

UBS Switzerland AG, Switzerland

UBS Switzerland AG, Switzerland

UBS Switzerland AG, Switzerland

1a

Instrument number

 

1

 

 2 

 3 

 4 

5

6

7

2

Unique identifier (e.g., CUSIP, ISIN or Bloomberg identifier for private placement)

 

-

 

-

3

Governing law(s) of the instrument

 

Swiss

 

Swiss

3a

Means by which enforceability requirement of Section 13 of the TLAC Term Sheet is achieved (for other TLAC-eligible instruments governed by foreign law)

 

n/a

 

n/a

 

Regulatory treatment

 

 

 

 

 

 

 

 

 

4

Transitional Basel III rules1

 

CET1 – Going concern capital

 

Additional tier 1 capital

5

Post-transitional Basel III rules2

 

CET1 – Going concern capital

 

Additional tier 1 capital

6

Eligible at solo / group / group and solo

 

UBS Switzerland AG consolidated and standalone

 

UBS Switzerland AG consolidated and standalone

7

Instrument type (types to be specified by each jurisdiction)

 

Ordinary shares

 

Loan4

8

Amount recognized in regulatory capital (currency in millions, as of most recent reporting date)1

 

CHF 10.0

 

CHF 1,500

CHF 500

CHF 1,000

CHF 825

USD 425

CHF 475

9

Par value of instrument

 

CHF 10.0

 

CHF 1,500

CHF 500

CHF 1,000

CHF 825

USD 425

CHF 475

10

Accounting classification3

 

Equity attributable to UBS Switzerland AG shareholders

 

Due to banks held at amortized cost

11

Original date of issuance

 

–

 

1 April 2015

11 March 2016

18 December 2017

12 December 2018

12 December 2018

11 December 2019

12

Perpetual or dated

 

–

 

Perpetual

13

Original maturity date

 

–

 

–

14

Issuer call subject to prior supervisory approval

 

–

 

Yes

15

Optional call date, contingent call dates and redemption amount

 

–

 

First optional repayment date:

1 April 2020

First optional repayment date:

11 March 2021

First optional repayment date:

18 December 2022

First optional repayment date:

12 December 2023

 

First optional repayment date:

12 December 2023

 

First optional repayment date:

11 December 2024

 

 

Repayable at any time after the first optional repayment date.

Repayment subject to FINMA approval. Optional repayment amount: principal amount, together with any accrued and unpaid interest thereon

16

 Subsequent call dates, if applicable

 

–

 

Early repayment possible due to a tax or regulatory event. Repayment due to tax event subject to FINMA approval.

Repayment amount: principal amount, together with accrued and unpaid interest

 

 

 

32 

 

 

Capital instruments of UBS Switzerland AG – key features (continued)

 

 

 

 

Coupons

 

 

 

 

 

 

 

 

 

17

Fixed or floating dividend / coupon

 

–

 

Floating

18

Coupon rate and any related index

 

–

 

6-month CHF Libor + 

370 bps per annum

semiannually

3-month CHF Libor

+ 

459 bps per annum

quarterly

3-month CHF Libor + 

250 bps per annum

quarterly

3-month CHF Libor

+

489 bps per annum

quarterly

3-month USD Libor

+

547 bps per annum

quarterly

3-month CHF Libor

+

433 bps per annum

quarterly

19

Existence of a dividend stopper

 

–

 

No

20

Fully discretionary, partially discretionary or mandatory

 

Fully discretionary

 

Fully discretionary

21

Existence of step-up or other incentive to redeem

 

–

 

No

22

Non-cumulative or cumulative

 

Non-cumulative

 

Non-cumulative

23

Convertible or non-convertible

 

–

 

Non-convertible

24

If convertible, conversion trigger(s)

 

–

 

–

25

If convertible, fully or partially

 

–

 

–

26

If convertible, conversion rate

 

–

 

–

27

If convertible, mandatory or optional conversion

 

–

 

–

28

If convertible, specify instrument type convertible into

 

–

 

–

29

If convertible, specify issuer of instrument it converts into

 

–

 

–

30

Write-down feature

 

–

 

Yes

31

If write-down, write-down trigger(s)

 

–

 

Trigger: CET1 ratio is less than 7%

 

 

FINMA determines a write-down necessary to ensure UBS Switzerland AG’s viability; or UBS Switzerland AG receives a commitment of governmental support that FINMA determines necessary to ensure UBS Switzerland AG‘s viability.

Subject to applicable conditions

32

If write-down, fully or partially

 

–

 

Fully 

33

If write-down, permanent or temporary

 

–

 

Permanent

34

If temporary write-down, description of write-up mechanism

 

–

 

–

34a

Type of subordination

 

Statutory

 

Contractual

35

Position in subordination hierarchy in liquidation (specify instrument type immediately

senior to instrument in the insolvency creditor hierarchy of the legal entity concerned).

 

Unless otherwise stated in the articles of association, once debts are paid back, the assets of the liquidated company are divided between the shareholders pro rata based on their contributions and considering the preferences attached to certain categories of shares (Art. 745, Swiss Code of Obligations)

 

Subject to any obligations that are mandatorily preferred by law, all obligations of UBS Switzerland AG that are unsubordinated or that are subordinated and do not rank junior, such as all classes of share capital, or at par, such as tier 1 instruments

36

Non-compliant transitioned features

 

–

 

–

37

If yes, specify non-compliant features

 

–

 

–

1 Based on Swiss SRB (including transitional arrangement) requirements.    2 Based on Swiss SRB requirements applicable as of 1 January 2020.    3 As applied in UBS Switzerland AG‘s financial statements under Swiss GAAP.    4 Loans granted by UBS AG, Switzerland.

 

  

33 

UBS Switzerland AG standalone regulatory information 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notice to investors | This report and the information contained herein are provided solely for information purposes, and are not to be construed as solicitation 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 Annual Report 2019, available at www.ubs.com/investors, for additional information.

Rounding | Numbers presented throughout this report may not add up precisely to the totals provided in the tables and text. Percentages, percent changes, and adjusted results are calculated on the basis of unrounded figures. Information about absolute changes between reporting periods, which is provided in text and which can be derived from figures displayed in the tables, is calculated on a rounded basis.

Tables | Within tables, blank fields generally indicate that the field is not applicable or not meaningful, or that information is not 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. Percentage changes are presented as a mathematical calculation of the change between periods.

 

 

34 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UBS Group AG

P.O. Box

CH-8098 Zurich 

 

www.ubs.com 

 

 

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.

 

 

UBS Group AG

 

 

 

By: _/s/ Todd Tuckner___________ 

      Name: Todd Tuckner

      Title: Group Controller and

            Chief Accounting Officer

 

 

By: _/s/ David Kelly _____________ 

      Name:  David Kelly

Title:    Managing Director

 

 

 

UBS AG

 

 

 

By: _/s/ Todd Tuckner___________ 

      Name: Todd Tuckner

      Title: Group Controller and

            Chief Accounting Officer

 

 

By: _/s/ David Kelly _____________ 

Name:  David Kelly

Title:    Managing Director

 

 

 

 

 

 

 

 

Date:  February 28, 2020

 

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