• Net Profit: $1.7 billion for the first quarter.
• Return on CET1 Capital: 11.3%.
• Net New Inflows: $32 billion in Global Wealth Management and $7 billion in Asset Management.
• Group Profit Before Tax: $2.6 billion, down 1% year-on-year.
• Group Revenues: $12 billion, broadly flat year-on-year.
• Operating Expenses: $9.2 billion.
• Earnings Per Share (EPS): $0.51.
• Cost/Income Ratio: 77.4%.
• CET1 Capital Ratio: 14.3%.
• Risk-Weighted Assets: Reduced by $15 billion sequentially.
• Global Wealth Management Pretax Profit: $1.5 billion, up 21% year-over-year.
• Investment Bank Pretax Profit: $696 million, up 72% year-over-year.
• Asset Management Pretax Profit: $208 million, up 15% year-on-year.
• Personal and Corporate Banking Pretax Profit: CHF 597 million, down 23% year-on-year.
• Noncore and Legacy Pretax Loss: $200 million.
• Loan-to-Deposit Ratio: 80%.
• Credit Loss Expenses: $100 million.
• Net Interest Income (GWM): $1.5 billion, down 4% year-over-year.
• Employee Count: 126,000, down 2% sequentially.

• Warning! GuruFocus has detected 1 Warning Sign with UBS.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UBS Group AG (NYSE:UBS) reported a strong first-quarter net profit of $1.7 billion, with an underlying return on CET1 capital of 11.3%.
• The company saw robust net new inflows, including $32 billion in Global Wealth Management and $7 billion in asset management.
• UBS Group AG (NYSE:UBS) achieved double-digit pretax growth in global wealth management, asset management, and the investment bank.
• The integration of Credit Suisse is progressing well, with significant cost savings and operational efficiencies realized.
• The company's balance sheet remains strong, with a CET1 capital ratio of 14.3%, supporting its capital return objectives for 2025.

Negative Points

• Market volatility and uncertainty, particularly due to potential changes in US tariffs, pose risks to global growth and investor sentiment.
• The Personal and Corporate Banking division experienced a 23% decline in pretax profit due to lower interest rates.
• Net interest income in Global Wealth Management decreased by 4% year-over-year, impacted by declining rates in Swiss franc and euro.
• The company faces challenges in maintaining its cost/income ratio targets amid fluctuating interest rate environments.
• UBS Group AG (NYSE:UBS) is constrained by leverage rather than risk-weighted assets, limiting optimization opportunities.

Q & A Highlights

Q: The fact that you're accruing the whole of the 2025 share buyback suggests that you intend to do that almost regardless of what the draft rules look like when they're published in June. Is that a fair interpretation? Also, how are your wealth management clients reacting post the US tariffs? A: No, it's not a fair interpretation. Our language hasn't changed. We are accruing based on our strong performance and capital position, but this is subject to financial targets and any immediate regulatory changes. Regarding client activity, we saw a spike in early April, but recent days show a more normalized environment with a wait-and-see attitude.

Q: There is releveraging in Asia. Has this continued in April, or was it only a Q1 phenomenon? Also, any updates on capital developments? A: The releveraging in Asia is part of our strategic focus to grow lending selectively and profitably. We can't speculate on future movements given the current environment. Regarding capital, the updated timeline for the proposal is now expected in the first week of June, and we are in a wait-and-see mode.

Q: Could you provide more insights on the strategic changes in US Wealth Management, particularly regarding adviser numbers and net new flows? A: We are executing our strategy to achieve a mid-teen pretax margin over two to three years. Our platform is stable, and there's broad support for aligning adviser incentives with strategic goals. We have a robust recruiting pipeline, and while there's some industry-wide attrition, our same-store net new money is strong.

Q: The parent bank's fully loaded CET1 ratio was down by about 60 basis points during the quarter. What caused this? Also, with risk density coming down, are you more constrained by leverage than risk-weighted assets? A: The reduction in the CET1 ratio is due to the accrual of a dividend expected to be paid in 2026. While we are more constrained by leverage, our key target remains the CET1 capital ratio on a risk-weighted basis. We have optimized RWA, but leverage offers less room for optimization.

Q: Can you elaborate on the India partnership and the onshore-offshore dynamics in emerging markets? Also, markets are pricing negative rates in Switzerland. How does this affect your cost-to-income ratio target? A: We see growth opportunities in India and have partnered with an independent asset gatherer to leverage future growth. Regarding negative rates, we see potential upside in our net interest income. We continue to execute against our cost/income ratio targets, and our expectations remain unchanged.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.