UBS Group AG

ladies and gentlemen good morning welcome to the first quarter 2021 results presentation the conference must not be recorded for publication or broadcast you can register for questions at any time by pressing star and one on your telephone should you need operator assistance please press star and zero at this time it's my pleasure to hand over to mr martin ozinga ubs investor relations please go ahead sir

Good morning and welcome, everyone. As usual, I will draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to our SEC filings, including the risk factors in our 2020 annual report. On slide two, you can see our agenda for today. It's now my pleasure to hand over to Ralph Hammers, Group CEO.

Thank you, Martin. Good morning, everyone. Welcome to the first quarter results. I hope you and your families remain safe and healthy. When we had our last update call three months ago, we said that our first priority coming into 2021 would be to build on our momentum by remaining laser focused on our clients. And as you can see by our results in the first quarter, we did just that. Client activity was high across the businesses. They continue to draw, the clients really continue to draw on us for trusted advice and relevant solutions. This resulted in record assets in wealth and asset management, record loan balances and transaction-based revenues in wealth management. But before I go into the results for the quarter, I'd like to first to cover a idiosyncratic situation that took place in the second half of March. The default of a prime brokerage client led us to incurring a $774 million trading loss. And the net profit impact for the quarter was $434 million. We subsequently risk-managed the tail of the exposure and closed all remaining positions in April, which has led to a $87 million trading loss in the second quarter. We're clearly disappointed by this, and we're taking this very seriously. One of the reasons that UBS has a balance sheet for all seasons is to handle unforeseen events, although this is not the kind of event we ever want to have. This buffer served us, our clients also, because we were able to continue with our plan and with our program and our growth. and providing credit and execution well through the pandemic, but also through this event. And in the first quarter of this year, despite this loss, we further increased our CT1 capital ratio to 14%. And that's a true testimony to the strength of our franchise and the results in the first quarter. The earnings power in the regional and business diversification further adds to that resilience In the first quarter, we made a return on CT1 capital of 18%. Also, the investment bank produced a double-digit return on attributed equity even after this loss. Speaking for the management team and myself, while we can't say there will ever be an unexpected loss, as risk is part of our business, we can assure you that will be transparent about mistakes. We'll fix them. We'll learn from them. The organization came together quickly to risk manage this challenging situation in a very constructive way. But equally, there are lessons to learn from this. We're reviewing our prime brokerage relationships, have already improved some of our risk controls. At the same time, prime brokerage remains strategically important for UBS. for our clients, and there's also for the investment bank. We're also open to dialogues with regulators on potential changes that could improve the market transparency around some of these businesses. So lessons being drawn, lessons learned being implemented as we speak. Now with that, let's continue our review of what we do best, which is serving our clients around the world. I'm now turning to the next slide. The backdrop of this first quarter was one of great investor optimism, improved economic indicators, constructive market sentiment. With long-term dollar interest rates off their historical lows, momentum shifted from growth to value stocks, and fixed income assets came under pressure, as you've all seen. We advise our clients how best to position their portfolio for that environment. through investment solutions, financing, underwriting, execution with strong results, which you can all see on this slide right here. We saw strong net assets flows across our businesses. In the institutional segment, low or negative rates continue to drive demand for alternative and emerging markets. We also continue to capitalize on our position as a leader across the global frontier of sustainable investing. wealth management clients remain active with record transaction revenues fee generating assets and loan balances in the quarter as you can see here as well on the swiss side the swiss economy is holding up quite well in the face of the continued covet measures with robust loan and deposit growth in our swiss business the persistent negative rate environment means personal clients are increasingly using our investment platform to invest access deposits for a return and meanwhile corporate institutions are taking advantage of the positive funding environment and we're helping them to do so. Equity capital markets had one of its best quarters on record. Turning to the next slide, here you can see that investments are truly at the core of our DNA. Our investment ecosystem is a cornerstone of our strategy and I will explain you more when I give you our strategy update You see the invested assets growing year-on-year by 33% here. The separate managed accounts initiative that we launched between wealth and asset management last year continued also this quarter to attract assets. I think it is a textbook example of what we can achieve for our clients and shareholders when we work together to deliver the best of UBS to our clients. It's a great springboard to build out our customized offerings as well. Demand for sustainable products continues to be high. That trend continues. Our flagship, as I mentioned, attracting another 5 billion of inflows in a quarter. Some of this is driven by MyWay. That's our easy-to-use, modular, and personalized discretionary mandate offering. This quarter, we successfully launched this product outside of Switzerland as well. and we aim to scale it quickly. In asset management, sustainable strategies were once again a driving force behind a very strong net new money quarter, attracting 8 billion of net inflows just in that category. Now, this continued momentum with clients combined with a positive market backdrop, as I said, resulted in the financial results, as you can see on slide six. Operating income growth of 10% broad-based across regions, across divisions, and that drove an 18% return on CT1 capital. We strengthened our balance sheet, increased our capital ratios, and repurchased $1.1 billion of shares. And these results, again, demonstrate the strength of our franchise as we're refreshing our strategy to unlock UBS full potential. But before I go to my strategy, let me over to Kurt, who will give you some more details on our performance in this quarter.