UBS Group AG

Thank you. Good morning. Welcome, everyone. First, I want to draw your attention to our cautionary statement slide at the back of today's presentation. These also refer to the risk factors in our 2020 annual report, together with additional disclosures in our SEC filings. Moving to slide two, our agenda for today, and it's now my pleasure to hand over to Ralph Hammers, Group CEO. Thank you, Marcin.

And everybody on the line, welcome. Thanks for joining us this morning. Hey, it's a good quarter, you will see. We're fueling growth today, but also for tomorrow. Across the board, our clients are benefiting from our trusted advice, quality execution, and our growing ecosystem. Our strategic initiatives are working, and our investments are paying off. So for the quarter, we delivered a $2.3 billion in net profit. The highest in almost 15 years, and our return on CC1 capital was over 20%. So we're making good progress on our strategic refresh as well, and we'll give you an update on this shortly in this presentation. Turning to the next slide, just looking across, you see the market and economic backdrop were broadly positive in the third quarter. Although there was some recent uncertainty towards the end of the third quarter, equity markets are still near all-time highs. Vaccination rates are rising. Fiscal monetary policies remain supportive. But at the same time, we see fears of inflation, the spreading of COVID variants, policy uncertainty in China, and also in the U.S., raising concerns around economic growth. We hear similar concerns from our clients too, of course, as evident in our last settlement report. But whatever the environment, we'll continue to provide our clients with our valuable advice and quality execution for them to weather through these uncertainties. So if you look at this slide, you see the ongoing momentum with the clients. Our private wealth clients continue to turn to us for these solutions and for the advice. At 5% annualized growth, we saw another strong quarter of net new generating fees, net new fee generating assets. Man, what a word. NFGA added to the scale of our global ecosystem for investing. Net new loans were positive at $3.3 billion driven by the Americas. That was despite the volatility in Asia Pacific causing some deleveraging in the region. While helping our clients navigate volatility and capturing opportunities, transaction-based revenues with private wealth clients were up 4% year-on-year against what was already a very strong performance last year. We saw particular interest in alternative investments and structured products as investors look for investments with a positive real yield that are resilient in a higher inflationary world. We saw $1.5 billion of inflows in asset management in the quarter, with continued strong momentum in alternatives, ETFs, SMAs as well. And from my first meetings with other CEOs, from my meetings with other CEOs, you see that the optimism is obvious. We're seeing corporate clients looking at actively pursuing M&A opportunities, and that is delivering some growth and fueling some growth As well, they want to do it in order to fast-forward the growth themselves, build skill themselves, and preempt disruption, as they see it in their markets. At the same time, private equity funds are flush with capital. That is still affordable, and that all adds to the M&A activity that we see. Funding markets are also favorable. We're helping firms take advantage of this as well, and as a result, The advisory and the equity and debt underwriting all had their best quarter on record. The best third quarter on record, I should say. Global banking revenues were up 22% against last year. SPAC-related fees were 43% year-over-year, mainly from deferred fees as mergers closed. In markets, our strategic choices are paying off as well. with $1.4 billion in revenues, equities just had its best quarter on record as well, third quarter on record as well. We saw particular strength in Asia-Pacific cash equities, and we're pleased with our performance in global electronic FX, both areas of focus for us. Prime brokerage balances reached an all-time high, helped by several hedge fund launches in the year. And in Switzerland, we see a continuing trend among our clients in converting cash savings into investments as well. Net new investment products for 700 million Swiss francs in the quarter, 13% growth annualized, driving record recurring fees there as well. Now continuing to build up and to build and deliver on our ecosystem for investing is fueling our growth as shown on the next slide. Just to start with the private markets here, investors continue to turn to private markets as a source for diversification, as you can well understand. But also for yield, we expect this to continue, even if markets were to turn a bit more volatile here. It's an asset class where our clients are generally underweight, and therefore an area where we can add value. During the first nine months of the year, we've facilitated 26 billion of investments into the private markets. and institutional investors as well. Our integrated SMA offering in the US saw another 5 billion of inflows this quarter, demonstrating what we can achieve by working seamlessly together for our clients. And yet another good example of our ecosystem at work here. Sustainability is not only the right thing to do, it's become a major engine for us for growth. But we also know that sustainability has many facets. That's why last quarter we further expanded our sustainable investment offering. For example, our private wealth clients can now personalize their sustainable investing mandates along six topics, depending on their preferences. We also became the exclusive distribution partner for Rubrico's Global SDG Engagement Equities Fund. And that's a fund that motivates companies to fulfill UN SDGs, and we target to raise 1.5 billion of investments over the next six months for them. Sustainability focus and impact investments grew annualized by 63% year to date, and reached $207 billion for us. Now, the success of MyWay, as you can see here as well, continues as well. MyWay is an intuitive application that allows clients and advisors to jointly set up, monitor, and adjust mandates. Continued, and the info continued also this quarter, invested assets on the platform more than tripled year-to-date, tripled year-to-date, to around 5.1 billion, as you can see, adding to the strong growth we see in mandates globally. And lastly, the third quarter again highlights the scalability of our platform. Year-to-date, we more than tripled net new fee generating assets per advisor, and this scalability is a significant contributor to the strong operating leverage this year. So the financial results overview shows you that our business momentum, our focus on fueling growth, our focus on discipline execution for our clients, delivering the full ecosystem to our clients. Basically, you know, the capabilities that we have ourselves, but also the capabilities that third parties provide through us. All of this led to another strong quarter across all of our businesses, but also all of our regions. And that resulted in a pre-tax profit of $2.9 billion. You can see an overview of all of this here across the different dimensions. Operating income, for example, was at $9.1 billion. That was up 2% from last year when we had a number of one-off gains. So in terms of the underlying, this is much higher quality in terms of income than it was before. Operating leverage strong again because the costs were actually down 1% year over year. Here you see the mix of how we've reported as well as how we've already reported kind of executed on some of the savings plans coming through and more to come next year also to support our investments. And all of this resulted into a cost income ratio below 69%, the lowest in over a decade. Net profit up 9% to the highest level in over a decade as well. Return on CC1 capital reached 20.8%. Tangible book value per share was up 4% sequentially here as well. As you can see, we continue to perform well above the financial targets that we have given you. And while we do that, we continue to be focused on driving growth on the top and the bottom line. Now, before I hand over to Kurt, because this is where I basically do that normally, I'd like to give you a bit of an update as to where we are on our strategic refresh. As I told you in the first earnings call, I would do a couple of things in my first year, which is one is concentrate on the business momentum, and the other one was to look at the strength of UBS. And there's many things that have impressed me that I'm impressed with at UBS. So when I took over as a CEO a year ago, I was excited to build on this foundation and to make a strong organization even stronger. And I saw so much potential beyond what we were delivering on and that, you know, it was all about unlocking the true potential of UBS. And as I said, you know, there's these three priorities that I focused on the first year. The first one is to articulate that purpose that was always there but was always implicit and never explicit, and we made that very explicit now with reimagining the power of investing and connecting people for a better world, which is really a driver for consistency across what we do, a driver and a support for dilemmas that we run into, also in terms of making strategic choices even. Second priority for me was, of course, safeguarding people and clients and supporting clients through the pandemic, which I think hopefully we're completely through, but nobody knows. Introducing a hybrid approach to working going forward as well. And third, just make sure that our clients are really supported and navigated in these markets that are not always as clear. And that's what we performed on, and you've seen the results. As to the strategic plans, I've also said that I would give you updates during the year when we felt that there was an update to be given, but that we would give you a full strategic update towards the end of this year, of this financial year. So we will give you a full strategic update on the 1st of February. And today I will take you, I will show you a bit on Switzerland, the Americas, and technology. So first things first, which is Switzerland. Switzerland is, of course, a very important business for us. And it's important that we continue to be the number one universal bank as we are. It's a highly integrative business. It's serving around one-third of the households here in Switzerland. It's serving over 90% of large corporates in our home country. and we enjoy a leading position in about every segment you can think. The successful execution of our strategy has led to growth, made us more efficient in how we serve our clients, and that helped us to offset some of the impact from the negative rate that we've seen here for almost six years now. So in addition to being stable and resilient, Switzerland is also our biggest region in terms of profit, with $2.5 billion in profit before tax during the first nine months of the year, and that's 37% higher than last year. And that makes it a very good base to take the next leap forward, which brings me to our key priorities for personal and corporate banking on slide nine. First, We aim to grow, and more than that, we aim to grow faster than the market. This means that we will double down on our commitments to be the number one universal bank in Switzerland. We make sure that we're the undisputed number one universal bank in Switzerland, making sure that we become even better for our clients in areas such as private pensions, sustainable finance, and mortgages. That's where we see growth opportunities. It will not come as a surprise that our digital capabilities will play an important role to make this happen as well. And that's why you see that the second and the third priorities for Switzerland are both technology dependent and technology focused. With digital at the core, we want to make sure that we remain the digital leader in Switzerland as well. We're focusing on making all of our banking products, our basic banking products, available digitally. That's an absolute must. We'll invest in that, making sure that all of our basic banking products become digitally available and backed up with remote advice to the extent needed. We are improving the experience for our clients through that as well, and we're doing that. Of course, we're not waiting for a launch of a strategy. We improve as we go. and we have already some handsome results there, and also make sure that we get some extra efficiency from this as well. And these efficiency gains, then, we can invest in growing a bulk market, as I said. In order to be successful in all of that, we have to further transform, and our transformation objective is about our people. It's about our culture. We have to organize our teams around client needs. We have to become faster. We have to become simpler and more relevant for our clients as well. And under this priority, our Swiss business is leading the way with regards to the agile at UBS setup. And we're rolling this out through the rest of the organization. We've also reduced up to two management layers in P&C, in the Swiss business, in the P&C part of the Swiss business already. in order to become less hierarchical and make sure that people basically use the strength they have in making things work for our clients and speed up decision making. With these initiatives, we target to grow our revenues with investments funded through our cost saves, through the digital at the core. We will have cost saves and part of those saves will invest in those products that I just indicated growing faster in pensions, sustainability, and mortgages. And if you do that, if we do that well, we will really make a shift away from the cost-income ratio of around 60% to a cost-income ratio of around 55% by 2025. That's what the plan is supposed to do, and I'm confident in the team to deliver upon that. So here, even with the leading position, we do think there is further improvement potential. We do think there is further growth potential, and we want to maintain our number one position in our whole market. We need a better bank for our customers. Turning to another region of importance, as I said, in March, in terms of geographic focus, There is two areas that are of utmost importance for us because that's where the wealth pool is growing faster than anywhere else, and that's also where the wealth pool is larger than anywhere else, and one of those regions is the Americas. It's important for us to be active in the Americas. It is an important part of our investment ecosystem. We have a focus in client-centric strategy that plays to our strengths as a global bank here. That differentiates us also from the other players in the marketplace. We've consistently invested in our business and our people for the benefit of our clients. We anticipated trends. We anticipated changes here. And you see that that is paying off. We're well regarded by our clients for our thought leadership, for our solutions that help them achieve their liquidity, their longevity, and legacy goals as well. And as a result, we're growing our ecosystem. And net new fee generating assets were 12 billion, we're up 12 billion, that's 7% annualized in the first nine months of the year. Net new loans were equally impressive as an annualized 28% year to date, just in this region. Our partnership with Banco do Brasil has added to our growth as well. Year to date, we executed 127 global banking deals through this JV, which is developing to a valuable feeder to our ecosystem. Profits in the region grew by 19% year-on-year to $2.1 billion. Prospects for the markets are also very attractive. The U.S., as I said, is the largest wealth pool globally. It's also expected to grow faster than any other mature market. But it's also a dynamic market. In the next 10 years, 70 trillion in assets are forecasted to transfer to the next generation. So a lot to gain here if you are well positioned to it and to advise your clients. And that is what we are, and that is what we want to be with some additional actions. And that gets us to the strategic priorities in the Americas on slide 11. In order to capture these trends and grow our franchise in the Americas, first of all, we still see ample opportunity in our core business, building on the momentum that we currently have with our clients. So what we think we can do even better is to deliver and grow our ecosystem across all of our businesses, the investment banking capabilities, the asset management capabilities to support our wealth clients, and And to the extent we don't have capabilities in-house, as I said, you know, our ecosystem is an open ecosystem. We will look for capabilities that third parties can help us providing as well in order to truly deliver to our clients what they need and to give them, to generate the best client outcomes on this one. And we have the scale for that, and we will build on that scale. We have the content for that. We have the solution for that. And through that, we are confident that we can continue to drive growth in the coming years. In order to do that, we will also continue to enhance our platforms from which our financial advisors work in wealth management. As I said, that's a running program, and that is progressing. But in order to support our financial advisors and our clients even more so, we have a second priority, and the second priority is about being a more holistic bank for our clients. We're planning an upgrade to our banking capabilities and to deliver a full-service banking offering. As you know, many of our clients there are business owners, so the offering will primarily cater for them in terms of lending and cash management as well. We have a very well-functioning bank there with high net promoter scores for our clients. and we think we can build on to the experience that we have there and just give more services to our clients and with that also be even more relevant to our clients through their whole life cycle. Of course, these capabilities will be digitally led. They will be based on cutting-edge technology, and as I said, they will be aligned with our client promise, which is these services need to be personalized. They have to be relevant, on time, and seamless. Now, our third priority for the Americas, and specifically for the U.S., is the rollout of a digital-led service proposition, and that's a scalable investment advice model for affluent clients. We are a trusted brand in the U.S., and we have premium content. And we see the opportunity to deliver our expertise and our content to a much broader set of clients. And we will start with our workplace wealth clients and our platform there. And we already service 2 million stock and retirement plan participants there. We're planning a differentiating offering and combining a winning digital experience with trusted human advice on a remote basis. And I think that's another example of how we can actually go back to our DNA of content and knowledge on one side, of advice on the other side, but delivering it in an additional scalable way to clients we already have that already think UBS, that have business with UBS, but want to do more of their wealth management with UBS. And that's a fluid proposition. We're looking at, you know, increasing the share of wallet with our clients and bringing the ecosystem to our clients. We're looking at further improving the growth with our clients and profitability with our clients, delivering more banking products. And we actually think we can grow in the market by addressing a further client segment, the affluent client segment, by building a digitally-led but remote-advised proposition to the new clients in the market. All of that brings us to where we are on technology. And also here, and also in the previous plans, I mean, we're updating you on these plans, but it doesn't mean that we have not already kind of made steps in this direction, and some of the results that you see today are already because of some of the steps that we've made. but specifically also in technology, the execution of our strategy to level up technology, to make technology a differentiator. That's truly in full swing. There is no plan developed at this moment in time in UBS where technology is not taken into account from the first instance, which basically means how do we deal with our clients? How do we service our clients? It is there, where technology can make the difference. It is there where technology can bring the personalization. It's there where technology can bring the relevance of the content and making sure that when we have a proposition, it will be there on time. So that way of thinking is prominent now in every plan development, and it's important as well. But for that, you need good technology itself. You need an engineering culture. As well, you need to manage technology in a very frequent way. And that is what these five pillars try to tell you. So if you want to be successful in technology and you want to deliver technology, you have to work Agile front to back. So we have launched Agile at UBS and are in the process currently of transitioning some 9,000s colleagues into this cross-functional setup. At this moment, 3,000 of them are already working in Agile ways today. We are piloting it in different areas as we speak. The experience on the back of these pilots, we will then use to roll it out even further. And in the end, we do expect that towards the end of next year, some 25,000 people will actually work in Agile at UBS. In order to support that, because if you work agile, you deliver incremental improvements in technology in two-week sprints, as you know, but you can't do that in the back of annual planning, so you do quarterly planning. So we've made our planning cycles shorter already. We've made them faster. We've made them more frequent. So we have started to our quarterly business reviews looking three months back as to where some of these projects have delivered, where some of these projects are going in the next six months, what we need to change, what we need to optimize, what we need to prioritize, but always with the strategy in mind, not tactically, strategy in mind. So zoom out, strategy, zoom in, three months back, six months forward. That's the way we run it. But There is more that we can do here, and that is all around data analytics. We feel they're critical to meeting our client promise in these days. And that's why, and maybe you've picked up on it or not, but recently we've implemented a central hub to drive the AI data analytics approach strategy in the group. In the same vein, we rolled out a new AI-based recommendation engine for clients' advisors in Switzerland already. And lastly, and on this chapter is you know, to make our technology estate even more flexible and less expensive to maintain. We're migrating away from legacy technology. We've already decommissioned hundreds of applications. We're moving 1,000 applications to the cloud just this year. And as you can see, we're putting the foundations in place to turn technology into a differentiator here at UBS as well. Now, where are we on our journey here? I think I'm proud to see what's happening here at UBS, the momentum that we have been able to build over the last couple of quarters, at the same time defining our future without taking our eyes off the ball. Here you see some of these results. Clients are rewarding us for what we do for them. and that's why we get their business, but that business also delivers attractive returns to our shareholders, and you see that on this slide. Our financial performance this year, shown to you in a more historical context, the last nine months we had the highest operating income in over a decade, the highest pre and post tax profit in over a decade, the lowest gross income ratio in over a decade, and a nearly 20% return on CTE1 capital. I think this is exactly where I have to hand over to Kurt.

Thank you, Ralph. Good morning, everyone. At 2.3 billion, we delivered the highest net quarterly profit since 2007. This translates into a 20.8% return on CTE1 capital, and a 17.2% return on tangible equity and drove 2.8 billion of CET1 capital generation. PVT of 2.9 billion was up 11% driven by two percentage points of operating leverage. The cost income ratio improved two percentage points to 68.7%. As a reminder, our third quarter last year included a $631 million gain from the partial sale of Fond Center. Excluding this gain, all business divisions and regions contributed to PBT growth and efficiency improvements. Our 3Q results included net credit loss releases of $14 million, of which $11 million in Stage 1 and 2. While some macro factors have improved slightly, we once again decided to apply a management overlay given continued macroeconomic uncertainty. As of September, the total overlay was 219 million, a 36 million increase from 2Q. Year to date, we generated 6.1 billion in CT1 capital, including about 500 million from the amortization of deferred tax assets in the U.S. Given the ongoing tax discussions in Washington, we wanted to update our sensitivity guidance in relation to our tax loss DTA. Assuming no other changes, we would expect that the value of our U.S. DTAs would increase by approximately $300 million for each percentage point increase in the U.S. federal corporate tax income tax rate. This would be effective in the quarter in which the tax law is enacted. Turning to expenses, Year-to-date, while growing operating income, we were able to maintain operating expenses, excluding variable and FAA compensation, currency effects, restructuring, and litigation broadly stable. This helped us deliver a nine-month cost-to-income ratio of 71.4%, our lowest since 2006. As a reminder for the fourth quarter, we expect an increase in costs due to seasonal effects, as we have seen in prior years. Moving to our businesses, GW1 PBT was up 43% to $1.5 billion, its best pre-tax profit on record. All regions contributed with double-digit profit growth, another record quarter in the Americas, and the highest 3Q profit in APAC. Operating income growth outpaced expenses by nine percentage points, with improvements across all revenue lines and a gain of 100 million from the sale of our domestic business in Austria, driving the cost to income ratio down six percentage points to below 70%. This was our ninth consecutive quarter with year on year positive operating leverage, and our cost to income ratio in the Americas fell below 80% for the first time. Net new lending was $3 billion, mainly on continued strong momentum in the Americas. This was partly offset by some deleveraging in APAC. Its client sentiment became more cautious following recent policy developments in China. Year to date, GWM generated net new loans of $21 billion, or 13% annualized growth, almost entirely from Lombard and mortgages. Our net new fee generating assets were $19 billion, an annualized growth rate of 5%. Our annualized net new fee generating asset growth rate for the first nine months of this year is 8%. Moving to income. Recurring fees grew 23% to a new high, driven by market performance and continued strong net new fee generating assets. Net interest income was up 8% sequentially on higher deposit volumes and fees, along with continued increases in our lending NII. For the fourth quarter, absent any interest rate headwinds, we expect NII to remain broadly flat compared with the third quarter. Transaction-based income rose 4%, driven by higher client engagement in alternatives, life insurance, and structured products. While client sentiment remained more muted in APAC due to uncertainties around China, our continued focus on book transformation and positive flows over the past quarters allowed the region to deliver its best 3Q PDT on record, as I just mentioned. Our interactions with clients and our world-class investment solutions, together with a constructive market backdrop, drove net investments of $98 billion in fee-generating asset products over the last four quarters. Net new fee-generating asset growth was above 6% in all regions, with 15% growth in Asia as we are seeing increasing interest by clients to diversify globally and move into endowment-style investing, private equity, and private credit, as well as hedge funds. We saw very strong momentum in P&C. driving our PVT up 44% to 439 million Swiss francs. Operating income increased 18%, with recurring net interest and transaction income all up year-on-year. Credit loss releases in the quarter were 6 million, a 91 million year-on-year improvement. Cost-to-income ratio in the quarter was 57%. Transaction-based income increased 7%, on higher revenues from credit card and foreign exchange transactions, reflecting an increase in travel and leisure spending by clients as pandemic restrictions continue to ease. Recurring net fee income was up 18% to an all-time high, primarily on higher custody, mandate, and fund fees. Continued momentum in recurring fees was held by $700 million of net new investment product inflows. as we engage with clients to provide alternatives to cash deposits. Year-to-date, net new investment product flows were $2.4 billion. Net interest income increased by 5% year-on-year as a result of various deposit optimization measures, which led to lower liquidity and funding costs and was further helped by $2.1 billion of net new loans and personal banking year-to-date. For asset management, I will reference year-on-year comparisons, excluding the $571 million gain on sale in 3Q20. PVT was up 27%, the 10th consecutive quarter of year-on-year PVT growth. Operating leverage was positive 11%, driving the cost-to-income ratio down 7 percentage points to 64%. Excluding a $28 million loss related to an associate, Net management fees were up 16% on market performance in nearly 150 million net new run rate fees over the last 12 months. Performance fees decreased to a more normalized level of 33 million. For the next quarter, we would not expect performance fees to repeat the exceptional result we saw in 4Q last year. After six quarters of exceptional net new money growth, where we averaged 20 billion, excluding money markets. Net inflows were muted in 3Q at 1 billion. The IB delivered its best PBT since 1Q13, up 32% year-on-year to 837 million. The return on attributed equity was 26%. Since the beginning of 2020, our investment bank has been delivering outstanding results supported by constructive markets, and while remaining disciplined in deploying balance sheet. Revenues have been above $2 billion every single quarter, with average return on attributed equity of 20%. We deliver this performance while absorbing regulatory RWA increases and remaining within our up to one-third of group RWA and LRD. This quarter, global banking revenues were 22%, with the highest advisory ECM and DCM 3Q revenues since 2013. Advisory was up 78%, benefiting from a higher number of sizable M&A deals. Equity capital markets increased by 32%, driven by higher levels of ECM issuance led by IPOs. Debt capital markets rose 7% and higher levels of leveraged loan and bond issuance. Excluding a $215 million gain from the sale of intellectual property rights associated with an index family in 3Q20, global markets revenue increased by 5%, driven by equity derivatives, cash equities, and prime brokerage. These were partly offset by lower income rates, foreign exchange, and credit products against the strong year-on-year comparative. Excluding $229 million in accelerated expenses from the modification of certain outstanding deferred compensation awards in 3Q20, operating expenses were up 3%, mainly on currency effects. Cost-to-income ratio was 67%. During the quarter, we generated $2.8 billion in CET1 capital and increased our CET1 ratio to 14.9%, and our CET1 leverage ratio to 4.31%. RWA increased by $9 billion sequentially, mostly driven by regulatory add-ons, which we detail on page 42 of our third quarter report. As guided, we completed $600 million of buybacks in 3Q, increasing our year-to-date repurchases to $2 billion. In the fourth quarter, we expect to repurchase up to $600 million. With that, we can open up for questions.