UBS Group AG

Hello and good morning, everyone. I'm pleased to be here today with you and to give you an update on our strategy and our ambitions. 2021 was another very strong year for us and will carry that momentum forward as we continue to focus on growth. We're expanding into new client segments to open new avenues of growth with a much broader set of clients and will continue to be vigilant when it comes to risk. As we're intensifying discipline as well now this will give us the financial capacity to invest strategically across our franchise especially in technology as we write UBS next chapter we're aiming to create value sustainable value for our clients for our shareholders for our employees and society at large now before we go into our plans let me start with a recap of our purpose and our vision last April we presented our strategic framework by sharing our purpose and our strategy on a page. And you can see it here on the screen now. We're starting with them today as well because everything we do here is guided by one common purpose, reimagining the power of investing, connecting people for a better world. As you've just seen in the video, our vision is to convene the global ecosystem for investing where Thought leadership is impactful and people and ideas are connected and opportunities are brought to life. And the UBS ecosystem depicted here on slide six is about connecting our clients with people and ideas. It's about helping them realize their goals. It's about delivering them to offer the best we have to offer. This can be from within our firm, but also from other contributors. Now, we are the orchestrator of this ecosystem, and that leverages our scale. It leverages our relationships. And we do this by curating offering on one side and matching clients and contributors on the other side. Now, the value of our ecosystem increases with scale. That's what makes growth so important for our story, and that's what makes it a key theme across all of our plans. Now let's start with sustainability, which is core to living our purpose. And it's not a secret that sustainability has always been a part of our story, certainly for the last decades. Last year we chose to focus our efforts on three defined areas to maximize our impact. And these areas are planet, people, and partnership. We're already making progress on all three. Let's first talk about planet here. Last year, we made a commitment to achieve net zero emissions across all of our operations by 2050. That commitment includes scope one, two, and three emissions, and that's underpinned by science-based targets and interim milestones. We've made a pledge to lead by example here, and when you look at our own footprint, it's clear that we're building on a strong track record. For example, Last year, we reduced our scope one and two emissions by another 75%. And we've also finalized our climate roadmap, and we're putting it forward for an advisory shareholder vote at our AGM in April. The next area here is people. In this space, we're helping clients maximize their impact through philanthropy. We're also engaging our employees who are helping us to make a difference in business. our local communities, the communities where we are active as UBS. And we're also seeing tangible progress if it is about diversity, equity, and inclusion targets that we have set for ourselves. Today, women make up 27% of our workforce at senior ranks, and we aim to bring this up to 30% by 2025. Now, the third area that you see here is partnership. And we have a long history of working with clients with communities, with thought leaders and standard setters to shape the industry's direction if it comes to sustainable finance. This goes all the way back to 1992 when we joined the UN Environmental Program Finance Initiative. And we've stayed at the forefront ever since. Now, we recently became founding members of the Net Zero Banking Alliance and the Net Zero Asset Managers Initiative as well. Clearly, clients benefit from our expertise and our extensive sustainability offerings. And that has led to sustainable investing being a major growth driver for us over the last few years already. Throughout 2021, we've been implementing our strategy and building our global ecosystem. So let me take you through some of those highlights that we see in the last year. On slide nine, As you can see, clients continue to put their trust in us. They turn to us for our content, for our advice, for our solutions, and that resulted in over $150 billion in long-term inflows during 2021. $107 billion of these were net new fee-generating assets in wealth management. And during the year, we also extended $28 billion of net new loans to wealth management and personal banking clients. And that helps them to finance their businesses, their homes, and meet other liquidity needs they may have. We're now managing over $4.5 trillion in assets on behalf of our clients. Now, on the right-hand side of this slide, you can see that some of our fastest-growing investment offerings of last year have really, really performed very well. First, private markets. That's a big opportunity for our clients. and for us as well. And by the end of the year, our clients had $150 billion of drawn commitments invested in private markets. Secondly, SMAs. The continued growth we see here speaks to the demand for customization. It shows what a seamless offering can do for our clients, but also to us. Last year, our wealth management clients drove $27 billion of inflows into these strategies. Third, sustainable investing. Invested assets in sustainability-focused and impact strategies increased by 78% to $251 billion during 2021. And lastly, assets in UBS managed. As you can see here, they grew to $214 billion. They're our flagship mandate solutions, which are linked to our CIO content. My way, as you can see here, our model mandate interface contributed to this growth as well. Now, as you can see, we consistently invest and innovate in ways to anticipate both the needs of our clients, but also to play the trends that we see in the industry. Now, in addition to investing and lending, Transaction advice and execution are also key value drivers for our businesses. On slide 10, you can actually see an overview of our performance right there. We're increasing delivery of our whole firm to our clients, and that has resulted in high levels of activity across all client segments in 2021. The momentum across our businesses led to the highest revenue since 2006. And at the same time, we've been exercising cost discipline, and we will continue to do so. And that combination resulted in another year of positive operating leverage, which excluding the provision of $740 million we took for the French court case in the fourth quarter. Turning to slide 11, you can see how our commercial momentum and our financial performance And our operating levers have translated into a very good picture here. We had the highest profit in 15 years, whether before tax or after tax. And that resulted in our return on CT1 capital of 17.5% and a 14% return on tangible equity. And we maintained our cost-income ratio of just under 74%. Now to conclude, this is the second consecutive year in which we exceeded all of our targets, with strong contributions from all businesses, all regions, and all divisions. So we can see we are operating from a position of strength here. We have the momentum. Now let's take a look at how we're building on all of that to write the next chapter for UBS. Now, a strategy always starts with our clients. On slide 13, you can see on how our client landscape is actually changing. Regionally, most of the wealth will be created in the US and in Asia Pacific. And most of the industry revenue growth is expected to come from affluent clients and entrepreneurs. Also a big trend is that women are increasingly gathering wealth and they tend to be underserved in the industry. And we see a shift in needs and priorities as wealth is passing down through the generations. Now in terms of products, we expect continued growth in alternatives and also ESG investments. And you've heard me say this already, our client expectations are changing and we need to adapt. In everything, convenience is king. Personalization is expected. And everything has to be aligned to personal values. And at the same time, our clients want experiences that are seamless and that are supported by technology. And that's why we're taking action. We're taking actions to deliver a more personalized, relevant, on-time, and seamless experience for our clients. So this is where we're steering the firm. To be ready for these trends and to benefit from them. The first thing we're doing is further evolving the way we serve and interact with our clients to help them meet their needs. Our clients will choose how they prefer to interact with us. They will choose. And based on that, we will serve them through three different coverage models. And that's what you see here on slide 14. On one side of the spectrum, we have an increasing number of clients who prefer to interact with us digitally. And for them, we're launching a digital offering in the US with the acquisition of Wealthfront that we just announced last week. And we're planning similar models in the rest of the world. Now, the lower cost of service that this model brings will mean that we can expand our client base to those clients who wish to invest smaller amounts. But it will always help us to retain existing clients and serve them in a more cost efficient way. Now the core of our franchise, however, is delivering personal advice. And that we do through our advisors. Here it will be critical for us to add more digital capabilities, which will enable our advisors to be more productive and more efficient in how they serve our clients. And on the other side of our coverage spectrum, we have our family offices and our institutional wealth clients. Now, these clients have sophisticated institutional-like needs. We serve them through a unified one UBS approach. That will make it even easier for them to get access to relevant products, relevant services, all the expertise that we have across all of our businesses. is important as part of that offering to our clients. And in our future model, we'll assess the profitability of our clients on a relationship level and not on a product level for this segment. Now this will make us more effective in offering unique lending solutions. Now the overarching objective of all of this is to provide our clients with more choice in how they want to interact with us, and benefit from our ecosystem and our capabilities. That's what I've said before. It's very important that they choose how to interact with us. We should not force them one way only, and that is a big change here. Now, with that, I'll now go through our growth plans by region. Starting with the Americas, the largest wealth pool in the world. So first, as you've seen, our momentum is really strong in our business in the US. And our scale and our content and our solutions will really help us to build on this momentum. We'll focus on delivering the whole of our ecosystem to our clients to deepen the relationships and drive growth through. Second, we aim to provide a more holistic banking service to more of our clients. We're widely valued for our investment capabilities, but we're not often recognized for our lending and deposit-taking abilities in the US. And that is what we're going to change. And third, we're rolling out a digital-led service offering to serve a much broader set of clients in the US. And as I mentioned before, we're really excited to accelerate this journey by joining forces with Wealthfront. On slide 16, you can see that Wealthfront is an industry-leading digital-only wealth management provider. They serve 470,000 clients and manage $27 billion in assets. This acquisition will help us to significantly increase distribution, help us to improve our scale and our capabilities for our digitally customized coverage model. It will give us a boost in the U.S., and through what we learn here, we'll be able to advance our progress also in other regions. In Wellfront, we found a partner that shares our vision, our values, our culture, and I'm truly looking forward to welcoming our new colleagues to the UBS family here. Their engineering culture will help us in how we deliver our services, both through Wellfront's current proposition but also for new propositions to come. Working together, we'll have ample opportunity for long-term value creation. And I'm also looking forward to what our ecosystem can add for Wealthfront's clients. For example, our remote advice or our products. Just two examples of how we can enrich their clients with our experience and what we bring to the table. Now in the near term already, Wealthfront's clients will have access to our industry-leading investment insights and our research. And we'll be able to offer our workplace wealth clients an attractive investment platform for their vested assets. So this transaction represents a great opportunity to deploy capital in a way that enhances our long-term ambitions. It will help us deliver a scalable, digital-led solution for our fluent investors. and it will seamlessly complement our core advisor-led businesses. Turn to the other growth region, Asia-Pacific. I'm now on slide 17. We've been committed to Asia-Pacific and have had a strong presence there for decades. We are by far the largest wealth manager in Asia-Pacific. We're the number one in equities. We're the largest asset manager for global clients investing in China. We have a truly unique franchise here. Now, for the coming years, we've defined five key priorities that will help us strengthen our position here. First, our onshore business in China. Over the past years, we've built one of the most established platforms among foreign peers here. We're expanding our license portfolio now and establishing a presence across segments. Our years of investment are bearing fruit already, and our clients look to UBS as the go-to house for China. And as the Chinese market continues to open up, we'll build on this strong foundation to accelerate our growth. We're moving towards a more integrated model with a countrywide strategy and a dedicated leadership here. And at the same time, we'll explore partnerships for access, for scale, and for complementary capabilities that we need to be successful in that country. Second, our second focus in Asia Pacific will be Southeast Asia. Here, wealth is being created very fast, and the region is attracting foreign investment as well. Singapore's status as a global finance hub is undisputed with over 50% of wealth inflows now going into Singapore, Coming from outside Southeast Asia, our strategy here is to let our clients benefit from the intersection of our investment banking capabilities and our wealth management capabilities. And we do that with a particular focus on technology firms, entrepreneurs, and family offices. And that's also why our third priority here is to expand our capabilities for these clients, specifically the ones in the new economy sectors. Now under that initiative, we're building dedicated teams across banking and wealth management. And we're planning to work closely with venture capital companies in our ecosystem in order to identify the right opportunities for us. We're hiring experts already to fast forward that initiative. Now, our fourth priority is Asia-Pacific, is sustainability in Asia-Pacific. We've seen interest in ESG increase dramatically in the region. And to remain the leader in this area, we'll invest in ESG research, investment, and corporate advisory capabilities. And lastly, we're building a new integrated structure product platform. because our clients value advice and solutions. This will give our clients and our advisors easier access and faster access as well to opportunities that may be there. So as you can see, we're expanding our footprint. We're building on our capabilities across the whole Asia-Pacific region here. Now moving to our next region, EMEA. I'm taking you through slide 18 now. Now, as you can see, EMEA continues to be a core region for us. It is important to our global footprint and it's also home to a number of valuable franchises across both private and institutional clients. It's also a diverse market and that requires a differentiated strategy. Therefore, one of our priorities is to optimize our footprint. And when we do this right, it will help us self-fund our growth initiatives and allow us for a much sharper focus here. We've already exited domestic wealth management markets in Spain and Austria, and we'll continue to review our footprint across Europe just to make sure that we have the scale and that we play in the places where we come in. On top of that, we're targeting other efficiency measures as well, And those are also part of our cost saves. But there is also growth opportunities. And as to growth, one of the biggest growth opportunities we see is offering the whole of UBS to mid-market corporates, their owners, and to growth entrepreneurs as well. And to capture these opportunities, we're setting up dedicated coverage teams for these sectors and hiring experienced bankers and advisors. Very targeted. Now, thirdly, we'll invest, as I said, in other places where we can win, which is not necessarily Europe, but also the MIA perspective. Now, if we're talking about places where we have the skill to win, that brings us right to Switzerland. And Switzerland I will cover briefly. You will see that on slide 19. And the reason why I will cover it briefly is because we already shared our plans in October on this one, and we already had some more time to discuss this with you. But we're well on our way to deliver on the plan that we discussed at. Just as a reminder, we're targeting revenue growth in attractive areas such as mortgages, pension and retirement, sustainable financing. We're setting up a hybrid SME approach, and all of that will build on our position as a digital leader in Switzerland already. That will improve our customer experience, which is really important to attract new customers and make sure that customers really stay with us. And it also helps us to continue to grow and deliver on the efficiency gains that we need here. Now, talking about efficiency as a testament to this, last year our cost-income ratio already improved by four percentage points in this region. and that is when we exclude our provision for France. Now, lastly, in this region, we're transforming our teams to become faster, more efficient, and more relevant for our clients. Now, I've covered the growth plans more from a regional perspective, but we can't deliver any of these plans, and we can't build our ecosystem if we don't also invest locally. in our asset management and investment banking capabilities. The success of these strategies really require a further look at these capabilities, and I'll cover those next. Starting with asset management capabilities, slide 20. Having an in-house investment engine is a clear advantage for our ecosystem for investing. So it's really no coincidence that the fastest growing areas in wealth management are closely aligned to our flagship asset management capabilities. First, custom portfolios like separately managed accounts. We're a top five SMA provider in the U.S., and we have proven capabilities in this business. Second, alternatives. Our real estate fund management capabilities are among the top ten globally. We have a broad multi-manager offering across public and private markets, and we have a standalone $11 billion hedge fund portfolio. UBS, or Collar. Now, DSMEC is one of the world's largest alternatives managers. Third, what we're really known for also is sustainability. We are committed to helping our clients to invest in line with their goals, specifically in this area. As of the end of 2021, sustainability focus and impact invested assets had reached $172 billion. Just from an asset management perspective, And that was a 77 increase versus last year. Now our fourth flagship asset management capability is investing in the Asia Pacific region, notably China. We can provide our clients with compelling investment opportunities in this region because we already have 25 years of experience investing in China across all of the different asset classes. And we also manage one of the largest China equities funds in the world. Moving to investment banking capabilities, and now on slide 21, across our regions, our investment banking capabilities are vital to how we deliver our whole firm to our clients. For wealth management clients in particular, we want to provide more investment banking products and specific solutions there as well. And we'll provide these capabilities while remaining disciplined on capital. When it comes to our market activities, our ongoing investments in technology, data, analytics have truly created a competitive edge. That contributed to actual market share gains in both cash equities and FX during 2021. We traded record daily volumes in cash equities, and we maintained our number two ranking in foreign exchanges. So in global markets, the clear priority will be to continue the pace of digital innovation. We're good at it. Second, in banking, we just had our best year on record, and here we'll focus our coverage and deepen our capabilities across the growth segments, sectors, and regions, more related to the story I was already telling in the regions, making them part of that strategic growth initiative there. Now, third, our research and investment banking capabilities will be more closely aligned for the benefit of our clients. And fourth, we're targeting to offer more of our sophisticated banking services to our wealth management clients. For example, our private markets ecosystem provides entrepreneurs and their companies access to capital. But at the same time, specifically that generates differentiated investment opportunities for clients and that's why it is such a beautiful ecosystem will also continue to expand our trading financing and lending capabilities for global families and institutional wealth clients now across all of these priorities we're adding capabilities to support our clients in order to continue to be successful An underlying imperative in all of our story is technology. And we've been talking technology early a quarter as well, and we've taken up action to level up technology, and you can see some of the progress right here. We're well underway with our plans to use technology to drive growth, a differentiating experience, and efficiencies. Now, as of last week, we managed $7 billion of invested assets in my way, just as an example. We bought, we acquired Wealthfront also last week, and we launched UBS Circle One. And that's an app that connects investors to ideas within a global curated ecosystem. So basically, UBS in the app. That's what we're launching. But also our AI data analytics centers. we have put together. And with that, we bring together scientists and experts from across the bank to help us create a more personalized and more relevant experience for our clients. Now, we're investing in these things and more by first reprioritizing. So making sure that everything we do is really geared towards strategy. By freeing a budget in our cost base and making sure that from some areas where we save, we can actually invest in technology. And we do it by delivering with better engineers. Now, over the past years, we've maintained our technology spend at around 10% of revenues, as you can see. Now, that means that we've actually invested more as revenues grew. But within that, we've also increased our strategic tech spend. And that will allow us to invest more in projects that have a direct impact on our clients and business. Maybe also to give you an update on our cost plan. So let's spend a few minutes on the broader cost picture here, and that's shown on slide 23. We've laid out our ambitious growth plans, and we've also indicated that we think we can save $1 billion growth by 2023. So basically, we are committed to self-funding all of these plans. Now, during 2021, we've already made progress on that. For example, we closed 53 legal entities, which is 14% of all of our legal entities. We've reduced our corporate policies by 23% just this year already. We refocused our European footprint, as I discussed earlier. That frees up a lot of money in order to invest. But also, we have introduced an agile way of working, where now 10,000 of our employees are transitioning into Our actions in 2021 already resulted in a $200 million growth savings, and we are on track to save $1 billion per year by 2023. Now, with these saves, we can continue to invest in growth without meaningfully increasing our cost. So how do our efforts to grow our ecosystem create value for our stakeholders? And that's what I'll talk about next. Slide 25 defines how we define success. At first, it's about society, society at large. We're committing to building a better world through our sustainability focus. We're committing to net zero emissions resulting from our own operations by 2025. That's scope one and scope two. As to scope three, we're also committing to align $235 billion of invested assets as part of the asset manager to net zero by 2030. Other commitments in ESG relate to helping our clients do good, for example, by raising $1 billion in philanthropy assets to reach 25 million beneficiaries. And we're also targeting $400 billion in sustainable investments by 2025. Second, And for the benefit of all of our clients, we'll assess on how we're doing through commercial aspirations. Net new fee generating assets averaged already 6% since we started recording the metric at the beginning of 2020. And with our current offering and our strategic agenda, we're optimistic that we can maintain growth rates of 5% and up going forward. And as a result, we aspire to achieve five and then six trillion of invested assets. And third, we are targeting a 15 to 18% return on CT1 capital. And that's significantly higher than our previous target and reflects the progress that we have made in the last two years. Now, in order to consistently achieve that return target, we'll have to operate at a lower cost income ratio. And that's why we're moving our target range cost income ratio to 70 to 73%. And as to growth, we expect to be able to continue to grow profits in global wealth management by 10 to 15% per annum, but through the cycle. Our plans foresee a more profitable UBS that delivers higher returns over the coming years. So then, I should also give you a bit more background on our capital management. And you see that on slide 26. So as you would expect, our first priority will always be to maintain a strong balance sheet. We need a balance sheet for all seasons. Our second priority is to continue to look for opportunities to invest, to grow. And clearly, you know, our default is to grow organically, but there may be inorganic opportunities as well. Either way, They will have to accelerate our strategy and help us to grow. The remainder will be returned to shareholders in the form of dividends or buybacks. Now, reflecting the step-up in profitability for the financial year 2021, we're proposing to increase our dividend to 50 cents per share to steadily progress thereafter. An additional excess capital will be used to buy back our own shares, and we expect this to be up to $5 billion this year. Which brings me to the end of our strategic update. To recap, UBS is in a better shape than ever. We have tremendous momentum with our clients, as you can also see with our Q4 results. And that allows us to move forward with confidence, to act on the opportunities ahead of us. We're opening up new avenues for growth with our existing clients, with new clients, and in new segments. Our strategy will also depend on successfully deploying technology in a differentiated way. And I'm truly excited about this opportunity that we have here at UBS and looking forward to giving you regular updates on our progress. Now, with that, let me hand over to Kurt to cover our financial results.

Kurt, welcome. Ralph, thank you. And good morning, everyone. For 2021, we delivered $7.5 billion net profit. As Ralph highlighted a little earlier, the highest since 2006, translating into a 17.5% return on CET1 capital and a 14.1% return on tangible equity. Now, following the verdict by the French Court of Appeal in December we increased our litigation provisions by 650 million euros to 1.1 billion euros in connection with this matter. The incremental provision translates to $741 million split between GWM and PNC. Total litigation provisions for the quarter were $826 million. For group, GWM and P&C, I'll talk about results both including and excluding the French provision, given the materiality. Full year 2021 PBT of $9.5 billion was up 16%. Excluding the French provision, PBT would have been up 25%, driven by operating leverage of 3 percentage points, with all business divisions and regions contributing to underlying growth in delivering positive operating leverage. During the year, we generated $7.7 billion in CET1 capital. Now, turning to expenses. We maintain our expense discipline throughout the year, managing to keep our expenses, excluding variable and FA compensation, currency effects, restructuring and litigation, broadly stable. And we did this while investing heavily in the business addressing regulatory requirements, absorbing inflation, and growing our operating income by 10%. This helped us to deliver a cost-to-income ratio of just below 74% or below 72% before the French provision. Now, looking ahead, we're on track to deliver the around $1 billion and gross in-year cost saves by 2023 that Ralph just reviewed. For 2022, we currently expect our operating expenses, excluding variable, FAA compensation, currency effects, and litigation to be up around 2% year over year. After absorbing increased investment spend, along with higher personnel costs related to increased competition and higher T&E, as COVID restrictions ease, our restructuring costs should be around $200 million in 2022. Also, we would expect group functions to post a quarterly loss of around $100 million on average per quarter in 2022, excluding accounting asymmetries and call-out items. Now, turning to the quarter. With $1.3 billion in net profit, we delivered 11.9% return on CET1 capital. PBT was $1.7 billion, down 13%, or up 24%, excluding the French provision. Our 4Q results included net credit loss releases of $27 million. Now, macro factors were not materially different in the third quarter, and we continued to apply a management overlay given ongoing macroeconomic uncertainty. As of December, the total overlay was $224 million, a $5 million increase from 3Q. Now, before we turn to the business performance, I'd like to spend a minute on interest rate sensitivity. We've done our analysis using mid-January forward rate curves and taken the balance sheet as of December 31st. which of course includes 2021 deposit and lending volume growth. Now, based on that, we would expect to see increases in net interest income of around $700 million in GWM and around $50 million in P&C when compared to full year 2021, with the majority occurring in the second half of the year. Moving to our businesses. GW1 PBT was up 41% to $1.2 billion, excluding its share of the French provision of $657 million. The Americas and APAC delivered record profits for both the fourth quarter and also the full year, with the Americas' 2021 PBT above $2 billion for the first time. Operating income increased 13% on good business momentum. Recurring net fee income grew 17% on higher average fee-generating assets, which was driven by both market performance and over $100 billion of net new fee-generating asset inflows during the year. Net interest income increased 10% year-on-year, with increases in volumes driving growth both loan and deposit NII higher. Sequentially, NII was broadly flat in line with our guidance last quarter. Now, for the first quarter, we expect NII to increase slightly compared with the fourth quarter, despite the lower day count by two days. Transaction-based income rose 4%, supported by higher client engagement in alternative investments and structured products. partly offset by clients being cautious on Chinese stocks following the recent policy developments in China and the rapid spread of Omicron. Now, in January, we saw lower transactional activity levels compared with a very strong January 2021, particularly in APAC, where clients remained on the sidelines in response to challenging market conditions and geopolitical concerns. Costs increased by 25%, mainly driven by the French provision. Without that, costs would have been up 6%, with GWM delivering positive operating leverage of 7 percentage points and a cost-to-income ratio below 75%. Net new fee-generating assets were $27 billion in the quarter, an annualized growth rate of 8%. helping bring the fee-generating asset balance to nearly $1.5 trillion as of year-end. All regions were positive, with the highest net inflows coming from the Americas. Net new lending in 4Q was $4 billion, mainly on continued strong momentum in the Americas. APAC saw some deleveraging, with our Asian clients being more cautious in the current uncertain environment, as I just mentioned. For the full year, GWM generated net new loans of 25 billion, or 12% growth, while remaining disciplined on risk. We continue to see strong business momentum in P&C, driving PBT up by 5% to 335 million Swiss francs, despite including 76 million Swiss francs of the French provision. Without this, PBT would have been up operating income increased 11% with net interest transaction and recurring income all up year on year. Credit loss releases in the quarter were 9 million. The cost to income ratio in the quarter was 59% before the French provision. Net interest income increased by 9% year on year, mostly as a result of various deposit optimization measures and further helped by $2.2 billion of net new loans and personal banking for the full year. Transaction-based income increased 18% on higher revenues from credit card and foreign exchange transactions, reflecting an increase in travel and leisure spending by clients. Recurring net fee income was up 16% to an all-time high, primarily on higher investment fund, custody, and mandate fees. Continued momentum in recurring fees was helped by $300 million of net new investment product flows as we engage with clients to provide alternatives to cash deposits. For the full year, net new investment product flows were $2.7 billion, a growth rate of 14%. In asset management, PBT was down 17% from a particularly strong 4Q20. Full-year PVT was $1 billion, up 12%, excluding the gains from the sale of Fondcenter in 3Q20 and 2Q21. Net management fees were up 21%, helped by over 100 million net new run rate fees over the past 12 months and market performance. Looking back over the last two years, we've added a quarter of a billion net new run rate fees, highlighting the strong volume and high quality of our net new money flows. Performance fees were down as they returned to more normal levels for an exceptionally good 4Q20. Investment assets rose to over $1.2 trillion for the first time. Net new money was $15 billion for the quarter and $45 billion for the full year, with positive flows across all regions, excluding Thailand, Excluding the gain for sale of Fond Center, AM's cost-to-income ratio was 61% for the full year 2021, down 1.7 percentage points year-on-year, and down 11 percentage points from 2019. Now, the IB delivered a 35% increase in PBT to $713 million on record 4Q income, The return on attributed equity was 22% for the quarter and 20% for the full year. Global banking revenues were up 4% to $696 million in 4Q. This was the sixth consecutive quarter above $650 million, and the full year was above $3 billion for the first time, as Ralph highlighted. Capital markets revenues increased 5%. primarily reflecting the increase in leveraged capital markets. Advisory revenues rose 3% on higher M&A revenues. Global markets revenues increased 6%, primarily driven by higher revenues from foreign exchange, financing, and equities products. Operating expenses were up 3%, driven by higher litigation and technology expenses. The cost-to-income ratio was 69%. During the quarter, we generated $1.6 billion in CET1 capital, contributing to a CET1 capital ratio of 15% and a CET1 leverage ratio of 4.24%. We provided some guidance on our expected RWA trajectory in the appendix. We expect to have more visibility on the timing and impact of Basel III implementation between the end of this year and early next year. As Ralph already said, we intend to propose a dividend of 50 U.S. cents per share for 2021, representing a total accrual of 1.7 billion, and we completed 2.6 billion of buybacks. This amounted to a total payout ratio of 58% in 2021. Looking ahead, we'll resume buybacks tomorrow and expect to continue purchases throughout the remainder of the year, This should allow us to buy back up to $5 billion of shares this year. With that, we can open up for questions.

Thank you, Kurt. And, of course, we also joined on stage with Ralph again. So I'm opening it up, and I think that we have our first caller, and this is Jeremy Siggy from Exxon. So hopefully, Jeremy? Good morning. We can see you. Hopefully you can hear us.