UBS Group AG

Ladies and gentlemen, good morning. Welcome to the first quarter 2023 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 Sarah Mackey, UBS Investor Relations. Please go ahead, madam.

Good morning and welcome everyone. Before we start, I would like to draw your attention to a cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors in our 2022 annual report, together with additional disclosures in our SEC filings. On slide two, you can see our agenda for today. It's now my pleasure to hand over to Sergio Amotti, Group CEO.

Thank you, Sara. Good morning, everyone. I'm happy to be back here with all of you, and it's an honor and privilege to lead UBS once again, especially at such a pivotal time for our organization and for all our stakeholders. First of all, I'd like to thank Ralph, the management team, and all of our employees for their dedication over the last two and a half years. During this time, UBS delivered record results and continued to build trust and confidence with our clients and our stakeholders. Our performance this quarter demonstrates that we continue to be a source of stability for our clients during periods of significant uncertainty. Our strong flows across global wealth management and asset management reflect our clients' continued confidence and trust in us. The results include an increase in litigation provisions relating to U.S. residential mortgage-backed securities. We are in advanced discussions with the U.S. Department of Justice, and I'm pleased that we are making progress towards resolving this legacy matter that dates back 15 years. On an underlying basis, which also excludes litigation, our results were solid. with a return on CT1 capital of 16.5% and a cost to income ratio of 72.8%. When I left UBS in 2020, our strength and stability put us in a position to consider all options for our future, including transformative acquisitions. Today, UBS is stronger than ever. We diversified revenue streams, continued capital and liquidity strength, disciplined risk management, and a balance sheet for all seasons. As a result, we are well prepared to be part of the solution to rescue Credit Suisse and contribute to financial stability in Switzerland and globally. Despite its complexity, I'm convinced that this transaction will also provide value for the clients and employees of the combined organizations. The acquisitions enable us to benefit from the significant value, franchise value, and in many cases, complimentary businesses within Credit Suisse. For our clients, the first quarter was largely a continuation of the teams from 2022. Clients continue to be concerned about the impact of debt inflation and central bank policies we'll have on economic growth, especially in the US. While our wealth management clients remain on the sidelines, our advisor helps them identify opportunities to manage their liquidity and diversify risks. As a result, we benefited from $20 billion in NENU fee generating assets globally, an annualized growth rate of 6%. NENU money in GWM was $28 billion. Importantly, $7 billion of this came in the 10 business days after the acquisition announcement. This is a further testament to how clients turn to us as they search for stability. During the first quarter, we helped our clients diversify cash holdings as they shifted deposits into money market funds and T-bills. In asset management, we saw another $18 billion in money market inflows with strong contributions from our U.S. wealth management clients. We saw further deleveraging, particularly in Americas, but also in IPEC and EMEA. This was offset by loan growth in Switzerland, resulting in stable loan balances quarter on quarter, excluding FX. Compared to last year's very strong first quarter, institutional clients were less active, particularly in equity derivatives and cash, as they lacked conviction in an uncertain market. We did have strong performances in prime brokerage and electronic effects. Clients continued to turn to us for advice in managing their assets, including their liquidity. What is important is deposit shifts into money market and T-bills remained with UBS. And we also saw $9 billion in new deposits into our platform. This supported positive NENU money across all of our regions in the first quarter. Let me go through each of the regions in more detail. In the Americas, our separately managed account initiative with asset management further supported NENU fee generating assets. And during the period of significant disruption in March, we saw positive inflows from our clients. As a result, we had solid menu money for the quarter. Our advisor recruiting momentum also continued and should support flows in future periods, aligned with our continued growth ambitions in the US. The strength of our business in Switzerland resulted in another quarter of inflows into mandates and other investment products. In EMEA, clients continued to be cautious overall, but net new money was positive, and net interest income rose by nearly 60%, as we started to benefit from higher Euro rates. Lastly, while our clients in Asia Pacific continued to take a wait-and-see approach in terms of transactions, we saw broad-based flows into net new fee-generating assets. We have now seen 17% net new fee generating asset growth in APAC over the last 12 months. When I first became UBS's Group CEO in 2011, we positioned our asset gathering and the Swiss businesses at the heart of our strategy. We successfully restructured our investment bank by reducing non-core markets activities and assets with discipline. We solidified our capital position and we took decisive actions to strengthen our culture. As a result of our efforts, we restored trust with all our stakeholders, materially de-risked our business and generated significant amounts of capital for our shareholders. As we now embark on another transformational step in a UBS journey, our principle will remain the same. We will be laser focused on delivering the best possible outcome for our unrivaled client franchises, our employees, our shareholders and for all of Switzerland. We will do this by maintaining our strong culture and focus on prudent risk management. The combination of UBS and Credit Suisse will result in around 5 trillion of invested assets, which is the equivalent for us of 7 to 10 years of net new money. It will make us the second largest wealth manager in the world. Importantly, it will reinforce our position as the only truly global player among the leading wealth managers, with strategic scale and complementary capabilities in the most attractive growth markets. We will reinforce our leading position in APEC, Switzerland, and EMEA, and will significantly enhance our position in Latin America. In asset management, the combination will improve our position globally and in Europe. But more importantly, we will bring together two highly complementary businesses to increase our scale and accelerate our strategic growth plans. With the combination, our clients will benefit from an enhanced offering in alternatives, credit and thematics, with additional scale for our index platform. We are already the leading bank in Switzerland. This is not a result of our size or market share, but our expert capabilities and the global reach we provide our clients. The combination with Credit Suisse will reinforce these strengths. There is strong competition in the Swiss market. For example, the combined market share of UBS and Credit Suisse in mortgages and in loans to corporate and public institutions is lower than that of the cantonal banks. Raiffeisen has twice as many branches as UBS and Credit Suisse combined. So, customers have plenty of options and we will have to work hard to earn and retain their relationships. As we think about the future of this business, my commitment is that we will look at the best option to create most value for both franchises in the interest of our clients, employees, shareholders, and society at large. This assessment will be based on facts, not emotions. Globally, we will stay true to our capital light and client-focused investment bank model, which we will leverage across the organization while benefiting from diversification and complementary capabilities. As a result, the investment bank will account for around 25% of group risk-weighted assets on day one and beyond. Activities outside our strategic focus and risk appetite will be run down in the best interest of our shareholders while minimizing the risk of potential losses to the Swiss taxpayers. We are excited about the opportunity to deliver the combined strengths of both firms to an expanded client base. An initial conversation with our clients suggests they agree and recognize the value of the combined organization. There is much to do and there will be difficult decisions to be made over the coming months. Transformations don't happen in a straight line. We know that from our own experience. but we are confident in our ability to deliver on the end state, as well as our existing growth ambition in the US and APAC to create long-term value for all our stakeholders. Before I hand over to Sarah, I'd like to provide a brief update on the status of the acquisition. We have received the required approvals from the Swiss authorities, including FEMA, as well as the UK's PRA and the US Federal Reserve. Additional required approvals are being expedited and we continue to expect the transaction to close in the second quarter. Since the deal is pending, we are limited in what we can communicate at this time, but we remain committed. to providing as much transparency as possible once information becomes available. Sara will take you through our high-level plan to provide you with more information on the transaction. One of my immediate priorities is our people across both organizations. We look forward to welcoming our new colleagues at UBS. Until closing, we are restricted in the extent we can engage and we are doing as much as we can given these restrictions. We have a lot of work ahead of us to bring our firms together and this transaction will present interesting and challenging opportunities to our current and future employees. We will be one team upon closing of the transaction. and we want the best people to take UBS forward. I'm also focused on establishing our target operating model and organizational structure. It is clear that while we manage this integration, we need a model that will allow us to stay close to clients and deliver on our ambitions and financial targets while also minimizing distractions. Over the coming weeks, I will provide you with more information on this. In summary, our strategy, capital strengths, risk management, and culture are what have put us in a position today to deliver solid underlying results against a challenging market backdrop. All of these factors will also play an important role as we deliver on our integration plans. While the task ahead of us is challenging and urgent, we believe that the acquisition of Credit Suisse presents a unique opportunity to generate significant long-term value to all of our stakeholders. In particular, I'm convinced that this transaction will help to reinforce the leading position of the Swiss financial center and will be of benefit to the entire economy. As we start writing our next chapter, I'm looking forward to working with my executive team and my colleagues across UBS and Credit Suisse to build an organization that our clients, employees, shareholders, and Switzerland can be proud of. With that, I hand over to Sarah.