UBS Group AG

Ladies and gentlemen, good morning. Welcome to the UBS first quarter 2024 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'd like to draw your attention to our cautionary statement slide at the back of today's results presentation. Please also refer to the risk factors filed with our group results today, 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, Sarah, and good morning, everyone. A little over a year ago, we were asked to play a critical role in stabilizing the Swiss and global financial systems through the acquisition of Credit Suisse, and we are delivering on our commitments. This quarter marks the return to reported net profits and capital accretion, a testament to the strength of our client franchises and significant progress on our integration plans. Reported net profit was $1.8 billion, with underlying PBT of $2.6 billion, and an underlying return on CT1 capital of 9.6%. Our commitment to stay close to clients supported healthy revenue growth in our core businesses and flows across our asset-gathering franchises. Meanwhile, we are executing on our restructuring plans at pace and actively winding down non-core and legacy assets. We also achieved another $1 billion in annualized round rate gross cost savings during the quarter as we progress toward our $13 billion target. As for the next significant integration milestones, we remain on track with our plans to simplify our Beagle entity structure. The merger of our parent banks is expected by the end of May and the transition to a single U.S. intermediate holding company is expected to occur shortly thereafter. The merger of our Swiss bank entities is set to take place before the end of the third quarter. All of this is subject to final regulatory approvals. These critical milestones will facilitate the migration of clients onto UBS platforms beginning later this year and unlock the next phase of the cost, capital, funding, and tax benefits from the second half of 2024 and more so by the end of 2025 and into 2026. Lastly, improvements. in our CT1 capital ratio was supported by our optimization of risk-weighted assets. As a consequence, we remain well positioned to deliver on our capital return targets for this year. Our underlying financial performance was driven by significant positive operating leverage at the group level with 15% revenue growth alongside a 5% reduction in operating expenses compared to the fourth quarter. Compared to a year ago, we reduced operating expenses by around 12%. We had excellent performance in global wealth management as underlying PBT doubled sequentially to 1.3 billion. Personal and corporate banking delivered underlying profit growth quarter on quarter, driven by higher revenues and lower credit loss expenses. Meanwhile, asset management posted solid results thanks to cost discipline. As a result of the restructuring efforts that we have undertaken over the last nine months, I am particularly pleased that Credit Suisse's wealth management, Swiss bank and asset management franchises are now all profitable and contributed to our financial performance. Investment bank delivered a double-digit underlying return on attributed equity supported by lower operating expenses compared to Q4 and another strong quarter in global banking revenues. Lastly, we had a positive revenue contribution from non-core legacy as we accelerated position exits while further reducing costs. While we continue to deliver on the integration, helping our clients manage, grow, and protect their assets remains our top priority. We maintain our momentum with clients in GWM. Invested assets have now surpassed $4 trillion as we generated $27 billion of net new assets. Though geopolitical volatility and macroeconomic uncertainty continue to weigh on client sentiment, We observed an improvement in risk appetite and activity. We also saw an improvement in client activity within P&C, particularly among corporates. In asset management, our clients continue to value our separately managed account and sustainability offerings. We have generated 21 billion in net new money during the quarter. In global banking, we outperform the fee pools in all regions, but most notably in the US, where the integration of Credit Suisse teams is progressing well and our pipeline continues to build. Let's move to non-core and legacy. As I said before, and you can see on this slide, we are making good progress in taking out costs and streamlining our operations as we run down the portfolio. We accelerated the wind-down of several complex and longer-dated positions this quarter, supporting a capital release of around $2 billion and a material improvement in our natural runoff profile. We are well-positioned to achieve our target to reduce non-core legacy risk-weighted assets to around 5% of the group by the end of 2026, and we remain focused on accelerating positions exit in a manner that continues to optimize value. Turning to capital. As you can see, the combination of our highly capital-generative business and the restructuring and active management of financial resources has further reinforced our balance sheet for all seasons. This permits us to follow through on our capital return plans for 2024. During the quarter, we began accruing for a mid-teen percentage year-on-year increase in our dividend. And, as previously communicated, we expect to resume share repurchases following the completion of the parent-bank merger, targeting up to $1 billion. Our ambition is to continue to repurchase in 2025 and for our capital returns in 2026 to exceed pre-acquisition levels. Of course, all of this is now subject to our assessment of any proposed requirements related to Switzerland's ongoing review of its regulatory regime. In this respect, I'd like to address the recent proposals in Switzerland to strengthen the Too Big to Fail regime. It is clear both to us and several expert groups that too low capital requirements were not why Credit Suisse needed rescuing. However, we agree with the Swiss Federal Council's view that capital and liquidity requirements on their own are not sufficient to ensure the resilience and stability of a systemically important bank. In addition to having a strong capital position, it is key to maintain a sustainable business model centered around risk-adjusted profitability and a robust risk management framework. All of these are core principles for UBS. For over 10 years, this approach has served our clients, employees, investors, and the Swiss economy well. It is what allowed UBS to respond to the Swiss government's request in March 2023 to be part of the solutions to stabilize the financial system. While some modifications to the regulatory regime may be necessary, and we have endorsed many, the discussion around capital should be based on facts. That includes a full and transparent account of what led to the idiosyncratic failures of Credit Suisse. The ultimate and crucial objective of the too big to fail regime must be to credibly demonstrate that a systemically important bank could be saved in a crisis largely through its own financial resources. We believe UBS has and will continue to demonstrate its resolvability from both an operational and capital point of view. With around $200 billion in total loss-absorbing capacity, our shareholders and structurally subordinated bondholders bear the significant costs and risks to ensure taxpayers would not suffer in the highly unlikely scenario that a major systemic event affects UBS. We appreciate that many of you would like a quantification of the potential impact of any new capital regime, but it's too soon to jump to conclusions. It would be inappropriate for us to speculate or respond to speculation on the potential impact. We were not involved in the consultation process leading to the publication of the Federal Council's report, and we do not have clarity on any proposed changes and how they would be implemented. Nonetheless, one point on which we may offer some clarification is the topic of parent bank capital. Our parent bank was already well capitalized in both absolute and relative terms and is in a position today to absorb the removal of substantial regulatory concessions granted to Credit Suisse. By fully aligning the treatment of capital at Credit Suisse to our more rigorous approach, UBS has to provide the additional capital required for the phasing of risk-weighted assets for Credit Suisse participations. UBS had already done this for its subsidiaries when the rules were introduced in 2017. Further, UBS will not rely upon the regulatory filter historically applied to Credit Suisse. Overall, this requires additional capital in the amount of about $9 billion. When applied consistently and coherently, the Basel III rules that UBS and its global peers must follow are robust. they too are being significantly tightened. In addition, the phasing in of progressive capital add-ons will already lead to substantially higher capital requirements for UBS's parent banks, about another $10 billion. So, overall, we are adding almost $20 billion in additional capital, which, of course, was already reflected in our previously communicated capital and financial targets. In our view, all of this must be considered when new requirements are discussed, defined, and calibrated. In this respect, we will be constructively contributing our views to the relevant authorities and various policymakers. As the third largest private employer, one of the country's largest taxpayers, and as importantly, a significant provider of credit to households and businesses in Switzerland, we believe it is also our responsibility to share our perspectives with the wider public. This is an important discussion for the country, and I remain hopeful for a proportionate outcome. In the meantime, in addition to executing on our integration plans, we will remain focused on what we are able to control, serving our clients, following through on our strategy, investing in our people, and remaining a pillar of economic support in the communities where we live and work. With that, I'll hand over to Todd.