UBS Group AG

Company Overview

Business Model: UBS Group AG is the largest truly global wealth manager and the leading bank in Switzerland, complemented by focused investment bank and asset management capabilities. Its strategy emphasizes client service, sustainable profitability, financial strength, innovation, and sound risk management, with approximately 60% of revenues derived from asset-gathering activities. The company's business purpose includes the acquisition, holding, management, and sale of direct and indirect participations in enterprises, particularly in banking, financial, advisory, trading, and service activities globally.

Market Position: UBS Group AG holds a leading global market position as the largest truly global wealth manager. It is also the leading bank in Switzerland. Regionally, UBS Group AG is the largest wealth manager in Asia Pacific, and the number one player in Switzerland and EMEA wealth management. Its Asset Management division is a global, large-scale, and diversified asset manager, and one of the leading Europe-based asset managers.

Recent Strategic Developments:

• Acquisition of Credit Suisse Group AG: Completed on June 12, 2023, for a purchase price of USD 3.7 billion, with Credit Suisse Group AG shareholders receiving 5.1% of outstanding UBS Group AG shares. This acquisition significantly expanded UBS Group AG's scale and market presence.
• Integration Milestones:
  • Merger of UBS AG and Credit Suisse AG completed on May 31, 2024.
  • Transition to a single US intermediate holding company completed on June 7, 2024.
  • Merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG completed on July 1, 2024.
  • Global Wealth Management client account migrations completed in Luxembourg, Hong Kong, Singapore, and Japan in Q4 2024, with Swiss business migrations expected to commence in Q2 2025.
  • Cumulative gross cost savings reached USD 7.5 billion by end of 2024, representing 58% of the USD 13 billion annualized exit rate target by end of 2026.
  • Non-core and Legacy division reduced risk-weighted assets (RWA) by 52% since Q2 2023.
• Strategic Transactions:
  • Agreements with Apollo Global Management and Atlas SP Partners in Q1 2024, including Apollo purchasing USD 8 billion of senior secured financing facilities, resulting in a net gain of USD 0.3 billion.
  • Agreement to sell Select Portfolio Servicing (US mortgage servicing business of Credit Suisse) in August 2024, expected to reduce RWA by approximately USD 1.3 billion and LRD by approximately USD 1.7 billion.
  • Agreement to sell 50% interest in Swisscard AECS GmbH to American Express Swiss Holdings GmbH in October 2024.
  • Asset Management divestments in 2024 included Brazilian real estate fund management business, Credit Suisse Insurance Linked Strategies Ltd, and a 62% majority stake in Credit Suisse Investment Partners.
  • Unified Global Alternatives (UGA) business unit created at end of 2024, combining manager selection franchises from Global Wealth Management and Asset Management, with USD 286 billion in invested assets.
  • Unified Global Banking formed, combining Global Wealth Management’s corporate finance capabilities with Global Banking.
• Technology & Innovation:
  • Deployment of 50,000 Microsoft 365 Copilot licenses to employees, the largest in global financial services.
  • Red, an internal chatbot based on generative AI, rolled out to approximately 30,000 employees.
  • 13 million AI-generated insights delivered to US advisors in 2024.
  • HOLT framework transferred from Credit Suisse to UBS Group AG in October 2024.

Geographic Footprint: UBS Group AG operates in over 50 countries, with major financial hubs in the Americas, Asia Pacific, EMEA, and Switzerland. Its invested assets of over USD 6 trillion are regionally diversified. Switzerland represents the largest single market for revenue generation.

Cross-Border Operations:

• International Subsidiaries: UBS Group AG owns 100% of UBS AG and Credit Suisse AG. Key subsidiaries include UBS Switzerland AG, UBS Business Solutions AG, UBS Americas Holding LLC, and UBS Europe SE.
• Joint Ventures: UBS BB (jointly with Banco do Brasil, focused on Latin America). Swisscard AECS GmbH (50% interest, being sold).
• Regulatory Compliance: UBS Group AG is subject to diverse legal, tax, and regulatory regimes across jurisdictions, including FINMA (Switzerland), Federal Reserve Board (US), PRA/FCA (UK), ECB/BaFin (EU), MAS (Singapore), HKMA/SFC (Hong Kong SAR), PBOC/NAFR/CSRC (mainland China), APRA/ASIC (Australia), and FSA/BOJ (Japan).

Financial Performance

Revenue Analysis (USD m)

Profitability Metrics:

• Operating Margin: 14.0% (2024) vs 69.2% (2023)
• Net Margin: 10.5% (2024) vs 67.0% (2023)
• Return on equity: 6.0% (2024) vs 36.9% (2023)
• Return on common equity tier 1 capital: 6.7% (2024) vs 41.8% (2023)
• Underlying return on common equity tier 1 capital: 8.7% (2024) vs 4.2% (2023)
• Cost / income ratio: 84.8% (2024) vs 95.0% (2023)
• Underlying cost / income ratio: 79.5% (2024) vs 87.2% (2023)
• Effective tax rate: 24.6% (2024) vs 3.1% (2023)

Investment in Growth:

• Capital Expenditures: USD 2.2 billion (additions to property, equipment, and software in 2024)
• Strategic Investments: The acquisition of Credit Suisse Group AG for USD 3.7 billion. Agreements with Apollo Global Management and Atlas SP Partners in Q1 2024, including Apollo purchasing USD 8 billion of senior secured financing facilities.

Currency Impact Analysis:

• Foreign currency translation in Other Comprehensive Income was negative USD 1,754 million in 2024, primarily due to the strengthening of the US dollar against the Swiss franc and the euro.
• Changes in foreign exchange rates may adversely affect profits, balance sheet, and capital, leverage, and liquidity coverage ratios.
• Group Treasury employs matched funding of assets and liabilities and net investment hedging to manage foreign currency exposure.
• The Group's presentation currency is the US dollar.

Business Segment Analysis

Global Wealth Management

Financial Performance:

• Revenue: USD 24.5 billion (+14% YoY)
• Operating profit before tax: USD 3.9 billion (+14% YoY)
• Cost / income ratio: 84.1% (2024) vs 83.2% (2023)
• Return on attributed equity: 11.8% (2024) vs 11.8% (2023) Key Growth Drivers: Consolidation of Credit Suisse Group AG revenues, higher recurring net fee income, increased transaction-based income, positive market performance, and heightened client activity in Asia Pacific and the Americas. Product Portfolio: Offers advice, expertise, and solutions to ultra high and high net worth individuals, guided by the UBS Group AG House View from the Chief Investment Office. Products include traditional equity and fixed-income securities, separately managed accounts, structured products, sustainable- and impact-investing products, and alternative investments. Provides wealth planning, sustainability-focused and impact investing, and corporate and banking services, as well as mortgage, securities-based, and structured lending. New units include GWM Solutions, Unified Global Alternatives, and Unified Global Banking. New Product Launches or Major Updates: UBS My Way (over USD 15 billion in invested assets), Direct Investment Insights, UBS Advice Compass, Red (internal chatbot rolled out to approximately 7,000 employees in Q4 2024), and 13 million AI-generated insights delivered to US advisors in 2024. Market Dynamics: Largest truly global wealth manager with strong positions in the US (world's largest wealth pool) and Asia Pacific (fastest-growing wealth market). Competes with Morgan Stanley, JPMorgan Chase, Wells Fargo, Bank of America, Julius Baer, BNP Paribas, Deutsche Bank, HSBC, and fintech firms. Geographic Revenue Distribution (2024):
• Americas: USD 11.3 billion
• Asia Pacific: USD 3.6 billion
• EMEA: USD 4.7 billion
• Switzerland: USD 4.1 billion
• Global: USD 0.9 billion Growth Markets: Targeted investments in the Americas (USD 2.1 trillion invested assets, approximately 6,000 financial advisors) and Asia Pacific (USD 0.7 trillion invested assets).

Personal & Corporate Banking

Financial Performance:

• Revenue: USD 9.3 billion (+21% YoY)
• Operating profit before tax: USD 3.2 billion (+13% YoY)
• Cost / income ratio: 61.5% (2024) vs 57.2% (2023)
• Return on attributed equity: 14.8% (2024) vs 16.7% (2023)
• Net interest margin: 200 bps (2024) vs 206 bps (2023) Key Growth Drivers: Consolidation of Credit Suisse Group AG revenues, higher recurring net fee income, and increased investment product levels due to positive market performance and net new inflows. Product Portfolio: Provides a comprehensive range of financial products and services to private, corporate, and institutional clients in Switzerland. Includes basic banking, mortgages, investments, retirement planning, capital markets access, syndicated and structured credit, trade and export finance, and global custody solutions. Offers sustainability-linked loans. New Product Launches or Major Updates: Partnerships with NORM (digital energy analysis), Fasoon and Startups.ch (business founding), SMG Swiss Marketplace Group (real estate portals), Brixel (property transactions), and Houzy (homeowner platform). Introduced UBS Loan Green. Market Dynamics: Leading bank in Switzerland, serving over one-third of Swiss households and over 90% of large Swiss companies. Named "Best Bank in Switzerland" by Euromoney for the tenth time since 2012. Competes with cantonal banks, Raiffeisen, PostFinance, other Swiss banks, international neobanks, and digital market participants. Geographic Revenue Distribution (2024):
• Switzerland: USD 9.3 billion Growth Markets: Focus on reinforcing position as a leading bank for large corporates, entrepreneurs, and emerging affluent clients in Switzerland.

Asset Management

Financial Performance:

• Revenue: USD 3.2 billion (+18% YoY)
• Operating profit before tax: USD 520 million (+56% YoY)
• Cost / income ratio: 83.7% (2024) vs 87.6% (2023)
• Return on attributed equity: 19.2% (2024) vs 14.1% (2023)
• Gross margin on invested assets: 18 bps (2024) vs 19 bps (2023) Key Growth Drivers: Consolidation of Credit Suisse Group AG revenues, positive market performance, foreign currency effects, revaluation of a real estate fund co-investment, and increases in Hedge Fund Businesses and Fixed Income performance fees. Product Portfolio: Offers investment capabilities and strategies across traditional and alternative asset classes, including customized multi-asset solutions and advisory/fiduciary services. Provides a comprehensive range of sustainability-focused products. Unified Global Alternatives (UGA) offers open architecture platforms across hedge funds, private equity, private credit, real estate, infrastructure, and multi-alternative investment products. Expands index and exchange-traded funds capabilities. New Product Launches or Major Updates: Unified Global Alternatives (UGA) created at end of 2024, with USD 286 billion in invested assets. UBS Advantage initiative to streamline trading and portfolio implementation. Market Dynamics: Global, large-scale, and diversified asset manager, one of the leading Europe-based asset managers with total invested assets of USD 1.8 trillion. Largest Europe-based manager of indexed investments. Competitors include AllianceBernstein, BlackRock, DWS, J.P. Morgan Asset Management, and others. Geographic Revenue Distribution (2024):
• Americas: USD 0.8 billion
• Asia Pacific: USD 0.4 billion
• EMEA: USD 0.4 billion
• Switzerland: USD 0.9 billion
• Global: USD 0.7 billion Growth Markets: Extensive presence in Asia Pacific, particularly China.

Investment Bank

Financial Performance:

• Revenue: USD 10.9 billion (+26% YoY)
• Operating profit before tax: USD 1.9 billion (2024) vs -USD 72 million (2023)
• Cost / income ratio: 81.6% (2024) vs 98.6% (2023)
• Return on attributed equity: 11.2% (2024) vs -0.5% (2023) Key Growth Drivers: Higher revenues for Global Markets and Global Banking, driven by increased merger and acquisition transaction revenues, growth in Equity Derivatives and Foreign Exchange, and higher Leveraged Capital Markets activity. Product Portfolio: Provides services to institutional, corporate, and wealth management clients, including capital raising, investing, and risk management. Strengths in equities, foreign exchange, research, advisory services, and capital markets. Global Banking advises on M&A and capital raising. Global Markets facilitates securities trading, financing, and risk management across various asset classes. Investment Bank Research covers over 3,700 stocks in 49 countries. Offers sustainability-focused advice, products, and research. New Product Launches or Major Updates: HOLT framework transferred from Credit Suisse Group AG to UBS Group AG in October 2024. Unified Global Banking formed. Market Dynamics: Business is regionally diversified with presence in over 30 countries. Major financial hubs in Americas, Asia Pacific, EMEA, and Switzerland. Competitors include Morgan Stanley, Goldman Sachs, Bank of America, Barclays, Citigroup, BNP Paribas, Deutsche Bank, JPMorgan Chase, boutique investment banks, and fintech firms. Geographic Revenue Distribution (2024):
• Americas: USD 4.8 billion
• Asia Pacific: USD 2.9 billion
• EMEA: USD 2.6 billion
• Switzerland: USD 0.7 billion
• Global: USD 0.0 billion Growth Markets: Focus on increasing market share in the Americas (largest investment banking fee pool), capturing opportunities in Asia Pacific (China and other markets), and leveraging its base in EMEA.

Non-core and Legacy

Financial Performance:

• Revenue: USD 1.6 billion (+130% YoY)
• Operating profit before tax: -USD 2.0 billion (2024) vs -USD 4.6 billion (2023) Key Growth Drivers: Consolidation of Credit Suisse Group AG revenues, net gains from position exits, net interest income from securitized products and credit products, and a net gain of USD 272 million from the sale of assets from the former Credit Suisse Group AG securitized products group to Apollo Global Management. Product Portfolio: Comprises positions and businesses not aligned with UBS Group AG's long-term strategy and risk appetite, including selected assets and liabilities from former Credit Suisse Group AG business divisions, residual assets and liabilities from UBS Group AG’s former Non-core and Legacy Portfolio, and smaller non-strategic assets from UBS Group AG’s business divisions. Includes legacy Credit Suisse Group AG corporate loans, emerging markets loans, securitized products, macro trading, life-finance, equities portfolio, and residual credit business. Market Dynamics: Actively winding down positions to reduce operating costs and financial resource consumption. Operational Metrics:
• Risk-weighted assets (RWA): USD 41.4 billion (2024), a 52% reduction since Q2 2023 and 44% YoY reduction. Aim to reduce to approximately USD 29 billion by end of 2025 and USD 22 billion by end of 2026.
• Leverage ratio denominator (LRD): USD 53.5 billion (2024), a 68% YoY reduction.
• Underlying operating expenses: Aim to exit 2026 with approximately USD 0.8 billion (excluding litigation).
• Underlying loss before tax: Aim for less than USD 1 billion (excluding litigation) by end of 2026. Geographic Revenue Distribution (2024):
• Global: USD 1.6 billion

Group Items

Financial Performance:

• Revenue: -USD 975 million (2024) vs -USD 495 million (2023)
• Operating profit before tax: -USD 752 million (2024) vs -USD 938 million (2023) Key Growth Drivers: Income from Group hedging and own debt, including hedge accounting ineffectiveness, within Group Treasury. Mark-to-market effects on portfolio-level economic hedges, mainly due to cross-currency-basis widening. Product Portfolio: Represents residual amounts from Group functions cost allocation, Group hedging, and own debt activities in Group Treasury, and certain costs related to deferred tax assets and the legal entity transformation program. Geographic Revenue Distribution (2024):
• Global: -USD 1.0 billion

International Operations & Geographic Analysis

Revenue by Geography (USD billion)

International Business Structure:

• Subsidiaries: UBS Group AG owns 100% of UBS AG and Credit Suisse AG. Other key international subsidiaries include UBS Americas Holding LLC and UBS Europe SE.
• Joint Ventures: UBS BB (jointly with Banco do Brasil, focused on Latin America). Swisscard AECS GmbH (50% interest, being sold to American Express Swiss Holdings GmbH).

Cross-Border Trade:

• Export Markets: UBS Group AG supports the international business activities of Swiss corporate clients through local hubs in New York, Frankfurt, Singapore, and Hong Kong SAR.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: USD 1 billion in 2024. UBS Group AG plans to repurchase USD 1 billion in H1 2025 and aims for up to an additional USD 2 billion in H2 2025. The ambition for 2026 share repurchases is to exceed full-year 2022 levels of USD 5.6 billion.
• Dividend Payments: A dividend of USD 0.90 per share is proposed for 2024, representing a 29% increase year-over-year. UBS Group AG is accruing for an increase of approximately 10% in the ordinary dividend per share for 2025.
• Dividend Yield: 2.95% (based on 2024 proposed dividend and year-end market capitalization).
• Future Capital Return Commitments: UBS Group AG is committed to progressive dividends and share buybacks, consistent with financial plans and maintaining a CET1 capital ratio target of around 14%.

Balance Sheet Position:

• Cash and Equivalents: USD 244.1 billion (as of December 31, 2024)
• Total Debt: USD 322.1 billion (as of December 31, 2024)
• Net Cash Position: -USD 78.0 billion (as of December 31, 2024)
• Credit Rating: Fitch Ratings Ireland Limited downgraded UBS Group AG to "A" from "A+" and UBS AG to "A+" from "AA–" upon the close of the Credit Suisse Group AG acquisition in June 2023.
• Debt Maturity Profile: Short-term debt was USD 30.5 billion and long-term debt was USD 183.7 billion as of December 31, 2024.

Cash Flow Generation:

• Operating Cash Flow: USD 3.3 billion (2024)

Currency Management:

• Cash holdings are diversified across major currencies, though specific amounts by currency are not disclosed.
• UBS Group AG employs natural hedging through operational diversification across various currencies.
• Financial hedging instruments and strategies are utilized by Group Treasury, including matched funding of assets and liabilities and net investment hedging, to manage foreign currency exposure.

Operational Excellence

Production & Service Model: UBS Group AG operates a client-centric model, emphasizing less risk-taking and capital. Personal & Corporate Banking utilizes a multi-channel approach with digital and remote channels. Asset Management focuses on investment excellence and value creation. The Investment Bank prioritizes high-quality execution, seamless client service, and digital transformation.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Digital Energy Analysis: NORM
• Business Founding Support: Fasoon and Startups.ch
• Real Estate Portals: SMG Swiss Marketplace Group (exclusive partnership for Homegate, Immoscout24)
• Property Transactions: Brixel
• Homeowner Platform: Houzy
• Technology: Microsoft (deployment of 50,000 Microsoft 365 Copilot licenses)
• Investment Management/Financing: Apollo Global Management and Atlas SP Partners (Apollo purchased USD 8 billion of senior secured financing facilities)
• Card Services: American Express Swiss Holdings GmbH (acquiring UBS Group AG's 50% interest in Swisscard AECS GmbH)
• Latin American Banking: Banco do Brasil (joint venture UBS BB)

Facility Network:

• Research & Development: Invests in partnerships with leading academic institutions worldwide to foster pioneering AI research.
• Distribution: Maintains an extensive branch network in Switzerland for Personal & Corporate Banking.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Regional sales forces and direct customer relationships, particularly in Global Wealth Management. An extensive branch network in Switzerland supports Personal & Corporate Banking.
• Channel Partners: Partnerships in Personal & Corporate Banking with NORM, Fasoon, Startups.ch, UBS Marketplace, SMG Swiss Marketplace Group, Brixel, and Houzy.
• Digital Platforms: Online and mobile banking, Direct Investment Insights, UBS Advice Compass, Red (internal chatbot), and the UBS Neo platform (UBS Live Desk, UBS Analytical Research Community).

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Serves over 90% of large Swiss companies.
• Strategic Partnerships: Collaborations with various partners across segments to enhance client offerings and market reach.

Regional Market Penetration:

• Switzerland: Serves over one-third of Swiss households, holding a leading position.
• Asia Pacific: Number-one wealth manager.
• Americas: Among the top players in the world’s largest wealth pool.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: Global economic growth slowed slightly to 3.2% in 2024. Inflation continued its trend toward normalization. Global financial wealth grew by approximately 7% in 2023 to an estimated USD 275 trillion, with an expected growth rate of 6% per year until 2028. Wealth concentration is highest in the Americas (49%), followed by Asia Pacific (27%) and Europe (21%). The High Net Worth Individual (HNWI) segment experienced the strongest percentage increase in population and wealth. Approximately USD 84 trillion of collective wealth is expected to be transferred in the next 20-25 years. Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Global Wealth Management: Morgan Stanley, JPMorgan Chase, Wells Fargo, Bank of America, Julius Baer, BNP Paribas, Deutsche Bank, HSBC, and fintech firms.
• Personal & Corporate Banking: Cantonal banks, Raiffeisen, PostFinance, other regional and local Swiss banks, international neobanks, and national digital market participants.
• Asset Management: AllianceBernstein, Allianz Asset Management, Amundi, BlackRock, DWS, Franklin Templeton, Invesco, J.P. Morgan Asset Management, Morgan Stanley Investment Management, Schroders, State Street Global Advisors, and T. Rowe Price.
• Investment Bank: Major global investment banks (Morgan Stanley, Goldman Sachs) and corporate investment banks (Bank of America, Barclays, Citigroup, BNP Paribas, Deutsche Bank, JPMorgan Chase), boutique investment banks, and fintech firms.

Regional Competitive Dynamics: The competitive landscape varies significantly by region, with strong local and international players in each market. UBS Group AG leverages its global scale and diversified offerings to compete across these varied environments.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics: Geopolitical uncertainty (Russia–Ukraine war, Middle East conflicts, global trade relations), macroeconomic risks (inflation, central bank monetary policy, China property sector stress, commercial real estate sector concerns), and the failure of major market participants. Technology Disruption: Risks from deploying newer technologies like blockchain, and the use of automation, machine learning, and artificial intelligence (AI), including generative AI and deepfake technologies.

Operational & Execution Risks

Global Supply Chain Vulnerabilities: Reliance on third-party systems (clearing systems, exchanges, information processors, central counterparties). The ION XTP ransomware attack in Q1 2023 disrupted exchange-traded derivatives clearing activities. Regional Disruptions: Exposure to political, economic, and natural disaster risks across its global operational footprint. Trade Restrictions: Impacts from export controls, tariffs, and trade war developments. Internal Control over Financial Reporting: A material weakness in internal control over financial reporting was identified at December 31, 2024, related to the risk assessment process of the Credit Suisse Group AG business acquired in 2023.

Financial & Regulatory Risks

Currency & Financial Risks: Exposure to currency fluctuation risks as a substantial portion of assets and liabilities are denominated in currencies other than the US dollar. Interest Rate Risk: Sensitivity to interest rate trends, including prolonged periods of low or negative rates and sharp increases. Credit & Liquidity: Credit risk exposure to clients, trading counterparties, and other financial institutions, particularly in Lombard lending, prime brokerage, securities finance, and Swiss mortgage and corporate lending portfolios. Regulatory & Compliance Risks: Subject to substantial changes in regulation, including recovery and resolution planning, capital and prudential standards, taxation regimes, market standards, fiduciary duties, and evolving ESG standards. Regulatory measures often differ significantly across jurisdictions, with Swiss requirements among the strictest. Multi-Jurisdictional Compliance: Operates under many different legal, tax, and regulatory regimes in over 50 countries. Trade Regulations: Subject to sanctions regulations (e.g., related to the Russia–Ukraine war) and trade restrictions. Tax Regulations: Financial results are influenced by tax law changes, reassessments of deferred tax assets, and operating losses of certain entities with no associated tax benefit. Potential material future tax liabilities may arise from the Credit Suisse Group AG acquisition.

Geopolitical & External Risks

Country-Specific Risks: Geopolitical events such as international armed conflicts, war, acts of terrorism, imposition of sanctions, global trade or supply chain disruptions, energy shortages, and food insecurity. Political Risk: Government stability and policy changes by country. Economic Risk: Currency devaluation and economic instability. Regulatory Changes: Local law changes affecting operations.

Innovation & Technology Leadership

Research & Development Focus: Global R&D Network: UBS Group AG invests in partnerships with leading academic institutions worldwide to develop ideas and foster pioneering AI research. Innovation Pipeline: Focuses on AI adoption to drive transformation, improve client service, and increase productivity. Generative AI is being used to enhance capabilities and platforms.

Technology Partnerships:

• Strategic Alliances: Microsoft (deployment of 50,000 Microsoft 365 Copilot licenses).
• Research Collaborations: Partnerships with leading academic institutions worldwide.

Leadership & Governance

Executive Leadership Team

International Management Structure: UBS Group AG operates under a dual-board structure mandated by Swiss banking law, comprising a Board of Directors (BoD) and a Group Executive Board (GEB). The GEB consisted of 15 members as of December 31, 2024. Regional Presidents ensure cross-divisional collaboration and local market focus.

Board Composition: The Board of Directors consists of between 6 and 12 members, led by Chairman Colm Kelleher. Three-quarters of BoD members must be independent. Renata Jungo Brüngger and Lila Tretikov are proposed for election to the Board. The Audit Committee Chairperson, Jeremy Anderson, qualifies as a financial expert. The Corporate Culture and Responsibility Committee monitors and reviews corporate culture.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Switzerland: Subject to consolidated supervision by FINMA under the Swiss Banking Act. As a Swiss systemically relevant bank, it faces stringent capital and total loss-absorbing capacity (TLAC) requirements. Amendments to the Capital Adequacy Ordinance incorporating final Basel III standards became effective on January 1, 2025. FINMA suspended annual approval of UBS Group AG's recovery and emergency plans in October 2024, requiring adjustments for continued resolvability.
• US: Regulated by the Federal Reserve Board, OCC, CFTC, SEC, FDIC, state regulators, FINRA, MSRB, and national securities exchanges. UBS Americas Holding LLC was assigned a stress capital buffer of 9.3% (effective October 1, 2024), resulting in a total CET1 capital requirement of 13.8%.
• UK: Regulated by the PRA and FCA. The PRA postponed the implementation of final Basel III standards to January 1, 2027.
• Europe (EU): UBS Europe SE is directly supervised by the ECB. Final Basel III requirements became applicable on January 1, 2025 (except market risk capital, delayed to January 1, 2026). The EU AI Act entered into force on August 1, 2024, and the Corporate Sustainability Due Diligence Directive (CSDDD) on July 25, 2024.
• Asia Pacific: Regulated by local financial regulators in Singapore, Hong Kong SAR, mainland China, Australia, and Japan.

Cross-Border Compliance:

• Export Controls: Adheres to technology transfer restrictions and licensing requirements across jurisdictions.
• Sanctions Compliance: Maintains a Group Sanctions Policy prohibiting transactions involving sanctioned countries, individuals, and entities. UBS Switzerland AG maintains one UN-related account for the Iranian government under specific conditions.
• Anti-Corruption: Subject to the US Foreign Corrupt Practices Act and the UK Bribery Act, with robust compliance programs in place.

International Tax Strategy:

• Tax Treaties: Benefits from the Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income.
• BEPS Compliance: The Swiss Federal Council introduced the Income Inclusion Rule (OECD minimum corporate taxation rules) effective January 1, 2025, with limited overall tax impact for UBS Group AG.

Environmental & Social Impact

Global Sustainability Strategy: UBS Group AG's sustainability and impact strategy is based on three pillars: Protect (aligning business with sustainable long-term Group strategy), Grow (embedding innovative sustainability and impact offerings), and Attract (being the bank of choice for clients and employees).

Environmental Commitments:

• Climate Strategy: Supports clients in the transition to a low-carbon world and considers climate change risks and opportunities. Total gross lending exposure to carbon-related assets decreased to 10.9% in 2024 from 12.1% in 2023.
• Carbon Neutrality: Revised target to reduce net greenhouse emissions (scope 1 and 2) to net zero by 2035.

Regional Sustainability Initiatives:

• Supply Chain: Global supplier ESG requirements and sustainability standards are integrated into the supply chain.

Social Impact by Region:

• Community Investment: The UBS Optimus Foundation mobilized USD 1 billion in philanthropic capital by 2024, aiming to reach over 26.5 million people by end of 2025. It raised USD 366 million in donations and committed USD 310 million in grants in 2024. Direct cash contributions totaled USD 74 million in 2024.
• Labor Standards: 32% of the global workforce engaged in volunteering in 2024, contributing 230,258 volunteer hours, with 39% being skills-based.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure: UBS Group AG has substantial portions of its assets and liabilities denominated in currencies other than its presentation currency, the US dollar, leading to foreign currency translation risk. Hedging Strategies: Group Treasury utilizes matched funding of assets and liabilities and net investment hedging to manage foreign currency exposure. This includes both natural hedging through operational diversification and financial hedging instruments.