UBS Group AG (UBS) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 25, 2022 2:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Sarah Mackey

Good morning and welcome everyone. Before we start, I would 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 in our 2021 annual report, together with additional disclosures in our SEC filings. On Slide 2, you can see our agenda for today. It’s now my pleasure to hand over to Ralph Hamers, Group CEO.

Ralph Hamers

Thank you, Sarah. Good morning, everyone. I am pleased to share good results with you for this quarter amid significant macroeconomic and geopolitical uncertainty, we executed with discipline. We delivered €1.7 billion in net profit and our return on CET1 capital was 15.5%. Our capital position remains strong with a CET1 ratio of 14.4% as you can see. And we managed costs well, leading to a cost/income ratio of 71.8% and our balance sheet for all seasons and strong risk management continued to be an asset for our clients and the investors.

Turning to the next slide, where you have the overall overview of the commercial momentum. This quarter, I spent a lot of time with clients across the globe and their feedback was really consistent. They are concerned about inflation, about the energy prices, the war in Ukraine, residual effects from the pandemic, economies are slowing down, central banks are raising rates at record pace and that’s affecting asset levels. It’s affecting market volatility and investor sentiment across the globe as well and we expect this to continue at least through the end of the year.

Client activity has been differentiated across segments. Institutional clients remain very active on the back of high volatility of foreign exchange and rates. The private investors generally remain on the sidelines waiting for signs of improvement. In all cases, our teams have stayed close to our clients, providing them with advice and solutions. And you can see the snapshot here on this slide. We have private clients seeking opportunities to protect and grow their wealth. They diversified their portfolio through mandate solutions and made additional commitments to private markets. And as a result, for need for guidance, which we gave, we saw €17 billion in net new fee-generating assets coming in through the quarter.

Wealth Management clients are seeking higher-yielding products on the back of higher interest rates. We’re capturing this demand through savings through CDs and money market funds and half of the €16 billion of net new money coming in through asset management in money markets. So I have the €16 billion in money markets. So €8 billion is actually coming from GWM clients. We also continue to actively manage our deposit offering and optimize net interest income, and that’s where we saw a 14% growth year-on-year in our deposit-taking businesses.